World Economy

Ranks of the Poor Expanding in Russia

Ranks of the Poor Expanding in RussiaRanks of the Poor Expanding in Russia

Natasha hides her face from a journalist’s camera and won’t reveal her last name.

As layoffs began to bite in Russia this January, she lost her administrative job. Now, she waits for the so-called Night Bus in St. Petersburg, a kind of meals on wheels for those on the fringes of society. Steaming hot soup, ladled out of Soviet-era army canisters from the back of a bus, accompanied by bread and tea, CBC reported.  

“At least it’s something,” Natasha, 57, says, her face obscured by her parka’s hood in –11 C temperatures. “I don’t need to spend money for bread. I can buy something else with this money. There’s not enough money for life.”

As Russia’s economy stalls, more Russians are being pushed into poverty. Three million more Russians fell below the poverty line last year—meaning they made less than 9,452 rubles, or $180, a month—pushing the total to more than 19 million.

That’s a record high in nearly a decade, and some analysts from the Russian Academy of Sciences suggest the poverty rate is as high as 25%.

Some see the current situation as reminiscent of the 1990s, when the collapse of the Soviet Union saw wages drop drastically, and 29% of the country fell below the poverty line.

Russia’s economy, heavily reliant on oil, has been battered by low oil prices and international economic sanctions, including those from Canada, imposed in the wake of Russia’s annexation of Crimea and its role in the conflict in eastern Ukraine.

“Our country faces serious economic challenges,” said President Vladimir Putin Tuesday, speaking to business people at a large engineering congress in Moscow. “Investments have decreased, the demand for your production has reduced. I can understand well your anxiety for the future.”

The average rate of inflation last year more than doubled to 15.5% before falling back this year, to 7.3% in March. Real incomes have fallen at least 10%. Russia’s currency, the ruble, has devalued by roughly 50%.

“When the economy is not healthy, more people become homeless,” said Gregory Sverdlin.

Sverdlin runs a St. Petersburg charity named Nochlezhka, meaning “shelter.” It’s the largest homeless shelter in St. Petersburg but has only 52 permanent beds. Some estimates put the number of homeless in Russia’s second largest city at 50,000.

The fallout from the depressed economy has lagged behind the economic indicators but is now beginning to show—everywhere. In a recent call-in show with Putin, many complaints were about the economy, delayed or unpaid wages and job losses.

But Sverdlin says authorities have not paid much attention to the homeless problem.