We Wouldn’t Mind If You Died of AIDS and Hepatitis C

Russia has an HIV epidemic. According to the Federal Aids Prevention Center, approximately a million Russians are infected. A third of them also have hepatitis C. At best, only hundreds of these patients receive state-of-the-art treatment. Image by Yaroslava Chingayev, special to Vedomosti

Officials Want to Replace Current Hepatitis C Treatment with Outmoded Therapy
Industry and Trade Ministry Supplied Money for Manufacture of Drugs
Irina Sinitsyna and Olga Sukhoveiko
Vedomosti
December 13, 2018

The Russian Health Ministry plans to significantly reduce procurements of the most effective treatment for viral hepatitis C, combined interferon-free treatment, thus reducing the availability of the drugs for patients infected with HIV in combination with hepatitis B and hepatitis C. Instead, the ministry has proposed putting these patients on interferon therapy. Maria Onufriyeva, director of Community of People Living with HIV, an interregional grassroots organization, has written about the matter to Health Minister Veronika Svkortsova. Ms. Onufriyeva has also sent a letter to Valery Alexeyev, director of the Honest Procurements Project at the Russian People’s Front (ONF). Vedomosti has seen copies of the letters. Ms. Onufriyeva confirmed she sent them. A spokesperson for Mr. Alexeyev said he received the letter. The Health Ministry has not responded to her query.

In November, Minister Skvortsova said that over 714,000 Russians were infected with HIV. According to the Federal Aids Prevention Center, whose figures Ms. Onufriyeva cites, there are 978,443 Russians infected with HIV. A third of them also have hepatitis C.

In late October, the Health Ministry published the final list and amounts of drugs it would be procuring in 2019 and providing to HIV patients, including HIV patients who also have hepatitis B and hepatitis C, writes Ms. Onufriyeva. (Vedomosti has seen a copy of this list.) In particular, the Health Ministry wants to reduce procument of dasabuvir by 750%, meaning one hundred patients would have access to the drug, while this year 748 people could count of getting it, according to the Community’s calculations.

In monetary terms, this would mean a drop in expenditures on the drug from 431.6 million rubles [approx. 5.7 million euros] to 57.9 million rubles [767, 754 euros].

The Health Ministry plans to switch to narlaprevir, intended for the treatment of hepatitis C in combination with other antiviral drugs. In 2018, as the Community has discovered, and as is borne out by information accessed on the federal procurements website, narlaprevir was not purchased by the Russian governmennt. In 2019, the Health Ministry could spend 139 million rubles [approx. 1.8 million euros] on procuring the drug in order to treat 430 people, the Community argues.

Dasabuvir is the most up-to-date antiviral drug. According to the Community, it can cure 98% of hepatitis C patients in twelve weeks.

This figure was confirmed by Vadim Pokrovsky, director of the Federal AIDS Prevention Center.

In Russia, HIV patients who also have hepatitis C have been treated with dasabuvir in combination with ombitasvir/paritaprevir/ritonavir, manufactured under the brand name Viekira Pak by the American company AbbVie. Dasabuvir was placed on the official Russian list of vital and essential drugs for this year. Two years ago, Alexey Repik’s R-Pharm and AbbVie agreed to partly localize manufacture of the drug at R-Pharm’s plant in Kostroma. As R-Pharm reported then, the deal covered repackaging of the drug and quality control. According to AbbVie, Viekira Pak is distributed in Russia by R-Pharm and Euroservice.

Ms. Onufriyeva writes that interferon therapy is much less effective in treating chronic hepatitis C patients with HIV. The treatment significantly reduces quality of life, since it requires weekly injections.

Mr. Pokrovsky explained the difference. Interferon treatment has almost no effect on the virus itself. It stimulates the body’s immune response, but it has numerous side effects, from impotence to mental disturbances. The treatment lasts a year.

Due to the length of the treatment, Ms. Onufriyeva said, it was between 52% and 133% more expensive than interferon-free treatment.

Tableted by R-Pharma, narlaprevir has to be taken together with ritonavir, pegylated (long-acting) interferon, and ribavirin, as indicated in the instructions.

In 2012, R-Pharma acquired a license for the production and sale of narlaprevir from Merck & Co. It tried to refine the drug with support from a federal targeted program administered by the Russian Industry and Trade Ministry. Trade publication Vademecum wrote that R-Pharm invested 700 million rubles in narlaprevir. The Industry and Trade Ministry would allocate 120 million rubles on clinical trials, Sergei Tsyb, head of the ministry’s Department for Chemical Engineering and Bioengineering, promised in 2012.

A R-Pharm spokesperson confirmed receipt of the funds.

R-Pharm registered narlaprevir in 2016. In the spring of 2017, during a meeting with the business community, President Putin promised R-Pharm’s director general Vasily Ignatiev that the government would allocate funds to procure the company’s drugs for hepatitis C patients.

“I will also keep this in mind when allocating resources for healthcare in 2018 and the following years, in 2019 and 2020. It will be necessary, of course, to use what you have developed,” Putin said.

Mr. Pokrovsky is certain the Health Ministry’s decision to reduce procurements of interferon-free drugs could have been influenced by Russian manufacturers wanting to compensate their costs at the state’s expense.

The R-Pharm spokesperson insisted that the company, like other manufactures, received a request from the Health Ministry to quote its prices for narlaprevir and dasabuvir.

“Our price offers for the drugs were the same as last year’s,” he said.

In total, according to the Community’s calculations, in 2019, the Health Ministry can spend 473.5 million rubles [approx. 6.3 million euros] on the procurement of drugs for treating chronic hepatitis C, as opposed to 1.1 billion rubles [approx. 14.6 million euros] last year.

In November, Vademecum wrote that, in 2019, the Health Ministry would also reduce its overall procurement of antiretroviral drugs under its program for providing drugs to people infected with HIV, including patients who were infected with HIV in combination with the hepatitis B and C viruses. However, although it would spend far less money, it planned to expand coverage to a mere sixty percent of those needing treatment.

Ms. Onufriyeva has asked the Health Ministry to consider increasing procurements and moving away from the chronic hepatitis C drugs scheduled for purchase in 2019 and towards drugs that have proven effective. The latter should be supplied to patients with HIV plus viral hepatitis C, including those suffering from advanced liver fibrosis and cirrhosis.

She has asked Mr. Alexeyev to assist her in protecting the interests of patients by sending inquiries to the Health Ministry, asking them to explain the reasons for the cuts in procurements and the selection of outmoded drugs. She also asked him to verify whether the Health Ministry’s actions were in compliance with antitrust laws.

She told Vedomosti she had not received replies to her letters.

vich

“How the Numbers of HIV-Infected Patients Have Changed, 2013–2018.” The red columns indicate total numbers of patients; the orange columns, first-time infections. Figures are given in thousands of people. Source: Rosstat. Courtesy of Vedomosti

Mr. Alexeyev explained the delay in replying. The letter contained a good deal of specialized and medical information, and it was under review by independent experts working for the Russian People Front’s Honest Procurements Project.

“The Russian People’s Front has drawn attention to problems with the list of essential and vital drugs, and their procurements, and this letter is the latest alarm,” he said.

According to Mr. Alexeyev, the Russian People’s Front has been reviewing the Health Ministry’s procedure for including medicines on the list and had already been in touch with the government.

hep b and c

“How the Numbers of Hepatitis Patients Have Changed, 2013–2018.” The dark blue bars indicate first-time cases of chronic hepatitis B; the light blue bars, first-time cases of chronic hepatitis C. Figures are given in thousands of people. Source: Rospotrebnadzor. Courtesy of Vedomosti

If the grassroots organization Community of People Living with HIV believes the industry regulator acted in a way that violated specific regulations on procurements or antitrust statutes, it can file a complaint with the Federal Anti-Monopoly Service (FAS) in the manner prescribed by law, said Maxim Degtyarev, deputy head of the Department for Oversight of the Social Sector and Trade at FAS. For the time being, however, FAS had no grounds to perform an inspection.

The Industry and Trade Ministry did not respond to our request for information.

Elena Filimonova contributed to this article.

Translated by the Russian Reader

Fußball über alles

std — The new football stadium on Petersburg’s Krestovsky Island, still unfinished after years of delays and rampant cost overruns. In the foreground is a monument to former city boss Sergei Kirov, murdered under mysterious circumstances in 1934. Photo courtesy of Pyotr Kovalyov/Delovoy Peterburg

Schools, Kindergarten, and Hospitals Sacrificed to the Stadium
Antonina Asanova
Fontanka.ru
August 15, 2016

The Smolny [Petersburg city hall] will finance construction of the football stadium on Krestovsky Island twice over. The advances of 2.6 billion rubles that have not been returned by VTB Bank and Transstroy will be issued to new contractor Metrostroy. Schools and kindergartens will have to wait.

To finish the stadium on Krestovsky, the Smolny is ready to sacrifice the completion dates of three dozen facilities, including kindergartens, schools, and hospitals. 2.6 billion rubles, earmarked for social infrastructure, will be “redeployed” to Petersburg’s construction project of the century. City hall is counting on recouping the reinvested funds later, and figures it can afford not to hurry with the construction of public facilities.

The Construction Committee has prepared a draft decree on reallocating its 2016 budget. By law, the agency can redirect up to 10% of the funds in its targeted investment program, i.e., 2.8 billion rubles, a committee spokesperson said on the record.

Off the record, sources at the Smolny have explained that the stadium’s former general contractor, Inzhtransstroy-SPb, has not run through the 3.6 billion rubles it received as an advance. The company can still deliver part of the construction work and purchased materials before August 25, a month after its contract with the city was terminated. But if the city does not succeed in offsetting the entire sum, it will have to try and collect the money either from the contractor or VTB Bank, which issued the guarantee for completion of the work.

Experience shows it is not worth counting on the good will of companies when it comes to giving back money. The Construction Committee is still in the midst of suing VTB for the return of funds issued under contracts for the construction of indoor ice rinks, which were terminated over a year ago.

A strategy of protracted litigation does not suit the Smolny at all. Completing the stadium before year’s end is a matter of honor to the city government. So the Construction Committee has decided to redeploy part of the funds allocated for new kindergartens and schools to Petersburg’s main construction project. Only facilities whose completion was planned for this year have not been touched.

The city’s calculation is simple. Construction of public facilities will be slowed down a bit for the time being. But when the stadium is delivered at the end of the year, and the monies that were advanced are returned to the budget, the long-awaited construction projects will again be accelerated to a proper speed.

Health clinics and hospitals will be most affected by the budget cuts. The Construction Committee has decided to withdraw nearly a billion rubles from construction of these facilities.

Expenditures on one of the city’s most protracted construction projects, a perinatal center at Maternity Hospital No. 9 on 47 Ordzhonikidze Street, have been reduced by a quarter billion rubles. Doctors were preparing to nurse premature and sick newborns in the facility, and spoke of modern operating rooms and a modern intensive care unit. The building, in fact, was supposed to be delivered at the end of 2015. But now the contractor, Stroykomplekt, owned by former Baltstroy top manager Dmitry Torchinsky and Alexei Torchinsky, has a new deadline: the end of 2017.

People in the suburb of Kolpino will also have to wait for the opening of the new surgical wing at Hospital No. 33. Only one million rubles has been left in this year’s budget for its completion, while 155 million rubles will be transferred to erecting the football stadium. However, the construction site on Pavlovskaya Street has already been idle for a year. The Construction Committee terminated its contract with the previous contractor, but has not yet found a new contractor.

The residents of Kolpino will not have to wait alone, however. Among the facilities where construction will be slowed down are health clinics in Strelna and Krasnoye Selo, an ambulance substation in Metallostroy, and a childen’s tuberculosis sanatorium in Ushkovo.

Funds for new school construction will not be slashed so drastically: only by half a billion rubles. Contractor ETS will have to slow down construction of a school in New Okhta, a massive housing complex on the far side of the Ring Road, near Murino. This year, financing of the construction project will be cut by 230 million rubles. New Okhta is being vigorously developed. Over the past three years, developer LSR Group has completed twenty-four residential buildings into which the city has been moving people on the affordable housing waiting list. But there are still no schools in the district. Parents have to shuttle their children over the Ring Road to the neighborhoods of Grazhdanka, built long ago.

Residents of the housing project on Badayev Street will also have to be patient. The city has stripped their future school of 90 million rubles in financing.

Finally, kindergartens will hardly suffer at all: funding of their construction will be reduced only by 310 million rubles. The biggest loser, to the tune of 130 million rubles, is the future kindergarten in the Golden Bay residential complex, near Tricentennial Park. Its completion has been postponed for a year, until the end of 2017.

The Smolny is even ready to cut funding for construction of a site directly linked to the new stadium: the waterfront near the Novokrestovskaya subway station, currently under construction. The contractor, Leokam, will have its funding for making improvements to the waterfront cut by nearly 240 million rubles. Apparently, the company will have to catch up next year. Under the terms of its contract, it has to deliver the works before the end of 2017.

The site of the new stadium was previously occupied by the Kirov Stadium, a federally listed architectural landmark, built by constructivist architect Nikolsky in — The site of the new stadium was previously occupied by the Kirov Stadium, a federally listed architectural landmark. Designed by world-famous constructivist architect Alexander Nikolsky and opened in 1950, it was unceremoniously demolished in 2006. Photo courtesy of Kommersant.

However, what matters is that the stadium on Krestovsky Island will be delivered before the end of this year, and cost estimates of its construction will not increase, formally speaking.

A total of 42 billion rubles [approx. 582 million euros] have been allocated on the stadium, Petersburg’s principal protracted construction project.

Translated by the Russian Reader

News of Soviet Karelia

Lake Onega embankment in Petrozavodsk, capital of Soviet Karelia. Courtesy of varlamov.ru

Media: Head of Karelia Orders Education Minister to “Tackle” Teachers’ Illegal Earnings
Zaks.ru
June 29, 2016

Head of Karelia Alexander Hudilainen ordered the republic’s education minister to “tackle” the money teachers earn on the side working as tutors. He gave the order at a meeting of the anti-corruption committee, reports Rosbalt News Agency, quoting Andrei Rogalevich, chair of the committee on education, culture, sport, and youth policy in the region’s legislative assembly.

According to the MP, Hudilainen called the minister’s attention to a website advertising the services of tutors in different subjects. He had counted 180 tutors from Karelia on the website and suggested these educators had been concealing their extra income and not paying taxes on it.

Rogalevich said that Hudilainen’s approach, which defined educators as corrupt, was wrongheaded.

“Rather than [blaming] officials, whose work causes much more damage to the budget and the republic’s population, [Hudilainen blamed] people whose salary is many times smaller than the ‘people’s champions,'” the MP noted.

Rogalevich also recalled that Hudilainen had previously indulged in ambiguous remarks about teachers. For example, Hudilainen had proposed drawing up a “list of shame” of educators whose pupils had been left behind to repeat a grade. He argued that repeaters were the fault of teachers who had not given extra lessons to slow learners.

Translated by the Russian Reader

NB. The September 18, 2015, edition of MK Karelia reported that the average salary for high school teachers in Karelia in 2014 was 28,975 rubles per month. On December 31, 2014, the ruble traded at nearly 71 rubles to the euro, meaning the average Karelian teacher was then making around 400 euros a month.

The Stability Pit, or, Bend Them like Gandhi

Screenshot of a photograph on the website of the Debt Collection Development Center. The photograph was taken during a conference on debt collection. Source: Tsentr razvitiia kollektorstva — Screenshot of a photograph found on the website of the Debt Collection Development Center. The photograph was taken during a conference on debt collection. The man in glasses displayed on the screen is identified as “M. Gandhi.” Source: Tsentr razvitiia kollektorstva

Russia in the Pit of Stability
The state has disclaimed all liability for the country’s future
Elizaveta Alexandrova-Zorina
Moskovsky Komsomolets
June 22, 2016

The country has been handed the bill for Crimea, Donbass, and “stability.” The bill includes unemployment, poverty, and hopelessness. The petrodollar dolce vita is over. The only things growing now in Russia are prices, taxes, and utility bills, while incomes, purchasing power, and the standard of living are falling. Nineteen million Russians live below the poverty line. Yet the minimum monthly cost of living in Moscow is 14,413 rubles [approx. 200 euros], and 9,452 rubles nationwide, meaning that a huge number of people who are not officially poor are barely making ends meet. Thirty-nine percent of families do not have spare cash; they spend their entire incomes on groceries. The worst thing is that these people cannot afford to buy not only things but also medicines. Almost fifty percent of the population suffers from structural hunger. And that is not is the limit: the crisis is not over yet.

On the other hand, no one in the government has been sacked, there has not been a single bankruptcy on the Forbes list of the world’s billionaires, and the number of dollar millionaires in Russia has not changed. “We picked the sweet berries together, but the bitter berries I pick alone”?

“Berries Are Sweet,” a song from the film Earthly Love (Yevgeny Matveev, dir., 1974)

The propagandists have, of course, been trying to powder the ugly picture with “poll results” claiming that eighty percent of Russians consider themselves happy, ninety-four percent look to the future with optimism, and eighty-two percent support the president’s policies. Not even the most desperately optimistic patriots believe in this anymore, however. Universal jingoistic boldness has given way to a heavy hangover, and instead of talk about Russia getting up from its knees, you more often hear the saying, “It won’t be worse than the nineties.”

It will be worse. In the nineties, it was only the free hand of the market that suffocated ordinary folk, but now the market will be reinforced by the strong arm of the state. More and more new taxes will be introduced: on property, land, vehicles, securities, and anything that moves. More and more bureaucratic dodges will be devised so the state can get its share, but from everyone and for nothing. There will be more and more new construction projects whose price tags will be doubled or trebled so the “elite” can maintain their prosperity. Phrases like “Crimea tax,” “payment for an extractive economy and decades of incompetent sloth,” and “money for officials and security forces” will be inscribed in invisible ink on each new levy, requisition, and massive construction project.

Sensitive to change, since they have something to lose, and quick off the mark, because they are able to leave, the middle class has quickly realized that hard times are coming. Since the introduction of sanctions, its ranks have thinned: some have been ruined, while others have fled. Even before the crisis, the regime did everything it could to make doing business more or less honestly in Russia unprofitable. Even the sanctions and promises to support domestic producers have changed nothing. Those who steal have it good, those who work have it bad, and the smaller the business, the more it gets fleeced. Due to the government’s anti-western rhetoric, many entrepreneurs who do business with other countries also got scared they would be targeted with everything from travel bans to confiscations of money and property. Hedging their bets, they have taken refuge in the Baltic countries, where it is easy to get a residence permit, as well as in Europe, Asia, and even Latin America. So many economic emigrants have left the country in recent years that we could speak of “economic steamships” bearing them out of the country. Many have purchased citizenships in other countries, and many of those people plan to renounce their Russian citizenships due to the passage of new laws. (The question of whether Russia needs such citizens and whether we should mourn their departure is beyond the scope of the article.)

But what will happen to those people who stay here? Will the nineties seem like a piece of cake to them?

People had no money in the nineties, but neither they did have any debt. Today, around thirty-eight million people have outstanding bank loans. This is fifty-nine percent of the working population, and it excludes people in debt to semi-underground micro lenders. Moreover, eight million people have at least three outstanding loans, and every sixth person has no way to pay back his or her debts. More than half the loans taken out in 2016 were used to pay off outstanding loans. In addition, people raised on the ideology of consumption cannot kick the credit habit even in hard time. Impoverished and unemployed, they mechanically keep on acquiring debt, using the money they have left to buy appliances or a trip to a resort, thus getting bogged down ever deeper in debt. The laws are written in the interests of the banks, and the inaction of the police and the connivance of the authorities favor the debt collectors. Banks get away with things mere mortals could not get away with. Billions are spirited out of the country annually using crooked banking schemes, and these crimes go to trial only in exceptional cases. It is one thing, however, to move capital abroad and not returns millions in loans to the treasury. It is almost a safe thing to do.

It is another matter not to give back a bank 100,000 rubles on time. True, a law regulating the work of debt collectors has finally been passe. As of 2017, absolutely criminal methods of forcing people to pay their debts will be prohibited. The law is quite timely, but you can count on laws only in countries where they are obeyed. Debt collection will thus shift from the legal realm to the semi-legal realm. Instead of official bank employees, debtors will now be getting visits from shaven-headed wise guys who supposedly have no connection to the banks.

By the way, bailiffs have recently been permitted to garnish the bank accounts of debtors. No one could care less whether you need the money for a life-or-death operation or you have a whole house of children to feed. The bank needs the money more than you do. The more the debt burden of the population increases, the more such measures will be adopted to help banks get their money back.

In the nineties, after the collapse of the Soviet Union, utility rates had not yet skyrocketed, and people could put off paying bills for years on end, until better times. There were no methods of debt collection, and besides, the housing and utilities sector had not yet been divvied up among contractors, many of whom are now in the hands of officials and their “subsidiaries,” only minus any government liability.

Nowadays, people who are overdue paying their utility bills for a couple of months are threatened with having their gas, electricity, water, and heating turned off, sued in court (which in Russia is always on the side of the strong), and can legally be evicted from their apartments. The regime, of course, serves the interests of the property management companies by increasing fines and simplifying debt collection procedures. Trying to carve up a meager budget, people wonder whether to pay the utility bills or make their loan payments. They base their decision on whom they fear most: the extortionists from the utility companies or the gangsters from the banks. The water and the power will probably not be turned off nationwide, but targeted outages and evictions will definitely kick off, and the most defenseless will be at risk. In my landing, a pensioner living with her sick son has had her electricity shut off, and the widow of a man disabled during WWII has received a “polite” threat from the housing service.

For the time being, Russians are keeping on top of their bills, but according to experts, the numbers of overdue utility bills will skyrocket and grow exponentially. Already sensing the profits to be made, collection services have taken an interest in the matter. (The new law on debt collectors, by the way, does not extend to people in debt to utility companies.) Considering their methods, this is definitely frightening. The website of the Debt Collection Development Center features a special section on extorting utility bill debts that lists such methods of pressuring debtors as special notices in the media and leafletting, participation of debt collection specialists in general tenant meetings, legal threats, and unorthodox options [nestandartnye varianty].* The last point gives me the creeps. What exactly are these unorthodox options? A clothes iron? A soldering gun? Matchsticks under the fingernails?

Another sign of the times that did not exist in the nineties is that no one feels sorry for anybody nowadays. A young family with a child has no way of paying back its foreign currency mortgage? Parents cannot pay for their son’s eduction? People have to sell the TV, car or dacha to pay off the loan used to buy that selfsame TV, car or dacha? You shouldn’t have borrowed money from a bank! You have no money to pay your bills? Sell your flat and buy one you can afford! You cannot pay for medical treatment or pay your university fees? Get a job! There are no jobs? That is your fault!

People have no sympathy for others or sense of solidarity. Nor should we expect protests and rallies in support of these who have gone into debt, even when the whole country ends up in that pit. The police and judicial system insures our government against any disturbances.

In fact, the punitive apparatus (from the police and the courts to bank debt recovery departments) is a single sector in which the state is present in one way or other. But what does the state do for its own people? It squanders state funds, including the pension fund. It cuts spending on everything not associated with the military, abroad and domestically. It has been exiting the social sector, shutting down hospitals, schools, and kindergartens, eliminating further and supplemental educational programs, canceling benefits, and reducing welfare payments that as they were amounted to kopecks. 24,000 schools, 4,800 hospitals, and 4,800 medical clinics were closed in Russia from 2001 to 2013 alone. (There is no data on the Rosstat website after 201. Apparently, it was decided to classify the information.)

The state has disclaimed all liability for the country’s future, but it still costs a lot to its people. In the nineties, the regime attempted to spend the Soviet inheritance, which was so rich that part of it is still left over today. In the noughties, it cashed in on resource extraction. Today, it has no choice but to shake down its own citizens for money. The entire state vertical, the entire system of power, from the government to the security forces, has focused on this. And since it often has to shake the last kopecks from people’s pockets, the process will be cruel and painful.

Translated by the Russian Reader

* In the interests of fairness, I should mention I could not find this exact wording on the Debt Collection Development Center’s website, although I did find the page where the other methods listed, above, were discussed. TRR

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.

“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.

Ilya Matveev: The New Putinist Stability?

OLYMPUS DIGITAL CAMERA

Events are unfolding in plain sight, and strange as it might seem, the flood of disinformation cannot prevent us from seeing a quite simple picture.

The subway workers’ union had long warned of the danger, and there had generally been a lot of reports in the press on the growing number of accidents in the Moscow Metro, and now there has been a new fatal accident.

The last couple of weeks, Russian media had reported constantly about how deftly the separatists had learned to use the Buk surface-to-air missile system and how many Ukrainian airplanes had been shot down. Just before news of the Malaysian airliner broke, reports had managed to surface—in “Strelkov’s dispatches,” in the media, everywhere—that the militants had shot down another Ukrainian transport plane. The plane turned out to be the civilian jetliner.

Recent articles in Vedomosti newspaper and especially leaks at b0ltai.wordpress.com make it easy to piece together the fiscal and economic situation in Russia. The country is in an “autonomous” recession, meaning one caused by internal factors. The resources for growth have been exhausted, and there is no money for Crimea or for executing Putin’s May 2012 presidential decrees. The government is preparing to respond with austerity measures: the abolition of free medical care for nonworking citizens, tax increases, and another raid on retirement savings. For now the situation is rough but not catastrophic. At the same time the overall trajectory is clear: there will be less and less money, and it will be ordinary people who pay the bills.

However, there is no one to protest: all the country’s internal contradictions, which were somehow politically articulated in 2011-2013, have been crushed by the Crimean steamroller, and the opposition is divided and marginalized. The population has closed ranks around the new Putin “geopolitics,” becoming an aggressively frightened mass. Any possibility of electoral protest has been completely blocked off: with stunning cynicism, the field has been purged in the run-up to municipal elections in Moscow and Petersburg.

We can see that the new system is closed upon itself: the geopolitical adventures are needed, ultimately, only to strengthen Putin’s personal power, to maintain his sky-high rating. The exact same role is performed by mega-events like the Olympics and the 2018 World Cup. Yet the economic cost of the geopolitics and mega-events will be huge, and people themselves will foot the bill (for sanctions, for Crimea, for kickbacks). However, the imperialist ideology surrounding the events for which they are paying out of their pockets will prevent them from articulating their protest politically. It is a paradox, but a paradox that has already been observed in history. Recall, for one, Marx’s remark that Louis Bonaparte ruled in the name of the peasant masses (who supported him at elections) but against the interests of these masses.

This new period of stability might last as long as the previous one. No, it is no longer the apolitical period of stability of the noughties, but it might prove no less stable.

Ilya Matveev is an editor of OpenLeft.Ru, a member of the PS Lab research group, a lecturer in political theory at the North-West Institute of Management (Petersburg), a PhD student at the European University (Petersburg), and a member of the central council of the University Solidarity trade union.

Ivan Ovsyannikov: Russia’s Welfare Chainsaw Massacre

Russian President Dmitry Medvedev holds

Welfare Chainsaw Massacre
Ivan Ovsyannikov (Russian Socialist Movement)
September 30, 2013
anticapitalist.ru

A “welfare chainsaw massacre” is exactly what we might call the government’s actions and statements over the last few months. The ruling class is once again attempting to pay for the latest uptick in the economic crisis from out of the pockets of workers.

On September 1, while speaking to students at the Far East Federal University, Putin announced the transition to a policy of austerity and reduced social spending. “The world economy has slumped a bit, and ours is hunkering down behind it,” the president said in his typical manner by way of explaining the upcoming unpopular measures. And he supported an earlier proposal, voiced by Minister of Finance Anton Siluanov, to replace the “maternity capital” program with “targeted assistance to poor families.”

However, a few days later, Dmitry Medvedev said that the maternity capital program would not be cancelled. “But it will be modified,” Minister of Labor and Social Affairs Maxim Topilin added in a whisper.

The fact that public opinion has been probed on such a sensitive point is quite significant. The maternity capital program is almost the only widely publicized social achievement of the Putin era. Putin has repeatedly stated it was his idea. And now this essential element of Putin’s social populism has been openly questioned.

No less provocative looking are the experiment with introducing social norms for electricity consumption (see Andrei Zavodskoi, “Cruel Economy”) and the de facto raising of the retirement age, which has long been discussed and is today closer than ever to realization. According to Deputy Primer Minister Olga Golodets, “We are not discussing raising the [retirement] age for any category of workers. We’ve gone another direction by promoting voluntary postponement of retirement. That is our principled position, and the government’s position.” However, such tricks are unlikely to mislead anyone.

The most scandalous revelations, however, are the statements made by government officials concerning labor relations. If, until recently, Mr. Topilin based his ministry’s decision not to index Russia’s penny-ante unemployment benefits on the fact that “at present there remains a high probability of finding employment in the labor market,” Mr. Medvedev has now said the exact opposite. He argues it is time to get away from the policy of preserving employment at all costs and not be afraid of cutting inefficient jobs: “The times all of us now face are not the easiest. […] Some people—perhaps a significant portion of the population—will have to change not only their jobs but also their professions and place of residence.” There is no doubt we have fallen on hard times, but the Prime Minister is clearly disingenuous when he talks about “all of us.” Russia’s ruling elite has no intention of depriving itself of jobs and handsome profits. So, in a conversation with François Fillon, Mr. Putin elegantly hinted that he would “not exclude” the possibility of seeking a fourth term as president.

But has the Russian economy “hunkered down” badly enough to warrant such painful experiments on the population? Isn’t “stagnation” only a plausible excuse for implementing the longstanding plans of the gentlemen from the Russian Union of Industrialists and Entrepreneurs?

As was reported in late August, the Ministry of Finance planned to save 1.1 trillion rubles [approx. 25 billion euros] over three years by eliminating the maternal capital program and reducing expenditures on pensions. At the same time, federal and regional budget expenditures on preparations for the 2018 World Cup should amount to 438 billion rubles, that is, almost half a trillion. The mass protests and riots in Brazil, sparked by excessive government spending on the 2014 World Cup, are still fresh in everyone’s minds. Russians could learn a lesson or two from Brazilians.

But maybe massive sports venue construction projects will generate many new jobs and return the taxpayer money spent on them? No, they will not. Unlike the great construction projects of the Soviet era, when funds were invested primarily in developing production, Olympiads, Universiades, and World Cups are, by definition, loss makers for national governments. Many analysts trace the current economic disaster in Greece to the 2004 Summer Olympics, which enriched transnational corporations while depleting public finances. The London Olympics have also been declared unprofitable. As for the 2014 Sochi Winter Olympics, its unprofitability has been recognized by nearly all serious experts, including Vnesheconombank chair Vladimir Dmitriev, who said in an interview with Vedomosti newspaper that “a serious percentage of [Olympics-related construction] projects are calculated to make a loss.” According to Dmitriev, “Given the current model and market trends, there are big problems with returns on investments. For example, one million square meters of hotel space are being built in the Imereti Lowland. When this space goes onto the market after the Olympics, a sixty percent occupancy rate will be hard to achieve. The costs of many projects have seriously risen as they have been implemented. […] For many sites, there is no complete project documentation or confirmed cost estimates. All this confirms our doubts.”

As for jobs, they really will be generated—for thousands of migrant workers. Federal Law No. FZ-108, adopted specifically for the World Cup, leaves no doubt about that. First, the law establishes special lightweight entry requirements for foreign workers involved in preparations for the World Cup. Second, it limits the applicability of a number of existing labor laws, effectively legalizing slavery. As the Confederation of Labor of Russia (KTR) declared in their statement on the subject, “The potential for runaway importation and recruitment of cheap labor, undermining the national labor market, and leading to a decrease in wages and legal guarantees in the area of labor relations, and an increase in the level of unemployment among the population, has been legally enshrined in the Russian Federation.”

The government could not care less about the fortunes of workers during the crisis, and it does almost nothing to hide it. How else can we account (to cite just one example) for Mr. Topilin’s proposal to deny free health care to all informally employed and unemployed people not registered with an employment bureau?

In light of the foregoing, the Kremlin’s actions aimed at reconciliation with the liberal opposition also become intelligible, as do unexpected initiatives to put the “against all” option back on voting ballots. The authorities fear that public discontent will grow and want to channel it in a direction that presents no danger to the ruling elite. Whether this political maneuver succeeds depends in part on the willingness of leftist political forces and trade unions to win over public opinion and make the fight against austerity measures as much of a mobilizing factor as it has been in Greece, Spain, and other countries facing the consequences of the capitalist system’s crisis.

Translated by the Russian Reader. Photo courtesy of deviantart.net