Whiskey, You’re the Devil

A .7-liter bottle of Ladoga’s Carrygreen “Irish whiskey” will set you back 1,285 rubles (approx. 17 euros) if you order it online.

Amid the departure of a number of foreign brands, Ladoga Group is the first in Petersburg to launch the production of Irish whiskey under its own brand.

The products will be produced at the plant in Petersburg from Irish grain and malt distillates aged in oak barrels for more than three years. The company is counting on the new product’s success due to Irish whiskey’s growing popularity in Russia and the withdrawal of several foreign brands from the market, Ladoga president Veniamin Grabar said.

“If bottling Scotch whiskey in Russia is already a familiar thing, then Carrygreen is one of the first whiskeys from Irish distillates bottled in Russia. It is now a rapidly growing product in its category,” he said.

Grabar claims that the volume of imports on the market is about 70%. And yet, Irish whiskey’s share of this market has been growing — from 16% in 2017 to 25% in 2021. Since 2017, the number of Irish whiskey brands on the Russian market has doubled, growing to fifty.

Veniamin Grabar, president of the Ladoga Group, “a strategic partnership of several independent enterprises which were joined together for the production and import of alcoholic products and bringing them to consumers.”

As the company told DP, the first batch of products under its own brand will total 63,000 bottles. The planned annual volume is 400,000 half- and .7-liter bottles. At the moment, the project is aimed at the domestic market: the company plans to take a 30% share of Russia’s Irish whiskey segment, and the entire Ladoga Group (including its own import distribution companies) aims to grab 7-8% of the domestic whiskey market. If its resources and feedstocks allow, the group does not rule out starting exports to the CIS countries.

According to Maxim Chernigovsky, head of the Club of Alcohol Market Professionals, whiskey in Russia is currently produced by about twenty factories.

“A significant part of the whiskey market in past years was taken up by imports from the UK and the USA. After the departure of a number of foreign brands, there was a shortage. Russian producers eliminated it by ramping up the production of this alcoholic beverage by 37% in 2022 compared to 2021,” he notes.

Thus, the shortage of whiskey in Russia has already been surmounted by domestic producers. Competition in this segment will definitely be intense, says Chernigovsky. “The segment is interesting: it is premium and high-margin. In fact, there is competition only among our own Russian homegrown factories. Foreign-made whiskey, delivered to Russia through parallel imports, show up on store shelves at a price at least 20% higher,” the expert argues. “Irish whiskey will be bottled in St. Petersburg for the first time, and Ladoga’s prospects can be called positive.“

According to estimates by the Club of Alcohol Market Professionals, 2,838,000 decaliters of whiskey were produced in Russia in 2021; in 2022, production increased by 37% to 3,891,000 decaliters. Among the largest players in this market are the Stavropol-based Alvis Group, the Stellar Group, Beluga’s Georgiyevsk distillery, as well as Tula’s 1911 Distillery. In addition, Bacardi bottles whiskey under the William Lawson’s brand at a Russian plant.

The Ladoga Group consists of several companies, including a production facility with an annual capacity of 4.5 million decaliters and a network of wholesale distributors. In 2021, Ladoga Distribution’s revenue increased by 18% to 12.9 billion rubles, and its net profits amounted to 121.9 million rubles, compared to 345.2 million the previous year.

Source: Svetlana Afonina, “Production of Irish whiskey up and running in Petersburg,” Delovoi Peterburg, 6 February. Translated by the Russian Reader

The Pogues, “Whiskey, You’re the Devil”

Barrister gins have won three medals at the UK’s Gin Of The Year™, considered the most important gin competition in the world. Barrister Organic and Barrister Blue gins won gold medals, Barrister Dry was awarded silver.

Once a year, the world’s most successful gin producers gather in London to present their production to prestigious jury of the UK’s most authoritative gin buyers. Gin of the Year organizer Peak Publishing is “the world’s most influential beverage competition entity” with 1 billion bottles sold since 2006. Barrister family gins traditionally show high results in international competitions such as CWSA, The GIN Masters, Beverage Tasting Institute, World Gin Awards, Frankfurt International Trophy, International Wine & Spirit Competition, New Zealand Spirits Awards and others. Today Barrister gins are available in overseas markets in Europe, Australia, New Zealand, India, China and the Middle East.

Source: “New Barrister triumph in London,” Ladoga, 23 November 2022

International economic institutions, which recently doubted Russia’s economy could survive under Western sanctions, are now sounding more optimistic than even the Russian government. The International Monetary Fund (IMF), known for its gloomy forecasts, this week predicted Russia’s GDP will grow at 0.3% this year.

The typically conservative IMF was much more upbeat than usual in its most recent forecasts for the global economy — for which it anticipates 2.9% growth (up 0.2 percentage points from its October forecast) because of “unexpectedly stable” dynamics.

Russia’s forecast was upgraded even more than the global figures: in October, the IMF expected a 2.3% fall in Russian GDP in 2023, now it is talking about 0.3% growth. In 2024, they believe Russia’s GDP will increase by as much as 2.1%.

IMF economists explain this surge of optimism with a familiar narrative: the stability of Russian oil exports. “At the current oil price cap level, Russian crude oil export volumes are not expected to be significantly affected, with Russian trade continuing to be redirected from sanctioning to non-sanctioning countries,” the report stated.

The IMF’s latest figures are the most optimistic forecast around. They are well above the February consensus among Russian economists (decline of 1.5% in 2023) and the official projections of the Russian authorities: the Ministry of Economic Development currently predicts a fall of 0.8% in 2023, while the Central Bank expects a drop of up to 4%.

If Russia’s economy is to live up to the IMF’s expectations, output needs to increase by 0.4% every quarter from the fourth quarter of last year to the fourth quarter of 2023, according to a Telegram channel run by Bloomberg Economics’ Alexander Isakov. The economist thinks this is realistic. “The shocks of losing the European gas market, the departure of car manufacturers and others remain… while retail lending is accelerating to finance a recovery in consumer demand,” Isakov wrote. “Thus, the IMF’s figures seem persuasive.”

Russia’s economy has adapted quicker than expected after the shocks of 2022. Central Bank analysts see five underlying reasons for this:

The stability of the banking system. Thanks to ample capital reserves, banks have remained in reasonable shape — while lending was supported by regulatory easing;
Falling export volumes offset by rising prices;
Rapid redirection of exports toward Asia;
An effective reshaping of logistics chains by import-based businesses;
Government support, with an increase in budget spending.

Business activity in Russia continues to recover. According to an updated State Statistics Service (Rosstat) estimate and the Central Bank’s figures, in the third quarter the economy turned a corner (+0.86% compared with the previous quarter). Russia’s economy moves into 2023 with a higher level of activity than was expected in the spring, Central Bank analysts wrote last month. Demand has been underpinned by government spending.

However, it’s important to point out that the economic recovery is patchy.

Constraining factors include a growing preference for saving rather than spending among the general population, difficulties with maintaining imported equipment and staff shortages.

In November, almost half of Russian businesses (45%) reported staffing problems. The dwindling workforce and the significant wartime brain drain could result in fierce competition to hire the remaining talent. And that will likely push up salaries faster than productivity can match, bringing inflationary risks (The Bell recently spoke at length with Vladimir Gimpelson, director of the Center for Labor Studies at the Higher School of Economics about current trends on the labor market).

“The IMF scenario is clearly the most optimistic of the possible outcomes that have some chance of happening in 2023,” said Dmitry Polevoi, investment director at Loko-Invest.

“However, from our point of view, GDP will still fall by 1.5-2.5% in 2023 due to weak demand at home and abroad, coupled with high levels of uncertainty.”

Source: Alexandra Prokopenko, “IMF upbeat on Russia’s economy,” The Bell, 4 February 2023. Translated by Andy Potts

Imploding Golden Billions

Five months into the Russian invasion of Ukraine, there remains a startling lack of understanding by many Western policymakers and commentators of the economic dimensions of President Vladimir Putin’s invasion and what it has meant for Russia’s economic positioning both domestically and globally.

Far from being ineffective or disappointing, as many have argued, international sanctions and voluntary business retreats have exerted a devastating effect over Russia’s economy. The deteriorating economy has served as a powerful if underappreciated complement to the deteriorating political landscape facing Putin.

[…]

Source: Jeffrey Sonnenfeld and Steven Tian, “Actually, the Russian Economy Is Imploding,” Foreign Policy, 22 July 2022

Maxim Katz, “How the economy of Russia is dying,” 21 July 2022: “Today we’ll talk about the branches already affected by the upcoming crisis. We’ll talk about the automobile industry and real estate, cinemas, and air traffic. We’ll also discuss why China is not going to help Russia” (with English subtitles). Mr. Katz was declared a “foreign agent” by the Russian Justice Ministry on 22 July 2022.

For Russian President Vladimir Putin, a two-word phrase sums up the current state of world geopolitics: “golden billion.” Speaking this week in Moscow, Putin declared that the “model of total domination of the so-called golden billion is unfair. Why should this golden billion of all the population on the globe dominate over everyone and impose its own rules of behavior?”

The golden billion “divides the world into first- and second-class people and is therefore essentially racist and neocolonial,” Putin continued Wednesday, adding that “the underlying globalist and pseudo-liberal ideology is becoming increasingly more like totalitarianism and is restraining creative endeavor and free historical creation.”

For most readers in the United States or Europe, a “golden billion” probably means nothing. But in Russia, this phrase has been around for decades as a doom-saying shorthand to describe a future battle for resources between a global elite and Russians. And since February, the Russian government has been deploying the theory to argue that Russia’s isolation after its invasion of Ukraine was not because of its actions — but because of an inevitable global conspiracy against it.

These complaints about inequality may seem rich coming from a man who has led an invasion that could help partially restore an empire, who has clung to power for decades while banishing his biggest opponent to prison and whose personal wealth was once estimated to be $200 billion. But at least some members of the Russian government seem to sincerely believe in the ethos behind these theories. And it may not just be Russians who find the idea persuasive.

Putin’s vague allusions to a golden billion over recent months obscure a far more conspiratorial history. The phrase comes from an apocalyptic book published in 1990, just as the Soviet era came to a crashing halt. Titled “The Plot of World Government: Russia and the Golden Billion,” the book was written by a Russian publicist named Anatoly Tsikunov under the pen name A. Kuzmich.

Tsikunov described an end-times conspiracy against Russia, with the wealthy Western elite realizing that ecological change and global disaster would see further competition for world resources, ultimately rendering the world uninhabitable for all but a billion of them. This elite realize Russia, with its natural resources, immense mass and northern location, needs to be brought under their control by any means necessary for their own survival.

This thesis was a twist on the widely disputed fears about global overpopulation developed by British cleric Thomas Robert Malthus in the late 18th century. However, it’s been given a modern, Russocentric update. In his 2019 book “Plots against Russia: Conspiracy and Fantasy After Socialism,” New York University scholar Eliot Borenstein writes that the idea fits into a broader, paranoid history.

The golden billion “gathers together many of the most important tropes of benighted, post-Soviet Russia (the need to defend the country’s natural resources from a rapacious West, the West’s demoralization of Russia’s youth, destruction of Russia’s economy, and destruction of public health) into one compelling narrative, a story combining historical touchstones (the Great Patriotic War) with science and pseudoscience,” Borenstein wrote.

Tsikunov died in unclear circumstances a year after his book was published, only adding to the mystique. But his idea was soon popularized by the anti-liberal Russian intellectual Sergey Kara-Murza, who stripped away its stranger edges and wrote in the later 1990s that the golden billion meant the population of higher-income democracies like those in the OECD or G-7 who consume an unfair proportion of the world’s resources.

More than two decades later, the theory is everywhere in the Russian government. Despite its conspiratorial beginnings, high-ranking Russian officials like former president Dmitry Medvedev and Russian Foreign Minister Sergei Lavrov have repeated it in public settings since the Feb. 24 invasion.

[…]

Even wild theories can have tactical uses. When Putin speaks about a golden billion, he uses it to tie Western exploitation of Africa and Asia recently with the backlash to the conflict in Ukraine. Though Putin has long presented himself as a voice of global conservatism, the righteous anger of anti-colonialism is no doubt a more potent force globally.

“Of course, this golden billion became golden for a reason. It has achieved a lot. But it not only took such positions thanks to some implemented ideas, to a large extent it took its positions by robbing other peoples: in Asia, and in Africa,” Putin said Wednesday. “Indeed, it was like that. Look at how India has been plundered.”

In South Asia, Africa and Latin America, stories of anger against domination and colonialism find a receptive audience. And these are three regions where countries have so far failed to rally behind Western efforts to isolate Moscow.

But the contradictions in Putin’s logic could undermine his story. Another tale of colonialism and domination is playing out now in Ukraine, which Putin has suggested is rightfully Russian land. As The Post’s Robyn Dixon reports, Putin is moving rapidly to annex and absorb the parts of Ukraine it currently holds, “casting himself as a new version of the early-18th-century czar Peter the Great recovering lost territory.”

[…]

Source: Adam Taylor, “The apocalyptic vision behind Putin’s ‘golden billion’ argument,” Washington Post, 22 July 2022

“Don’t You Know What’s Going On?”

Spoiled by grocery delivery services, I am rarely in supermarkets these days and don’t see all of life’s nitty-gritty.

Today I went into the Dixie [a Russian discount supermarket chain] near my house. Everything seemed pretty normal. I went along the shelves, but I really like buckwheat groats [a staple cereal grain in Russia] and wanted to buy some, and there was no buckwheat. I didn’t need sugar but when I saw there was no buckwheat I looked at the sugar shelf — no sugar. Also there were no Always pads, and I needed some. Probably there was lots of other stuff missing too, but I didn’t have time to make a thorough study. I put some of what was there into my basket and got into line for the register. I never remember prices, alas, so I didn’t particularly notice whether anything had gotten more expensive over the last month. But this would be cleared up shortly.

A woman and her friend come running into the store, right up to the register, and she starts complaining loudly that she bought ketchup for 146 rubles [$1.33 today (3/15/22) — trans.] as per the shelf tag, but at the register they charged her 194 rubles [$1.77], which she only noticed when she got home and checked the receipt.

“Why would I want ketchup for 194 rubles! You have to sell it for the price that’s written on the tag. Give me my 48 rubles back!”

“We’re not giving you anything back: our prices don’t match the shelf tags. You can return the ketchup and we’ll give you your money back.”

“What do you mean, the prices don’t match? You are obliged to show them!”

“On your website it still says that ketchup costs 146 rubles,” the woman’s friend interjects.

“The prices are changing every other day here, you think we’re going to go around pasting up the new ones all the time?! Don’t you know what’s going on?” screams the cash register lady.

“We’re not the ones setting the prices. They change by themselves in the system. They don’t even send us shelf tags: we just scan everything here at the register!” adds another cashier supportively.

“Why is the store management suddenly changing the prices?” I ask.

The line, the cashiers, and the woman with her friend all look at me with stern incomprehension and even an element of disapproval.

“What, you don’t know,” someone mutters angrily, and everyone again looks away, down at the floor or at the checkout conveyer belt.

Everyone knits their brows in silence. The older cashier quietly tells the younger one how to do a return, take cash and calculate the correct change, because many people’s bank cards aren’t working.

No one says out loud that President Putin is waging war in Ukraine or that “NATO-the Americans-who knows who” is to blame. No one discusses why the prices are higher and why there’s no buckwheat. No one says anything at all and everyone looks at the floor.

Only the man who was standing behind me went back to the shelves and grabbed a third bottle of vodka.

Source: Alexandra Polivanova, Facebook, 14 March 2022. Translated by the Fabulous AM with the author’s permission. Photo by the author

Eat Y’Self Fitter

zeitfur “Time for the girlfriend.”

More bad news from Russia’s Northern Capital:

Количество фитнес–клубов в Петербурге превышает спрос. По данным “ДП” их услугами по–прежнему пользуется небольшая часть населения Северной столицы. В настоящее время в Петербурге спортом в фитнес–клубах регулярно занимаются не более 4,8% населения, в то время как в Лондоне их посещают 20% жителей, в Барселоне — 35%, а в Берлине — почти 60%.

“The number of fitness clubs in St. Petersburg exceeds demand. According to Delovoi Petersburg newspaper their services are, as before, enjoyed by a small segment of the Northern Capital’s populace. Currently, no more than 4.8% of Petersburgers work out in fitness clubs, as opposed to 20% of Londoners, 35% of Barcelonians, and nearly 60% of Berliners.”

ATTENTION! Why do you think this is the case? The first person to send me the correct answer in the comments, below, will get a special prize, dispatched via the mails from Berlin, where I am among the 40% of losers who do not work out in fitness clubs.

Please don’t use Google or other artificial intelligences to answer the question. Instead, use the brains the good Lord gave you.

Photo by the Russian Reader

Oleg Volin: How Capitalism Kills in Nizhny Tagil

уралвагон Front entrance of the famous Uralvagonzavod Factory in Nizhny Tagil. Courtesy of Vasily Shaposhnikov and Kommersant

Oleg Volin
Facebook
February 20, 2019

Capitalism kills. Overwork, wage cuts, nasty managers, and the lack of a clear future drive workers to kill themselves.

On the morning of February 19, 2019, in Nizhny Tagil, Sergei Chernykh, a young worker, left his boss’s office, put a noose around his neck, and jumped off a raised area, damaging his spine and suffocating in mere seconds. Arriving on the scene, an ambulance crew (who, to top it all off, were not immediately let into the factory) were powerless to save his life.

The situation in Nizhny Tagil is not merely rough but bloody. Chernykh’s suicide was the fifth suicide in the past year by a worker at the Uralvagonzavod plant.

There have been several dozen similar incidents, but Chernykh’s death stands out from them in that he committed suicide at his workplace.

Chernykh could not bear life’s hardships and so he parted with it right on the spot. Whether he meant it or not, he thus focused the public’s attention on the outrageous working conditions endured by Uralvagonzavod workers.

The plant’s press service has not yet commented on the case, but it is obvious the increasing incidents of suicide have been caused by deterioration of socio-economic conditions and the lack of prospects.

Over the last twenty-eight years, Nizhny Tagil’s population has steadily declined, dropping from 440,000 residents to 350,000 residents. It would be strange not to see this as a telltale sign of what has been happening in the city.

Chernykh’s friends and acquaintances mainly say he was “driven” to kill himself. Many residents of Nizhny Tagil could find themselves in similar circumstances, especially if they work at Uralvagonzavod.

A female worker in Forging Shop No. 170, where Chernykh was employed, said the 27-year-old man’s suicide occurred after he attended a meeting of plant managers that he was not supposed to have attended. The employee asked she not be named since, she claimed, everyone in the shop was afraid, everyone needed a job, and she did not want any extra problems.

“Sergei was a rank-and-file worker, a cutter, but since our section foreman and section manager were on sick leave, Sergei was temporarily appointed foreman. And since there was no manager in our section, Sergei was sent to that meeting,” the woman claims. “It’s at these morning meetings that the shop foreman tells everyone what section has to do what and how much they have to do during a shift.”

“There are emergencies, and the shop foreman forces people to hurry up. He could not care less whether are enough workers to do the job or not, whether they have the tools they need or not. All that matters is that the work be done quickly. If you don’t have any workers, you go do the job yourself,” she says.

Marina Pogrebnykh, a distant relative of Chernykh’s, does not know the particulars of his death, but she likewise has no doubt plant management was to blame.

“I’m certain management are to blame for it. I don’t believe he would just take his own life like that, especially since this was not the first such incident,” says Pogrebnykh.

The anonymous female worker at Uralvagonzavod confirmed Chernykh was the third plant employee to have killed himself in the past three months. On the social networks, there has been talk there may have been more such incidents.

“We are under extreme pressure at work. You can make good wages, but you have to live on the shop floor to make the good money.

“Our section foreman killed himself. Yes, of course, it was a personal situation, but I can say that if he hadn’t drunk he would be alive. But when he was foreman in another shop he never drank, although the workload was huge. So, it’s a little hard to believe in coincidences.

“Our current section foreman, a woman, quite often comes back from meetings with management completely stressed out. She’s already getting up there in terms of age, but they yell at her like they yell at everyone else,” says the late Chernykh’s female coworker.

Two weeks ago, twenty-five Uralvagonzavod workers filed suit against their employer over new rules for calculating wages. According to the workers, the new rules have cut their pay in half while their workload has increased. Although these rules came into force in 2018, the workers have only now decided to file suit.

“Management tells us the the plant has been modernized. Due to this modernization, our workload has decreased, allegedly, meaning we should produce more. It’s on paper that things look good to them. On the contrary, we haven’t noticed any changes,” say the workers by way of explaining why they have sued olant management.

“On the contrary, we now have additional functions, but our wages have been halved. This happened despite the fact that previously we had one of the highest pay grades at the plant due to occupational hazards and the heavy physical workload,” they say.

Nizhny Tagil’s Dzerzhinsky District Court has not yet made a ruling in the case.

Founded in 1936, Uralvagonzavod manufactures military equipment, railroad cars, and road construction equipment. In 2016, the company was merged with the Russian state corporation Rostec.

Poverty and overwork have led workers to hang themselves. It is all quite sad. Workers must realize they need to fight together to improve their condition. They must organize themselves, go on strike, and take other actions.

The nooses should be reserved for other heads.

This text is based on media reports.

Thanks to Tom Rowley for the heads-up. Translated by the Russian Reader

Postage Stamps and Gunpowder: Syria and the Russian Economy

embrace

Postage Stamps and Gunpowder: How Important Is Syria to the Russian Economy?
The Kremlin has been trying—unconvincingly—to repackage its military campaign in this devastated country as a long-term investment project.
Yevgeny Karasyuk
Republic
February 27, 2019

The economy was probably the last thing on the Kremlin’s mind when it decided to get involved in a civil war in the heart of the Arab world. But now that Russian military forces have been in the region for several years, the Kremlin has been increasingly trying to spin its support for Bashar Assad’s regime as a sound investment, a contribution to a prosperous trading future between the two countries.

Russia has claimed it is willing to export to Syria anything it can offer in addition to weapons, from wheat to know-how for preventing extremism on the internet. Along with Iran, the country has big plans for taking part in the postwar restoration of Syrian cities and Syrian industry, including the energy sector. Russia’s governors speak touchingly of their readiness to go to Damascus at the drop of a hat to negotiate with the Syrian government.

“When the talk turns to Syria, I immediately catch myself thinking I need these meetings, I need to see those people again and again, and I need to be useful,” Natalya Komarova, head of the Khanty-Mansiysk Autonomous District said at the Russian Investment Forum in Sochi two weeks ago.

The expenses Russia has incurred during the Syrian campaign are shrouded in mystery. Analysts at IHS Jane’s calculated in October 2015 that Russia could have been spending as much as $4 million a day. In July 2017, the opposition Yabloko Democratic Party published its estimate of the overall bill: as much as 140 billion rubles [approx. 1.87 billion euros], but this total did not include associated costs, including humanitarian aid. In 2017, according to RANEPA, 84% of Russia’s official total of disbursed humanitarian aid ($19.6 million) went to Syria. What kind of economic cooperation could justify such figures?

It would be pointless even to try and find an answer in recent trade trends between the two countries. Its volumes are negligible. During the first nine months of 2018, Syria’s share of Russia’s exports was 0.09%, while Syria accounted for 0.002% of imports to Russia during the same period. This has always been more or less the case.

trade

“Trends in Russia’s trade with Syria (in billions of US dollars).” The pale violet line indicates Russia’s exports to Syria, while the blue line indicates Russia’s imports from Syria. The data for 2018 is only for the first nine months of the year. Source: Russian Federal Customs Service. Diagram courtesy of Republic

The largest transaction in the history of the economic partnership between the two countries was Moscow’s cancellation of $9.8 billion dollars in debt, 73% of what Syria had owed the Soviet Union. At the end of the 2005 meeting at which this matter was decided, Bashar Assad and Vladimir Putin also spoke publicly of the idea of establishing a free trade zone. Subsequently forgotten, the undertaking was mere camouflage for the political bargain reached by the two men, which was and remains support for the Syrian dictator’s regime in exchange for the dubious dividends the Kremlin has received by increasing its influence in the region. It is believed Russian strategic bomber saved Assad, who had already been written off by the west. But explanations of what Russia has ultimately won for its efforts and what its economic strategy might look like have been more muddled and contradictory than before.

In an October 2018 interview with Euronews, Russian Foreign Secretary Sergei Lavrov avoided directly answering a question about joint economic projects. During his tenure as head of the Russian Export Center, Pyotr Fradkov (not to be confused with his father former PM Mikhail Fradkov, the current head of the Russian Foreign Intelligence Service or SVR) talked about Russia’s potential involvement in developing the “high-tech segments of Syria’s economy.” A month ago, however, the selfsame Russian Export Center placed Syria at the bottom of its ranking of 189 countries in terms of their favorability for foreign trade.

The Syrian economy, in turn, can currently offer Russia even less. Mainly, its exports boil down to fruit, but in such small and unstable quantities that they cannot seriously compete with deliveries from Turkey. Russia has been promised priority access to the development of natural resource deposits in Syria, which are teeming with oil, natural gas, and phosphates. But the smoldering war and the lack of security guarantees for investments have hampered implementing these plans.

Russian experts pin their hopes on the surviving remnants of industry in the government-controlled areas of Latakia, Tartus, and Damascus. Based on the fact that “the level of production that survived has enabled Assad to almost fully provide himself [sic] with food during five years of war,” Grigory Lukyanov, a political scientist at the Higher School of Economics has concluded the Syrian government “depends on a well-developed business community.”

Syria, however, seemed like a nightmare for investors well before the country was turned into an open wound. “Only a crazy person would go into Syria at his own behest,” Vedomosti quoted a source at a major company that was involved in negotiations with the Syrian government in the summer of 2012. Suffering from international sanctions, Syria proposed that Russian companies take part in construction of a thermoelectric power station in Aleppo. Four years later, one of Syria’s largest cities had been turned into ruins by heavy bombardment.

The Rothschilds [sic], who made fortunes on wars, thought the best time to invest was when blood was flowing in the streets. Their approach might seem to resemble the Kremlin’s strategy. But let’s not kid ourselves: unlike the famed financiers, President Putin is completely devoid of insight when it comes to the economic consequences of his military escapades. Business plans are not his strong suit.

Photo courtesy of Mikhail Klementyev/AP and the Washington Post. Translated by the Russian Reader

Falling

200 ruble note-1

200 ruble note-2 A year ago, Russian Central Bank chief Elvira Nabiullina triumphantly introduced the new Crimea-themed two hundred ruble banknote into circulation. Since the economy is shaped more by flows of goods, resources, people, services, knowledge, and money, and the actions of ordinary people, decision makers, and the snake oil salesmen known as capitalists, and less by puerile revanchist neo-imperalist symbolism, the new banknote, pegged at €2.90 by Deutsche Welle only a year ago, is now worth a mere €2.65. I am keeping my specimen as a souvenir of the current bad times until better days arrive. Image by the Russian Reader

Fall in Real Incomes of Russians Accelerated Sharply in September
Economists Say Government’s Forecast No Longer Realistic
Tatyana Lomskaya
Vedomosti
October 17, 2018

Real incomes of Russians have declined for a second month in a row, Rosstat has reported. Their decline accelerated in September to 1.5% in annual terms after falling by 0.9% in August. Prior to that, they had grown for seven months, from the start of the year, by 1.7%. (This figure excludes the one-time 5,000-ruble payments made to pensioners in January 2017.) Real wages accelerated their growth in September, from 7.2% to 6.8% in the previous month.

Incomes of ordinary Russian had been falling for four years in a row, from 2014 to 2017, resuming growth only this year. In the first half of the year, they increased by 2.6%, mainly due to wage increases, notes Igor Polyakov from the Center for Macroeconomic Analysis and Short-Term Forecasting (TsMAKP). Business income increased only by 0.7%, while social transfers (excluding the one-time payment to pensioners) increased by 1.2%, which was significantly weaker than all incomes generally. Other sources of income decreased. There was a slight increase in incomes derived from property, but incomes received from securities and deposits decreased, as did, apparently, incomes from unreported activity, says Mr. Polyakov. He argues it is unlikely circumstances have changed considerably in recent months.

But the anxiety of Russians caused by the volatility of financial markets has increased, says Mr. Polyakov. People have taken to withdrawing cash from foreign currency accounts and transferring it to safe deposit boxes, as well as spending it abroad on holiday. Rosstat cannot register these expenditures and thus reduces its assessment of miscellaneous income. In August, the public’s net demand for US dollars grew by comparison with July from $0.8 billion to $1.7 billion, an increase of nearly 53%, the Central Bank reported.

Retail growth slowed in September to 2.2% in annual terms from 2.8% a month earlier. It is likely the public preferred buying foreign currency while curtailing consumption, argues Mr. Polyakov.

The drop in incomes combined with the serious increase in wages [sic] remains a mystery, writes Dmitry Polevoy, chief economist at the Russian Direct Investment Fund. The growth in real incomes in the first half of 2018 was mainly due to the presidential election campaign, notes Vladimir Tikhomirov, chief economist at BCS Global Markets. Salaries in the public sector and pensions increased rapidly. [That is, the Kremlin bribed Russians directly dependent on its largesse to get out the vote for President-for-Life Vladimir Putin—TRR.] After the election, growth stalled. And, after a palpable devaluation of the ruble in April and accelerating inflation, a dip in incomes was anticipated, argues Mr. Tikhomirov. In September, prices for imported goods rose. In addition, the seasonal discount on fruits and vegetables ended, and the July increase in utilities rates made itself felt, explains Mr. Tikhomirov.

By the end of the year, the incomes of Russians will gradually decline a little, while overall incomes will grow less than 1% on the year, predicts Mr. Tikhomirov. Real incomes might grow by 2% on the year, counters Mr. Polyakov. In any case, this is noticeably lower than official forecasts. The Russian Economic Development Ministry anticipated a 3.4% growth in real incomes in 2018.

Real incomes of ordinary Russians fell by 1.7% in 2017, although the government had forecast a 1.3% increase, the Federal Audit Chamber noted in its opinion on the draft federal budget for 2019–2021. When the forecast was corrected, incomes had decline dsteadily from the beginning of the year, and there were no preconditions for rapid growth by year’s end, the auditors write.

Income growth depends on whether private enterprise will increase wages, argues Mr. Polyakov, but thos wages will be subject to the planned rise in the VAT to 20% in 2019.

President Putin has set a goal of halving poverty by 2024. (The official poverty rate last year was 13.2% of the populace.) The Economic Development Ministry’s forecast significantly increased the growth rate of real wages and anticipated higher growth rates for real incomes, which has raised doubts at the Audit Chamber. There is no wage increase for public sector employees planned in 2019, while the growth of wages in the private sector will depend on growths in productivity.

Rank-and-file Russians have been forced into debt, write analysts from RANEPA and the Gaidar Institute in their opinion on the draft budget. By mid 2018, Russians owed banks 13.7 trillion rubles (approx. 181 billion euros), an increase of 19% from the previous year, they write, and an amount that significantly outpaces the increase in nominal incomes. It is an alarming trend that means an increase in the amounts of money ordinary Russians spend servicing loans, experts warn.

Translated by the Russian Reader

Macaroni Is a Vegetable

“3,500 rubles.” Graphic courtesy of Vedomosti. At the current exchange rate, 3,500 rubles is worth approximately 46 euros.

Some Can Only Afford Macaroni, But Some Cannot Even Afford That
Saratov Official’s Suggestion to Spend 3,500 Rubles on Food a Month Is a Reality for Millions of Russians
Tatyana Lomskaya
Vedomosti
October 19, 2018

The statement by Natalya Sokolova, minister for labor and employment in Saratov Region, that 3,500 rubles a month was enough for the “minimum physiological needs” of Saratov pensioners so angered the public that she was made an ex-minister in a matter of days. Ms. Sokolova had insisted it was not worth raising the monthly minimum cost of living for unemployed pensioners by 500 rubles: an increase of 288 rubles would be enough.

“Macaroni always costs the same,” she said.

Ms. Sokolova, however, refused to go on such a diet by way of an experiment. Her status supposedly did not allow it.

But is it only Saratov pensioners who subsit on such a meager diet? Let’s compare them with other regions.

The authorities calculate the amount of the mountly minimum cost of living on the basis of the cost of the monthly minimum food basket. They add to its cost (which is 3,500 rubles in the case of Saratov pensioners) the exact same amount of money for paying for non-food items and services, for example, clothing, housing, and utilities. The monthly minimum cost of living for pensioners in Saratov Region was therefore 7,176 rubles (95 euros) in the second quarter of 2018. It was 9,354 rubles (124 euros) for the region’s able-bodied residents, and 9,022 rubles (120 euros) for its children.

That is not much, but there are even poorer regions in Russia. For example, in Belgorod Region, an able-bodied resident should be able to live on 8,995 rubles (120 euros) a month, while a pensioner should be able to survive on 6,951 rubles (92 euros) a month. In Mordovia, the corresponding figures are 9,132 rubles (121 euros) and 6,975 rubles (93 euros) a month; in Chuvashia, 9,248 rubles (123 euros) and 7,101 rubles (94 euros). The federal monthly minimum cost of living is 11,280 rubles (150 euros) for an able-bodied person, 8,583 rubles (114 euros) for a pensioner, and 10,390 rubles (138 euros) for a child. Meaning that, on average, the monthly diet in Russia as a whole is only a little more expensive than the Saratov diet: between 4,000 rubles (53 euros) and 5,500 rubles (73 rubles).

The monthly minimum food basket includes the cheapest groceries. It is meant to provide an individual with the necessary amount of protein, fats, and carbohydrates for a month, explains Liliya Ovcharova, director of the Institute for Social Policy at the Higher School of Economics. The basket mainly contains baked goods, a few eggs, lots of porridge, milk, and an altogether small amount of meat. According to Ms. Ovcharova, the diet will keep a person alive. It is another matter that it is “tasteless” and below rational norms of consumption, flagrantly lacking in meat, vegetables, and fruit. It is not surprising people find this diet unacceptable.

In 2017, however, the incomes of 13.2% of Russians were below the minimum cost of living, meaning that 18.9 million people in Russia could not afford even the macaroni snubbed by the ex-minister in Saratov. This figure includes children: one in five Russian children lives in family whose per capita income is below the minimum cost of living. Among old-age pensioners, however, there is practically no one who is officially poor. If their incomes are below the minimum cost of living for pensioners, they receive an additional payment to help them top up to the minimum. Children in large families are not eligible for these additional payments.

The question is what is now the more realistic approach: making the diet more humane or reducing the number of people who cannot afford even an inhumane diet. For example, the government could first reduce the number of children in need to 5%, and then improve the diet. Vladimir Putin ordered the government to reduce the number of needy people by half by 2024. If we now increased the minimum cost of living by 50%, the number of poor people would, on the contrary, double, Ms. Ovcharova estimates.

But the number of poor people can be measured not only on the basis of the minimum grocery basket, a standard that was introduced back in the 1990s. In European countries, for example, people with incomes of 50% of the median have been considered poor since the 1950s. At the same time, the Europeans base their calculations not on minimal but on rational norms of food consumption, Ms. Ovcharova notes. They compute how many specific vitamins, minerals, iron, and calcium a person needs. This food basket is much pricier and presupposes a completely different level of consumption and well-being.

It is probably best not to count how many Saratov pensioners can afford this food basket until 2024.

Translated by the Russian Reader

How Rosstat Stopped People’s Incomes from Falling by Fudging the Stats

1024px-Centrosoyuz_Moscow_-_Ak_Sakharova_view The Tsentrosoyuz Building, on Sakharov Avenue in Moscow, was designed in 1933 by Le Corbusier and Nikolai Kolli. Originally built as headquarters of the Central Union of Consumer Cooperatives, it now houses Rosstat and the Russian Federal Financial Monitoring Service. Photo courtesy of Wikipedia

Rosstat “Stopped” Populace’s Incomes from Falling
Analysts Accuse Agency of Fudging the Figures
Yelizaveta Bazanova and Filipp Sterkin
Vedomosti
February 19, 2019

“The worst thing you can do is mess around with statistics. […] When we lose sight of our system of coordinates, we wander in the dark, and anything we say is fraught with delusions,” said German Gref when sizing up the resubordination of Rosstat (Russian Federal State Statistics Service) to the Economic Development and Trade Ministry in 2007 during Gref’s tenure as minister.

Rosstat has several times been reassigned from the Russian government’s oversight to the Economic Development Ministry, and back again. The last time Rosstat came under the ministry’s wing was spring 2017. Economists also predicted at the time Rosstat would have to produce statistics showing he authorities in a good light.

On Monday, Rosstat reported on the populace’s real incomes in January 2018. For the first time in a long time, they did not decline in annual terms, nor did they increase, according to the agency’s estimate. But a fall in incomes was prevented only due to the fact that Rosstat did not take into account income a segment of the populace had earned a year ago: a one-time payment to pensioners of ₽5,000. At the time, it allowed the agency immediately to record a growth in incomes of 8.8%. This was the only month in 2017 when such growth was recorded. If this payment is not included in calculations, incomes grew only by 1.3% a year ago, Rosstat said on Monday. Rosstat took this payment into account all last year and did not reconsider its results: a decline in incomes by 1.7%. The data had been corrected for the sake of its comparability, the agency explained.

This is “frank manipulation,” claims Kirill Tremasov, director of the analytics department at Locko Invest. According to his own computations, incomes actually fell by 7% last month, but in the run-up to the March presidential election there is no stomach, apparently, for publishing figures about this decrease in incomes. Rosstat should publish real data, possibly furnishing them with adjusted calculations. Or the figures for all of 2017 should be revised, in which case incomes would be shown to have fallen by 2.1–2.2%, not by 1.7%, argues Tremasov.

fullscreen-7e Real Incomes of the Russian Populace in Terms of Percentages Relative to the Previous Year. The seven-percent drop in January 2018 is based on Kirill Tremasov’s estimate (see above). Source: Rosstat. Courtesy of Vedomosti

The statistics would have then deviated even more from the forecast of the Economic Development Ministry, which had anticipated a 1.3% uptick in incomes in 2017. Rosstat’s figure mislead the public, Tremasov concludes.

The way Rosstat treated the indicator was wrong, says Vladimir Bessonov, head of the Laboratory for Research in Inflation and Growth at the Higher School of Economics. He is certain that if the one-time payment to pensioners was taken into account in January 2017, it must also be taken into account now. Although it is unlikely Rosstat cheated on purpose, he argues, because hat would pose much too serious reputational risks to the agency.

This approach changes the picture of trends, say Igor Polyakov of the Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF). Both the one-time payment and seasonal phenomena should not be factored into calculations for the whole of 2017. Compared to December 2017, incomes increased by 1.5% in January 2018, he claims, but public sector wages were indexed by 4%at the beginning of the year, and the pensions of unemployed pensioners by 3.7%. To get a real take on incomes, we should wait for February’s figures, which will be free of temporary factors, argues Polyakov.

In reality, real incomes are 3.3% lower than they were in 2011, and 11.4% lower than their peak values in 2014, Tremasov has estimated. 2017 was the fourth year in which people’s incomes fell. In 2014, 2015, and 2016, they contracted by 0.7%, 3.2%, and 5.8%, respectively.

In 2018, incomes will continue their downward trend, argues Vladimir Tikhomirov, chief economist at BCS Financial Group. According to its own forecast, however, the Economic Development Ministry anticipates a 2.3% growth in real incomes.

“Monthly data on people’s incomes are unrepresentative anyway. The reliability of the primary data used in the methodology is not perfect, to put it mildly, sometimes to the point of directly contradicting reality,” a federal official says in response to Rosstat’s report.

Bessonov confirms there are, indeed, many bones to pick with the performance figures for the populace’s real income, and problems with the methology for estimating them.

The indicator has not been terribly representative since 2014, argues Natalya Orlova, chief economist at Alfa Bank. We need it, among other things, to estimate the performance of the informal sector, where wages are counted as income. However, whereas miscellaneous income had grown by 25% in 2015, it fell by 7% in nominal terms in 2016. But even if the indicator is not representative, says Orlova, this does not mean it can be treated the way Rosstat has treated it.

A spokesperson for the Economic Development Ministry did not respond to our request to comment on this article, while Rosstat refused to comment.

Translated by the Russian Reader

Previous posts on the same subject:

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

________________________________

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.