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Wednesday, August 29, 2018

Putin softens controversial pension reform

Putin softens controversial pension reform

Russian President Vladimir Putin speaks during an address to the nation concerning a pension reforms proposed by the government, in Moscow, on August 29, 2018. 

Russian President Vladimir Putin on Wednesday proposed a series of measures to soften a deeply unpopular pension reform, in an apparent attempt to stem a major fall in his approval ratings.

In a rare televised address, Putin suggested raising the state pension age by five years to 60 years for women, instead of the earlier proposed eight years to 63, among other measures.

“The treatment of women in our country is special, gentle,” Putin said in the 30-minute speech.

However, he stuck to the overall plan, saying the proposed increase in the retirement age for men would still be by five years to 65, as originally planned.

The Russian leader, who is 65, also suggested early retirement for mothers with large families.

He said companies that fire or refuse to hire employees because they are nearing pension age should face administrative or criminal liability.

The proposed reform — already approved by parliament’s lower house in a first reading last month — has sparked a rare outburst of public anger, with tens of thousands rallying across Russia in recent weeks.

Putin had sought to distance himself from the unpopular measures and had been widely expected to soften the proposals to buttress his falling approval ratings.

Most Russians have been against the proposed hike and critics said the reform would essentially rob ordinary people of their earnings.

Unlike in some western countries, pensions in Russia are meagre and many have to work past their state pension age to survive, while others rely on financial help from their children.

‘Hard but necessary’

Putin insisted Wednesday that tough measures were needed, citing “serious demographic problems” stemming from the country’s huge losses during World War II and the fallout from the collapse of the Soviet Union in 1991.

“We will have to make a hard, difficult but necessary decision,” Putin said, adding his proposals would soon be sent to the Russian parliament’s lower house, the State Duma.

“I ask you to treat this with understanding,” he said.

The state pension age in Russia is among the lowest in the world and the proposed reform will be the first increase in nearly 90 years.

But given Russians’ low life expectancy — 65 years for men and 76 for women — many will not live long enough under the proposed reform to receive a state pension.

However, the government says the burden is simply too great for its stretched finances as the economy struggles under Western sanctions.

Putin said that unlike a decade ago, the country’s economy was ready for such reforms, pointing to the lowest unemployment rate since 1991 and increasing life expectancy.

Putin said that before announcing the amendments he had studied all “constructive proposals”, including those put forward by the opposition.

Ahead of the televised address, a Moscow court jailed Putin’s top critic, Alexei Navalny, for 30 days on Monday, just days before he planned to stage a rally against the reform.

Putin said the reform would allow authorities to better adjust pensions for inflation, bringing the average pension to around 20,000 rubles ($353) a month in 2024 from some 14,000 rubles now.

He also promised that various categories of employees, such as miners and industrial workers, would get to keep their benefits and proposed doubling the size of unemployment allowances for people close to pension age.

‘Huge injustice’

Putin, who had previously vowed not to raise the pension age, has seen public trust in his presidency fall to 64 percent last month from 80 percent in May, according to VTsIOM state pollster.

The last time his approval ratings were this low was in January 2014, just months before his popularity skyrocketed following the annexation of Crimea from Ukraine.

Ordinary Russians welcomed the proposals, but some economists said Putin’s proposed amendments were only superficial.

Irina Petrova, a 44-year-old Saint Petersburger, said the reform was a “huge injustice”, even despite the proposed changes.

“I am very much disappointed in the authorities in principle,” she told AFP.

Ruslan Grinberg, scientific director of the Institute of Economics at the Russian Academy of Sciences, said the changes could help defuse tensions to some extent.

“This is a concession to public sentiment,” he told AFP.

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