Putin offers cash for kids to avert population crisis

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President Vladimir Putin has pledged cash bonuses to Russian women who give birth to two or more children to reverse what he says is the gravest problem facing contemporary Russia: a declining population.

He used his annual state- of-the-nation address yesterday to warn that Russia's population of 143 million was falling by an average of 700,000 each year, a figure comparable to the population of Bahrain.

The problem is regarded as a national security issue since large areas of Siberia and the far east of Russia are dangerously under-populated. It is an anomaly that has stoked fears among ordinary Russians that they will one day be usurped by migrant workers from neighbouring China, whose 1.3 billion people are packed into a territory considerably smaller than Russia, the world's largest country.

Mr Putin made no mention of such fears but he warned the problem had become critical.

"The most acute problem in modern-day Russia is demography," he told the country's great and good in the Kremlin's Marble Hall, to frequent outbursts of frenzied applause.

"We have to stimulate the birth of a second child in every family. This is what we need to resolve this problem: first, a lower death rate; second, an efficient migration policy; and third, a higher birth rate."

About 80 Russians die every hour, often due to preventable lifestyle diseases such as alcoholism, and life expectancy for Russian men is just 59 years. Mr Putin conceded that poverty was putting off many would-be mothers and promised to dip into the country's growing pot of oil revenues to tackle the problem.

"What stops a woman deciding to have a second child?," he asked. "Poor living conditions, limited income [and] sometimes, God help us, the thought of whether they will be able to feed the child or not."

Mr Putin's solution is a 10-year plan which, it is estimated, will cost the Kremlin the equivalent of £80m a year. Quoting the country's most famous living writer, Aleksander Solzhenitsyn, he called for the revival of "ancient caring attitudes" towards the family.

Under Mr Putin's proposals, which take effect in January, women who give birth to a second child will receive a one-off cash bonus of 250,000 roubles (about £5,000). In a country where many scrape by on a monthly wage equivalent to just £160, the bonus is a generous one. Child benefit will also be increased, from the current level of 700 roubles a month to 1,500 roubles for the first child in the family.

Women who give birth to a second child can claim a further 3,000 roubles a month and will receive financial help with child care.

Although he devoted much of his speech to domestic issues, Mr Putin also found time to deal subtly with harsh criticism of his policies from Washington.

Dick Cheney, the US Vice-President, has accused Russia of backsliding on democracy and of using its energy resources as a political weapon, but Mr Putin dismissed the allegations.

He said: "Not everyone has been able to move on from the... prejudices which are a leftover from the epoch of global confrontation despite the fact that there have been fundamental changes in the world. Where is all this pathos about protecting human rights and democracy when it comes to the need to pursue their own interests?"

He also made it clear that Russia was actively rearming and was poised substantially to boost military spending, which he said was currently 25 times lower than Washington's.