#6041
#6
Novye Izvestia
January 25, 2002
WE'VE BEEN STANDING STILL SINCE SEPTEMBER
But television news isn't going to tell us that
Russia is facing some serious problems ahead
Author: Otto Latsis
[from WPS Monitoring Agency, www.wps.ru/e_index.html]
THE RUSSIAN ECONOMY IS IN TROUBLE. UNLESS THE SITUATION IS
ALLEVIATED SOON, THE MOST IMPORTANT ACHIEVEMENT OF THE PAST DECADE
WILL BE IN JEOPARDY. THE MATTER CONCERNS RUSSIA'S ABILITY TO SERVICE
FOREIGN DEBTS WITHOUT NEW LOANS, AS WELL AS RUSSIA'S PROSPECTS OF
ECONOMIC GROWTH.
The Russian economy is like a railway carriage pushed into motion
and left to roll along all by itself. With no engine, the carriage is
running out of momentum, moving more and more slowly.
Russian exports did not grow by any noticeable margin in 2001,
and imports showed a 20% rise. In the wake of the default of 1998,
exports were at double the amount of imports, and a considerable
positive trade balance still exists. Instead of growing, however, it
has been falling fast. Unless the situation is alleviated soon, the
most important achievement of the past decade will be in jeopardy. The
matter concerns Russia's ability to service foreign debts without new
loans. Last but not least, the growth of gold and hard currency
reserves has stopped after two years of rapid accumulation. The gold
and hard currency reserves has even gone down somewhat.
According to American methods, depression becomes a hard fact of
life after absolute reduction of the GDP over two quarters of the year
in a row. Situation in Russia is not that bad yet. The momentum of
growth over the last three years and the accumulated reserves are such
that barring something entirely unexpected, there will be no collapse
this year, no matter what. The previous favorable trends are over,
however; it is time we began worrying about the future. It is clear in
any case the period of easy money which permitted resolution of all
conflict situations without much trouble is over.
Here is one such situation. According to the latest statistics
(for October 2001), the average salary of teachers throughout Russia
amounted to 1,862 rubles a month, or just over $60. The sum amounts to
53% of the average wage of Russian workers in general, and is only 338
rubles above the average subsistence minimum for the third quarter of
2001. It follows that average teachers can only feed themselves, and
no one else. This is almost the worst indicator in a decade.
The government's attention to teachers and other state-sector
employees is therefore understandable and justified. The president
once promised to double salaries of state-sector employees in 2002. It
would not have solved the problem in its entirety, of course, but
would have made it easier to tackle in any case. Had it happened, that
is. Unfortunately, certain details became known after the president
made the promise.
Funding for a significant increase in the wages of state-sector
employees is specified in the federal budget only for the categories
of employees funded by the federal government. Teachers, health
workers, and similar professionals are paid from regional budgets, and
the recent tax amendments are going to take more money from the
regional budgets than they will give. In other words, Moscow told the
regions to raise salaries of state-sector employees and decided that
enough was enough. This is what its taking care of state-sector
employees was restricted to. There are many regions where specialists
have already made all necessary calculations and reached the unsavory
conclusion: they will be lucky to manage a 20% rise in salaries at
best, and doubling is out of the question. Besides, inflation in 2001
was 18% instead of the expected and promised 12-14%. It certainly
seems that something similar is going to happen in 2002. Compare the
promises with reality.
This is not a new problem at all, but this government in the last
two or three years had the best chance in the last 30 years of making
significant progress in the matter. The chance was lost - or used
ineffectively. Things are going to deteriorate, demanding more and
more effort to improve them. In order to live up to high public
expectations, the government will have to overcome many more
difficulties, political difficulties among them.
There is, however, another solution. We may recall the Vremya TV
news program of the Brezhnev era: when the citizenry didn't really
know how things stood.
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