Making Life Easier for Vegans in Petersburg

Анастасия Емельянова, основатель VegCode
Anastasia Yemelyanova, VegCode founder. Photo courtesy of Sergei Yermokhin and Delovoi Peterburg

A Barcode for Vegans: Petersburgers Develop App for Identifying Vegan Products Through Barcode
Inna Reikhard
Delovoi Peterburg
December 12, 2018

App Interests a Thousand Users in Single Woeek
Petersburgers Anastasia Yemelyanova, Alyona Kabardinova, and Nikolai Dubrovsky have developed the mobile VegCode app (Vegan IT LLC). Made available to users in early December, the app is designed for vegans. It lets shoppers use barcodes to figure out whether or not items in stores contain animal products and have been animal tested. The app currently has a database of 26,000 items marked “vegan” and “non-vegan.” Most of the items are edibles and cosmetics. Household cleaning products will soon be added to the list.

A Growing Segment
As the designers explained, there is a demand for the app, since the number of vegans in Russia has been growing at a rate of fifty percent annually. There are now approximately 150,000 vegans in Russia.

The team has been preparing to expand the app’s functionality by adding a map of vegan shops, cafes, and producers. The app, which operates in Russia and the CIS, will earn money by advertising the services of these businesses.

Attracting Investors
“Unlike Western Europe and the US, the problem of identifying vegan goods is much gnarlier in Russia, because there is not a well-defined system for labeling goods and far fewer speciality magazines,” Yemelyanova explains.

For example, you might find a retail item labeled “Lenten,” but it might not be appropriate for vegans. On the other hand, producers sometimes have no clue their product lines include ethical products.

The startuppers commenced work on the app in early 2018. They raised money on the crowdfunding website Planeta. They also made it to the finals of Philtech Accelerator, winning a 100,000-ruble prize from the Higher School of Economics. The team got another 300,000 rubles from venture investor Alexander Rumyantsev.

Yemelyanova says the hardest thing was compiling the database of retail items marked “vegan.”

“We get information about the content of products from open sources. Our users can also add items via the app. After they are moderated, the new items are listed in the database,” a spokesperson for the company said.

In a week’s time, the nearly thousand users who downloaded the app have suggested 4,000 more items for inclusion in the database.

Prospects
The market for vegan products in Petersburg has been growing rapidly. In 2015, sales were estimated at 80 million rubles [approx. 1 million euros]. In 2017, this figure climbed to 400 million rubles [approx. 5.3 million euros].

Petersburg has several dozen fast food outlets and shops catering to vegans, including Bunker and B12 Vegan Shop.

Petersburg is also home to a small number of vegan producers. Businessman Ivan Ivanov, for example, makes lactose-free dairy products, wheat steaks, and other edibles under the Primal Soymilk brand. Verde produces cheese and curd. Veganov makes soy and vegetable sausages, while Soymik produces soy-based products.

“Petersburg has the most thriving vegan movement in Russia. The city also has a growing number of vegan producers. Mainly, however, these are small businesses in which not a lot of money has been invested. Their products are usually not sold in retail chains, but I think the day when they’ll be sold there is not far off,” says Ivanov.

Ivanov says he had thought himself about making an app for identifying vegan products.

Translated by the Russian Reader

House of Cards

mir-sberbankA disembodied hand proudly holding a Sberbank-issued Mir card. Photo courtesy of PressTV

Central Bank Preparing for Cutoff of Some Banks from International Payment Systems
Regulator Asks Small Banks to Have Backup Intermediary Able to Service Their Cards
Anna Yeryomina
Vedomosti
December 6, 2018

The Russian Central Bank has asked small banks to find a backup partner that would be able to service their bank cards. This would be an asset if their current intermediary banks were cut off from international payment systems.

The Central Bank is concerned with the continuity of card transactions in banks that work with payment systems indirectly, that is, via an intermediary bank. The regulating authority has advised these indirect clients of payment systems to contract with another bank, besides their primary intermediary bank, that could supply them with access to card payment systems. Five bankers confirmed to us they had received the memorandum.

The memorandum also says the contract should provide for a test exchange of information when integrating with the new intermediary banks. It also states payment systems should draft an action plan and recommend it to their participating banks.

The major intermediary banks are Payment Center Credit Union, Uralsib, VTB Bank, Rosbank, and Promsvyazbank.

A Central Bank spokesperson stressed the memorandum was only advisory, but it was based on international recommendations for risk management in payment systems. The need for banks to contract with backup intermediary banks is not so obvious. According to several of its recipients, in early autumn the Central Bank had sent banks a letter urging them to draft plans to ensure the continuity of payments, but it had not recommended any specific measures.

Switching intermediary banks is a time-consuming, expensive process that takes between three to six months, notes Maya Glotova, director of Kartstandart, a processing center that partners with Payment Center Credit Union. The most high-profile case occurred in 2013 after Master Bank’s license was revoked. As Glotova recalls, Master Bank had functioned as an intermediary bank in payment systems and provided payment processing services. Small banks had to halt their operations for several weeks, and several of them had to leave the payments business. Glotova estimates it would cost a single bank more than $100,000 to switch intermediary banks in the three payment systems.

Intermediary banks had little to say about the memorandum. A spokesperson at Promsvyazbank promised to follow the Central Bank’s recommendations, while a spokesperson at VTB Bank said their own intermediary program had worked well.

Several bankers believe the Central Bank is hedging not only against the collapse of intermediary banks but also potential sanctions, which are fraught with the possibility that intermediary banks would be cut off from Visa and Mastercard, as occurred in 2014 and 2015. The United States has been drafting a new set of sanctions that could affect major banks. Payments within Russia would not be affected: these transactions are processed by the National Payment Card System (NSPK). Russian bank cards, however, would not function abroad. (A spokesperson for NSPK, which operates the Mir payment system, said they had not received the Central Bank’s memorandum.)

VTB Bank had drafted a plan to counter sanctions, its president, Andrei Kostin, told the TV channel Rossiya 24 in October.

“We have been mapping out with both the government and the Central Bank how to avoid the consequences, especially for individuals and companies. I think we can overcome them. I don’t think the sanctions will be wholesale and directed against the entire financial sector,” Kostin said.

Translated by the Russian Reader

Migrant Worker Blues

OLYMPUS DIGITAL CAMERACentral Asian migrant workers queuing outside the Russian Interior Ministry’s work permit application center on Red Textile Worker Street in St. Petersburg. Photo by the Russian Reader

Should Everyone Disappear into the Shadows? What the Fee Increase for Migrant Worker Permits Entails
Yekaterina Ivashchenko
Fergana News
November 29, 2018

The license [in Russian, patent] system for foreign nationals seeking permission to work in Russia was introduced in 2015. The cost of a work permit has varied from one region to the next. In Moscow, for example, it initially cost 4,000 rubles a month. In 2016, the price rose by 5% to 4,200 rubles, and in 2018, it rose by 7% to 4,500 rubles.

It is absolutely necessary to have a work permit. Without it, a migrant worker faces up to 7,000 rubles in fines, expulsion from Russia, and a ban on entering the country for a period of three to ten years. Employers who hire employees without work permits are punishable by fines, and their operations can be suspended for up to ninety days.

Something important happened on November 21, 2018. The Moscow City Duma approved a law bill increasing the cost of a work permit in Moscow. In 2019, it will rise by 500 rubles (11%) and cost 5,000 rubles a month (approx. $75).

The next day, November 22, Moscow Mayor Sergei Sobyanin said the city’s revenues from legal migrant workers had been growing and would exceed 16 billion rubles ($241 million) by year’s end.

“By paying such a high price for permits, migrant workers have come to occupy a fair position vis-à-vis Russian nationals [rossiyane] working in Moscow, because in the past they paid nothing at all, and, of course, it was profitable to employ them, but the situation has changed today,” said the mayor.

On January 1, 2019, the cost of a license for migrant workers seeking employment in Moscow Region will increase by 450 rubles. The Moscow Region work permit, which cost 4,300 rubles ($64.60) in 2018, will cost 4,750 rubles ($71.50) per month in 2019.

Taras Yefimov, chair of the Moscow Regional Duma’s budget, finance and tax committee, said the measure would enrich the region’s coffers by around one billion rubles [approx. $15 million]. In 2018, Moscow Region made six billion rubles [approx. $90.5 million] on migrant work permits.

St. Petersburg has decided to raise the price of the work permit from 3,500 to 3,800 rubles a month. City officials noted the decision was made because foreign nationals had begun earning considerably more money.

Filling out the forms for extending a work permit. Photo courtesy of Fmskam.ru and Fergana News

Wages Are Not Growing
Svetlana Salamova, director of Migranto.ru, a website for migrant workers looking for jobs and employers seeking to hire migrant workers, has not seen the real growth in the wages of migrant workers that officials have cited.

“The wages of foreign nationals who are employed on the basis of work permits has remained at the level of 29,000 rubles to 35,000 rubles [$435–$525] a month. Maybe the Moscow authorities are focused on high-profile specialists who make 168,000 rubles a month officially?” Salamova sarcastically wondered.

Salamova has noticed wage increases only among Kyrgyz nationals. After Kyrgyzstan joined the EAEU (Eurasian Economic Union), employers offered them 40,000 to 45,000 rubles a month.

“But they work without permits. (EAEU nationals can work in Russia without permits as long as they have an employment contract — Fergana News.) Besides, many Kyrgyzstanis agree to low wages of 19,000 to 20,000 rubles a month. They work part time in several places at once, and so ultimately they make a decent amount of money,” explained Salamova.

Salamova did not discount the possibility that fees for work permits have been raised in light of the fact that employers must index wages for inflation as of the new year. Perhaps the authorities decided to increase the cost of permits for foreign national because they took into account this indexation of wages on the Moscow job market.

Immigration center in Moscow. Photo courtesy of Mos.ru and Fergana News

But what do migrant workers themselves have to say about it?

“Since 2015, the fee for the work permit has increased three times, but I have not even once received a raise. We spend little as it is: 4,500 rubles for the permit, plus the fee for residence registration; 6,000 rubles on rent, 5,000 on groceries, 2,000 on transportation. I sometimes buy clothes and medicines, and there are unforeseen expenses, like when my phone stops working. So, I have only 10,000 rubles left over from my monthly salary of 35,000 rubles. The latest 500-ruble increase will definitely affect my expenses. 6,000 rubles a year is a lot of money: an average family in Tajikistan could live for a month on that amount. It means my relatives back home will have to get by one month of the year without receiving a remittance from me,” said Magomed, who comes from Khujand, Tajikistan’s second-largest city.

Pushed into the Gray Economy
In June 2017, Mayor Sobyanin said the problem of illegal migrant workers in Moscow had been solved and had ceased to be a source of concern for Muscovites. Most migrant workers were employed legally and duly paid their taxes.

Experts believe the increase in the price of the work permit could lead to a rise in the number of foreign workers who decide not to pay taxes.

“The cost of the work permit will increase by 11%. An extra 6,000 rubles a year might not seem like a huge amount of money. But for migrant workers, who earn this money literally with their blood, living far from their families, and undergoing numerous hardships and risks, this is not a small amount at all: the overall cost of a permit for a year will be 60,000 rubles or $900. Some migrant workers will thus decide to go off the books. Consequently, Moscow’s budget is unlikely to get a huge boost, but the city will be supporting a policy of pushing migrant workers into the gray economy with all the attendant social consequences,” says Professor Sergey Abashin.

“It is odd that Moscow MPs say we will start earning more. Every migrant worker pays around 12,000 rubles to get a work permit in the first place. Then every month he pays for the work permit and his residence registration, he pays the rent, and he buys groceries. He even has to pay bribes to the police. People are taking money from us at every turn. What will we have left to send home?” said Muhammad, who is originally from Samarkand.

Batyrzhon Shermuhammad, a lawyer and founder of the website Migrant, also sees no signs of a wage increase.

“If you look at the want ads, you will see that the wages of migrant workers who are employed on the basis of work permits range from 25,000 rubles to 35,000 rubles a month. We monitor the job market, and no one mentions anything about a salary of 40,000 rubles a month. On the contrary, the economic crisis in Russia has been deepening. There is inflation, and the dollar/ruble exchange rate has been rising, which affects the remittances sent by migrant workers,” Shermuhammad said.

The latest increase in the cost of the work permit will force migrant workers to retreat into the shadows, he argues.

“One could understand the increase if the economic situation had improved, but the trends are negative: the prices in shops have increased, and the dollar has become more expensive vis-à-vis the ruble. People have no money, and so they have been having problems with residence registrations. Also, by law you cannot be late paying for your work permit even by a day. If a migrant worker is paid his wages late, he cannot pay the fee for his work permit, and he has no way of shelling out approximately 12,000 rubles to have a new work permit drawn up. While introduction of the work permit system brought migrant workers out of the shadows, the subsequent tightening of immigration laws and the increase in their expenses has been leaving migrant workers with fewer chances to stay legal, even if they would want to,” Shermuhammad said.

Migrant workers from Kyrgyzstan. Photo courtesy of Kloop.kg and Fergana News

“Even though I make good money, a 6,000-ruble increase in the price of the work permit is a serious expense, and I have huge expenses aside from the permit. My mother, sister, and I pay 33,000 rubles a month for a place to live. That is 11,000 rubles per person, plus utilities. In addition, I have to pay the fees for my studies twice a year: that is another 100,000 rubles each time. We don’t spend a lot on food, no more than 10,000 rubles per person a month. I also spend money on transportation, clothes, and gifts, and I spend 5,000 to 7,000 rubles a month for English lessons. Lately, we have not been sending a lot of money home, $200 to $300 per month at most. Mom and I used to be able to save money, but in the last six months our expenses have skyrocketed, and after the new year they will increase even more due to the work permit. Basically, the increase in the work permit fee means I won’t be able to pay for English lessons for a month,” said Ilkhom, who hails from Tashkent.

“For migrant workers, 500 rubles is a mobile phone connection for a month,” said human rights active Karimjon Yorov. “It is the cost of a week’s worth of subway trips. It is two lunches, finally. For families with children, it means being able to buy school supplies or pay for school lunches. In short, 500 rubles is a lot of money.”

Yorov argues that raising the cost of the work permit will make migrant workers not want to pay for it, meaning that revenues to Moscow’s coffers will actually decrease.

“Migrant workers will prefer to work without a permit and cross the border every three months. Currently, a trip to the border and back (i.e., exit and re-entry) costs 8,000 rubles in total, while the cost of a work permit for three months is 13,500 rubles, meaning they save 5,500 rubles by exiting Russia and re-entering it. This comes to 22,000 rubles, plus 12,000 rubles for the initial paperwork. The total is 34,000 rubles, which is the same as the cost of round-trip plane ticket to Uzbekistan. When you do the maths, it makes more financial sense for migrant workers to be off the books. The authorities themselves are forcing migrant workers underground, especially now that the laws on immigration registration have been tightened. Whether you get a work permit or not, if you do not live at the address where you are registered, you will be deported. Migrant workers will emerge from the underground only when the law on immigration registration has been abolished,” Yorov concluded.

Thanks to Sergey Abashin for the heads-up. Translated by the Russian Reader

Atlantic City

There could hardly be a place in Petersburg more dispiriting than the far west end of Savushkin Street (of troll factory fame), but the sheer dreadfulness of the post-Soviet new estates, business centers, and shopping malls that have sprung up there and all around the city’s outskirts is exacerbated by the tendency of their developers to burden them with impossibly escapist and chirpy monikers. So, I emerged from the new Begovaya subway station last Sunday to find myself (briefly) in Atlantic City. {TRR}

atlantic city-1

atlantic city-2

Photos by the Russian Reader

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Anti-Central Asian Migrant Worker Dragnet in Tula

uzbek cuisineRussian riot police (OMON) prepare to enter a business identified as “Uzbek Cuisine” in the Central Market area in Tula during yesterday’s “total spot checks.” Photo courtesy of Moskovsky Komsomolets in Tula

Unprecedented Document Checks in Tula: Migrant Workers Lined Up in Columns Many Meters Long
MK v Tule (Moskovsky Komsomolets in Tula)
October 20, 2018

Беспрецедентные проверки в Туле: мигрантов выстроили в многометровые колонны

The total checks of migrant workers in Tula have moved beyond the Central Market. According to Moskovsky Komsomolet in Tula‘s correspondent, law enforcers from the Tula Regional Office of the Interior Ministry, the riot police (OMON), the Rapid Deployment Special Force (SOBR), and the Russian National Guard have inspected the streets adjacent to the market.

In particular, visitors from the Asian republics [sic] were also checked on Pirogov and Kaminsky Streets. Law enforcers looked to see whether people had documents [sic], residence registration stamps, and work permits.

Approximately two hundred migrants workers were formed into a long column that grew longer by the minute. Checks for violations of immigration laws proceeded apace.

The total spot checks for illegals [sic] in Tula started at 10 a.m. on October 20, when law enforcers descended on the Khlebnaya Square area en masse. The entire market was cordoned off.

All photos courtesy of Moskovsky Komsomolets in Tula. Translated by the Russian Reader. Thanks to Sergey Abashin and Valentina Chupik for the heads-up.

Migrant workers, most but not all of them hailing from the former Soviet Central Asian republics of Uzbekistan, Kyrgyzstan, and Tajikistan, have been perfect scapegoats for the Putinist police state, which from day one (nearly twenty years ago) has increased its hold on public opinion through an endless series of semi-official campaigns against nefarious aliens and “national traitors.”

So-called law enforcement officers have long ago turned shaking down migrant workers—something literally every resident of every major city in Russia has seen with their own eyes thousands of times in recent years, but which they have “disappeared” along with most of society’s supposedly intractable problems—into a land office business, that is, a source of easy, quick cash.

In any case, as likely as not, most of the men shown in the photographs, above, probably had all the papers they needed to live and work legally in Russia, including residence registration papers and work permits. Unless they have temporary or permanent residence permits, they would have to renew these papers every three months in a process that is every bit as wasteful, time consuming, and humiliating as yesterday’s dragnet in Tula.

To add to their woes, the top brass of Russia’s dizzying of ever-proliferating, interwing, and competing law enforcement agencies and secret services regularly trot out cooked-up stats showing, allegedly, that migrant workers commit either an outsized proportion of all crimes in Russia or the majority of crimes. Human rights advocates can easily punch holes in these barefaced attempts to generate moral panics while simultaneously proving the police state’s continued indispensability, but these counterarguments rarely if ever get the audience enjoyed by Moskovsky Komsolomets, a mass-circulation national tabloid, based in Moscow, that for many years now has published local supplements in Russia’s numerous, far-flung regions.

Owned until 1991 by the Soviet Communist Youth League (Komsomol), Moskovsky Komsolets abandoned whatever socialist and international principles it had long ago, opting for sensationalism and high circulations. According to the BBC, the newspaper had an average issue readership of 1,215,000 in 2008, making it Russia’s second most read newspaper, after Argumenty i Fakty. Given its heavy internet and social media presence, those readership figures have certainly only gone up in the intervening years.

MK, as it usually styles itself nowadays, perhaps to make us forget about its humble socialist origins, was also identified in 2004 by the Sova Center and the Moscow Helsinki Group as the leading purveyor of hate speech amongst Russia’s national print media outlets. Certainly, yesterday’s “photo essay” in MK in Tula was an attempt to whip up a moral panic while boosting readership.

The newspaper, however, is not primarily responsible for the fact that Russian officialdom and to a certain extent, Russian society at large demonizes, terrorizes, and racially profiles the cheap, supposedly expendable immigrant workforce that keeps the perennially flailing Russian economy afloat.

If you want to learn more about the bigger picture when it comes to migrant workers in Russia, a story egregiously underreported by the international press and reported mostly in the sensationalist, racist manner, displayed above, by the Russian press, I would recommend the following articles, published on this website in the past year, plus Professor Sergey Abashin’s now-classic essay “Migrants and Movements in Central Asia,” published here three years ago. {TRR}

 

Falling

200 ruble note-1

200 ruble note-2A year ago, Russian Central Bank chief Elvira Nabiullina triumphantly introduced the new Crimea-themed two hundred ruble banknote into circulation. Since the economy is shaped more by flows of goods, resources, people, services, knowledge, and money, and the actions of ordinary people, decision makers, and the snake oil salesmen known as capitalists, and less by puerile revanchist neo-imperalist symbolism, the new banknote, pegged at €2.90 by Deutsche Welle only a year ago, is now worth a mere €2.65. I am keeping my specimen as a souvenir of the current bad times until better days arrive. Image by the Russian Reader

Fall in Real Incomes of Russians Accelerated Sharply in September
Economists Say Government’s Forecast No Longer Realistic
Tatyana Lomskaya
Vedomosti
October 17, 2018

Real incomes of Russians have declined for a second month in a row, Rosstat has reported. Their decline accelerated in September to 1.5% in annual terms after falling by 0.9% in August. Prior to that, they had grown for seven months, from the start of the year, by 1.7%. (This figure excludes the one-time 5,000-ruble payments made to pensioners in January 2017.) Real wages accelerated their growth in September, from 7.2% to 6.8% in the previous month.

Incomes of ordinary Russian had been falling for four years in a row, from 2014 to 2017, resuming growth only this year. In the first half of the year, they increased by 2.6%, mainly due to wage increases, notes Igor Polyakov from the Center for Macroeconomic Analysis and Short-Term Forecasting (TsMAKP). Business income increased only by 0.7%, while social transfers (excluding the one-time payment to pensioners) increased by 1.2%, which was significantly weaker than all incomes generally. Other sources of income decreased. There was a slight increase in incomes derived from property, but incomes received from securities and deposits decreased, as did, apparently, incomes from unreported activity, says Mr. Polyakov. He argues it is unlikely circumstances have changed considerably in recent months.

But the anxiety of Russians caused by the volatility of financial markets has increased, says Mr. Polyakov. People have taken to withdrawing cash from foreign currency accounts and transferring it to safe deposit boxes, as well as spending it abroad on holiday. Rosstat cannot register these expenditures and thus reduces its assessment of miscellaneous income. In August, the public’s net demand for US dollars grew by comparison with July from $0.8 billion to $1.7 billion, an increase of nearly 53%, the Central Bank reported.

Retail growth slowed in September to 2.2% in annual terms from 2.8% a month earlier. It is likely the public preferred buying foreign currency while curtailing consumption, argues Mr. Polyakov.

The drop in incomes combined with the serious increase in wages [sic] remains a mystery, writes Dmitry Polevoy, chief economist at the Russian Direct Investment Fund. The growth in real incomes in the first half of 2018 was mainly due to the presidential election campaign, notes Vladimir Tikhomirov, chief economist at BCS Global Markets. Salaries in the public sector and pensions increased rapidly. [That is, the Kremlin bribed Russians directly dependent on its largesse to get out the vote for President-for-Life Vladimir Putin—TRR.] After the election, growth stalled. And, after a palpable devaluation of the ruble in April and accelerating inflation, a dip in incomes was anticipated, argues Mr. Tikhomirov. In September, prices for imported goods rose. In addition, the seasonal discount on fruits and vegetables ended, and the July increase in utilities rates made itself felt, explains Mr. Tikhomirov.

By the end of the year, the incomes of Russians will gradually decline a little, while overall incomes will grow less than 1% on the year, predicts Mr. Tikhomirov. Real incomes might grow by 2% on the year, counters Mr. Polyakov. In any case, this is noticeably lower than official forecasts. The Russian Economic Development Ministry anticipated a 3.4% growth in real incomes in 2018.

Real incomes of ordinary Russians fell by 1.7% in 2017, although the government had forecast a 1.3% increase, the Federal Audit Chamber noted in its opinion on the draft federal budget for 2019–2021. When the forecast was corrected, incomes had decline dsteadily from the beginning of the year, and there were no preconditions for rapid growth by year’s end, the auditors write.

Income growth depends on whether private enterprise will increase wages, argues Mr. Polyakov, but thos wages will be subject to the planned rise in the VAT to 20% in 2019.

President Putin has set a goal of halving poverty by 2024. (The official poverty rate last year was 13.2% of the populace.) The Economic Development Ministry’s forecast significantly increased the growth rate of real wages and anticipated higher growth rates for real incomes, which has raised doubts at the Audit Chamber. There is no wage increase for public sector employees planned in 2019, while the growth of wages in the private sector will depend on growths in productivity.

Rank-and-file Russians have been forced into debt, write analysts from RANEPA and the Gaidar Institute in their opinion on the draft budget. By mid 2018, Russians owed banks 13.7 trillion rubles (approx. 181 billion euros), an increase of 19% from the previous year, they write, and an amount that significantly outpaces the increase in nominal incomes. It is an alarming trend that means an increase in the amounts of money ordinary Russians spend servicing loans, experts warn.

Translated by the Russian Reader

Macaroni Is a Vegetable

“3,500 rubles.” Graphic courtesy of Vedomosti. At the current exchange rate, 3,500 rubles is worth approximately 46 euros.

Some Can Only Afford Macaroni, But Some Cannot Even Afford That
Saratov Official’s Suggestion to Spend 3,500 Rubles on Food a Month Is a Reality for Millions of Russians
Tatyana Lomskaya
Vedomosti
October 19, 2018

The statement by Natalya Sokolova, minister for labor and employment in Saratov Region, that 3,500 rubles a month was enough for the “minimum physiological needs” of Saratov pensioners so angered the public that she was made an ex-minister in a matter of days. Ms. Sokolova had insisted it was not worth raising the monthly minimum cost of living for unemployed pensioners by 500 rubles: an increase of 288 rubles would be enough.

“Macaroni always costs the same,” she said.

Ms. Sokolova, however, refused to go on such a diet by way of an experiment. Her status supposedly did not allow it.

But is it only Saratov pensioners who subsit on such a meager diet? Let’s compare them with other regions.

The authorities calculate the amount of the mountly minimum cost of living on the basis of the cost of the monthly minimum food basket. They add to its cost (which is 3,500 rubles in the case of Saratov pensioners) the exact same amount of money for paying for non-food items and services, for example, clothing, housing, and utilities. The monthly minimum cost of living for pensioners in Saratov Region was therefore 7,176 rubles (95 euros) in the second quarter of 2018. It was 9,354 rubles (124 euros) for the region’s able-bodied residents, and 9,022 rubles (120 euros) for its children.

That is not much, but there are even poorer regions in Russia. For example, in Belgorod Region, an able-bodied resident should be able to live on 8,995 rubles (120 euros) a month, while a pensioner should be able to survive on 6,951 rubles (92 euros) a month. In Mordovia, the corresponding figures are 9,132 rubles (121 euros) and 6,975 rubles (93 euros) a month; in Chuvashia, 9,248 rubles (123 euros) and 7,101 rubles (94 euros). The federal monthly minimum cost of living is 11,280 rubles (150 euros) for an able-bodied person, 8,583 rubles (114 euros) for a pensioner, and 10,390 rubles (138 euros) for a child. Meaning that, on average, the monthly diet in Russia as a whole is only a little more expensive than the Saratov diet: between 4,000 rubles (53 euros) and 5,500 rubles (73 rubles).

The monthly minimum food basket includes the cheapest groceries. It is meant to provide an individual with the necessary amount of protein, fats, and carbohydrates for a month, explains Liliya Ovcharova, director of the Institute for Social Policy at the Higher School of Economics. The basket mainly contains baked goods, a few eggs, lots of porridge, milk, and an altogether small amount of meat. According to Ms. Ovcharova, the diet will keep a person alive. It is another matter that it is “tasteless” and below rational norms of consumption, flagrantly lacking in meat, vegetables, and fruit. It is not surprising people find this diet unacceptable.

In 2017, however, the incomes of 13.2% of Russians were below the minimum cost of living, meaning that 18.9 million people in Russia could not afford even the macaroni snubbed by the ex-minister in Saratov. This figure includes children: one in five Russian children lives in family whose per capita income is below the minimum cost of living. Among old-age pensioners, however, there is practically no one who is officially poor. If their incomes are below the minimum cost of living for pensioners, they receive an additional payment to help them top up to the minimum. Children in large families are not eligible for these additional payments.

The question is what is now the more realistic approach: making the diet more humane or reducing the number of people who cannot afford even an inhumane diet. For example, the government could first reduce the number of children in need to 5%, and then improve the diet. Vladimir Putin ordered the government to reduce the number of needy people by half by 2024. If we now increased the minimum cost of living by 50%, the number of poor people would, on the contrary, double, Ms. Ovcharova estimates.

But the number of poor people can be measured not only on the basis of the minimum grocery basket, a standard that was introduced back in the 1990s. In European countries, for example, people with incomes of 50% of the median have been considered poor since the 1950s. At the same time, the Europeans base their calculations not on minimal but on rational norms of food consumption, Ms. Ovcharova notes. They compute how many specific vitamins, minerals, iron, and calcium a person needs. This food basket is much pricier and presupposes a completely different level of consumption and well-being.

It is probably best not to count how many Saratov pensioners can afford this food basket until 2024.

Translated by the Russian Reader