Sunday, January 20, 2019

Income Inequality in Russia Now What it Was Just Before 1905 and 1917 Revolutions, Financial Expert Says


Paul Goble

            Staunton, January 20 – Income inequality in Russia has risen to the point that it now equals the level of income inequality in the Russian Empire just before the 1905 and 1917 revolutions, Kirill Teteryatnikov says; but despite that, dealing with this political explosive development has been dropped from Russian government strategy documents.

            The researcher at the Vneshekonombank says that today, the least well-off half of the population receives only 17 percent of national income, the very same level that such people received in tsarist Russia in the years before the 1905 revolution. And those at the top of the income pyramid now received roughly the same share as those in that position before 1917 (ehorussia.com/new/node/17757).

            What makes this differentiation so unfortunate, Teteryatnikov says, is that the private capital that the wealthiest groups have been able to create “is not being invested in the Russian economy, is not creating new work forces, and is not promoting consumer demand, but instead is being sent abroad.”

            As a result of these trends, he continues, “after a quarter of a century since the start of market reforms in Russia, the poor have become still poorer, the rich richer, and the superrich extremely so,” with the bottom half falling behind by 20 percent and the top ten percent gaining 141 percent – and those in the top 0.1 and 0.01 percent doing far better than that.

            Given the well-known impact of economic inequality on development and political stability, one might expect the government to be focusing on it ever more intently. But in fact, Teteryatnikov says, the reverse has been the case: Fighting inequality was mentioned in government documents in 2008-2009, but it was dropped as a priority in the 2015 strategy paper.

            And this has happened, he points out, even though “the problems of inequalitiy and poverty have not only remained but become more serioius.”

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