Russians Surviving the Crisis Not Thanks to Regime but In Spite of It, Researcher Says

Paul Goble

            Staunton, January 27 – The number of Russians working for themselves or in kinds of economic activity not registered with the state has been growing every year since 2008, Alekandr Pavlov says; and the expansion of their number over the last two years has prevented the mass unemployment and hunger that many had expected the economic crisis to bring.

            And it is that rather than any anti-crisis measures adopted in Moscow or in the regions that has allowed Russians to survive, the Khamovniki Foundation for the Support of Social Research expert says. In short, they are surviving the crisis “not thanks to the regime but in spite of it” (rbc.ru/opinions/society/26/01/2016/56a755e49a794740e4162175).

            When the crisis began, Pavlov says, some regions announced and introduced anti-crisis measures and some didn’t. He studied both and concludes on the basis of his research that these programs had little impact either on the number of officially unemployed or on the expected rise in food shortages and misery.

            There are several reasons for this, he continues. Regional officials have only two feedback channels from the population: official statistics and individual complaints.  But “it has turned out that neither the one nor the other has been capable of adequately reflecting the processes taking place in the localities.”

            And because that is so, Pavlov says, officials didn’t have any information about those working-age Russians who were not in official categories like homemakers, students, business people and the like but who nonetheless somehow working at something and thus maintaining at least a minimal standard of living, largely independent of and unnoticed by the state.

            In 2013, he points out, many in Russia were struck by the statement of Deputy Prime Minister Olga Golodets that there were 38 million Russian residents who were “occupied” in ways she didn’t know. She and others claimed in April 2015 that that number had declined, but in fact it has gone up.

            Indeed, Pavlov continues, those occupied in positions the state doesn’t include in its accounting have been rising every year since 2008 “despite all the efforts of the state.”  And in many ways, that rather than any actions by the authorities has saved Russians from what would otherwise have been a complete disaster.

            Using government figures, Pavlov found in the eight regions he examined that the number of Russians engaged in some kind of economic activity but not counted by the state in 2014 ranged from 27 percent in Samara Oblast to 45.3 percent in Mordvinia – and that in all places this figure had increased since 2008.

            Faced with declining incomes and rising prices, Russians have been forced to rely not so much on the government “which often is viewed as a source of resources but rather on their social ties and various kinds of self-supply,” Pavlov says. And this affects people across the social spectrum with people adding to their nominal incomes as they can.

            “Almost always,” he says, “people have side occupations from which they benefit ranging from simple theft and ending with the export of their intellectual efforts abroad.”  But much of it involves the revival of crafts or the use of craft-like operations to earn money, his research shows.s

            In Russia’s provinces, “the overwhelming majority of homemakers engage in such activities although this is rarely acknowledged.” Most say they live on their pay, but it turns out that they raise food, help their neighbors build houses, and engage in what in other circumstances would be called second jobs.

            And these positions often bring in more money or resources than do the jobs that they are formally attached to, Pavlov says. Individually, these second incomes are small, but collectively they amount to enormous sums.  In Ulyanovsk Oblast, for example, these second jobs account for more than 80 percent of the region’s earnings from the production of furniture.

            “All these unseen practices are helping Russians to survive the crisis,” Pavlov says, and they are quite responsive to the situation. When prices for food go up, people raise more of their own; or when mortgage markets collapse, they help build houses for their neighbors or register as unoccupied dachas houses in which people live on a permanent basis.

            And these craft-life operations are often among the leaders at import substitution.  Unregistered Russian craftsmen are now making Italian furniture, details for European cars and even rebuilding lathes and other equipment that no one can any longer import from abroad, Pavlov says.

            And thus “a paradox has arisen which it is difficult for the government to understand: formally [that is according to statistics] everything is getting worse and worse, but in fact they aren’t so bad.”