Abstract From The Russia In Pieces By Cristina Carpinelli

Abstract from “The Russia in Pieces” (2008) The social global scenario of the last decade distinguishes itself because of growing inequality. Instead of seeing poverty diminish, we are witnessing a growing social gap. Even when overall living standards rise, poverty can also increase if societies become more unequal. Global macroeconomic forces, and in particular the rise in interests rates, debt crises, and the pressure for deregulation, privatization and liberalization generally since 1980, have all contributed to a pervasive rise in economic inequalities within Countries of the world. Over the past decades extensive macroeconomic conditions have been attached to the provision of development aid and loans as well as for the cancellation of debt with disastrous consequences for social development. Policies imposed by IMF and World Bank on developing Countries (or on Countries in financial difficulties) of liberalization and privatization (with the adoption of structural adjustment programmes) have increased inequalities, not diminished them, impacting most severely on communities and families with least access to decent work and the means to a sustainable livelihood. For the majority of the people living in poverty, of which a disproportionate number are women and children, agriculture and fishery provide the only viable livelihood for themselves and their families. Economic reforms imposed on developing Countries (or on Countries in financial difficulties) have promoted export-oriented production, particularly of primary products for which world prices have dramatically declined, and an increased control over agriculture and fishery by corporate interests. The result has been increased impoverishment for large sections of developing Country societies for whom there are no alternative options. For many low income Countries aid is the most important source of finance for development. For these Countries it is also the only real source of investment for the basic social infrastructure that is vital for assuring the welfare and well being of its people and for effectively addressing poverty. Aid will only be effective when it is sustainable and predictable, contributing to the development strategies defined by a Nation itself. It needs to 1

be free from ties imposed by donors, which not only distort its value but also prejudice a Nation’s commitment to development policies imposed from outside. For many developing Countries their debt servicing obligations undermines development. For this reason, it would be necessary the complete cancellation of debts where not to do so would undermine the Country’s economic recovery. The withdrawal of the state and the privatization of service provision - of health care, water, education increasingly deny access to those unable to pay for what constitutes a basic human rights. Major humanitarian agencies (Ong) argues that IMF policies seek to keep inflation at very low levels and do it blocking public spending on sanitation, education, ecc., paying only attention to strategies of macroeconomic stability and not to strategies of human development. Globalization and liberalization of trade, the corporatization of agriculture, fishery and other forms of production should not be the guiding frameworks for agriculture and fishery. Instead, sustainable local livelihoods, food sovereignty, environment regeneration and social concerns should be the guiding principles. A reform of our international system of governance is long overdue. It needs to be re-built so as to adhere to principles of justice and democracy. The World Bank, IMF and WTO must be brought fully within the UN system, with their roles being redefined. Their governing structures must also be reformed to reflect changes in the global economy. Women constitute the majority of the world’s poor and often carry the social and economic burden of looking after the most vulnerable members of the community, such as children, the elderly and the sick. Economic reforms that dismantle social obligations of the state and privatize public goods, impact disproportionately on women and deepen gender inequality as women are pressed into filling the gap. At the same time women constitute crucial active agents in any strategy to eradicate poverty. Denying full and free access of women to the economic sectors and labour market is not only a denial of their basic human rigths but is also detrimental to a country’s economic development. Poverty cannot be tackled successfully without ensuring equality of access to the means of livelihood between women and men, and equity of opportunity. While gender equality and equity are fundamental objectives in themselves, they are also an essential precondition for eradicating poverty. It’s imperative that the relationship between gender equity, poverty eradication and the promotion of social justice are comprehensively incorporated in future strategies. The structural adjustment programmes (Sap) imposed by IMF to transition Countries provided for: the passage from a planned economy to a free market one; liberalization of prices; reduction of public expenditure, including cuts on sanitation, education and social services considered unproductive from economic point of view; cuts on military expenditures; cancellation of benefits directed to the poorest people; privatization of public and state enterprises; restriction of access to credit; liberalization of trade; promotion of export-oriented production; removal of the barriers to private investments; deregulation of labour market. The Saps have had a terrible effect on domestic politics of transition Countries, above all in which of them they didn’t adopt politics of social security. The process of transition from a planned economy to a market one in the Countries of the Center-eastern Europe and in those of the former Soviet Union represents an interesting experience of analysis and comparison for people that are interested in the labour market and the systems of welfare. More than twenty Countries have almost simultaneously introduced radical transformations in the economy and reformed the mechanisms of social protection. Such transformations have proved to be more painful and variegated than initially anticipated. Negative phenomenons have accompanied and still accompany the transition: extremely elevated and persistent rates of unemployment, emerging acute inequalities in the income distribution, sensitive increase of the poverty. From the experience of the economies in transition, some important lessons can also be drawn for the Countries of the western Europe, included Italy. The transition, in fact, can be seen like an “extreme” form of the processes of reform of the systems of social protection and the labour market into action in the european Countries. The politics of transformation adopted in the transition Countries have been different. In the Countries of the center-eastern Europe has been paid attention to the politics of protection to the unemployed (the “victims” of the transition), as incentive for a rapid restructuring of the economy based on the move of labour force from 2

the old state sectors to the new private sector. The adjustment of the economy has taken place, therefore, through the unemployment. In the Fsu Countries, the adjustment has taken place through a decrease in salaries and an high hidden unemployment. The conclusion of some liberal economists is that in the Countries of the center-eastern Europe the governments have made the mistake to design too generous politics of support to the unemployed and of social transfers, above all, without temporal limits. The negative consequences have been that there is still today an elevated and persistent unemployment, that a too remarkable proportion of people have gone out from the labour force, above all through the anticipated retirements, and that all this has actually represented an obstacle to the economic recovery. Nevertheless, it could be objected that in the Countries where the level of protection and support to the unemployed has been negligible (Fsu Countries), the economic performance and the process of restructuring have been disastrous. In the Fsu Countries, the governments have not introduced a system of protection for those people that had to leave the enterprises and the sectors in decline. The absence of a “safety net” has represented a real break on the economic growth, as the workers have preferred to maintain the job also with very low salaries, rather than to enter the “pool” of the unemployed. The transformation that the Fsu Countries have put in action, has been indeed dramatic. The hinges on which were based the systems before the transition have been completely dismantled. They can be summarized in a few points: . 90% of the labour force was employed by state; . labour income plus social transfers together accounted for over three-quarters of total income; . personal income tax was very low. Taxation had almost no distributive impact; . child benefits accounted for 3% of gross income, three times the level of market economies; . cash social transfers were distributed almost equally per head, rather than being focused on the poor as in market economies; . the social benefits were all regarded as entitlements which were provided free or at minimum cost; . the tax yield was based on “profits” of state enterprises, typical of a socialist societies. On the contrary, in the market economies, it’s based on personal income and expenditures (private consumptions); . wages were somewhat more equally distributed than in market economies, with differentials between manual and non-manual employees being markedly lower. Overall, because taxation and social transfers were broadly neutral, inequality was dominated by wage inequality; . although average incomes and living standards pre-transition were low, the scale of social transfers, consumer subsidies and the egalitarian wage distribution meant that the incidence of poverty was also relatively low by international standards, at between 5% and 10%, and it is likely that very few people were in extreme poverty. In these Countries, between a quarter and a third of the population live in persistent poverty, below a realistic subsistence level for a sustained period of time. The total number of poor has risen from about 14 million in East Europe and the Soviet Union before the transition, to about 168 million after the reform, an increase from 4% to about 45% of the population. The poverty derives from low and unofficial wages and high levels of open and hidden unemployment (together with shadow-economy, irregular employment and second job) resulting from economic transition. All this is reflected in a dramatic increase in inequality. Households with dependent children or disabled members are the most vulnerable, because of the low level of incomes and the erosion of their real value, and of the lack of child and disability benefits. In Russia and Belarus, the average wage is no longer sufficient to support two individuals at the minimum subsistence level; in combination with the erosion of child benefits, this means that actually a two average-wages family with two dependent children will be living in poverty. In Moldavia, only about 20% of wage earners (breadwinners) are earning enough to support one dependent. With smaller intensity, this situation is also verifiable in Ukraine. Dependency puts great strains on the traditional households, leading parents to abandon their children (an estimated one million children have been abandoned during the transition, of which 200,000 of them in Russian Federation). Child poverty is an emotive issue but it is not a distinct issue - it arises because parents cannot earn enough to support their children and child benefits are not sufficient to cover their marginal cost (of children). 3

Similarly, the average pension has fallen below the subsistence minimum. Poverty is a serious problem and it’s still rising in all the Fsu Countries. The primary source of social and industrial conflict and of political opposition to reform is the low level of wages (also the endemic wage non-payment or wage arrears) but also the transformation of universalistic social security sistems into private sistems of social insurance. Access to health services, education and social services has been severely curtailed. Suicide, alcohol abuse-related deaths and wide diffusion of the drug have all risen sharply. The spread of “social diseases” (tuberculosis, syphilis, diphtheria, and so on) is being compounded by the fact that there is often a lack of awareness, education, infrastructure, and programmes addressing the problems. A common demographic indicator of transition Countries of the Fsu is the high male adult mortality (The high mortality rate for working-age males has produced in Russia a new problem: material support to children surviving their fathers. However, the applicable type of pensions - survivor’s pension - represents 51% of the minimum subsistence of a child, which no way can fully compensate for the reduced family income) and the sharp fall in life expectancy for men and women. Mortality, nuptiality and fertility trends are more or less equal to those normally observed during wartime. Mass destitution in these Countries (mainly in the rural areas) is only being averted by receipt of social benefits, return to subsistence agriculture (the use of the own plot of land to survive) and reliance on family support networks which are under increasing strain. Family and women in Russia in Transition 1. Modernization of the Family: New Emerging Forms of Family Patterns. In the early 20th century in Russia, relatively large rural families with dependent children were prevalent. Since the mid-century, owing to the shift of the majority of the work force to the non-farming sector and to the migration of most of the population into the cities, the majority of families have lived in urban areas. The modernization of the family and its functions has been accompanied by a significant change, if we consider the size and composition of families themselves. In the 1970s and 1980s, the share of the smallest families (i.e., two-members) increased (especially in rural communities, where this phenomenon was connected with the mass migration of young people to the cities), whereas the proportion of families with five and more members decreased. Over the same period, the proportion of medium-size families (consisting of three or four persons) has exceeded 50 percent and remained relatively constant. The 1994 micro-census of the population showed that 60 percent of all families consisted of a married couple with or without children. At the same time, the distribution of urban and rural families by size showed some differences: the rural population is distinguished by a high share of both the smallest and the biggest families. Currently three types of families are most prevalent in the Russian Federation: a) married couples with children (nuclear families); b) single parents with children (single-parent nuclear families); c) married couples with children, or childless, living with one of the wife’s or husband’s parents or other relatives (extended, or complex families with a married couple nucleus). Nevertheless, the growth of the percentage of all these categories together has been accompanied by growth of the share of nuclear families (type a) and by reduction of the share of complex families (type c). The changes that russian family has undergone in recent decades have produced also alternative forms of family patterns, such as unregistered cohabitation or unipersonal family (the “single”). 2. Changes in Family Formation: the Most Striking Demographic Changes which Have Accompanied the Transition. The most striking demographic changes which have accompanied the transition apply particularly to birth rates, marriage rates, divorce and high male adult mortality rates reflecting on the household structure. Household structure is being affected by demographic trends such as fewer marriages and more cohabitation (which, however, do not account for the rising share of births outside marriage) and more divorces or more premature male adult mortality. There are signs that more and more children are not living in dual-parent households, but in single-parent households or extended family households. 3. Family’s Demographic Type and Poverty. Single-mother families and single elderly women make up a group with the highest poverty risk. In case of single-mother families, poverty factors include both low individual income of the mother, and the insufficient 4

amount of private and public transfers designed to partly offset the absence of the second income source in the family (children’s alimony following the divorce, pensions for the benefit of children after the death of their father, single-mother allowances, and so on). Women household heads with dependent children have more problems in finding work and are particularly vulnerable to unemployment. Elderly population poverty factors belong to the sphere of insufficient amount of the effective pension allowances for individuals of the older retirement age, of which 90% are women. In the new economic environment the financial status of retirees and single-parent families has been further undermined by the dwindling public consumption funds. 4. Family and Social Support: from Interfamily Mutual Assistance Network to Social Networks and Civil Empowerment. The families need not only incentives, money and material resources, but also social support. Social networks are vital resources. Traditional networks based on reciprocity survived from peasant society through the Soviet period, but are now coming under increasing pressure with the growth of inequality which undermines reciprocity. Not nearly enough is known about the role of such social networks or the conditions under which they thrive, but one feature inherited from the Soviet period is that they tend to be narrow, confined to relatives and close friends, and so do not provide a strong basis for the development of community and civic organizations. Close inter-family ties to some extent compensate for the lack of government social support to families with kids. They support families with “private transfers” rendered in cash, in kind or in service. But this phenomenon today tends to grow and transform in line with the social changes in the society. The social isolation of the family is complemented by her civil and political isolation, which prevents her from defending and pressing her own interests. Democracy and good government starts at the bottom, so that initiatives to reform institutions from above need to be complemented by measures to encourage participation from below by supporting the development of effective participatory community and civic organizations at the base so that they can press for the civil rights. They can play an important part in supporting family by providing legal advice and representation for those families whose rights have been violated. 5. Sexual Violence/Abuse within the Family: Domestic Violence With the collapse of the Soviet Union in 1991, the Russian Federation has emerged as the largest, richest, most populous, and most powerful successor state to the former superpower. In transitioning from one-party rule and a command economy to a multi-party political system and a market economy, however, Russia has undergone substantial economic and political turmoil. The effects of this instability and dislocation have been experienced throughout russian society. They have been devastating for the families, particularly for the lives of women and children. From the workplace and government to the streets and the home, russian women and children are increasingly encountering discrimination, exclusion and violence. While there are no official statistics specifically on domestic violence, according to the present Ministry of the Interior, approximately 80 percent of violent crime occurre in the home, and 30 to 40 percent of murders in Russia are committed by one family member against another, and women and children are the most frequent victims. A phenomenon of the last years are women’s crisis centers that provide services such as hotlines, individual counseling, emergency shelters and legal aid. These centers, registered officially as nongovernmental organizations under Russian law, provide the only services available to victims of domestic violence (battered women and children). In 1994 was created the “Russian Association of Crisis Centers for Women”, that actively encourages regional and local women’s groups to build a network of crisis centers. 6. The Impact of the Transition on Rural and Urban Families: Socio-Economic Inequalities. The problems of rural and urban families are qualitatively different. Food consumption of rural families (threequarters of which in Russia is home-grown) is substantially greater than that of urban families and nutritional standards even of the poorest families are much better The urban family runs the risk of going hungry, because it is less likely to have access to land. The rural family is much less likely to go hungry, but it will be much shorter of money and the things that only money can buy. Moreover, it is less likely to have access to services. The rural family probably suffers the most from the deterioration in the social infrastructure, in health care and from the sharply increased cost and reduced provision of public transport. In such a situation, the

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comparison of the rural family to the urban one is possible on the basis of the analysis of real consumption and real expenditure. 7. Child and Family Welfare: Child Protection, Family Support and Istitutional Care. The adoption of some federal laws in 1998-1999 promoted the development of an infrastructure of social services and the creation of new types of institution rendering social services to families, women and children: residential family and child social support agencies, social rehabilitation centers for juveniles, social shelters for children and adolescents, rehabilitation centers for children and adolescents with limited capabilities, psychological and pedagogical assistance centers, emergency psychological aid helplines and crisis relief centers for women. The number of family and child social support agencies, at the beginning of 2000, amounted to 2,240 institutions. One of the types of social services extended to families and children is “social patronage”. Social workers address the problem not only for the client, but also of his or her family, and try to resolve it. The work of family and child support agencies is aimed to prevent juvenile neglect, create conditions for preventing violence against children and adolescents, and protect their rights. Also the network of agencies that help the victims of domestic violence is a new line of social work. 8. Child and Family Welfare: the State of the Health Care System. The state of the health care system is at the center of both Russian public attention and political debate. The existing health care problems have been greatly aggravated by the breakdown of the old system. In the Soviet era, virtually all health care was provided free by the state-run health sector, which emphasized the quantity of medical personnel and facilities over the quality of services and pursued goals set on the basis of political ambitions rather than on objective medical needs and economic capabilities. With the crumble of the command economy, the public health sector plunged into a deep financial crisis. The budget of the resources currently allocated to health care is hardly sufficient to pay the salaries of the sector workers, and there is virtually no money left for drugs or equipment maintenance and replacement. As a result of the dire crisis of the health care system, the health status of the russian families is worsening, and many diseases that were long thought to be eliminated or controlled are now spreading again. The russian government has attempted to reform the health care sector through decentralization, marketing of services in state-owned facilities and the promotion of the private medical sector. However, the reform has non yet produced any noticeable results. Russian families are used to receiving free care and are unwilling, and very often unable, to pay for the services. 9. The Impact of Wage Nonpayment and Wage Arrears on the Families and Their Survival Strategies. As a result of the failure of enterprises and government to fully pay workers in a timely fashion (the average wage delay in the hardest hit regions and industries is over three months, while many people are unpaid for six months and more), we find that families are more likely to take second jobs, increase home production for own-consumption and sale, reduce their rate of saving, sell family assets, and receive transfers of goods and money from relatives (which, in turn, reduce the effect of wage nonpayment on poverty). Wage nonpayment also contributes to a rise in barter between workers and firms, although the monetary value of these goods and services does little to arrest the upward trend in outstanding net debt to workers. 10. The Impact of Regional Inequalities on the Family Standards of Life. The collapse of the old system and the disintegration of the Soviet Union has removed the old system of income equalization between town and country and between regions, allowing substantial inequalities to open up on the basis of different resource endowments. These regional inequalities have been considerably intensified by structural changes in the economy, with the decline of agriculture and of old heavy industries and the riorientation of industry towards export markets. Moreover, the structure and level of prices differs quite considerably between regions as well. All this situation produces very dramatic differences between the families, which live in different areas of Russian Federation.

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11. The Impact of Low Pay and Unemployment on the Family Standards of Life. Low wages are a result of both the decline in the general level of wages and the very substantial increase in differentials. Pay differentials have widened substantially in favour of senior and middle managerial and professional employees at the expense of clerical staff and manual workers. Differentials between industries have also changed very radically, with agriculture everywhere suffering worst and engineering and military production losing their formerly privileged position. There have also been very substantial increase in regional pay differentials and price levels. In Russia, low wage households are two-third of the total number of poor. Those who have suffered most from declining incomes are households headed by manual workers in declining industries (who will mostly be men) and regions, those headed by lower-grade clerical workers (which will mostly be female-headed households) and those headed by unskilled manual workers. The dramatic fall in wages and rise in unemployment has prevented a growing number of able-bodies adults from earning sufficient to support themselves, let alone any dependants. In Russia, the average wage is no longer anything like sufficient to support two individuals at the minimum subsistence level - this means that a two average-income family with two children will be living in poverty. When the wages are so low for many in employment, with many being paid nothing at all, the unemployed are not necessarily worse off than those formally in work. The impact of unemployment on the status of the households depends on the level of unemployment benefit and the earnings of other household members. Only a minority of the unemployed receive unemployment benefit and in general the benefit rates and eligibility have been reduced as unemployment has grown. Households with children or disable members are the most vulnerable because of the low level of wages and the erosion of the value of child and disability benefits. 12. Families Consisting of Migrants and National Minorities. During transition, Russia have found itself having to absorb ethnic migrants. It is estimated that by mid-1994 there were two million russian returnees, plus about 500,000 non-russian refugees from conflict zones in the Fsu, and 600,000 from the far abroad. Migrants appear to have problems integrating despite the commonality of language and religion and are also, like ethnic minorities, disadvantaged. In Russia the ethnic minorities tend to live in the more remote rural depressed regions and suffer from the removal of the former mechanisms of regional redistribution. They tend to have larger families and lower levels of education than ethnic russians. All these factors combined determine great differences between russian families and the non-russian ones. 13. Qualitative Indicators as Well-Being Measures of Families. The falling share of wages is not compensated by an increasing share of cash social transfers. But full citizenship demands not only an income by cash transfers, but also free access to social services, health care, child care, education, transport and leisure; a safe and healthy environment, including clean water and efficient sanitation; freedom from crime and from the fear of crime; respect for freedom of speech and association and the right and ability to participate in public life. Many of the chronically poor families are such because of their social isolation due to the deterioration of social and public services, of health care and the education systems, the fracturing of social life. 14. The Lack of Social Protection of the Families: The Crisis of the Welfare System. Social assistance in most countries is not well-targeted, and in Russia it’s actually regressive. Social assistance accounts for only a very small proportion of expenditure, despite the enormous increase in both unemployment and poverty resulting from the fall in wages and the erosion of the real value of categorical benefits. The fall in both profits and wages in the transition crisis undermined the fiscal basis of the state budget and of the social and welfare system, while shortage of liquidity has added the problem of the nonpayment of taxes and contributions to the social funds. Meanwhile, much of the new private sector operated in the informal economy and was able to evade or escape taxation. As a result, the present system offers the worst of all existing social and welfare sistems: on the one hand, the erosion of benefits and the inadequacy of unemployment insurance mean that it no longer functions as a universalistic welfare system which guarantees that the principal high risk groups will be protected. On the other hand, the inadequacy of the present system of social assistance means that it is unable effectively to relieve the prime at-risk categories of the population (children, the elderly and the chronically sick and disabled) and to protect the 7

unemployed and the low-paid. The breakdown of the benefits system have produced the worsening of the conditions of life of the families. The non-payment and the meagre entity of the maternity and child benefits and of the pensions, in disadvantaged conditions of labour market, is such that the majority of families fall in poverty without social benefits. 15. Looking into the Future: Measures Aimed to Provide for Income Supports for Families in Order to Cushion the Impact of the Changes (Some Examples). The policy aimed to guarantee the family well-being is associated with the measures of well-directed social support. Such policy may achieve a desiderable effect only if it is pursued along with the measures aiming at bringing down the overall poverty level which affected the majority of the russian families. With the rise of the nominal statutory wages insurance payments to government social funds (the pension fund, employment fund, etc.) will also go up, which will make it possible to increase pensions and other social benefits, and resolve the wage and pension arrears issue. The measures aimed to increase the official wages and salaries of low-paid categories of employed may be achieved through the revival of the national production and the decreasing differentiation in labour payment. At the same time, it’s necessary to increase supervision over the payment and distribution of incomes through a) programs to eliminate the gap between the minimal wages and the subsistence minimum; b) exclusive programs targeted to control the income of top managers; c) extrusion of non-money forms of labour payment. Extrusion of non-money forms of labour payments and inclusion of social benefits, grants and privileges into the system of wages and salaries could be also considered as a pontential resources for raising official income. It’s necessary to bring down the tax burden related to wages and salaries and the payroll fund. Finally, it’s necessary to adopt measures targeting single-parent families support through a: an improved system of government and private transfers (for example, to reinforce the law ensuring that the father, after separation, pays child’s alimony in time and in the amount needed to meet the child’s interests. As for children’s benefits, and in particular single-mother allowances, their assessment basing on the minimum statutory wages invariably devalues the already meagre amounts since the statutory wage minimum has not be indexed for some time already. The income-based assessment of those allowances does not radically help since the amount remains the same while the eligible income threshold stays rather high. It would be more appropriate to introduce a separate, supplementary allowance that some countries offer to support singleparent families - “a single-parent allowances” - and pay to low-income families); b: the creation of a favorable environment for the realization of women’s professional potential (for example, ensured access to child care institutions, when special services are offered at home or outside home; a more sophisticated households services industries that helps to create jobs for women on the one hand, and allows single working mothers to continue in the jobs and take care of the household on the other; introduction of specific measures targeting socially disadvantaged categories of mothers - single mothers, mothers of big families or incapacitated children - and designed to have employment agencies offering retraining or encouraging employers); c: the adoption of exclusive measures designed to help single women of the older retirement ages (for example, to create the conditions for an easier access to individual social welfare. Currently, pensioners’access to individual social welfare is restricted by the applicable indigence criteria whereby in most regions the welfare assistance is available only to those whose incomes are less than half the subsistence minimum). As the transition has progressed, Russia has been spending relatively less on family allowances. Support programs have often shifted from universal coverage to targeted coverage and, in some cases, have been eliminated altogether. The family allowances are usually received by the mother. However, this arrangement also means that women are the ones who mostly keenly feel the deterioration in the benefits. At the same time, divorce and single-parenthood are becoming more common, and this is placing women and children at greater risk of financial difficulty and poverty. There is also evidence that couples with more children have a greater chance of divorce, thereby exposing a greater number of children to risk. Single-parent families are hardly a new phenomenon in the region. In the past, there was little difference in the poverty rate among children in singleand two- parent families. This was apparently due to the generous family allowances, guaranteed employment and readily available childcare. Because these are being eroded, a new group of disadvantaged children those living in single-parent households - is likely to emerge in the region. For this reason, it’s necessary also to look at the issues of child support payments by non-custodial parents and personal income tax reform as part of the new policy framework around family income. 8

16. Changing Childcare During the Transition. For households with young children, adequate, accessible and affordable childcare is crucial to the effort to balance employment and family responsibilities. During the transition childcare environment has changed. The population of infants and young children is greatly reduced, public childcare facilities are less available, childcare fees have increased, and stay-at home parenting is being promoted. Maternity entitlements have remained relatively untouched and, along with parental leaves, have been extended. However, the good intentions behind maternity and parental leave measures often go unfulfilled in the new labour market. It’s tipically women who must adapt and take on more responsibilities in order to accommodate the new circumstances. Thus, there is evidence that employers may be unwilling and parents unable to take full advantage of the leaves. Male participation in parental leave remains negligible. Enrolment rates in nurseries and kindergartens have fallen because childcare costs increased. A range of childcare options needs to be developed to meet the different necessities of families, particularly of ones in need of help, and the diversity emerging in the work and family arrangements of women and men. 17. Changing Living Conditions and Lifestyles of Families During the Transition. The transition has brought many changes in the living conditions and lifestyles of families, and these social factors are important determinants of health. The population have experienced micro-nutrient malnutrition linked to a drop in food consumption, a deterioration in the quality of the nutrients consumed, and the disruption of certain nutrition programs such as the fortification of bread with iron and the supply of vitamin and mineral supplements to pregnant women and children. The access to medical service is declining, including the availability of and ability to pay for medical treatments and drugs. The upheaval of the transition has created an environment - increased poverty and social stress, more migration, changing social values, and growing criminality - that provides fertile ground for risk-taking behaviours. The spread of “social diseases” is being compounded by the fact that there is often a lack of awareness, education, infrastructure, and programs addressing the problems. There are indications that smoking and alcohol consumption have risen sharply among the teen-agers. The prevalence of drug abuse and sexually transmitted diseases (Hiv, syphilis, ecc.) has also risen alarmingly. The Russian Social Welfare In the 1990s, economic transition and the end of Soviet-era public welfare forced more Russians into poverty as state social support programs failed to meet the social needs of a new economic system. Most enterprises provide an extensive social safety net for their workers, including maternity leave, child allowances, housing, paid vacations, and medical care. However, many workers are forced to postpone retirement because the post-Soviet pension system, which is Russia’s largest expenditure for social welfare, has not been adequate to provide for retirees. Between 2002 and 2004, average monthly benefits increased from US$45 to US$58. Worker pensions are funded by employers through a single social tax and by a direct assessment on self-employed workers and independent farmers. In January 2005, the government’s poorly planned conversion of pensioner benefits, such as subsidized medicines and transportation, into less valuable cash payments aroused large demonstrations all over Russia. In mid-2004, an estimated 20 percent of the population fell below the minimum subsistence level of US$79 per month. Most welfare agencies are run at local o regional rather than national levels, but they suffer from inadequate funding and corruption. No agency ministers specifically to the homeless, whose number has grown since 1991. The Fund for Social Support, which maintains a number of social assistance programs, has suffered from corruption scandals.

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