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Moscow / AFP
Russia gears up for parliamentary elections on September 18 in the grips of its longest economic crisis since President Vladimir Putin took charge in 2000.
Despite falling incomes and rising poverty, parties loyal to the Kremlin strongman look set to dominate the vote yet again. What role is the crisis playing in the vote and can we expect a change of direction?
During Putin’s first decade in power high oil prices fuelled a boom in living standards and impressive growth figures, but also stifled the underlying need to diversify Russia’s energy-reliant economy. Since 2014 Russia has been mired in recession as a double-whammy of lower oil prices and Western sanctions over the Ukraine crisis have hammered the economy.
The country’s GDP fell by 3.7 percent in 2015 and is expected to drop by at least 0.5 percent this year before a miniscule bounce back in 2017. The crisis has hit the pocketbooks of middle and lower class Russians as the weak ruble means the price of imported consumer goods has shot up. The number of people living in poverty has soared to a nine-year high while consumer spending has plummeted.
The government has responded with belt-tightening measures as it struggles to meet Putin’s demand that the budget deficit should not top 3 percent of GDP.
But economists argue that the authorities need to make far more drastic structural changes to the economy if it wants to avoid years of stagnation.
“For the first time in 15 years, elections are taking place at a time when real incomes are flagging,†Yekaterina Schulmann of the Russian Academy of National Economy and Public Administration said. Meagre pensions, low family allowances and rising utility bills have been recurring themes in campaigns for a slot in Russia’s 450-seat Duma. Candidates from the left and right have blamed the government for either being too liberal, or not liberal enough. In the run-up to the vote the authorities pledged in a populist move to make a one-off payment to pensioners to offset their dwindling incomes.