Mobilization-type social policy
Yevgeny Gontmakher, Russia makes transition to mobilization-based social policy. No matter how Russian-Ukrainian crisis ends, it can already be stated confidently: We are making transition to mobilization-type social policy at forced pace.
Why did I use the words "forced pace" above? The point is that such a transition emerged as far back as last year when it was clear to everyone (even to Vladimir Putin): The Russian economy is coming to a serious and long-term standstill. In a social sense this means that the treasury's tax revenues are obviously insufficient to support even those extremely modest commitments (compared with the minimum standard desirable for people) which have been publicly adopted. For example, there is the very rapid increase in wages for budget-funded workers that has been announced, an increase at least to the average level for their region of residence. Or there is the increase in pension payments at least to cover inflation. And the creation of 25m highly productive (and thus highly paid) jobs by 2020 is in great doubt if you take into account the period of long economic stagnation that is beginning. The reduction (including the absolute reduction) of state funding for health care and education enshrined in the 2014-2016 federal budget that has been adopted is a fait accompli.
However, just recently it could have been expected that the state policy formed in the 2000s would not have a rapid impact on Russians' everyday situation. The promised increase in wages for budget-funded workers has overall taken place although it is being accompanied by a welter of side-effects, for example, the reduction in employment in this sphere. Pensions are being paid on time and are even index-linked. In addition, a considerable proportion of Russian society (above all, the elderly) have retained the habit of the uncomplaining limitation of their own current material position as happened, for example, immediately after the 1998 default. Ultimately the state retained some resources in the Reserve Fund and the National Welfare Fund and the volume of gold and foreign exchange holdings remains high.
All these factors would have been entirely sufficient for the authorities to get through the 2016 State Duma election satisfactorily (that is, to ensure a One Russia majority) and, most importantly, to re-elect Vladimir Putin for another presidential term in 2018 even with a further steady worsening of the economic situation.
But Russia's direct interference in Ukraine's affairs, which has now happened, radically complicates the implementation of this political scenario because the economic situation in Russia is now bound to worsen visibly in the very near future. And the problem is not even one of formal growth figures or the fall of GDP. They can be corrected absolutely honestly by means of the price factor, a good harvest, a recalculation of the initial base, and so forth. Something else is more important: The already unfavourable investment climate has suffered a blow of such force that it can recover from it only via the strongest political changes which relate first and foremost to the reform of the institution of the Russian state (including the abolition of the laws of the "crazy printer" [reference to State Duma law-making activity], the introduction of a real separation of the branches of power, and much else besides). In addition, let us be frank, we are now the outcasts of the world economic system because of the abrupt departure not only from the G8. Our own integration process in the Eurasian area has been put in doubt. Belarus, Kazakhstan, Uzbekistan, and especially Kyrgyzstan, Tajikistan, and Armenia, whose territories are home to our military bases, are seriously alarmed, I am sure.
Russia can restore its positions only, as noted above, in the event of the launch of real political and, subsequently, economic reforms. But the likelihood of such a development is close to zero at the moment. This is precisely why social policy will rapidly acquire the character of a completed mobilization.
What form will this take?
1. A change in the tax system: The introduction of a progressive scale of income tax, an increase in the tariffs for contributions to the pension fund, and a sharp rise in real estate and automobile taxes (without a significant differentiation depending on the value of these assets). The money received (if, of course, it is received) will be used to plug the most explosive social gaps. The authorities' motivation: "it is necessary to share" and "we are surrounded by enemies so it is necessary to tighten our belts". In practice: in effect the forcible expropriation of a significant part of the material wellbeing of the Russian population's high- and middle-income groups.
2. The "optimization" of the budget network: the rapid reduction of employment in this sphere, and the transfer of real estate within the framework of the so-called "private-state partnership" to business. The authorities' motivation: the "more diligent use of resources". In practice: the curtailment of the volumes of the provision of free services in education, health care, and social services coupled with a lowering of their quality.
3. The growth of effective unemployment because of the absence of the resources to support millions of inefficient jobs in such sectors as metallurgy, the agro-industrial complex, and the budget-funded sphere. At the same time, the official unemployment level will be artificially reduced through, for example, the tightening of the rules of registration at state employment centres and the reduction of the scale of the unemployment allowance.
4. The redistribution of budget resources in favour of support for the military-industrial complex (the defence order) and also of those that cannot be reduced (at least in nominal terms): pay and allowances for people in uniform and officials, the wages of budget-funded workers who remain in the profession, and payments to pensioners. Thereby an attempt will be made to retain the loyalty of the aforementioned categories of people by fleecing all the rest of society.
It is obvious that a "social policy" of this kind cannot be implemented without a most powerful brainwashing via the media (first and foremost the federal television channels), restrictions on access to considerable segments of the internet, even tougher pressure on any self-organization of citizens that is independent of the authorities, a further clericalization of Russian life, and the tight ideological control of the situation in the educational system. On the subject of ideology, by the way: This is the concept of "conservatism" as the core of the Russian soul that is now being urgently developed.
Will such a strategy achieve the ultimate goal - the preservation of the regime's invariability for the years and, possibly, decades ahead?
My answer is ambiguous. If those who are most actively dissatisfied with such a "life" are allowed to emigrate they will do so en masse. Possibly the tally will run into the hundreds of thousands of families. On the other hand, those who remain will be doomed to a hopeless existence justified by a total deception - something midway between Hugo Chavez's oil-rich Venezuela and Fidel Castro's zombified Cuba. In this sense the success of the mobilization model of social policy is entirely possible.
It is just that I feel sorry for my country. It does not deserve such a wretched fate.