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Child Poverty in Russia

Dear colleagues, friends, It is a pleasure to be here today in Moscow for such an important discussion with such a distinguished panel.

For several consecutive years strong economic growth has been a reality across the region, as it is here in Russia. Together with slowly declining inequality, this has meant an overall reduction in levels of material poverty. Indeed, the recent World Bank report indicates that economic growth has lifted 40 million people out of poverty since 1998.

Even with this robust recovery, some 60 millions still find themselves living in poverty. And the characteristics of this poverty has changed. Economic growth has benefited those close to the poverty line, but the depth of poverty has increased for those left behind. It is concentrating in rural areas and amongst the most vulnerable and marginalized.

There are also important shifts taking place in the age-profile of poverty.  In a number of countries, children have become the majority of the poor. Indeed, the World Bank data points out that here in Russia while adults in age group 18-45yrs have benefited from economic growth between 1999-2002, the highest incidence of poverty- and the greatest rate of deterioration- has been in the 0-14yrs age group.  Among children!

These are all important reasons why holding this Round Table on child poverty in Russia is both timely and relevant. The current economic recovery gives a unique opportunity to address child poverty in a more systematic way within the framework of the government’s ongoing social reform effort.

Why single out child poverty?

Why is there a need for a special focus on children? Why not just concentrate on poverty reduction among adults? The assumption often made by policy makers is that policies that are good for adults will be good for children.  This may be true sometimes but often is not the case.

The arguments bear repeating. Of course, much of children and young people’s experience of poverty is clearly similar to and shared with that of their families. There are crucial differences, however, in the way children experience poverty.

First, it is well recognized that childhood is a critical period of development in life and that poverty experienced in childhood has particularly severe effects. What recent evidence is showing is just how long lasting those effects are. Children growing up in deprived households do less well in terms of life chances, in educational attainment, wages, employment rates and other social outcomes in adulthood. Child poverty is also being shown to be crucially linked to the inter-generational transmission of poverty, and its perpetuation. Any long term efforts to tackle poverty and inequality need effective action to break child poverty.   

Secondly, the arguments for investing in human capital as central to economic growth are very familiar to many of you. Children in this sense are a ‘public good’ with high returns in investment of national resources.  But the characteristic of a public good is that if left to individual or market decisions, there is a marked tendency to under-invest. This points to the special role that government must play in ensuring that the level of investments is adequate, and that there are even playing fields. The costs of not investing in children, or investing in some children rather than all children are very high ( in terms of stratification and its consequences as we see in France today).

There is also a question of ‘time’. For older generation of Russians who experienced poverty during the decade of transition, social and economic hardships are still perceived by and large as something of a temporary nature. But for poor children, poverty has already become the only way of life they have experienced. This sense of “normalcy” of being poor contains a great risk for the future of any society.  For children the period spent in poverty is often  the vital period of their lives.  

Thirdly it perhaps particularly important here in Russia, there are further hidden economic costs of child poverty. Young parents who look at other families and see that having a second child may be the factor that tips a family into poverty, will decide not to have more children. The demographic consequences for a country such as Russia are profound and can become irreversible.   

Last but not least, investing in children is driven not only by moral or economical considerations: it is a legal responsibility of states as well. The Convention on the Rights of the Child, ratified by Russia and almost all countries of the world, guarantees that the basic needs of children will be met as a fundamental economic and social right, and establishes that States Parties must implement such rights “to the maximum extent of their available resources".

These four arguments – the adverse and irreversible consequences of poverty on children, the demographic impact, the critical role of government in investing in children and the obligations on society to put children first, make a powerful case for national policy attention - in good times and bad!

The study

Let me turn to the study that we are discussing today “CHILD POVERTY IN RUSSIA: Alarming trends and Policy options” was carried out by Independent Institute of Social Policy (IISP) in cooperation with UNICEF. It provides solid analysis of the child poverty phenomenon in Russia, enriches our understanding of this problem and suggests possible scenarios for policy action. Let me congratulate the researchers on this very clear and sharply focused report.

I am not going to try and summarise the findings now. We will be hearing these from Dr Lilia Ocharova in just a moment   It may be useful however to look for good policy examples among Russia’s peers in OECD countries.

The recent report prepared by UNICEF Innocenti Research Centre “Child Poverty in Rich Countries 2005” finds that three fundamental forces - social trends (including demographics), labour market conditions, and, most importantly, government policies – are the key determinants of child poverty rates. In particular, the government commitment to fighting poverty among children and the choice of policies that are actually implemented can make a significant difference.

The report highlights that higher government spending on family and social benefits is clearly associated with lower child poverty rates in rich countries. Within this, family and child-oriented taxes and benefits contribute significantly to achieving reduction in child poverty rates in OECD countries.

Interestingly, the study by IISP has produced similar results. It suggests that any strategy aimed at reducing poverty among families with children should be a combination of raising the income of the working population and targeted social payments for children in poor families.

Three observations

As we start this discussion, I would like to make three observations:

We will be talking mostly today about income poverty of families and the need for a specific response to meet minimum income needs of children and families.  This is central to the discussion.

Children’s vulnerability of course goes beyond ‘income’ to include a child’s education, health and social participation where deprivation in one area often has implications in reinforcing deprivation in others. Growing up without parents to care for them or without a community that cares about young people may be as damaging as being income poor. 

Income poverty is in this way an expression of larger problems that families and young people are facing. These problems are less visible, with responses that are more complex (more software than the hardware of income transfers!).

These aspects often relate to social isolation that poor families face; the difficulties within a family where parents are struggling with problems of self- esteem or addictions (including alcohol or drugs) . These too have impact on children and cause scars that we do not see through exclusively monetary measures.

We need responses to support parents, in counseling, in fostering mutual support groups. We need to be thinking of services for parents that do not depend on social assistance for children. Here, no one sector can respond alone.  Health and education need to assume greater responsibility for families and children in poverty. Creativity is needed in designing and putting into place new forms of support complementary to action on the income side.  In other words, child poverty has a multidimensional nature that we must not lose sight of.

Secondly, the report notes the dramatic fall in the share of child and maternity benefits  in sharp contrast to the position of the elderly, which has been better protected. This is not to suggest that pension spending should be cut to make room for child benefits: pensioners are still entitled to full protection. The argument is that the overall envelope of resources for social protection needs to be increased and that children need to have their fair share.

Thirdly, if data is telling that income poverty is becoming chronic, we need to ‘unpack’ poverty into its different constituents. We need different types of indicators to tell us what is happening to the standard of living underneath the tip of the iceberg that we are seeing. Some of those indicators already exist. For instance, the number and trends of children in public care is a sensitive indicator on pressures on families and the ability to cope with stress.

Today’s round table

I believe there is an opportunity provided by favourable economic cycle and ongoing social sector reform in Russia today. This gives the chance to strengthen social investment as an instrument of economic growth on the one hand, and of social inclusion and the fulfilment of child rights on the other. These goals should be at the heart of profound social reforms that Russia is currently undertaking.

Today’s study contains a number of policy options. These are put forward to stimulate debate and develop a consensus on possible approaches appropriate to conditions today in Russia .  We hope the discussion will put child poverty at the centre of national policy debate. That is where it should be.  

Thank you.

 

 

 

 

RELATED LINKS

Child Poverty in Russia press releases:

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Russian

Summary of Report (word)

Real Lives:
Yura's story

UNICEF in Russia


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