Russia should have a look into Basic Income

Santeri A.
3 min readNov 14, 2019


Credit: Jani Snellman

Extract: Since his reelection in 2018, most analysts argue Putin has focused primarily on internal affairs. He has pushed the Russian government on a spending spree, with a greater focus on infrastructure. However, allocating public money into what Putin calls National Projects includes several downsides. Such massive infrastructure projects take years to move from the stage of being planned to being achieved. In countries like Russia, a share of the public money spent on infrastructure tends to get lost on corruption, and the choice of companies used for such projects favors major players, owned by a small group of people. Russian public bids do not ban companies that have previously been caught for corruption, and Russian public projects are known to be overbilled, with the Sochi Olympic games as a great illustration. To top that off, the country’s low unemployment rates mean that it does not necessarily need the employing effect of these projects, taking away one of their expected upsides. As a result, Putin’s national infrastructure spending spree has so far failed to bring the promised growth levels, and the Russian Federation won’t become a top-five economy by 2024, as Putin had promised before his reelection.

Paradoxically, Russia among all states, and with its communist past, has an acutely stunted social benefits system. It has not always been this way. As noted by Simon Clarke, the author of A Basic Income For Russia?, Soviet Russia had an official ‘minimum consumer budget’ which defined the socially acceptable minimum standard of living and was used initially for the assessment of need-related child benefit payments and later as a guide in defining the minimum wage and minimum pension. This amounted to 50 roubles per head per month when it was introduced in 1975, increasing to 75 roubles in 1985. With diverse layers of today’s benefits divided between students, pensioners, the disabled, the unemployed and others, these benefits, as a rule, are very low. A combination of ever more centralized power, corruption, and lack of diversification on the national economy have resulted in Russia not reaching its full economic potential. Behind the numerous issues lies a lack of investing in the Russian people. As simple as it sounds, a better overall quality of life in Russia would result in improvements with most, if not all of the problems stated earlier.

Nevertheless, some statistics are encouraging. Gross domestic product, salaries, life expectancy, among other measurements have improved during Putin’s presidency, especially during his first two terms. Russian public debt is low, and its gold and foreign exchange reserves exceed $500 billion. Infrastructure is not necessarily what is lacking the most in Russia. Nonetheless, 21 million Russians live in poverty in 2019, according to Russia’s State Statistics Service. This number has increased by three million over only one year. Consequently, the Russian government should focus on ameliorating the average Russian’s quality of life, and fighting inequalities. Several options are available, but the focus should be put on reforming social programs. A simplified, potentially more efficient and fair system such as Basic Income would likely fit the country’s situation in a better way than the current bureaucratic system of pensions.

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