The quarantine measures and partial plant closures caused by the corona infections catch Russia on the wrong foot. Two thirds of the population have no savings and one third live on 240 euros a month. Do the Russians now have to prepare for even tougher times and, as in the 1990s, grow vegetables and fruits on their dachas?
People hope that President Vladimir Putin will give the right instructions to limit the crisis. Putin has already made four televised speeches on the Corona crisis (17 and 25 March, 2 and 8 April). The number of those who are satisfied with the work of the Russian president increased from 67 to 71 percent according to a survey conducted by the Wziom Opinion Research Institute in the last week of March
The situation in Russia is difficult. According to the Nesavisimaya Gazeta, only nine percent of Russians believe that the health system has grown during the corona crisis. 74 percent of Russians have problems buying masks.
In his speech on April 8, Putin made some remarkable announcements. Doctors who work directly with Corona patients receive a salary supplement of 1,000 euros. First aid nurses and doctors who work with Corona patients receive a salary supplement of 600 euros. The Russian President stated that 400 million euros had been transferred to the regions for the establishment of special hospital infection departments. A further 158 million euros would be transferred to the regions in April for the purchase of respiratory machines and first aid vehicles.
The measures ordered by Putin and the government are an attempt to iron out the mistakes of the past. In the last 15 years, according to Nesavisimaya Gazeta, four thousand hospitals in Russia have been closed under a program of “optimization” and the number of hospital beds reduced by 400,000. In December 2019, deputy prime minister Tatyana Golikova admitted that health care had “deteriorated sharply”. Industry Minister Denis Manturov promised the Russian president to increase the number of ventilators produced monthly to 1,500.
First companies resume their work
Meanwhile, there are first signs of relaxation. On Monday, 250 of the 750 medium and large industrial enterprises of the city of Moscow resumed their work. However, it was said by the city administration that they were trying to let the employees, who were not directly involved in the production, work from home. The resumption of work in the Russian city with the highest number of Corona-infected amazed. Didn’t Putin just prepare the public for another four weeks of quarantine?
The companies had ceased their work after the first televised address by the Russian President on 25 March. According to the TASS news agency, according to a Putin Ukas, companies can continue their work during quarantine on the condition that employees are adequately protected by hygienic measures.
One reason for the resumption of work is probably the tax losses for the city of Moscow in case of plant closures. The 250 companies that have now resumed their work pay 110 million euros in taxes into the city treasury every month.
Heavy losses for the economy
Russia is still facing the peak of Corona infections, Russian Prime Minister Mikhail Mishustin said a few days ago. The statistics seem to prove him right. In the last day, the number of infected patients increased by more than 1,000 new cases. On 9 April, the total number of people infected was 8,672, including 5,841 cases in Moscow alone. There is no information or estimates on how high the number is. A total of 63 people have died from the Corona Virus in Russia so far.
The quarantine measures ordered by Vladimir Putin on April 2, up to partial closures of companies by the end of April, are being followed by the people. Many hope that the quarantine measures will be lifted before 30 April.
In order to know how much help the most important companies need, the Russian government ordered a Stress Test at leading Russian banks. The analysts of the banks present two Stress scenarios. According to the first scenario, the quarantine ordered by Putin ends in the summer and the oil price stands at the mark 20 dollars per Barrel. According to a second scenario, economic activity in Russia is frozen until autumn and the price of oil falls to $ 10 per Barrel. The scenarios show that the Russian economy is expected to suffer a severe slump.
The Russian government is working on an aid plan for the Russian economy. A list of 650 systemically important companies will be published on 10 April. This company had “the largest opportunities to support,” writes the Nezavisimaya Gazeta.
KP leader Zyuganov:” Corona " conceals deeper crisis
Gennady Zyuganov, chairman of the KPRF, the largest Russian opposition party, said on Monday after a video conference with the Russian Prime Minister, Mikhail Mishustin, that the current economic crisis did not originate primarily in the Virus disease. The corona crisis exacerbates already existing bad developments. Russia needs more sustainable development in the areas of industry, agriculture and science. In this context, Zyuganov recalled the global financial crisis of 2008, when economic growth in Russia declined by eight percent. However, pro-government Russian economic experts only expect economic growth to decline by one to three percent due to the Corona crisis.
The KP chief recalled that 53 million Russians already live with an income of the equivalent of 230 euros per month. Many people would even earn only 100 euros a month. All of these people need immediate help in the amount of the equivalent of 300 euros. The help had to come quickly, because the reserves of the people were soon exhausted. Many had no savings.
It is also important that the state helps people with the cheap procurement of agricultural technology and fuel so that they can order their private fields and fallow land. If the food supply in Russia is not secured, there will be “Hunger and insurrection.”
Protect companies from speculative Acquisitions
The Russian umbrella trade union federation FNPR also filed demands with the government. In a letter to the Prime Minister, FNPR chairman Mikhail Shmakov called for a wage supplement of 50 percent for all workers in the medical sector. Today, medical personnel are not only working under the risk of contagion but also under constant overburdening.
The head of the union also demanded that the public prosecutor’s office and the police must strictly check that the employers do not bypass the ordered work rest during the quarantine period and force the employees to work in disregard of the risk of infection. One must also prevent mass redundancies. There should only be financial support for the companies that maintain the jobs. The lower incomes would have to be completely exempt from taxes. The top incomes would have to be taxed more heavily. Only in this way can the hole be filled, which is caused by the failure of payments into the health insurance.
Schmakov called for immediate measures to protect important companies from speculative capital. This is now trying to buy up companies with falling stock prices. The government must draw up a plan to nationalise companies that play an important role in social and economic stability. All privatizations of state enterprises would have to be suspended for one year.
Russian labour law obliges companies to continue paying wages
Vladimir Putin announced in a televised address on 2 April that the quarantine measures due to the corona infections will be extended until the end of April. However, regions where there is no major risk with the Corona Virus could take softer measures.
But who now pays the wages and salaries for millions of workers sent to quarantine-forced leave? Vladimir Putin has not commented directly on this. Does he assume that the entrepreneurs continue to pay the wages? This corresponds to the Russian labour law. It obliges companies to continue paying employees the wages if production has to be stopped for economic, technological, technical or organizational reasons.
For small and medium - sized enterprises, however, continued payment of wages is a very hard chunk. Many of these companies – particularly in the services and tourism sector – could go bankrupt in the coming months. As a consolation, the government promises small and medium-sized enterprises interest-free loans for the payment of salaries, an extension of six months in the payment of taxes and a Moratorium on bankruptcy proceedings.
There is still no clear concept of how the government intends to overcome the crisis. One can assume that behind the scenes the interest groups, the state, parties, entrepreneurs and trade unions are wrestling with each other.
“No one explains what the wages are to be paid, if there is no profit,” writes the national-liberal Nezavisimaya Gazeta, and a question on Everyone’s mind. The paper goes on to say that it cannot be the Russian government’s obligation to “support millions of workers who have been sent on unpaid leave,” because that would increase the budget deficit and attack the financial reserves.
Financial expert:” Prosperity Fund " as security cushion in case of further sanctions
The most important Russian financial cushion is the national wealth Fund. It currently has a volume of 127 billion dollars. So far, this fund has been used to compensate for Russian tax losses caused by the falling oil price.
If the consequences of the Corona crisis were to be tackled in the same way as Europe and the USA, then the resources of the prosperity fund would be completely used up next year, investment broker Timur Nigmatulllin told Nesawisimaja Gazeta. The Russian government will not touch the wealth fund, said the Broker, because there could be new sanctions from the West at any time and then you need this money.
The independent Russian trade union “confederation of Labour” (KTR) has collected 100,000 signatures for the demand that wages for employees of small and medium - sized enterprises be paid from the Social Security Fund, according to its own data. Entrepreneurs pay into the Social Security Fund, from which the wages for days due to illness are usually paid.
In Moscow it has become quiet
The incision in the life of the Muscovites by the quarantine is enormous. In the city, which normally only comes to rest for two hours at night due to seething energy, it has become quiet. On the wide streets, where there are always traffic jams, there are now about as many cars on the road as in socialist Times (Video: drive through the city center). After all The air has improved.
According to the Moscow Ministry of transport, the number of passengers on the Moscow Metro, in which nine million people travel every day, has fallen by 83 percent.
Who can, went to the dacha. Supermarkets, which are usually open 24 hours a day in Moscow, now close at night. If you want to read newspapers, you have to go on the Internet. In my residential district, all newspaper kiosks are closed.
The Russians are developing survival methods. An important role is played by the Internet, which offers distraction but also the opportunity for visual communication. In demand is everything that lifts the mood, funny, crazy, less contemplative. Cooking recipes and funny photo collages are exchanged. The Moscow Tango scene organizes online Milongas. Russian youtube channels have been outbidding each other for weeks with the latest conspiracy theories. Without evidence, it is claimed that the corona Virus was deliberately used by” dark forces”. Among others, the left-wing video Blogger Konstantin Sjomin agitates against these conspiracy theories, having given up his job as a spokesperson for the state television channel Rossiya 24 a year ago.
No all-round monitoring in the Russian capital
After all, the Russian government did not want to put the citizens under great surveillance of all Muscovites. The city government presented a project last week after every citizen had to order QR Codes to legalize leaving the house for a dumpster or a grocery store. But Mayor Sobyanin praised that the citizens already show a lot of discipline. The previous control measures were sufficient.
But in several Russian regions there is more surveillance than in Moscow. In Nizhny Novgorod you have to legalize leaving the house with QR Codes. In Tatarstan you have to send a text message to the city administration and state the reason for leaving the House. And in the far east of Vladivostok you need an ID card that proves an important activity when traveling in the city.
The Russian television tries to improve the mood of the viewers with reports about companies that make protective suits or masks. In this context, a production Department of the truck manufacturer Kamas and an oil processing factory in the Republic of Tatarstan were shown. A university in Kaliningrad produces masks with silver, which are supposed to have an antibacterial effect.
The students in Russia are now to be increasingly involved in teaching via the Internet. But not all students have Laptops and Tablets. In St. Petersburg there are exactly 17,000 students who need a Tablet or Laptop. The governor of St. Petersburg, Aleksandr Below, has now asked the citizens of the city to hand over unneeded Tablets to needy students.