Tuesday 7 April 2009

Halting Russia's population collapse

Demographic experts say Russia's steep population decline could have serious consequences for the economy.
"The numbers are frightening," says Sergei Zakharov, from the Institute of Demography at Moscow's Higher School of Economics.
By 2050, Russia's population could shrink from the current figure of 142 million people to 100 million, according to a United Nations sponsored study published last year.
When we travelled to Russia as part of its series looking at where the BRIC economies - Brazil, Russia, India and China - will be in 2020 it found that the picture for Russia's population was bleak.
One young mother who spoke to us was Tina Larionova. She had two children and has thought of having more, but she believes that mothers are not respected in Russia.
As a woman who had had a successful career, she says she feels that mothers are discriminated against when they go back to work and that Russian companies feel that working mothers are a burden and are difficult to accommodate.
It is certainly true that Russia has seen a sharp decline in its birth rate, caused in part by the economic hardship of the 1990s when the country went through the transition from communism to capitalism.
But that is not the only reason why its population is falling.
Its mortality rate, mainly amongst men of reproductive age, is shocking by West European standards.
According to Sergei Zakharov, one in three Russian men die before retiring, most commonly from alcoholism, traffic accidents and poisoning caused by the consumption of illegal low-quality alcohol.
Russia is one of a few countries in the world where life expectancy has decreased since the 1960s.
According to official data from 2006, Russian men live on average 60 years, 15 years younger than the European average. The life expectancy for Russian women is 72 years.
Economic impact
Population decline directly affects the country's economic growth and could also discourage international investors.
"Where will the investor choose to invest?" asks Deutsche Bank economist Markus Jaeger.
"In India or China, where the income per capita grows together with the population, or in Russia, where the income per capita is growing, but the consumer market is shrinking?"
Social security could also be affected by the population crisis he says.
"If the workforce is not renewed, there will not be enough people to pay for the pensions of retired workers. This could put huge strains on the tax system and could cause political tensions."
Mr Jaeger adds that in demographic terms, Russia is in the worst position of any of the BRIC countries.
He explains that India's population has been growing fast, while in China the workforce will continue to expand until 2015, when the population will start to age, but it should not decline.
Brazil, he estimates, will benefit from an 20% increase in workforce by 2025.
Mr Jaeger believes that Russia could face a population collapse.
Since 2006, in an attempt to reverse the population fall, the Russian government has been offering financial incentives to families that have a second child. The strategy of giving families a one-off payment of $10,000 (£7,000) on a child's third birthday has had immediate results.
There has been an increase of 130,000 births from 2006 to 2007.
The policy came too late for Alena and Alexander, but they did not need financial inducements to have more children.
They have six, aged between 21 and three.
They live in a very small house in the Moscow suburbs. Their large family is a result of not using contraception after having difficulty conceiving their second child.
They have no regrets, despite struggling on a monthly income of $2,900 (£2,000).
Alena supplements Alexander's income from writing and being a tourist guide by giving courses in child birth and child rearing for pregnant women. The classes include advice as well as exercises. But children cannot form part of the workforce, at least not yet. So another government strategy is to encourage immigration.
Since 1992, some 5.5 million immigrants have come to Russia
And in 2006, Vladimir Putin's government introduced a new policy to attract Russian speaking immigrants of Slavic origin into the country.
But the director of the Centre for the Study of Population Problems, at Moscow State University, Valery Yelizarov, is wary of this policy.
"Russians are wary of foreigners," says Valery Yelizarov.
"They do not like to mix with people from other cultures and faiths.
"Now, with the financial crisis leaving millions of Russians unemployed, immigrants will be increasingly targeted by xenophobic attacks."
There is no easy way out for Russia as it tries to halt its population collapse, but to do nothing could bring the country to its knees and ruin any hope it has of joining the leading economies of the world.
She also said that a hangover of the Soviet era is the custom that women only had one child, and that that thinking affected how women behave today.

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