Bureaucrats Earn Several Times More Than the Majority of Russians
According to the Federal Service for State Statistics’ March 5 report, 2011 salaries of federal civil servants in Russia were three to four times higher than the average pay in the rest of the economy. The problem is that their work is not always as productive. Neither is a high income a guarantee against corruption. But as long as the world oil prices are what they are now, the officials’ salaries will remain at their present level.
The Federal Agency for the Procurement of Military and Special Equipment (Rosoboronpostavka) is the leader in terms of the average amount of pay received by its civilian employees: 103,300 rubles per month, or 23.4% less than in 2010.
Number two is the Government Executive Office, where the average pay in 2011 stood at 102,100 rubles per month, or 1.8% less than in 2010. At 91,300 rubles per month (or 2.5% more than in 2010), the Accounts Chamber is in third place. Number four is the Presidential Executive Office, with 90,300 rubles per month, or 5.2% more than in 2010.
Whatever the differences between individual agencies, Russian bureaucrats are paid from 4 to 4.5 times more than employees in the rest of the economy, where the average pay was 23,500 rubles in January of this year.
Be that as it may, the high salaries have not led to a breakthrough in the fight against corruption. Russia is number 143 in last year’s world corruption rating, where it is listed alongside Nigeria, Azerbaijan, Uganda and Belarus.
Russia is far from being a leader in accordance with the competitiveness index for governance efficiency calculated by the World Economic Forum. Igor Nikolayev of the Financial and Accounting Consultants says that the 2003-2004 government decision to dramatically increase civil servants’ salaries was motivated by the hope that this move would have a positive effect on the efficacy of the entire state machinery. “But in reality no radical changes have occurred,” he stated.
Mikhail Delyagin of the Institute of Globalization Problems is of the same opinion. Civil servants’ work requires diligence, not initiative, he commented. A more important thing in this sense is good social guarantees that should induce an official to perform his or her duties in good faith. Besides, “apart from the official salary there are numerous add-ons that in some cases may form the bulk of incomes received by state officials,” he said.
Moskovsky Komsomolets
Putin’s Options: Will Russia Change Overnight?
So here we go again: just like in 2000, Russia has a new president, Vladimir Putin. According to statistics, his popularity has even grown over the past 12 years, from 53.4% to 63.6% of the vote. However, these statistics do not reflect the reality correctly.
If he plans to continue running the country the way he did over these past years, his third term will end in a major crisis. The social contract between the government and society – “you let us get rich and we don’t meddle in politics” – has been irretrievably broken.
Theoretically, Putin could make things easier for himself by tightening the screws. But the bitterness in Russian society has reached a level where he would have to tighten them really hard. Anything less won’t work. He would have to turn Russia into a larger version of Belarus.
But Putin certainly has enough sense to understand that this policy would damage Russia’s future and destroy its economy and political sphere. He does not seem ready to try bloody repressions.
Another option would be to concede to the pressure of the creative class. But Putin is not someone to concede to anything easily.
The most reasonable option for him is probably to draft his own political agenda and get out in front of the change. To achieve that, he must renounce part of his own political heritage: a parliament that is not really a parliament; governors who have no connection with the people they represent whatsoever; and a presidential executive office that manipulates every sphere of life. All of these will have to go.
Moreover, it will not be enough to simply announce these changes; they need to be tangible. We have heard political leaders announce the right things while acting entirely differently too often. This time, the screws need to be loosened effectively.
At the same time, this should be done with caution, making sure the screw head doesn’t slip off. We must keep in mind the lessons of Gorbachev’s perestroika: sometimes attempts to make things better have the opposite effect. No reform should lead to the country becoming unmanageable.
And, most importantly, if reforms really occur, Putin should be ready for the emergence of other strong leaders in Russia. While the present-day Russian politics is dominated by personalities – or rather one personality, in the future it needs to be dominated by institutions.
Developing political institutions was never a priority for Putin or for society, for that matter.
In the past the public was rather indifferent to politics. At the new stage of development – a stage other countries such as Britain went through in the mid-19th century – the generally ignored middle class rose up and demanded that the nobility (the ruling elite and the oligarchs in Russia’s case) share power.
It is Putin’s challenge as president to understand the message of the time. The price of a mistake will be too high, and the entire country will have to pay for it along with him.
Argumenty i Fakty
Post-Election Slump Forecast for the Stock Market
“Everyone will go bankrupt within three months. Russian capital may burn up in pre-election fever.”
Pre-election excitement now gone, Russian stock markets may face a long recession and a series of bankruptcies.
Hundreds of investors may fall victim to a pre-election fever at the MICEX-RTS stock exchange. As soon as the presidential race is officially over, share indices that have been rising fast will go into a steep decline, with risky investments losing their value.
Who will get hit hardest?
Share prices soared in the last week of February. Further fluctuations were hardly noticeable but only until the first days of March. Within less than two weeks, RTS and MICEX rates set a record of the past six months and came close to the pre-crisis peak. At the close on February 24, the RTS reached 1,722 points while MICEX ended at 1,594.
BCS analyst Dmitry Dorofeyev said the rise reflected a mass closure of short positions that were opened when the Russian market was falling faster than warranted by external factors.
While Dorofeyev does not link the activity in the Russian markets to easing of political tension, many stock market players believe it is directly related to positive developments in Russian politics.
“Finally, after months of dry spell, people have started buying. They have started to believe that Europe and Russia are out of trouble,” RIC-Finance analyst Mikhail Fyodorov speculates. “It is not only the Russian markets that have seen explosive growth recently. Many global markets are growing. As far as Russia is concerned, the ruble is its catalyst.”
Ruble to collapse?
Russian currency has been growing strong since mid-January. However, Dorofeyev believes the Russian currency’s triumph will be short-lived.
“Perhaps it was just luck. The escalation of the Iranian issue triggered the rise in oil prices. It is also a time when exporters and banks are selling foreign currency reserves to pay profit and mineral extraction taxes and keep their ruble liquidity at a comfortable level.”
The analyst also expects that, as the shock of the short position closure fades away, rates will return to their early February level.
“The Russian market will handle a couple of trade sessions before it drops,” Fyodorov agrees. “The market is yet to be affected by the negative news last month, with the steadily distressed economy of the United States, Europe and the largest Asian countries speeding up the collapse.”
“The world believes in the positive statistics presented by the United States. But they are misleading,” Fyodorov says. “Europe is stuck in a hopeless recession. India’s GDP is slowing down. China is caught in a real estate crisis. Any investments are highly inadvisable at the moment. The current growth is a trap similar to the one we saw before the 2008 crisis and in 2011. Those who are buying now will come to regret it three months later.”
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