As William Churchill stated, "These people will never be defeated". Source: Kirill Andreev
Tim Ash and his colleagues at Royal Bank of
Scotland were in Moscow on March 14-15 for a look-see. Russia is the “flavor of
the quarter”: the economy is doing far better than expected and the budget
deficit could disappear completely this year, four years ahead of schedule,
among other things. And it is one of the few places in the world taking in new
money, with some even suggesting it could emerge as a possible safe haven in
the face of instability in the Arab world and Japan's woes.
But Ash says he was surprised to find the locals so
pessimistic about their prospects. "In terms of overall impressions from
the trip, we were actually taken aback by the generally downbeat views of
locals on the economy. While accepting that high oil prices would provide a short-term
boost to the economy, there was concern that this would likely just discourage
policymakers from addressing deeper seated structural weaknesses revealed
through the crisis over the past three years," Ash wrote in a note on the
Ash's comments on the pessimism among locals is poignant.
I have often noticed this: Russians in general tend to be a lot more downbeat
about the future of their country than the foreigners who live and work
I'm not sure exactly what the cause of this is. One factor
is surely war-fatigue. Russians have literally been battling to build a new life/country
for two decades now, and it has been really hard work. What little progress was
made in the 1990s was almost all knocked down in the ruble crisis of 1998 and
most had to start again and rebuild their businesses. (They did and the upshot
was there was a lot less conspicuous consumption and a lot more investment
after that crisis: Who talks about Novy
Russky these days?).
Under Vladimir Putin, stability and an economic boom
appeared, and in 2007-ish there was some real optimism about the future (look
at all the babies in Moscow - everyone's kids here are the same age: 4 and 7).
But the 2008 economic crisis knocked everything down again.
Russians are simply tired of struggling, if you ask me.
The foreigners love the dynamism of Russia and the opportunity it presents, as
it stands in sharp contrast to the ossified social hierarchy of home (with the
exception of the Internet sector, which is partly why that's so sexy to younger
However, as one of my Russian colleagues said to me the
other day: "You are already an adventurer simply because you are here, so
this all suits you. And you have the option of leaving anytime you want. Me, I
have to put two kids through Russian schools. I rely on the Russian medical
system. And I will be dependent on the Russian pension system. That is a
totally different deal to yours."
The recent crisis has depressed everyone and in 1998 it
took four years for moods to lighten. I was surprised at how well most of my
friends took this crisis compared to the black pall that fell over Russia in
1998. But that's not to say they are happy.
Moreover, with Duma and presidential elections looming,
there is more uncertainty on the near horizon. The crisis undid Putin's
implicit promise — "don't meddle in politics and I will fix the
economy" — and people are angry because they can see that the state is only
pretending to listen to them. When profit margins were fat and wages soaring,
it didn't matter. But now the opposite is true: They are thinking more about
politics and feel betrayed by the government.
For the country's oligarchs, the situation is slightly
different, although they are also thinking about politics. Everyone is nervous
because of the anti-graft campaign. Everyone is assuming that someone big—either
from business or the administration—is going to be arrested to serve as an
example. This would help the anti-graft program, which is not doing well at the
moment (everyone started paying taxes after former Yukos CEO Mikhail
Khodorkovsky was arrested in 2003), but it would also play extremely well to
the gallery ahead of elections. So, many rich Russians have been sending money
abroad and diversifying their businesses internationally.
Personally, I think this is a temporary thing and that
everyone will cheer up again after the elections are over and the economy is
moving again. After all, things are getting better in Russia pretty quickly,
despite the big bumps in the road. (And spring will help, as everyone is very
depressed this time of year as the snow turns to slyakot, mountains of slush.)
And Russians don't give up—ever, regardless of how down in the mouth they are. They have this Herculean ability to deal with suffering. One of my favorite Winston Churchill quotes is from a trip to Moscow in the depths of winter during World War II: As he was being driven to see Stalin, a group of Russians standing in the snow eating ice cream was pointed out to him: "These people will never be defeated," he replied.
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