Russia Can Recover Only if Moscow Addresses Problems of Middle Class as Well as Those of the Poor, Kuzminov Says

Paul Goble

            Staunton, May 4 – Vladimir Putin and the Russian government have acted as if they can address the impact of the pandemic on the population adequately if they come up with new programs for the poorest strata of Russians. But in fact, the economic crisis is hitting the middle class hard, and the regime must develop programs to help it as well, Yaroslav Kuzminov says.

            Up to now, the rector of Moscow’s Higher School of Economics says, the government has supported production and given some aid to the very poorest groups, but it has not supported members of the middle class with new programs who in many cases have lost their sources of income (rbc.ru/economics/04/05/2021/608ab3679a79476197153417).

            That failure, Kuzminov says, hits the Russian economy and society in a double way. On the one hand, it means that many of those who had been solidly middle class only a year or two ago have now fallen into poverty. And on the other, their fall eliminates one of the most important bases for innovation and economic growth.

            He warns that this trend is “explosive from the point of view of politics.” These may not yet be visible, but the impoverishment of the middle class is such an important and dangerous development that the powers that be must do something about it. If they don’t, there is no way Russia will be able to boost its growth rates in ways the Kremlin talks about.

            Last September, Kuzminov says, HSE researchers concluded that “as a result of the coronavirus, 6.1 percent of the working middle class has shifted to the category of the poor because of the   loss of work and the reduction of incomes.” Researchers said that 8.7 percent of middle-class Russians had lost their jobs and the incomes those provided.

            According to Rosstat figures for 2020 as a whole, he continues, “the level of poverty in Russia … amounts to 12.1 percent or 17.8 million people.” That official figure is the lowest since 2014, but the reality almost certainly is different. And the situation will only get worse unless the government adopts anti-crisis policies to address the needs of the middle class.