Friday, April 29, 2011

Window on Eurasia: Little Possibility of Social Explosions in Russia, Sociologist Says

Paul Goble

Staunton, April 29 – At the present time, Lev Gudkov, the head of the independent Levada Center polling agency says, there is “neither the possibility nor the potential” in the Russian Federation for the kind of social and political explosions which continue to occur throughout the Arab world.

In an article on the “Osobaya bukhva” portal yesterday, Gudkov says that “the Russian middle class, despite concerns about losing everything is loyal to the regime” and generally lacks any capacity for solidarity and action,, preferring “as before” to place its hopes in the state (www.specletter.com/obcshestvo/2011-04-28/print/osnovnaja-massa-naselenija-rossii-ochen-konservativna-depressivna-i-bedna.html).

And “the main mass of the population,” the sociologist continues, is not likely to rise in protest either because its members are “very conservative” and “depressed” -- even if they are also “poor” because like the middle class they fear losing what they have more than they hope to achieve something more.

According to the pollster, “about 80 percent of [the Russian] population considers that one should not trust people around them and that one must be very careful [even] in talking” about problems. Consequently, “they believe and are concerned only about those closest to them” rather than identifying with a larger group or class.

All this makes the situation in Russia very different from that in the Arab world, Gudkov argues. “There, the breakthrough has been achieved on the basis of the appearance, at least in Egypt, of educated people, [whom one could] conditionally call the middle class [and who] did not find a place for themselves or see a future for themselves under the ruling dictatorship.”

As a result, and precisely because of “modernization processes,” groups were formed which felt themselves without prospects and who thus decided to act to advance their own collective interests against those of the state. But the situation in Russia is “different,” and thus, Gudkov says, he “does not see” many chances for “mass uprisings and social explosions.”

And this is the case, he continues, even though there is “chronic dissatisfaction” among many groups. That is because while they are unhappy about this or that situation, most Russians are far more willing to put their trust in the state to solve their problems than they are to trust others in society and work together to improve conditions on their own.

Many in fact, “do not even imagine how a better life might be possible,” Gudkov says. “They understand Soviet life and Soviet forms of organization.” The ongoing degradation of social infrastructure angers them but what they want is for the state to solve their problems. As a result, their dissatisfaction “is not destructive for the regime.” Rather the reverse.

In principle, the pollster continues, what is called the middle class could be a source of change, “if it really understood the growing threat to its existence” – “instability, the absencxe of new institutions, independent courts, media freedom .. and access to political activity,” “all that Russians “today are deprived of.”

“But the risks [involved in seeking those things] are too great in the consciousness of this narrow stratum, [and] therefore opportunism arises,” an opportunism limited both by fear of losing one’s position and the possibility of leaving rather than changing the situation inside Russia itself.

Gudkov then focuses on what he calls “one really interesting problem” – the passivity of university students. On the one hand, he says, many of these people are getting many of the things they want; and on the other, many are opportunists, something that “paralyzes political solidarity and the political activity of this group.”

Were a protest to arise among them, the Levada Center leader says, it would “however strange this might seem take the form of conservative-nationalis[m].” Many students, “especially those from the provinces,” are filled with “nationalistic resentments” and envy” for “rich America and the Russian oligarchs.”

Moreover, he says, many of them suffer from “a complex of incompleteness caused by the collapse of the USSR, a sense of national incompleteness,” most strongly expressed outside of the capitals because people there have fewer prospects, their instructors are from soviet times, “and there are very few new people and new ideas.”

The Russian state is inclined to “support and provoke such attitudes through a system of propaganda and instruction,” offering “an eclectic mix of old prejudices, Orthodoxy, imitation fundamentalism, and ideological boilerplate of Soviet times” rather than promoting new ideas and new directions.

An instructive finding of polls in this regard, Gudkov says, is that 78 percent of the population of the Russian Federation considers themselves to be Orthodox, but only two to five percent go to church regularly and only about 27 percent believe in God, in salvation, and in eternal life.

Thursday, April 28, 2011

Window on Eurasia: Russians No Longer View Orthodox Church as Separate from the State, Lunkin Says

Paul Goble

Staunton, April 28 – Most Russians do not consider the Russian Orthodox Church of the Moscow Patriarchate as separate and distinct from the Russian state, a perception that reinforces indifference to matters of faith and that has led many to ignore or disparage the first signs of a genuine religious revival, according to a leading specialist on religious life in Russia.

Roman Lunkin, the director of the Institute of Religion and Law and a leading scholar at the Institute of Europe of the Russian Academy of Sciences, says this is part of a larger problem: “Religion and chiefly Orthodoxy are conceived in the mass consciousness of Russian society in an irrational and contradictory way” (www.politjournal.ru/index.php?action=News&tek=9555).

“For the majority of [Russians], it is customary to view Orthodox leaders and the Russian Orthodox Church as an institution as a constituent part of the official chronicles on federal television channels and in the press,” Lunkinn says, but when the Church uses these ties to push its agenda, many Russians become angry.

That is because, Lunkin says, Russians are “accustomed to consider themselves as Orthodox and with satisfaction listen to speeches by the Patriarch and the bishops that ‘we are all baptized into Orthodoxy,” but they do not want the Church to try to extend its influence, viewing that as a form of “dangerous clericalization.’”

For most of the post-Soviet period, Orthodox leaders have supported this contradictory view, but “independently from the declared basis of the consteitutional system and the declarations of Orthodox hierarchs that the Church does not want to again become a government church, Orthodoxy has always ceased to be viewed as separate from the state.”

Since 1991, Russian officials and commentators have routinely declared that Orthodoxy is “the preserver of the richness and values of Russian culture and spirituality,” thus replacing the term “people” in the oft-repeated Soviet slogan that “’art belongs to the people’” and thus putting the Church in a complicated position.

Evidence of this is provided in the way in which the media oppose state-supported Orthodoxy and unacceptable “sects,” and the willingness of the Russian people to accept that division, a willingness that shows that “neither in society nor in the media is there an understanding of what faith is, how one can believe and what is religious practice.”

Even more important, all this is evidence of a lack of interest in the faith itself and in the fundamental aspects of the Orthodox religion and a willingness of many Russians to view Orthodoxy iin conjunction with “a semi-pagan culture’ with “astrological-occult” aspects including “superstitions, fortunetelling, diets, and in general about how religion must help.”

This “folklorization of Orthodoxy” is not the result of any “ill intention” or popular inattention. Rather, “under conditions of the existence of the polar opposites” of Official Orthodoxy and sects, “genuine faith does not interest anyone;” and consequently, “what develops is precisely folklore.”

The situation has somewhat improved in recent years, Lunkin says, and he points to the influence of Patriarch Kirill as being a positive one in this regard, an especially interesting comment given that Lunkin has often been criticized by Orthodox hierarchs for his critical attitude toward the Patriarchate.

Evidence of this improvement, of a greater concern with faith rather than form, Lunkin suggests, is to be found in a place many Orthodox hierarchs may not like: in the dissent of the Izhevsk “free thinkers, three priests who declared about their refusal to recall Patriarch Kirill in their prayers and who accused the Church leadership of tight connections with the powers.”

Nonetheless, it is still true, Lunkin says, that “the number of practicing believers as before remains extraordinarily few, and besides this, religious life consists not of Orthodoxy and ‘the sects” but of the most various movements and confessions,” often far beyond Orthodoxy or even Christianity.

“The number of believers who are becoming part of the Russian Orthodox Church in a genuine way is slowly growing, especially to the extent that the Church is becoming more open, more willing to talk about its problems and involved in social projects and the development of parishes.”

Window on Eurasia: Central Asian Countries May Leave CIS in the Coming Decade, Moscow Analysts Say

Paul Goble

Staunton, April 28 – The Russian-led Commonwealth of Independent States will survive this decade at least, but it will likely have fewer members, with the countries of Central Asia the most likely to exit because they “will make a different geopolitical choice,” according to a leading Moscow specialist on the post-Soviet region.

During a video conference between scholars and officials in Moscow, Tbilisi, Almaaty, Bishkek, and Chisinau, Aleksey Vlasov, director of the Center for Post-Soviet Research at Moscow State University, said that “the nucleus” of the CIS will survive but some of its outlying members will likely leave (www.ia-centr.ru/expert/10364/).

Vlasov mentioned three “factors” which he said would prevent the complete unraveling of the CIS: “the absence of visas, Russian as a common language of communication, and the still existing trade and economic preferences in relations among the [Commonwealth member] states.”

“If the three components disappear,” he continued, “the CIS as such will not exist. In this case, the CIS will be transformed into a club of interests, the presidents will meet twice a year, some questions will be discussed, but not more than that. While these exist, it is necessary to add to them certain motives so that the system will not weaken but be strengthened.”

Another participant in the video conference, Sergey Mikheyev, the director general of the Moscow Center of Political Conjuncture, agreed. He said that in his view, the CIS “in one form or another will be preserved over the course of the next decade because there exist definite preconditions for this.”

There are actually many reasons for “integration within the framework of the CIS,” Mikheyev said. “The question is in how deep this integration can be. As far as the membership is concerned, then it certainly can be changed, but this to a significant degree depends on external factors because around the perimeter of the CIS, destructive processes are taking place.”

As far as the countries of Central Asia are concerned, the Moscow analyst said, “the question could be put in a still worse form.” That is because those countries are “not simply reorienting themselves” but because outside forces are promoting this “in a quite dangerous key.”

The remarks of Vlasov and Mikheyev represent a remarkably open acknowledgement by those close to the powers that be in Moscow that the CIS is hardly the vibrant organization Russian leaders often seek to present it as. But more than that, their words point back to the way in which the CIS itself was in fact organized.

The CIS was not created at Belovezhe as many now think. Instead, the actions of the presidents of the three Slavic republics prompted the leaders of the Central Asian Muslim states to meet and consider forming their own organization. Fearful of what that might mean, Russian leaders then organized a meeting in Kazakhstan to link the two groups into the CIS.

The comments of Vlasov and Mikheyev this week suggest that 20 years on, the organization has not been able to overcome that original division effectively and that it, rather than the withdrawal of Georgia or the assumption of associate status by Turkmenistan, is likely to be the defining vector in that organization’s future existence.

Window on Eurasia: Regional Paper Considers Impact of Russia’s Possible Disintegration on Samara Oblast

Paul Goble

Staunton, April 28 – Many analysts in Moscow and the West have talked in general terms about what they see as the probable disintegration of the Russian Federation into a number of independent states, but a Samara paper this week has taken the next step and discussed what independence would mean for that oblast.

And while this article’s prognostications are no more certain of coming true than those who discuss this possibility in more general terms, they are interesting and important for what they say about how ordinary people are thinking about such outcomes and what their views say about their current expectations and fears.

In an essay in the Tol’yatti paper “Ponedel’nik,” Aleksandr Gremin says that he is not calling for the disintegration of Russia – that is a criminal offense – but only seeking “to analyze what awaits Samara oblast if in the country for one reason or another begins a parade of sovereignties” (rus.ruvr.ru/2011/04/26/49421674.html).

As he points out, “predictions of Russia’s disintegration into regional principalities, khalifates, republics and confederations” are nothing new. They have been a staple of articles from “serious institutes” in the Russian capital and abroad, with most disturbing prognoses eing “the separation of Siberia from European Russia and a split along the Volga-Urals line.”

If the UN is correct, Gremin continues, by 2030, the population of Russia will “fall to 118 million” and “this means that in Siberia and in the Far East the population will be less than would be needed to keep their territories within Russia.” The North Caucasus will likely have already left, “in a Kosovo scenario,” as soon as “the river of money from Moscow runs out.”

Indeed, given the international community’s interest in the natural resources of the Russian lands, the Kosovo “scenario” is the most probable way the disintegration of Russia will be arranged, with “local referend[a], unilateral declaration[s] of independence, [and] recognition of sovereignty by the key powers, the US, China and the European Union.”

“Kaliningrad is already prepared to run to Europe,” Gremin says, and “the rich national regions like Tatarstan and Bashkortostan are already anticipating the fruits of [such future] independence” from Moscow.

While this process could be violent, it might be peaceful as was the disintegration of the Soviet Union 20 years ago. “The heads of the subjects of the federation could meeting somewhere in Gorki, sign something like the Belovezhe accords, and return to their gubernias already with the status of presidents, general secretaries, beloved leaders, and emperors.”

“You don’t believe this?” Gremin addresses his readers. “But this is precisely what happened in 1991!”

In such a scenario, Samara oblast, he continues, would occupy a “special” position. Samara is a wealthy region, “and up to 70 percent of the taxes collected there go to Moscow.” As a result, “many suppose that with such resources, we [Samarans] having acquired independence would live as the rich, full and happy.”

But Gremin argues, those who think so are mistaken. “Independence would not work in Samara oblast’s favor,” and “here is why.” On the one hand, Moscow would not want to give us up, and on the other, very quickly, “other strong young states” would “immediately become interested in us.”

“Look at a map,” the journalist suggests. Samara would find itself in that event wedged between “one Islamic world – Kazakhstan, Turkey and Iran – and another Islamic world Kazan and Ufa.” Neighboring Orenburg, “also a Russian area rich with oil and gas,” would find itself “in a similar situation.”

As a result, “Samara oblast will never be a self-standing independent state.” Instead it will be fought over by Moscow and “a Tatar-Kazakh alliance.” Indeed that has happened before and “more than once.” And “all our cities – Samara, Saratov, Orenburg and Stavropol – were founded as fortresses, as fortified regions and bases for the conduct of military operations.”

“In the medium term historical perspective,” Gremin suggests, “Samara oblast would automatically fall into the sphere of interests of the Islamic world and territorially would be included apparently within Tatarstan and not Moscow – in part because we the local population already today do not like the Moscow occupation regime and often spend weekends in Kazan.”

Can such a scenario be avoided? Gremin asks rhetorically, and then he observes that “the majority of researches are convinced that it already cannot be. In the ‘blessed’ [first decade of this century] powere was occupied already by others than those that were needed” for an alternative future.

The journalist’s concluding advice to his Russian readers is “Learn Tatar.”

Wednesday, April 27, 2011

Window on Eurasia: Plan to Build All-Russian Muslim Body around New Tatarstan Mufti Runs into Trouble

Paul Goble

Staunton, April 27 – The plans of some in Moscow that the center could build an all-Russian Muslim organization around the new mufti of Tatarstan and thus weaken both the two other Muslim bodies with such pretentions, the Union of Muftis of Russia (SMR) and the Central Muslim Spiritual Directorate (MSD), have run into trouble before they could take off.

On the one hand, boosting the position of the Muslim leader in Tatarstan has led the authorities in Kazan to adopt an even more Islamic, not to say Islamist, position in their public appeals. And on the other, the election of a new mufti has led to a split in the ranks of the Tatarstan MSD’s congregations with some breaking off to form a new MSD of their own.

Following the election of Ildus Fayzov as the mufti of Tatarstan two weeks ago, Roman Silantyev, a specialist on Islam with close ties to the Moscow Patriarchate and notorious for his attacks on SMR head Ravil Gainutdin, played up the idea that Fayzov could become a paramount leader of Islam in Russia (www.interfax-religion.ru/islam/?act=dujour&div=374).

Silantyev’s idea was based on Fayzov’s declaration that the Tatarstan MSD of which he had become the leader would not be part of the SMR even though Fayzov’s predecessor Gusman Iskakov had been vice president of this organization “on his own initiative and as a private person,” the Russian Islamic expert said.

Moreover, because the Tatarstan MSD has numerous parishes beyond the borders of that Middle Volga republic and not just in adjoining areas, Silantyev continued, Fayzov is in a position to present himself as “the leader of an all-Russian Muslim structure,” one which already controls, according to Silantyev, a fifth of all the Muslim congregations in Russia.

As Silantyev points out, the Russian government has its problems not only with the SMR and Central MSD in Ufa – the North Caucasus Muslim organization does not play an all-Russian role – and because Moscow is disappointed in the results of its recent effort to create an all-Russian Muftiate up to now. Consequently, the Kremlin “can begin” to look at Fayzov.

The Russian expert outlines some of the reasons for what he calls “a cooling of relations” between the SMR and Kazan, including issue of Wahhabism, ties with the Central MSD and Talgat Tajuddin, and the fact that an SMR leader took the lead in opposing Fayzov in the run up to the mufti election in Kazan.

Silantyev’s suggestion, which almost certainly reflects the ideas of many in Moscow and especially those close to the Russian Orthodox Church, has run into difficulties for reasons that he and others should have anticipated, reasons that reflect both the nature of Russian political life and the nature of Islam.

If Moscow would like to see another center of Islamic administration in the Russian Federation, establishing it in Kazan has the potential to create a serious problem for the center because it gives the leadership of the Republic of Tatarstan yet another lever to advance itself as spokesman or at least bellwether for all the non-Russians of the Russian Federation.

That is because Kazan can now, as it is doing, present itself as a spokesman for Islam too. On Monday, for example, Tatarstan President Rustam Minnikhanov noted in a message to the World Congress of Tatars that “religion plays a big role in the preservation of national identity” and that Kazan is “concerned” about the situation of Islam in other parts of Russia.

Islam, the Tatarstan leader continued, is “the foundation of Tatar culture” and consequently, when today “mosques in regions of Russia are passing over into alien hands which do not very much strive to preserve our Tatar traditions, the traditions of our ancestors, it is necessary to focus attention on this (www.islamrf.ru/news/russia/rusnews/15835/).

But perhaps a more immediate if ultimately less serious problem for the Russian authorities is that the Tatarstan MSD is now at risk of disintegrating into two or more smaller MSDs, with Muslims in Almetyevsk declaring today that they do not want to subordinate to the Tatarstan MSD of Fayzov (www.interfax-religion.ru/islam/?act=news&div=40530).

Because the MSD system has no canonical basis in Islam – such institutions are a political-administrative convenience for Russian officials who would like Islam to be a church like Orthodoxy – any parish can decide to opt out of an MSD whenever it likes, at least from the point of view of Islamic law.

And in this case, it appears that local Muslim leaders, at least some of whom opposed Fayzov’s election and his increasingly active program, have decided that the most effective way to register their objections is to withdraw. If they do and if others follow, Fayzov may not have the base that Silantyev and others hope for.

Window on Eurasia: North Caucasian Reminds Russians Moscow is Subsidizing More than the North Caucasus

Paul Goble

Staunton, April 27 – Russian nationalists are angry that Moscow is subsidizing the Muslim North Caucasus, but a North Caucasus analyst has reminded them and everyone else that Moscow is also subsidizing other and predominantly Russian regions as well, something he suggests the nationalists should be thinking about as well.

On Saturday, the Russian Civic Union and the Front of National Salvation organized a demonstration in Moscow to call for an end to Russian government subsidies to the North Caucasus. About 400 people listened to speakers denounce Russian spending in that restive region (www.kavkaz-uzel.ru/articles/184396/).

One of the participants in that demonstration, Viktor Sobolyev of Vladimir Zhirinovsky’s Liberal Democratic Party of Russia (LDPR), said that his party was the only one in the Duma which has constantly raised the issue of Russian money flowing into non-Russian portions of the country and wants to see it go to Russian regions instead.

But the meeting was about more than just Russian money supposedly going to waste in the North Caucasus. It also was about corruption, and one participant told Kavkaz-uzel.ru that he fully agreed with speakers there that “’a fish rots from the head’ and that corruption begins here [in Moscow] in the highest echelons of power.?

One North Caucasian commentator, political scientist Ruslan Martagov said it was completely understandable that Russians were concerned about the flow of money to the North Caucasus and to corruption there. “How can one explain such large transfers … to simple people” when there are many worthy projects elsewhere in Russia that remain without funding?

And such ordinary Russians, he continued, are outraged by the corruption in the North Caucasus, although most of them recognize that “the corrupted Kremlin has given birth to a corrupted elite in the North Caucasus It has given it birth and it is feeding it as well.” Over time, this will lead to more inter-ethnic tensions.

That is because Moscow has the opportunity to start up a new conflict in the North Caucasus if its own position becomes shaky, and when it does so, the political scientist suggested, “in the eyes of society, this will be completely justified,” an attitude that makes questions about funding the North Caucasus potentially serious.

But another North Caucasian expert, Aslambek Paskachev, an academic who heads the Russian Congress of Peoples of the Caucasus, said Russian nationalists “should turn their attention to the Far East and the Volga region which are getting more subsidies than the republics of the Caucasus” because of the way in which the Russian system is now arranged.

And as far as corruption is concerned, “then in the North Caucasus, it is just the same as it is everywhere else.” Because that is the case, the holding of the Saturday’s meeting, he suggested, prompts the question as to who may be trying to play “the Caucasus card for their own political purposes.”

On the other hand, Paskachev continued, “let’s consider who is feeding whom and who has fed whom at various periods of modern history.” He noted that he had worked in the Chechen-Ingush Gosplan in Soviet times and that at that time, the republic had sent 21 million tons of oil to the rest of Russia every year” – including rocket fuel for Yuri Gagarin’s flight!

That alone shows how wrong speakers at Saturday’s meeting where when they asserted that “the North Caucasus has never given the country a single scholar, artist or writer … All the income from oil went in those years into a common union pot. And our republic, using the meeting’s language, during the so-called stagnation ‘fed’ more than one region of Russia.”

“Why then is it necessary to hate all those who live in the South of Russia,” Paskachev asked. Advancing “Slogans like ‘the Caucasus for the Caucasians’ and ‘Russia for the Russians,’ the North Caucasian specialist said, “will only lead to the collapse” of the Russian Federation as a whole.

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Window on Eurasia: Despite Rising Oil Prices, Russians’ Standard of Living is Falling

Paul Goble

Staunton, April 27 – Many observers had assumed that recent increases in the price of oil and gas would boost living standards in the Russian Federation, a major exporter, but in fact, according to Moscow’s statistical agency, living standards there are again beginning to fall as is public confidence in the future.

In an article in today’s “Svobodnaya pressa,” Lev Ivanov and Dmitry Ivanov use Rosstat data to show that “despite the growing prices for oil and gas, the standard of living of Russians fell in March compared to a year earlier by 3.4 percent and that popular expectations about the future declined as well (svpressa.ru/economy/article/42654/).

Moreover, the two journalists point out, “if one looks at the graph of monetary incomes of the population offered by Rosstat, then it is obvious that this spring, the statistically average Russian lives approximately at the level of the height of the crisis, the winter of 2008/2009” and has not benefitted from the rise in the price of oil and gas.

Last month, compared to a year earlier and with inflation taken into account, the two “Svobodnaya pressa” writers say, average pay for Russians fell by 0.4 percent. They note that “the main reason” for this trend is not a decline in pay but rather “the continuing growth of the cost of living.”

And that trend in turn has sent consumer confidence tumbling. According to Rosstat, that index fell three percent in the first quarter of 2011, with only 13 percent of the population now expecting an improvement in their material position over the next 12 months, 23 percent expecting a decline, and 53 percent anticipating little change.

These figures, Ivanov and Ivanov say, put Russia in the range of the crisis countries of the European Union, Greece and Portugal, rather than with those EU states which are coming out of the recent economic crisis. And what is worse, they suggest, is that this decline in standard of living “correlates with the worsening situation of the Russian economy as a whole.”

GDP is falling as is investment, and the growth in incomes from the sale of oil and gas is not having an impact on the standard of living of ordinary Russians. Using Rosstat figures, they show that those at the top of the income pyramid are benefitting from these sales but those in the middle and bottom are not – or at least are not at a rate higher than inflation.

Given these figures, the two asked three specialists whether these figures suggested that there is “renewal of recession in Russia.” Aleksey Mikhailov, an expert at the Moscow Center of Economic and Political Research, replied that “all contemporary statistics are practically useless” because “they reflect the desires of the leaders and not real processes in the economy.”
Prime Minister Vladimir Putin has declared that GDP grew 4.4 percent in the first quar4ter and so “we will soon with surprise find out that there was no fall in the real incomes of the population and no fall in investment in the first quarter .. Just wait for Rosstat’s corrections! All will be well.”
But if one considers the real situation and not that as presented by the country’s leadership, Mikhailov continues, one sees that investment has fallen well below plans and that ruble has strengthened and will continue to do so at ever higher costs to consumers, a situation that the government is doing nothing to correct.
“Russia is a prisoner of liberal fundamentalism,” the economist says, just as it was before the crisis of 1998. And undoubtedly, this will lead to a new crisis” once the price of oil falls or when the regime commits the next “stupidity” and thus sends Russia into a tailspin.
Yevgeny Yasin, the director of studies of Moscow’s Higher School of Economics, was more measured in his language but equally damning in his conclusions. He pointed out that “citizens do not eat oil” and that as a result, income differentiation is increasing with “the majority becoming poorer.”
What is especially worrisome, he continued, is that “when there was a crisis, demand fell and prices should have fallen,” but Russia “did not make use of this situation” and introduce reforms in the economy. Inflation remains high, “and this will lead to a further decline in real incomes.”
“Growing prices for oil will not save the situation,” Yasin said, because “if the temporary extra incomes will be wasted on everyday expenses,” that will only give the illusion that things are well for a time. And “when after this the crisis comes,” the money that could have been put to good use for investment in change won’t be available.
And finally, Mikhail Khazin, the head of the NEOKON consulting company, said that the situation reflects serious distortions in the Russian economy. The price of oil has doubled but domestic production has declined, with all the oil earnings going to the rich rather than being used for social purposes.
“As a result,” Khazin says, “the incomes of the population are falling, [and] real inflation is much higher than what our government says.” Together these trends are promoting “degradation in our economy” at a rapid rate. And that can be seen in particular in the case of inflation.
If one ignores the export sector, one sees that the real disposable incomes of the population are falling and thus the sales of such goods as well. That means, Khazin says, that “the possibility of earning profits” there has declined as well. “Who then will invest in an economy in which profits are falling?”