PUTIN'S RUSSIA ON THE CUFF - CROWLEY

Russia is facing economic disarray — and with that has come a spike in protests by workers and others. The Kremlin has reason to be worried.

What’s causing this Russian economic crisis? International economic sanctions because of the occupation of the Crimea; a decline in the ruble; and above all the collapse in oil prices are all to blame. With the pinch, the government will be forced to continue to raise taxes and cut benefits, which will almost invariably lead to more protest.

Russian workers — a group often seen as supportive of Putin and his regime — are already protesting wages that are shrinking and sometimes not being paid at all. Most recently, a nationwide protest by thousands of truck drivers caused panic when they descended on Moscow to protest a new tax. Russia’s liberal opposition hopes — and the Kremlin fears — that Russian workers from the heartland might join with middle class protesters from Moscow and St. Petersburg. In 2011-12, tens of thousands of those urban  liberals took to the streets in Russia’s two main cities, donning white ribbons to protest what they alleged were fraudulent elections that led to Putin’s return to the presidency.

Such a combination, across class and region, might lead to a “colored revolution” of the kind that drove corrupt leaders from power in post-Soviet countries like Ukraine and Georgia. Putin has sought to inoculate himself from such an event, in part by championing workers who denounced the Moscow protesters, and portraying himself as real Russian muzhik — a regular guy who hangs out with biker gangs.

But is a “colored revolution” on the horizon in Russia? Despite some commentators‘ suggestions, that’s quite unlikely. But Putin is no doubt concerned. The economic crisis and the prospect of growing protests pose substantial challenges to his leadership. 

As global oil and gas prices plummet, the Russian government is in crisis. As recently as 2013, revenues from that sector accounted for 50 percent of the federal budget. The loss of that revenue not only puts a crimp in Russia’s economy; it changes the very relations between the Russian state and society.

When oil prices were high the Russian government could afford to use oil industry “rents” to help maintain the legitimacy of the regime. That’s what Nikolay Petrov, Maria Lipman and Henry E. Hale (among others) have termed a “non-intrusion pact”: The government offers economic growth and a certain level of social benefits and subsidies and otherwise leaves citizens alone, so long as they stay out of politics.

With oil income dropping, however, the Russian government can’t keep up its end of the bargain. Now it needs citizens to accept fewer benefits and to pay higher taxes just as their incomes are dwindling.

And Russians aren’t happy, turning out for a surge in economic protests throughout the country. Petr Bizyukov at the Center for Social and Labor Rights in Russia found 409 labor protests in Russia last year, the highest since the center began keeping records in 2008. That’s a 40 percent increase from 2014 and 76 percent higher than the average from 2008-2013 (which included Russia’s economic crisis of 2008-09).

Data: Petr Bizyukov, the Center for Social and Labor Rights. Figure: Petr Bizyukov and Stephen Crowley

Other databases are reporting a similar increase in labor protests. Many workers clearly weren’t going to follow the traditional Russian pattern of quietly supplementing lower wages with larger potato gardens and vodka binges, as Andrei Kolesnikov of Carnegie Moscow had suggested they might.

Then, last November, came a nationwide protest by Russia’s long-haul truck drivers, when the government moved to implement a new road tax on load-bearing tractor-trailers. The fee charged might seem small — four rubles per kilometer for trucks weighing over 12 tons —  but many truckers argued that they were barely breaking even before the new tax.

Drivers in 43 of Russia’s 85 regions and more than 70 cities took to the streets in various forms of protest. In some cases, they drove in “snail” convoys at less than 10 miles per hour. In other cases they blockaded highways altogether. The protests persisted through December, with truckers in some regions refusing to drive in January. Trade with neighboring countries was temporarily disrupted.

The truckers were especially furious that the fees would be collected by a private company owned by the son of Arkady Rotenberg, one of Putin’s longtime cronies. Last December, as truckers drove to Moscow with a threat to blockade the city’s ring road, some carried signs saying “Rotenberg is worse than ISIS.” Another proclaimed, referring to the earlier middle-class protesters in Moscow, “We are not like those white-ribboned dreamers in 2011. We have crowbars, and we won’t hesitate to use them when we are pushed to the wall.”

Although the protests were largely ignored by state-run media, opinion polls showed that almost two-thirds of the population supported the truckers.

But the truckers’ revolt did not portend a coming colored revolution. The authorities prevented most truckers from reaching central Moscow, intercepting several convoys along the way. Their protests have largely died out, even though the government offered only limited concessions, such as a reduction in the fine for noncompliance.

But what’s more significant is that, despite some angry slogans, the truckers mainly demanded changes in the tax system, not the political system. Rather than denouncing Putin, most truckers appealed to him. “President, help us!” was one of the most prominent slogans. Some of the opposition groups that had been behind the 2011/2012 protests — both on the left and the right — tried to unite with the truckers, in order to combine economic with political demands to bring about substantial change in Russia. But the truckers would have none of it.

There is still a wide gap in Russia between the growing economic concerns of many, on the one hand, and the strong levels of support for Putin as a leader, on the other. That suggests that most Russians are a long way from calling for regime change. Many still credit Putin with “raising Russia from its knees” after the disastrous 1990s. They remain convinced by state media that colored revolutions like the 2014 Maidan revolution in Ukraine lead to anarchy.

There is also the question of whether the truckers’ revolt counts as a labor protest. As owner-operators, most Russian truckers are small businessmen, surviving on very small margins. As Russian analyst Dmitrii Oreshkin has argued, the truckers protest can best be seen as a taxpayers’ revolt.

Labor hasn’t been especially powerful in Russia. Most of those hundreds of labor protests cataloged by the Center for Social and Labor Rights have been small and isolated, only affecting a particular city or company. Russian unions are generally weak, and in the past most strikes were spontaneous events in private firms in far-flung regions or in “monotowns” — one-industry towns left struggling after the Soviet collapse.

When wider protests do happen, it’s because government actions hurt disparate workers as a single category, as happened with the truckers. Coordinated, cross-regional labor protests are indeed increasing, led not by industrial workers but most often by “budget sector” employees such as teachers and medical workers who are being hit by money-saving reform plans, cuts in state budgets, or sometimes the nonpayment of their wages.

Citizens protest, too, when the Kremlin tries to cut benefits and raise revenue. In 2005 the government attempted to replace Soviet-era benefits like free public transportation and energy subsidies for the elderly with cash handouts that many felt didn’t make up for the loss.

After spontaneous protests among the elderly in several Russian regions, the government quickly backed down, in the end spending more than the reforms would have saved.

Similarly, in 2008, a government attempt to tax imported cars brought protesters out in the streets in dozens of cities. The protests were eventually dispersed, and the tax remained, but costly compensation was provided to the cities with the greatest protest.

As with the truckers, the Putin regime survived these protests with some combination of concessions and repression. But the protests revealed that the state can only demand so much from the population.

And now labor protests in Russia’s industrial regions are on the rise, becoming less isolated, as protesters from one firm clump together with strikers from another.

These new protestors come from Putin’s base of support

When Putin survived the protests in 2011 and won the March 2012 presidential election, some speculated that he did so by pitting “rural and Rust Belt Russia against urban and modernizing Russia.”

Yet the very presence of worker protests challenges Putin’s claim to be the guarantor of stability. Russia’s working class is said to be Putin’s electoral base, and parliamentary elections loom in September. While workers may not be ready to join anti-Putin protests, economic discontent will certainly impact support for United Russia, the Kremlin-backed party long dominating parliament.

So what can the Russian government do? The government has been subsidizing many factory towns that are teetering on bankruptcy — but that money is going away. With the steep drop in oil revenues, the Russian government will be compelled to raise taxes and cut spending. And that will almost inevitably lead to more protests.

In short, barring a sudden jump in oil prices, the Putin regime must renegotiate its relationship with Russian society, and the results may not be pretty.