Staunton, July 9 – Russian officials “at the highest level” are blocking efforts to use the tax system to restrict excessive consumption of alcohol by Russians on the basis of misguided notions that such efforts will threaten their ratings and the country’s stability or lead people to turn to surrogate sources, according to a leading Moscow expert.
In addition to the moral side of the question, Darya Khalturina says, “where is the scientific evidence that the population will react worse to the growth of excise taxes on alcohol than to increases in the costs of communal services?” Indeed, she points out, “the experience of Eastern Europe and Ukraine has not shown a decline in the rating of governments” that do this.
Khalturina’s comments come in an interview she gave this week to Politcom.ru in which she described the terrifying reality that there are now 2.3 million registered alcoholics in Russia, 500,000 premature deaths from alcohol each year, and daily alcohol consumption by a third of Russia’s children (www.politcom.ru/10382.html).
And Khalturina, who heads the Academy of Sciences group monitoring risks and threats and serves as an expert consultant to the World Health Organization, warned that if Russia does nothing, Russia’s population even if immigration continues at current levels could decline to 70 million by 2050 – fewer than half the current total -- with all the consequences that would have.
Her comments on other aspects of this problem are equally intriguing and disturbing. Asked when she believed Russia has entered on its current path of drunkenness as a national disease, Khalturina pointed to two specific events: Stalin’s decision to end prohibition in 1925 to raise money for the Soviet state, and the popular response to Leonid Brezhnev after 1964.
Unlike many others, Khalturina then praised Mikhail Gorbachev’s anti-alcohol campaign as “very valuable and successful.” It led to a reduction in crime, to an increase in the birthrate, and most significantly to a rise in male life expectancy by 2.6 years.”Never before or after,” she noted, “have Russians lived as long as they did under Mikhail Gorbachev.”
Moreover, she continued, the impact of the anti-alcohol campaign was almost immediate, certainly over a matter of months. And despite predictions to the contrary, “the growth in the consumption of illegal alcohol did not turn out to be comparable with the decline in the consumption of legal alcohol.” As a result, this campaign saved 1.3 million Russian lives.
Khalturina said that her efforts and those of like-minded people over the last four years had not accomplished as much as many hoped, not because many lower and mid-level officials disagreed with the conclusions the anti-alcohol groups offered but because officials farther up the chain of command were reluctant to move quickly.
Very little has been accomplished besides the adoption in 2006 of amendments to the law on alcohol which introduced similar taxes on alcoholic beverages and other substances containing alcohol and the more recent decisions to increase the minimum price of alcoholic beverages. Both of these cut mortality rates, although much more could be done.
Asked about the recent increase in excise taxes on alcohol, Khalturina was dismissive: “If earlier Russia was a country with very low excise taxes on vodka and very low excise taxes on beer, then now, as a result, Russia is a country with mid-range excise taxes on beer and very low excise taxes on vodka.”
Much of the resistance among officialdom and politicians to raising prices for alcohol by means of excise taxes, Khalturina said, is the mistaken assumption that doing so will drive people to surrogates. But that is based on a fundamental misunderstanding of what “illegal alcohol” is in the Russian case.
“The overwhelming majority of illegal alcohol in Russia is produced not by moonshiners but by legally existing producers,” a situation that the Russian authorities have contributed to by failing to introduce adequate penalties for those companies which choose to avoid paying the excise taxes required.
Moreover, she continued, while raising excise taxes increases the state’s take, it also leads to a rise in the price of illegal vodka and thus reduces consumption of it. “As a result, mortality, alcoholism, traumas, the number of murders and suicides, crime, and the number of orphans all fall.”
“Unfortunately,” Khalturina said, proposals to go even further in this direction “already have been rejected at the highest levels” out of fear of social instability or a lack of understanding of the problem. But if such officials reflect, they would see that Russians would not respond to changes in the price of alcohol differently than to other price changes.
It is absolutely critical that Russia address these problems now. If Moscow doesn’t, she said, “the withering away of the population” will continue. “Scholars at the Russian Academy of Sciences have calculated the consequences. Under the worst set of assumptions, the population could contract to 70 million in 2050,” even if migration continues at current levels.
Recently, she said, there was a clear warning signal of the dangers of doing nothing. “In February, there was a rise of mortality in a number of regions. Why? Because the Finance Ministry handed over alcohol excises to the regions. What did the governors do? They needed money, and they boosted the production of alcohol” -- just as Stalin did after 1925.