Ever More Russians Affected by Crisis and Angered by It, Russian Academy of State Service Says

Paul Goble

            Staunton, October 1 – The Russian Academy of Economy and State Service has released a 108-page report showing that ever more Russians are being hurt by the economic crisis, that ever fewer of them expect things to improve anytime soon, and that ever more of them are angry about this situation.

            The disturbing, even damning report prepared by the Academy’s experts can be found at new.ranepa.ru/images/docs/bulleten/bulletin-3.pdf. Its key findings have been summarized today by RBC’s Elena Malysheva (top.rbc.ru/economics/01/10/2015/560bf7299a7947cafb5d72a9) and by Kasparov.ru (kasparov.ru/material.php?id=560CD3481A635).

            “The economic crisis is disturbing Russians ever more and spreading to new groups of the population,” Malysheva writes. Pay and incomes are falling and are expected to fall even more rapidly toward the end of this year, and as a result, pessimism about the future is intensifying as is anger about the situation.

            According to the Academy report, “the essential difference from previous periods of our observation is growing dissatisfaction of the population with the worsening socio-economic conditions.” Earlier this year, most Russians felt things were stabilizing but now that is changing and those who are pessimistic about the future are increasing.

            Malsyheva summarizes the report’s findings this way: “the growth of negative expectations is found in all types of settlements but especially strongly affected are residents of megalopolises,” with the faction of those residents expecting increasing to the point that now 70 percent of the population of major Russian cities report being affected by it.

Outside the major cities, the regions with the greatest sense of unease are the Komi Republic, Karachayevo-Cherkessia, Chechnya, Ingushetia, and Pskov, Astrakhan, Nizhny Novgorod, Kemerovo and Ivanovo oblasts. Ever more Russians are borrowing to maintain their standard of living or seeking public support.

The report notes that ever more Russians are falling into poverty with the hardest hit being pensioners and children with families. Much of this is hidden because unemployment remains relatively low, something possible only because workers are being paid for fewer hours or their wages not paid at all.

Another reason that Russian employment has remained relatively low, the report says, is that the relatively large generation born in the 1950s is currently being replaced by the relatively small generation of those born in the 1990s. And yet a third reason is the departure of some gastarbeiters, thus opening new positions for Russians.

The report also notes that social spending is down with 25 regions having but spending on education, 11 having cut it on health care, and so on.  The 12 percent cut in education spending in Moscow is odd, the report says, because the city’s budget has grown by 14 percent over the last year.