Regarding purchasing power parity, our country is streets ahead of most of our neighbours, and remains strong on a global comparison.
Section of Belarusian goods opened at Minsk’s Euroopt hypermarket
Recent research by the International Labour Organisation has shown that in most countries people spend the greater part of their earnings, up to 70 percent, on food. In our country, consumer spending on food is 39.9 percent. Over the last ten years however, a clear downward trend can be seen. On purchasing non-grocery goods, the average household in Belarus spends 38.9 percent of its income, and on services, 18.6 percent. If you compare these numbers with statistics from previous years, the logical conclusion is that the prosperity of our people is growing.
Certainly, there are also disadvantaged sections of the population. The ‘poverty line’ concept has its own criterion in all countries. In our case, people officially belong to this disadvantaged population when their incomes are below the minimum living wage. Since November 1st, this sum has been set at 1,396,000 Belarusian Roubles. It has been calculated as the minimum amount necessary to satisfy basic needs. Over the last decade and a half, the number of Belarusians in this disadvantaged group has dropped significantly. In 2000, almost 42 percent of the population belonged to it, and then in 2005 the share decreased by almost two thirds and was approximately 13 percent. In 2010, the figure was 5.2 percent and in 2013 rose slightly to 5.5 percent. The economically difficult 2011 was an exception when the number of disadvantaged slightly increased before the downward trend resumed.
Belarus is one of the few countries in the world where there is a positive policy to prevent the significant division of society according to income level. The ratio of incomes of 10 percent of the richest and 10 percent of the poorest groups of the population has remained unchanged in Belarus for more than ten years. The average differentiation index here is between 5.6 and 5.9, one of the lowest worldwide. In Russia, for example, the income gap between rich and poor is 16.7. In the USA the difference is 16 times greater, in Moldova more than 12 times, Estonia, Latvia and Lithuania has a differential of approximately 10. Poland and France measure 9 on the same scale and Germany 7. In Norway, which has been recently named the best country for standards of living by the UN, according to its Human Development Index rating, the ratio of income gap between rich and poor is 6.
By Alexander Benkovsky
