Putin in a dilemma: abolish pensions for more children? Protests erupt!

Putin in a dilemma: abolish pensions for more children? Protests erupt!

The Russian government faces significant financial challenges that urgently require new solutions. How fr.de reported that massive cuts in significant investments have been made in order to save costs. These cuts became necessary because the oil trade, a key economic sector in Russia, is weakening and thus depressing the state's revenue.

Amid these financial constraints, billionaire Konstantin Malofeev has made a controversial proposal: abolishing state pensions. According to Malofeev, such a measure could help increase the birth rate, since only a limited group of people in the Tsarist Empire benefited from pension benefits. These statements were met with strong popular protests, as many citizens feared that it was an idea supported by the Kremlin.

Demographic concerns

The demographic situation in Russia is precarious. In 2023, the birth rate fell to 1.41, which is the lowest value in 17 years. President Putin has set a goal of increasing the fertility rate to 2.3 by 2030. But this is a daunting challenge, especially since the United Nations forecasts that Russia's population could shrink to between 74 and 112 million by 2100, compared to the current 146 million.

Already in 2022, the official population of Russia was given as 145.6 million and there was a census that showed 147.2 million. However, this census was heavily criticized by demography experts, among other things because of the low participation of the population and the insufficient recording of migrants. Demographic development has been characterized by a decline since the collapse of the Soviet Union, particularly in the 1990s when the birth rate fell to 1.16.

Consequences of the Ukraine War

The current situation is further exacerbated by the war in Ukraine, which is causing both exodus and loss of life. It is estimated that there are now over 9,500 deaths and a staggering 2.8 million border crossings from Ukraine have been recorded. In addition, the number of migrants coming to Russia permanently could stagnate. This increases the challenge of maintaining the population and increasing the birth rate.

Economically, this uncertainty is also having an impact on the banks. Sberbank's Mikhail Matownikov has proposed skimming interest from savings deposits to finance construction projects. He believes the interest would be enough to support unsold housing projects. Sberbank, which is partly state-owned, plays a central role in the Russian economy and could therefore represent an important measure to address resource scarcity.

In summary, Russia is facing a serious crisis not only economically, but also demographically. The proposals to abolish pensions and the plans to increase the birth rate are under pressure from war and a fragile economic situation, which makes finding a solution extremely complicated.