Enduring the Crisis

From Irina Yasina in the Lebanon Daily Star:

Whole regions – the Urals and Mordovia, for example – are stagnant. Moscow, which used to rain gold on the economy, is also suffering, because it, too, depends on natural resources, and its biggest taxpayers – Gazprom, Lukoil, Transneft – are now in bad shape. Indeed, Moscow’s budget has lost about a quarter of its revenues. But, given the tastes and appetites of Moscow’s mayor, you can assume that he will continue to pour what money remains into the city’s building boom. What does not bring in money – roads, schools, hospitals, and kindergartens – will suffer.

As in the early1990s, everyone is again afraid of unemployment. But back then therewas almost no unemployment, peaking at 12 percent, because Russia’sLabor Code made firing employees difficult and very costly. Moreover,most Russians do not object strenuously to wage cuts, reductions inworking hours, and unpaid leaves.

Thereis a good reason for this docility. Moving and buying a new apartmentin a different place is almost impossible, which makes Russian workershighly immobile. In Soviet times, people were proud of the fact thatthey had only one or two jobs during their lifetime. Those who acteddifferently were referred to pejoratively as “job-hoppers.” So, today,people stay near idle factories – kind of employed, but having nothingto do and earning virtually no money. Occasionally the factory paysthem something, but people mainly live off their own vegetable gardens.The outcome is widespread alcoholism, poverty, and lack of prospects.

Yetreal signs of crisis are emerging. Electricity consumption fell 6percent in November when compared to a year ago, and freight traffichas decreased by 20 percent. Even the Ministry of Economics recognizesthat Russia has entered a recession that will last at least six months.