Saturday, June 3, 2017

Kremlin has Money for Itself and Its Defenders but Not for the Russian People, Mikhailov Says

Paul Goble

            Staunton, June 3 – Russians have been living with and joking about Dmitry Medvedev’s incautious remark last year that “there is no money, but hang in there;” but now an analysis of Moscow’s latest moves shows that the situation is at least potentially far more explosive because it finds that the Kremlin has money for itself and its defenders but not for the Russian people.

            If the Medvedev paradigm led people to conclude that everyone was suffering from the crisis even if some remained far wealthier than others, the new vision suggests something very different and that the Russian people as a whole are being asked not only to tighten their belts but to do so in order that the Kremlin, the oligarchs and their siloviki defenders don’t have to.

            The problem is that this model, of course, is not sustainable: It will not produce growth and may even lead to further contraction, thus leaving a smaller pie that will require the Kremlin to extract even more from the rest of population to meet its needs and leave the population increasingly impoverished, sullen and quite possibly inclined to revolt.

            In a commentary on, Aleksey Mikhailov openly declares to the Russians that “there is money but it isn’t for you,” that the budget adjustments gave nothing to the people and that the government is talking about holding pensions constant for two decades or even more (

            And this pattern very much on view at the Petersburg economic meetings this week clearly shows, the commentator says, that what the Kremlin plans to do is to take as much money as it can either for itself or to disperse to the force structures either to engage in foreign adventures or to defend itself against any popular unrest.

            Aleksey Kudrin of the Center for Strategic Development criticized this arrangement “but only in the foreign press,” Mikhailov says. And he had even predicted that raising the pension age would allow increasing pensions in real terms by 30 percent. The government clearly doesn’t accept that, and Kudrin has not published the basis of his calculations.

            All this prompts the question, the commentator suggests, “who needs economic growth” about which Vladimir Putin and other figures have spoken so much in recent days “if it does not lead to an improvement of the standard of living of people and leaves them in poverty in their old age?”

            Knowing that what the Putin regime plans to do is not sustainable over the long term and will lead to disaster first for the population and then for the regime, Kudrin called for “reducing the role of the state in the economy, fighting to end Russia’s dependence on oil exports, investing in education, modernization, and infrastructure and improving ties with the West.”

             But there is no chance that the current regime will accept any of this because they conflict with “the Kremlin-centric model which Putin built when oil prices were twice as high as they are now” and when he could win the loyalty of his entourage by making them fabulously rich.

            “Russia is losing time in a catastrophic fashion,” Kudrin continues. “Unfortunately, the authorities only very slowly are recognizing that structural changes are needed.”  And while they move toward that recognition, the Russian people suffer even if the Putin elite continues its lavish lifestyle and Putin himself his aggressive foreign policy.

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