Ilya Matveev: Austerity Russian Style

Austerity Russian Style
Ilya Matveev
November 19, 2014
OpenLeft.ru

Despite attempts to confuse and misinform the public, protests in the social sector will continue to grow.

sm13“Only the rich will survive”

Reforms of the social sector in post-Soviet Russia have always had a very important feature: their course has been completely confusing and opaque, and everything connected to the reforms, even their strategic goals (!), has been shrouded in mystery. This is partly a consequence of the extreme fragmentation of the Russian state apparatus, unable to implement a completely coherent reform strategy, but in many ways it is a quite deliberate policy: a policy of disinformation.

The Russian authorities are confident that painful reforms are not necessary to explain, let alone announce, sometimes. One can always give journalists the shake, because who are they anyway? As for the public, it suffices to blame them for not understanding the grand design, for confusing reform and optimization, optimization and modernization, modernization and business as usual. This “spy” policy towards reform leaves wide room for maneuvering. It is always possible to note the level of public indignation and pull back a bit (while making the obligatory remark, “That was the way it was intended!”).

This has been borne out by research. For example, Linda J. Cook, author of Postcommunist Welfare States, has written that when carrying out reforms, both the parliament and the government have relied on a strategy of delays, deliberate obfuscation, and denial of responsibility.

At moments of crisis, chaos and uncertainty in the social sector only grow. Yet now, in my opinion, an absolutely unique situation has taken shape.

First of all, the social sector in Russia has been moved into an austerity regime. This must be noted. Funding will be cut, along with the quantity (and quality) of public services in education, health, and other areas. But how has this austerity been organized?

Paradoxically, it was launched not by a technocratic decision hatched in the bowels of the government, but by Putin’s populist decree on increasing the salaries of state employees. Disinformation has reached its peak: cuts are made to the social sector via a decree that at first glance has nothing to do with it. However, it does, as it turns out. The mechanism is simple. Given insufficient federal subsidies for executing the decree, the regions can carry it out only one way: by cutting some workers while increasing the workload (along with the salaries) of other workers. Of course, the decree does not function in isolation: for example, in health care it is combined with measures to move to “single-channel” financing, meaning that salaries have to be increased, but the only available money is from the health insurance fund. Together, the decree and single-channel financing form a lethal package, leading to indiscriminate layoffs and the closure of health care facilities.

Such is the strange state into which the social sector has been immersed. No less strange is the political spectacle being played out around this issue, a spectacle that reprises in caricatured form the conflict between Party activists and bourgeois specialists in the 1920s. When government and regional “specialists” warn about the impossibility of fulfilling the “order of the Party” (Putin’s May 2012 decrees), “activists” from the All-Russia People’s Front reply, No objections! If you mess up, it’s the firing squad for you! Putin weighs in wisely: the decrees must be carried out, but taking mistakes into account, and without excesses at the local level.

However, the banal fact is that from the outset the federal funds allocated for implementing the decree were not nearly enough, and subsidies will be cut even more in 2015. In such circumstances, implementing the decree on salary increases, in fact, automatically translates into layoffs, increased workloads, and the closure of public facilities.

At the same time, according to Kommersant, “[I]n general, suspension of the decrees may not have to be announced: technically, the government and the administration do not have to do this.”

It is a kingdom of crooked mirrors. “Salary increases” mean layoffs and increased workloads. These increases/layoffs can be stopped at any moment, but what that depends on is unclear. “Activists” are fighting “specialists.” Putin remains calm.

But will society remain calm? The juggling act with Putin’s decrees has not gone unnoticed by independent trade unions representing state employees, including Action, Teacher, and University Solidarity. University Solidarity has already announced protests against cuts to subsidies for increasing the salaries of university lecturers in 2015. The layoffs cannot be hidden, even if they are presented as “increases.”

The rally against the dismantling of the Moscow health care system, on November 2, was the largest social protest since 2005. The protests will continue to grow. In this situation, in my opinion, it is important to point to the clear link between cuts to the social sector and Putin’s policies. The “activists” are no less to blame than the “specialists,” but the main culprit is Putin, who, after all, signed these very decrees. The only way to stop the degradation of the social sector and prevent permanent crisis in the Russian economy, which actually has lasted since 2008, is broad political change.

Ilya Matveev is a researcher and teacher.

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