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UN World Summit 14-16 September 2005 Working out of poverty in Russia

Despite the Russian Federation's recovery from financial collapse in 1998, official statistics show that almost one person out of five still lives in poverty. What's more, a high percentage of those living in poverty are Russia's so-called 'working poor': at least half actually have jobs. ILO on line reports from Russia's North West where the ILO recently launched a project to promote employment and reduce poverty.

Article | 15 September 2005

VSEVOLOZHSK, Russia (ILO on line) - Sergey and his wife Oxana both work - he as a teacher, she as a physician - but their combined earnings total just 4,500 rubles a month (about US$ 157). As a low income family, they also receive a benefit of 70 rubles (about US$ 2.50) for each of their two children. The total amounts to about US$ 162 per month - far below the official poverty line of US$ 390.

Sergey and Oxana are typical of Russia's working poor, many of whom are concentrated in education, culture, health and other public services. Other vulnerable groups include the rural population, those living in small and remote towns, children and the unemployed, people with low education, and those living in depressed regions.

How do they cope? Tight budgets, few purchases, a lifestyle limited to the bare necessities. "The worst month for me is September when our kids go to school", Oxana says. "Children grow so fast, and every year we need to buy new clothes for school, also notebooks and other things. I go over the list, trying to limit myself to the absolutely necessary items, and I buy only at sales, but I still cannot go below US$ 150.00. This creates a huge hole in our budget, and I don't think we'll be able to pay all our debts before December".

According to Rosstat, the statistical office of the Russian Federation, 18 per cent of the population, or about 30 million people today lives in poverty. Regional differences are dramatic, as poverty levels vary from 8-9 per cent to 70 per cent in some areas in 2004.

Though the Russian Federation doesn't have a national anti-poverty strategy so far, President Vladimir Putin has put forward an ambitious programme aimed at achieving sustainable growth and development for the country. Poverty reduction is one of its most urgent national goals. Other priority areas aim at doubling the country's GDP, reforming the health, housing and education sectors, and improving social conditions for army personnel. The UN Millennium Development Goals (MDGs) would be the foundation of such a Russian strategy that could go well beyond the global goals.

"In the area of poverty reduction this includes support to regional pilot programmes with an emphasis on employment generation and training, where the ILO clearly has an important role to play", says Pauline Barrett-Reid, former director of the ILO Moscow office. "This is why we launched a pilot project based on the ILO Decent Work agenda to promote employment and reduce poverty in the North West of the country".

The Russian Ministry of Labour and Social Development proposed the North West Federal Okrug (district) as a project pilot territory, and the choice wasn't accidental. The okrug that comprises 11 regions with a total population of 14 million, has experienced most types of poverty found today in Russia, including low wages for the working population. Within the district itself, there are important differences of poverty levels ranging from 16.5 per cent in St. Petersburg to 35.1 per cent in the Kaliningrad region.

The ILO had already launched various training courses and seminars for regional administrations, and employers' and workers' organizations to promote Decent Work, and to learn how to apply the ILO's anti-poverty tools at the regional level. The programme also provided a comprehensive overview on the poverty situation across the regions of the okrug, or district, and fostered the development of policy recommendations regarding standards of living, as well as income, wage and labour market policies.

"A set of studies prepared during the project found keen interest among of all those who deal with the poverty issue, and ILO Moscow now receives numerous requests for copies", Ms. Barrett-Reid said. "The most popular study is certainly the one on social benefits' monetization - a burning issue in today's Russia." Through the recent monetization of social benefits the Russian government tried to reduce the social burden on the state, which caused social unrest last January.

Project coordinator Rimma Kalinchenko says the project has just been completed and appears to have achieved much. "At the same time we have a feeling of being at the very beginning of a long way still to go", she said. "We have already received proposals from donors who offered their support to continue our work. But most important for us is the fact that the Decent Work approach is being increasingly recognized and applied to poverty reduction not only in the North West but also in other regions of Russia".