Paraphrasing an opening sentence of Leo Tolstoy's 'Anna Karenina', that goes as 'Happy families are all alike; every unhappy family is unhappy in its own way', it can be said that every Russian poor is different - poor for different reasons and to a different extent. They come from different backgrounds: ages, religions and different regions of the country. However, there is an important fact – the poor in Russia are numerous. According to the World Bank, 20 percent of the Russian population (roughly 30 million) live below the poverty line, which is defined as a monthly income of 1,000 rubles (less than $40). The consequences of poverty are overwhelming - Russia is lagging behind many countries in the human resource development index. For instance, present-day Russian life expectancy is ten years shorter than that of Cuba and the incidence of tuberculosis in Russia is 10 times higher than in Europe. This essay aims at analyzing the phenomenon of poverty in Russia as well as possible solutions of fighting it.

Some of the causes for extremely poor living conditions for many Russians are:

- the collapse of the Soviet Union that caused the disappearance of social security nets and emergence of poverty;

- political and societal changes over transitional period – acute corruption and abuse of power, leading to a deeply divided society;

- poorly elaborated and/or implemented economic reforms; 

- high unemployment rates and significant underemployment;

- inequality between public and private sector development leading to even full-time working people being hostages of poverty, mostly low-ranking civil servants;

- high inflation rates resulting from growing “export money” inflow and irrational budgeting policy;

- extreme weather conditions that aggravate poverty, requiring expenditure for heating, clothing and calorie-intake.

Although the situation might look bleak, several actions on the national and international levels could be taken to fight poverty.

National Measures:

1.  There is a need to have a national anti-poverty strategy incorporating the following measures:

1.a. Strong budgeting policy, reducing government spending to lower inflation and reorganizing the structure of spending by focusing on the most vulnerable fields and those adding the most value to the economy;

1.b. More sophisticated social security reforms, avoiding simple transformation of social benefits into substantially smaller cash payments;

1.c. A true educational and health system reform, where they are made accessible to all echelons of the population;

1.d. Aggressive anti-unemployment policy;

1.e. Premium on improving living standards, developing infrastructure and providing access to information and modern technologies;

2.  All-out efforts have to be made to ameliorate national economy, especially by diversifying.

While growth has been steady, it has been uneven; the poor have fallen further behind. Exports are mostly commodity-based and investments remain concentrated in the natural resource sectors. This is undesirable in any case, even more so in light of reducing poverty. The economy success will depend on scope and speed of diversification, both away from oil and gas, and deeper into Russia's regions.

3.  Improving public sector management and fighting corruption is essential.

Important measures include modernizing the civil service, public administration and judicial systems, and improving public finances. It is crucial to eliminate corruption and provide equal opportunities for individuals and businesses.

International Institutions need to:

1.  Improve efficiency of international aid.

International organizations are to refrain from 'feeding people fish rather then teaching how to catch them' – simply distributing ready money, and try harder to promote earning. It’s important to share international experience and assist in generating and implementing ideas.

2.  Expand microfinance to public.

Although microlending is available in Russia, it mostly targets small enterprises. Individuals who often need money for a start-up but are ‘unbankable’ should also benefit from microlending.

3.  Create incentives for investments beyond resources sector.

Industries that have a multiplier impact like housing or automobiles, or would alleviate impacts of poverty like medical investments, are the types of sectors in need of investment.

Lord Rothschild once said “the right time to invest comes when there is blood on the streets”. Translating it to Russia’s reality, this means that while there is a big need of investors in not-so-lucrative sectors (electroenergy, infrastructure), opportunity to make money there should attract attention.

Realizing any of the above proposed measures would improve present conditions. However, for the best possible results, above factors should be treated as the mechanism of a watch where each part is essential.