In Putin’s Russia, now Business Journalists Come under Fire

Earlier this week we linked to a piece from Alex Rodriguez, one of the best Russia journalists in the world, from his paper the Chicago Tribune.  Rodriguez recited a litany of incidents of the Kremlin cracking down on journalists who dared to use the word “crisis” in describing Russia’s current economic picture.  One incident Rodriguez described was as follows: “Russia’s business daily, Vedomosti, received a warning from Russian authorities after it published an article by economist Yevgeny Gontmakher that discussed the potential in Russia for unrest spurred by the economic crisis.”

Now Robert Amsterdam has translated Gontmakher’s article. It follows. Hero journalist Grigori Pasko has his own take on these events, also on Amsterdam’s blog.

Scenario: Novocherkassk-2009

Yevgeny Gontmacher

06.11.2008, №210 (2232)

Vedemosti

I’m not going to pretend I’ve got my very own version of «Day of the Oprichnik». Vladimir Sorokin — he’s a professional writer, who has already managed to do this brilliantly. I’ve got another genre: I would like to attempt to model a situation that may with ever greater probability be realized somewhere in the depths of Russia already in the nearest future. There can be many concrete causes: from an attempt by the local powers to save money on people (by the way, just a few days ago, people blocked off the main street in Barnaul several times, protesting against an attempt to monetize city benefits) to heating interruptions in the upcoming winter. But the economic crisis, into which Russia is sinking ever deeper, hints at new story lines as well.

Prologue

And so, following chronological order:

No. 1. A mass layoff of people from the local machine-building (metallurgical, chemical, etc.) city-forming enterprise has taken place in the city of N-sk. The enterprise’s owner had tried for several months not to allow this to happen, having sent the most valuable workers on administrative leave with the payment of 2/3 of their salary and having laid off nearly the entire office staff. But a miracle did not take place: demand for the output of this plant never did rebound to the pre-crisis level, the money to maintain the remaining cadres also dried up. And so they had to be laid off, one and all.

Event No. 2. Several thousand unemployed people have suddenly appeared in N-sk, people who would be ready to take practically any paid employment (the families have to be fed, after all!), but it turns out that this too no longer exists. Small business, headily developing at the end of the 80s — in the 90s thanks to the entrepreneurial activeness of former engineers, designers, and government officials, stopped growing in the 2000s due to the all-powerful administrative press. As a result, it will not be able to absorb big masses of the new unemployed. The budgetary complexities that have appeared (starting with low prices for oil and ending with the fact that the plant that has shut down has stopped paying its taxes to the N-skian treasury) have sharply reduced the number of even the most primitive vacancies in the budgetary sphere [civil service--Trans.].

Event No. 3. The contracted solvent demand of the population has led to a crisis in N-skian retail trade. The supermarkets and self-serve stores of every variety that had once appeared are closing, giving rise to yet another wave of layoffs. The only ones surviving are small retain points trading in the most elementary things — bread, cereal grains, milk, cheap sausage, powdered soup mixes. Lonely old women, standing on the streets, attempt to sell vegetables grown in their own garden. Flea markets start to appear.

Event No. 4. Total paralysis of the administration of the region and the mayoralty of N-sk. Officials, trained to fear the loss of warm spots in the «vertical of power», await instructions from above. But at this time on the federal television channels in the breaks between an ice show and «Twisted mirror» they’re reporting «about certain of our difficulties, provoked by the American economic crisis».

Event No. 5. Unrest begins among people who have been brought to the point of desperation by the loss of even the most primitive life prospects, and spontaneously grows into open protest. The inhabitants of N-sk go to the local mayoralty, demanding of the power that it do at least something. The confused officials scatter, fearing violence. The police don’t interfere, but neither do they conceal sympathies with the «insurgents», many of whom are neighbors or even relatives.

Event No. 6. People occupy the abandoned government offices. Spontaneous leaders appear, who attempt to guide events into an organized course. Among the ringleaders there are no local party bosses, for example communists. They are permanently embedded in the pseudo-party system that had formed at the beginning of the 2000s, and have fallen into the same kind of stupor as the government officials have. Furthermore: members of «United Russia» are feverishly hiding their party cards in secret places (or even burning them on the gas stove).

Event No. 7. Demands are presented to the higher-standing powers — starting with the governor and ending with the president of Russia: «Bring back work!», «Overfed bureaucrats — to answer!». There’s even a chance that the slogan «Russia — for Russians!» will be advanced. It is announced that the building of the mayoralty will remain occupied until the fulfillment of these demands.

Event No. 8. The regional governor, having received reports about the events taking place in N-sk, urgently gets in contact with Moscow. The first reports on the disorders are coming through via internet and telephone into the information space. About them report «Echo Moskvy» and «Liberty». The Federal television channels are silent.

Event No. 9. Moscow does not respond to the inquiry of the governor. In high offices reigns easily explainable perplexity: to go in for negotiations with one’s own population — this is far from the same thing as shouting into the telephone receiver: «Shamil Basayev, do you hear me?!» Apply force? Only it turns out that it doesn’t exist. The local police won’t go against their own townspeople. Send in the OMON? But what if blood is shed? Then the fire could flare up and spread further. All the more so given that the «insurrectionists» have been brought to the point of desperation and have nothing to lose. Besides this, undesired witnesses have started to arrive in N-sk — journalists.

Event No. 10. After long deliberation, an order is given to the governor: to go there and begin negotiations, attempting to talk the people into dispersing and going home in exchange for a promise to get to sort out the situation that has been created.

Event No. 11. The governor, understanding that they’re going to fire him anyway for having allowed the situation in N-sk to take place, submits his resignation. The situation in the region becomes more acute. A new head of administration, hurriedly elected on Moscow’s recommendation by the local legislative assembly, is sent from another region.

Event No. 12. The new governor publicly announces about how one of the banks «with state participation» is prepared to give a preferential credit for the resumption of the work of the shut down city-forming enterprise in N-sk.

Event No. 13. The inhabitants of N-sk demand that the governor become their hostage until the moment of the execution of the promises given by him.

Event No. 14. The same kind of unrest flares up in M-sk…

Exposition

I wouldn’t want to guess how such local shakeups might end for the situation of the country as a whole. One thing is clear: the most likely variant, when the situation will dissipate — the people will tire of kicking up a furor, all the more so given that the powers are going to try to make use of their currently most powerful weapon, money. In the given case–having resumed the work of a knowingly loss-making, uncompetitive plant, which is in need of a major overhaul, presuming, in particular, letting go a significant part of the personnel. But it is obvious that it’s impossible to constantly keep the N-skian plant afloat at the expense of state injections. Therefore, sooner or later (more likely — sooner), everything will fall back in its place. But to propose something else, besides a decidedly short-term reprieve, is something the current state can’t do: it has sunk into corruption, has lost any even remotely serious skills for the professional resolution of the problems that have arisen. This can be seen, in particular, from the «horrible» (in the words of Vladimir Putin) state of small business and the abhorrent investment climate. Therefore the «it will dissipate» variant in actuality is extremely interim in relation to the present fork in the road.

Or, not waiting until the N-skian or other such events become the prologue for an all-Russian shakeup, we’ve got to at last embark upon a decisive modernization of all of Russian life — from the economy and to politics as well — on principle of the minimization of state participation in social processes, honest competition and freedom of private enterprise.

Or we’re all being sucked into such a crisis, the way out of which is impossible within the framework of the current constitutional order.

Yevgeny Gontmacher is a member of the management board of the Institute of Contemporary Development

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5 responses to “In Putin’s Russia, now Business Journalists Come under Fire

  1. I think you should start a contest to invent a new Russian word for “crisis”.

    LA RUSSOPHOBE RESPONDS:

    Probably the Kremlin wouldn’t find any single word adequate. It would probably have to be a phrase like “evil, dastardly, racist conspiracy of russophobic foreigners bent on Russia’s destruction, heroically obstructed by the historic leadership of the Great Leader Vladimir Putin”.

  2. You forgot to add …and his talking head Dima and faithful cadre of like-minded Putinistas.

  3. What about “Bailout”? Is that an acceptable word in Russia? No’sk needs to ask for a “Baylowt” i.e. the central bank printing rubles as fast as the machines will run.

  4. You know, noone was allowed to talk about the Great Terror. Or about the Holodomor, the Famine in Ukraine. As former Ukrainian President Kravchuk recently stated on a talk show, his uncle was shot for even reading a letter about someone dying in the Famine.

    “If the Kremlin says it’s so, then it’s so.”

    But people knew and saw differently.

    One would think that in a country such as roosha, where the propaganda did not, and does not fit the reality, people would have already learned by now, in the 21st century, that Putin’s reversion to Stalinism simply won’t work.

    In other words, one would have already expected a “massive thaw.”

    So Herr Putin has decreed that the word “crisis” is verboten – just like Stalin.

    So what do you call it when Abramovich owns several yachts, including the biggest one in the world – but the rest of the people in roosha, except for Abramovich, Putin and Stalin, are unemployed and starving?

    Pleasure?

    Because none dare call it crisis.

  5. And, the reserves continue melting away. After the numbers were massaged last week to announce a $5 billion “increase” just before Putin’s orchestrated town hall meeting the previous week, this week it is announced that the reserves dropped by $18 billion last week, down to $437 billion. This is down by 26.9% since August 8th. Given that Russia has to pump out billions to bail out its companies that owe piles of money to Western investors, I would estimate that half of the reserves will have been spent by the end of this year, and in a few more months the reserve cupboards will be bare.

    Source: http://www.vedomosti.ru/newsline/index.shtml?2008/12/11/697545

    LA RUSSOPHOBE RESPONDS:

    Great work as usual! No wonder the Kremlin is so interested in muzzling the press!

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