Window on Eurasia: Growing Income Inequality Could Lead to Disorders in Russia

Paul Goble

Baku, January 26 – Russians in richest ten percent of that country’s population now have incomes more than 15 times those people in the bottom ten percent, according to government figures. But Russian researchers say the actual level of inequality is significantly greater – and in Moscow, this ratio may now be as much as 50 to one.
One reason why the ratio in Moscow may be so much worse, these researchers say, is that the top ten percent of earners take in far more from the 30 to 40 percent of the economy there that remains off the books than do those at the bottom of the Russian income hierarchy (http://www.mk.ru/blogs/MK/2008/01/25/society/335224).
But even the smaller overall figure, Moskovskiy komsomolets reported yesterday, is greater than ratios of six or eight to one in European countries and 10 and 12 to one in the United States but also vastly higher than was the case in Russia in the early 1990s.
Yevgeny Gontmakher, a senior scholar at the Russian Academy of Sciences’ Institute of Economics, told the paper that even the level of income inequality according to the government at a minimum poses serious policy challenges and may ultimately lead to a more populist politics and social protests of various kinds.
That does not mean there is going to be an Orange Revolution or some other form of “organized resistance” in Russia, Gontmakher said. Russians are not culturally disposed to take such steps. Instead, he said, the continued “marginalization of the population” is likely to continue, leaving people more apathetic and alienated.
But at some point, the economic analyst said, “if one leader or other at a critical moment comes out and says to them: look at all those oligarchs, then [there is a chance that the Russian people] will steal from and kill them – that is, they will conduct themselves as a typical marginalized crowd.”
The current “stability” in Russia is thus deceptive and will not last forever, he continued. Many have forgotten that this word is a synonym for “stagnation.” And they have also forgotten that the explosions that led to the end of the communist system and the dissolution of the Soviet Union grew out of “stability” under Brezhnev
Gontmakher devoted most of his interview to a discussion of the various ways other countries, aware of how dangerous such differences in wealth can be for their societies, have reduced income inequality to what he suggested was a more or less acceptable ratio of 10 to one.
Asked why none of this was being considered in Russia, Gontmakher offered a devastating comment on the state of politics in that country now. The reason no one is talking about this, he said, is because “the center of decision making with us in recent years is located inside a single head.”
“This is the head of a professional intelligence officer, and he was taught that for taking decisions what is needed above all is adequate and objective information. But,”
Gontmakher said, “I have the deep sense that over the course of the last several years, no objective information, at least about social issues, has entered that head.”
Obviously, conditions in the Russian Federation in some ways are better than they were when Vladimir Putin came to office. He is proud of that, and as a result, the Russian president has not focused the need to address numerous underlying “systemic problems,” like income inequality, which in fact have gotten worse during his years in office.
In short, Gontmakher observed, Russia is currently a country in which “the blind are leading the blind.” And “everyone knows how that will end,” however much Putin and those around him keep insisting as some earlier Moscow leaders have done that “life is becoming better and happier.”