Paul
Goble
Staunton, December 1 – “Russia is
entering the first systemic economic crisis in post-Soviet times” which is of
its own making and which has only been “deepened by the fall in world prices
for oil” that Moscow and many others want to blame for the problems the Kremlin
faces, according to Valentin Gubaryev.
In a commentary in “Gazeta,” the
Moscow commentator argues that Russia now “lives in a more ‘terrible’ economic
reality,” given the price of oil and the ruble exchange rate with the euro and
the dollar, “than even the most alarmist variant” of government projections
only three months ago (gazeta.ru/comments/2014/11/28_e_6319449.shtml).
And this crisis is both different
and more serious than the two others with which it is often compared, Gubaryev
says. The 1998 crisis which led to default “was the result of half-heartedly
radical in intention and less radical in execution of market reforms,” one that
arose” when the political and economic system of post-Soviet Russia was still
not put in place.”
Russia’s default at that time was
triggered by the decline in oil prices that meant that Russia was earning
“approximately three times less than it was spending” and consequently was “not
in a position to service its short-term government obligations,” a problem that
some are beginning to say is returning now.
And the crisis of 2008-2009 was “to
a significant degree not a Russian one.” Instead, the Russian economy simply
followed the path downward of the world and “above all the American” economy.
But “today we have a serious economic crisis with the label ‘made in Russia,’”
one that is the product of the political and economic systems in the country.
In that situation, Russians need to
recognize that “no one except [themselves] are going to lead the country out of
[this] crisis.”
Russian officials today suggest that
the declining value of the ruble is not a bad thing because it allows them to
meet their budgets, but while that might be true, meeting the budget by relying
on the weakening of the ruble “is in absolute contradiction with the growth of
the incomes of the citizens.”
They face rising prices, a reduction
of jobs, and the possibility that their incomes will be cut. (Today’s “Nezavisimaya
gazeta” features an article suggesting that fears are spreading that the
Russian government may cut salaries of government employees, even though the
regime is denying this (ng.ru/economics/2014-12-01/4_venesuela.html).
In the first two post-Soviet
economic crises, in 1998 and in 2008-2009, the Russian government “tried to apply
defensive measures.” In the first, it devalued the ruble and more importantly “cut
budgetary expenses. And in the second,
it formed a commission that in extraordinary fashion ensured the liquidity of
the most important banks and companies.
Today, however, there is “only
silence and inactivity. The government
and the prime minister are silent. The deputies and senators are silent or
propose wild legislative initiatives like the confiscation of property of
foreigners in Russia … The expert communities are silent.” And the opposition “only
criticizes the authorities” but without hope of influencing the situation.
In sum and as a
result, Gubaryev says, “both the authorities and society have not begun talking
about the threats or formulating programs for getting out of the crisis. They
do not even recognize its existence,” and instead, he argues, they are
operating only with the hope that something will turn up.
Perhaps oil
prices will rise, they think, or the European Union will lift the sanctions or
Ukraine will support the Donetsk and Luhansk peoples republics even though Kyiv
doesn’t control their territories.
So far, the
government’s “social therapy” has been directed to protecting bureaucrats and
big business, but “the economy has simply been excluded from the discourse”
that the regime promotes. Moscow media
talk about the Ukrainian and European economies as such; they don’t talk about
the Russian one but only the details.
There has not been “any serious and honest
conversation with people about the difficult situation” in which the Russian
economy and hence Russia finds itself. Instead, Russian television viewers are
offered a combination of “’dances with stars’ and ‘the struggle with the
Banderites.’”
As a result,
there is the growing impression, Gubaryev says, that “the authorities are
afraid to recognize not just certain errors of their policy but also the
complexities of the current economic situation” and fear “questions from the
population, especially when, as polls suggest is now the case, “the majority is
beginning to recognize” how serious the situation is.
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