Happy Holidays, Russia!
A Moscow union official has revealed the shocking fact that unemployment in Moscow doubled over the course of the city’s observance of the 10-day winter holiday that began on New Year’s eve and lasted until Orthodox Christmas earlier this month. According to the official, Moscow now has nearly 300,000 unemployed workers, up 500% from 60,000 one year ago and 70,000 four months ago, and job vacancies have fallen by 6% in two months.
It’s a given, of course, that the Kremlin is not telling the truth about these numbers, but minimizing them, and that even if it were inclined to tell the truth Russia is not a society (Russian link) that can accurately collect such data because of sheer incompetence, corruption and fear of official reprisals. The RBK Daily business journal reports that the Kremlin’s rate of 6.6% unemployment likely underestimates the total by at least 15% so that the real current rate of unemployment is at least 7.5% — 6 million Russians out of 75 million in the workforce.
It’s also a given that Moscow is Russia’s economic engine, where the vast majority of the national wealth has been concentrated. If Moscow is facing straits this dire, just imagine what is going on in the more remote provinces — if you dare.
Moreover, the full brunt of the finanical collapse that began in August 2008 has not yet been absorbed by the economy in chief. As energy prices continue to bottom out (the gas market has not yet caught up with the oil market, but it will), Russia will inevitably enter a massive recession for which it is ill-prepared either in terms of leadership or in terms of economic structures in the economy. Russia’s stock market has virtually been wiped out, and its credit market likewise. Vladimir Putin has led his country to the brink of ruin, yet even now Russians have still not found the courage to challenge him. Will they wait to begin blaming Putin until the country actually does totally collapse and disintegrate?
Only time will tell.