David Hearst: Deckchairs on the Titanic

This is one of several opinion pieces I’ve seen about Operation Successor remarking on the economic difficulties expected ahead. David Hearst writes in the Guardian’s Comment is Free: What is brushed aside by such sweeping calculations is the state the country is actually in. Money from the oil and gas boom is still flying out of the country, just as it was in the bad old days of Yeltsin. Investment in infrastructure and industry is a fraction of what is needed. Electricity generating stations are being privatised, but the transmission lines are crumbling. Look at the daily gridlock of traffic in Moscow, and you will today be hard put to spot a Russian car. Great for the sales of Mercedes and Volvo, but assembling foreign cars does little for the economy. Russia does not even supply the spare parts. Nor is the oil or gas industry wonderfully efficient. Economists in Moscow say that if the price of oil fell to $50 a barrel, Russia’s balance of payments would quickly start looking pale and sick. Yeltsin-like in fact. There will be no democratic restoration until Russia stands on its own two feet again, in every sense. The fear of collapse or disintegration or another war in the Caucasus still lingers, despite the energy boom (or possibly because of it). For the very few, personal wealth – and usually obscene amounts of it – provides the only reliable insulation from the chaos of daily life. Inflation is running at a healthy gallop, and most people are hard put to afford the rising cost of staple foods, rents, electricity and heating. And as for buying the right surgeon, official or judge when they need one, forget it. Law is a service for the rich. It is a telling fact that while Putin enjoys consistently high levels of public support, no other level of government is trusted. A former government official told me he reckoned that 35% of the money for any government contract would disappear through corruption.