Millions more Russians living in poverty as economic crisis bites
. . . skyrocketing poverty, and shocking economic decline driven by the sudden decline in oil prices.
"An average of 19.2 million Russians – or 13.4% of the population – were living last year on less than 9,452 roubles ($139) a month, the minimum subsistence level determined by the Russian government in the fourth quarter.
This figure represents a 20% increase year-on-year, with an average 16.1 million people living below the poverty threshold in 2014."
Ouch, this is terrible. Millions of people slowly falling into desperate poverty.
"Russia’s energy-reliant economy shrank by 3.7% in 2015 and is set to continue suffering this year.
In September, the World Bank warned against a “troubling” increase in poverty in Russia resulting from a sharp drop in the income of the most vulnerable social groups including pensioners.
Prime Minister Dmitry Medvedev conceded in January that increasing poverty was “one of the most painful” consequences of the economic crisis.
Real wages in the country shrank 6.9% last month in comparison to the same period last year.
Retail sales were down 5.9% last month year-on-year.
Russia’s newly-founded rating agency said Monday it did not expect economic growth until 2018."
The only reason it expects economic growth in 2018 is because that date is so far off there will be plenty of time to down grade later. Russia has a commodity economy. What we forget is that at the end of the Soviet period, the reason for the collapse was that the people in power in the USSR realized that the nation was taking valuable resources, and commodities, adding labor, and creating something with less value than the resource, and commodity inputs. Let that sink in. They were taking valuable things and making them less valuable through manufacturing.
This was a shocking conclusion, but undeniable. That left two courses of action, one was to improve manufacturing, which would have taken decades, and billions in hard currency, which Russia did not have, or stop manufacturing, and switch the economy to a resource, and commodity economy. They chose the latter. Many Russians were impoverished, but the economy turned, and the poverty rate slowly fell, and Putin emerged, and became essentially a dictator, running a Mafia like state.
Now faced with the existential threat of low oil prices, Russia is without recourse. It cannot cut out manufacturing. It does not have manufacturing to build upon, and the economy is tanking. This is the outcome of failing to embrace the free market economy, with republican governance, and reformed religions. Here at the End of History, we know what works, and we know what does not.
Good luck Russia, you will need it.