Tuesday, March 30, 2021

Kremlin Should Be More Worried about Inflation than about Navalny, Tarasov Says

Paul Goble

            Staunton, March 28 – Rising prices and the disappearance of some goods from food stores has led many Russians to conclude that a wider variety of products than just sugar and oil are in short supply and will soon disappear. Such conclusions, Aleksey Tarasov says, are a greater threat to the Kremlin than Aleksey Navalny is.

            The Novaya gazeta commentator says that in advance of Navalny’s return, the Kremlin decided to slow or stop prices rises for those two commodities. But its approach didn’t work because of the nature of the producers and the sellers and because Russians drew the wrong conclusions (novayagazeta.ru/articles/2021/03/26/finita-dolche-vita).

            Sugar production is dominated by three large companies, and they are only too happy to have prices set at a level where their profits are guaranteed, experts with whom Tarasov spoke say. But supermarkets are seeing demand rise, and their attitudes about price controls are entirely different because if they are in place, they can’t raise prices even as demand increases.

            And demand for products that have already seen price rises will continue to go up because Russians on the basis of their historical experience assume that means that either prices are being set unjustly by outside forces or that the goods in question are in short supply and are buying things up to be prepared.

            Had the government not tried to freeze prices for these key foodstuffs, it might have faced protesters in January with very specific demands rather than the release of Navalny which no one in fact expected, Tarasov says. But now it faces a new and larger problem: people assume goods are going to disappear, and they are even more angry about that.

            That is the result of the Russian government’s relatively clumsy approach to controlling prices; and now a situation has emerged in which the Kremlin should be far more worried about new inflation than about anything Navalny may do. Russians who face rising prices and empty shelves are a more serious problem than those who want an opposition leader released.


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