The main event of the outgoing year 2018 for Russia is neither the FIFA World Cup nor even the opening of the Crimean Bridge. The main event is the pension reform, the negative influence of which has undermined public confidence in the president.
Russia’s Pension reform – Putin’ brainchild
Gone are the days when most Russians would praise President Putin for his desire to listen to no-one important people. However, the decision of the Russian government to raise the retirement age in Russia and the swift approval of the relevant law showed that Vladimir Putin listens to interests of big business representatives to the detriment of the interests of the population.Putin says that one would have to raise the retirement age in Russia in five or seven years anyway. Yet, this mantra of his sounds unconvincing just because this is a long period of time, during which it could be possible to break the negative trend. There were good proposals made at this point, but they were all about the redistribution of income of large capital and the introduction of a progressive taxation scale.
Also read: Putin loses everything he hasFor example, the rate of returns in gasoline prices in the Russian oil industry is 40 percent. This is a lot. For comparison, the profitability in the mining industry in the United States is only ten percent. The average profit rate in Russia is eight to ten percent. In a nutshell, Russian oil companies receive extra high monopoly profits, the lion’s share of which accounts for the natural resource royalty, which the state should appropriate to spend it on the needs of the people.Putin decided not to go that way. He took account of the fact that many current pensioners in Russia are indifferent to the pension reform, because they still receive their pensions. In addition, the majority of young Russians are indifferent to the issue as well, because it is too early for them to think about pensions. The decision to raise the retirement age in Russia has struck not just the material (people will lose 82.2 billion rubles of income during the first year of the program), but the psychological blow on the country.
This article originally appeared at «PRAVDA.Ru»