Economist Zubets named the shortcomings of the Central Bank’s plan to combat poverty

“We need to increase pensions and social benefits of all types”

The Bank of Russia announced that, within its competencies, it is ready to take six steps to reduce poverty in the country. Having announced this at a plenary meeting in the State Duma, the head of the Central Bank, Elvira Nabiullina, according to experts, kept silent about the main thing: the problem is not in the monetary, but in the macroeconomic plane, which is incomparably broader. In order for the population’s income to grow, it is necessary to create new jobs with high wages. And this is already the task of the government.

According to official data from Rosstat last year, the number of citizens living below the poverty line is about 16 million people. This is about 11% of the population. The very concept of “poverty line” is also established by Rosstat, and as of January 1, 2024, the average in Russia corresponds to an income of 15,543 thousand rubles per month per person. Statistics vary quite significantly by region. For example, for the Kamchatka Territory the poverty line exceeds 30 thousand rubles, in the Krasnodar Territory – 15.962 thousand.

What are these 6 steps from the Central Bank? The actions mentioned in the State Duma by Elvira Nabiullina include: reducing inflation (since it is a “tax on the poor”); measures to protect citizens “from excessive debt exposure” (which is caused, in particular, by the massive issuance of preferential mortgages); combating fraud in the financial market (the poor are most vulnerable to criminals); providing support measures in the form of credit holidays to persons with a high debt load; development of “financial products specifically for people with low incomes” – social account and social contribution; special financial literacy programs.

According to a number of economists, the Central Bank’s initiative, even if all six points are implemented, will not solve the problem of poverty at its roots. The only effective method is to stimulate domestic production, which entails the creation of new jobs where people are paid salaries significantly higher than the minimum wage.

“It is not the Central Bank that should fight poverty, this is the exclusive prerogative of another state body – the government,” Alexei Zubets, an expert at the Financial University under the Government of the Russian Federation, was categorical in his assessment. – In this case, it is necessary to increase pensions and social benefits of all types. It is also necessary to increase the minimum wage – at least to 40 thousand rubles, and preferably to 50 thousand. The only effective, truly effective tool that the Central Bank has at its disposal in the context of the topic we are discussing is investment. Without cheap investments, industry cannot be developed; without them, there will be no increase in high-paying jobs. For some reason Nabiullina kept silent about this. As well as the fact that a high key rate does not allow businesses to take out loans and invest in production, sharply limiting the potential for growth in household incomes.

– It turns out that the policy of the Central Bank itself contradicts the solution to the problem of poverty?

– On the one hand, Nabiullina points to the high level of debt among the population, but, on the other hand, people take out bank loans to buy vital things for themselves. Preventing them from doing so through high stakes is a very non-trivial way to fight poverty. As for financial literacy, which the head of the regulator also spoke about, this concept does not exist “in a vacuum”, without money. If people have money, sooner or later they will become financially literate on their own, without any help from the state – simply by virtue of the daily practice of using their funds.

– How do things stand with poverty in Russia today?

– There are still many poor people in the country. At the same time, you need to understand: Rosstat’s 15,543 thousand rubles per month per person is not the threshold of poverty, but of poverty. From a social, not a mathematical, point of view, the poor are those who are unable to meet their most pressing, basic needs. In today’s reality, those whose income does not exceed 40 thousand rubles per month per family member can be considered such. It turns out that in Russia the poor are almost half of the population. There is also the concept of deprivation, and it is also social, not material: this is the inability to live a full life, go somewhere (even to the country) to relax, invite friends for tea, buy protein food for your child, and an extra shirt for yourself, go to the movies or theater.