(Don’t) Pay Your Rates

DSCN4253A Petersburg housing services worker risking life and limb to clear snow off the roof of a tenement building in the city’s downtown. Photo by the Russian Reader

Russians Are Increasingly Not Paying for Their Flats
Growing Debts for Housing Services and Utilities Reflect Obvious Social Ills
Pavel Aptekar
Vedomosti
February 21, 2018

The increase in housing and utilities rates, occuring alongside a protracted downslide in personal income, has produced an abrupt upturn in debts for housing services and utilities, and collections of arrears in court, especially among low-income segments of the Russian populace.

The Russian Supreme Court has published statistics on the collection of debts for housing services and utilities. In 2014, 2.1 million such cases were ajudicated by the courts. In 2017, the figure was 5.4 million cases, and the total amount of recoverable debt had doubled, from ₽60 billion to ₽120 billion—taking into account, however, the debts of legal entities that paid for heating irregularly. Nevertheless, these figures reflect both an alarming trend—utilities payments have increasingly become a burden for disadvantaged parts of the populace—and the unwillingness of the rich to pay the bills for flats they have purchased as investments.

Generally, the collection of payments for utilities and housing services proceeds calmly. According to the Institute for Urban Economics, 95–97% of apartment residents pay their bills on time, but an individual’s timeliness in paying their bills depends on their income, as well as the climate and budget priorities of the Russian region where they live. According to Rosstat, household expenses on utilities and housing services per family member rose between 2014 and 2016 from ₽1,511 to ₽1,816, i.e., by 20.2%. The share of total household expenses spent on utilities and housing services rose during the same period from 10.3% to 11.3%.

For the sake of budget savings, many regions have reduced subsidies on housing and utilities, which has seriously increased the amount of money spent on these services by local populations, says economist Natalya Zubarevich. For example, housing and utilities account for 25.8% of paid services in Kursk Region, while in neighboring Oryol Region the figure is 41.1%. In Khabarovsk Territory, housing and utitilies expenses make up 26.7% of the cost of all services, while in Amur Region, which has a comparable climate, the figure is 45.8%.

In 2016, housing and utilities expenses accounted for 15.2% of all expenses among the ten percent of Russian families with the lowest incomes, and 14.8% of all expenses among the ten percent of families who were less poor. People who have to scrimp on everything are often forced not to pay for housing and utilities simply in order to survive. However, according to Mikhail Men, Minister for Construction and Housing, some of the arrears are owed by the proprietors of apartments bought as investments, who do not want to pay the bills for vacant flats.

According to Rosstat, the total amount of money owed by the Russian populace for housing and utilities in 2014 was ₽111 billion; in 2015, it was ₽135.8 billion. Subsequently, the debts have grown more quickly. In October 2016, Andrei Chibis, Deputy Minister for Construction and Housing, informed TASS News Agency they had reached ₽270 billion, and in July 2017, Men cited the figure of ₽645 billion [approx. €9.2 billion].

This increase reflects an obvious social ill. Housing and utitilies fees are billed by private companies, who turn not only to the courts to collect unpaid bills but also to the services of illegal debt collectors. Such circumstances could engender serious conflicts, especially in small towns with poor populations.

Translated by the Russian Reader. See my numerous previous posts on the problem of debt in Russia.

Russia’s Working Poor

Employed and Poor
Andrei Bespalov
Takie Dela
December 13, 2017

According to official statistics, at least ten million Russians work hard all their lives but cannot escape poverty. 

Russia has no clear criteria for poverty. The concept is absent from Russian legislation. There are poor people throughout the world, but not in Russia. We vaguely define them as “low income,” meaning people whose income is below the subsistence level. Each region of Russia has its own subsistence level. For example, for a person of working age to make it for a month in Omsk Region, he or she needs at least 9,683 rubles [approx. 140 euros]. In Moscow, the minimum income is twice as high: 18,472 rubles [approx. 267 euros]. If your income is lower than the officially approved subsistence level, you are living below the poverty line. True, this in no way mean you cannot be paid less this same minimum for your work. You can indeed be paid less: if your monthly wage exceeds the minimum wage at least by one kopeck. Currently, the minimum monthly wage in Russia is 7,800 rubles [approx. 113 euros].

Story No. 1: Olga
We imagine you have go looking for poor people far from Moscow, and the farther you get from Moscow, the more flagrant poverty you will encounter. It is not true. There are large numbers of people living below the poverty line in the capital. I should emphasize that, in this case, we are talking Russian nationals, not about migrant workers from the former Soviet republics.

Take Olga. She works in a lab at Moscow Medical University. In her fifteen years there, she has risen from senior lab assistant to head of the lab. Olga’s monthly salary is 12,000 rubles [approx. 173 euros], and it is her entire income.

True, she gets the occasional bonus, but they come “a little more often than once in a lifetime.” Ordinary lab employees are paid 11,000 rubles a month [approx. 159 euros]. Such salaries are hardly a rarity in Moscow.

Olga was educated as a programmer. She graduated from Bauman Technical University, but she has not worked as a programmer for a long time. She believes she cannot catch up and has lost her qualifications. Olga worked as a programmer before her children were born. Her family had enough money for everything, and besides, she had the opportunity to earn money part-time. When her maternal leave was up, she was unable to go back to her old job: her department has been disbanded. She was able get the job in the lab at Moscow Medical. Olga likes everything about the job—her colleagues respect her, and her work team gets along well with each other—except the salary. Management occasionally permits her to work from home. This is good for Olga: she does not have to spend money on commuting. (Olga lives in Moscow Region, not in the city.) This comes to around 300 rubles [approx. 4 euros] a day for the trip to the city and back on the commuter train and a round trip on the subway to the university.

When her children were small, Olga did not try and find better-paid work, and when they were older, she tried, but was turned down everywhere she applied. To her surprise, she realized no one wanted to hire a woman in her forties.

“First, you can’t find work because of the children, who are constantly ill, and then you can’t find work due to your age. Although what age are talking about? I’m forty-five!”

Olga had wound up in the category of people with no prospects. The only place she could get a job was a school. Olga worked there for several years before quitting. She had never been offered a full-time position, and her monthly salary of 6,000 rubles [approx. 87 rubles] was only enough to pay for her commute.

“I don’t want to leave these folks. It’s easy working with professors. They are quite cultured, decent people. It would be a pity to quit the job. I feel I’ve become a highly qualified specialist over the last fifteen years,” said Olga.

If it were not for her husband, a programmer, she would have a hard time feeding them and their two children. The family of four’s overall income is above the subsistence level, if only by a little. It comes to around 80,000 rubles [approx. 1,155 euros] a month. (The per capita subsistence level in Moscow is 18,472 rubles, meaning Olga and her family make around 7,000 rubles more in total than the subsistence level.) It was their good fortunate both her sons were admitted to university as full scholarship students. Olga and her husband would definitely not have been able to pay their tuition.

Olga’s family took out loans to improve their living conditions. They started out in a room in a communal flat and, after several steps, moved into their own two-room flat. However, they had to rent housing for three years, since construction of their apartment building had been postponed. Renting meant additional expenses. Subsequently, Olga had to take oout a loan to fix up the flat in order to move in as quickly as possible. That was five years ago. Of the original loan of 500,000 rubles, they still have 300,000 rubles [approx. 4,300 euros] to pay off. The monthly minimum payment is 20,000 rubles [approx. 290 euros].

In her free time, Olga tries to earn extra money by knitting. She says she is very good at it. But she is unable to supplement her salary by more than 4,000 or 5,000 rubles a month, and this happens extremely irregularly. Olga says a master knitter would have to work all month without taking a break to earn that kind of money. Everyone likes the things Olga knits, but people are willing to buy them if they do not cost more than mass-produced Chinese goods, that is, they are willing to pay the price of the yarn. Olga is not ready to give up her job at the university.

It’s Unique
The poverty experienced by employed people harms the economy and hinders its growth. This was the conclusion reached by the Russian Government’s Analytical Center in a report published in October 2017.

“The poverty of workers generates a number of negative economic and social consequences, affecting productivity and quality of work, shortages of personnel in the production sector, especially manual laborers, the health of the population, and educational opportunities,” wrote the report’s authors.

Olga Golodets, deputy prime minister for social affairs, has spoken of the fact that the working poor have no stake in increasing productivity. Judging by a number of recent speeches, the authorities are aware that grassroots poverty threatens the country. Golodets called poverty among the working populace a unique phenomenon in the social sector. A uniquely negative phenomenon, naturally.

Story No. 2: Nadezhda
Nadezhda works as a history teacher at a technical school in Barnaul. She has been teaching for twenty-seven years, and her monthly salary is 12,000 rubles [approx. 170 euros]. Nadezhda has been named Teacher of the Year several times. The regional education and science ministry awarded her a certificate of merit for “supreme professionalism and many years of conscientious work.”

Nadezhda works with a cohort of students that includes many orphans and adolescents with disabilities: the visually impaired, the hard of hearing, and the deaf and dumb. It happens that her class load is as much as eight lessons a day.

Nadezha and her eleven-year-old son share a room in the technical school’s dormitory. Nadezhda has been on the waiting list to improve her living conditions for fifteen years.

“Last year, I was ninety-fourth on the list. This year, I’m ninety-first. At this rate, I can expect to get a flat in thirty years or so,” she said.

Nadezhda thought long and hard about applying for a mortgage, but she decided against it, although the bank had approved a loan of one million rubles [approx. 14,500 euros]. But what income would she have used to pay back the loan, when the monthly payment would have been 21,000 rubles?

In Altai Territory, where Barnaul is located, 12,000 rubles is above the subsistence minimum, which has been set at 10,002 rubles for the able-bodied population. In addition, the state pays Nadezhda’s son a monthly survivor’s pension of 8,300 rubles after the death of his father. Officials cite this as grounds for rejecting her request that her son should receive additional social benefits. The family’s monthly budget is 20,000 rubles, so they should be living high on the hog from the official viewpoint, apparently.

In 2013, Nadezhda suffered a severe concussion involving partial loss of hearing and eyesight. She was struck by a student high on drugs, she said. She spent over two months in the hospital. Ever since then, she has had to take pills that run her 3,000 rubles a month.

“Working with classes in which there are many orphans is not easy at all. They demand your constant, undivided attention. When I say ‘demand,’ I mean ‘demand,’ and they get that attention. But then conflicts arise with the parents of other children: the class doesn’t consist entirely of orphans. They say I don’t give their kids enough attention.”

Over the course of her life, Nadezhda has never been able to earn enough money to buy a standard 600 square meter dacha plot. Thanks to her former father-in-law, however, she grows vegetables on his plot.

“I hear the call to be a patriot from every radio, TV set, and kitchen appliance. What are you going on about, guys? I have been humiliated my entire life, paid crumbs for a difficult, responsible job. I’m hit on the head by students, and they go unpunished. I’m told to quit if it doesn’t suit me: no one is holding me back. They tell me they will find a way to evict me from the dormitory, although they are unlikely to succeed as long as my son is a minor. I’m a teacher of the highest category, with a certificate of merit from the education ministry. Our family income exceeds the minimum subsistence income by 700 rubles, meaning that officially we are not poor. Thank you very much, it makes life so much easier.”

A Trend
Since 2005, the poverty level in Russia has decreased threefold, note the authors of the study. At the same time, they write, “We cannot recognize as normal circumstances in which over ten million employed people have incomes that do not allow them to provide decent living conditions not only for themselves, but for their families.”

The researchers at the Russian Government’s Analytical Center have noticed a trend in recent years. There have been more people working in needy families, but “this has not vouchsafed their exit from poverty.”

Story No. 3: Igor
Igor Kurlyandsky, a PhD in history and senior researcher at the Institute of Russian History of the Russian Academy of Sciences, cannot be categorized as belonging to the working poor. His monthly salary exceeds the minimum subsistence income for someone living and working in Moscow by 600 rubles. His monthly after-tax income is 19,300 rubles [approx. 279 euros]. There are freelance jobs, of course, but they are irregular and do not change Igor’s circumstances for the better.

“Generally, the salaries at the institute are pitiful. Doctors of Science and senior employees are not paid much more than I am, three or four thousand rubles more,” Kurlyandsky said.

FANO (Federal Agency for Scientific Organizations) is supposed to pay quarterly bonuses based on performance indices, for example, academic publications. But this year, according to Kurlyandsky, FANO has not paid out any of these bonuses, and it has canceled old bonuses as well.

“It’s wrong to demand that scholars publish frequently. They might work for a year in the archives, collecting material for future academic articles. Or they might take several years to write a book. I worked for four years on a book about the relationship between the regime and religion during the Stalin era. I will not be paid a fee for the book. I might get a salary bonus for it from FANO. But whatever it is, if you divided it by four years, it would amount to kopecks. The institute has nothing to do with selling books. Authors earn nothing except complimentary copies.”

According to Kurlyandsky, the Institute of Russian History, one of the principal historical research institutions in Russia, with many wonderful scholars on its staff, is itself a beggar.

“It literally has no money for anything. The state hardly finances it. Of course, for many years, its fellows can travel for business only at the expense of host institutions.”

“If memory serves me, the last time researchers got a raise was around fifteen years ago. Life becomes more expensive, but our salaries stay the same. Over this period there were several spikes in inflation, but our salaries were not indexed. I have to skimp on lots of things,” Kurlyandsky confessed.

Where Are There More Poor People?
If you look at the situation by sector, the majority of the working poor are employed in housing services and utilities, education, culture and sports, agriculture, forestry, and a number of other sectors. The sectors with the fewest working poor are the resource extraction industries, finance, public administration, the military-industrial complex, and social security administration.

Generally, the statistics say that, since 2005, the number of working poor has decreased from eight million to two million, and the percentage of poor people from 24.4% to 7.3%, and this has occurred mainly due to the private sector, not the public sector.

Story No. 4: Svetlana
Forty-four years old, Svetlana works as a senior librarian. She arrived at the library immediately after graduating from a teacher’s college. Twenty years on the job, Svetlana has a huge amount of experience and a monthly salary of 8,300 rubles [approx. 120 euros].

“When I was a student, I imagine my future job as a perfect idyll: silence, lamps glowing on the tables, people reading, and me bringing enlightenment to the masses. It’s funny to remember it. I didn’t think about the money then, of course, but nowadays it’s the thought with which I wake up and go to sleep. My husband teaches at a university and makes a little over 14,000 rubles [approx. 200 rubles] a month. We have two sons in school. My dad is quite unwell, and my husband’s mom and dad are also quite ill. So we earn our 23,000 rubles a month and divide it among seven people. Among seven people, because my dad and my husband’s parents have pitiful pensions, public pensions, despite the fact they worked in factories for thirty years. It’s my perennial puzzle. What should we buy? Medicine for the elderly? Shoes for the kids? Pay off part of the debt we owe on the residential maintenance bill? Buy decent trousers for my husband? I haven’t given myself a thought for a long while. Honestly, I wear blouses and skirts for ten years or so before replacing them. I can’t recall the last time I bought cosmetics.

“Earlier, we bore our poverty more easily, maybe because we were younger. So what there was nothing to eat with evening tea? Who cared that we dressed modestly? It was a style of sorts. We tried to make sure the children had better shoes and clothes.

“The most terrible thing right now is not that we are paid kopecks. My husband used to believe we would struggle through, that we would work off our debt. But then he burnt out. He forces himself to go to work. The children are perpetually dissatisfied, and our parents are always ill. Only I don’t pretend it’s okay, that everyone lives like this. I have caught myself sizing up how people are dressed on public transport, and at the store I look into their baskets. What fruits, meat, and wines they buy! We are always eating buckwheat groats with bits of chicken and meatless soups. I hate the dacha, but it really does put food on our table.

“I have no prospects. I won’t live long enough to be promoted to head librarian, because our head librarian is my age. I lack the strength for side jobs. My real job is not easy: there is lots of scribbling involved. Plus, we divvied up the jobs of the cleaning woman and  janitors, so we either mop the floor or chop ice on the pavement. I crawl home barely alive. Frankly, I don’t see how my life could change, and I’m used to it. What worries me is my sons’ future. I’m horrified when I think that soon they will be applying to university. What if they don’t get full scholarships? We definitely don’t have the money to pay for their educations. So it turns out we have doomed our boys to the same poverty.”

It’s Shameful to Admit
Nearly everyone with whom I spoke when writing this article asked me not to use their real names and places of work. They all made the same argument. First, it is shameful to admit you work for mere kopecks. Second, their bosses would be unhappy and punish them for “disclosing information discrediting the organization.” Many of my interviewees actually had signed such non-disclosure agreements, entitled “Code of Ethics,” at work.

All illustrations courtesy of the artist, Natalia Gulay, and Takie Dela. Translated by the Russian Reader

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Labor ministry: about 13% of Russian population live below poverty line
TASS
December 28, 2017

The number of citizens with incomes below the minimum cost of living is around 20 million people, according to the Russian labor minister

The incomes of about 13% of Russia’s population are lower than the minimum cost of living, Labor Minister Maxim Topilin said in an interview with Rossiya 24 TV channel.

“According to current estimates, the number of citizens with incomes below the minimum cost of living is still around 20 million people, which is 13–13.5% of the country’s total population,” Topilin said.

He noted this is “at least an unpleasant indicator.” The minister attributed this figure to price increases in the last two years and, as a result, the growth of the subsistence minimum.

Topilin stressed the government has already taken the first steps to reducing the number of people with incomes below the subsistence minimum. He recalled that under a law that was adopted recently and would come into effect on January 1, 2018, the minimum wage would rise to 85% of the minimum subsistence level, and to 100% on January 2019.

“For the first time in the history of the Russian Federation, we have managed to bring the minimum monthly wage to the minimum subsistence level,” Topilin said.

NB. This article was lightly edited to make it more readable—TRR.

“Life Is Very Difficult for People”

“Life Is Very Difficult for People”
Yelizaveta Mayetnaya
Radio Svoboda
November 30, 2017

The announcement first appeared on the doors of a cafe in St. Petersburg, and then on the social media networks: “Olivier salad, kharcho, vegetable ragout with chicken, compote or ale, bread. 200 rubles. Free of charge to veterans and impoverished pensioners.” The whole town learned about the charity campaign literally within a few days, and old people flocked from all ends of the city to enjoy the free lunch special.

No one asks for any letters, verifying a person’s income. Pensioner ID cards are not required, either. You just have to sit down at a table and you will be fed.

Czech Yard, the cafe that will not let pensioners go hungry, is a family business. 25-year-old Alexandra Sinyak, the cafe’s co-owner, came up with the idea for the charity campaign.

“It all started with an old man who came into eat, but had little money on him. My husband was working in the cafe that day. He felt sorry for the man and said that lunch specials in our cafe would be free to pensioners,” recounts Sinyak. “The old man came for lunch every day for three weeks or so. We thought we should be feeding all the old people in our neighborhood, and not once, but on a permanent basis. We hoped our colleagues would support us, and one or two cafes that fed old people would pop up in each district. We did not imagine, of course, that they would come from all parts of the city to our cafe, but life is clearly very difficult for people. They spend forty minutes, an hour traveling one way to come here. We feed everyone. We do not turn anyone down.”

At first, Sinyak recalls, for some reason the old women brought their pension receipts along with them. The amounts listed on them were 6,200 rubles, 8,000 rubles, and 10,000 rubles. [That is, these women receive, at most, a pension of 143 euros a month.] They brought other receipts as well, such as the receipts for their apartment maintenance bills, which contained almost identical sums. [In fact, the amount of my latest apartment maintenance bill is 6,285 rubles and 20 kopecks. It tends to be lower by two or three thousand rubles in the summer months, when the centralized heating system is shut off—TRR.] Many of them have adult children who are employed, but they cannot help their own old folks, because they are barely making ends meet themselves.

According to Rosstat, around two million employed Russians are paid wages below the subsistence level. If we account for the fact that this money is also spent on other family members, the number of employed but impoverished Russians is over twelve million people or 16.8% of the population, according to calculations made by experts at the Russian Federal Government’s Analytical Center. Analysts at the World Bank have argued that the percentage of economically vulnerable people in Russia is over fifty percent.  According to a World Bank report, the proportion of Russians with a daily income of less than $10 has risen to 53.7%, while 13.8% of Russians spend less than 5$ a day.

Sinyak has seen her share of employed poor people in hospitals and rehabilitation centers. Four years ago, she and her husband gave birthto a premature baby. Doctors told the couple the girl would not be able to walk, talk or see, and they could not even dream of sending her to school. The Sinyaks threw all their efforts into making their baby daughter well. Now she has a slight limp, but is otherwise a normal child.

“We organized charity concerts for the children, and my husband and I simply gave their parents money because we really wanted to help them,” says Sinyak. “Now we are thinking about organizing a New Year’s party for the old people.”

At first, they posted the announcement about the free lunch specials on the cafe’s front door, but only one person showed up. It was only after Sinyak posted the announcement  on social media sites that the whole city discovered her and her husband’s lunches. Now they serve at least twenty-five free lunch customers daily.

То самое объявление

The initial announcement outside the cafe: “Dear patrons! The restaurant invites needy people of pension age and veterans to enjoy free lunches daily from 10 a.m. to 1 p.m.” The post on the VK social network reads, “Czech Yard Cafe at 73 Sixteenth Line. All veterans and elderly people can eat lunch for free from noon to four p.m. […] We will support all cafes that can afford to do it. There are three of us for the time being. We are reposting this. Maybe a whole bunch of cafes in every district of the city will join us.”

One of their customers is 66-year-old Lyubov Volkova. She lives nearby, but she ordinarily does not walk on the side of the street where the cafe is located. She saw the announcement on VK. She spread the word to all her girlfriends in the neighborhood so they could lunch together.

“The lunch specials are a tremendous support to me. I worked my whole life. I have the title of veteran worker, but my monthly pension is 10,200 rubles, and the maintenance bill for my two-room flat is at least 7,000 rubles during the winter. I’m left to my own devices,” says Volkova, sighing heavily. “The electricity has been shut off for non-payment, and I have 15,000 rubles in unpaid fines, but I have not paid them, because I do not have the money to pay them. There are lots of people like me in our district. The people at the housing maintenance service and the electric company have become insolent. They constantly raise rates. They could not care less whether we can pay their bills or not. It is a good thing that Alexander appeared on the scene. Her cafe is charming and serves tasty food, and it is just nice to come here.”

Александра Синяк с мужем Евгением и пенсионеркой Любовью Волковой

Alexandra Sinyak, her husband Yevgeny, and pensior Lyubov Volkova

Volkova leads a rather active lifestyle. She is a member of the human rights public monitoring commission, inspecting pretrial detention centers and prisons, and she also volunteers at several public veterans organizatons. But all this work is unpaid.

“Most of the work in Russia is done by migrants. Our own people struggle to make ends meet, and they cannot get jobs. I have two sons, but they themselves have to squirm to feed their families. And I have lots of girlfriends: we left jobs at research institutes in the nineties to trade on the streets in order to raise our children. The situation was no better: everyone’s pensions were tiny. You know, I really love Russia, but everything that is happening makes me terribly sad. I want to go back to the Soviet Union. There was stability and calm then. Sure, we did not live high on the hog, but nor did we go begging. We had enough to pay for the essentials.”

Igor Bukharov, president of the Federation of Restaurateurs and Hoteliers of Russia, says the vast majority of restaurateurs have been feeding the needy for many years, but they do not talk about it.

“Societies for disabled people ask us for help, as do war veterans, as do veterans of military operations, as do the orphanages. Who doesn’t ask us for help?! Some ask to be fed breakfast, some ask to be fed lunch, some ask for help with charity suppers, and I have never heard of anyone being turned down,” claims Bukharov. “Generally, I think helping the needy is everyone’s personal affair, and we should not talk about it.”

For the time being, according to Alexandra Sinyak, they have been contacted by one only restaurant, in Sestroretsk, about arranging lunches on a permanent basis, rather than a one-off basis, and businessmen have turned up who are willing to supply their cafe with produce. Municipal councils in some large cities arrange free lunches for pensioners, but there are waiting lists, and the pensioners have to provide documented proof of their neediness. On the other hand, you can then eat free twenty-one times per quarter, says Lyubov Volkova.

Social organizations also provide assistance in the form of produce and groceries. For example, the Rus Food Fund has distributed 20,000 tons of produce and consumer goods to the needy during the five years it has operated. Right now, for example, the fund has been collecting “Food for the Backwoods” in time for the New Year’s holiday. The food will be delivered to the poor and lonely who live in villages in seven regions. Fifteen thousand people will receive assistance.

Anna Kirilovskaya has taken charge of so-called foodsharing in St. Petersburg. Volunteers collect food from various businesses, and distribute it for free to the needy. Originally, Kirilovskaya explains, the idea was to save edible produce from being discarded. The project now employs around 400 volunteers. The produce is collected almost daily, and thirty businesses give away their leftovers on a constant basis. According to the project’s website, over 113,000 kilos of produce have been saved in the different regions where foodsharing exists and there are teams of foodsavers.

“The volunteers decide themselves what to do with the food. They can take unsold soup from a cafe and pour it into sixty packets, freeze them, and eat them for the next two months. But I know that many of our volunteers take care of neighbors, families with lots of children, and old people. Some volunteers will take leftover meat that has been given to them, turn them into cutlets, and hand them out to the people they look after, but we get the most donations from vegetable warehouses. We mainly distribute fruits and vegetables,” says Kirilovskaya.

According to Kirilovskaya, the businesses most willing to help are owned by green-minded people who promise their customers fresh products and goods.

“Imagine how bakers at a private bakery feel when they have to throw their unsold goods into the trash in the evening?” Kirilovskaya wonders. “But everyone, employers and employees, likes giving away food to the needy. By the way, employees appreciate their employers more when they have this considerate attitude to their work.”

Alexandra Sinyak says she does not know what to do if hundreds of people come every day for their lunch specials, and whether she and her husband can continue to feed them at their own expense for very long.

“We decided we would do it as long as we were able,” she says.

In the coming days, she plans to make the rounds of the cafes in neighboring districts to personally persuade their owners to provide similar lunches to their own local pensioners. Sinyak is certain that someone will respond to her request.

Lyubov Volkova argues that Sinkyak should keep a count of the people who come for lunch, and if there are really too many of them, to refuse to serve everyone.

“I would not want these wonderful, kind folks to end up beggars themselves because of us poor pensioners,” she says.

Translated by the Russian Reader. Thanks to Comrade Preobrazhenskaya for the heads-up

Poor Russians Up to Their Necks in Debt

ruble coin 2This one-ruble coin, minted in 2014 and sporting the newish symbol for the ruble, adopted in 2013, won’t buy you love or much anything else. 

Poor Russians Go into Debt
Tatyana Lomskaya
Vedomosti
October 11, 2017

Low-income Russians have been unable to wait for an uptick in incomes and have turned to loans to meet their consumer needs. Experts, including the Central Bank, believe such borrowers are a danger to the economy.

The demand of Russians for loans has been growing. In August, their arrears to banks rose to levels not seen since the spring of 2014. Ruble-denominated loans reached their maximum historic high, according to RANEPA’s monthly newsletter Monitoring the Economic Situation in Russia. Banks have been vigourously issuing loans. In July, they provided Russians with 23% more loans than at the same time last year. Consumer loans have been the fastest growing. According to the National Credit History Bureau, such loans increased by 27% over the past eight months.

Loans have been playing a growing role in the budgets of Russian families, notes the newsletter. In the first six months of the year, new loans made up 21% of household final consumption expenditures. This is significantly higher than the crisis levels of the last two years (15–18%), although it is still below the peak levels of 25–27% in 2013–2014. With virtually no increase in the real incomes of individuals, this generates additional risks to their financial circumstances, noted RANEPA’s analysts.

Residents of poor and distant regions are the biggest borrowers of consumer loans at the moment, along with the poorest segments of the populace, notes Natalya Zubarevich, director of the regional program at the Independent Institute for Social Policy. This is how they offset falling incomes. Wages in Russia have been growing since August 2016, but real incomes have continued to fall.

People cannot skimp and save forever. People turn to loans to meet their needs, says Zubarevich. What matters is that banks not issue too many loans, which would raise the specter of a huge number of defaults.

The debt burden has been growing more quickly in regions with the highest poverty levels, according to the FR Group, although the situation varies from region to region, notes project manager Anastasia Zyurkalova.

Russians have been spending more and more of their income on consumption. According to some indications, they have abandoned the savings model of financial behavior, acknowledges Yelena Grishina, head of RANEPA’s research laboratory on pension systems and social sector actuarial forecasting. One of the ways they survive is by taking out loans. Certain segments of the populace have outlived the means they once had for limiting consumption. In the first six months of 2017, a linear dependence bwtween increases in the volume of loans and poverty levels in the regions was observed, says Grishina. Russians are now more positive than a year ago: they have assessed the changes in their welfare, and the percentage of those who skimp on food and clothing has decreased, note RANEPA’s analysts [sic].

The burden of non-mortgage loans is highest in regions with high unemployment and a poorer populace, Alfabank’s chief economist Natalya Orlova wrote last autumn. The middle class [sic] would be unlikely to emerge as the main source of the growth in demand for retail loans, she noted. The average borrower is more likely to be someone with a limited income. Judging by the numbers for the first six months of 2017, nothing has changed, says Orlova. It is still less well-off Russians who want to bring their consumption up to average levels. The increase in retail loans in the poorest regions is likely due to people’s tapping out their savings and and trying to maintain a certain level of consumption, agrees Karen Vartapetov, an analyst at S&P.

A significant portion of the demand for consumer loans comes from people whose incomes are less than the median income in Russia. Often, their incomes are unstable as well, and their debt burdens are high, noted analysts in the Central Bank’s research and forecasting department. (Their opinions may differ from the financial regulator’s official stance.)  Yet banks currently do not really have the capacity for an increase in lending, and so even a moderate uptick in consumer loans is fraught with risks no less serious than during the 2010–2012 loan boom. To limit these risks, the Central Bank has been working out individual debt burden indicators, notes a source at the regulator. The share of an individual’s expenditures on repaying loans should be such she could continue to pay back the loan even if negative events were to occur.

For the time being, the largest banks surveyed by the Central Bank have reported that the percentage of borrowers with increased levels of debt burdens has not grown, and the number of people with monthly incomes of less than 20,000 rubles [approx. 290 euros] who have taken out cash loans has fallen, says the source at the regulator. The banks have been forced to behave more conservatively. Everyone well remembers the wave of late payments in 2012–2013, says Yuri Gribanov, CEO of Frank RG.

After the crisis of 2015, the quality of loan applicants has not improved considerably, notes Sergei Kapustin, deputy board chair of OTP Bank. There are still many people with problematic debts that have not been managed and refinanced at another bank. According to certain channels, the share of such debts is ten percent, and banks have been forced to lower the number of loans they issue. In addition, a number of bankers issue unsubstantially large loans to people who have borrowed money at other banks in amounts disproportionate to their incomes.

The demand for consumer loans is currently quite high, says Mikhail Matovnikov, Sberbank’s chief analyst, and there are still a lot of extant bad loans at high interest rates, especially among low-income Russians. This not at all what the economy needs, and it is bad for borrowers, too, he argues.

The banks’ fight against such loans has pushed borrowers into the arms of microfinance institutions, where the circumstances can be even worse. This year, the microlending market has grown from 186 billion rubles to 242 billion rubles [approx. 3.5 billion euros]. The banks have not met the steadily growing demand for loans, according to research by microlender Home Money.

home money

A screenshot from Russian microlender Home Money’s website. “It’s simpler to make a phone call than to borrow from somebody! Call if you need to! New services: personal legal consultant; home protection; credit history.”

Measures to limit interest rates cooled the consumer lending market in 2015–2016, notes Dmitry Vasilyev, an analyst with Fitch. Currently, the portfolio’s growth matches the nominal growth in incomes of Russians (2–3% during the first sixth months of 2017) and the percentage of risky and unsecured loans has lowered. Some borrowers have drifted to the microlenders, while some banks have been weeded out due to noncompliance with tougher standards, says Vasilyev.

Orlova points out the banking sector is at a crossroads. Maintaining quality lending means not taking on as clients people working in the informal sector and incapable of confirming how much they make and microlenders currently lending at very high rates. Or banks could increase their appetite for risk and take on inferior borrowers to increase their market shares and loan portfolios. Banks have to earn money. If there are no borrowers willing to pay (for example, the government, which would have to become much more active in the state debt market), the issue would become particularly critical. Prospects for income growth in the coming year are worsening, and the risk that not very well-off people would not be able to service their loans is growing, warns Orlova. Poverty will not seriously decline in Russia in the coming year, if we believe the government’s three-year macro forecast, as submitted to the State Duma. It will drop from 12.8% of the populace this year to 11.2% in 2020, i.e., it will not drop to the levels of  2012–2013 (lower than 11%).

Translation and image of the ruble coin by the Russian Reader. Thanks to Comrade Koganzon for the heads-up. The original article, as published yesterday by Vedomosti on the front page of its paper edition, was behind a paywall. Thanks to Press Reader for providing me with the text of the article.

Extreme Makeover: Russian Home Edition

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Ty Pennington

This is what is meant by ruchnoye upravlenie or “hands-on governance” in Russia.

“In a stage-managed gesture of benevolence a year ahead of a presidential election, Russia’s Vladimir Putin flew 1,200 km (750 miles) to call in on a woman living in squalor and ordered her to be rehoused immediately” (Gleb Stolyarov, “Eyeing election, Russia’s Putin stages visit to voter’s rundown home,” Reuters, June 28, 2017).

None of the other candidates (?), especially Alexei Navalny, who was officially sidelined by the Central Electoral Commission the other day, can hand out new houses and trips to Sochi to the needy. If they could and did, they would probably be brought up on charges for influence peddling or something like that.

But Putin can do it. The problem is that he cannot and will not do it for everyone, and certainly not in the systematic way implied by the clause in the 1993 Russian Federal Constitution that declares (emptily, as it would turn out) that the Russian Federation is a “social state,” i.e., a welfare state in the best sense of the word. That would mean bankrupting the current Russian state, i.e., the capitalist oligarchy run by Putin and his cronies in “manual mode” for their own benefit and one else’s.

I love the headline: “Eyeing election…” There are virtually no real elections in Russia, and in the few elections where a real, well-meaning person might, theoretically, be able to sneak past the watchful eyes of the elections boards—say, if she ran as a candidate in a lowly municipal district council (not even for city council or regional legislative assembly, where the winners do have nominal or real power and, at least, in Petersburg, personal discretionary budgets for spending on pet projects)—she would end up serving on a entity that has almost no budget (to hand out largesse, like Putin did in this case, or to do something that benefits all or many of her constituents) and no power whatsoever.

Putin will limit his campaigning to a few feel-good demonstrations of “manual control” like this one, where he unwittingly reproduces the role played more cheerfully and persuasively by Ty Pennington on ABC’s popular reality TV program Extreme Makeover: Home Edition, which probably did more for the needy than Putin has ever done and ever wants to do. TRR

Photo courtesy of Wikimedia

Popular Protests in Novosibirsk Defeat Governor’s Plans to Raise Rates

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Rally against planned building maintenance and utility rate hikes, March 19, 2017, Novosibirsk. Photo courtesy of navalny.com

Novosibirsk Cancels Sharp Hike in Utility Rates in Wake of Protests
Yevgeny Kalyukov
RBC
April 19, 2017

Seven protest rallies in the region’s capital have forced regional leaders to give up their plan to raise rates for housing services and utilities by 15%.

RBC Novosibirsk has reported that Vladimir Gorodetsky, governor of Novosibirsk Region, has announced he will not raise rates for residential building maintenance and utilities by 15% beginning July 1, 2017.

During a briefing on Wednesday in Novosibirsk, Gorodetsky said he had signed an amendment to a decree adopted in December 2016. The amendment lowers the maximum rate rise to 4%.

Seven protest rallies have taken place in Novosibirsk in recent months. Protesters demanded the authorities either give up plans to increase rates so sharply or resign. Opposition politician Alexei Navalny was involved in the third rally.

“I hadn’t imagined the degree to which the protesters were dissatisfied. It’s a rare thing when my speech is more moderate in mood than the slogans shouted by rallygoers. My overall feeling was that the city had had it. Clearly, no one here can pay the new rates. And it’s a sure bet no one wants to pay for someone else to live well. We also have to understand the rate rise hasn’t come into force yet. Meaning the people coming out to the rallies realize there will other figures on their bills come June. I’m curious to see what will happen here in August when the summons to take to the streets, contained in the building maintenance and utilities bill, arrives in everyone’s apartment,” Navaly wrote in his blog after the rally.

On April 17, a petition calling for cancellation of the rate hike, signed by several thousand people, was delivered to Gorodetsky’s office.

“Believe me, I don’t listen just to the opinions of the people at the rallies. I have meet with the trade unions, the Public Chamber, and the Russian People’s Front. People said the burden was heavy,” Gorodetsky said on Wednesday by way of explaining his decision.

In keeping with the decree “On Maximum Increases in Payments Made by Citizens for Communal Services in the Municipalities of Novosibirsk Region in 2017,” signed on December 16, 2016, the amount of money charged to consumers of communal services would have increased by 15% as of July 1, 2017, in a number of towns and villages in the region, including Novosibirsk itself.

Translated by the Russian Reader

“We Are Treated like Schmucks”: Why Volga Region Pensioners Have Rebelled against the Regime

“We Are Treated like Schmucks”: How and Why Volga Region Pensioners Have Rebelled against the Regime
Yeveniya Volunkova
Takie Dela
April 4, 2017

What Happened?
Certain benefits for pensioners, disabled people, and other beneficiaries were cut in Samara at the beginning of 2017. Monthly payments for housing services and utilities were replaced by compensation for actual expenses. People now have to pay their bills first, then show the authorities the receipts, and only after that, if they have no debts, are they compensated for their expenses. The system has not been put through its paces and does not function, so there have been problems with assembling documents and getting compensation. In addition, a charge for major renovations has been added to the housing maintenance bill, a charge that many people do not pay as a matter of principle. Also, free public transportation for working pensioners has been abolished, and the number of free rides on the subsidized transport pass has been limited to fifty. This lasts many people two weeks; moreover, people complain the “rides” disappear more quickly. The frosting on the cake was the cancellation of monthly cash payments for working pensioners, who number 175,000 in Samara Region. People have lost their supplementary pensions, which ranged from 600 to 1,200 rubles. Non-working pensioners, whose pensions are over 19,500 rubles, have also been stripped of supplementary payments. The Samara administration did not give permission to hold a protest rally on the city’s central square, allowing it only in a remote neighborhood. Despite these precautions, the protesters packed the square.

The fourth large-scale protest by pensioners took place in Samara on April 2. The old folks first rebelled against Samara Region Governor Nikolai Merkushin in early February, when around 300 people attended a protest rally. The number of protesters has grown each time, and yesterday, according to unofficial statistics, around 4,000 people gathered on the square near the Athletics Palace. The protesters told our correspondent Yevegniya Volunkova what they were protesting and how they had succeeded in coming together when the rallies have not been mentioned on television at all.

***

Nina Dmitrievna and Tamara Petrovna

Both women are seventy-nine years old. They heard about the rally from flyers and the internet. Their main complaints are Mordovian produce in the city and a fountain during the plague.

We’re upset about our poverty, the judicial system, and very many other things. But first of all, we want to see Merkushkin replaced. He squanders money and imports everything from Mordovia, including crushed stone, paving tile, and cement. Whatever shop you go to, the produce is all Mordovian. It’s no wonder his nickname is the Mordvin Pasha. During these hard times for the region, he wants to build the best fountain in Europe on the river embankment. Is now the time for it? Replace the pavement and benches, sure, but why the heck do we need a fountain right now? My friends and two children live in poverty, and it’s hard to buy bread. But this stadium [Samara is one of the host cities for the 2018 World Cup — TD], good God, how much money they’ve embezzled, and it’s not clear whether they’ll finish it or not. They took their kickbacks, but there’s no money left to build the thing. If we could see that everything was being done on behalf of the people, we would put up with it, but they have been stealing. Merkhushkin pumped three million into the wall on Samara Square [the Wall of Honor on Glory Square, which cut off a beautiful view of the Volga and Zhiguli Mountains, popularly known as the Wailing Wall — TD). It’s in terribly bad taste! And so much money was spent.

Mikhail Viktorovich

Seventy years old, he heard about the rally from friends. His main complaint: how can he survive on his pension?

How the mean regime deals with veterans! Yesterday, villagers told me their family had a monthly pension of 8,000 rubles [approx. 133 euros] or so. What is that? How can a person survive? Today, I went to get milk and bread. I also bought some biscuits and something to put in a soup. 600 rubles [approx. 10 euros] was gone just like that. Is the governor here? He didn’t show up? Shame on him! He stole kopecks from pensioners. Down with our government! They have not made a single effective move to improve the well-being of veterans.

Irina Olegovna

Sixty years old, she heard about the rally from a girlfriend. Her main complaint is that she has been forced to work to survive.

My monthly pension is 7,700 rubles, and I used to get a veteran’s bonus. I worked as an educator my whole life. Merkushkin took way the 621 rubles I got as a veteran’s bonus. I have no husband and no support. I’m forced to work to survive, but I have a whole passle of ailments. Should I approve his policies? He can go back to his native Mordovia. Besides, he lies and lies and lies. He shamelessly lies that he gives us a pension. I wrote a letter to him asking him to help me find work. Do you think he helped me? He didn’t do a damn thing for me.

Valentina Andreyevna

Sixty-three years old, she found out about the rally from the internet. Her main complaint is shamefully low pensions.

I came out of a sense of solidarity. I don’t receive any discount benefits: my length of service was too short. There should other slogans here: “Decent pensions!” Give us a decent pension and we wouldn’t need discounts. We’ll pay for public transport passes, for apartment maintenance costs, and so on. But it’s impossible to live on our miserly pensions.

Valery Remizov

Twenty-two years old, he found out about the rally from the internet. His main complaint is bad roads.

I came to the rally to voice my dissatisfaction with Nikolai Merkushkin’s social policies. It’s a pity our pensioners have to stand in the cold, demanding a few miserable kopecks. I’m sick of the state of the roads in this country. I’m tired of the fact the regime treats me hypocritically not only as a disabled person but also as an individual. It treats everything as a resource that can be sent off to war, god knows where. And yet it cannot organize a decent urban infrastructure, a decent life. I think the government needs to revise its policy of restricting the number of rides on public transport one can take if you have a discounted travel pass. I ride public transport all the time and I travel around town more than the authorities think I do.

Emma Viktorovna

Seventy years old, she heard about the rally on the internet. Her main complaint is that the governor was decorated “for his contribution to cosmonautics.”

Merkushkin is impudent. He’s an outsider in Samara. My colleagues, who have worked all their lives at the cosmodrome, were decorated for their service. But why the hell did they did stick an honorary pin on him for his contribution to cosmonautics? He has made no contribution whatsoever to cosmonautics. A persons should be more modest. Yet our colleagues where shown on TV standing off to the side, while he was shown in close-up. How did Samara manage without Merkushkina? Probably, it didn’t manage. But little Nikolai showed up, and it has been once achievement after another since then.

“Roads are Samara’s second misery. The fools in power are the first.” Roads are one of Samara’s worst problems. Photo courtesy of Yevgeniya Volunkova/Takie Dela

Roman

Sixty-five years old, he heard about the rally from his grandson. His main complaint is that the restricted number of trips on the discounted public transport travel pass make it hard for him to travel to the Volga.

Can you deceive people like that? They compare us with Penza, where forty-eight rides is more than enough, supposedly. Samara is a huge city: fifty trips a month is not enough here. When I’m traveling, all my rides get eaten up by he transfers. It’s a huge city. In the summer, I want to go to the Volga to swim. How many transfers is that? Fifty trips runs out in two weeks. Then there are housing services and utilities. We are forced to pay for utilities, but the discounts come later, after we’ve paid. Yet officials have included a fee for major house renovations in our bills. I don’t want to pay it. What am I paying for? I’ve lived half my life in the same building, which is falling apart at the seams. Major renovations have never once been carried out in that building.

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Samara Subway and Tram Map. Courtesy of CartoTalk

Nadezha Fyodorovna

Sixty-nine years old, she heard about the rally from reading flyers. Her main complaint is how the money owed to pensioners has been used to pay for the governor’s palaces and the World Cup.

That scumbag Merkushkin took away all our benefits. How did he dare? He built himself palaces on Rublyovka, four palaces at three hundred million each. Does he have a conscience? Today, he was on Channel Two saying he built all the roads for us. The roads are all good, and everything in Samara is good. Only our pensions will have to pay for the World Cup. He’s a real bastard, a scumbag. We should send him packing back to Mordovia, where he can choke on his sons and relatives. Let’s keep coming out for protest rallies and demanding he resign.

Irina Olegovna and Lyubov Andreyevna

Forty-six and seventy-seven, they heard about the rally on the internet. Their main complaint is that the regime embezzles money and treats people like schmucks.

Irina Olegovna: I’m not a pensioner, but I came to stick up for them. I’m outraged by the injustice that flourishes in our country. The authorities have found the right people to rip off: pensioners. They holler about being a super power, that they defeated the fascists. Who beat whom? What’s the standard of living in Germany and the standard of living in Russia? Who did they defeat? Pensioners and sick children?

Young people attended the rally this time to support the pensioners. Photo courtesy of Yevgeniya Volunkova/Takie Dela

Lyubov Andreyevna: We’ve been spat on from all sides. You cannot get in anywhere to talk to anyone, whether it’s housing services and utilities or healthcare. Everywhere they could not care less about us. I’m seventy-seven. I use the internet and I know everything. I was a decision-maker when I was employed, but now I’ve been utterly humiliated. Thank you, Navalny, that you exposed Medvedev. We must send him packing

IO: It’s absolutely clear to everyone that regime embezzles money, and the fact they are silent is additional proof that thievery is going on. What happened to Serdyukov and Vasilyeva are proven facts. There was a trial, and they were let go. They sold off the property of the defense industry and lined their pockets. I don’t understand who needed this demonstrative flogging. They pulled out their dirty underwear, showed it to everyone, and put it away. I’ll be damned!

LA: Because they consider us idiots.

IO: Stupid schmucks!

LA: Stupid schmucks, cows, that’s who we are!

IO:  I agree with you completely. But ultimately they have to understand a point of no return will be reached, when it all goes to hell. What, are they waiting until people come after them with pitchforks? The country has already reached the boiling point. What the heck do we need Crimea for when our country is poor? I used to support Putin. He inherited a heavy burden, the country was in ruins. He seemed decent. I believed he’d put the country in shape. But then I realized what was what.

LA: Putin works for the oligarchs, not for himself. And we cows will all die off.

Vasily Petrovich

Eighty-two years old, he found out about the rally from a flyer. His main complaint is that payments have not been made to people who went through the war as children.

Look, I’ve brought a newspaper from 2014. Merkushkin promised to make monthly payments of 1,000 rubles to people who went through the war as children. But he didn’t give us fuck-all. We spent the war on a collective farm. Cold and hungry, we supplied the front and the cities with produce, while we ourselves ate grass and dirt. We survived, we were victorious, and now what? Now we are dying in poverty.

“Stop Making Fools of Russian Dudes!” Protest rally in Samara. Photo courtesy of Yevgeniya Volunkova/Takie Dela

Lydia Nikolayevna

Sixty-eight years old, she heard about the rally on the internet. Her main complaint is that her family has been stripped of all benefits, and that the regime takes people for idiots.

I’m a history teacher, I worked my whole life. Three years ago, my daughter died, leaving me to take care of my granddaughter Lada. She’s thirteen and in the sixth grade. By order of the city administration, the city paid the difference in the housing services and utilities bills for her as an orphan for the whole of 2016. The payment was small, but it made a difference. I’m a veteran of pedagogical work and disabled. We were supposedly divided into two groups: “rich” pensioners, who got 19,000 rubles a month, and poor pensioners. Money was taken away from us under the pretext of giving it to the poor. Money was taken from 175,000 people and then returned, allegedly, but we still haven’t got the money back. I don’t think they took the money in order to give it back. I take my granddaughter to school. I have to transfer, and I use four rides on my discounted travel pass. When they limited the number of trips to fifty, they took us for idiots. They also sucker us out of rides. My friends recorded every trip and noticed that they were shorting us by ten rides. They run out before the month ends, and they kick us off public transport. They’re secretly stealing even from these crumbs, from the fifty rides, as if we couldn’t check how many rides we were getting. I feel ashamed of this regime. We worked honestly our whole lives, and now they’re punishing us, punishing orphaned children and disabled people. It’s disgusting.

Nadezhda

Sixty-one years old, she heard about the rally on the internet. Her main complaint is the thieves in the government.

I have been denied the chance to travel by public transport. I need to drop off and pick up my granddaughter nearly every day. Of course, the number of rides on the travel pass is not enough. It’s just digusting. Why did they decide to limit us? What made them think fifty rides was enough for us? Merkushkin says that somebody made a thousand trips in a month on a seasonal pass. That’s utter rubbish. Even if it’s true, does that mean everyone has to have their benefits slashed? How many crooks and thieves are in the government? How many cases of corruption have been proven? In keeping with Merkushkin’s line of reasoning, all governors should be hauled into the Investigative Committee, no?

Organizing People through Their Wallets

“Let’s Reforge Medvedev’s Palaces into Unlimited Rides for Veterans.” The fifty rides they get on their free transport passes is not enough for residents. Photo courtesy of Yevgeniya Volunkova/Takie Dela

The main organizer of the rallies, Mikhail Matveev, a Communist MP in the Samara Regional Duma, is certain that his best organizer, the person who gets people out to the protest rallies, is Governor Merkushkin himself, the man whose decisions have driven people to the edge.

“Our old ladies don’t just read newspapers and watch TV. They’re not as backwards as they seem. They read social networks and blogs. Young people tell them things. Plus, we leaflet mailboxes and residential building entryways. We printed around 15,000 leaflets for the March 19 rally. The printing was paid for by the party and by ordinary people. It’s not a lot of money, but we don’t have anymore. Residents help us by leafletting for free and printing the leaflets at home on their printers. But the main organizing factor is people’s wallets, and the main organizer is Merkushkin. It used to be that pensioners weren’t aware that the number of trips on public transport was limited, but suddenly they were kicked off buses. The pension checks arrived, they were 700 rubles less, and so on. Dissatisfaction has been growing. We are grateful to Governor Merkushkin for the fact that his blunt propaganda pisses people off. There are all the phrases he tosses off at meetings with constituents, like, ‘It was you who did it so that we did nothing for you,’ and so on. They make the rounds. There will be more protest rallies until we get the pensioners their benefits back and send the governor packing.”

Translated by the Russian Reader

They Also Lie About How Much They Pay Us

“Loans, whatever your credit history, paid in cash in 30 minutes.” Flyer photographed in central Petersburg, 15 May 2017. Photo by TRR

Russian Public TV: Average Wage in Pskov Region Two Times Lower than Official Figures
Pskovskaya Guberniya Online
March 15, 2017

An SMS poll conducted by Russian Public Television (OTR) has shown that the average monthly wage in Pskov Region is two times lower than the official figures, amounting to 9,950 rubles [approx. 160 euros]. These figures were published by OTR’s news service on the basis of information sent by viewers. OTR viewers reported their minimum and maximum monthly wages: they amounted to 6,500 rubles and 15,000 rubles, respectively. According to Rosstat, the average monthly wage in Pskov Region amounts to 22,264 rubles [approx. 358 euros].

The poll showed that the average monthly wage in Russia is 15,158 rubles [approx. 244 euros], which is also two times less than the official figures. Rosstat reported that the average monthly wage this year has amounted to 36,746 rubles [approx. 590 euros]. According to Rosstat, the poorest region is Dagestan. The average monthly wage in the country’s wealthiest regions—Murmansk, St. Petersburg, Yamalo-Nenets Autonomous District, Khanty-Mansiysk Autonomous District, Sakhalin, Kamchatka, Moscow, and Moscow Region—is over 40,000 rubles per month [approx. 640 euros].

According to OTR’s survey, only viewers in Moscow, Moscow Region, Buryatia, Ingushetia, the Maritime District, and Belgorod Region make over 30,000 rubles a month. Viewers in Kabardino-Balkaria, Kursk Region, Orenburg Region, Pskov Region, Saratov Region, and Tver Region make less than 10,000 rubles a month. The lowest monthly wage was discovered in Novgorod Region. A postman there makes 2,800 rubles a month [approx. 45 euros].

Translated by the Russian Reader. Thanks to Comrade Koganzon for the heads-up. See “Russia’s Economic Performance: Fudging the Stats” (February 16, 2017) and “Alexei Gaskarov: A 25,000 Ruble Minimum Monthly Wage Is a Good Idea” (February 9, 2017) for more perspectives on these issues.

The Lowdown

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Despair as a Sign of the Times
The general mood of discouragement has been growing because Russia has shifted into idle, and it is unclear when and how it will end
Nikolay Mironov
Moskovsky Komsomolets
September 6, 2016

Pain and despair have seized the country. Russians are losing their jobs. They cannot pay back their debts and feed their children. Due to constant problems and the lack of apparent prospects, families are falling apart. Some make desperate decisions, finally putting an end to their lives. Russia is losing people.

In July, an employee at a sports school in Trans-Baikal Territory committed suicide after he was not paid. In early August, a married couple in Blagoveshchensk, who were up to their eyeballs in debt,. jumped from a fourteenth-floor window, leaving their young child orphaned. This spring, a father of five in Kiselyovsk in Kemerovo Region hung himself because of debts. Large numbers of similar reports have been coming from different parts of the country.

Can you live on a wage of 10,000 to 15,000 rubles a month when prices are rising continuously? [15,000 rubles is currently equivalent to approximately 200 euros. — TRR.] Or on a pension of 8,000 rubles a month? How do you raise children on this kind of money? And what if, God forbid, you have emergency expenses, for example, for expensive medical treatment, whose cost exceeds the family budget many times over? Well yes, Russia has free medical care, so to speak, but we all knew what it is really like.

It has terrible consequences. The wave of cancer patients voluntarily departing from life continues. After a series of well-publicized cases in  2014–2015, the situation has not improved this year. In mid August, a man suffering from the cancer in the Moscow Region committed suicide with explosives. In June, another cancer patient committed suicide in Yaroslavl. Despite numerous similar suicides, the Russian Health Ministry continues to claim there is no link between the suicides of cancer patients and a deficit of pain medication. Just as there is no link, of course, between the despair felt by cancer patients in our country and the state of Russian medical care, which generally gives little chance to defeat the disease to those who have no money.

According to Rosstat, 24,000 to 26,000 people take their lives each year in Russia. But the causes of this and the means of remedying the situation are not discussed seriously. Instead, Rospotrebnadzor (Russian Federal Service for Supervision of Consumer Rights Protection and Human Welfare) have drafted recommendations for reporters on how to cover suicides.

Fewer and fewer people in our country know what they are going to live on tomorrow, how they will pay for rent and medical care. Russia is plunging into poverty. People have lost their sense of stability and security. The government, on the other hand, ignores these problems. It clearly has no strategy or even tactics for solving them.

There are a gazillion “public servants” in Russia, more than in the Soviet Union, but they serve only themselves and their bosses. High-ranking officials and the business clans that have fused with them live in a secure and comfortable world, whereas the common people are forced to survive alone. The civil service has lost its effectiveness. It has turned into a caste of masters and lords from whom we cannot defend ourselves, because they are the power, while we are “cattle.”

Can fear of policemen really be a norm of a civilized life, of a civilized country? Yet lawlessness on the part of the police has remained. All the talk about combating it has been just that—talk. Here is a recent case. Igor Gubanov, a resident of Magnitogorsk, protested against police lawlessness by cutting off two of his fingers. He could find no other way of making himself heard. In January, Gubanov and his wife, who live in a communal flat, were taken to a police precinct where, according to Gubanov, policemen raped his wife. A criminal investigation was launched, but soon the police investigators closed it, accusing the victimized woman of making false charges.

Despair is felt not only by people who have decided to commit shocking acts. The overall mood of discouragement has been increasing due to the fact Russia has shifted into idle and got stuck in the doldrums, and it is unclear when and how it will end.

The national anthem and memories are all that remain of the once-great country: outer space, victories, and prestige. The country’s most recent major achievements happened fifty years ago. The “unbreakable union” has been replaced by “our great power Russia,” but what is next? Great and poor, great and impoverished. Do these notions go together? How long can we live like this?

The Russian welfare state exists only on paper. Such declarations, by the way, have also been inscribed in the constitutions of Latin American, African, and Asian countries. A Brazilian in his favela reads that he lives in an wonderful welfare state, and he is amazed. The same is true of our fellow Russians, with their miserable wages and pensions. True, unlike their brothers from the country “where many wild monkeys live,” they do not live in huts yet. But, as they say, the night is young.

The main problem nowadays is that the country lacks a locomotive capable of pulling it out of crisis. The regime is concerned only with self-preservation. Officialdom is corrupt, inefficient, and lacking any strategic benchmarks. The “elite” (which I put in quotations, because they really are not the best people in the country) have been thoroughly denationalized: they have no stake in developing Russia. Until a normal and non-corrupt state makes the “elite” serve the country, it will never move it forward. In this case, what is wanted is the bloody-mindedness of a Peter the Great, who once put an end to mestnichestvo and forced the boyars and gentry to serve the country, or the statesmanship of Alexander II, who abolished serfdom over the lamentations of the landlords.

Instead, pro-government spin doctors have been increasingly ratcheing up the propaganda machine, searching for enemies, and heavily sugarcoating reality. Jingoism has already bored everyone to death. The people directing the show do not believe in it themselves, and the audience has stopped believing in it as well, despite the sunny ideology foisted on them, because Russia is running in place, and no one is solving its problems. The propaganda spiel that enemies are to blame for everything is still functioning, but even it cannot serve as a perennial explanation for each new outburst of social turmoil and, especially, the government’s extremely poor performance. So fine, Obama is a bad guy, but what does that have to do with indexing pensions?

The only thing the regime can really boast about is reinforcing itself. But it is a regime presiding over a country losing its vitality. As a priority, the self-preservation of the “elite” deprives Russia of the chance to put itself back in motion. Yet the purged political arena, in which there is almost no opposition to speak of, much less plain old independent people who think about their country, has stopped generating leaders. There is only one leader left in the country, and he presides over a multilayered horde of bosses and oligarchs, embezzlers and dolts  perched on their estates and thinking only of themselves.

Except for United Russia, a product of the same regime, Russia’s political parties have no weight nationwide. The same goes for grassroots organizations. The media have been muzzled. Those who try and shout louder than the rest face either a harsh crackdown or a trivial payoff. Many people have taken to making oppositional noises in the hope they will be paid to shut up. Imitating protest has become a business, just like imitating patriotism. Amid the mob of clowns and crooks, the reasonable speeches made by the few real patriots who are rooting not for themselves but for their country are drowned out by the overall senseless din.

By eliminating potential enemies, the regime has also destroyed the very possibility of an alternative emerging, of a reboot. The current policies are clearly ineffective, but what and who should replace them? Reasonable prescriptions, for example, for supporting the national non-oil economy and import substitution, restoring consumer demand through social assistance to an impoverished population, ending capital flight, going after offshore companies, and clamping down hard on corruption have been voiced. These ideas, however, have come from second- and third-rank players who can advise the authorities but cannot demand anything from them. So the regime has ignored them year after year, thus exacerbating the crisis.

I am not trying to whip up a frenzy. I would like to say something positive, but the situation is firmly deadlocked. It is clear what reforms are needed. It also clear how to implement them and where to begin: with the “elite,” the civil service, the budget, and the tax system. The only open question is who would be capable of doing all this. We have already talked about the government. Russia’s active middle class is small, and it is extremely demoralized. We are left with the rank-and-file population, who have suffered most from the crisis and seemingly have a stake in launching reforms. But for the time being only a few ordinary people have been willing to take responsibility, allowing the regime quickly to localize protests, as happened with the farmers.

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Nikolay Mironov. Photo courtesy of the Center for Economic and Political Reform (Moscow)

In the current environment, self-organization, society teaming up with honest people in the civil service and law enforcement, could be effective. Those honest people are undoubtedly there, but not in leadership roles. The country needs a grassroots organization, a movement, a party that could unite people and impose its own rules on the authorities. Society has to make the first move itself, which will serve as a signal to the honest people inside the system. We have to get the ball rolling.

Responsibility for what will become of the Motherland and us tomorrow lies with each of us today. As Mahatma Gandhi said, “Be the change that you wish to see in the world.”

All we have to do is not be silent, not relinquish our right to speak and act to someone else, not to count on an unknown savior of the Fatherland showing up. If he has not saved the country already, why would he do it now? And, needless to say, do not be afraid. We have to overcome our isolation to put an end to the senseless suicides, severed fingers, and broken lives, to put an end finally to the shameless plunder of the people and the export of the loot abroad. Even the smallest action, as long as it is collective, carries more weight than the most desperate individual deed.

We can, of course, wait for the moment when the country finally goes to hell in a hand basket, as in Tsarist Russia or the late Soviet Union. But do we really have to go through turmoil and destruction every time we need a new impulse to development? Are victims so necessary to the process of recovery?

The country is at a standstill, and the dump truck of history is rushing toward it. There are two options. Either we start the engine and drive, or we wait to get run over and tossed onto the roadside.

Nikolay Mironov is head of the Center for Economic and Political Reform, in Moscow, and a frequent columnist for Moskovsky Komsomolets newspaper. I published a translation of his column “Whipping Bear: Why the President Needs a ‘Bad’ Prime Minister” in June 2016. Translated by the Russian Reader. Thanks to Sean Guillory for the heads-up. Photo by the Russian Reader

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