Russia’s Proposed Retirement Age Increase is Dead Wrong – What Russia Needs is a New Industrial Economic Model

The Russian government plans to implement a rise in the retirement age of workers from 60 to 65 for men and from 55 to 63 for women. These proposals are not only insulting and de-humanising to a population that has for centuries suffered at the hands of foreign war, but it demonstrates that there is a profound lack of imagination in the heart of Russian government when it comes to solving the key economic problems of the day.

The new scheme which is opposed by leading opposition parties including the Liberal Democratic Party of Russia (LDPR), is designed as a money saving initiative. In general money saving initiatives are misguided where there are ample opportunities for the state to generate wealth on a win-win basis that does not involve punitive measures against senior citizens.

 

 

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In pushing to increase the retirement age, Russia is breaking off from the Chinese model where the male retirement age is 60 for men and between 50 and 55 for women, depending on the status of their employment. By contrast, western governments have continually pushed to increase retirement ages in a cynical ploy against some of the most vulnerable people.

The key to solving Russia’s economic problems ought to begin with large investments in the industrial sector. As a large nation with vast natural resources, there is no excuse for throwing away the potential of a revived manufacturing and technology sector.

 

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One of the main problems in Russian industry is that a group of corrupt oligarchs continue to run some of the nation’s most valuable companies. As both the Communist Party of the Russian Federation and Liberal Democratic Party of Russia have proposed, major industry must be taken back under government control, while at the same time, as the LDPR has consistently called for, medium and small businesses run by ordinary people must have outdated bureaucratic burdens lifted from their shoulders.

A hybrid economy where big businesses are managed by the state and where the profits of these businesses are reinvested into public projects and social welfare when combined with a more open market for small and medium seized anti-oligarchic entrepreneurs is the key to a successful economic future for the Russian people. Furthermore, Russian tech firms should get early stage tax breaks in order to help boost future dividends from one of the world’s most dynamic sectors in which many Russians have excelled at an individual level.

By adopting a version of Chinese style market socialism with Russian characteristics, Russia can once and for all bid farewell to its criminal class of oligarchs and adopt a model that leaves less space for corruption and more room for innovation, re-investment and social progress.

 

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Russia should also work with its Chinese neighbour and partner to pioneer the use of artificial intelligence which according to the Chinese model can generate profits for the nation without the need of a large low-skill industrial labour force. The AI revolution could help a country like Russia which is large in terms of geographical space but with a low-density population, to help propel the state into a brighter future and one where one would neither need to worry about overall declining population trends nor about having to punitively raise the retirement age.

At the same time, Russia should work more proactively to expand free trading relationships with Asia. A Russia/Eurasian Economic Union-ASEAN free trading agreement would represent a large boost to Russia’s agriculture exports at a time when western sanctions have helped to strengthen the productivity of Russian farmers.

Furthermore, working on free and fair trading relationships with developing African nations could help to bring more raw materials into Russia for use in a re-started industrial sector while simultaneously helping to give Russian producers important inroads into the emerging markets of the developing world.

With all of the options available for a long overdue revitalisation of the Russian economy, punishing the elderly is the last place to start. The government must reverse its crude plans to punish senior citizens and should instead look to generate national revenue through stripping oligarchs of their assets, investing into modernised and AI based industry and finally, in pursuing active free trading partnerships throughout Asia, Africa and beyond.

 

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