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RIA Novosti
January 12, 2005
THE PENSIONER IS ALWAYS RIGHT
MOSCOW. (RIA Novosti political commentator Dmitry Kosyrev). Russia has begun 2005 with some predictably unpleasant moments. Pensioners have taken to the streets in numbers in spontaneous protests in the "northern capital", St. Petersburg, the central Russian cities of Vladimir and Samara, and in Solnechnogorsk and Khimki outside Moscow. They were always suspicious of the reform of the pension scheme - replacing benefits in-kind with cash - when pensioners were promised increased pensions in place of their withdrawn privileges such as free travel on city transport.
The reform was conceived to improve the lives of senior citizens, and everything looked good on paper. But elderly Russians, with their great experience, after listening to television speakers about the gains they were to enjoy from the reform, and waiting for the promises to come into effect, totted up their rubles and kopecks, and took to the streets.
Many had predicted these developments. In particular, Morgan Stanley's analyst Byron Wien hit the mark when he drew up his "Ten Surprises of the New Year" for 2005, forecasting all kinds of disasters for Russia, up to and including a "second Russian revolution." Mr. Wien's list, admittedly, deals with surprises, i.e. extreme, rather than normal, scenarios. But it is understandable that pensioners in Russia today are very unhappy.
It is common knowledge that President Putin's market reforms go much deeper than anything done by his forerunners since 1992. And in macroeconomic terms the "monetization of benefits" is both logical and natural. The in-kind and subsidized system, which still prevails in pensions and housing rent, for example, is a weight on the country's entire economy. But from the administrative perspective, this measure - remembering Russian realities - could not have worked without any problems. And it does not take a Morgan Stanley man here to see this; all Russian media were unanimous in predicting as many surprises as those forecast by Mr. Wien. It can, of course, be said that pensioners, with their biologically checked response to new realities, are always wrong. This can be seen in any Sberbank office when changes are announced not only to household charges, but also even to the forms that have to be filled in. Long lines of senior citizens, many with seeing and hearing problems, have to be told on an individual basis about the changes and how much they must now pay.
However, it makes more far sense to consider that the pensioner is always right. At least in Russia, where the "market" reforms of the early 1990s deprived the older generation of all their savings, and where inflation and the collapse of the pension system impoverished millions of elderly people. They had to make do with $20 to 30 a month amidst three-digit galloping inflation. Given this background, they have the moral right to suspect an ineffective bureaucracy of every possible sin.
Importantly, these suspicions were well founded, as the enforcers of the laws that looked perfect on paper have messed things up again. And they have done so to such an extent that the pensioners' revolt was the first item taken up by the State Duma (lower house of Russian parliament) after it resumed work after its long New Year's recess. A plenary meeting on Wednesday considered an address to the government and the prosecutor-general concerning the non-implementation of the law on benefit payments.
Parliamentarians largely spent their holidays in their constituencies and brought many incidents they had witnessed to the capital. House speaker Boris Gryzlov and the chairman of the labor and social policy committee, Andrei Isayev, had very many interesting things to tell their colleagues. For example, if regional budgets lack the funds for benefit payments, in-kind benefits may be continued. But, according to Mr. Gryzlov, the regional authorities have failed to seize this opportunity. Besides, the law prescribes that the volume of benefit financing may not be reduced, nor the number of claimant categories, because the point is that benefits must come in the form of cash. But the local authorities, to all appearances, have decided to economize on the pensioners.
And that is not all. Even under liberal reforms old people had certain rights to receive some prescribed medicines free. No one planned to deprive them of that privilege - but officials in the Ministry of Public Health and Social Development had no time in the holiday rush or were unable to explain to all pharmacies how the system would work now.
Last but not least, free travel. The Duma was told that the mayor of a protest-ridden town of Vladimir had cancelled free travel for pensioners, compensating only those whose pensions were below 1,600 rubles a month. And that is just over 50 dollars. As for a rebellious Moscow region, free travel is the issue here, too. Elderly people living outside the capital go to Moscow in their tens of thousands to earn something on the side or offer their wares at Moscow markets, and without free travel their earnings, which are not nearly large enough, have been all but halved.