This week’s Russia Magazine column, “Russia’s Widening Wealth Inequality,”
The Putin years have been financially good for many Russians. Petrodollars have trickled down to a large portion of the population. Overall, Russians are wealthier than ever before. Economic stability and prosperity are pillars of the Putinist social contract, Putin’s personal longevity as Russia’s head honcho is tied to the country’s continued economic prosperity. But Putinism is not just based on a rising tide lifting all boats. It’s rooted in the ability of Russia’s wealthy elite to get even wealthier. The concentration of Russia’s wealth into a few hands is bore out in recent statistics reported in Credit Suisse’s Global Wealth Report 2013.
The report presents some startling findings concerning Russia. The gulf between Russia’s haves and have-nots is ever widening. Despite increases in Russian household wealth from an annual $1,650 in 2000 to $11,900 today, a mere 110 billionaires own 35 percent of Russia’s $1.2 trillion in household wealth. According to the report, 93.7 percent of the population owns $10,000 or less, and dispelling the notion of a monetary middle class, a paltry 5.6 percent own between $10,000 and $100,000. Poverty fell over the last decade, but inequality rose. “Russia has the highest level of wealth inequality in the world, apart from small Caribbean nations with resident billionaires,” the report concludes. The report’s authors seem surprised by this wealth concentration. Perhaps it’s because they ascribe to the ideological notion that Russia’s transition from communism to capitalism should have produced a vibrant middle class. “At the time of transition there were hopes that Russia would convert to a high skilled, high income economy with strong social protection programs inherited from Soviet Union days. This is almost a parody of what happened in practice,” the reports states with its own parody of a tired tenet of liberal teleology.