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. Last Updated: 07/27/2016

How to Help the Poor

Transforming the economy has meant riches for a few and substantially lowered incomes for many. But who really needs help? What do the Russians themselves think about this? The European Union's Municipal Economic and Social Reform Initiative of Tacis, or MERIT, surveyed the economic problems in Russia at the town level. Focus group research carried out in a number of provincial towns shows that people want specific help f to get their children educated and fed, to have reliable and regular heating, water and power and the like. People are looking for locally organized programs to deal with malnutrition or runaway kids and second-hand clothes markets and credit unions.

Poverty has grown in Russia. Government statistics show 35 percent of the population with incomes below the subsistence minimum. That level is stringently set according to nutritional criteria and obligatory expenditures. Some researchers consider poverty to be higher, given the drop in living standards during the 1990s, while others argue that the "shadow economy" provides for undeclared earnings. Accordingly, it is difficult to design a cash benefits system targeted at the poorest families. Another approach must be found.

Analysis points to a concentration of poverty in smaller towns and the countryside. The MERIT project investigated the situation in 70 coal-mining towns located all over Russia and is working with six towns, including Kiselevsk and Prokopiyevsk, near the city of Novokuznetsk in Siberia, Venev, close to Tula, and Novoshakhtinsk in the southwestern region of Rostov.

The average size of a coal-mining town is under 80,000 inhabitants. Employment levels have fallen sharply, and in some places mines have closed completely. Other factories supplying textiles, clothing, furniture and machinery have shut or have scaled back. In economic terms, Russian coal-mining towns are a microcosm for Russia as a whole and, with formerly well-paid workers and better than average social facilities, were considered better off in Soviet times. But demographically, the population is shrinking faster, preschool attendance is falling off and crime seems to be higher. Good levels of nutrition, infant care and access to early and higher education are being eroded quickly. New jobs in services are not being created quickly enough to replace the jobs lost from heavy or light industry.

Other "single-industry" towns show similar problems. Stalinist industrialization left these towns ill-prepared for the market economy. Towns were built around a strategic industry. Old market towns were cut off from their agricultural hinterland by the collectivization of agriculture. Big cities have many more opportunities as centers of learning and services. It is not surprising that low-income households comprise 60 percent of all households in single-industry towns, compared to 40 percent nationwide. Fewer job opportunities perpetuate the cycle of low incomes and the "cash-less economy" f forcing the accumulation of debts by the local authority and utilities. Only 15 percent of local budget commitments are paid in cash, the balance being covered by IOUs and chronic deficits.

School teachers and social workers in three such towns in the Urals and the Kuzbass region of Siberia told our researchers, from the Institute for Comparative Labor Relations Research, that the numbers of stray or hungry children are growing. Very little financial assistance is provided by the local administrations. Trust funds offer one-time help, but many consider the assessment process humiliating and the benefits inadequate. Officials tend to have a negative attitude toward the poor. "We are not accustomed to speak of the poor," said one local official from Prokopiyevsk in Siberia. "We have low-income categories and we have socially vulnerable groups." The latter are considered to be jobless or low-paid women, pensioners or the sick. Another leading official from the same town argued: "The majority of poor people are those unwilling to work: asocial elements." Similar opinions were offered in Kiselevsk, Siberia and Kize, which is in the western Ural region of Perm.

Charity from businesspeople exists but there are too few such entrepreneurs. Most help is given by friends, family and neighbors in the form of small loans repaid when it is possible. Teenagers are willing to help elderly people if this can be organized. Teachers, who are poorly paid themselves, collect money to feed pupils and provide them with pencils and notebooks. The poor are helping each other.

Focus groups prioritized the problem of educating children from low-income households and easing the constraints of setting up a small business. People seem to want small-scale, locally responsive solutions, realizing that the state cannot provide a decent living for all any longer. Schools and clinics come into regular contact with people in need but have no mandate to act outside of professional boundaries.

The state should not treat poverty as a function of a threshold income. Central and local governments must adopt a wider definition of who is "needy" and empower the front-line public servants to identify what help is needed and provide it directly within the school or clinic or through small grants and loans. Local authorities are starting to realize the need to work with the community and nongovernmental organizations. Towns cooperating with the MERIT project are ready to disseminate good practice.

Greg Kaser has just completed an 18-month term as project manager for the Municipal Economic and Social Reform Initiative of Tacis, part of the European Union's program of technical assistance and training for Eastern Europe, the Caucasus and Central Asia. He contributed this comment to The Moscow Times.