Grigory Pasko: Russia’s Rising Food Prices

Africa needs Russia’s money more than Russians do? Grigory Pasko, journalist Если Вы хотите прочитать оригинал данной статьи на русском языке, нажмите сюда. The basic products of nutrition – bread, meat, butter, sugar, fish and vegetables – have increased in price in Russia since the beginning of the year by 4 times more than in the European Union. Such an unpleasant statistic of prices for foodstuffs has been published by Rosstat [the state statistics agency—Trans.] Experts explain the anomalous foodstuffs inflation by the absence of competition on the market, as well as the protectionist protection of domestic producers, whose prices often exceed the world level. “Stab[ilization]fund. And the people.. nothing as usual” (source)

I have the opportunity to compare prices for foodstuffs here, in Russia, and beyond the border, where I sometimes go. The increase in prices is not in Russia’s favor, and especially not Moscow’s. At the everyday level, the non-wellbeing in the economy and the increase in inflation look like this. I come into a supermarket and but a package of apple juice for 36 rubles. Just a week ago it cost 26 rubles. Same thing with sugar, milk, bread-and-bun articles [the old official Soviet term for “baked goods”—Trans.], vegetable oil… It would be easier, probably, to name a product the prices of which have not gone up.Prices for agro-output sold at retail continue to grow. The greatest increase in half a year is noted for fruit-and-vegetable output – prices have nearly doubled, maximally increased is the price of potatoes – by 83 percent. Prices for fruits have gone up by 28 percent. On the whole, the overall increase in the prices of goods and services in the first half-year has exceeded 5-7 percent.(Different in different regions).Foodstuffs in Russia have increased in price from December through August on average by 12.2%. At the same time in the 27 countries of the European Union the analogous indicator comprised a mere 3%. A four-fold difference in the tempos of growth of prices for products is evident in nearly all groups of goods. Thus, prices for bread-and-bun articles and cereals have gone up in Russia by 21.6%, while in Europe – only by 5.5.Recently, the trade unions of Russia conducted throughout the entire country actions of protest against high prices for fuel – for automobile gasoline. The trade unions advanced a whole series of demands:- to stop straightaway the growth in prices for fuel on the domestic market of Russia;- to establish the reasons for the unrestrained leap in prices;- to punish the guilty;- to ensure a stable increase in wages.Not one of these actions did the Russian federal television channels show. And not one of these demands has been satisfied yet.

A humorous design for a modern version of a “Bread Card of a Russian” in preparation for a possible return to food rationing in the country. The word under the Visa® logo isn’t “gold”, it’s “golod” – Russian for “hunger”. (source)

On the net I found information about the increase in the prices of goods in the Ukraine, in Italy, and in Armenia.Broad and systemic overviews on Russia I did not find. Although assistant to the president of Russia Arkady Dvorovich did report about how inflation based on the results of the year 2008 will be higher than was forecast, however nobody from the government or the administration of the president said what measures will be undertaken with respect to reducing the level of inflation and to lowering prices for foodstuffs.In the meantime, according to the data of Rosstat, in the first months of the year 2008 a large part of the expenditures of the federal budget was spent on national defense. On these needs was expended around 417 billion rubles. Another 360 billion were put into national security and law-enforcement activity. That is, expenditures on who knows what (ALL articles of budgetary spending on defense are ALWAYS held in secret) comprised 777 billion rubles. At the same time money put into the socio-cultural sphere comprised only around 400 billion rubles.In the opinion of specialists, the majority of the economic indicators of the RF published in recent times can not be called favorable. The tempos of growth of GDP are falling, foreign investments are shrinking, the price of oil is falling, while the high tempos of inflation threaten to outstrip the increase in the incomes of the population. Recently, wages were raised for Muscovite budgeteers [civil servants paid out of the city budget, including in the educational and medical spheres, public works, utilities, etc.—Trans.], while the Centrobank raised the normatives for deductions into the Required reserves fund [reserve requirements—Trans.] for the sake of the struggle with inflation. However already at the beginning of the next year the economic situation in the country could deteriorate sharply. This threatens companies with large losses, and their employees with downsizing and an overall reduction in the tempos of growth of wages.(About the growth of inflation eloquently testifies such an everyday fact: only recently on the television show «Snimite eto nemedlenno» [Take this off right now—Trans.] a guest would be given a wardrobe makeover with the help of a Citibank (not to be confused with City-bank) credit card for a sum of 50 thousand rubles. Now this sum comprises 100 thousand rubles).The Russian economy in the year 2008 lowered the tempos of growth. About this speak both statistical data, and the forecasts of officials. Last year the GDP of the RF grew by 8.1%. However in the year 2008, according to the latest assessments of the Ministry of Economic Development (MER), the growth comprised 7.8%. Moreover the ministry gave the forecast of development assessing the dynamic of just the first seven months of this year.It is known that the combat activity in the Caucasus sharply complicated the economic relations of the RF with western countries. Stock market indices fell to record-low indicators, while western investors in the very first days of the conflict took out from Russia around 7 mln. dollars in investments.It is known likewise that the state smoothed the stock market indicators thanks to large financial injections – three trillion rubles! However, supporting the budgeteers and state corporations in need of loans with money, the state merely postponed the solution of the problems to a later time. Next year, in the opinion of specialists, the situation could sharply deteriorate.Despite all this the state allows itself to waste huge money not only on defense and armaments, but also on other, let us say, projects.Recently Russia adopted a decision to allocate $42.9 mln to the World Bank for programs to raise the level of education in the countries of the CIS, Asia and Africa, as well as $8.2 mln for the creation in Moscow of a center of international cooperation for the development of eduction. She is likewise financing international efforts aimed at the struggle with infectious diseases in the world.*Article written based on materials of Russian and foreign mass information media