God Is Merciless, or, Mary Dejevsky

DSCN1761

Since childhood I have had the habit of going to sleep listening to the radio. It would be a queer but innocent habit were it not for the fact that I had Lutheranism mainlined into my brain during childhood as well. I am thus perpetually a sinner in the hands of an angry god, and that god is frequently quite displeased with me. Or so it seems.

From time to time, Jehovah punishes me by putting the British journalist and Putin fan Mary Dejevsky on the radio as I am going to sleep.

Last night, she was on ABC Radio National’s Between the Lines, and she was in fine fettle.

Asked about the political crisis sparked by the pension reform in Russia, Dejevsky said she rather admired Vladimir Putin for spending some of his tremendous reserves of political capital and popularity by biting the bullet and trying to solve an objective problem so his “successor” would not have to solve it.

It is actually a good problem to have, this business of needing to raise the retirement age precipitously, Dejevsky argued, because it is premised on the supposedly happy alleged fact that Russians are, on average, living much longer than before, and that, we were meant to imagine, was due to Putin’s wise policies.

When the hapless Australian interviewer, Tom Switzer, asked her about the nationwide protests sparked by the proposed reform and the numerous arrests at those protests, Dejevsky dismissed them out of hand, claiming she had been to “provincial Russia” just last week, and things there were “peaceful.”

I won’t even go into Dejevsky’s sparkling defense of Putin’s illegal occupation of Crimea, which prefaced her lies about Putin’s popularity, the pension reform, and the supposedly sleepy provinces.

In case you are not a Lutheran occasionally punished by the Lord God Jehovah by having to listen to Mary Dejevsky in the middle or night or read the latest pro-Putinist tripe she has written, I would remind you she has long been gainfully employed by the Independent and the Guardian as a columnist, and she is a frequent guest on thoroughly respectable news outlets such as ABC Radio National, BBC Radio 4, etc.

It seemingly has not occurred to the smart, cynical folk working at these bastions of tough-minded journalism that Mary Dejevsky is a less than objective observer of the Russian scene.

The Lutheran god is a merciless god. {TRR}

Photo by the Russian Reader. This blog was slightly edited after I received legal threats from an electronic entity claiming to be Mary Dejevsky.

Alexei Tsvetcoff: A Supremely Intelligible Speech

 

Vladimir Putin, “Address to Russians on the 2018 Pension Reform,” 29 August 2018

Alexei Tsvetcoff
Facebook
August 29, 2018

Putin’s speech was supremely intelligible. It boiled down to this. We could just as well not change the retirement age over the next ten years, but we are going to do it anyway merely because we want to do it. We are going to fuck each of you over to the tune of one million rubles at least, because we like lining our pockets with the money, and no opposition can do anything to stop it.

We are not going to raise the taxes of the oil and gas bourgeoisie, because we are the oil and gas bourgeoisie. The Pension Fund’s palaces and the palaces per se of the ruling class are beautiful, but there is no need to touch them. Let them be. Anyway, things could be a lot worse, believe you me.

The speech was an open declaration of class warfare on the majority on behalf of the ruling minority. It was a rude statement by the modern-day equivalent of Yuri Olesha’s Three Fat Men, a group of people rendered insolent by their impunity.

The tsar in his mercy granted indulgences. He took three years off the proposed new retirement age for women, and six months off the retirement age for the first cohort whom the reform will roll over, as well as promising guaranteed employment and property tax benefits for pre-pensioners, and so on.

This summer’s political upsurge has borne preliminary fruits, but they are decorative. The wave of opposition to the proposed reforms must rise higher and higher, and popular hatred must adopt really effective guises, meaning guises that frighten the regime.

A genuine mobilization of society would smash this reform, conceived by thieves, to smithereens, and maybe some other things as well—if such a mobilization occurred, of course.

If the entire country takes to the streets in September, we shall soon see a new speech by Putin, in which he says he has changed his mind. Now the authorities will be gagging, demonizing, isolating, and banning vigorous opponents of their mean-spirited reform on a daily basis. All of us, therefore, must become vigorous opponents of the reform.

Alexei Tsvetcoff is a well-known Marxist writer and manager of the Tsiolkovsky Bookstore in Moscow. Thanks to Valentin Urusov for the heads-up. Translated by the Russian Reader

Yevgenia Litvinova: “The Buskers Played Pink Floyd’s The Wall”

litvinovaYevgenia Litvinova. Her placard reads, “Crimean Tatars are not terrorists! Free political prisoners! Emir Hussein Kuku, a member of the Crimean Human Rights Group, has been on hunger strike since June 26.” Photo courtesy of Ms. Litvinova’s Facebook page

Yevgenia Litvinova
Facebook
July 19, 2018

July 18, 2018

We arrived at Strategy 18 ahead of time yesterday, but we started our pickets half an hour later.

An unauthorized rally against raising the retirement age was planned to take place on Malaya Sadovaya Street. They might have needed help. Paddy wagons were lined up on the Nevsky. It was understood people would be arrested. That was what happened.

Two hundred people attended the protest rally. Fourteen of them were detained, including Father Grigory Mikhnov-Voytenko, a member of the Petersburg Human Rights Council. The detainees were driven from one police precinct to another for three hours. They were released around midnight.

Why do so few people defend their own interests? Are they afraid? Yes. Was the rally poorly advertised? That, too. But there is also an indifference to everything and everyone, including oneself.

Around a year ago, in September 2017, we organized a Peace March. It was also unauthorized, of course. Approximately three hundred people showed up. It was understandable: people are fed up with the antiwar agenda. They want to isolate themselves from other people’s corpses and the crimes of their own government.

Pensions affectly them directly, however. They are the ones whose money is being stolen, lots of money when you add it up. Yet people are again okay with everything.

“Should I bring the rope [to hang me]?”

At seven-thirty, we went back to our own plan, pulling out placards about the persecution of the Crimean Tatars. Natalia Voznesenskaya and I stood together for reasons of safety. There were tons of hired thugs [titushki] out on the Nevsky yesterday. They all claimed to be Crimeans who had just arrived from Crimea. You would have thought Crimea had sent a landing force to the shores of the Neva.

When they walked by us, they would shout the same thing.

“It’s not true! It doesn’t exist! You’re making it all up!”

What doesn’t exist?

My placard featured a picture of Emir Hussein Kuku, who has gone on hunger strike. What was not true? Did Kuku not exist? Did he not go on hunger strike?

There has been good news from Kuku’s wife. He ended his hunger strike today, July 19. However, his hand was forced by the rapid deterioration of his health.

That was today, though. His hunger strike lasted twenty-four days.

I have a young lady friend who is three years old. “No” and “not” are currently the keywords in her vocabulary.

When the first two lines of Samuil Marshak’s famous children’s poem “What a Scatterbrain”—”A scatterbrained man lived / on Basin Street”—are read to Sonya, she comments, “He did not live. He was not a man. He was not scatterbrained. It was not on Basin Street.”

It was exactly like that at our protest yesterday. A woman holding a child’s hand shouted the memorized text at us. She didn’t hesitate to look that way in front of the child. Or she thought the child didn’t understand what mom was saying.

There was also an attack on one of our picketers. Alexander Khmelyov was standing on Anichkov Bridge. One of the hawkers who encourages people to go on boat trips, a huge man in his thirties who could just as well have been tossing heavy sacks for a living, tore Alexander’s placard from his hands and tossed it into the Fontanka River.

We complained to the police. We pointed the attacker out to them.

Their response?

“Go to the precinct and file a complaint.”

The guardians of order didn’t bother to go up and talk to the attacker.

The buskers were playing Pink Floyd’s The Wall.

Translated by the Russian Reader

Anything Goes

DSCN6137A monument to Felix Dzerzhinsky, founder of the Soviet secret police, in central Petersburg, 6 May 2018. Photo by the Russian Reader

Ukrainian political prisoner Oleg Sentsov has been on hunger strike for sixty-six days.

Can you imagine not eating for sixty-sixty days? I can’t.

Instead of supporting Mr. Sentsov, most of the world decided to turn its back on him by staying glued to their TV sets during Vladimir Putin’s expensive celebration of his despotic regime’s extraordinary ability to pull the wool over nearly everyone’s eyes.

Certainly he didn’t get any pushback yesterday from the putative “leader of the free world,” who is a vain, spineless traitor who has probably never heard of Oleg Sentsov.

Solidarity with Oleg Sentsov doesn’t mean you have to stop eating, too, but it should mean not having your cake and eating it, too.

The World Cup was cake. Nobody can live for a month on a diet of cake without getting sick. The world has just done it, and now, at least as I see it, the world is a lot sicker than before the World Cup.

When infants are baptized in the Lutheran church, the priest asks the godparents and parents whether they “renouce the Devil and all his ways.”

Putin is a devil. You cannot embrace some of his ways while denouncing others. You either take the whole package or reject it. If you reject it, you show a little bit of willpower—for the sake of Crimean political prisoners Vladimir Balukh and Oleg Sentsov, for the sake of people bombed by the Russian airforce in Syria, for the sake of persecuted Karelian historian Yuri Dmitriev, for the sake of Russian Jehovah’s Witnesses, now branded “extremists” and subject to increasingly numerous arrests, for the sake of the innocent young people framed in the New Greatness and Network “terrorist” cases, for the sake of ordinary Russians everywhere fighting the government’s plans to drastically raise the pension age—and you don’t have anything to do with the World Cup or anything else sponsored, promoted, and supported by the current Russian regime.

The sheer number of people, including my own acquaintances, who could not bear to show solidarity with any of these people at all, if only for one month, has shocked me.

Please don’t pretend now that you’re really opposed to the Putin regime. You’ve shown your true colors.

Anything goes, right? || TRR

Where Did You Go? (Day 44)

44th day“The forty-fourth day of Sentsov’s hunger strike.” Post on filmmaker Askold Kurov’s Facebook page

Ukrainian political prisoner and filmmaker Oleg Sentsov has completed the forty-third day of his hunger strike. His only demand is that Russian authorities release the other Russian political prisoners they have imprisoned during their illegal invasion of Ukraine.

Unfortunately, I have the growing sense that even the most progressive Russians, whatever that means, are so impressed by the nonstop international football party that has been unleashed on the streets of their major cities that they are less and less able to focus on what matters in the near term (the government’s plan to raise the retirement age, the pending retrial of Yuri Dmitriev, the mind-bending Penza-Petersburg “terrorism” case, Sentsov’s hunger strike, six more years of pitch-black Putinist reaction). They behave and talk like people who have richly earned a celebration.

In the grand scheme of things, none of us deserve a celebration. We are sinners in the hands of an angry God, and we deserve to be crushed.

Viewing our fallen world more realistically, however, we probably do need to give ourselves a break, no matter how dire the circumstances, every once in a while, but only after we have done our work, especially the collective grassroots work that keeps our societies from slipping over the edge into the abyss of lawlessness, reaction, and fascism.

With few exceptions, Russia’s hyper-educated populace, however, checked out of hands-on politics long ago. They are literally the most holiday-prone bunch I have ever encountered in the world. Nearly everyone I know is endlessly on vacation, on the road, not at home, checked out, off the radar in internal exile, you name it.

This was my roundabout way of saying the truly heroic Mr. Sentsov’s chances do not look good. // TRR

* * * * * * * * * *

Many of my western leftist friends have been having a field day with the White Pride House’s disgusting treatment of immigrant families and children from Latin America, as they should be.

But when it comes to the Kremlin’s disgusting treatment of nearly everyone under its own black hole sun, from Oleg Sentsov and the alleged Penza-Petersburg “terrorists” to Yuri Dmitriev and Oyub Titiev, mum has been word among western leftists.

This is not to mention the Kremlin’s escapades in Syria and Ukraine, the wretched treatment of migrant workers from Central Asia in Russia itself, or the fact Russia is basically off limits to the refugees and asylum seekers whom, in some cases, it has helped to generate, as in Syria.

Meanwhile, Russia has been witness a slow but noticeable exodus of its own asylum seekers and more quiet exiles, including dozens if not hundreds of political activists, and thousands of LGBT people, now that the country has been officially and virulently homophobic for several years.

None of this gets even so much as a look-in from most of my western leftist friends, who, at best, are happy to have me rattle on about these things ad nauseam, but probably think I have been lying or exaggerating these past ten years.

In any case, nothing the Kremlin ever does figures in either their political activism or political thinking (except in complaints about “anti-Russian hysteria” in their local mass media). They are loath to show solidarity with grassroots Russian activists, even Russians in serious trouble like the young antifascists implicated in the total frame-up known as The Network Case.

No, the wroth of western leftists is always and only reserved for the Great Satan, the cause of all evil in the world, the country that invented imperialism, racism, capitalism, nepotism, and daltonism, the United States of America.

Why they should be so implicitly sympathetic to the hyper-reactionary, neo-imperialist, homophobic, anti-working class, rampantly state capitalist, kleptocratic, illiberal, anti-intellectual, wildly corrupt nationalist and racist regime in Russia is beyond my powers to comprehend.

But their silence speaks louder than their words, as does their pointed failure, when it comes to people I know personally, to engage meaningfully with all the things I have written and translated over the last ten years.

This is especially palpable now the World Cup is underway. Even politically engaged liberals among my acquaintances have obviously given the Russian regime a free pass for the month.

Actually, they have been giving it a free pass since 1999, but I won’t mention discuss this long, ugly story now.

What I meant to say was that Ukrainian filmmaker and political prisoner Oleg Sentsov is dying, and the western left pointedly has nothing to say about why he is in “jail” (as the Moscow Times quaintly puts it, although he is actually incarcerated in a maximum security penal colony north of the Arctic Circle) and why he was sent there for twenty years.

It is pathetic. It is also part of the reason why “the masses” generally trust the western left about as far as they can throw it. Because just like Donald Trump and Theresa May, there are species of despotism, tyranny, and even genocide the western left really quite fancies or, at least, can countenance in the name of “anti-imperialism.”

To put it bluntly, I am afraid the western left would rather Oleg Sentsov and his ilk just crawled under a rock and died. They only muddy what should be a crystal-clear view of “geopolitics.” // TRR

Darya Apahonchich: No Exit?

you must die“You must die.” ∴ “Wicked Russia.” Downtown Petersburg, May 6, 2018

Darya Apahonchich
Facebook
June 15, 2018

My father died two years ago; my mom, a year and a half ago. Both of them were fifty-nine. They worked their whole lives, my mom a little longer. She taught physical therapy and physical education. Dad was a military man and volcanologist. He went into business after perestroika.

I don’t want to generalize, but they had very different, very complicated lives. They did not communicate with each other for the last twenty years. But they had one thing in common: they did not think in terms of the future. They did not look forward to anything. They did not dream of traveling. They did not plan to move house or look for better housing. They did not want new friends. They did not pursue hobbies. They never got the hang of computers. (Although Dad used them, he did not like them at all.)

One another annoying but important thing was that they drank a lot. When they were on binges, they would turn into people who could not care less whether there was a future or not. In the aftermath of their binges, they would experience an agonizing sense of guilt.

I find it horribly painful to write this, but it is not only my family’s story. It is the story of many families in Russia.

When we cannot choose our own reality, we do not think in terms of the future. Along with poverty and helplessness, we learn the important lesson that we cannot change anything, and all that awaits us is death.

I have always asked myself whether anything would have been different if my parents had more money and opportunities. When it comes to alcoholism, I don’t know. Maybe nothing would have changed. As far as despair was concerned, maybe they would have made a difference.

The new retirement age in Russia will be sixty-three for women, and sixty-five for men. The government has been instituting this reform hastily, while people are watching the World Cup.

Photo and translation by the Russian Reader. Thanks to Ms. Apahonchich for her kind permission to translate and publish her piece on this website.

Raising the Retirement Age in Russia

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

Alex Gaskarov
Facebook
June 4, 2018

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

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

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

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

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

*********

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

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

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

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

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

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

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

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

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

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

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

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

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

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

June 1, 2018, Moscow

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

Translated by the Russian Reader

Soaking the Public to Make Russia a Powerhouse

Russian Authorities Could Raise the VAT to 20%
Giving Them Two Trillion Rubles to Execute Putin’s May Decree
Yelizaveta Bazanova and Filipp Sterkin
Vedomosti
May 27, 2018

Prime Minister Dmitry Medvedev has promised to find the eight trillion rubles [approx. €110 billion] the government lacks to carry out Putin’s new May decree. We have learned the government and the Kremlin will go looking for a considerable portion of this sum in the public’s pockets. Approximately two trillion rubles could be collected over six years by raising the VAT from 18% to 20%. Our sources, three federal officials, said this option had been discussed and was one of the most likely options, although a final decision had not been made. However, one of our sources said the Finance Ministry had proposed abolishing the 10% preferential VAT rate and replacing it with an allowance.

Another two trillion rubles or so would be supplied by an increase in the retirement age, which Medvedev had announced, said two of our sources, without specifying how quickly it would be increased and by how much.

The final four trillion rubles would be provided by measures that have already been made public. The state would raise three trillion rubles for infrastructure projects by floating fixed and variable federal bonds, and establishing a temporary fund within the budget. The remaining one trillion rubles would be supplied by reforming taxation of the oil industry, nullifying export duties and raising the severance tax to offset them.

However, some of the decisions could still be revised, our sources said. As one of them noted, everything was in a state of rapid, constant flux.

Who Will Pay the VAT Increase?
Officials have long discussed an increase in the VAT, but as part of an overall taxation maneuver, as proposed by the Finance Ministry, that would have involved reducing pension deductions while raising the VAT to a flat rate of 22%. The Finance Ministry’s idea was to sanitize the economy and pump an additional 500 billion rubles into the budget. The idea was rejected, but several officials said it had proven impossible to find the money to carry out the May decree without raising taxes. Increasing the VAT without reducing pension deductions was a common trick, said a member of the board of the Russian Union of Industrialists and Entrepreneurs (RSPP).

The VAT was pegged at 20% until 2004, when it dropped to 18%. Returning it to 20% would be a less painful solution than the other options on the table—increasing the personal income tax rate and introducing a sales tax—argued two officials. Although, as one of them noted, if the state wanted to stimulate economic growth, it should not rob it of resources.

By increasing the VAT, the state would be primarily confiscating resources from the general public, which has experienced a four-year-long slide in incomes, while businesses would be able to compensate a considerable portion of their costs by embedding them in prices and thus passing them on to consumers.

As research by the UK’s statistical service has shown, companies raise prices ahead of time when an increase in the VAT is expected. Natalia Orlova, chief economist at Alfa Bank, has calculated that a two-percent increase in the VAT would accelerate a rise in prices of 0.8% to 1%, which would not be terrible during a period of low inflation. (In April, inflation was 2.4% in annual terms.) But along with abolishing the preferential rate, raising the VAT could deal a serious blow to the general public and have a knock-on effect on consumption, warned Alexandra Suslina at the Economic Expert Group. The preferential rate is currently valid for food products (except luxury items), children’s goods, books, textbooks, and medicines. In 2017, the preferential rate deprived the federal budget of an additional 550 billion rubles or about 0.6% of GDP.

According to a study by Alexander Isakov, chief economist at VTB Capital, when prices suddenly rise, people are less inclined to skimp on food, alcohol, and transportation. A one-percent increase in prices leads, most of all, to decreased spending on communications and medical care.

Business would pass on costs to domestic consumers, but the VAT for exports is zero percent, said the RSPP board member. There would also be victims, however. A tax increase would hit sectors where competition is intense the hardest, warned Vladimir Salnikov, deputy director of the Center for Macroeconomic Analysis and Short-Term Forecasting (TsMAKP). This was borne out by an IMF study performed in the wake of an increase in the VAT in Germany in 2007.  When competition is intense, companies find it harder to retain their market share after price rises. Retailers, who have already slashed their profit margin amid weak consumer demand, would suffer, said a tax consultant at a major retailer. Salnikov warned the structural effect would be bad, increasing the burden on manufacturing industries, not on raw materials exporters.

Most of all, it would increase the burden on the machine-building and transportation sectors (by 6.8% and 6.6%, respectively), the electricity sector (by 6.8%), construction (by 5.6%), the information sector (by 5.4%), and the hotel business (by 4.4%), according to Salnikov’s calculations. On the other hand, it would decrease the burden on chemicals manufacturing, wood processing, and agriculture.

Officials have little time to decide who will pay for Putin’s May decree. The cabinet has drafted proposals for the tax system, and final decisions would have to be made during the State Duma’s spring session, Anton Siluanov, appointed first deputy prime minister and finance minister, said earlier. Currently, no decisions had been made, his adviser Andrei Lavrov confirmed, but in the near future the government would be deciding on measures for adjusting the tax system. Natalya Timakova, the prime minister’s spokesperson, would not comment on the subject, while Dmitry Peskov, the president’s press secretary, was unavailable for comment on Sunday.

fullscreen-1tqbPerformance of actual pensions and wages vis-à-vis the same period during the previous year. Red line=actual amount of allocated pensions; blue line=actual paid wages; *=lump-sum payments taken into account. Source: Rosstat. Courtesy of Vedomosti

Working for the Decree
Saving two trillion rubles over six years would mean raising the retirement age by at least one year annually for both women and men, noted Yuri Gorlin, deputy director of RANEPA’s Institute for Social Analysis and Forecasting. This would make it possible decrease transfers from the federal budget by two trillion rubles, agreed Tatyana Omelchuk, senior researcher at the Finance Ministry’s Financial Research Institute (NIFI). This option for increasing the pension age was tabled by the Center for Strategic Research when it was headed by Alexei Kudrin, who has now been tapped to chair the Accounting Chamber. Annually, around 40% of the Pension Fund’s income is provided by the federal budget. In 2018, 3.34 trillion rubles will be transferred from the budget to the Pension Fund.

The pension age should be raised not only to save two trillion rubles for executing Putin’s decree but also to generate resources for increasing pensions at the same rate as salary increases, said an official. There was the danger the government would try to minimize the transfer as much as possible, and then there could not be enough money to step up the indexing of pensions, Gorlin noted.

Options for raising the pension age were discussed even before Tatyana Golikova was appointed deputy prime minister for social issues. In an interview with RBC, she said the government had only discussed the decision. The final parameters had not been agreed. Her spokesperson declined to comment.

Gorlin said the main goal of raising the retirement age was to ensure a more acceptable increase in pensions. An excessively radical approach to the problem would significantly increase the danger of unemployment’s rising, while also spurring the demand for disability pensions, he argued. Referring to the findings of a sociological survey, experts at the Higher School of Economics have claimed the most acceptable option for raising the retirement age would be sixty years for women and up to sixty-three years for men. Gorlin argued the most rational option would be between sixty-two and sixty-three years for men, and between fifty-nineand sixty-one years for women.

Translated by the Russian Reader

Base

rds-pensioner-banner
“You, Grandpa, are still not old. / You’ll live without indexation. / It’s not the same for our friend Assad / Who can’t live sans our aviation.” Courtesy of Ivan Ovsyannikov and the Russian Socialist Movement (RSD)

_________

State Duma Rejects Indexation for Working Pensioners
October 9, 2015
Lenta.Ru

Photo: Alexander Kozhokhin/RIA Novosti

The pensions of working pensioners will not be indexed for inflation. Olga Batalina, head of the State Duma’s Committee on Labor, Social Policy and Veterans Affairs, made the announcement on Twitter.

batalina
“Despite the Finance Ministry’s ideas, the pension will be preserved for all working pensioners, but will not be indexed [while they are still working]. You quit work, indexation kicks in again.”

She noted that all working pensioners would continue to receive payments, but the payments would not be raised while they are employed.

“You quit work, indexation kicks in again,” added Batalina.

Earlier, on October 9, she announced that the government had to decided index pensions twice in 2016. Batalina explained this would be done so that pensions would increase to the level of inflation for 2015.

On October 8, however, Deputy Prime Minister Igor Shuvalov noted that the possibility of a second indexation next year would depend on the Russian economy’s growth.

On the same day, the government approved the draft budget for 2016. It is expected that revenues will reach 13.58 trillion rubles, expenditures, 15.76 trillion. The deficit is projected at 2.8 percent of GDP (2.18 trillion rubles).

A part of the treasury’s expenditures will be covered by a freeze on pension savings. Another cost-saving measure is reducing the indexation of pensions (to 4 percent at an expected inflation rate of 12 percent). Moreover, the idea of terminating pension payments to working pensioners was considered.

Translated by the Russian Reader

_________

Balancing Russia’s Budget Could Cost Pensioners $46 Billion
Anastasia Bazenkova
June 24, 2015
The Moscow Times

Russia’s roughly 40 million pensioners receive on average 12,900 rubles ($240) in state pension payouts. Photo: Denis Abramov/Vedomosti

Russia’s economic crisis is forcing the government to consider sweeping savings on pension payouts, a move that could go down badly with a core part of President Vladimir Putin’s electorate.

The Finance Ministry this week floated a proposal to save more than 2.5 trillion rubles ($46 billion) over three years by raising pensions at less than the rate of inflation.

The measure comes as the ministry struggles to slash spending amid an economic recession that is eroding budget revenues.

A steep devaluation of the ruble has meant that prices have grown much faster over the past year than salaries, and since payroll taxes are the main source of income for the pension system, the Finance Ministry has said continuation of inflation-linked pensions could threaten the country’s state-run pension fund.

In May, average nominal incomes were 7.3 percent higher than in May 2014, while prices were on average 15.8 percent higher, according to the Rosstat state statistics service.

“If the income of the fund continues to grow slower than its payouts, it could break the entire pension system,” the Vedomosti newspaper quoted Deputy Finance Minister Maxim Oreshkin as saying last month.

The government is already subsidizing a 3.3 trillion ruble ($60 billion) hole in the pension fund, said Pavel Kudyukin, an associate professor at Moscow’s Higher School of Economics.

“This is no longer affordable for the state,” he said.

Pre-Crisis Thinking

According to documents for a government meeting on Monday obtained by news agency RBC this week, the Finance Ministry has drawn up plans to curb planned pensions increases from 7 percent to 5.5 percent in 2016; from 6.3 percent to 4.5 percent in 2017 and from 5.1 percent to 4 percent in 2018.

That means that payments will be increased not in the line with the actual inflation, which is expected to fall back into single digits early next year, but according to inflation forecasts made in early 2014, before Western sanctions over the Ukraine crisis and a sharp decline in global oil prices pushed Russia’s economy into recession. Russian GDP is expected to shrink by around 3 percent this year.

These changes, together with cuts to some other undisclosed social spending items, would save around 2.5 trillion rubles over 2016-2018, RBC reported, citing the Finance Ministry documents.

The government has said no decision has yet been taken.

The changes may require changes to legislation, which requires that Russian pensions are indexed twice a year in line with inflation.

Political Consequences?
Spending on pensions has risen rapidly in recent years as President Putin has sought to use booming oil revenues to raise living standards of pensioners and low-paid state employees.

Pensions were raised even in 2009, during Russia’s last economic crisis, Kudyukin said.

Russia’s roughly 40 million pensioners receive on average 12,900 rubles ($240) in state pension payouts, according to the data from Russia’s pension fund.

The Finance Ministry’s proposal to abandon the link between pensions and inflation aroused sharp criticism from other ministries.

Maxim Topilin, the labor minister, demanded that money be found for the indexation of pensions for next year and the following years and for an analysis of the effectiveness of spending, news agency RIA Novosti reported Tuesday.

Analysts polled by the Moscow Times doubted that the measure would be implemented, as pensioners provide a bedrock of support for President Putin ahead of planned elections in 2018.

“Pensioners are the current government’s main electoral support,”said Pavel Salin, head of the political science center at the Financial University. “The authorities will not reduce pension payments on the eve of the election period.”

Unwillingness to alienate voters is why another Finance Ministry proposal, to cut government expenses by increasing the retirement age of civil servants from 60 to 65 years, has little chance of approval, analysts said.

Hiking the retirement age has been on the agenda for several years — the idea has been repeatedly promoted by former Finance Minister Alexei Kudrin — but has never gained traction.

But even if the Finance Ministry succeeds in making savings on pensions, any discontent would not lead to dramatic political consequences, experts said.

The move could cost Putin a few percentage points off his rating, but not dozens, Salin said.

Putin could afford that — the president’s approval rating is at a record high of 89 percent, according to a poll by the Levada Center released Wednesday.

Given the political apathy of Russians and a surge in patriotic feeling that followed Moscow’s annexation of Crimea from last year, people will bear less generous pensions, Kudyukin said.

“The question is, for how long will they bear them?” he added.

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