News » March 2, 2005

‘Managed’ No More

Russians take to the streets to protest the privatization of their social welfare system.

By Fred Weir

Russian Communists protest against the bill on the replacement of social benefits with cash compensation.

Moscow—While Americans debate the potential impact of Social Security privatization, Russians are already reacting to a sweeping overhaul of their system. The protest wave began in early January, when thousands of angry pensioners in several cities blockaded roads, occupied government buildings and scuffled with police over cancellation of their traditional welfare benefits. By late February, students, trade unionists and academics were rallying over a wider range of issues, and the five-year period of social calm, often credited to President Vladimir Putin’s strategy of “managed democracy,” was in shambles.

Putin is not—at least not yet—in serious trouble. But many of his government’s draconian plans to privatize Russia’s social sphere, including housing, education, health care and public transport, have been thrown into disarray. “They may call it ‘adjustment,’ or going over to market mechanisms, but this is about slashing government expenditures and removing the life-support systems for millions of people,” says Mikhail Delyagin, president of the Institute of Globalization Studies in Moscow. “People are only beginning to realize how deeply affected they will be by these changes. We can expect much bigger protests in the months to come.”

The trigger was a new law that kicked in January 1, replacing a multitude of in-kind benefits enjoyed by Russia’s 30 million pensioners with a single cash payment. The canceled services included the right to ride free on public transport, discount medicines, access to no-cost health clinics, housing subsidies and a range of other privileges. Retirees, who took to the streets in rolling protests that were still going on in late February, complained that the compensation added to their pensions barely made up a fraction of what they’d lost.

The reform also impacted millions of others, notably disabled people who lost access to free wheelchairs, prosthetics and therapy, guaranteed since Soviet times.

Russian media reported on a spate of assaults by elderly passengers upon bus conductors who demanded fares, highlighting the rage felt by some at losing the right to ride for free. “Many older people will feel isolated now, like they can’t afford to travel to visit family and friends like they used to,” says Valentin Makarov, an 84-year-old World War II veteran.

Makarov did the math and joined hundreds of others to blockade the main road into Moscow from the suburb of Khimki in January. He says his monthly pension of 2,300 rubles (about $80 U.S.) was increased by 450 rubles ($15 U.S.). But his apartment maintenance charges alone jumped by 35 per cent, or 300 rubles ($10 US), and he must now pay 600 rubles twice a month for medicine he needs. “If we have to pay to use public transport, that will be another 600 rubles a month at least,” he says. “There is no way to make ends meet, and the few things we could rely on to be free have been taken away.”

According to a calculation made by Communist lawmakers, the full value of promised state benefits to some 100 million needy Russians totaled one and a half trillion rubles, or about $50 billion U.S. But last year only 550 billion rubles (about $18 billion U.S.) was actually paid out to fund the system. “The budget for 2005 provides only 160 billion rubles (about $5 billion), or more than a threefold reduction,” says Vladimir Kashin, a leading Communist deputy of the Duma, Russia’s parliament. “We are looking at a full-scale attack on the needs of the majority of people.”

Russian authorities were quick to blame opposition agitators for the unrest. But, ironically, even the powerful Communist Party—whose membership is mainly pensioners—appears to have been blindsided by January’s initial wave of protest. The Communists and other opposition groups, such as the liberal Yabloko party, are now involved and planning coordinated nationwide actions.

The Kremlin has reacted by criticizing the government for its “clumsy” implementation of the reforms, increasing cash payments and temporarily restoring some benefits. It’s offered special compensation boosts for war veterans, whom Putin hopes will join him on Red Square for a gala celebration of the 60th anniversary of the USSR’s victory over Nazi Germany on May 9. The vets have threatened a boycott, which could be politically devastating.

And discontent appears to be spreading. Students have held their own rallies over a proposed law canceling all military deferments that the Kremlin hoped might stave off the Russian army’s collapse. After the protests, the defense minister postponed the measures until later this year. “There’s a lot of ferment among students now, and not just over the threat of being dragged into the army,” says Oleg Orlov, an organizer for the Students Defense League, one of several radical movements said to be proliferating on Russian campuses. “It’s getting impossible to obtain the free education guaranteed in the Russian constitution. Everything is being commercialized, with the result that poor students are being forced out. We could see students pour into the streets this spring, just like they did in Ukraine.”

Scholars have demonstrated over meager state support for science, professional drivers rallied over the rising cost of gasoline, and a quarter million Russians took part in a Communist Party/trade union-sponsored “day of protest” on February 12 to demand the reforms be rolled back. A January survey conducted by the Defense Ministry found that 80 percent of military personnel are “dissatisfied” over the reforms, which canceled their free rides on public transport and curtailed their access to food rations and other non-cash benefits.

The Kremlin says it’s still on track to introduce a sweeping housing reform at the beginning of next year—potentially far more explosive—that will privatize most municipal services and require tenants to pay market prices for utilities and maintenance of their flats. Last year, the pro-Kremlin majority in the Duma passed Russia’s first-ever eviction law, so people can now be dispossessed for chronic non-payment of heat, electricity or other bills.

“People are expecting the worst,” says Valery Fyodorov, director of the state-run VTsIOM public opinion agency. “The reforms have barely begun, but all our polls show that people are already deeply suspicious. They don’t expect anything good from government, and this is a very big problem.”

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• Reader Comments

  Oh man, if the wacky russians who are being oppressed my Putin are protesting the change of their social welfare system, what will happen if “free” americans are forced to change with the cronyism of the American political system. Oh let’s see, what multi-national company privatizes Social Security, Lockheed martin! So defence contractors are going to be holding onto OUR money for us, what happens when Haliburton or General Defence pulls an Enron. Oh wait the’ve got so many kickbacks from Bush & co. that they won’t ever go under. Even if they might, the gov’t will give them more money to baill them out. At least the russians and the americans will be on the same monitary level soon, then we can start the Cold War all over again.

  Posted by skip on Mar 3, 2005 at 12:05 AM

  It’s significant that, as the article says, the main Communist constituency is pensioners, past their ability to improve their lives by working. It might have been smarter to phase out subsidies for the old by simply identifying an age under which no new freebies would be given and allowing time to do the rest. As for free education, free utilities, and the rest, I can’t help but think that there was a failure of mathematical calculation generations ago. Maybe that would have dispelled the idea that any government could give away so much unless it was in charge of an incredibly wealthy society from which to pay for it all. Of course, Russia is incredibly rich, but only in the sense of potential, being still a developing nation with a raft of yet-to-be-tapped resources. If I accepted Marxist theory (which I don’t much, except for the idea of alienation among workers who cannot prosper from their labor, which I think Marx simply observed as easily as we can all observe it), I might say that when the Bolsheviks tried to hop over the capitalist wealth-building stage and straight into sharing the wealth, the promised benefits of the Revolution became impossible. Seems like a clear case of chickens coming home to roost, most unhappily for those like the old or handicapped who will now be left wanting. That single cash payment will be gone in no time, I’d be distressed too.

  Posted by Kuya on Mar 3, 2005 at 6:09 AM

  Are you joking? Russia is NOT incredibly rich, there is no magic number to stop “freebies” and there were no free utilities. Soviets paid for everything; rent, food, electricity. Unless of course you were a high up member of the graft ridden government. But back to the beginning. Russia has SOME natural gas, SOME oil reserves (smaller than Texas’ before the pumping began) and a whole lot of wet timber that is so knotty and warped, the only people who want to buy it from them is the Japanese. Marx was a member of the group of people he argued for (the workers) so was Engels, so was Lenin, so was Kruschev, so was Breshnev… So yeah he kind of observed it. Every day of his life. Anyway Marxism was not designed for a nation as large as the USSR, it was for Germany, Marx himself siad it wouldn’t work in Russia(too many ethnic groups). But the point is: you repeat what you hear from people and TV(boob tube) and movies that were made in the US or other western nations (propaganda). Putin does it and it’s bad, Bush does it and he is a great leader (HA!) BAAAAAAAA

  Posted by Skip on Mar 3, 2005 at 5:46 PM

  Oh my god, I can’t believe I missed that. You used the phrase Communist constituency to describe Russians. Its not the 60s anymore.

  Posted by skip on Mar 3, 2005 at 5:48 PM

  Did I offend you in a past life, dude?

  Why would you think I see Bush as a great leader?

  Never mind, clearly you’re on the warpath. I hope you’re using all that energy to enlighten your neighbors, as well as showing your fangs to me.

  Do you yell a lot when you talk to people?

  Posted by Kuya on Mar 4, 2005 at 12:09 AM

• extended discussion >>>Continued...

  Discussions with more than 5 comments are continued on our special discussion page to encourage continuity and ease of use. There are currently 7 posts.

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