Putin Budget Points to Another Lost Decade for Russia, ‘Nezavisimaya Gazeta’ Says

Paul Goble

            Staunton, October 4 – The three-year budget the Russian government has proposed suggests that Russia will continue to stagnate, poverty will continue to grow, and the country will fall further and further behind the developed world and even its nearest neighbors, according to the editors of Nezavisimaya gazeta.

            In a lead article today, the editors of the Moscow paper say that “in Soviet times, the authorities promised citizens constant growth in well-being and they misled them. But the present-day powers that be are promising instead an increase in poverty and they aren’t misleading anyone” (ng.ru/editorial/2017-10-04/2_7087_red.html).

            “Over the last nine years, the Russian economy has risen by a total of 1.7 percent,” or less than 0.2 percent per year, the editors continue.  “Now it is being suggested that the country agree to a second ‘lost decade,’ in the course of which Russia will lag behind the rest of the world in terms of rate of development.”

            In the decade just ended, China has surpassed Russia in terms of pay, and Kazakhstan in terms of consumer spending.  The level of poverty in Russia shot up, and Russia’s GDP fell to 74 percent of what it had been in dollar terms.

            If the new budget is adopted and followed, by 2020, China, India and turkey will pass Russia in terms of GDP per capita. And by 2035, Russia is likely to fall from being the sixth largest economy in the world to somewhere between tenths and fifteenth. Production per capita will fall from 52^nd in the world to 65^th to 70^th place.

            The rest of the world will continue to develop just as it has in the past decade and thus leave Russia further and further behind.  Over the last 26 years, they write, the Russian economy increased “all of 13 percent” while the world GDP for that period “increased by 148 percent,” more than 11 times what Russia achieved.

            Of course, it is true that other countries have remained in stagnation for long periods of time. Argentina is one.  And “in these countries, people live, raise families, give birth to children, and go to movies, cafes, and restaurants.  Such an existence will be possible in Russia as well,” the paper says. 

            But that doesn’t mean things won’t get worse. As the economy declines relatively, tax collections will fall, and the government will cut social spending, especially if it is focused on other things.  Next year, the government plans to spend 140 billion rubles (2.3 billion US dollars) less on social needs. 

            That is in an election year: in 2019, the situation will become much worse.  According to economist Igor Nikolayev, “never yet in the 212st century has been planned such a harsh budget.” And he predicts more bad things ahead including a rise in the pension age and an end to indexing of pensions.

            Russians need to speak out against this plan, Nezavisimaya gazeta says; otherwise by their silence, they will have implicitly become complicit in their own increasingly bad future.