Russia: Pensions Anger Marks Political Shift

From 1 January some 34 million pensioners and disabled people were stripped of state benefits such as free or subsidised transport and healthcare. Their benefits were replaced by a meagre cash sum with which they are now supposed to pay for services. Thousands of pensioners demonstrated in towns and cities the length and breadth of Russia, in places blocking traffic and taking on riot police. There were numerous fights between passengers and bus or tram conductors after pensioners were told to pay fares. ‘Stop the genocide of pensioners’ and ‘Shame on the government and the president’ declared pensioners’ banners in St Petersburg. Others waved red flags, beat spoons against saucepans and chanted slogans calling for Putin to step down.

Fittingly, the largest protest was in Russia’s second city – St Petersburg, formerly Leningrad – where some 10,000 pensioners took to the streets. The protests began almost 100 years to the day since the demonstration that sparked the 1905 revolution. Pensioners demanded the basic pension should be raised by 500 percent.

‘We came here because they turned us into nobodies,’ pensioner Lyudmila Ivanova, 67, told a newspaper. ‘They stole our entitlements and our old age.’

The southern city of Stavropol saw a rally of 5,000 people, while in Izhevsk, capital of Udmurtia, a similar number rallied outside the regional government building and blocked the city’s main road. Cities such as Perm (the Urals), Angarsk and Tomsk (Siberia), and Khabarovsk (east coast) saw rallies thousands strong. In some cities people came back day after day to block the streets.

The protests quickly forced the federal government to promise to more than double a planned increase to the basic pension from 100 to 240 roubles a month (about £4.50). Pensions currently average £40 per month. The pensioners’ action also wrung concessions out of regional governments, which variously promised free or cheap travel, and lower rents for pensioners and disabled people. A new wave of protests is likely to take place in early February when people receive their first unsubsidised rent and utility bills.

Political analysts warned that the protests could create civil unrest across the country and damage Putin’s popularity, which is already sliding. Putin has also just suffered a crushing foreign policy defeat in Ukraine, where Russia pumped millions into backing the losing candidate.

It is unclear how the pensioners’ protests were initially organised. Neither the Communist Party nor the trade unions – the country’s most frequent organisers of social protests – called people onto the streets, although they then supported the protests. This marks a major shift in Russian politics. During Putin’s presidency most large-scale rallies have been either orchestrated by the Kremlin or by pro-Kremlin parties in the state Duma. The ‘red-brown’ coalition of Communists and nationalists is a dwindling force, partly because Putin stole its fire.

Protests on this scale were last seen in 1998, when thousands of angry coal miners protested against massive wage arrears, blocking railways in Siberia and picketing Moscow’s government building for weeks. Under the new benefits law that came in this year, the federal government is responsible for subsidising housing costs for 14 million war veterans, disabled people and Chernobyl clean-up workers. But another 18 million people also entitled to discounts are now at the mercy of regional budgets that are often short of cash.

When parliament debated the benefits law last summer, many regional leaders claimed that regional budgets could not afford the cash payments to replace the benefits. But last year Putin scrapped elections for regional governors, who will now be appointed from Moscow. As a result regional leaders have been keeping quiet so as not to lose favour with the Kremlin. On the other hand, this means all the anger at the benefit changes is now directed at Putin. ‘[The pensioners’ revolt] is a blow to Putin’s personal authority, and the anger over worsening living standards will be aimed at him and the federal authorities,’ said Sergei Smirnov, director of Moscow’s Social Policy Institute.

The government is keen to press ahead with market reforms. The economic development and trade minister German Gref said recently that quick action on economic reforms was vital. The consequences for ordinary Russians are clear – the cost of a ticket on the Moscow metro, for example, jumped by 40 percent on 1 January.

The pensioners have therefore struck a massive blow at Putin’s attempts to further liberalise the economy. Last month the Financial Times said that the benefits unrest could make Putin shrink from other liberal reforms – of the electricity and gas sectors, and of healthcare. In another sign of government weakness, the government also said it would back down from plans to scrap students’ exemption from military service, a move seen as an attempt to keep them from joining in with the pensioners’ protests.

An analyst at Renaissance Capital said, ‘It is ironic. What was, or appeared to be, a very brave political reform could actually be the death knell of the liberal reform agenda’ because of the protests. In Britain, with the TUC’s national pensions day of action this month, the Russian protests are a fantastic example of how direct action can get results.