Putin Declares War on Russians’ Health

(Bloomberg – bloomberg.com – Marc Champion – May 14, 2015)

At what point will Russians begin to question the choices being made by their government? Maybe when those choices start killing them.

As Bloomberg’s Ilya Arkhipov and Henry Meyer report, Russia’s health system has suffered a severe reversal as a lower oil price has reduced government revenue and spending. Forced to pick between budget priorities, the government is trying to get more Russians to pay for health services and is cutting the number of doctors and nurses it employs.

The system was inefficient and badly needed reform, yet treatment delays are up and people are dying for lack of transplants and other care they would have received just two years ago. The story of Marif Alekberov, a 27-year-old fireman who can’t afford the $23,000 for a bone marrow transplant he needs after exposure to a toxic spill, makes the brutal point.

At the same time, Russian President Vladimir Putin has stuck with his expansion in defense spending, digging even deeper into the budget than expected as Western sanctions have made it harder to borrow. In the three years from 2013 to 2015, Russia’s defense budget will have increased by more than 36 percent (20 percent in dollar terms), according to data from the London-based International Institute for Strategic Studies. By contrast, inflation-adjusted health spending is 9 percent lower than it was two years ago.

Addressing military brass in Sochi this week, Putin told them the military expansion program remained on track. Or, in Putin’s words: “All questions relating to the allocation of adequate resources have been resolved.”

European nations such as Germany and Italy, which spend 1.5 percent or less of their economic output on defense, are often ridiculed for this “postmodern” approach to a still dangerous world, and rightly so. Russia plans to spend 4.2 percent of gross domestic product on defense this year. But what is the danger Russia faces that justifies sacrificing the health of the nation to buy more tanks?

In Ukraine, Russia is engaged in a war of choice: Putin’s determination to ensure that the country’s ex-Soviet neighbors accept a Russian sphere of dominance — his nascent Eurasian Union — was a strategic decision, not an existential one. Before Russia’s intervention, ethnic Russians in Ukraine were under no threat of attack.

Standoff in Ukraine

Nor did the association agreement with the European Union that triggered the Ukraine crisis presage a NATO takeover of Russia’s leased naval base in Crimea, let alone an invasion of Russia. These were all convenient fictions designed to justify Putin’s policy.

Russians certainly welcomed the annexation of Crimea, and TV propaganda on the war in Ukraine is effective in part because it reflects what viewers want to believe: They share with Putin a sense of victimhood and national hurt that they want to redress. So far, there is very little sign of this patriotic fervor wavering.

Most Russians were no doubt also proud of the new model army Putin put on display in Saturday’s Victory Day parade, including the new T-14 Armata tank now due for an estimated $9 billion rollout. Yet they know, too, that Russian soldiers are fighting in Ukraine and are ambivalent about the value of deeper involvement, which is why Putin denies his troops are present. That doesn’t suggest a blank check.

For a long time, Russia didn’t have to choose between funding priorities such as health and security. Oil’s rise from $20 a barrel or less in the late 1990s to more than $100 a barrel ensured the government could deliver improvements pretty much anywhere. From 2000 to 2013, per-capita health spending rose 10-fold.

Those days are past. Of course, Russians’ capacity for suffering is legendary, and they have a near memory of when living standards were substantially worse. Most are prepared to accept a great deal of economic pain in exchange for national pride. But how much?

Article ©2015 Bloomberg L.P. All Rights Reserved. Article also appeared at http://www.bloombergview.com/articles/2015-05-14/putin-declares-war-on-russians-health