Report - UNDP Russia

Figure 3.4Housing utilities in overall consumer spending ofRussian households, % (sampling survey ofhousehold budgets)1086%4203.74.35.1 5.2Source: Rosstat, www.gks.ru4.7Figure 3.5Housing utility expenditures in overallconsumer spending of Russian householdsby decile groups (decile breakdown by averageper capita disposable income), %*18.016.014.012.010.08.06.04.02.00.03.93.119801985199019920.91995199719985.24.619992000year год1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008Source: Incomes, expenditures and consumption of households, basedon random sampling of households (digests, 1999-2008)*Note: Consumer expenditures of households in this decile group aretaken as 100%living of Russian households is not to be soughtin the field of employment and wages. The keyinteraction between households and theenergy sector is via spending by the former onhousing utilities (government sector rents,electricity, water and gas bills, which are usuallycharged monthly in a single itemized bill). Webegin with some international comparisons, forwhich spending on housing utilities aregrouped together with household spending on6.27.27.78.38.78.27.620012002200320042005200620072008firstsecondthirdfourthfifthsixthseventheighthninthtenthWholepopulationfuel. As of 2005 9 (the most recent year for whichstatistics are available) such expenditures were9.4% of actual final consumption of Russianhouseholds, compared with 17.9% in Latvia,17.3% in Italy, 15.0% in Hungary, 16.0% in USA,15.3% in Great Britain and 19.2% in Sweden. SoRussian household expenditures on housingutilities are rather low, even compared withcountries where the per capita income level issimilar. In countries with higher per capitaincome levels the shares of housing utilitiesexpenditures are also high. This probablyexplains the poor technical, technological andinstitutional state of Russia’s housing utilitiessector. Even if Russia succeeds in overcomingnegative effects due to high levels of corruptionin this sector, it will be impossible to achieve abreakthrough in quality of housing utilityservices without larger payments byhouseholds. Increase in the share of householdexpenditures spent on housing utilities will alsoencourage the general public to rationalizetheir relationship with the state and businesswith respect to production of and payment forthese services.How has household spending onhousing utilities developed? Available data areshown in Figure 3.4. They show that decline ofpersonal incomes during structural reforms(1990–1995) was accompanied by reduction ofthe housing utilities share in total householdexpenditures. Low prices for housing utilitieshelped people to cope with fall of their incomesby nearly half, but lack of investment hadnegative impact on maintenance of theservices. Starting from 1994 housing utilitiesprices skyrocketed. By 1995 their share inhousehold budgets had returned to levels atthe end of the Soviet period and the growthcontinued. Housing utility price growth pausedfor the 1998 crisis, but then resumed. Thehousing utility share in household budgetsdeclined in the last two years of economicgrowth, but the current crisis is likely to reversethat trend.9Social Situation and Living Standards in Russia, 2008. Statistical Digest/Rosstat – M, 2008,p.48262 National Human Development Report in the Russian Federation 2009