An Economic Windfall Means Nothing For Russian Citizens


The recent rise in oil prices — almost 80 percent from their mid-January low — is a sudden gift to the Russian economy and government. Yet officials act as if the country is as squeezed financially as it was earlier this year: There’s no sign of expanded social spending, despite approaching parliamentary elections and worrying poll results. The Kremlin has other plans for any extra money.

In early April, the Economy Ministry issued a forecast for the year based on an average oil price of $40 per barrel. That seemed optimistic at the time, when the year-to-date average price hovered around $35. At the beginning of June, the average has almost reached $40, and it could rise because the current price is $50 and the rally shows no signs of letting up. Russia added $20 billion to its international reserves between January and April. Inflation has been stable at 7.3 percent (on a year-on-year basis) for three consecutive months — the slowest price growth since 2014, creating conditions for an interest rate cut, perhaps even this week. …

Yet late last month, when retirees in Crimea complained to Prime Minister Dmitry Medvedev that their pensions were too low and asked when they might be indexed to inflation — as the government is supposed to do every year — he gave a reply that has since turned into a meme on the social networks and forced Putin to half-apologize:

“We just don’t have the money. If we find money, we’ll do an indexation. You hang on in there. All the best, don’t be sad, stay healthy.”

  • Drunk_by_Noon

    This is what systemic corruption looks like in Putin’s Russia.

    • Exactly.

      Not even to win votes will Putin put money into the public sphere.

  • DavidinNorthBurnaby

    “The Kremlin has other plans for any extra money.”
    Plans known as “graft”. 😉

    • Drunk_by_Noon

      Supposedly Putin’s personal wealth is approaching 100 Billion Dollars.
      What he would need that much for, I have no idea.
      It’s more than anybody could practically spend in Russia and he’s known for petty confiscation anyway.
      He just takes things from people, and when he can’t, he just bills it to the government.
      It’s the damnedest thing in that he’s a billionaire that runs out on dinner checks and shoplifts.

  • ismiselemeas

    Stupid, drunk Slavs. I know, my father in law is amongst them.

  • FactsWillOut

    I think he should use the money for weapons, against the day when the NATO’s Muslim hordes attack.
    What he should not do is emulate the depraved, decadent west.