Today, the international community needs to focus on reducing social inequality and gradually converging the level of economic development.
This was stated by Russian President Vladimir Putin.
To do this, states must follow four main priorities, the Russian president said on Wednesday, January 27, during a video link speech at the World Economic Forum in Davos.
A person should have a comfortable living environment.
These are housing and accessible infrastructure: transport, energy, utilities.
And of course, environmental well-being, this should never be forgotten.
A person must be sure that he will have a job that will provide a steadily growing income and, accordingly, a decent standard of living, ”the Russian leader noted.
The head of state added that after the end of their careers, people should receive a decent pension and a social package.
In addition, world governments should provide their citizens with an effective level of medical care, as well as quality education, Putin said.
In his opinion, in this way it will be possible to achieve effective development of the modern economy, "where people are not a means, but an end."
As the president emphasized, it is these approaches that underlie the strategy of the Russian authorities.
“Our priorities are built around a person, his family, aimed at demographic development and saving the people, at improving the well-being of people, protecting their health.
We are working to create conditions for decent and efficient work and successful entrepreneurship, ”explained Vladimir Putin.
As Alexander Razuvaev, head of the Alpari information and analytical center, noted in a conversation with RT, at the moment the ability of companies and states to compete primarily depends on the quality of human capital.
In this regard, the level of education and health care in the country play a decisive role, the expert is sure.
At the same time, providing citizens with comfortable living conditions and a decent level of income has a positive effect on people's motivation and labor productivity, experts say.
Against this background, it is social policy that is at the head of the economic agenda of a number of states, including Russia.
This is the opinion of Vladimir Tikhomirov, chief economist at BCS Global Markets.
“By improving the quality and availability of social services designated by the President, the state will raise the standard of living, fertility and thus contribute to sustainable economic growth,” Tikhomirov explained.
Depth of inequality
According to Vladimir Putin, the socio-economic problems that have become aggravated in recent years have become a key challenge for the whole world.
The President recalled that, without taking into account the crises of 2008 and 2020, the period of the last forty years has become “oversuccessful” for the global economy.
During this time, the volume of world GDP has doubled, and globalization and the rise in developing countries have helped lift more than 1 billion people out of poverty.
“If we take the level of income of $ 5.5 per person per day, then according to the World Bank, in China, for example, the number of people with lower incomes has decreased from 1.1 billion in 1990 to less than 300 million in recent years.
This is definitely China's success.
And in Russia from 64 million people in 1999 to about 5 million at present.
And we believe that this is also a movement forward in our country in the most important direction, by the way, "Putin stressed.
Meanwhile, as the president noted, the overall benefit from the rapid growth of the global economy has been unevenly distributed.
As a result, in recent years, the gap in incomes of people in the world has significantly increased, especially in developed countries.
“According to the World Bank, if 3.6 million people lived in the United States of America with an income of less than $ 5.5 per day, for example, in 2000, then in 2016 there were already 5.6 million people.
During the same period, globalization led to a significant increase in the profits of large transnational, primarily American and European companies, ”Putin said.
According to him, over the past 30 years in a number of developed countries, the incomes of more than half of citizens did not grow, but stagnated.
At the same time, the cost of education and health care services has tripled.
The President attributed this state of affairs to a policy of the 1980s, which was based on the so-called "Washington Consensus."
According to experts, we are talking about a set of measures when countries are trying to achieve economic growth by increasing private debt, deregulation, as well as cutting subsidies and other government spending.
“It is curious that during the same time the stock markets have grown significantly.
The reason is simple - the economic policy of all G7 countries is pursued in the interests of the wealthiest strata.
It all boils down to the fact that stock indices are growing, and this is the main thing, but if someone is poor, this is his problem, ”explained Alexander Razuvaev.
During his speech, the Russian leader also pointed out the growing problem of the lack of demand for a large number of citizens.
According to the International Labor Organization, in 2019, 267 million young people in the world did not study or work anywhere, and among those employed, almost 30% live with an income below $ 3.2 per day.
At the same time, the coronavirus pandemic has only exacerbated the current situation, Putin said.
“Last year, the decline in the global economy was the highest since the Second World War.
Labor market losses by July were equivalent to almost 500 million jobs.
Yes, by the end of the year, half of them were restored.
Still, this is almost 250 million lost jobs.
This is a large and very alarming figure, ”the president stressed.
The Russian leader added that from January to September 2020, the loss of labor income in the world amounted to $ 3.5 trillion and is currently continuing to grow.
In his opinion, this state of affairs further exacerbates social tension in society.
Job Fair in Bogota, Colombia
© Luisa Gonzalez
As Vladimir Putin noted, in the current environment, stimulating the economy with traditional instruments by increasing private lending is becoming impossible.
Thus, in most countries, interest rates are at a record low, and the volume of debt has reached unprecedented levels.
“According to the IMF estimates, the level of total debt of the public and private sectors has come close to 200% of global GDP.
And in some economies it exceeded 300% of the national GDP, ”Putin said.
© Igor Golovniov / Keystone Press Agency
As Nikita Maslennikov, the head of the Finance and Economics department of the Institute of Contemporary Development, told RT, in the face of the fight against the pandemic, many central banks began to print money and pour funds into the financial systems of their countries.
Pumping the economy in cash should accelerate the recovery process, but it increases a number of long-term risks.
“The result of this policy was the growth of debt.
The burden falls on the shoulders of companies and states.
Also, an increase in the money supply in circulation risks turning into a surge in inflation.
And besides, the policy of such monetary stimulation leads to inflation of bubbles in the financial markets, "Maslennikov noted.
The further development of the world economy will be largely based on budgetary incentives, Putin said.
First of all, we are talking about increasing the role of states in the socio-economic sphere.
“It is absolutely clear that the world cannot follow the path of building an economy that works for a million people or even for a“ golden billion ”.
It's just a destructive attitude.
Such a model is by definition unstable, ”Putin added.