2.2. Social Policies
Appraisal
of the situation
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The population is feeling the results of
reform foremost
through the social support system; the rapid devaluation
of
income, the widening of the scope of lay-offs in the
workplace, the destruction of past state social
institutions, and the rise of crime and general
aggressiveness.
In a country where the social welfare system
fulfilled the
function of guaranteeing the social base of the ruling
elite which, accordingly, to a large part was realized by
the state as subsidized foodstuffs, distributed housing,
free medical services, etc., a weakening of the state
power in practice means a fall in the previous system of
social welfare for the average citizen.
The decline happens in the following manner.
Firstly, the
central power pretends that it does not notice the drastic
devaluation of the population's monetary income as a result
of a liberalization of prices and the consequential
inflation in the consumer sector. The sharp leap in prices
is thereby taken as unexpected, and consumers are left to
deal with it by their own devices. These attempts at fiscal
stabilization occur above all at the expense of the general
public, its current incomes and savings. Even in the cases
of measures taken to compensate the population for the
higher cost of living, such actions take place after such
time lags and in such scales that they really have no
influence on rate of the fall of the family's standard of
living. The prime example of this attack by the
administration on the incomes of the population is the delay
in paying out wages, pensions and benefits. The
administration considers it possible not only to pay a
significant part of the population sums far less than what
is considered the "poverty line," but it also
delays this
payment of wages, pensions and benefits over a long period
of time.
The next step is a decline in the state
social support
system, the free system of medical care and education. These
services are not abolished, but under an austere economic
regime the means to support them shrink drastically.
Considering the condition of the services previously, this
basically means their destruction. The main problem is that
nothing is being done for the creation of new institutions
to replace the old system. For that, one needs resources.
The lack of resources in local budgets prevents
the solution
of this problem at a regional level. Instability in the
political and economic situations discourages private
investment in these spheres. Hence, the old system is being
destroyed, and there do not yet exist the conditions for
the
creation of a new one.
Pressure on the population also occurs through
state
enterprises. An uncontrolled recession in production
results in the dismissal of workers. As the government
sector of the economy crumbles, supplementary employment
takes on a very important role, but the absence of such
a
sphere and other opportunities to earn a living heightens
the pauperization of society, the growth of crime and
social strife. The worsening of enterprises' financial
affairs is fraught with yet another problem; the
destruction of those government agencies in charge of the
social infrastructure. In many regions these agencies are
the sole source of satisfying the needs of the inhabitants
for housing, health services, pre-school care, etc.
A similar scheme of the destruction of the
old system of
social services for the general public has its own flawed
logic. The argument is as follows: 1) The social sphere
in
our country is a source of inflation. Therefore, 2) in the
interest of our financial stabilization programs, it is
very
important to free the budget of inefficient social expenses.
Here we have an example of a knee-jerk reaction to accept
the need to change over to a new model of government social
funding, but formulating in advance neither the model,
which, by the way, is strongly tied to the form of
government involvement, nor the mechanism of change itself.
The attempt to use the traditional programs
of stabilization
in our country were doomed to failure due, in a large
extent, to social limitations. Vital criteria in deciding
how to use stabilizing measures are: the standard of living
of the general population, the length of time which the
public is willing to withstand austere measures,
the level
of social patience, the degree of control that the state
has
over the events unfolding, and the readiness of the
executive and legislative branches of government to realize
further steps in the process of reform. Besides that, a
preliminary condition for the carrying out of shock therapy
is the availability of monetary resources among the general
public comprising the private sector. In the end, the
experience necessary to carry out these reforms in such
large, diverse countries simply did not exist. As a result,
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the attempt at financial stabilization in
Russia not only
failed to achieve the desired result, it actually brought
into being a whole array of more difficult problems,
seriously worsening the situation.
The administration forcefully placed the
costs of
stabilization upon the general public. That is by definition
legal. Experience has shown that the negative results of
stabilization programs severely burden the affairs of the
state sectors of the economy. Here in Russia, such a sector
comprises practically the whole economy. But there is a
different side to the problem. It is those groups of workers
employed in the state sectors, who exert the most pressure
on the administration, while foiling attempts to create
a
stabilization program.
The changes which are occurring in the social
sphere
practically guarantee that the crumbling of the old system
of social programs is irreversible. The creation of new
forms of ownership and the development of new economic
entities in our country are progressing very slowly and
as
yet have very little effect on the social structure of the
country. It is sufficient to say that in the first half
of
1992, i.e., when economic reforms began, the share of
workers employed in the government sector in Russia
decreased only by 1.3%, having comprised 75% of the number
of jobs in the domestic economy, and in 1991, 6.3% of the
workers took new jobs. These state workers comprised 75%
of
those employed in agriculture. It is typical
that the process of creating a farming infrastructure is
slowing down. By June 1st, 1992, only 33% of state-owned
collective farms chose to reregister as private cooperatives.
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With no correlation between the rates of
creating new
forms of employment and new jobs and the curtailment of
manufacturing, the effect is felt first of all by state
enterprises, creating a serious threat of massive
unemployment. Although today the number of registered
unemployed is still low by international standards and
remains below 1% of those employed (203 thousand persons),
it is worth noting that this figure rose 3.4 times in the
first half of 1992. Besides that, a strong potential for
hidden unemployment is a unique feature of our country.
Already today the number of unemployed reporting to
employment agencies seeking jobs is twice the number of
vacancies, and this does not count the qualitative
imbalance in the skills of the employment seekers and the
skills required by the job listings.
The absence of a well thought out policy
for the creation
of a labor market and the spontaneous nature of this
process to date have intensified the vulnerability of the
general public in the face of high inflation. In the first
half on 1992, the growth of average income rose 3.4 times
while the consumer price index (CPI) rose practically 10
times. In the second quarter, the monthly CPI was about
117%. Despite the fact that about 50% of the public's income
goes for food, its quality significantly decreased.
The nutrition structure of the population is drastically
changing, as carbohydrates begin to comprise more and more
of the food eaten. Two thirds of the average calories are
gotten from bread products, potatoes and sugar. Even so,
the daily calorie intake during the first half of 1992
decreased by more than 11%.
The process of income stratification among
the
population, which began the moment when unemployment
appeared and began spreading, can no longer be simply
dismissed as a fall in the standard of living.
Pauperization of the general public is gaining strength,
which in our country means the co-existence of an
impoverished general public and an insignificant group of
rich, with no middle class.
Negative institutional changes are also
increasing in social
spheres. The destruction of the state system of free medical
care, education and social services is occurring in the
absence of a sufficiently effective nongovernmental system
in these areas. There do not yet exist the conditions
necessary to support the change to a new form of guaranteed
public health and education services. The problem here is
current wages, pensions and benefits, which would have to
cover those expenses. There also exists the problem of
determining the share of free services provided by the
government. This problem is tightly bound to the economic
opportunities not only of the government, but also of the
population. Under such conditions when fees for pre-school
care rose 12 to 14 times in the first half of 1992 and
sanatoria and resort area fees rose 12 to 20 times, the
majority of people cannot allow themselves to look after
their health, to study or take care of their children, i.e.,
they cannot lead a normal life without the help of the
government.
In fact, the function of the government
in the area of
social services has remained as before: distribution. But
there is practically nothing to distribute. The appearance
of new functions, among which is included a new role for
the
population, the creation of a partnership relationship in
the social sectors, and the protection of property, must
all
precede the execution of a whole range of serious
institutional measures. Therefore, a change toward a new
state social policy can only happen in a general framework
of economic reform. This is also necessary
because there is
developing among the population a new model of behavior
in
this nuclear, uncontrolled, multidirectional economy. The
existence of such an economy is normal, but only in certain
limits, when it acts as a social shock absorber. Its
domination not only destroys organized economic activity,
but also the state structure. This is why today, what is
needed is political will; only a strong power can do all
these things.
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