Saturday, November 10, 2012

Window on Eurasia: Russia’s Population Decline will Benefit Russians, Moscow Officials Say

Paul Goble

            Staunton, November 10 – Despite occasional upticks caused by changes in the numbers of women in prime childbearing age cohorts, the population of the Russian Federation continues to decline, but instead of bewailing it, Moscow officials are now saying that this decline will lead to a growth in the incomes of those who remain and become “a motor of economic growth.”

            In an article in “Argumenty Nedeli” entitled “Withering Away for the Better,” Denis Terentyev calls attention to a declaration of the Economic Development Ministry in September in which officials said that population declines will continue but they will work to the benefit of those Russians who remain (

            According to the ministry’s report, declines in the size of the reserves of workers and growth of productivity of work as a result “’will stimulate the growth of pay.’” Such a statement represents a major departure from the widespread view that “bad demography” constitutes “the main macro-economic risk” to Russia.

            Until now, most officials from Vladimir Putin on down have routinely said that “the reform of health care and the promotion of greater numbers of birth” are critical. Spending on mothers, the so-called “maternal capital,” began in 2008, he continues, but it has not boosted birthrates: Today, among women under 25, the birthrate is lower than in the crisis year of 1999.”

            “Demographic indicators” are a long term thing, sociologist Sergey Prokhorov observed.  “For example, in the 1990s, very few children were born, and this fact will define demography over the next 10 to 15 years.  Before 2020, the number of potential mothers 18 to 35 will decline by five million.”

            Moreover, even if health care is improved, deaths among the baby boom generation of the 1950s are going to go up as the numbers of the oldest age cohort rise from 15 million to 35 million by 2027, a figure that surpasses any that Russia has ever known, according to the sociologist.

             “It is possible and necessary to stimulate fertility,” he continues, “but even in the most favorably placed countries of Europe it does not exceed 1.6 children per woman. And this means that no natural growth of the population of Russia will take place.”  The only source of increase will be from immigration.

            Some officials suggest that Russia can avoid population decline by increasing life expectancy, but “the most optimistic predictions” in that regard foresee an increase only “to 70 years for both genders.” That would be an improvement over now, but in fact, as the sociologist points out, “it would only be a return to the level which existed in Russia in the 1980s.”

            The Russian government not only is not spending enough per capita on health care – its current expenditures are “two to three times less than in Bulgaria and Romania, not to mention  Sweden and Norway,” and the Russian figures will decline further unless the economy grows much faster than is likely.

            That is even more likely because the bureaucracy has become ever less interested in investing in health care now that there is widespread recognition that “Russian women will not give birth to six or seven children as in the middle of the 19th century.”  As a consequence, “plans for improving demography will remain without money and attention.”

            Almost a year ago, Elvira Nabiullina, the then economic development ministry, said that the Russian state budget couldn’t support population points, unless they had at least 100,000 residents. Concentration in Russian megalopolises is part of a worldwide trend, sociologists say, but in Russia it has taken extreme forms and become “dangerous.”

            As many people now live in Moscow and its environs than do in all Siberia, a pattern that some Russian economists argue means that Russia is following the Canadian path.  But that is nonsense: Canadian agriculture is highly profitable and based on good road and rail connections with the cities; Russia has none of those advantages.

            This fall, the Economic Development Ministry has stopped “denying the obvious. Instead, it now acknowledges that the working age cohort in the country will fall by four million over the next four years.  Supposedly as a result, productivity and hence wages will grow, as employers have to get more out of the remaining employees.

            But economist Andrey Bliznets says that it is far from clear where the investments for such a development will come from given that capital is flowing abroad in unprecedented amounts.  Instead, he says, investments and incomes may fall, and to cope with the situation, Moscow will have no choice except to raise taxes.

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