By now, you will probably know that Russia’s president went on primetime TV to announce a climbdown on reforms to the state pension. He did not say whether – a la Theresa May – he had had an epiphany on his wilderness holiday, but his broadcast, scheduled only hours before, was a departure for someone whose preferred genre is the marathon phone-in.
Oh, oh, chorus the Western media, with more than a little Schadenfreude, Vladimir Putin is in trouble. And I bet this is the impression you were left with.
According to this script, the original reason for the changes was, of course, that the Russian economy was “in desperate straits” – whether from lower energy prices, Western sanctions (fully merited), or just sheer, standard, Russian incompetence. What is more, the Kremlin’s underhand attempt to “bury” what were bound to be unpopular reforms, by having the government announce them on the opening day of the World Cup, had failed; Russians were not so stupid as to fall for that one.
Now, more than two months later, with popular protest across the country still mounting and Putin’s ratings down 20 per cent, the Kremlin had been “spooked” into a panicked response. As if this was not enough, the proposed changes – which were summarised as raising the state pension age for women to 63 (from 55) and for men to 65 (from 60), with no mention of when this was planned to happen, were patently unjust. After all, average life expectancy for Russian men is currently only 66 – so the reforms basically stood to strip them of their pension rights. Enter Vladimir-the-Omnipotent to put it right.
Well, no, actually. There is so much wrong with this “narrative” that it is hard to know where to begin. First, the state of the Russian economy. It is not actually doing that badly. Energy prices have been edging up – to the benefit of the Russian exchequer. Inflation has been at a record post-Soviet low. The new middle class in Moscow and St Petersburg may have felt a slight pinch from restricted imports, and industry – especially the high -tech sector – may be suffering from less Western investment and harder access to international credit, but over a 30-year span, most Russians, across the country as a whole, have still never had it so good.
This does not mean there are no shadows on the horizon. But some are the very same shadows that loom over many Western countries with a growing elderly population – including, let’s be blunt, our very own. And the timescale should not be ignored. Contrary to what you may have understood, Russia’s pension changes, just like ours, will be phased in, and they come into full effect not tomorrow, not next year, but in 2028 (for men) and 2034 (for women).
None of this will make Russia’s proposed changes any more popular, but they should be set in a wider context. How come we regard such forward-planning in Russia as a panicked response to economic crisis, when it is treated as a prudent, albeit unpleasant, necessity here?
Ah, but the disparities in life expectancy, you might object. Let’s look at those disparities. Current life expectancy for Russian women is 77, not so very different from the 81.7 in the UK, where the state pension age for women is currently being raised to 67, or 78.7 in the US. The big gap is with the men. But the average here is deceptive. Those who survive past 40 have a lifespan closer to a Western norm.
What skews the figures is the death rate among young and middle-aged men – attributed to alcohol and attendant risks, such as accidents at work and on the road, plus suicide. A full 25 per cent of Russian men die before they reach 55, compared with 7 per cent in the UK. With vastly improved nutrition in the past 20 years and a shift from hard liquor (vodka) to beer, soft drinks and wine, the average life expectancy for men is already improving and could look rather different in a decade. As I say, these are long-term trends, and Russia’s state pension plans do not come into effect tomorrow.
So why, if raising the state pension age is actually a reasonable move – especially if Russian state pensions are to be higher in the future than their current paltry £150 equivalent a month – has there been such opposition, and why has Putin backed down?
In fact – another misconception – the Russian president has not retreated very far. In his broadcast this week, he said that the age for women would be increased not to 63, as planned, but to 60 – for which he gave a rather emotional and, in tone, very Soviet-era, justification, about how women occupied a special place, had to be home-makers as well as members of the paid work force, etc etc. Despite the huge disparity in current life-expectancy, however, he made no concession for men.
At which point it is worth asking again the question that underlay so much of the Western reporting on Putin’s pension broadcast. How much damage have the proposals done to Putin’s popularity and could it, eventually, prove fatal?
As even generally flattering Russian measures of Putin’s ratings show, plans to increase the pension age appear to have led to an enormous, 20 per cent, fall in his popularity, despite any positive fall-out from the World Cup. His current 60 per cent is still enviable by the standards of most world leaders, but it shows a vulnerability.
What should also be recognised, however, is that state pensions are an almost uniquely sensitive issue in Russia. In Soviet times, pensions were small, but sacred, and those Russians currently receiving, or about to qualify for, their pension lived at least half their life under the Soviet system. Many were additionally scarred by the crises of the 1990s, when pensions became worth almost nothing or simply were not paid. Putin alluded to this when he spoke. He also knows this from experience.
The protests that most threatened his presidency came not from any pro-democracy rallies in Moscow or St Petersburg, but from protests by pensioners and military veterans in 2004-5, when Putin proposed to “monetise” Soviet-era benefits and privileges hitherto paid in kind. The sight of elderly Russians, tramping the streets in the snow, is not something he will want to repeat.
Which may well be why the changes were announced, not just under cover of the World Cup, but in summer. Why – perhaps – they contained some room for retreat, and why Putin made his post-summer broadcast. The Russian president is a vastly more adroit politician than he was when he started out in 2001.
Whether the Kremlin or Putin personally was “spooked” by the fall in his ratings, however, and whether this was the main reason he backtracked is a separate question. The prospect of street demonstrations continuing through the autumn – which still cannot be ruled out – is something he surely wants to avoid at all costs. But is he trying to sustain his personal popularity as a way of securing his political survival?
I prefer another explanation: that he understands – as Emmanuel Macron and maybe Angela Merkel also understand – that popularity is capital that can banked for a future election, or spent sooner on necessary, but unpalatable, reform. With Putin, such a theory might also presuppose that he has in mind to retire at the next election, by which time he will be 72 (and well qualified for his pension). That, though, is a whole other question for a different day.
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