Today, after waiting for as long as possible, President Putin finally addressed the Russian people on the topic of pension reform and presented his own take of this matter. When the lazy clowns who run the Russian presidential website finally are done translating the full text, it will appear here: http://en.kremlin.ru/events/president/news/58405. You can also check a good summary made by RT here: https://www.rt.com/politics/437112-putin-on-changes-in-russian/. My purpose today is not to comment on the substance of what Putin said, but on the political dimension of his move.
First, his speech was nothing short of brilliant. Putin readily admitted that this was a very controversial topic and that his own views on the matter have changed because the Russian economy has evolved and also fundamentally changed. By saying this he skillfully deflected the criticism that he has flip-flopped on this issue.
Second, Putin did say that while the proposed reform was controversial, opposition parties did seize this opportunity to score points. Putin had to say that because all the political parties in the Duma rejected this proposal and asked for a referendum or the resignation of the Medvedev government. Only “United Russia” (minus one person) voted for this project and it appears that the majority of the Russian people also opposed it. This is why Putin also added that there were some constructive proposals which should be adopted in the final law. In other words, Putin did not appear to “backtrack” or “make concessions”, but he did show his willingness to listen to the opposition and the Russian people.
Third, Putin did offer some concessions/amendments which ought to address, at least to some degree, some of the concerns of those opposed to this project. Most importantly, Putin did say that other options had been considered, but that this was the only realistic and responsible one. Putin thus placed the responsibility to come up with a better plan on the opposition and indicated that no such plan would work.
All this is very important because for the first time since 1993 the Russian President is facing not a fake “court” opposition or some agents of influence paid for by the Empire, but a real and patriotic opposition which supports Putin but not Medvedev and his government. Up until this summer, the Duma opposition parties were, frankly, mostly “pretend opposition” parties who did not really matter, but with the controversy over pension reform this has now changed this and Putin has skillfully adapted to the situation: he succeeded in striking a very precise balance between appearing to be in full agreement with the Medvedev government and caving in to opposition demands. By addressing the Russian people directly and by appealing to their understanding for what are admittedly tough choices Putin has, yet again, successfully managed to use his immense personal political capital to extricate himself from a potentially dangerous (in political terms) situation.
It will be interesting to observe in the next days and week how the main leaders of the opposition chose to respond to Putin’s message. My feeling is that they will have to tone down the vehemence of their criticism lest they come across as engaging in petty politics for purely political games. On substance, however, the problem remains far from solved and there is a very real possibility that Putin and, even more so, Medvedev will have to offer further concessions.
S, I thought about this reform ever since it was announced, and here are my thoughts.
Russia had to raise the age limit, as it needs the work force. On the other hand, the “Liberal West” is increasing the retirement age to 75 years old. As far as I know, all the Ex-Communist countries were retiring people at 55 which is, lets admit it, to low. 75 may be little to high.
As an after thought, I know of some teachers in Greece, who since the retirement haven’t received a dime from the communist Syriza’s government. The lady, I heard about, has been retired two years now and no money in site. This is not Russia, but the famous EU.
Just a thought.
In the west, if we look at participation rates in the economy, we can see substantial underemployment. In modern high productivity economies (including Russia), there is now no shortage of labor, as there was in past centuries. That is, the amount of actual labor needed, is smaller, and decreasing with ever more technological advances. This means that the entire goods and services for the population are provided by fewer workers. We don’t need advancing retirement ages. We need more intelligent work distribution. It is not necessary to increase the age of retirement, in Russia, EU, US. Productivity tells us that. Regressive economic policies are ideological based, not based on practicality/reality. One solution is shorter work week, to increase labor participation. For example, there are over ninety million people of working age in the US that don’t have work, but they are interested in working. I don’t know what the figures are for Russia, but they have an advanced economy, not a third world economy. Ideology of Medvedev is clear.
I don’t know if Medvedev is a neo-liberal ideologue or not, but to me you come off as a progressive utopian ideologue.Subscribing to a linear,ever-improving view of technology, which is not a by-gone conclusion.Technological changes certainly do disrupt workplaces but it is not a simple one way street as you seem to think it is, technological changes both destroy and create new jobs.
Yes, that’s right, destruction of jobs created new jobs: the agricultural revolution/industrial revolution resulted in employment in agriculture dropping from over 75% of workers, to less than one tenth that, between 2 and 5% somewhere, and the economy has developed a vast amount of diversity, that people have so many other types of jobs now. But the trend is still decreasing, for employment, because of technology. There are plenty of possibilities for creation of employment, as education and public sector science can always be ramped up. But neoliberals won’t do that. There are plenty of resources available in Russia, and in the US for much more full employment.
And technology won’t grow if there is no research and development. No one said it was linear, nor a one way street. We know what has happened, and we know the interests of capitalists, to decrease employment, and squeeze more out of labor. That is hardly utopian.
‘progressive utopian idealogue’, lol, economics is known as the dismal science!
Unless you live in the west, then it is a one-way street of destruction of jobs.
We heard the nonsense back with NAFTA, that losing the old jobs would lead to the creation of new and better jobs. But that did turn out to be lies and nonsense. Turns out Ross Perot was correct when he referred to the giant sucking sound of jobs leaving. And note, Trump’s new NAFTA isn’t really any better, and now gives Americans a complete removal of any health inspections of food being imported (in White House corporate speak, the removal of ‘non-tarriff’ barriers on agriculture.)
Lets for instance look at the process of robots replacing humans for labor. Does that create a few new jobs? Yes it does. There will be someone in India designing the new robots. And a factory in China or whereever they can get near slave labor to assemble the robots. And those will replace many local jobs as now you deal with robots everywhere from the fast-food joint to the bank to all sorts of customer service and routine assembly jobs.
Even those jobs will go away eventually, as the corporations cut costs even further with AI’s that design the robots and robot assembly factories where robots build the other robots and no human being below the rank of corporate vice president is employed in the process.
Off shoring and out sourcing. Job losses.
the problem is ownership and social control and their ideology. Putin and Medvedev are capitalist and that is where the problem lies. Medvedev is worse representing virulent neo liberal capitalism: scorched earth something that there.
the job is not crucial..cant be crucial if you are going to accommodate constant upgrading of technology to max production and keep the environment clean. the attitude would be readiness for employment change, labor reduction and all that. but how can that be manged ion any society? it cant be managed by the capitalists because their motive is profit. lets face it..technological advance and capitalist dominate social organization works for no one even the capitalist himself.
no matter what Putin argues the oligarchy, the capitalist are bound to create Brave New World. they have no alternative but to do so. profit drive planning leads there. Capitalism cannot introduce technology except to eliminate jobs. and if the introduction of technology is interrupted then society suffers because technological advance is consistent with human survival..not the one sided linear capitalist technological advance but such advance drive by HUMAN need..the collective
so humanity must go on with scientific and technological advance. we consume the advance making way for more. and more is the way we solve our problems. humans must come to know nature. humans live in a reality in which the constitution is the natural one, the one that nature established out of which we came. written human constitution are minority documents written by minorities for minorities that are dangerous before the ink dries. humanity must be directed by nature which means what we know of nature and the best we can do at any time to try ensure our collective survival. for human survival to be achieved all must go forward not just minorities who engineer the rest of us into stupidity to ensure their own untroubled survival at the top of society. if anything guarantees human extinction it is current oligarchic social control and the Brave New World they are heading towards
only general democratic social control can get humanity through..the end of capitalism and the emergence of democratic social control. and the way forward includes right now worker co-ops..industry placed in the ownership of those who work in industry who will decide all that is relevant is to be decided in the industry, ultimately and as quickly as may be possible all that is to be decide socially
it is workers controlling an industry who can best understand the process broadly, comprehensively and decide effectively in the interest of all in that industry. they can introduce all quality technological advance, reduce labor time. use profits to expand into areas that can take up labor slack, decide what to do with profits after paying themselves properly in the society to help take the society forward. and once industry becomes fully worker controlled that would be the same approach to national issues..controlled by the people on the cooperative basis.
all the social problems stem from oligarchic social control as their mode is exploitative, profit driven social chaos. worker control ends exploitation and all social capitalist social chaos and war, war production etc etc etc. worker co-ops would be a massive step forward socially for society. the writing would be on the wall for capitalist exploitation
Vlad Putin is a capitalist..a committed capitalist… and a politician. and no matter how good a politician he is it is still politics of a capitalist kind that has no positive end game for Russia or the world. that is why Putin is dallying with all these half games here wasting the time of the Russian people. no matter what he says, no matter ho sophisticated his politics what is the issue…the security of the Russian people in perpetuity. that is not addressed at all here or at best manipulated by Putin for his political advantage
Russia is an advanced economy but it is a society as well..and the needs of the people must be met comprehensively..and Putin has not addressed that. he has played politics. the Russian people needs to get rid of the Russian fifth column..and they need to ask and answer their problems from the point of the people. when this is done honestly the answer is clear..no oligarchic control, the end of capitalism and worker ownership and control of industry…which of course means general ownership of the means of production. we now know how to take the next step towards democracy..Worker Co-op
all this here by the Saker in his defense of Putin is a waste of time. in the advanced countries there are the means to produce wealth to end all human suffering up to more than required levels. and this in an on-going manner for there will always be improvement. and once the advanced countries get going in the manner the rest of the world will catch up quickly. there would be no more international forces to impede their progress
there is a lot about Vlad Putin I admire, a great deal of progressive achievements on his part. he got Russian back on track, reestablished its independence. but I worship no man or woman. critique is the most valuable of human social tools. and Putin must be critiqued..all the time or we will lose him. the way the Saker talks about Putin is nothing short worship and that silly, even suicidal
Putin is playing a silly and dangerous game with the west. he is turning the other cheek to the west too much. he has to stand up at some point. he should have exerted by direct Russian intolerance of the west insults long ago I agree with PCR relative to Putin Russia and their constant appeasement of washington and western europe. that is a silly and dangerous games especially when you have the strength to stop them
it is the same with Jeremy Corbyn in England. the Zionist who are one with capitalism will go to any lengths to stop worker coops in england becoming nationalist policy..obviously because it will end capitalism. Did Corbyn not know and anticipate the opposition of the Zionist and to what lengths they would go..and to prepare for such attack including polices of attack..to be ready for the war no quater asked because none would be given?
if Corbyn did not know and anticipate then he is the wrong business..he is out of his depth..does not have to capacity to do the job he sought and won. Corbyn is then an appeaser and a fool for it
I don know what these two men think they are dealing with both the Zionist/Capitalist opposition or the people of the world including directly their own Russian and English populations. who is fooled? no one at all on this day. Putin keeps going on with his dam silly appeasement of the west giving the clear impression that when the chips are down he will move over to Medvedev and the Atlanticists. why in the hell else does he behave as he does then.
and Corbyn began as an appeaser, as if he is sorry he will have t bell the capitalist giving them every opportunity and more to fight back even as he must call for worker co-ops.
Putin appears to be a stronger man that Corbyn but I wish that stronger progressive men/women appear to replace these 2 guys, committed to social progress. it would be better if the people took the issue into their own hands directly, rise and put an end to oligarchy, creating spontaneously the new forms to carry society forward as they go
“That is, the amount of actual labor needed, is smaller”
Exactly. Productivity has more than doubled in the last 30 years, so with half of the workers we can sustain the same standard of living as in the 80s, and that wasn’t a bad period. And I reckon productivity will increase in a faster pace in the coming years.
As far as I know, the retirement are in the former communist countries is 65 for men.
It was 55 for women and 65 for men.
Above I’m speaking about those countries which are now in the EU. In the socialist times the retirement age was 55 for men and 52 for women, but back then there were no unemployment at all. The best schools were the technical schools, where students were learning a profession which assured them a guarantied job with a contract for life. Those professionals, after the fall of that system emigrated in the west, with all their good skills learned in their former socialist countries, for free. The loss of those professionals was enormous for those eastern countries. This is also a kind of war, with prisoners, only this time the prisoners went “voluntarily” – meaning : forced by events and need to survive. Isn’t there a similarity with war ?
Everyone speaks about the economic dimension but who speaks to the moral aspect of increasing a retirement age to that which many men will not live long enough to enjoy even one year ?
At least someone might well be advised to speak about health services, advice, programs etc. given to men to aid their longevity. Perhaps men who have done kidney killing work like long distance trucking for more than 20 years at one point in their lives could still retire early? In this age of keeping track of everything everywhere, surely tracking someone’s work history by occupation would be easy.
At least Russia is having what amounts to a class discussion on a simple level . How the goodies are divided and who gets what–that would never happen in Looneytune-landia. ( 69 days until annihilation)
If you read the translation – concerns such as the one you have stated may be addressed
This pension reform was handled very badly
Announcing it during the World Cup looked very sly and shifty
The arrogance of the govt was disgraceful
They should have set up all all party working group to research and come up with an acceptance plan.
As it stands now the communist should press- politely for more concessions on age.
60/65 or 60/62
My exact reaction. A government that acknowledges the concerns of the people? Not in America! That’s been defined as being un-American.
When was the last time the American government even acknowledged the concerns of the people, much less actually changed a policy because of listening to the people? That simply does not happen in the oligarchy known as America.
If that happened, America would be out of Syria. I seem to remember the American people voting for the candidate that said no to more regime change wars, and defeating the candidate that promised an immediate escalations and no-fly zones?
If that happened, America would have National Health Insurance/Single-Payer/Medicare for all, instead of a group of vulture capitalists making profit off of people disease and suffering.
There’s a very long list of things that would be very different if the American government gave a dang about what the American people wanted.
Its so startling to hear that in dictatorships like Russia ruled by a strong-man killer like Putin that the government actually listens to the people. No wonder America wants to nuke them. They set such a bad example and make the bankers look bad. Next thing you know the American workers will be opposing the bankers attempts to privatise social security and make workers work until they drop dead, just like it used to be back in the golden age of American capitalism.
When they first brought it in for the American citizens the age to collect was 65 and the average life expectancy was 63. Yes you read that correctly. Half the people would be dead before they could collect.
Now the retirement age is still 65 but life expectancy is 83. Do you see a problem? All the public pensions in the USA are grossly under funded and lurching towards collapse.
Defined benefit (DB) pensions are really just Ponzi schemes. Private companies realised this decades ago and went to defined contribution setups which offer the workers one great advantage. Their pension funds are in their name and move with them when the change companies or retire. It is not at the mercy of some incompetent fund manager they have no choice over.
Does anyone know what type, DB or DC, the current and proposed Russian pension setups are?
Just a bit of a quibble, the mean life expectancy cannot be used to support the conclusion you state. Low life expectancy in the late 19th and early 20th century was largely due to the high rate of infant and child mortality during that period. Those who died in infancy or childhood were neither contributors to nor beneficiaries of retirement plans and not relevant to the question of sustainability. For women reaching age 60 in (say) 1940 the average life span was 77 years (75 for men). That is 12 and 10 years respectively beyond a retirement age at 65 during which benefits would be collected. Since that time, life span has increased by about 5 years. So it is true that people would be potentially collecting benefits for more years. On the other hand, due to modern levels of household debt, many workers today cannot afford to retire at age 65 and will continue to work. But in any case, it’s incorrect to imply that most people in the early stages of pension programs collected little or no benefits.
You’ve got it right. The SS administration itself has written about this.
Among the people who reach 60, the expectancy hasn’t changed much. Men in 1940 could expect 12.7 years; men in 1990 could expect 15.3 years. That’s an increase of 2.6 years, which was well within the original “error limits” of the calculations.
The difference is mainly in childhood. Before penicillin and widespread vaccines, many people didn’t even reach working age, let alone retirement age.
The Vaccines didn’t do much. Better water and sanitary made the difference. Research over many years in Germany involving 9000 vaccinated and 6000 un-vaccinated children showed clearly that vaccinated people attract around 400% more illness.
Point taken. Thanks.
Everywhere in the developed and developing economies is the demographic problem. Not enough young to support the old.
Russia is particularly impacted.
And ironically, in nations where they have huge young numbers, they have very high unemployment (Iran, Arab, African nations).
So, Russia is not unique. It’s just at the time in the Timeline when adjustment has to be made.
Putin has explained it all. The “other” ideas all fail and fail very quickly, not only in the pension-age-payment result of the idea, but in the social upheaval that their failure will bring. Russia would soon look like Ukraine, with millions standing outside with a cup in their hand begging for a handout.
Putin is a very smart economics man. He has resurrected the economy and built bulkworks against the storms from the oil price fluctuations and US sanctions wars. He has created real value in the Russian economy and is now building equity for all citizens. There is private ownership and there is shared ownership. Pensions are shared ownership. All are affected by all. Thus, reform has to be made.
Putin will be trusted on this matter.
It is change. It is very personal. It is a bit scary for many.
But it is solid thinking and good policy to adjust the age and to moderate in many ways the impact for women, for older workers, and for families. Putin has emphasized all these as necessary.
Putin has settled the matter. Russia’s pension had to be adjusted for reality.
Most importantly, now the full focus can be on Development of the entire economy. Growth and Wealth for millions more workers in all sectors is on the agenda. Look at China as an example of what Growth does for the poor and the new middle class. Real wealth spreads through these classes when an entire nation grows, innovates and creates products and services of value. Russia has a huge infrastructure to build. This will touch every citizen and improve their life and bottom line. Staying “employed” longer will be seen soon as desirable compared to “early” retirement.
Putin means to get on with this Mission. The Pension Reform is small piece in the scheme of things.
Five years from now, all will see the wisdom of these changes.
Until something is done about recovering money from the oligarchs, I’m not very sympathetic. Russian life expectancy is low, the amount Russians receive for pensions is also low, and many of the social services that existed during Soviet times are gone.
I’m not sure of your point here….
Are you claiming all oligarchs are criminal or just robbing because they’re rich and ruling? (They aren’t oligarchs if they’re just rich.)
Are you unaware of the changes the country has been through since the fall of the Berlin Wall – or advocating a return to soviet style communism?
… Seems to me, if people don’t have enough because of circumstance, that’s sufficient cause for “sympathy.”
“Everywhere in the developed and developing economies is the demographic problem. Not enough young to support the old. ” -This is a neo-liberal myth.
The long term trend is capital substituting for labor. That is, technology continually decreases the cost of production of commodities, and the labor required decreases continually, lower labor participation rate. It is not a demographic problem. It is an ideological problem. Always the liberals have to make statements, such as, ‘not enough stem graduates’ and similar, prevarications. Always for liberals, is the ideology to crush labor.
The shortage is not of labor, but shortage of jobs.
“This is a neo-liberal myth.”
Birth rates down in nearly every nation that is developed. Facts, not your myth counter.
The panic in EU is over lack of the right age workers.
Thus, the attempt to bring in refugees for a new labor force.
China has a huge problem of age discrepancy.
US has a big problem, thus the liberals fighting for illegal immigrants.
Liberals build the desire for government support. Conservatives are the ideologues who resent labor.
Other than being wrong on your two main points, you are correct about the trend of technology displacing workers. But that has always been the case since the beginning of civilization in any kind of economy.
Yes, the fertility rates are down, but the replacement of labor with capital is not down, it is up! Robotics, etc. Facts. There are more than enough young to support the old. There is massive youth under-employment in the developed world. Facts. Deny, if you will. And so the point about the myth still stands.
“Always for liberals, is the ideology to crush labor.” – should be neo-liberals. The modern imperialist liberals are also not labor friendly, as they pretend. All political groups have been co-opted by the oligarchs in the west, they are not labor friendly. Oligarchs are not labor friendly, they own the politics.
“The panic in EU is over lack of the right age workers.” this is a misdirection, as is usual from oligarch dictated press. The real aim of oligarchs is to have a labor pool that is so large there can be no wage pressures in any dimension. No worker security of any sort. There is no shortage of employable youth in Europe. The Hungarians and some others know this, they know no immigrants are required for labor. Deny it if you will. They wish to smash the social democracies of Europe. It is people like Soros that are pushing for immigration. Are the Hungarians clamoring for immigrants? No. Why not? They don’t need them. Neither does any other country there.
“US has a big problem, thus the liberals fighting for illegal immigrants.” This is likewise about crushing labor. There is absolutely no shortage workers in the US. It is about smashing workers rights, security, and about having low wages. The liberals are misrepresenting their position, as is characteristic. Perfidious. In keeping with their positions in liberal imperialism.
“Other than being wrong on your two main points…” Are you an economist? And if so, what economics school do you follow? You haven’t demonstrated the invalidity of anything.
“But that has always been the case since the beginning of civilization in any kind of economy.” No quite, up until into the industrial revolution, agriculture was still hand labor, not horses, no mechanization, no artificial power… And that was for grain farming. Plowing/preparing land by man power. Brutal. They were debating in England over introduction of horse power in the 19th century, not before. And agricultural of that brutal sort was the major employment until into the 19th and 20th centuries, like upwards of 75%. Mechanization and power were slowly introduced in the 19th century, and only in the end of the 19th century, beginning of the 20th century did the proportion of workers in agriculture begin to diminish.
Anon, I agree with your comment. Few years back, when the big three car manufacturers were in deep doodoo, Ford was building car plant in Mexico. The plant was supposed to have only fifty (50) plant employees to maintain the robots. Remember robots work 24/7 and no strikes, etc, etc. This was reported in one of the engineering magazines.
From the European commission itself, on youth unemployment: http://ec.europa.eu/social/main.jsp?catId=1036
No shortage of workers.
Your claims are a bit contradictory.Why would the oligarchs try to crush labor with immigration if they can do the same with technological advances(automation,robotics,etc.) instead?Plus, immigration is a risky choice, it can cause trouble both long and short term, even for the oligarchs.
It’s not contradictory. There are different labor demands, different sectors. Some sectors are pressured by automation, others are pressured by immigration, eg, jobs like the lowest agricultural hand labor, janitorial etc.
Production jobs, the high pay jobs, those they want to automate.
Actually there is also professional immigration labor: in the US, the professional worker visa. Employers want these workers, as immigration law is restrictive, more than labor law. Workers on visa cannot leave employers. And it is also about crushing wages. Crush rights, crush wages.
The question is not one of the young working to support the old and if there are enough young to do this.
The question is one of how much are the bankers and the oligarchs and the capitalists are taking for themselves.
The question is almost always one of how much of the product of their labor goes to the workers, and how much goes to the owners and stockholders as profit. In the modern world, we’ve gone to near slave labor and massive amounts going to the owners. I don’t know how it is in Russia, but that’s true in the west.
We’ve seen it over and over. Good jobs in Europe or the US are closed down. They are replaced with jobs in the Balkans or Mexico or China or wherever they can get as close to the corporate ideal of slave labor as they can get. Thus, the amount paid to the workers for creating a product to sell drops smaller and smaller and smaller. Then of course, this is taxed to pay for the state and the workers are then told that their diminishing share of the income has to pay for a retirement system as well.
What portion of the $1000 price for a new iPhone is paid to the workers in China who make it?
In the US, there is a stat of the ratio of the highest paid person in the company to the lowest paid. Back when America was Great (in Trump’s terms), ie in the 50’s and 60’s, that ratio was about 20 to 1. The CEO made 20 times what the lowest paid employee on the loading dock made. Now its much higher. I’m remembering numbers like 400 to 1, and I haven’t looked lately so that’s likely from past times of greater equality than this current instant, as this just keeps getting worse and worse and worse.
The bosses and shareholders are taking all the money. That’s the problem. I’m sick of being told that I have to work for ever lower wages to compete with slaves in China, then being told that I have to fund and save for my own retirement, while the bosses spend 10 million on a wedding party for their kids.
Yes, the rentiers are taking too much. No doubt.
The message I’m getting from Europe is that the great proportion of people don’t want the immigrants. It is the elites that want the immigrants.
Not surprising that the interests of capital, as promulgated in the press via public relations/ communications specialists, are placed in peoples minds. The matrix of reality as artificially defined by elites.
Look at the European nations that are honest, and don’t want the immigrants. You’re unlikely to get honesty out of the French, German etc propaganda MSMs.
Yes. The problem herein lies in the system, not the problem. Take California for instance. High income taxes, property taxes (by virtue of values), and sales taxes. Then look north 2 states. Oregon has no sales tax and comparable other taxes. Washington has no income taxes, lower sales taxes, and comparable property taxes.
Yet all 3 states run “fine”. The issue is that there is plenty of capital, but that the systems across the world do two things: (1) they couple the deployment of public capital in a less than efficient matter, with (2) high debt loads which are a tax on the entire system itself.
It’s not a silver bullet, but the place to start is to require that all budgets be balanced. That will make capital deployment more efficient when there are less dollars to go around, and it will eliminate the incentive to take on debt and kick the can down the road.
Youth unemployment in Europe:
There are lots of articles and data about youth unemployment in Europe. There is no shortage of young workers in Europe, nor in US, nor anywhere else in the developed world. Soros’ type and other liberal billionaire myths are pushed in the MSM.
The last known youth unemployment rate for Russia is ~16.3%, 2017. Again, no shortage of young workers. No need to raise the pension age.
From Colonel Cassad, translated by Yandex
The Kremlin supported the pension reform
33 position in the ranking
29 Aug, 13:43
On the Kremlin website posted a message to Putin with a justification of the need for pension reform. Special surprises did not happen – the Kremlin, with reservations, supported the pension reform.
“16 June 2018, the Government submitted to the State Duma a bill on amendments to the pension system. On 19 July it was adopted by Parliament in first reading. His main, main goal is to ensure the sustainability and financial stability of the pension system for years to come. So, not only preservation but also growth of income, pensions of current and future retirees.
To achieve these goals the bill along with other measures, provides for a gradual increase in the retirement age. Understand how important these issues are significant for millions of people, for each person. So I appeal to you directly to talk in detail about all aspects of the changes proposed by the Government to indicate their position and to share with you their suggestions that I consider fundamental.
First of all let me remind you that the debate about the necessity of raising the retirement age did not begin suddenly, not today. Talked about this in the Soviet period, and in 90‑e years. But solution is not accepted, for one reason or another was postponed.
At the beginning of the two thousandth and members of the Russian Government, and many representatives of the expert community once again began to aggressively raise the issue of pension reform and raise the retirement age.
The objective conditions for this existed. It was obvious that at the turn of the 2020s years we will inevitably face serious demographic problems. What is the problem?
Every 25-27 years to adulthood, when you can create a family, to have and raise children, we enter a much smaller number of citizens than it should be. This happens as a result of heavy demographic losses during the great Patriotic war. And it’s not only direct losses but also millions not born in the war years.
Period, when adulthood was part of another small generation, also saw in the mid 90‑ies of the last century. But at this time, the country is faced with severe economic and social crisis, with disastrous consequences. This led to the second demographic shock. Born even less children than expected. The demographic collapse of the late 90s was comparable to the 1943 and 1944 war years.
And now this, is extremely small, the generation born in the 90s included in the age. In this regard, even more increases the load on the pension system, because we have it built largely on the solidarity principle. That is, the pension contributions of people working today are used to pay current pensioners, our parents ‘ generation. And they, in turn, while he worked, sent contributions to pay pensions to the generation of our grandfathers.
The conclusion is clear: declining working-age population is automatically reduced opportunities for benefits and indexation of pensions. So, changes are needed.
But then, in the 2000s, I was against them. Talked about this in private meetings and publicly. For example, in 2005 one of the “Straight lines” straight said that before the end of my presidential term such changes will not.
In 2008, when I left the post of the President of Russia, the basic provisions of the pension system is fully preserved. And now I think that at that time such a position from an economic point of view, was reasonable, and with social – absolutely justified and fair. I am convinced that to raise the retirement age in the early and mid-2000s, it was absolutely impossible.
I recall how in that period the country lived. This is a fragile economy with very modest gross domestic product and extremely low wages. This high level of unemployment and inflation. The poverty line was almost a quarter of the country’s citizens. Life expectancy was barely over 65 years.
If those socio-economic conditions, we began to raise the retirement age, and for this, as now planned, to increase pensions, then what could it be then brought? Many families, especially in small towns and rural areas would have lost the primary and sometimes only source of income. At a high level of unemployment and the work would not exist and retire, it would be impossible to get out. And all the possible increase in their pension just “ate” would be high inflation, and as a result the number of poor would be even greater.
It was necessary first to overcome the consequences of the shocks of the 90s, to ensure economic growth and solve pressing social problems.
What has changed over the years? We did not spend time in vain. We, all of us – the citizens, the government, the country worked.
As soon as we were able to generate the necessary financial resources, we sent them to the social development and the preservation of our people. Started the implementation of long-term demographic measures, including the maternity capital programme. And it gave good results, partially offsetting demographic failures of the past decades. We have overcome serious difficulties in the economy and in 2016 reached again a stable economic growth. Now the unemployment rate in Russia is the lowest since 1991.
Of course, we still have a lot to do. Including in the health sector, in other areas that determine the quality and length of human life. But the undeniable fact is that due to the complex taken by the state measures and, very importantly, more responsible attitude of people towards their health the rate of growth of life expectancy in Russia is one of the highest in the world. Over the past 15 years, life expectancy has increased by almost 8 years and 7.8 years.
Know that all of us not really used to trust statistics. Our conclusions, as a rule, from what we can see in real life around them. Someone actually lives a long life, and some of our relatives, friends, unfortunately, leaves quite early. But here we are talking about an objective assessment of the growth of life expectancy in Russia, confirmed by the experts of the United Nations.
We have set a goal to reach by the end of the next decade to a life expectancy of over 80 years. And will continue to do everything that people in our country live long and healthy lives.
All what I just said is objective, but still quite dry analysis of the situation that is certainly important. But it is equally important to feel and consider that the proposed changes are the vital interests, the plans of hundreds of thousands, millions of people. Someone is already thinking to retire to devote more time to family, children, and grandchildren. Someone planning to continue to work and hopes to retire as additional help. And entitled to it, of course. And suddenly such prospects are distant.
Of course, all this is perceived by many people painful. I well understand and share this concern. But let’s see what options we have.
To accept low income seniors and waiting for the pension system will crack and finally fall apart? To pass unpopular but necessary decisions on the shoulders of the next generation, knowing what awaits the country in 15-20 years, given the real situation, to act?
Again, changes in the pension system, especially associated with raising the age of retirement, worry, worry people. And of course, that all political forces, first of all, of course, the opposition will use this situation for self-promotion and strengthening of their positions. This is the inevitable costs of the political process in any democratic society. Nevertheless, I asked the Government to seriously study and use all made constructive suggestions, including from the opposition.
As for the current, the current government, the easiest, most easy for her today – nothing to change. Now, in spite of the difficulties, the Russian economy is feeling confident. In the budget there are resources to replenish the Pension Fund. We at least the next 7-10 years will be able to continue to index pensions the deadlines.
But we know that gradually there will come a time when the indexation of pensions from the state will not have enough funds. And then came the regular payment of pensions can be a problem, as it was in the 90s.
See, back in 2005, the ratio of working citizens, which are regularly paid contributions to the Pension Fund, and people receiving insurance old-age pension, was approximately 1.7:1. And in 2019, it will amount to 1.2:1. That is, almost 1:1. And if you do not take any measures, we will not be able to keep the income pension system. And that means that the incomes of today’s and future pensioners. On the contrary, they will inevitably depreciate, to decline relative to wages.
And where to reduce them? Pension and so today is quite modest, not commensurate to the contribution made by older generations in the development of the country. We are in front of them a huge debt.
The proposed changes in the pension system will allow not only to maintain the level of incomes of pensioners, but the main thing is to provide sustainable, rapid growth.
In 2019, the indexing of old-age pensions will be about 7 percent, which is twice the projected inflation for the end of 2018. In General, in the next six years we will be able annually to increase old-age pension for pensioners on the average on 1 thousand roubles. As a result, this will give the opportunity to 2024, to reach the average level of pensions for pensioners 20 thousand rubles per month – now, remember, this is 14 144 rubles.In the future, beyond the horizon of 2024, the changes in the pension system will form a solid basis for a steady annual increase in the insurance pension above inflation.
Pay attention to the mechanism of the annual increase of pensions shall be laid down in the bill to change the pension system. We had to do it to its second reading in the State Duma.
Naturally, the question arises: if the Government had considered any other options other reserves to ensure the sustainability of the pension system without raising the retirement age? Of course, Yes. Of course, considered.
On my instructions, the Government until recently carried out this work. All possible alternative scenarios have been carefully studied and calculated. It turned out that, in fact, nothing drastic they do not solve. In the best case just patch holes. Or worse, carry devastating consequences for the economy as a whole.
Well let’s see, it seems to be effective, seeming a fair measure – the introduction of a progressive income tax. The Ministry of Finance estimates, the application of increased tax rates, for example, 20 percent to high income, can give, and not sure of the order of 75-120 billion rubles a year. These funds in the best case, will last for six days. Because daily, I want to emphasize this, the daily requirement for the payment of pensions in Russia amounts to 20 billion rubles.
Another option is to sell part of gossobstvennosti, for example, as some suggest, all the buildings of the Pension Fund, including its regional offices. Of course, I agree, they too swung their apartments. People find it annoying. And I also support. According to estimates, the total cost of these facilities is 120 billion rubles. But even if we sell them, and the money will be spent on pensions, will be able to pay them about six days. This is not a solution.
Or proposes to impose additional taxes on oil companies, fuel and energy complex. I can tell you all that we will be able to collect enough to pay pensions to a maximum of a couple of months. Moreover, we will supply pensions, entire pension system in the country in an extremely vulnerable position, in dependence on the difference of prices in the world hydrocarbon markets.
Maybe make more active use of the reserve funds are replenished through proceeds from oil and gas? Yes, it is possible for some time, and it is. And if tomorrow, like I said, the prices of these goods fall, which is entirely possible and has happened several times, what then? The reserves will be exhausted instantly, and within a few months. The lives of people, their pension income in the years ahead cannot and should not depend on the price of oil, which changes every day.
Maybe should continue to increase funding of the Pension Fund? At the expense of the Federal budget to cover the deficit? Said, that while there are resources. They are really there. But look here is the big picture.
In the current year for these purposes we have allocated a budget of 3.3 trillion rubles, of which 1.8 trillion rubles to ensure the payment of insurance pensions. If we assume that we want to achieve the goal, to reach an average pension of 20 thousand rubles, nothing is not changing, the Pension Fund deficit would have increased by half to 5 trillion rubles. For comparison, that’s more than all spending on national defense and security of the country.
By choosing this solution, we will sooner or later ruin our finances, will be forced to borrow or print unsecured money with all its consequences: hyperinflation and increasing poverty. Lacking resources, will not be able to ensure reliable security of the country. Will not be able to solve the most urgent task: to develop education and health care, to support families with children, to build roads and infrastructure, to improve the quality of people’s lives. We are doomed to economic, technological lagging behind the other States.
Therefore, our failure to act now, or the adoption of temporary “cosmetic” measures would be irresponsible and unfair to the country, and to our children.
Again, for many years, I am very careful and sometimes wary of any proposals to change the pension system. Sometimes very sharply reacted to these ideas. However, the trends now prevailing in the field of demographic development and labour market, an objective analysis of the situation shows that the pull on it is impossible. But our decisions must be fair, balanced, necessarily taking into account the interests of the people.
In this regard, I propose a number of measures that will allow mitigate their decisions.
First. The draft law proposes to increase the retirement age for women for 8 years to 63 years, while for men it increased by five years. This will not work, of course. This is wrong. In our country the treatment of women particular, careful. We understand that they are not only working on the primary place of employment, they, as a rule, the whole house, taking care of family, raising children, care of grandchildren. The retirement age for women should not rise by more than for men. Therefore, I consider it necessary to reduce the proposed bill raising the retirement age for women from 8 to 5 years.
Next: we must provide for the right of early retirement for mothers of large families. That is, if a woman has three children, then she will be able to retire three years early. If four children four years earlier. And for women who have five or more children, everything should stay as it is now, they can retire at 50 years.
Second, as already mentioned, the retirement age is assumed to increase gradually. So that people can adapt to new situations, to build their plans. But they are well aware that the hardest thing to have to those who first face with the increase in the retirement age. Very soon. And we need to take this into account.
In this regard, I propose for citizens who had to retire under the old legislation in the next two years, to establish a special privilege, the right to draw a pension for six months before the new retirement age. For example, a person who according to the new retirement age will have to retire in January 2020, will be able to do it in July 2019. That is, again, 6 months earlier.
Third: that you care about and even, I would say, scares people approaching retirement age? They are afraid to face the risk of job loss. That can remain without pension, without salary. After fifty work really hard to find.
In this regard, we must include additional safeguards to protect the interests of older citizens in the labour market. Therefore, for a transitional period, I propose to consider pre-retirement age five years before the date of retirement. Again, here we need a package of measures. So, I consider it necessary to establish for employers administrative and even criminal liability for the dismissal of employees close to retirement age, as well as the refusal in employment of citizens because of their age.Appropriate changes to the laws have to be made simultaneously with the adoption of the bill on raising the retirement age.
Of course, it would be wrong and unfair to be guided here only by administrative measures. Therefore I instruct the Government to offer real incentives for business employers to be encouraged to take and keep at work citizens approaching retirement age.
What I would like to add? Older people usually have good professional experience. This is usually a reliable and disciplined staff. They can bring great benefit to their businesses and companies. It is important that they, as well as younger workers, if desired, could undergo the necessary retraining to acquire new skills, to improve their skills.
In this regard I instruct the Government to approve for citizens close to retirement age a special program for professional development. It should work as soon as possible and be financed from the Federal budget.
And if a person approaching retirement age decided to resign of his own free will and have not yet found a new job, and in this case, we need to strengthen social security. It is therefore proposed to increase the maximum size of unemployment benefits for citizens of pre-retirement age more than doubled – from 4900 rubles, as now, to 11 280 rubles from 1 January 2019, and to set the period for the payment of one year.
Finally, it is also necessary to secure the employer’s obligation to annually provide employees close to retirement age two days for a free check-up with pay.
Fourth: when making changes it is impossible to act according to the template. That is, just % increases. We must recognize the special conditions of life and labour of the people.
We have provided conservation benefits for miners, workers of hot shops, chemical plants, Chernobyl, a number of other categories.
I think that you need to maintain the current terms of appointment of pensions for the indigenous peoples of the North.
We must support the residents of the village. Has been repeatedly discussed and even taken a decision on whether 25‑cent premium to the fixed payment of pension for pensioners living in rural areas who have not less than 30 years of experience in agriculture. But the introduction of this decision into force has been postponed. I propose to begin these payments from January 1, 2019.
Fifth: I believe that those who started early to work should be able to retire not only in age but also taking into account the earned experience.
Now the bill stipulates that the pensionable service on early retirement is 40 years for women and 45 for men. Offer for three years to reduce the length of service giving the right to early retirement: for women up to 37 years and for men up to 42.
Sixth: consider fundamental to maintain for a transitional period, until the completion of the reforms in the pension system, all Federal benefits in force on 31 December 2018. Mean tax benefits on property and land.
Yes, these benefits have traditionally been provided only with the retirement. But in this case, when the pension system will change, and people relied on these benefits, we have to make for them an exception, not to provide benefits in connection with retirement and upon reaching the appropriate age. That is, as before, will benefit women upon reaching 55 years and men 60 years. Thus, even before retirement they will no longer pay the tax for your house, apartment, garden plot.
I know that representatives of the party “United Russia” in regional legislative assemblies and governors have undertaken initiatives to preserve and all existing regional benefits. This is a very important things for people. Such as free travel on public transport, incentives for utilities, major repairs and gasification, incentives for the purchase of medicines and several others. Support, this approach certainly. And I hope that all necessary decisions will be taken in the regions before the entry into force of the new law on pensions.
As you know, many experts now believe that we have too long with the issues that are discussed today. I don’t think so. We just were not ready to this sooner. But to save on do not. It would be irresponsible and could lead to serious consequences in the economy and the social sphere, negatively affect the lives of millions of people, because now it is clear that sooner or later the state will still have to do it. But the later it gets, the tougher those decisions.Without any transitional period, without storing a number of benefits of those mitigation mechanisms that we can use today.
In the long run, if we hesitate, it may jeopardize the stability of the society, and hence the security of the country.
We need to develop. Needs to overcome poverty, provide a decent life for older people, and current and future retirees.
The proposals we have discussed today, will be issued as amendments and promptly submitted to the State Duma.
I very objectively, in detail and sincerely told you about the current status and proposals for sustainable development of the pension system in our country. Once again, we have to make difficult, difficult, but necessary decision.
Please treat this with understanding.”
A better translation here: http://en.kremlin.ru/events/president/news/58405
By the way, Saker, I seem to remember you worked as a translator. How long did it take you to translate a 3770 words-long document?
This is more than a standard full day’s work – no laziness, as I see it.
And is it really necessary to use such words as “lazy clowns” in reference to the Russian presidential office”, when you have no way of assessing their work load?
Yes, indeed, I used to work as a translator and as an interpreter and I know this line of work very well. So let me explain to you:
1) When an official like the Russian President makes a speech the text of his speech is agreed upon and passed on to the translation services BEFORE that speech is made.
2) When a translation is important, you give it to a team each working on, say, one page, and then the senior translator goes over the final text
3)3770 words is not that much for an experienced translator who can even record it on a device and have a secretary type up the text. At, say, 70 words a minute these 3770 words take 54 minutes to type up.
So yes, I do call them “lazy clowns” because I see no excuse whatsoever for the Russian Presidential Administration to work so much slower than, say, the White House or the United Nations.
Heck, they could even post an “unofficial rush translation” (which a court-reporter could type up while Putin speaks) and then release the official one 24-48 hours later.
By the way, they have exactly the same problem at the Russian Ministry of Foreign Affairs.
Which tells me that this is a Russian problem: still not understanding the kind of world we live in and how important it is to get the message out there in the shortest possible time.
So yes, I stand by my “lazy clowns”. Very much so.
PS: as for their work load – peuleeze! If the Presidential Administration is so broke that they can’t afford hiring enough personnel then let them ask Gazprom or Rosoboronexport to help them!
At one point back in the dark ages of dial-up internet, I wanted to transcribe a speech of Ralph Nader. It was available in audio on the internet, but I wanted to make a transcript available for those where downloading audio was difficult (like I said, this was in the dark ages.)
That didn’t involve translation, just transcription.
And I was suprised at what a time-consuming and work intensive process it was. It wasn’t helped by it being a long-ish speech (over an hour), and the fact that a Nader speech was very dense in terms of information. It was not your typical politician’s fluff of reciting slogans. But still, the process of listening to an audio recording, then typing a transcript of what you heard, was a very long process. To be accurate, you couldn’t listen to more than a couple of sentenances at a time. Or at least I couldn’t.
Thus, I have some sympathy for delays in providing a transcript. Although, I’d assume that the Kremlin employees should have the advantage of working with the printed copy prepared before the speech was given. Ie, something was written to put on the teleprompters. Then you’d still have to listen closely and catch every word that went off script to give an accurate transcript. And none of this gets to translation to English yet. :)
I think we should face the fact that capitalism is dead and needs to be given a Christian burial.
One very intelligent Russian article on Putin’s Reform of Pension System.
Translated by Yandex:
Putin took responsibility for pension reform
I agree with Margarita Simonyan: “Putin today took personal, personalized, riskovannye responsibility for the unpopular reform.”
So. And he did it thoroughly, carefully and with maximum tact to the citizens. His speech on the pension reform is an example of how the head of state (and official especially) needs to explain their actions as is humanly needs to refer to the nation whose fates depend on the decisions. And at the same time, how not to slide into populism.
The leader of Russia answered all populist proposals and shown on the fingers that their introduction will help in the short term, but not solve the problem systematically. So, application of increased tax rates on high incomes 20% will add 75-120 billion a year – enough for six days. The sale of property pension Fund will total 120 billion rubles will be spent for the same period. The introduction of additional taxes on the fuel company will provide a maximum pension for a couple of months, but puts the country’s pension system in dependence on the difference of prices in the world hydrocarbon markets.The use of reserve funds – the same story, the problem temporarily, until the falling price of oil and gas.
Putin proposes other measures – a system aimed at ensuring the growth of benefits and maximum protection of citizens approaching retirement age. Several of them, will highlight the most important:
– to reduce the proposed bill raising the retirement age for women from 8 to 5 years – women are our everything
– to provide the right of early retirement for mothers of large families. That is, if a woman has three children, she can retire three years earlier – an additional motivation for having children and reward the mothers for their hard work
– to introduce administrative and even criminal liability for the dismissal of employees close to retirement age, as well as the refusal in employment of citizens because of their age (consider pre-retirement age five years before the date of retirement) – strong protection of those who in a cruel liberal world is in a very vulnerable position
– to increase the maximum size of unemployment benefits for citizens of pre-retirement age more than doubled – to 11 thousand 280 rubles from 1 January 2019, and to set the period for the payment of one year; the retention of all benefits upon reaching 55 years and men 60 years is an additional guarantee of financial security of people close to retirement age
What distinguishes systematic and elaborate decisions from situational and populist that they are aimed in principle at the crux of the problem and care about the welfare of all citizens, not to take away from some and give to others. Although it is recognized that the lack of social justice, a strong gap in income causes a negative perception overall objective necessity of the pension reform.And the decisions of the President missing a decision on this very point – the creation of a mechanism for additional responsibilities to future pensioners those who have huge capital. I think this decision a matter of time.
Thus, today we saw how state leader takes responsibility for future generations, makes a decision that could easily be avoided. And what distinguishes the normal Russian sovereign, Tsar, from “democratic” temporary worker who comes to 5 years, to quickly grab, and then let the fire burn everything. No wonder Russian envy in many countries and even the West, looking at Putin.
I think that after today, many of those who sincerely upset from the pension reform and succumbed to the agitation of the manipulators, quietly judge and move in the direction of the discussion. And navalnyata with Khatami can relax, the action will not.
It is very important for some to believe the system in Russia is different.
It isn’t. Yeltsinites remain in charge of modern Russia.
The Russian elite is grateful to their anglo ‘partners’ for all the support they received these last 18 years.
Together, oligarchs of the east and west, have wrought the new great psyop of the 21st century. Putin will now diminish himself for the rest of his tenure because that’s what the script says he must do.
One of the few realistic comments. Agree with you. I have also noticed a great deal of change in Putin after the elections. Is this scripted or not I can’t tell but his popularity is down around 20 percent in his home country, which is real. One way or another his image of “Great World Leader”, “Euroasian Leader”, “China’s reliable Partner”, “Savior of the World ” type clichés don’t work any longer. At least for me.
Well, the problems you face when your central bank has no sovereignty and your country is run on an interest and debt based currency.
When will Putin finally nationalize the Russian Central Bank and restore complete Russian financial independence? Or will he ever?
Retirement age is arbitrary.Why does state decide when you retire.Is not the individual one who decides where and when to work or when to go into retirement.
Why is this not so.Everybody likes and wants something for nothing.
Why is the government responsible for your retirement or decides when you can retire.
I spent 31years in a factory.It was a good job,made good money,but saved shit.Why,because i knew that guaranteed retirement plan waited for me plus CPP.Yes i am from Canada.
Now,once i retired,for whatever reason i had awakened to a realization that nobody,not the factory i worked for (unless negotiated in collective bargaining) nor the government owed me anything.
We,as free individuals are responsible for our selfs and that includes retirement.
A person should plan their life and savings for retirement from day one.And the most important thing is to live within ones means.
You may end up working twenty years and be able to retire if you “choose” or keep working 40-50 years if you like the job.Bottom line,you would choose where,when and how.
I think the best thing is that i can pass on this realization to my kids.i did not have that luxury so paying the price.
Do you notice how much of sheeple we are by even debating this subject.
Human,take responsibility for your own existence.
Society has the responsibility to ensure every one of it’s members the basics of life and a fair share of the goods of the world, from the time of birth to death. Any other arrangement is a false scheme to create a hierarchy of wealth – which in turn insures all the evils of war and poverty we see today. This is so simple that people wedded to our corrupt systems fail to acknowledge it. Quit lying and scheming, and create a just and fair society!
Excuse me, Branko, but with every pay check you pay a percentage of your salary into the CPP and Old Age pensions in Canada, matched by your employer. Of course, you have a right to collect from these pensions. This does not prevent you from “retiring early” if you want. It does not prevent you from working longer either, if you want. But at 65 or 67 now, you would collect on your pension investment. A pension isn’t something you get for free in most cases. You have worked for it.
In Turkey, until recently perhaps, a women could retire after 20 years of work (a man 25 years), and collect a state pension. Of course, she could work longer and collect a higher % pension amount. The pension would be indexed to your average salary and the maximum you could collect would be 70% after 30 years paying into it. Many people would start collecting after retiring, and still continue to work! For some, this would be necessary since the pension would be insufficient. But companies would benefit, since they would no longer have to pay into your fund once you had officially retired.
Yes,agree.We pay into it but it is so miniscule compared to what we get back.
The pension system everywhere in the world besides the countries where the population is growing is very bad and that is an understatement. In Russia, China, ofcourse the West it is just a ponzi scheme. Russia, just as a few years back in Holland, the young will bear the costs promised by politicians in the past, to the older people that now enjoy the hand outs by the system.
I like Putin big time but here he made an unhonest call. Just as politicians in Holland did. Not letting the costs being paid by the generation that caused the problems but the young(er) generation that had no way in causing the issue and make them pay for the generation that caused them.
I know politically the generation that will bear the costs have little political power but still. Very, very dishonest. Just as what in Holland should have been done, Russia should have be doing. Sorry, we, as the political power, over promised you. Now you eat the losses. Not some future generation that is still working or at school or even to be born.
This article is highly confusing. I don’t actually see anywhere the proposed retirement ages for men or women. All I see is that it will be rising, but apparently not as much as what the Medvedev clan proposed.
I don’t understand how this is a brilliant move for Putin as The Saker suggests. It makes him look slightly less neoliberal. This is not inspiring by any means. This is where Putin’s weakness in economics reveals itself. It really makes me wonder about and miss the influence of Sergei Glaziyev.
I think the response that the worker’s are too few thus they have to work longer is false. The best solution is to shorten the work week. You could have two three day a week work forces and leave Sunday as a national day of rest. The religious element of Russian society might appreciate this. Return Sunday to what has traditionally been for family and rest.
Money can be returned to state coffers from Oligarchs. It is quite possible. Best tool I have seen for that is through a Wall Street Sales tax. Most countries in the world have a stock exchange. The revenue from that tax would be incredible.
Not understanding the dynamics of this situation at all. Really weird to read an article on this website and come away more confused than before. Probably I am missing something.
I think pensions were a bad idea from the beginning.Too much built on top of too many transient things.What guarantee is there today’s political/economic systems/circumstances will exist when one grows old?What guarantee is there the young will follow in the footsteps of the old?Russian people who have lived through two political upheavals in less than a century should understand this better than most.
Fundamentally the cycles are the same as what existed for thousands of years, when the young are too young,weak and vulnerable they have to depend on the old who are healthy and able-bodied, and when in time the old grow too old,weak and vulnerable they have to depend on the now grown young who are healthy and able-bodied.Apparently these days there are a lot of middlemen in the middle of this process between parents and children.
Russia is a Sovereign Nation with its own Sovereign currency, which is backed by Gold to a great extent , plus its huge oil and gas resources, the petro-ruble.
It can never run short of money, It can be created at a computer stroke by its Central Bank. It can buy any resource within its borders ,including all idle labour and create full employment.
Inflation is controlled by adjusting the taxation rate to remove/destroy excess money from circulation.
The deficit between taxation and expenditure is the required level to maintain full employment , full use of resources ,while controlling inflation of the ruble.
Reducing pensions , reduces the amount of money in circulation and can cause recession in its economy, leading to unemployment and reduced tax receipts to the Treasury.
A State Pension Fund can be financed by workers contributions at a suitable interest rate paid by the State, This workers Pension money is no different than issuing Treasury bonds to the Private Bank System with an interest coupon.paid at a later date in the future.
Russian State economist are still trapped in a neoliberal mindset and believe they have to go outside the State to raise money, This is economic nonsense.
Perhaps a mathematical solution could be offered to keep everyone satisfied. Like so:
The country’s pension authority posts average pension amounts for various retirement ages, various lengths of employment, various income levels. (This could be presented as an online calculator.)
Each adult person uses the calculator (or doesn’t) and makes his/her decision.
Each person declares his/her desired retirement age to the pension authority, and the declaration is registered, and a confirmation is mailed back (say, with a yearly tax assessment) every year as a reminder, so as to avoid anyone saying he/she wasn’t aware.
A provision for altering one’s chosen retirement age may be included, with some limitations, say, with requiring a person to stick with his/her choice for at least 5 years, and not being allowed to shift the retirement age by more than 1 year downwards and more than 2 years upwards.
In such a setup, enough people will realize that retiring at 55 at, say, 50% of the pension available when retiring at 65 is not for them. They will realize that pensions are based on a working population’s labor, not on marching in demonstrations.
Putin proved to be weak. The demographics of Russia is low but death rate is now lower than ever. Responsible leader accept facts to move Russia from Soviet era system. Retirement age should be flexible and encourage people to retire later than 58-60 y age.
From the work them till they drop school I take it.
The reality of hard working construction labor and media talking head or university professor is very different.
The Saker provides sound observations from afar on the political dimension. But make no mistake. Ordinary people the breadth of Russia are at this moment seething with rage and confusion. I am not talking about those tiny ragtag minorities of liberals, ultranats, insurgents, committed atlanticists and so on, but the normally silent vast majority who form the basis of Mr Putin’s support. They are talking of betrayal of trust and more than one of my contacts close to the ground describes a sense of mourning at large. People are comparing this day to the end of the SU and talking about a sense of mourning among ordinary people. These descriptions are coming to me directly from people on the ground who are deeply patriotic and have no love of the west and its degenerate values.
Don’t misunderstand this: it is not the pension reforms as such that they are even thinking about (people know that by and large they have become unavoidable), but the process, the machinations, the fatal weakening of the president’s standing and the dismantling of the “Russian way” of being that they are so mortified about. People who know Russia well will understand exactly what this means.
It was the introduction of the State Monopoly on the sell of alcohol in the time of Tsar Alexander III and his Finance Minister Witte, in order to address the problem of rampant alcoholism among the workers and the peasants, engaged in a formidable effort to make Russia stronger by development of industries and modernizing agriculture, which provoked a state of grievance and righteous indignation at the callousness of the ‘elites’ towards the ‘little people’, among exactly the ones whose life and health the measures were meant to improve. It lead little by little to the ‘revolution’.
Yours is an apposite reminder of that period in the 19c and its pathway to 1917.
I have been shocked by the number of normally mild people I interact with within the RF, both metropolitan and oppidan, who are uttering the “r” word and talking about their president having been irredeemably weakened by this (perhaps deeply hatched) process.
As I said above, this is coming from his rock-solid suppporters.
@apposite reminder of that period
Yes, you must be shocked. The reforms of Witte and Stolypin, fully backed by Tsars Alexander III and Nicholas II, were absolutely necessary because there was no other way for Russia to build her capacity to maintain the integrity of the Russian state threatened then as today by external enemies hellbent then as today to carve and plunder it. Tsar Alexander is famous for his saying (to his son): “Russia has only two friends, her Army and her Fleet”. To build a strong army and a strong fleet, building a strong heavy industry and financial independence were conditions sine qua non. No less than a national effort and a moral reform requiring some sacrifices, fully backed by the Church. This truly national effort resulted in tremendous successes in a very short time, so much so that the external enemies got so alarmed at the perspective of Russia becoming again an impregnable Great Power, that they had to revert to their only tools at hand: external war and internal subversion. So, you had the Japanese attacking Russia at the behest of the Anglo-Americans and socialist-populist agitation at home. Popularity of a beloved Tsar, suddenly dropped and the most absurd calumnies hurled at his head and family.. The necessary accent on heavy industry, the building of the Transsiberian have been decried as ‘prestige projects’ eating the money that should have been invested in light industries, producer of consumer goods for the enjoyment of the ‘toiling masses’, consumer goods that could have been as before just imported. Stolypin said: “You need a great shock, we need a great Russia, Give me twenty years of peace, both at home and abroad, and you will not recognize Russia”. But the ‘people’ wanted them NOW (sounds familiar?). They wanted vodka and Soviets, not hard work. His reward for wanting to make Russian peasantry independent and prosperous through work were two bullets in his chest. For the Tsar were many more bullets and bayonets. For the people who wanted vodka and Soviets the GULAG. For the peasants made prosperous, extermination. Nor did the ‘mild people’ who wanted to make Russia great again but turned against the Tsar because the pace of reform was too slow, fared better.
Without being Russian, but having supported Putin and his close entourage for about five years now ( this only, I admit it, a bit by gut feeling in the hope that he would become one day the socialist I would wish he would be, but not only, also basing myself in his somewhat confussing rhetoric to the masses ) I am feeling, curiously, the same than what you describe the Russian plain people are feeling…
For me, the turning point was the confirmation ceremony….I can not say that I did not feel suspicions all the time, but, you know, one always holds some hope….
I do not know what is the level of urgence in implanting these measures now, but, if the mood of the people is so, Putin is probably commiting the hugest error of his brilliant career as politician, but mainly as the dearest president of the Russian Federation, since he is assesing an accurate blow to the not so long ago recovered moral strenght and trust of the Russian people. It does not seem the most propitious moment to undermine moral strenght and trust of the population when you are at war….
Just yesterday I was reading this address by V.V.Putin linked in an article by Patrick Armstrong published at Strategic Culture, which in spite of being from years ago, says it all about Putin´s ideas….Anyway, I do not regret supporting him during the Syrian campaign, since they were there in the right side and have made a great work so far for peace in the ME and the world and in the fight against takfiri terrorism, but his position in favor of capitalism, as we know it, included casino capitalism of money engineering as a way of creating own personal wealth, places me at odds with him when it comes to workers rights, prospects and well being, and society prospects as a whole…..
P.S: I read some weeks ago ( I cannot remember where, I read a lot everyday… ) that the polls on the coming regional and municipal elections to take place in September in an important Russian city ( If I do not recall badly, St. Petersburg… ), were throwing a really bad result for United Russia, most probably influenced by the pensions reform issue,…to the extent that, the article was saying, a head of the party in St. Petersburg had suffered a heart attack…. do not recall well whether he even had died….
What someone said about Putin commenting about “other plans failed”, may have been in reference to the immigration, and of course flood of illegals. Contrary to what MSM is trying to sell to the public. Maiority of those do not possess any useful skills and usually end up being a burden to social programs instead of contributing to the pension plans.
Example: an arab illegal immigrant with dozen wives and four dozen kids all drawing welfare cheques (checks in the US).
Immigration is not a problem for RF (on nothing like the scale in western Europe and N America, Africa, the Middle East). The controls are strict and effectively carried out. Even for former SU migrant labourers, it is tightly regulated and the economic benefits outweigh the detriment. The only place where it could become a problem in the future (but is not yet) would be along the China-Siberia border, but as long as China and Russia maintain cordial relations, that won’t materialise.
(The bigger problem is Americans trying to fish for Russian women (and taking babies, though that has been clamped down on).)
Anonious…. to which nation are you referring? Since this article is about pension plans in Russia, your comment seems to be a bit off topic.
For people to work longer they need health. And guess what, in the elderly home where I work the patients are getting younger and younger. For the moment as a 62-year-old I’m getting bossed around by 50-60 years old.
We even have people younger than 45.
I have colleagues with chronic diseases at age of 38 trying to function and uphold their families. Those chronic diseases previously reserved for senior citizens!
Society in the West is bonkers and headed to utter poverty for everyone and dying in the gutter all alone bereft of any care whatsoever.
Living in a nation that has had incompetent (aka corrupt) government for decades, its fun to watch someone competently run a nation.
Speaking of “Russian meddling” in an election, I wish they’d have gone so far as to put Putin on an American ballot. Or at least publicize a write-in campaign. I’d gladly vote for Vlad over Hillary and Donald. I don’t agree with everything he does, but brains and basic competence would be such a welcome option. Be interesting to see how many votes he’d get. Of course, since the election results are all rigged in America, they just trust whatever the computer says, we’d never know if Vlad got a lot of votes.
Note of course that here in Banker-Land, even the socialist radical “choice” on the ballots doesn’t mention lowering the retirement age from 67, and ideas like not letting older employees be laid off or for increasing unemployment benefits for them as they are the most likely to be age-discriminated against by viscious capitalists are completely beyond any discussion in Banker-Land.
They never fully recovered from the decay and the great plunder of Yeltsin years because the “Yeltsin Years” never ended. They want hard core liberalism, capitalism: they have got it and enjoy it and they must be happy because this reform will certainly not affect their dear oligarchs and their rich minions. Russia, roots, soul and mind ended forever with the defeat of USSR and deliberate destruction of the welfare and social system with almost all the rest. Maybe it’s too late also for a real patriotic opposition.
It would have been useful for the Russian Federation to be socially dynamic and responsible with an air of freedom, smelling sweetly … quite different from the west … but no … the RF is falling into line … “a dedicated follower of fashion”.
Pravda is the voice of the communist party and here is their voice on this issue …
“… After the president’s televised address to the nation on August 29, it became clear that it was Putin who initiated the pension reform in Russia. This is evidenced by his harsh affirmation about the lack of alternatives to the reform. Until recently, however, Putin tried to distance himself from his government, which he had allegedly commissioned to develop and implement the unpopular reform.”
The comments are interesting.
( … bear in mind that a pensioner’s benefit is fully circulated through the economy and a sovereign operated Central Bank can assist in ‘special’ money supply, if the politicians seriously considered all options available.)
so when the pensions run out what will happen to all the old people if they are living longer..83 on average I have seen here in the USA. it appears that the Oligarchies are doing their best to shorten general life spans around the planet. planet is increasing, medical help increasingly unavailable, crime increases including heavy violence, the dispensing of medicine that kills, the increase of fast food everywhere.
I remember when I used to work in the city and had to eat fast food I would break wind that was literally catastrophic for those close-by. I was fat and unfit all the time. when I stopped and worked close to my home I ate at home and it all stopped. I lost weight and felt better all the time. that is when I realized that fast food is a disaster that has hit humanity..and that its utter quality is probably intentional..to help shorten life human life spans.
but I see all the problems and conditions and facts about current existence in all the posts here..everyone of them. the question begs; WHO IS GOING TO ADDRESS THOSE PROBLEMS…AND THOSE PROBLEMS ARE ALL ONE PROBLEM, STEMMING FROM THE RELATIONSHIP BETWEEN RICH AND POOR?
The rich and capitalism are the source of all those social dysfunctions. how else can that be,..what and who else caused them? that is how we have lived all along..so there.
the rich cannot and will not solve those problems..the one problem out of which all those negative effects spring. only the people can solve what are essentially there problem. the rich with all their money can buy their way out of it. it is our problem but all here ignore it.
IT IS ONLY WE THE PEOPLE CAN SOLVE OUR OWN PROBLEM..THE PROBLEM OF THE PEOPLE: CAPITALISM! I IS ONLY THE PEOPLE CAN RELATE ALL THOSE NASTY CONDITIONS OF EXISTENCE WE FACE TO THEIR SOURCE AND ADDRESS IT WITH COMPREHENSIVE SOLUTION…THE TRANSFER OF OWNERSHIP OF SOCIETY TO THE PEOPLE..FOR THE PEOPLE TO GET UP AND TAKE SUCH OWNERSHIP IN THE FULL REALIZATION THAT WE WILL NOT SURVIVE UNLESS WE DO.
Jeremy Corbyn is right in principle, even if his effective political policy to win the power to effect it is seriously lacking.
I am really surprised by the general attitude here on this issue. the people are not at the table with Putin and he feels free to express and support a capitalist solution which is seriously foolish, address not the real problem in all its comprehensiveness. only the people can resolve aging and technology in industry, outsourcing, pollution, health systems and the quality of such systems so that they do not harm but help..an on and on.
the capitalist cannot help. for the capitalist system to go business must make profits but because it is exploitative it cannot go on indefinitely. it sputters and comes to a halt. in the meantime the capitalist makes all kinds of dangerous social mischief in order to fabricate profit at the expense of society. ultimately we come to this point at which war means the end of society so war and creative destruction to rebuild at profit/deb is no longer and option.
so what is the option for the capitalist at this point? he has all the money in society he cant give it back. he cant expand..there is nothing he can do to keep his system going. his solution is obvious: he has to remain on top, in charge of society, and that does not require capitalism ultimately..it requires police state and Brave New World. and that whether the capitalist realizes it or not. that is the capitalist option that remains, and there is where human society, globally, is headed as we speak, even in Russia, China etc. Global society is literally a police state as we speak, surveillance everywhere, and laws that lock down not free society
the only option for the people, the ordinary people of the world is to rise, now and establish popular democracy, for the people to take the direction of society into their hand putting the oligarchs to the side and in the past. as technology advances putting vast coercive powers into oligarchic hands society will lose all ability to control them and ensure a positive destiny for the people, for the human species
I see all the comments here and they are all partial, do not address the central questions..where the people and th oligarchy go. Vlad Putin for all his good works is not the answer. he is a committed capitalist and there is no answer for the people in capitalism. there is only human death at the end of capitalism and Brave New World.
I have said my piece. I am done
Please can you not use capitals – its like screaming and not allowed – any further will go to trash. Mod
whooops! sorry man. I wasn’t thinking. I wanted to show emphasis..I should have used Italics.
sorry! wont happen again
If you want to emphasize words/sentences – under “Leave a Reply” is “Click here to get more info on formatting” and a [+] sign – click on the [+] sign and all different forms of formatting are available to emphasize your comment. Hope that helps. Mod