It would be wise for the Russian Government to wonder about the sense
of stimulating economic growth and striving for "additional income" from
taxes if all of this is only hastening the extinction of the country's
population.
Russian demographic patterns are displaying two conflicting tendencies:
The number of people dying in Russia exceeds the number of new citizens
being born by two-thirds, although the birth rate is rising more quickly--by
0.01 percent--than the mortality rate. Immigration covered
part of the huge gap between the two indicators in recent years, but now
migration figures are decreasing dramatically: Migration made
up for more than 45 percent of natural attrition in 1997, but the figure
was below 8 percent in the first 10 months of 2001. The birth
rate obviously will not compensate for these migration losses for a long
time.
An analysis of the causes of mortality is not encouraging either:
The number of deaths due to cardiovascular diseases (the cause of 55.2
percent of all deaths) was 13 percent higher in the first 10 months of
2001 than it had been in the first 10 months of the previous year.
Deaths caused by diseases of the digestive organs increased by 3.5 percent.
Meanwhile, deaths due to infectious and parasitical diseases decreased
by 0.9 percent and deaths caused by respiratory ailments decreased by 6.8
percent. The last two causes combined, however, are equivalent
to only about one-tenth of the number of cardiovascular fatalities.
Furthermore, the declining rate of fatal respiratory disorders is clearly
due to the closure of many industrial production units entailing work with
chemicals, paints, and other harmful substances.
The overall result--a higher rate of mortality combined with a rising
birth rate--seems confusing, but only at first. Its direct
relationship to the non-democratic (так в тексте)
indices of the State Statistics Committee is evident. Above
all, there is the steady growth of the GDP. It is true that
the industrial product has decreased perceptibly in recent months along
with the whole gross product: Industrial production in November
2001 was 2.9 percent below the October figure, and GDP growth in the third
quarter of 2001 was only 4.9 percent, as compared to 5.3 percent in the
second quarter. Production volume in the basic sectors decreased
by 6.3 percent in November. Changes of this magnitude during
these months, however, have been characteristic of the Russian economy
in recent years.
In spite of this atmosphere of economic growth, the rate of natural
attrition will reduce the population of Russia to only 140 million in five
years (the figure is 144 million now, but it was about 150 million 10 years
ago). The barely noticeable "natural growth" of the population
does not seem to be inconsistent with the statistical evidence of a tendency
toward GDP growth, but the continuation of the essential extinction of
the population offers more eloquent testimony. Overall economic
growth must be accompanied by the growth of personal income--the official
indicator of the standard of living. This seems to be the case.
The real average wage was 23.5 percent higher in November 2001 than in
November 2000 (and amounted to a nominal 3,655 rubles). The
growth of the average wage during the year ranged from 8 percent (in the
microbiological industry) to 61.9 percent (in the wholesale trade in
consumer goods) in different sectors of the economy, but in most branches
the increase was from 35 percent to 55 percent. This was true,
for example, of light industry, the timber industry, education, public
health, and all of the fuel branches.
The appearance of the uniform and "equitable" growth of wages is shattered
completely by elementary statistical comparisons, however:
The monthly increase in wages in rubles amounted to 484 rubles in agriculture,
about 560 rubles in education, and about 580 rubles in public health care,
but those same average "percentages of growth" produced a monthly wage
increase of 4,600 rubles in the gas industry, 3,800 rubles in the oil industry,
1,800 rubles in electrical power engineering, 2,250 rubles in transportation,
1,300 rubles in communications, and 3,000 rubles in the financial and insurance
sphere. The increase in the monopolistic branches is two or
three times as high as the whole salary in some branches of the budget-funded
sector. This also has a "demographic" impact: In
the most successful branches, the recorded economic growth has produced
tangible gains, quite sufficient to foster a slight rise in the birth rate
for the families of workers in this relatively small number of branches.
In the spheres representing the most common occupations, on the other hand,
the population is dying out. The propaganda about "a better
life and a happier life" can still act as an emotional stimulus affecting
the birth rate, but death cannot be swayed by government assurances.
Obviously, there are many things our officials could do about this if they
wanted to. They would have to start, however, with a clear
idea of the ultimate goal and would then have to pursue it consistently.
The recent expectations of the favorable impact of economic growth have
proved to be groundless, as the earlier statistical comparisons demonstrated:
The qualitative aspect of this growth clearly has not improved the quality
of life for everyone in the country. Meanwhile, the rate of
growth is declining steadily. The government's lack of an integral
social policy is an even bigger problem.
Whereas some high-ranking officials want to focus more attention on
social problems, others have been busy compounding these problems.
One of our top officials has proposed the legitimization of paid medical
services, probably forgetting that his official duties consist in maintaining
and improving the standards of universally accessible health care. This
nasty trick--it cannot be described as anything else--might be explainable,
although it does seem inexcusable, by the inexperience of the Minister
of Public Health in matters of economic and social policy.
That is "not his bailiwick" (although it does seem that he has a professional
obligation to know that the governments of the largest countries, such
as the United States, Canada, and Germany, have been doing their utmost
for years to protect people from the ruthless vicissitudes of the medical
and pharmaceutical markets). The Deputy Finance Minister also
has a professional obligation to realize that the assertion that higher
taxes on medicines will not raise their prices--ostensibly because "prices
determine the market"--is not only an example of economic nonsense, but
also of highly dangerous nonsense. The year has just begun,
the new taxes have not even been charged yet, but the market has already
pronounced its judgment on the professional competence of the Russian financial
experts: Medicine prices are already soaring, and some medicines
are no longer being sold. Meanwhile, the prices of medical
services are rising more quickly than inflation, even without the Minister's
permission.
This is not the main problem, however. In this case, the
higher prices in the "self-regulating market" will have a clear-cut result:
The population will buy less of the more expensive medicine, which could
not have been described as readily affordable even before, and the quality
of the medical care available to most of the population will be worse than
it is now. The actions of those two officials will result in
worse preventive health care and medical treatment. That is
why we should not expect a lower rate of mortality in the country, especially
from diseases of the cardiovascular and digestive systems, despite all
of the encouraging "economic" assurances of the government.
The value-added tax on medicine will contribute from 5 billion to 7 billion
rubles to the budget. At the end of this year, we will be able
to calculate the exact "human cost" of this meager 0.5 percent of "additional
income" in the federal budget by taking a look at demographic dynamics.
All of these statistics underscore the regrettable fact that our government
officials are less likely than ever to coordinate their decisions and that
they cannot foresee the impact of their own words and actions.