Knotty Problems

Photo: The czarist-era mansion that is now the headquarters of the presidentially appointed governor


Look down a single street and you can see signs of three different eras in Russia – the czarist era before the 1905 revolution, the Communist period to 1991, and the modern era. There are brightly stuccoed buildings next to faded Krushchev-era housing, and passers-by talking on cell phones. It is complicated to try to take it all in.

The Russian economy is said to be growing at a healthy rate near 7 percent, and I can see signs of it all around Ekaterinburg. Construction cranes arch across the skyline. There are some clusters of high rise buildings growing in the city center, and here and there are what Russians call “point buildings” or “candles” sticking up above neighborhoods of five-story buildings. One of these “candles” is being built near us, and construction is going on 24 hours a day, six days a week. I assume that they’re trying to get the outside work done before winter sets in. Neighbors don’t seem to have any say about the klieg lights and banging noises that definitely disturb sleep.

I know that a one-bedroom flat in a new building was recently sold for the ruble equivalent of $500,000. Larger flats go for multi-millions. Real estate is regarded as a good investment for those that have the money. Ah, but how many have that kind of money?

You see old people on the street who look like they’re living in Soviet times, only perhaps not as well as they did then. A typical pension of 3,000 rubles a month is equivalent to $120. The average salary of a working person is about 12,500 rubles, or $500. Monthly utility bills and the charge for maintenance on state housing take a chunk of money, and the service is terrible – in many cases, it’s worse than nothing.

A friend had a water leak in her flat while she was away on vacation. The downstairs neighbor called a city plumber, who did nothing more than turn off the water for the whole building. When an upstairs neighbor complained, the city sent someone to turn the water back on without bothering to isolate the problem. The continuing leak ruined the downstairs flat, and now that neighbor is suing my friend. They both know that poor maintenance of the very old plumbing by city services caused the original problem, but neither expects the city to pay for the damages – or replace worn-out valves and rusty pipes.

Bad maintenance is an irritating fact of life for the multitude in state-owned buildings. In many areas it hasn’t improved or gotten worse since Soviet times. What is changing quite noticeably is food prices. Since the collapse of the Soviet Union Russia has struggled with inflation, and the goal this year is to keep it below 8 percent. Already it’s above that. In Russia 40 percent of the consumer price index is for food – in the U.S. food accounts for only 15 percent of the CPI.

Food prices shot up in September, worrying both average Russians and politicians. There is not a single cause, but there is one definite effect – many ordinary things become luxuries to pensioners. I’ve been told that cheese, as well as most meat, costs too much now for pensioners to buy very often.

And what about medical care? Russia has a mixed system today. There is socialized medicine that is theoretically free, however anyone with money finds it useful to spend it when necessary on doctors and drugs. Doctors are so severely underpaid that many students are now entering medical school just to get free education, and more than half look for jobs in business rather than medicine after graduation. Good medical care is therefore thinly available across this vast country. What happens to a person in a remote village when they get sick, I asked a friend. “They die,” she said. She cynically half-believes that the government wants these people to die off so that they will no longer be a burden on the state.

Russia is the only developed country in the world that has experienced a decline in life span in the last 40 years, while death rates in certain working age groups have doubled. The greatest cause of death is heart disease and the second greatest is alcohol poisoning from illegal spirits. These two causes of death affect men in particular. Cancer can affect anyone, and is in third place as a cause of death. With a five-year survival rate of only 43 percent for all forms, it is so feared that patients might not be told what is wrong with them.

Even supposedly healthy people may have unusual problems. I know of a young mother of twins who breast-fed her babies. The drain on the calcium in her body caused her teeth to loosen, and they all fell out. Another mother breast-feeding her baby is losing her hair. The doctor tells her she’ll be all right when she weans the baby.

Housing…food…health care… These are the biggies in a person’s budget. I could comment on transportation, clothing, and entertainment, but I’ll end with just one more item: personal income tax. A few years ago it was noted that rich people were using various schemes to avoid paying taxes. It was decided that it would be a good idea to tax everyone the same. No longer would the rich pay European level taxes. With a rate lowered to 13 percent, they would feel shamed not to pay.

The Moscow Times reported recently that the Znamenka advertising agency was asked to make an ad, displayed in 2005 and 2006, that showed a new metro station paid for with taxpayers' money. The caption read: "Thanks to all those who paid taxes. To all those who didn't, please do so." The Times quoted the president of Znamenka, Alexander Moshayev explaining, “We want people to understand that taxes are paid and collected not to make officials rich. We're saying, 'If you haven't paid, please do so, because others have and you should feel a little ashamed.’" I hope the rich do feel a sense of shame. They don’t have much to fear from law enforcement.

The most remarkable part of the flat tax scheme is that the tax on the poorest people was raised from 12 percent to 13 to meet the goal of everyone paying the same. I don’t recall that there wasn’t much opposition to this proposal. The political parties that are called “opposition parties” like to be known as pro-Kremlin. They are opposition only insofar as they’re not the favored party, and they seem to hope that if they curry favor, one of them might become powerful later. Real opposition is quashed because the greatest fear is of instability.

To unravel any one of Russia’s problems leads to a knot somewhere else.