World Economy

Putin Boasts of Growth, Economic Development

Russian economy has come back into the black last year.Russian economy has come back into the black last year.

Russian President Vladimir Putin said the biggest achievement during his tenure is economic development with the scale of the country’s economy having almost doubled.

“Our biggest achievement is that our economy has changed radically,” said Putin in an interview with the American broadcaster NBC that aired over the weekend, Xinhua reported.

Putin said the number of people living below the poverty line has decreased by half, though the number still living in poverty remains high. “We must remove the gap between people with very high and very low incomes,” he added.

By noting the country’s gold and currency reserves are growing, Putin said this provides an opportunity to “take the next step” towards enhancing labor efficiency, attracting investment and changing the structure of the Russian economy.

Putin, who is set to win a fourth historic term in March 18 polls, oversaw a period of economic growth during his first two mandates (2000-2008) that boosted personal incomes in the wake of the financial instability of the 1990s when many Russians lost their savings.

But his third stint in the Kremlin, which began in 2012 after four years serving as prime minister, saw a decline in ordinary people’s quality of life.

Russia has seen purchasing power decrease continuously for the past four years after the economy was hit with international sanctions punishing Moscow for its annexation of Crimea in 2014 followed by a fall in global oil prices in 2016.

The country’s poverty rate, which had fallen from 29% in 2000 to 10.7% in 2012, inched back up to 13.5% in 2016, according to the most recent annual official figures.

In November, the World Bank released a report in which it said less than half of the population, 46.3%, was secure from sinking into poverty—citing a figure which was 10% lower than in 2014.

The situation is particularly dire in provincial Russia, where ordinary people subsist on extremely low salaries and young families often have to be helped by retirees’ meager pensions.

According to a study by Credit Suisse bank, the richest 10% of Russians control 77% of the wealth, placing the country on the same level of inequality as the United States in a ranking of developed countries.

Although the Russian economy has come back into the black last year, medium-term forecasts for growth don’t exceed 1 or 2%, far from the successes of the early 2000s.

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