Russia: Hyperventilating over the Economy
In a sign of how serious the ongoing financial crisis is in Russia, the daily "Izvestia" published an article urging the readers not to panic or be depressed from the grim news about the state of the Russian and global economy. The article featured prominent psychologists urging people not to get emotional, but rather seek to analyze the gloomy data in order to truly discern what this crisis means to them personally. "Try to understand to what extent you are going to be touched by these changes," writes one such expert. "As your colleagues or friends lose their jobs or have their salaries cut, try to anticipate major changes to your lifestyle and try to adapt right away. If you think your salary will be cut, try to seek a part-time job. Also, you should know your rights as a worker - try to find out what you are entitled to in these uncertain times."
While this particular advice may be well-intentioned, the rest of the article does not contribute to lowering the already-high blood pressure of an average Russian citizen - it lists a dozen executives who have recently committed suicides by various means due to the effect of the worsening Russian economy. If there is ever a silver lining - if it can be called that - amidst this gloomy economic data, it's the fact that Russian citizens lived almost the entire decade of the 1990s in a perpetual economic, social and even personal crisis. As Russia continued to experience terrible after-shocks form the collapse of the Soviet Union, its people had to adapt to conditions and circumstances that most Americans would reject outright as unacceptable. Therefore, today's Russian people are somewhat better prepared to weather the economic storm than their American counterparts, if only because they are used to prolonged instability and economic uncertainty.
As US President Obama announced that he will hold American mayors responsible for proper spending of the massive economic stimulus, Russian President Medvedev announced that he will fire governors who are incapable of performing their job. Medvedev specifically stated the ongoing economic crisis could not be used by the governors in their defense. "This is your moment of truth," said Medvedev in his address to the heads of the regions. "And I hope you understand that." At the same time, the Russian president called on the federal officials to pay better attention to the needs of the regions, making it clear that not just governors could be held responsible. This past week, Medvedev already fired 4 regional heads. "We have no right to relax," stated the president. "Our economic situation is complicated, and we have to save federal funds on all levels."
Meanwhile, official government data gives more grim news for the Russian economy. Elvira Nabiullina, Economic Development Minister, stated that the "situation is changing - but not for the better. Main problems are lack of credit, lowered foreign and domestic interest towards Russian products, unemployment and lowered personal incomes in the population." According to Nabiullina, Russian GDP contracted at 2.4% in January 2009 alone.
Nonetheless, Russian armed forces would not suffer even in the midst of the ongoing economic crisis. "There are key areas where we have no right to cut expenses," said President Medvedev, "and they include the new look of our military, the ongoing modernization, and the social improvements amongst the military cadres." One such important reform will be the salary increase amongst the junior and senior officers in the military, making an average pay equivalent to $3,375 per month. Russian officials hope that such monthly salary will return prestige to the military service, with said reforms slated to take place after 2012. However, the economic crisis could postpone such reforms till 2016.
Russian military exports could increase even more with this week's visit to Moscow by Mustafa Mohammed-Nadjar, Iranian Defense Minister, who reminded his Russian counterparts that Iran has a robust domestic defense industry with a defensive purpose. While stating that Iran has not attacked anyone over the past 30 years, the defense minister also expressed great interest in Russian advanced military technology. He drew attention to the fact that Iran and Russia have common threats and opportunities in the region, "and when it comes to certain questions, our positions and interests completely dovetail. We are always ready to utilize advanced military technologies and equipment - Russia has such capability and we intend to use it, as before."
