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. Last Updated: 07/27/2016

UNDP Urges Social Spending

Human development ranking
10United States
31Czech Republic
60Antigua and Barbuda
176Sierra Leone
Source: United Nations Development Program Human Development Report 2005

Russia needs to put more money toward improving state services and provide greater opportunity to the country's poorest citizens, the authors of the United Nations Development Program's annual human development index said Thursday.

The UNDP placed Russia 62nd in its ranking, which graded 177 countries' development on factors like income, life expectancy, access to health care and education.

Last year Russia ranked 57th, though the UNDP said the two indexes were not fully comparable because they used different methodologies.

"In terms of poverty, the situation in Russia is definitely improving," said Sarah Burd-Sharps, one of the report's authors. "But I think we're seeing a very slight increase in inequality of opportunity."

Russia, with per capita income of $9,500 and an average life expectancy of 65.3 years, was sandwiched in between No. 61 Malaysia and No. 63 Brazil.

Norway took first place, with per capita GDP of $38,000 and a life expectancy of 79.4 years. Famine-stricken Niger trailed the index, with a life expectancy of 44.4 years and per capita GDP of $835.

Russia was just four places short of being called a"high human development" country, falling into the index's middle category of "medium human development" countries.

Russia is making progress in the fight against poverty, the report's authors said, but the country's poor need better access to public services like health care and education.

The UNDP's appeal for more social spending dovetailed with plans announced by President Vladimir Putin earlier this week to spend an extra $4 billion on education, health care, housing and agriculture next year.

Providing the poorest 20 percent of the population with better access to hospitals, schools, roads and intangible goods such as market information for farmers, would have a catalytic effect on poverty reduction, social development and overall economic growth, Burd-Sharps said.

Russia's richest 20 percent receive 39 percent of the country's income, while the poorest 20 percent get only 8 percent, according to the report.

Also, an enormous gap between Moscow and Russia's regions persists, Burd-Sharps said. Only 3 percent of Moscow's population lives in poverty, while in rural areas the figure is as high as 50 percent.

Russia's score in the UNDP index was helped by an adult literacy rate of 99.4 percent, one of the highest in the world, but was pulled down by a low average life expectancy of 65.3 years -- well below closely ranked Brazil, which has a life expectancy of 70.1 years.

The report said that Russia had not significantly increased spending on health or education as a percentage of GDP since the collapse of the Soviet Union, and that both were still lower than military spending in proportion to the entire economy.

Russian military spending as a share of GDP fell from 12.3 percent to 4.3 percent after 1990, the report said. Education spending was 3.8 percent of GDP and health spending was 3.5 percent.

By contrast, Norway spends twice as much for education and health care in terms of GDP share, and only half as much for defense.

"It's upsetting that this peace dividend has not been invested in public spending on health care," Burd-Sharps said.

Russia's anticipated entry into the World Trade Organization should be a plus for Russia's development -- if Russia can use diplomacy effectively to advance its own interests in the WTO, she said.

"Russia should negotiate hard," said Gina Volynsky, a trade specialist at the UNDP's Eastern Europe headquarters in Bratislava.

Yet she warned that opening Russian markets and lifting tariffs too quickly could also have a negative effect.