Three Prospective Reforms Likely to Hurt Putin with His Political Base in the Population

Tower and Building Inside Kremlin

(Paul Goble – Window on Eurasia – Staunton, June 3, 2018)

Vladimir Putin has the coercive resources and elite support to remain in office regardless of whether the population supports or deserts him, but at least some of his power depends on his ability to mobilize his base which consists of government employees, industrial workers, and especially pensioners.

At present, three reforms, driven by technology, the economic crisis and demography, are moving forward that have the potential to anger members of some of the most pro-Putin groups in the population, opening the way at least potentially for opposition leaders to generate support for themselves against the Kremlin.

First, according to Audit chief Aleksey Kudrin, roughly a third of all Russian government officials will lose their jobs over the next six years given the need to improve efficiency and the ability to do so by relying on technological innovations like computerization (ura.news/news/1052337001).

Given the enormous size of the bureaucracy in Russia, those who lose their positions and those who fear they might constitute a large segment of the population, one which including their family members could number in the millions. In the past, Putin has been able to count on their near unanimous support. If this reform goes forward, he probably won’t have that luxury.

Second, if the Russian economy is going to recover and move beyond its reliance on the export of raw materials, it will need to close down a large number of ineffective factories both in the so-called “company towns” and elsewhere. At a minimum, that would disrupt the lives of many workers; and at a maximum, it could lead to a significant jump in unemployment (krizis-kopilka.ru/archives/52971).

But unless those factories are closed, they will remain a burden on the economy even though they are politically useful because they employ another group of millions of people, who have counted on Putin to keep the plants open and their jobs in place. If that changes, some of them are likely to question their support.

And third, it is already clear that pensioners are going to take a double hit. On the one hand, as has already attracted much comment, the government intends to raise retirement ages reflecting budgetary stringencies and the somewhat longer life expectancies of Russian employees.

On the other – and this has so far attracted far less attention – the pensions Russians are getting and will get are equal to a far smaller share of their working-age incomes than was true in the past. In Soviet times, pensions were close to 50 percent of working-age incomes; now they are about 20 percent and falling (kasparov.ru/material.php?id=5B137B0B45B91).

This combination means that fewer Russians will get pensions and that those who do will get less money than they had expected and be pushed closer to poverty levels than ever before. It is difficult to see how such pensioners will remain enthusiastic supporters of the Russian government and behind it the Kremlin leader responsible for these changes.

[Article also appeared at windowoneurasia2.blogspot.com/2018/06/three-prospective-reforms-likely-to.html]