Democratization, Social Welfare and Individual Rights in Russia: The Case of Old-Age Pensions

Article excerpt

ABSTRACT: Russia's transition to a market economy has been accompanied by serious, and in some ways unanticipated, disruptions of the existing social welfare system. The social policy dilemma has become a contentious issue in the national political arena. This paper examines the debate on the relationship between social welfare and democratization in post-communist Russia, exploring the case of pensions for the elderly. Although the causes of the pension crisis are complex and rooted in institutional difficulties, the state's fiscal weakness alone does not explain the difficulties and controversies associated with Russia's pension crisis. Analysis of the assumptions and principles of pension policy during the Soviet era and perestroika reveals that Russia today is caught between contradictory and competing discourses over citizens' entitlement to pensions: Is an old-age pension to be considered a reward distributed by a prosperous society, or a basic and inviolable human right? Although the Russian government has used an argument that in effect makes pensions conditional on government resources, citizen and opposition protest has to some extent compelled the Russian government to be increasingly sensitive to demands for guaranteed pensions.

The plight of pensioners in the former Soviet Union is one of the most tragic social consequences of the collapse of communism. Since the introduction of "shock therapy" in 1992, Russia's state-funded old-age pension system was severely tested, and the pension crisis in the country did not improve over the first eight years of the post-Soviet transition. Pensions were slow to keep up with a skyrocketing standard of living. By 1995, the average pension had fallen to 94% of the pensioner subsistence minimum.1 Worse, the crisis of pension arrears appeared, causing some citizens to endure weeks or months of delays in receiving their payments. By October 1995 pension arrears were reported in 62 regions2 and by 1998 one expert claimed that pension arrears were "systematic."3 As of August 1998 (before the financial crash that led to the resignation of Prime Minister Sergei Kiriyenko), the national Pension Fund was 31 billion rubles in debt. 4 In February 2000, even following two pension increases in a three-month period during election season, the average pension stood at 650 rubles, which was only 95% of the subsistence minimum. 5 How could this pension crisis fail to disappoint citizens accustomed to a more predictable, if modest, set of social benefits during the Soviet era?

It is noteworthy that pension debate in Russia provoked great intensity and controversy. Yet until 2001 there was relatively little progress in serious, sustained efforts at reform. The shortcomings of social welfare reform in post-- communist countries are often presented as the result of a lack of fiscal resources or as reflections of the institutional dilemmas of the transition from communism.6 The fiscal and institutional obstacles to pension reform in Russia are indeed daunting, but politics have also played an important role in the way that the pension crisis has unfolded. There has been full consensus that pension reform is necessary, but a lack of consensus over what it should involve. Within Russian political society, actors often argued that the government failed to fulfill its legal and moral commitments to provide citizens with a pension sufficient to maintain a minimal standard of living. In this regard, the debate over old age pensions is symbolic of larger issues in the political arena: it reveals a collision of contending, unresolved ideas over the mutual obligations between citizens and the state. Are citizens entitled to pensions as a universal human right? Has the government made a moral commitment to the pensioners? Or are pensions only a conditional benefit, subject to the state's fiscal and institutional capacities?

This paper will argue that the pension crisis in Russia reflects, and in part results from, a clash of ideas over the rights of the individual. …