‘Managed’ No More

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 60^th 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.”