The Kremlin is Lying to the Russian People about their Future

Ace Russia correspondent Galina Stolyarova, writing for Business Week’s Transitions Online blog, documents the obscene extent to which the Kremlin is hiding basic facts from its own people:

There is a mantra these days, repeated diligently by Russian television: “The Russian authorities have taken all necessary measures to ensure that the global financial crisis does not produce a strong negative effect on the social situation in our country,” or “The situation is under control.”

The word “crisis” is scarcely used and only to concede that, yes, a crisis is unfolding, but this is happening very far from Russia, so the viewer mustn’t worry.

All reports that do touch on the negative consequences of the global banking slump come from abroad. Russian television tells viewers about impoverished Britons unable to bury their dead relatives because the government no longer provides subsidies for that purpose, or about the American businessman, driven mad by the loss of his managerial job, who shoots his entire family and himself. But nothing is said about the clerks of Russian banks living in constant fear of being laid off, or about young families no longer able to keep up with their mortgage payments. Nothing at all is being reported from the regions, and there is no ground-level view of the situation. Only the Kremlin-cabinet view is aired.

It is an open secret that television in Russia – heavily filtered and as unchallenging as possible – is used to manipulate the public or to provide some kind of mass psychotherapy when officials feel it is required.

Journalists working for the state-controlled media admit in Internet forums that whole lists of words and expressions have been banned for use on Russian television, including “panic,” “plummeting shares and markets,” “market collapse,” “market meltdown,” “the bottom has dropped out of the market,” and “record plunge.” Euphemisms like “decrease” are used instead.

No wonder, then, that 20 percent of Russians polled in mid-October by the National Agency for Financial Research said they think the global financial problems will have only positive consequences for Russia. A further 40 percent said they are convinced that there will be no negative impact on Russia.

From watching Russian television, you could easily get the impression that most ordinary people have not been affected. A 10-minute street poll, however, suggests otherwise. While the reports remain positive, the effects are starting to show, and as more people share the bad news, anxiety is spreading. One person told me he had withdrawn his savings from a Western bank. “I felt my money would be safer at home,” he said. “I don’t have very much, but I don’t want to lose it.”

Some Russian viewers complain that the mainstream media are no help in getting a clear picture.

“What I find really insulting is that Russian television only broadcasts soothing ‘everything’s going to be fine’ speeches by officials, which are completely irrelevant to our everyday concerns,” said Marina, 35, a St. Petersburg resident and the owner of a small printing business. “My clients are cutting their budgets, and I’m getting fewer and fewer orders because I usually print advertising material. I need to decide whether I should close my business or carry on, but it’s difficult for me to get a true picture of how the crisis is unfolding and affecting Russia. Why am I being treated like a brainless moron?”

Another participant of the street poll said she had traveled to Norway last weekend, where her MasterCard and Visa, both issued by a St. Petersburg bank, were repeatedly declined, causing her to end up owing hundreds of euros in cash. “I was lucky I was traveling with other people who could lend me the money. It was very stressful. I couldn’t use my cards to pay in restaurants or in the hotel where I was staying, and on some occasions I wasn’t even able to take money out,” she recalled. ” ‘Your bank does not approve this transaction’ was the standard reply, but there hadn’t been any warning from the bank.”

A survey conducted this week by the Internet portal found that 10 percent of Russian employers have already made staff cuts, while another 10 percent are preparing to make them soon.

Most cuts have occurred in banking, consulting, construction, and development companies

In the meantime, the price of oil has dropped below $70 a barrel, a critical level for the Russian economy, and the government looks set to start using its stabilization fund. It is considering earmarking at least $200 billion for a rescue of Russia’s ailing banking system.

The move would be sure to infuriate ordinary Russians, who regard bankers as “speculators.” With 63 percent of the Russian people earning less than 15,000 rubles (430 euros) per month and 30 percent getting just 5,000 to 6,000 rubles per month, the use of the stabilization fund for a banking rescue plan is bound to be unpopular.

Naturally, it has not yet reached the stage when tens of thousands of Russians besiege their banks, become desperate to save their kopeks or stare in disbelief at empty shelves in food stores. But has any official wondered what is going to happen when a critical mass of the population becomes genuinely concerned?

Here is one example. In May, panic gripped many residents in St. Petersburg after rumors spread of a serious accident at the nuclear power station in Sosnovy Bor, 70 kilometers west of the city. The station operates four Chernobyl-type reactors and has a history of minor accidents.

Thousands of people stormed local pharmacies, emptying shelves of iodine, while teachers in kindergartens and nurses in some hospitals closed all the windows in fear. Internet forums teemed with “eyewitness” accounts of the first victims of radiation poisoning arriving at hospitals and of a radioactive cloud moving toward the city at speed.

The authorities were quick to appear on all TV channels with reassuring statements denouncing what they labeled “provocation,” “hooliganism,” and “information terrorism.” Yet the panic continued the next day, until it finally died out naturally as nobody experienced symptoms of radiation poisoning.

In the end, the leak scare proved to be a false alarm. In an extremely rare case of agreement between environmental groups and officials, the station’s managers and independent ecologists said the rumors were false. The incident, however, served as a litmus test for the public trust in the words of the authorities and the mainstream media that readily transmit them. And it was not the authorities who stopped the panic. The bureaucrats had to wait for its natural end.

It became painfully obvious that even when officials speak the truth, the Russian people have been told too many lies to take government promises seriously.

After all, hadn’t all Russians been promised in 1998, as the ruble continued to lose value and prices for Russian exports plummeted, that the state was definitely not going to default on its debts?

Indeed, keeping people in the dark about the real scale of the financial crisis is not worth the effort. However they choose to describe it, a crisis is in the air, and is being increasingly felt in Russia from Kaliningrad to Vladivostok. And as so often before, the Russian people are resorting to their own devices, without waiting to hear what officials have to say. They have long since learned the meaning of the expression “sink or swim.” As the Russian proverb puts it, saving a drowning man is that man’s own problem. They would appreciate it, however, if their ability to understand and assess a situation were more highly regarded by their governors, at least to the same extent as in other countries that have already been severely hit. When panic sets in, nobody is going to listen.

One response to “The Kremlin is Lying to the Russian People about their Future

  1. Considering that maybe 1% of the Russian population invested anything in stocks, most of them aren’t affected by the crisis yet. Unless it gets better, this won’t continue, and it really will be lying – however, as of now, it’s fine.

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