Russian employment support programme falls flat

By on 26/04/2016
The scheme's spending is overseen by Russia's Ministry of Labour and Social Protection

A 3.9bn ruble (USD$60m) anti-unemployment scheme run by Russia’s 18 regional governments has failed to generate significant results, the Accounting Chamber of the Russian Federation has found.

The spending, overseen by the Ministry of Labour, was part of a national anti-crisis programme initiated in 2014 when oil prices began to fall. Predicting a rise in unemployment, the ministry passed funds to the regions in 2015 – but according to Vladimir Katrenko, the Accounting Chamber’s auditor, the regions focused their employment programmes too narrowly on a few chosen sectors.

In the Altai Territory, for example, the vast majority of spending went to protect the jobs of workers at risk of dismissal in a handful of manufacturing industries, whilst just 49 workers in non-manufacturing sectors received support.

“As a result we can establish that, on average, the number of officially registered unemployed in these regions either increased or, sometimes, remained unchanged,” Katrenko concluded. “Of course, the efforts of local administrations were better than nothing but, taking into account the amount of government expenses on these programmes, we could have expected a much more systematic approach to the labour market problems.”

Tatiana Maleva, head of the Centre for Social Analysis at the Russian Presidential Academy of National Economy and Public Administration, told Global Government Forum that the regions had expected the pattern of unemployment to repeat that of previous recessions, in which manufacturing businesses shed jobs whilst demand for public sector professionals remained strong.

“Usually specialists from such sectors as health and education can easily find another job within the Russian labour market. The demand for these professionals is permanently so strong that even an economic crisis, if it is short, cannot seriously influence their position,” she said.

However, the combination of western sanctions and a depressed oil price that shows few signs of recovery have led to these traditionally more robust sectors shedding staff. “Since we do not see any real possibility for an increase in the price of oil, there will be no reason for the Russian economy to develop and so the crisis is going to be a long one,” Maleva explained. “In such a situation the scope for companies to hire people would, of course, be much smaller, than before”.

The Accounting Chamber concluded that the regions should have taken a systematic approach to supporting employment across their labour markets, including sectors such as health, education, culture and social protection which have survived previous economic storms relatively undamaged. In this recession, according to the state statistics bureau Rosstat, job losses have been growing across the whole economy.

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About Anastasya Manuilova

Anastasya Manuilova is an economics reporter for the Russian newspaper Kommersant, covering welfare, labour markets, demographic change and the pharmaceutical industry

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