Plugging the Baby Gap? The Struggle to Reverse Demographic Decline in Russia

Recently, Russia has been struggling to reverse plunging birthrates by adopting anumber of radical policies designed to encourage women to have more babies. The breakup of the Soviet Union and the ensuing economic and political instability prompted a decadelong decline in fertility rates, which dropped from 1.72 children per woman in 1991 to 1.2 children per woman in 2000. As a result, Russia lost nearly 6 million inhabitants. Relative stability and high oil prices in the decade that followed saw fertility rates settle at around 1.6 children per woman in 2012 and 1.71 children per woman in 2013, which is still below the needed replacement rate of 2.1 children per woman. This article focuses on the maternal capital subsidy for the birth of two or more children that took effect in 2007 and will run until 2016. It deals with two questions. The first question is, why has maternal capital fraud been so prevalent? The second question is, does maternal capital make a difference when it comes to increasing Russia’s birthrate? In exploring these questions, the article considers the future of maternal capital subsidy, specifically focusing on the social, economic, and political outcomes of the current Ukraine crisis and Russia’s annexation of the Crimean peninsula. The article concludes that the overly restrictive design of the maternal capital program provides afertile ground for fraud and that this subsidy fails to address the many complex causes underlying Russia’s declining fertility rates, thus limiting its effectiveness. Mothers and their families want the maternal capital money here and now because they do not believe that the money will be available in the future (in part, such belief is justified by the turbulent history of the 1990s and several bank collapses). The other side of the coin is that the state does not trust its citizens to use maternal capital money in a responsible fashion and has thus prescribed very limited usages for these funds. This lack of trust on both sides creates fertile ground in which fraud and corruption flourish