Monday, October 19, 2015

Three Small Cutbacks in Russia with Three Large Consequences

Paul Goble

            Staunton, October 19 – Three relatively small cutbacks in Russia – the end of Transaero flights to the Russian Far East because of the company’s bankruptcy, a cutback in government funding for the repatriation of Russians from abroad, and discussions about elimination of subsidies for workers in the Far North – may very well have extraordinarily large consequences.

            The end of Transaero flights from Vladivostok means that that region is ever more cut off from Moscow and European Russia, triggering anger among passengers in the short run and leading ever more people in that region, eight or more time zones from Moscow to focus neighboring countries in the Far East rather than on Russia.

             Reductions in funding for and the tightening of conditions on compatriots whom Moscow has hoped to attract from abroad to address Russia’s demographic problems and to provide a concrete example of Moscow’s support for Vladimir Putin’s “Russian world” will reduce the flow of such people still further and increase cynicism about this entire project.

            And the likelihood that Moscow will cut back on subsidies to workers in the Far North, subsidies necessary to attract Russians to that region, will have two serious consequences: Russia will not be able to develop the economy of the region as it had hoped, and in the absence of an influx of Russians, the non-Russian share of the population there will increase.

            All three of these developments were very much on public view this week.  “The Siberian Times” reported today that as a result of the collapse of Transaero’s service, no economy class tickets to Moscow will be available anytime soon and that train service as an alternative takes a week (

            Russians in Vladivostok and throughout the Far East are furious. One travel agent said that “passengers [have been] getting violent and crying, especially those whose flights were cancelled. But returning the money is not easy either. Transaero [is sending] its customers to places where they bought the tickets. And we are forced to make refunds.”

            But the travel agents aren’t paying immediately. “We take a written request for a refund, but they are all under consideration. The money is returned only to military people for now. As for the civilians, their requests are being studied,” one agent said, a comment that will do nothing to calm those who have been more than a little inconvenienced.

            Also today, “Nezavisimaya gazeta” reported that Moscow is planning to cut funding and tighten the conditions for the compatriots program. In reporting this, the paper’s Velimir Razyvaev says that the authorities despite what they say “simply don’t believe that the Russian world outside of Russia is really doing that poorly” (

            And “Vesti Karelia” reported that as Moscow has cut back in its subsidies, firms in the Far North have had to cover part of these costs. A few have done but only by raising their costs to the point they are not competitive while others have not as the cost of holding on to their workers (

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