Thursday, April 3, 2008

Window on Eurasia: Middle Income Russians – A Middle Class Unlike Any Other

Paul Goble

Baku, April 3 – Moscow hopes to make 60 to 70 percent of that country’s population “middle class” by 2020, but Russian officials have not recognized that income alone does not define this social category, a shortcoming that some Moscow analysts suggest means the Russian “middle class” may be one unlike any other.
And consequently, these experts say, even if Moscow achieves its goal on paper – and many doubt that it has any chance of increasing middle income groups beyond 50 percent even under the best of circumstances – the authorities will discover that this new group will not play the stabilizing and legitimating role there that it does elsewhere.
In an article in yesterday’s Novyye izvestiya, Mikhail Kalmatskiy describes both the background and current state of discussions about the creation of a middle class in Russia and the expectations Russian politicians and their Western counterparts have for this group (
In the 1990s, Russian officials under the influence of Western advisors began to talk about the creation of a middle class in their country as virtually a panacea for all of Russia’s problems, something that would allow it to escape the past and enter into a more open, prosperous and democratic future.
Now, in its new Concept for Social-Economic Development Up to 2020, the Russian government has formally announced its commitment to expand the Russian middle class to include roughly two-thirds of the population, far more than it forms at the present time and far more than the middle class embraces in most other countries.
This plan has sparked intense discussions within the expert community in Moscow, with many of its members saying, Kalmatskiy reports, that the government’s goal will simultaneously be “both easy and difficult to meet.”
It will be “easy,” the members of this Russian expert community say, “because no one [in the government] has seriously thought about the defining features of a middle class,” thus allowing the regime to claim victory on the basis of rising incomes alone.
But it will be “hard,” they argue “because a genuine middle class even in an ideally developed economy cannot consist of more than 50 percent of the population, a fraction that Vladimir Putin and Dmitry Medvedev insist in the best traditions of the Soviet past that they will not only meet but over fulfill.
And that will be true even if the government equates middle class with middle income. On the one hand, such an equation means that Moscow can claim victory whenever it wants. But on the other, such a victory will be hollow, not only because of the enormous differences across the country but because the two things are not the same.
Oleg Fomichev, who serves as an advisor to the minister for economic development, told Novyye izvestiya that middle class status is not simply about incomes “but more about a lifestyle” including certain possessions like a car and housing and a specific pattern of consumption.
If economic development allows more Russians to have those things – and he acknowledged that only 20 to 25 percent of Russians have them now -- then that alone will bring “our man to the level and style of Western man,” a view that appears to inform even the most sophisticated government opinion in the Russian capital.
But other independent experts disagree. Marina Krasil’nikova, an expert on incomes and consumption patterns at the Levada Center polling agency, said that the people in their own country whom many Russians refer to as middle class do not have either the values or the source of incomes that those in the middle class of the West.
Specifically, she said, they lack “such values as freedom and equality of opportunity,” and “the conditions of inclusion in this class with us are not connected with the level of education or social status.” And consequently, the group which is described as middle class with us in fact [ought] to be called the middle income population.”
And she specifically argued that “those who receive money from the state – government employees, those paid out of budgetary funds, workers in state companies – should not be identified as middle class” because members of that group “should be independent of the state as far as the source of their incomes is concerned.”
Natalya Tikhonova, a specialist on social policy at Moscow’s Higher School of Economics, suggested some additional characteristics for a genuine middle class. She argued that its members must have educations “no lower than specialized secondary school,” not do physical work, and have above average incomes and property ownership.
Western research on the middle class, she said, had always focused on professional status, including educational attainment, rather than incomes alone and never included people with lower social status even if they happened to have incomes higher than those in the true middle class.
Unless the Russian economy were completely transformed, something she suggested was highly unlikely over the next few decades, Tikhonova suggested that it would be very difficult to increase the members of this educated stratum beyond 40 percent because there simply are not enough positions in the economy to support them.
Moreover, she continued, “it is no secret that many people with a higher education are forced to do physical labor or work in trade because they cannot find employment in the areas for which they have been trained. And even if they earn no less, they all the same lose the opportunities for career and professional growth and hence the status of membership in the middle class.”
Other specialists whose views Kalmatskiy cites agree, adding that for the government to really achieve its goal of creating a large middle class, there will have to be “not only a structural reform of the economy but also a change in the mentality of potential candidates for this class.”
At present, they point out, most Russians whose incomes have gone up spend them on immediate consumables rather than invest in those things such as property or increased education that members of the middle class in other countries do. And they suggest that changing those values will take far larger than 12 years.
But perhaps the most negative comment on the Kremlin’s assumptions behind this project came from Boris Kagarlitskiy, the director of the Moscow Institute of Globalization and Social Movements and an outspoken commentator on Russian social policies.
He told Novyye izvestiya that the Russian government has an overly ideological view of what a middle class can do even though it is clear that the authorities do not understand precisely what such a class is. They believe, he said, that “if we have 60 percent in the middle class, then everything in the country will be wonderful.”
But in fact, he pointed out, the situation could turn out as it often has in Russian history entirely differently. That is because the existence of a middle class does not necessarily guarantee stability; it has often proved to be a seedbed from which “revolutionaries” have emerged.

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