Pension Fight Highlights Russia’s Fundamental Problem – Its Government, Gontmakher Says
July 10 – The fight over Moscow’s proposal to raise the pension age highlights
the fact that Russia’s “main problem is a state [which] doesn’t fulfill its
functions of serving” the people. Instead, it acts like an enormous corporation
that collects rents and doesn’t distribute them in an effective way, economist
Yevgeny Gontmakher says.
To justify the
increase in pension age, Russian officials are projecting a rise in the life
expectancy of Russians to 80 by 2030, Gontmakher begins, but there is no reason
to believe them, Instead, that figure may rise from the current 72 years to
only 75 because more is required for that to happen than the government is
doing. And even that will be an
Those countries which
have achieved longer life expectancies have higher incomes out of which money
for pensions can come and better medical care to ensure people at all ages are
healthy, neither of which the Russian government is promoting. Consequently,
the claims of its spokesmen should be dismissed as fantasies.
says, there must be a different view of pension-age people and their economic
and political possibilities than the one most people in Russia have. In the
West, older people serve in top posts, and they use the occasion of retirement
for retraining or moving into a new career altogether.
In Russia, on the
contrary, Gontmakher says, people view education as a one time thing allowing
them to have a job for life and then taking retirement after which they will do
little unless compelled to by pensions that are too low for survival.All that has to change; and for that to
happen, the entire system has to change.
The aging of the
population could prove to be a good thing if there is more investment in
education and health care, he argues; and it may even be accompanied by an increase
in longevity as the government says – but only if the government puts more
funds into these things that it ever has in recent years.
need to be willing to put more money aside for pensions both directly and via
the government, the economist argues; but to do that, they must be able to
trust the government not to steal it for its own purposes. There is no reason
for them to do that in either case.
On the one hand,
the government now controls the banking system and siphons off funds from
long-term savings accounts rather than protecting them. And on the other, it
uses pension contributions to the government as simply another source of
revenue for whatever it wants to do to meet its own purposes.
Gontmakher, trust must be restored; and he argues that one way to do that is to
have the pension age adjustment begin only in January 2025 and then only
gradually rather than all at once.There
is likely to be a softening of the reform this fall but not a wholesale
revision of that kind.
recalls that Vladimir Putin said in his message to the Federal Assembly on
March 1 that “the greatest threat for Russia is falling behind.’I agree with that one hundred percent,”
But what Putin
means by this and what is required are too different things. It isn’t so much
that the Russian population has fewer computers and robots.Rather, there is a “global” revolution going
on as far as the organization of society is concerned.” That that is where the
behind is in the most important area: in the development of the human being.
For the country this can end poorly [because] our Russian individual will
become non-competitive” with others.