Is Russia Poor?

Very often in my time in Russia I have heard Russians refer to their country as “poor.” I often remind them that Russia is in fact one of the richest countries in the world, but the problem is who controls that wealth.  Still, I get sick of Team Russia Putin fans who like to use this misnomer as a propaganda tool.  To be more specific, they set up the myth of Russian poverty and then knock it down with statistics which are supposed to prove that Russia is actually doing quite well economically, and it’s all thanks to Vladimir Putin.  The problem is that poverty alone isn’t exactly the issue which causes many Russians to dream of life abroad.  The real problem is much deeper.  

To be sure, there is indeed widespread poverty throughout Russia.This is the legacy of privatization. You don’t even need to leave Moscow to see dilapidated areas which look like sets for post-apocalyptic films. And if you do go outside of Moscow you will see much more of the same, if not worse. But herein lies the first part of the problem.  

Imagine if you will, that in the United States, a country of nearly 320 million people, there was only one place where you could live in order to have a decent salary and a fighting chance at some social mobility.  Let’s imagine it’s New York.  Now let’s imagine that while you could live an extremely modest lifestyle in other cities, there are certain other cities where the price of certain staple goods are as high as New York prices. Obviously that would be a bit of a problem.  Moreover, since everyone wants to live in New York, real estate prices go through the roof.  We are all familiar with the astronomical rents and prices of real estate in New York today, but remember we’re imagining a country where this is the place where everyone who has the ability wants to move there.  Since demand would price many people out of the market for real estate in the city, they would inevitably flood  the suburbs further and further out.  Home ownership would be a pain, even without Russian interest rates which are around 12% at this point.  

This is one of the main problems of Russia, and you begin to feel it ever more acutely when you find that for several hours in the morning, you physically cannot get on the first three or four metro trains which stop at you station because there is literally no room. For me it means that morning work is all but impossible, but given the conditions of ordinary Russians I have no right to complain. And if that doesn’t sound bad enough now, just keep in mind it is getting worse.  Traffic is another issue, and this is exacerbated by people needing to commute between suburbs and a city which really wasn’t designed for private car ownership(something which is true of many European cities).  The youth organization Stopkham has gained notoriety for exposing people who park illegally or drive on sidewalks, but sometimes I can’t help but think that many of these people need to drive, and they need to park their cars, but there simply are no spaces for them to do so. In Russia, if not many other countries, it’s easy to say people shouldn’t do X, but when you consider the alternatives this reasoning sometimes breaks down.

This brings me to another point.  A friend of mine and I were once discussing a problem with a small town just outside of Moscow where several new apartment buildings stand.  These are the kind of apartments which middle class people could possibly hope to afford, but their distance from the city makes driving a necessity. Unfortunately the developers left out one little detail- parking. There was space for several towering blocks of flats, but not the parking for the cars people would need to live there. When I brought this up my friend told me about a client who paid for a parking space in her new complex and found that the “space” was literally big enough for her small car to fit just within the lines. Without spaces between this and those on either side, one would theoretically not be able to open the car’s doors.  The point I’m trying to make here is that you are almost always getting ripped off here.  Poor consumer protection laws and corruption means that you rarely get what you pay for.  Yes, Team Russia fanatics, you can be ripped off in other countries as well, but in most industrialized countries you don’t get this feeling that people are out to fuck you out of your money every chance they get.  

For the “middle class” Russians, however, the problem certainly isn’t poverty.  The problem is that your decent salary and apartment simply don’t matter.  Late last year, several banks starting with Master-Bank had their licenses revoked. As far as I know, ordinary depositors were eventually compensated, but it must have come as a shock to them, and specifically those whose pay cards were through Master-Bank. Several other banks faced revocations thereafter. The reason cited was connections to money laundering, but here you can never know what the real reason was.  Even if money laundering was the issue, which is very plausible here, one would think there was a better way to first freeze the offending accounts, then gradually deal with the bank in a way which doesn’t leave customers without access to their money without warning.  The latest rumor is that after the Sochi Olympics finish, the government will start taking out other banks. It may be just a wild rumor, but you literally can’t tell in this country and that in itself is an example of a real problem in Russia. 

The overriding problem which these events represent is the issue of massive, sweeping legislation which is imposed in a seemingly arbitrary manner. Just recently it was announced that there will be new restrictions on online shopping which will make it much harder to order goods from abroad.  The real reason? Who the fuck knows?  It’s just become a given that from time to time the government will propose, and often pass, some piece of sweeping legislation which may totally reverse previous laws and possibly ruin your shit. I don’t want to sound petit-bourgeois here, but imagine if you start some new business which gets ruined because one day the government imposes new regulations which make your previously legal operation illegal, no matter how innocuous it is?  See all the rage over Obamacare? It’s some groundbreaking, massive legislation, but it was talked about for a great deal of time and the main features were set to be implemented just last autumn. Remember all the insanity surrounding the talks about healthcare reform which began in 2009? Imagine those talks never happened. Instead, you wake up one morning in 2013 and a news story informs you that the Affordable Healthcare Act has just been passed, and you need to sign up for health insurance right now.  This is the kind of thing which happens several times a year in Russia. 

Putin campaigned on the promise of “stability,” yet it’s clear from talking to most Russians that they don’t feel the situation is stable at all.  Indeed Russia is a growing economy and it may very well be stable for the time being, but you have to remember that these are people who lived through the 1990’s, in addition to the wild changes which I alluded to above.  The effect is like waiting for the other shoe to drop; maybe things are stable and possibly improving, but you can never be sure. Tomorrow can bring disaster. True, sweeping changes can happen in other industrialized countries as well, but typically they are preceded by discussions which may last several years, or the changes are set to take effect some time after the legislation is passed.  In Russia you’ll have something like the infamous US adoption ban which smacked would-be adoptive parents upside the head out of nowhere.  In other words, this kind of legal ambush can affect people inside and outside of the country.  

I could go on for pages with more examples, but the point I’m trying to make is that when it comes to the way many people feel about Russia, poverty isn’t necessarily the central issue.  That is to say when judging Russia, the idea that it is poor is something of a red herring. The problem for many people is that they are not poor at all, and may in fact be better off than many Americans, but this doesn’t bring any satisfaction because there’s always the feeling that tomorrow could sweep everything away. And being poor here is much worse than being poor in other industrialized countries, of course.  In any case, discourse over Putin-era Russia which revolves around Russia being poor or not simply doesn’t address the real issue for most people.


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