VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
ARCHIVE OF THE OFFICIAL SITE
OF THE 2008-2012 PRIME MINISTER
OF THE RUSSIAN FEDERATION
VLADIMIR PUTIN
Sycheva Valeria
General Director of VTsIOM (Russian Public Opinion Research Center) Valery Fedorov said "people do not blame the government's socio-economic policy for the crisis."
What were the readings on the Russian social barometer when it transpired that Russia had not been spared by the economic crisis? According to the latest measurements of public attitude, the social health of people in Russia has deteriorated all along the line, with just one exception - citizens still trust the authorities. Mr Fedorov spoke with Itogi about the "crisis in the head."
Itogi: Mr. Fedorov, has the nation felt deterioration in the economy?
Valery Fedorov: Human mentality is always driven by inertia. People do not want to part with what they more or less understand and are used to. Russians were remarkably optimistic even in September and October when the whole world had already been gripped by the financial crisis, and the media was eating it up. However, in November the quantity of negative information transformed into quality, and certain tensions became apparent. The estimates of future personal well-being dropped. However, the political situation remains stable, and this is a very positive feature because people rely on their confidence in the authorities. This obvious resource of trust allows the top authorities to take radical and even unexpected steps to alleviate and localise crisis phenomena.
Itogi: But Russians have never had special trust in the authorities...
Valery Fedorov: This is true. Trust in the majority of government and public institutions remains steadily low. I mean the Church, the court of law, and the trade unions, to name but a few.
Apart from family and closest friends, Russians only trust the presidency, and what may be called a personal institution, that is, Vladimir Putin. He is being trusted, and hopes are pinned on him regardless of what position he occupies. Incidentally, as soon as he headed the Government, its prestige went up. People trust the media more or less; most of the regions trust their governors; after the August war, people have gained more confidence in the army.
Itogi: Are you saying that the ratings of the President and the Prime Minister have remained immutable regardless of anything?
Valery Fedorov: They soared after the events in Georgia in August, and did not go down one bit in autumn. When asked to name five or six politicians whom they trust most of all, our respondents invariably pick up Vladimir Putin. In recent estimates, 62% have selected him (the figure one year ago was the same). Dmitry Medvedev comes second with 45% (last January he had 34%). There is one more rating - approval or disapproval of the President and the Prime Minister's performance. Putin has 81% here and Medvedev 73%.
Itogi: Could you please comment on this?
Valery Fedorov: Russians have not forgotten the steady growth of the economy and of their personal incomes for eight years running. They give credit for this economic marvel to Vladimir Putin. Dmitry Medvedev became president a little over a half a year ago, and it does not occur to anyone to blame him for the current economic headaches. People believe that the crisis has come from the United States, and is not a result of Russia's socio-economic policy. Russia has been drawn into the crisis against its will because globalisation has gone too far.
Itogi: Is this the view of the majority?
Valery Fedorov: The majority does not understand at all where the crisis has come from. They simply note that it has arrived. But when you ask them about its reasons, they usually blame it on the collapse of the US mortgage system and investment banks. People perceive it as an event which has come from the outside as distinct from the 1998 default which was seen as bankruptcy of the policy pursued by President Boris Yeltsin and all of his Governments, from Yegor Gaidar to Sergei Kiriyenko.
Itogi: Are you registering signs of growing social tensions?
Valery Fedorov: There is no doubt that tensions are growing. First of all, allow me to repeat that social optimism is falling. Thus, last January 32% of Russians expected the life of their families to be better in a year; in November this figure dropped to a mere 20%. Nine percent expected their lives to deteriorate; now this number has grown to 22%. A turn in the tide occurred in August-September. Until then, the share of optimists was increasing every month, or remained the same, whereas that of pessimists was either stable or decreasing. This trend reversed during the autumn.
Itogi: Who will be the hardest hit by the crisis?
Valery Fedorov: The richest and the poorest will be the least hit by it. The former will not suffer much because they are few, they are too important, and their value for the state is obvious. If strategic economic empires like BasEl or NorNickel are allowed to go down the drain, whole cities, regions, tens of thousands of people, hundreds of adjacent companies and suppliers will deteriorate into a state of chaos. Besides, the richest always have a reserve airport, and none of them is going to become poor. They have contacts in the Government, and can always get help from it.
A large group of poor (about 24%-28% of all Russians), and those beneath the poverty line (another seven to ten percent) on the other pole will not suffer much because they rely on a system of government pensions, allowances, and social benefits. Their consumption level is basic, and prices of bread, milk, and tariffs are usually regulated by the state which has enough resources to support them. It has already announced its intention to again raise pensions and allowances next year.
Itogi: Apparently, the middle class will be the worst hit?
Valery Fedorov: There is a middle class and so-called medium strata between these two poles. The middle class includes people who have money for everything but a new car, apartment or summerhouse. They account for no more than 16%. All others, some 45%-55% are materially below the middle class but they are not poor. They have enough money for food and clothes, but find it difficult to buy household appliances, such as a fridge or a gas stove. They orient themselves towards the lifestyle and consumption habits of the middle class which they see as a model, and account for the majority of our population.
These people will be the worst hit by the crisis, first of all because they are too numerous and there is not enough money in the treasury to help all of them. Second, the government is used to helping the poor, not the middle class, and it simply does not have mechanisms for such aid. Third, the poor have nothing to lose, while these people have a lot at stake. They have taken out loans, given birth to children, or at least planned them. Now they have found themselves in a predicament. Their incomes have stopped growing, they have to pay back the loans, and refinancing is difficult.
Itogi: What will happen to the dream of a strong and numerous middle class?
Valery Fedorov: Tens of millions of people dream of joining it. In our surveys, many respondents list themselves as the middle class although they do not fit into the category by any criteria. We cannot afford to loose our "model class" because this is a dynamic, educated, and self-sufficient part of our society. It is a political imperative of our time.
It is necessary to set up political, social, and economic mechanisms of aid for the middle class. First, we should help it identify itself as a social community, and incorporate it into politics. As distinct from their Western counterparts, our middle class representatives are not interested in politics. They ignore elections, and stay away from political life in the belief that it is the domain of pensioners or bureaucrats. But if they do not get involved in politics, nobody is going to protect their interests.
Second, we need to adjust our credit system. America created its massive middle class with cheap long-term loans. We started developing our system with the help of Western loans, but this source has now been shut off. The Government should fill our banking system with long-term, accessible money that will be loaned to the middle class. A short-term task now is to assist those who have already taken loans but their material status has taken a turn for the worse.
Third, we should support small business. In the last few years, the economic climate has not been conducive to its development. Entrepreneurs we have surveyed pointed to the deterioration of this climate: higher taxes, raids on companies, and high rent. We should at least do what we have already decided, that is, reduce taxes on small business, and go further by lowering rent, at least on the property owned by regional administrations, and reduce the tariffs for new link-ups to energy sources.
Itogi: Will the Russian provinces suffer from the crisis more than the centre?
Valery Fedorov: The provinces vary a lot, and apart from Moscow there are about ten major regional development centres. First of all, this applies to million-plus cities which have formed the market's critical mass, such as St Petersburg, Yekaterinburg, Novosibirsk, Nizhny Novgorod, and Voronezh. They are capable of pulling not only themselves but also the surrounding provinces out of the crisis. Take Yekaterinburg. On the one hand, Urals has developed machine building and metallurgy, and is bound to be strongly hit by the crisis. On the other hand, it is a centre that does not solely depend on these industries, and it will not go down the drain because metallurgy is in a bad shape. Moreover, even in the remotest regional backwater there are a number of businesses and simply a stratum of people who will not rush for loans or subsidies but will try to survive on their own by using their own brains. We are much better off now than we were in 1996 and 1998.
Itogi: What about city-sustaining companies?
Valery Fedorov: Yes, they now pose the greatest risk. For instance, there is a single aluminum plant in the Leningrad Region's Pikalyovo District. But non-ferrous metallurgy has dropped off sharply, including aluminum, which has dropped accordingly. Where will its workers go?
The social mobility in Russia is extremely limited, and affordable rent is not available. The average American changes his place of residence five or six times in his lifetime. But moving to a new place in America is no problem, whereas here it is akin to a natural disaster. It is time to make rent cheap and accessible. This is better than preventing employers from reducing jobs by administrative methods, which only perpetrates economic inefficiency of their companies. We should create conditions for transferring workers from shut down enterprises to where they are in demand. On the one hand, we cannot prohibit big companies to dismiss people, but, on the other, we cannot afford massive lay-offs, which may trigger social unrest. We should find the golden mean here.
I believe that the regions will intensify their competition for smart businessmen that are ready to come and launch production. Before, we had a huge shortage in the workforce, but now we will have it in abundance, and governors will receive a powerful impetus for seriously improving the investment climate in their regions. This may be one of the positive consequences of the crisis if we approach it rationally instead of perpetrating panic thereby promoting the economy's funeral.
Itogi: What if large areas of the country are deserted by this approach?
Valery Fedorov: In the last 15 to 20 years, we have witnessed a tacit reduction in the number of whole villages and small regional centres, and I believe this process may accelerate. Probably, the Government should give up support of dying centres, and concentrate on the promising ones.
During any crisis much of what seemed unrealistic becomes possible and even life-saving. Many decisions which could not be made in a calm socio-economic and socio-psychological atmosphere may be made during a crisis. In this sense, the crisis may play a positive role. But this requires a bold approach and a credit of trust in the authorities, which should "see the forest behind the trees" rather than try to resort to some panic-driven short-term measures. They should keep an eye on strategic priorities to use the crisis for the nation's benefit rather than come out bankrupt having to start from scratch again.
