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CNN World Report

Putin Announces Increase in State Wages, Pensions.

Aired May 06, 2001 - 14:16   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ASIEH NAMDAR, CNN ANCHOR: The elderly are some of the most affected people by fixing drug prices, especially in Russia. But after enduring a decade of post-Soviet stagnation, Russian senior citizens are finally getting an economic break.

President Putin has announced an increase starting this week in state wages and pensions. The hike is fueled by higher state income from spiraling world prices for Russia's oil, gas and other commodities.

ORT has more on the plight of Russia's pensioners.

(BEGIN VIDEOTAPE)

MAXIN BOBROV, ORD REPORTER (voice-over): At a special meeting of the Pension Reform Committee, Russian President Vladmir Putin announced that monthly pensions will be raised. Russian senior citizens will be paid an average of 1,013 rubles, or about $35 American each month. There are about 38 million senior citizens in Russia. It is guaranteed the minimum pension from the state. Now each Russian citizen is also allowed to make payments to a special account to save money for his or her retirement.

Younger people pay more, older citizens pay less. But this raises the question of what to do with those the funds. At the moment, this huge amount of money is simply sitting in the Central Bank, generating no interest. But if it was invested in the economy under state guarantees, this will allow the government to substantially increase pension payments. And a special committee is now preparing a proposal on how to reform Russia's pension system.

But an even bigger problem than pension reform is the life expectancy of Russian citizens. An average Russian male is not likely to live long enough to collect the pension. Statistics show that he will live only 59 years.

ALEKSANDER POCHINOK, RUSSIAN MINISTER OF LABOR (through translator): These facts are very sad. We are working on a new law that will allow widows and other close relatives to inherit this money. But this question is very complex and it must be discussed not only by the government and the parliament, but by all Russian people.

UNIDENTIFIED ORT REPORTER: This report was prepared by ORT Russia for CNN WORLD REPORT. (END VIDEOTAPE)

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