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The Issue of Mass Poverty


Globalisation also causes more wage differentiation inside Russia. Particularly favoured are export-oriented industries (like oil, gas, non-ferrous metals), natural monopolies, and the banking sector, where wages are more than twice higher than the country average. Suffering are practically all industries working for the domestic market, as well as medical services and education where wages are less than half of the national average. 


Because most employment is in the less fortunate industries their plight tends to reproduce mass poverty. Not surprisingly, the number of persons with incomes below subsistence level rose from 34.2 million in the crisis year of 1998 (25 percent of the population) to 47.7 million in the relatively boom-like first quarter of 2002 (33 percent). And although by early 2004 the number of those living below the poverty line had been reduced to 24 percent, it appears that fast economic growth in the last few years did little to reduce hardcore poverty.

The effect of globalisation is also seen in the enormous gap between Moscow, where most superprofitable big business and bank headquarters are situated, and the provinces that mostly live form hand to mouth. The gap between average incomes in the capital and most provinces is as large as 5 to 8 times. The only province comparable in incomes to Moscow is oil-producing Tyumen. Gaps like these are typical of Third World countries with intensified economic relations with the rest of the world: parasite metropolises against the background of widespread decay.

Is there a way to spread the benefits of the new economic system from a few thriving pockets of capitalism to the rest of the country? Can the Russian government find strategies that will allow the expansion of Russia Minor into Russia Major? Does it realise that economic growth per se does not guarantee fair distribution if economic policy is not aimed at social justice? The answers to these questions hold the key to Russias future and to the solution of its economic, social, and political problems.

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