“Double-digit poverty remains stubbornly high” – RealnoeVremya.com

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World Bank urges Russia to create new national program to help people living below the poverty line

Russia’s poverty rate has declined slightly since peaking at 13.3 percent in the third quarter of 2020, but the figure remains in double digits, undermining the Kremlin’s ambitious goal of halving the poverty level in Russia. by 2030.

Russia needs a more scalable and inclusive social safety net system to meet its national goal of halving poverty by 2030, according to the world Bank. According to the bank’s experts, the country has admirably contained further spikes in the poverty rate induced by COVID-19, mainly due to various compensatory social policies, such as increasing unemployment benefits, family allowances and unemployment benefits. support for single-parent families. As the economic recovery continues to accelerate, the World Bank expects Russia’s poverty rate to drop to 11.4 percent by the end of 2021.

However, experts believe that strong economic growth alone will not be enough to meet Russia’s goal of halving poverty by 2030, as “double-digit poverty remains stubbornly high.” “We believe this [the growth] will need to be complemented by a social safety net system that is more scalable and inclusive, ”they say in a comment noting that the current social protection system only transfers about 10% of the total social assistance budget to the poor . To achieve Russia’s strategic goal, the country’s safety net should be able to meet the complex financial, health, labor market and long-term care needs of the poor and vulnerable.

The World Bank has suggested a national program to help people who fall below the poverty line. Photo: pixabay.com

As a concrete example of how a scalable and inclusive safety net can be woven, the World Bank suggests a national program to help people who fall below the poverty line. Under the program, these people are expected to receive a payment to compensate for the income gap combined with incentives to lift them out of poverty through work activation support. “With many caveats, such as excellent targeting, we estimate the cost of the lower bound for such a program to be around 0.3% of GDP.”

In addition, the bank’s experts note that Russia’s policy responses to rising food prices, such as export bans, quotas, tariffs, price caps and subsidies, have been politically attractive. and easily applicable administratively, but economically distorted. According to a recent study by the Higher School of Economics, the beneficiaries of these measures were Russian producers and unsanctioned importers, while for Russian citizens consumer losses amounted to 2,000 rubles per capita. As low-income families and the poor are disproportionately affected by rising food prices, a better approach to help them would be to improve the targeting of Russia’s social safety nets to reduce food insecurity. and poverty, concludes the World Bank.

By Anna Litvina


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