Putin's Payments To Russian Soldiers Lead To Poverty Reduction In Russia: Report

Russian President Vladimir Putin's payments to soldiers for their participation in the war in Ukraine have helped reduce poverty in the country, according to a report.

Russia's spending in the war effort in Ukraine led to a record budget deficit in December. However, an investigation launched by Bloomberg Economics found that Moscow's spending, which included expanded handouts and payments to soldiers fighting in Ukraine and their families, has helped sharply increase the income of the poorest 10% of the country's population.

The publication also cited statistics from the national statistics agency Rosstat which found that the number of people living below Russia's official poverty line has decreased by at least 700,000 in the third quarter of 2022 compared to the year before. People living under the official subsistence level are defined as those having an income below $186 per month.

Additionally, the number of people living below the poverty line by the third quarter of last year has gone down by 2.3 million when compared to the second quarter.

Apart from Moscow's spending on social military benefits, the Kremlin is also expected to spend about 2 trillion rubles ($30 billion) on assistance to families with children and 800 billion rubles ($12 billion) on pensions this year. The amounts are twice the figures spent in the second half of 2022, according to the outlet, citing Russia's finance minister Anton Siluanov.

Despite the poverty reduction, economist Yevgeny Gontmaker told the publication that people in Russia, in general, are getting poorer. He also noted that the size of the country's middle class has shrunk due to the war and now comprises below 10% of the population.

"The people as a whole are getting poorer, but the poor are becoming fewer in number," he said.

The report comes after Putin ordered the payment of 5 million rubles ($73,000) to the families of soldiers who are killed in combat in Ukraine. Veterans who suffered injuries or traumas in the war will also receive 3 million rubles ($44,000).

The order will cover the families of soldiers who died or were injured since the war in Ukraine began in February 2022.

In November last year, Putin ordered a one-time payment amounting to 195,000 rubles ($3,200) for contract soldiers and people who have been mobilized to fight in Ukraine. Putin claimed the payment was designed to "provide additional measures of social support."