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RUSSIA: Falling living standards



Commenting on the last posting about Russia, from Moscow Cameron Sawyer says " 5-month growth figures for Russia are 6.1 percent, not .1, the highest rate in Europe". [It may well have been a typo. RH]. Cameron continues: "Living standards are definitely rising, and rising faster than the rate of GDP growth. I cannot imagine how anyone, no matter how hard he tried, could come up with an argument that they are falling. That is because wages are rising faster than the other costs, as a result of pent-up demand for labor and labor shortages in some industries. Perhaps falling living standards in the article refers to pensioners. The boom is not reaching them, as I said before. That is the dark side of the Russian economic boom. The extended family system in Russia is highly developed, and so pensioners whose children and grandchildren are benefiting from the boom are doing fine. But those who are alone, for one reason or another, live miserably.For anyone interested in the statistical details of the Russian economy, there is a good World Bank report at
http://www.worldbank.org.ru/ECA/Russia.nsf/ECADocByUnid/0CF40EF2E501A275C3256CD1002B7D90/$FILE/RER5-Final-English-18-03-03.pdf

Russia is a democracy and the government has a lively, noisy, and active opposition. That is as it should be. The opposition, particularly the Communists, are doing their best to highlight any real or invented weakness of the government to improve their chances in upcoming elections. That is also as it should be. But imagine if a foreigner formed his idea of what was going on in America in 2000, for example, by listening to Republican campaign speeches. This foreigner would have got the impression that the country was on the verge of bankruptcy or revolution, with millions of people starving and the moral fiber of the country completely eaten away. You should regard Communist campaign speeches in Russia in 2003 in the same light. One should search such sources for grains of truth, but take the overall content with a big helping of salt.

The article mentions that Putin is far ahead of others in opinion polls. That should tell you what the broad mass of people feel about the direction of the country. The mood, notwithstanding the content of Communist campaign speeches, and notwithstanding the natural Russian inclination to complain, is extremely good".

RH: We would be interested in what Cameron can tell us about the reaction to Putin's state visit to London.

Ronald Hilton - 6/27/03


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