Vladimir Putin held a meeting of the Council for Strategic Development and National Projects, in which he noted that "the West's calculation to destroy the Russian economy did not materialize."
“The price level in Russia – after a serious surge in March-April – has practically not changed since May, and the Russian ruble has become one of the strongest currencies in the world since the beginning of the year. <…>
As a result, in the third quarter, the poverty rate fell to 10.5 percent. Of course, this is a small movement, but a movement in the right direction. The incomes of the poorest part of the population also grew by 27.8 percent in nominal terms – in nominal terms, I want to emphasize this and I will say again that we are talking about people with the lowest incomes – which allowed us to reduce the level of inequality a little bit.”
Of course, it is more profitable for Putin to compare the price level not with last year's pre-war values, but with the spring ones, when after the start of the war against the backdrop of unprecedented sanctions, prices jumped up and never returned to the previous level. However, I would still like to remind you that there is a “people's monitoring” of prices, and the figures there look much less rosy than official statistics: for example, prices for cabbage increased by an average of 41% over the year, for flour – by 40.6% , for tea – by 39%, for sugar – by 29.9%. If we compare, as Putin wanted, with the May level, then even there we cannot say that prices have not changed at all: for example, the price of meat for six months increased by 11.9%, fish – by 10.4%, tea – 22 .6%.
In addition, we recall that the government is trying to limit the markup of retailers so that products do not rise too much in price, and in response, they simply reduce the packaging of products. That is, even for the same price, a person buys less goods.
As for the "strong ruble", this myth has been repeatedly debunked by economists. Here is what Vasily Solodkov, director of the HSE Banking Institute, told The Insider in May:
“The ruble is strengthening for several reasons. Firstly, exporters have introduced a mandatory sale of 80% of foreign exchange earnings and there are restrictions on the purchase of foreign currency, primarily cash. There are also restrictions on the transfer of currency abroad, that is, non-residents cannot receive income on those securities that they had. Secondly, our imports are falling catastrophically for various reasons (starting from logistics and ending with the fact that someone simply stops selling something to us). And the last thing: if earlier people planned vacations and left somewhere, now it is difficult. In fact, you can fly to a very limited number of countries, the main tourist hubs now are Turkey and Dubai. At the same time, the prices for air tickets have multiplied, and therefore citizens are planning holidays within the Russian Federation without creating demand for foreign currency.
The low exchange rate of the ruble only reflects the fact that we currently do not have a normal market economy with free supply and demand.”
And finally, about reducing the level of poverty in Russia. This has been happening since the beginning of 2021 and coincides with the introduction of a new calculation method by Rosstat – now the poor are not those whose income is below the subsistence minimum, but those who receive below a certain level of the "poverty line" – this is "the subsistence minimum for the fourth quarter of 2020, which will increase quarterly in line with the rate of inflation. In turn, the subsistence minimum is now calculated based on the average per capita median income and median wages (formerly the food basket). Also, from 2021, the subsistence minimum is set annually. That is, in simple terms, the government simply shifted the poverty line down, thereby arbitrarily reducing the number of poor people. In addition, the new methodology does not show how much is needed for living, Yevgeny Marchenko, financial consultant and head of EMFINANCE, noted in a commentary to RIA Novosti.
As for “reducing the level of inequality”, this is also explained quite simply. Experts say that Rosstat simply does not have the tools to obtain data on wealthy Russians.
“Rosstat estimates income without taking into account property receipts, which, as a rule, it cannot calculate. These include, for example, income from shares that are often traded on Western markets. Rosstat does not have the tools to see them,” says Safonov, <Professor of the Financial University under the Government Alexander>. In 2022, after the introduction of tough sanctions by the West, Russian investments in foreign financial instruments, settlements for which were carried out through the European systems Euroclear and Clearstream, were frozen.
It is also necessary to distinguish between income inequality and wealth (assets) inequality. It is believed that Russia has one of the highest concentrations of wealth in the world among the richest citizens.
Data on the richest people is poorly collected around the world, as they have more means of accumulating wealth and often consciously try to avoid excessive attention from statistical and tax services, said Dmitry Kulikov, director of ACRA's sovereign and regional ratings group. In addition, the exchange of data between countries is far from universal, therefore, having assets in different states, a person has the opportunity not to fully disclose to any of them.
Louis Chauvel, professor of sociology at the University of Luxembourg, drew attention to the imperfection of data on rich Russians. Billionaire-type rankings by Forbes cover only super-rich Russians, and these are journalistic estimates. Consultants with access to information about their VIP clients rarely disclose even depersonalized data, and Russian private banking service providers (individual banking services for VIP clients) see only the segment of millionaires who keep money in the national banking system.
By the way, even in propaganda publications such as Tsargrad, the story of the decrease in the number of the poor was met with skepticism and indignation.
“Turning to the economist Mikhail Delyagin, the presenter asked:
– Why did you react so harshly to this topic?
Mikhail Delyagin: You can only comment on it with foul language. I once joked about how our government is fighting the poor. In fact, not with the poor, but with the poor. Because what people in power call poverty is actually poverty. And if you have an income below the subsistence level, then you are officially killed, but slowly. Such a bitter joke.
There are 300,000 fewer poor people in the country. What was our mortality rate last year? So, compare this with the data on supermortality.
– Half a million people.
– They died, and the mortality rate became less, in the sense of poverty became less, they died out. <…>
The day before, at a meeting of the parliamentary committee on state construction, Nikolai Rybushkin , a United Russia deputy, criticized the executive branch of Tatarstan for the fact that officials cannot restrain price increases. The deputy said that the majority of the population had become impoverished and had to buy only half a loaf of bread in stores. Mr. Rybushkin warned that if the government does not deal with this problem, quote, the people may eventually get bored with it.