Middle-class Russian family at the dinner table.
Putin Regime Attacking Russian Middle Class’s ‘Territory of Freedom,’ Inozemtsev Says
Staunton, VA, June 28, 2016 – The compact between Vladimir Putin and the Russian population consisted of two parts, one in which the population as a whole gave up their claims to participate in politics in exchange for stability and higher incomes and a second in which the Kremlin leader bought off the emerging middle class by recognizing for them a certain “territory of freedom.”
The first of these has been weakened as a result of the economic crisis brought on by the collapse in the price of oil and the imposition of sanctions and counter-sanctions, but for many parts of the population, it has frayed but not come apart, as a result of the Kremlin’s efforts to ensure that certain basic payments are made on which the population depends.
But the second compact, Vladislav Inozemtsev argues, is in danger of rupture because “the powers that be are confidently carrying out an attack on the middle class, on that stratum of ten to fifteen million people who have been able to achieve something in the new Russia and who were and remain the most active part of society.”
While the Russian government continues “to do a great deal” for government employees and pensioners and thus largely retains their support, the Moscow economist says, it is undermining its support among this group because it is cutting into what the members of that group have expected as their rightful “territory of freedom.”
The Kremlin may assume that the support of the mass population is sufficient, Inozemtsev says, but “experience shows that the elderly and the employees of budget institutions in practice never save the powers that be from the next revolution or Maidan” which in almost all cases are led by “the most well-off and responsible citizens.”
The Moscow commentator points to three of the areas where these attacks on the Russian middle class are taking place: against debtors, with the imposition of new fines on middle class activity, and regarding foreign ownership and foreign bank accounts.
More than 38 million Russians have bank loans, amounting to a total of 10.5 trillion rubles (US $160 billion). Of this, some 891 billion rubles’ worth (US $15 billion) are in arrears. Those who are behind in their payments are increasingly subject to restrictions on their travel abroad under a 2007 law.
These people are part of the growing army of those not allowed to travel abroad. They number almost two million now, a number projected to rise to 4.5 million by next year, is huge. In Moscow almost, “all most four percent of the adult population” now falls into this category, Inozemtsev says.
But thanks to more recent laws, those who are in debt and behind in their payments may also be prevented from having the right to drive a car. “Just imagine,” Inozemtsev says, this happening in the US and “reflect upon the political future of a congressman or senator who would risk introducing such a bill in Congress.”
The Russian middle class is also under attack by the government in the form of fines imposed on drivers either for parking without paying or violating other traffic laws, violations that are now being caught on video cameras. Such fines can rarely be appealed and consequently they add to anger among the middle class toward the government.
Indeed, Inozemtsev says, there is now a clear sense that “the authorities are terrorizing the most independent and relatively well-off part of the population, the very ‘middle class’ which for long years was the main beneficiary of economic growth in the country and the support of the Putin regime.”
And third, the middle class is the most effected by new restrictions on foreign bank accounts. Given that Russians own “more than 700,000” pieces of property in Europe alone and that there are as many as 100,000 Russian students in European countries, there are many Russians who need foreign accounts. Now they are at risk of fines and other punishments.
Such actions will affect “at a minimum” two million Russians, many of whom will compare the way they are being treated with those closer to the Kremlin. And such comparisons, Inozemtsev implies, will hardly be likely to make them more supportive of Putin and his regime.