‘Demographic Optimism’ Criticized

Russian First Deputy Premier Medvedev’s ‘Demographic Optimism’ Criticized

Nezavisimaya Gazeta August 13, 2007 Article by Igor Naumov: “Medvedev Seized With Demographic Optimism — First Deputy Premier’s Incorrect Forecast May Hit the Economy”

The government cannot reconcile itself to continuing depopulation in Russia, and in connection with this, it is constructing grandiose and more or less unfeasible plans. First Deputy Prime Minister Dmitriy Medvedev yesterday (9 August) made the latest statement of this sort, setting the aim not only of reducing the pace of Russia’s depopulation but also of increasing the country’s population to 145-150 million people by 2025. The incorrect demographic forecast casts doubt on the feasibility of the no less optimistic government forecasts for the economy.

Not a month passes without members of the government demonstrating their optimism with regard to Russia’s future in the most varied of spheres and industries. In an interview published in yesterday’s edition of the German weekly, Stern, First Deputy Prime Minister Dmitriy Medvedev expressed concern about the difficult demographic situation in Russia and spoke of the government’s grandiose plans to improve Russian demographics. “People at some point ceased to believe in the future so they no longer want to create families. We want to encourage our citizens to have children. We are helping parents to pay for their children to stay in Kindergarten or – and this is a Russian invention – with the help of federal subsidies for multiple-child families: the 250 thousand roubles, which each mother receives for the second and each subsequent child. Our aim is to stabilize population numbers at a level of 145-150 million people by 2025,” the first deputy prime minister stated. He also reminded people that as well as by increasing the birth rate, this goal would be achieved by means of reducing mortality and attracting migrants. Let us note that the country’s population numbers are currently at around 142 million and they are continuing actively to fall.

Experts do not share the first deputy prime minister’s optimism. According to data from the Russian Academy of Sciences’ Institute for Socio-Political Research, Russia’s population will fall from today’s 142.7 million to 122 million by 2025 if the current level of births and deaths are maintained and it will fall to 83 million by 2050. Even if these indices are improved somewhat, the difference with the figures stated by Medvedev comprises around 20 million people. At the same time, Russia is unlikely to be prepared or able to count on such an influx of migrants from abroad. According to UN data, Russia’s population numbers should fall to 110 million by 2020. The answer to the question as to who is right is fundamental to the development of the economy. Its development is directly linked both to the overall numbers of the population and its structure – in particular to the proportion of the population able to work. In the experts’ opinion, not only the overall number of Russian residents will fall but also the proportion of the population able to work. Moreover, individual ministers also agree with this.

In the opinion of German Gref, the head of the Ministry for Economic Development, Russia’s able-bodied population will fall in the next few years by 2.5 million and an acute shortage of manpower will arise, which will have a negative effect on the economy. Yevgeniy Gontmakher, the head of research at the Center for Social Research and Innovation, is sure that the government’s plans to increase Russia’s population to 145-150 million are not practical. “Medvedev is using data from the Ministry for Health and Social Development, which thinks that the birth rate may realistically be increased 1.5-fold. But this is pure voluntarism. God forbid that the birth rate should fall from the current figure of 1.3 children per woman. And the Ministry for Health and Social Development wants to increase it to 1.8. This has never happened in developed countries,” Gontmakher stated.

A reduction in mortality, which today exceeds the birth rate by 700-800 thousand cases a year, by extending the average life span of Russians is also unlikely to be a practical task, he stressed. After all, no substantial increase in expenditure on healthcare is envisaged in the three-year budget. Attracting migrants from the countries of the near abroad could partially stabilize the demographic situation. However, Yevgeniy Gontmakher noted, in this case not 300,000 but a minimum of one million foreigners need to come to Russia each year.

“If the Russian economy develops at a reasonable pace, as we are seeing at the moment, the birth rate will fall and mortality will not reduce in the absence of additional measures on the part of the government,” Vladimir Tikhomirov, the chief economist at Uralsib FK, stressed. Such measures are currently being taken. Thanks to them the demographic situation can be stabilized and the birth rate can be increased somewhat. However, the expert has great doubts about the figures stating that around 145-150 million people will live in Russia by 2025. Mistakes in calculating the presence of human resources are dangerous for the economy. Vladimir Tikhomirov did not rule out that a slowing in the pace of economic growth might be a consequence. Incidentally, the expert acknowledged, no one in the government is drawing up detailed plans for socio-economic development for such a lengthy period ahead.

Nezavisimaya Gazeta August 13, 2007

Article by Igor Naumov:.

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