Recent figures show that there are now 20.3 million poor in Russia. This means that over 14 per cent of the population lives below the poverty line of 1,400 kroner in monthly income.
– This is an increase in the number of poor people at 2.3 million in 2014, writes the Norwegian Embassy in Moscow in a note as NTB has gained access to.
And the outlook for this year gives little cause for optimism.
Inflation remains high, foreign exchange reserves are shrinking and the budget is made up with an oil price of $ 50 barrel. This week, oil prices fell below $ 33 a barrel.
Steep decline
The Russians have a long history to make it through hard times. But in the period from 2000, when Vladimir Putin came to power in 2013 was growth in prosperity formidable. This led to fewer poor people and a far larger middle class.
Putin managed to stabilize the country after the troubled 1990s, helped by an oil price in the period was multiplied.
– From 2000 to 2013 were household real income quadrupled. Meanwhile sank proportion living on incomes below the official poverty line, from 30 to around 10 percent, writes Norwegian Institute of International Affairs in an article.
But the last couple of years the trend has reversed, and last year sank the real disposable income with 11 percent, the biggest decline since 1999.
Oil and sanctions
The main reason is oil prices, which have fallen by two thirds since the summer of 2016.
– Oil revenues account for traditional one-third of revenues in the state budget, argues Foreign Ministry diplomats.
Another important reason is western sanctions the violations of international law Western countries believe Russia has been behind in Ukraine.
The sanctions have led to far fewer Western goods in Russian store shelves and thus higher prices, poor access to credit and scared investors. Recently announced thousands giant ConocoPhillips that the company leaves Russia for 25 years.
By New Year forbade besides Russia importation of agricultural products from Ukraine and Turkey, two of the country’s largest trading partners. It will likely drive prices further up.
The conflict with Ukraine is entrenched as a result of Russia’s annexation of the Ukrainian Crimean peninsula. In addition, Russia has come into conflict with Turkey after the shooting down of a Russian aircraft over Turkey before Christmas.
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