Staunton, June 23 – No sector of the Russian economy has been hit harder by the combination of the pandemic and economic crisis than transportation, a key part of the country’s infrastructure and one whose problems must be addressed if Russia is to recover, according to Russian economist Vladislav Inozemtsev.
“On the eve of the coronavirus crisis,” he says, “the Russian transportation branch was in a relatively stable situation.” Despite problems in other parts of the economy, those for the basic segments of the transportation system were quite stable and in some cases even promising (ridl.io/ru/glavnaja-zhertva-covid-19/).
More cargo was being carried by railways, trucks and airplanes year on year, Inozemtsev says; and passenger traffic was increasing by even larger numbers. But “the coronavirus changed everything as not only the external borders of Russia were closed, but the movement of people inside the country was sharply cut back.”
In the first four months of the crisis, the number of passengers being carried by rail fell 21.2 percent and has fallen even further since. Cargo being carried by rail fell 7.2 percent compared to the same period a year earlier, reflecting both declines in exports and a reduction in production in many other branches.
Things have been much worse in Russian aviation. Russia’s airlines carried more than 90 percent fewer passengers than in the same period a year earlier. But the situation with trucks and buses has been less dire. Cargo carried by truck fell less than one percent, but passengers on buses fell by 21.3 percent. But increased competition there has put many carriers in trouble.
“It has become clear,” Inozemtsev argues, “that the chief strategy of the powers that be is to simply wait out the coronavirus,” hoping for better times ahead before increasing poverty leads to massive protests against the regime. That is especially true regarding the transportation sector. It needs massive help lest it become a multiplier of the economy’s problems.
The economic consequences of not taking action soon in this and other sectors soon, “could be quite significant.” Transportation needs government help, and the Russian economy needs Moscow to give it lest problems in that sector limit the recovery.