Tag Archives: pension reform

Resilient Russia

There is a particular breed of Russia watcher who likes to predict the country’s imminent collapse. For such ‘experts’, Russia is perpetually on the brink of social unrest, instability, and possibly even revolution. The apparent popularity of President Vladimir Putin and the seeming strength of the Russian state are just facades hiding a seething cauldron of discontent which is likely to boil over the moment that the state opens up the lid by relaxing the forces of repression. The ‘Putin regime’, in other words, is doomed. It’s just a matter of time.

You’ve no doubt read this sort of thing. It’s pretty common. So too is another type of analysis which maintains that Russia is stuck in terminal economic decline. The only way out of this is ‘deep structural reform’, but the ruling regime is incapable of carrying out such reform, as it would undermine the interests of the oligarchic clans which prop it up. Barring regime change, the only way Russia can do is down.

The fact that the Putin regime stubbornly refuses to collapse or even show any tangible signs of serious weakness doesn’t deter pundits from repeating these ideas. An example is an article in today’s copy of The Guardian. Written by French academic Marie Mendras, the article’s content is pretty much summed up by its title, ‘Putin’s Russia is a sinking ship’. Don’t be fooled by the World Cup, Mendras says:

The overwhelming majority of Russia’s 140 million people worry about declining living standards, falling health and education levels, material insecurity, and corruption. A few weeks ago, protests erupted in many regions and across social classes against a government plan to raise the pension age … this demonstrated a swell of mistrust in the authorities … sociologists at the independent Levada Centre in Moscow point to a rising pessimism. … Domestic social anger, civic demands, youth opposition, and ‘temporary diasporas’ [caused by the ‘brain drain’] may converge to create difficulties for Putin. … Putinism as a formula for stability has run its course.

Let’s take a quick look at Mendras’s evidence. For sure, Russians worry about ‘material insecurity’. Living standards did decline substantially in 2014-2016, but since then they’ve begun to rise, albeit slowly. I don’t know about education levels, but health certainly isn’t declining. On the contrary, Russian life expectancy continues to increase. As for the other stuff, let’s have a look at what the Levada Centre actually has to say about social attitudes. Mendras’s article links to what Levada calls the Social Sentiments Index. This has indeed taken a sharp dip in recent months, probably because of the negative response to the proposed pension reform. But if you look at the Index over the longer term (as shown among some other charts here), you can observe that while it goes up and down in the short term, over the past 18 years the general line has remained remarkably stable. It’s possible that the current dip could turn into something more substantial, but as yet it’s far too early to say that. It could just be a temporary phenomenon related to the pension issue.

Another Levada index (the Consumer Sentiment Index – to be found just under the Social Sentiment Index) suggests a much more positive picture. Consumer sentiment has risen quite dramatically since 2016. This suggests that Russians are much more optimistic about their economic situation. In the long term, that it is likely to translate into more general social satisfaction.

As for Russians’ overall attitude to their country’s development, yet another Levada Index (entitled ‘Assessment of situation in the country’) shows a sharp decline in positive attitudes in the last couple of months (again, most likely connected with the pension issue), but even now more Russians think that their country is going in the right direction (46%) than the wrong direction (42%). Again, one can’t easily predict what the future holds and whether the recent drop will continue further downwards or prove temporary, but the data at present doesn’t justify alarmism.

Indeed, it may indicate that the Russian state is in a rather stronger position than its critics make out. The need for pension reform has been clear for years. But until now the Russian state has felt too weak to enact it. The pension issue is precisely the sort of ‘deep structural reform’ that many insist Russia has to carry out. The problem with such reforms is that they tend to be very unpopular. This is why governments often avoid them. But in the aftermath of Putin’s decisive re-election as president, and after Russia’s successful weathering of economic recession, the Russian government apparently now feels that it is strong enough to get away with it. And the evidence would suggest that so far it is. As the Levada data shows, the government has taken a hit as a result, but it’s not a massive one. As for the protests which Mendras mentions, it is noticeable that they have been far less substantial than those over a previous attempt at pension reform in 2005. The Russian state looks as though it will be able to weather the negative reaction to its current plans relatively comfortably.

At a conference I attended last year, a group of experts from Russia and the English-speaking world almost unanimously agreed that Russia was far more resilient than generally portrayed. In the past four years, it has endured a collapse in energy prices and consequent collapse in the value of the ruble, economic sanctions, and war (in Ukraine and Syria), and yet has emerged remarkably unscathed. That suggests that the Russian state possesses quite deep reserves of strength.

Over the past decade, I’ve read so many variations of Mendras’s thesis that I’ve lost count. All sorts of reasons have been put forward to explain why the ‘Putin regime’ is doomed – demographic decline, economic failure, Western sanctions, the supposed alienation of Russian youth, and so on. So far, none of them have amounted to anything and all the predictions of impending collapse have proven untrue. That doesn’t mean that they can’t come true in the future, but I’m not betting on it.