“Popular” (Who Will Foot the Bill for the 2018 FIFA World Cup?)

zenit arena-3The Zenit Arena in Petersburg is the most expensive football stadium in history. And one of the ugliest. Photo by the Russian Reader

Mega events like the 2014 Winter Olympics and the 2018 World Football Cup are held in Russia not for compelling or eve merely sound economic reasons, but to satisfy the destructive, overwhelming vanity of the country’s president for life and his clique of gangster-cum-satraps.

Do you think ordinary Russians are unaware of this? If they are aware of it, maybe the current Russian regime isn’t nearly as “popular” as the press and Russia’s troika of loyalist pollsters (Levada, FOM, VTsIOM) would have us believe?

Why would a regime so remarkably bad at the basics of governance be “popular”? Because Russians are less intelligent than other people?

Or is it because the current regime has treated them from day one like inhabitants of foreign country it has recently occupied by brute fore? // TRR

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The initial plan had been that as of 2019 each region would be responsible for its own arenas. But local authorities estimate that this would create costs of 200 million to 500 million rubles (€2.6 -6.5 million/$3.2-8 million) — a tremendous financial burden for seven of the cities hosting World Cup matches.

Several do not even have teams that play in Russia’s top football division. The most successful squads in Volgograd, Kaliningrad, Nizhny Novgorod and Samara play in the country’s second tier. This season, home games in those regions drew just 1,000 to 5,000 spectators. Saransk’s team plays in the third division; Sochi does not even have a professional squad. So generating sufficient money through ticket sales will prove challenging at best.

And even the more-elite clubs Yekaterinburg and Rostov, which respectively attract some 4,500 and 9,000 fans per match, will struggle to generate enough income to cover the hefty running costs of their huge football stadiums.

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Raising the Retirement Age in Russia

zenit arenaRussia has the money to build stadiums like Zenit Arena, in Petersburg,  the world’s most expensive football stadium, and stage incredibly expensive mega events like the 2018 FIFA World Cup and the 2014 Sochi Winter Olympics, but it cannot afford to pay its workers decent pensions without raising the retirement age beyond the current life expectancy for forty percent of Russian men. Photo by the Russian Reader

Alex Gaskarov
Facebook
June 4, 2018

It is quite likely a draft law on raising the pension age will be tabled in the State Duma in the very near future. The authorities probably want to take advantage of the restrictions on large-scale rallies during the 2018 FIFA World Cup. Raising the retirement age is not entirely an economic issue. The Pension Fund has been running a huge deficit because 40% of wages are paid under the table. This is a colossal amount. Even the most incompetent revenue service could easily reduce this figure.

It appears there is an implicit consensus between the regime and a segment of the business world that the latter agrees not to get involved in politics, while the regime agrees not to try very hard at auditing businesses. It is a commonplace that only suckers pay taxes to the current regime. Admittedly, there are grounds for this.

Nevertheless, wage laborers are the clear losers, and it is also obvious why. If the majority of people are so easily gulled during elections, as we saw recently, what reason does the regime have to keep its campaign promises and bother about reducing poverty?

I really hope liberals will also support the campaign against raising the pension age. There are market-based means of fixing the problem, for example, reducing mandatory pension deductions while simultaneously raising the corporate profits tax. When salary deductions come to 43%, while the corporate profits tax is 20%, it makes financial sense to understate salaries even without resorting to illegal gimmicks.

The trade unions have launched the campaign, but everyone is free to join it.

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KTR Launches Campaign against Raising the Retirement Age
Confederation of Labor of Russia (KTR)

The Executive Committee of the Confederation of Labor of Russia (KTR) has issued a statement concerning plans by the Russian federal government to raise the retirement age. […] To sign the statement and join the grassroots campaign in your city, write to  ktr@ktr.su or call +7 495 737-7250 or +7 903 140-9622.

Statement by the Executive Committee of the Confederation of Labor of Russia (KTR) on Plans by the Russian Federal Government to Raise the Retirement Age 

On May 8, 2018, during a plenary session of the State Duma, Dmitry Medvedev spoke of the need to make a decision about raising the retirement age. Currently, various government proposals for implementing a decision are vigorously being discussed in the media.

The Executive Committee of the Confederation of Labor of Russia (KTR) argues that plans to raise the retirement age are not based on the available official statistics and do not meet the objectives set by the Russian president for the government. The KTR does not support solutions of this sort and announces the kickoff of a broadly based grassroots campaigns to oppose their implementation.

According to the Russia Federal Statistics Service (Rosstat), the average life expectancy in sixty-two regions of the Russian Federation is less than 65 years for men, while in three regions it is less than 60 years. If overall demographic trends in Russia remain generally the same, 40% of men and 20% of women will not live till the age of 65. Enacting proposals to raise the retirement age mean a considerable number of Russians will not live to enjoy retirement.

For many years, the Russian government has pursued an economic policy that has produced a deficit of 40–45 % in the Pension Fund. The KTR believes the deficit emerged primarily because a huge number of employees work without the benefit of an employment contract. Their wages are paid off the books, and mandatory pension contributions are not deducted from their wages. The Pension Fund’s managers estimate that regular deductions are made for only 43.5 million people out of a total working-age populace of 77 million people.

Rosstat has estimated that 10 trillion rubles in wages are paid under the table annually. This means that, annually, at the current rate of 22%, the Pension Fund does not receive 2.2 trillion rubles in deductions.

So, the current rate of deductions could be maintained and the Pension Fund would not show a deficit if all employment were legal and on the books. Moreover, average pension payments could be increased.

Illegal employment is grounded in the disenfranchisement of workers due to ineffective procedures for protecting their right to employment contracts and collective bargaining. The KTR argues that positive outcomes could be generated by increasing the liability of employers who pay employees off the books and fail to make tax and pension deductions. Overcoming powerlessness, however, necessarily involves changing the laws and restoring real rights to organize and join a trade union, bargain collectively and strike, and protect trade union organizers from summary dismissal.

The fight against informal employment must be the primary solution to the Pension Fund’s deficit.

If plans to raise the retirement age are enacted, the absence of government-funded retraining programs, automation of production, and the bleeding of low-skilled jobs from the labor market will generate a millions-strong army of elderly people who have no jobs and no pensions.

As an association of independent trade unions, the KTR appeals to all forces in society, political parties, and social movements to oppose the increase of the retirement age and get involved in the grassroots protest campaign.

We propose organizing an open headquarters for running the national campaign to protect the rights of workers to pensions.

June 1, 2018, Moscow

Boris Kravchenko, president, KTR
Igor Kovalchuk, chair, KTR Executive Committee
Sergei Kovalyov, secretary general, KTR; president, Russian Federal Flight Controllers Union
Oleg Shein, vice-president, KTR

Translated by the Russian Reader