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Monday, October 24, 2016

The difference between Crimean and Ukrainian pensioner striking

In the Internet appeared the video, which Prime Minister Dmitry Medvedev in response to a complaint from Feodosia pensioner on a small pension responded that “no money”. In fact, the situation is not so critical: the authorities are still looking for opportunities to re-increase of pensions this year. And what would be the pensions received by pensioners of the Crimea, if the Peninsula remained part of Ukraine?

Prime Minister Dmitry Medvedev on the eve during communication with the inhabitants of Feodosia said about the lack of money for the indexation of pensions. So he responded to a complaint of a local resident about the pensions in eight thousand”, which it is impossible to live under the current “crazy prices” in the region. According to the inhabitant of the city, she did not even counted the first of the promised indexation of 4%.

“The Ukrainian retired on a pension unable to pay even the utility costs, not to mention buying food”

“Pensions are going to do for the country. We can’t do in only one place… Her retirement (indexation) does not, we do not accept. Just no money now,” – said Medvedev, and his companion called it “honest.” “Find the money, do indexing” – the Prime Minister said and wished the people a “good mood”. For a video of this conversation was posted online and caused a great resonance.

In the Kremlin, in turn, declined to comment on Medvedev’s statement about the lack of budget funds for the indexation of pensions. “In this case, I would not consider it proper to comment on the decision of the government and especially the head of the Cabinet; the question I will leave no comment,” said presidential press Secretary Dmitry Peskov. He stressed that the issue of pensions “it is a question of the government, it has the broadest powers”.

Later the press Secretary of the head of the government Natalia Timakova explained there had been a misunderstanding. She recalled that at the beginning of this year, the government had to index pensions by 4%, “and then the Prime Minister said that economic results of the first half will decide on the second increase of 4%”. This is no solution, but no one took the decision to cancel the second increase. “There are half a month to assess the socio-economic situation, work is underway, the government continues to evaluate the possibility of the second doindeksatsii pensions,” she said.

The legislation provides for the indexation of pensions on actual inflation rate. In 2015, it was 12.9%. However, in 2016 because of economic situation pensions for the first time in many years will be indexed below inflation – a maximum of 8% in the worst case scenario for a lower percentage, but not less than 4% (which has already taken place). At the same time Medvedev promised to make every effort to return to the normal indexation of pensions in 2017.

Certainly, 8 thousand rubles – this is not too much. However, what would happen to Ukrainian pensioners, if Crimea remained part of Ukraine? What would the pension received by elderly residents of the Peninsula?

The average pension in Ukraine is now 1670 hryvnia, rouble or 4462. For comparison: in Russia the average pension in March 2016 was equal to 12 397 rubles, which is almost three times higher. Ukrainian authorities have promised the indexation of pensions this year, but even speech are not about to increase in proportion to inflation. And in Ukraine in the past two years, prices don’t just grow in the country in fact there is hyperinflation. Only the official price increase in 2014 amounted to almost 25%, and in 2015, and does 43%. In Russia, inflation is also high, but significantly less in 2014 and 11.4% in 2015 to 12.9%.

However, the comparison of the average sizes of the pensions are not always correct, more fair would be to compare revenues with expenditures in each country. The main costs incurred by seniors is housing and utilities and buy food.

In Russia housing and communal services are a maximum of 126 rubles for one square meter of housing under Federal standards. Thus, the maximum cost of housing services for a Studio apartment of 35 sq. m will be 4410 rubles. If you exclude all benefits for a pensioner living alone, the cost of utility services can be given by the maximum of one-third of the average pension in 12 400 rubles, or slightly more than half at a lower pension in 8 thousand roubles. Of course, for pensioners it is already a significant item of expenditure.

However, the Russian pensioner is still able to pay the maximum rate of the HCS, and still have on other items of expenditure. The Ukrainian retired on his pension is unable to pay even the utilities.

So, according to the expert of the “Ukrainian choice” Alexander Koltovich, subject to increased tariffs on a range of housing services in may 2016 living in a Studio apartment during the heating season will have to pay monthly on average 2388 USD, or 6380 rubles. “As a result, a single pensioner receiving the minimum pension in the amount of UAH 1130, paying above utility bills, will owe the state more 1258 USD. The family of two pensioners also do not overpower the suggested government rates. Paying the bills for communal, they’d still owe 128 UAH”, – thought Koltunovich. Even if the pensioner receives 1670 UAH (the average pension), he is still not able to fully pay the bill for utility services. For food products of the Ukrainian pensioners will not remain a penny.

If two years ago it was still possible to say that Ukraine is a cheaper country than Russia, now it is not. A little comparison of prices for basic foodstuffs in Ukrainian and Russian online stores showed that the cost of food at least equaled, and as a maximum on the poorer Ukraine is higher than in richer States.

Thus, according to Ukrainian online store, FreshMart, wheat sandwich bread, Harry’s is 118 rubles (USD 44) to 80 rubles in the Russian online store “Platypus”.

In the Ukrainian shop the cheapest cooked sausage with cream is 447 rubles (167,4 USD) per 0.6 kg against 198 rubles for half a kilo of the cheapest doctoral sausage in “Platypus”. Even higher quality sausage in a protein casing “Rublev” in Russia is cheaper – 330 rubles per 560 grams. Ground coffee Lavazza Rossa in Ukraine is 417 roubles (156 USD) for 250 grams, against 374 rubles for the same coffee in packaging of 200 grams. A striking difference in price of the same coffee, only beans and in packing on 1 kg, in Ukraine – 1776 roubles (665 USD), in Russia – 1475 rubles.

Even such an inexpensive product as sugar, in the Russian store are slightly cheaper – for 1 kg it is necessary to lay out from 51.30 ruble and the Ukrainian store and 53.4 rubles (20 USD), but for less than 800 grams. But a kilogram of wheat flour and a dozen eggs in the Ukrainian shop you can buy for a few cents cheaper than in Russian (if to take for comparison the cheapest product in a particular category). As can be seen, the cost of food from the Ukrainians and Russians should be about the same level.

Therefore, no matter how many complaints residents of the Crimea, which after the transition from hryvnia to rubles life on the Peninsula has risen, it’s safe to say that prices in their stores were not lower, and at maintaining the hryvnia calculations. Here only, unlike citizens of Ukraine, pensions and salaries in Crimea after joining Russia has grown to the national average, initially higher levels.

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