Vremya MN June 8, 2001 THE GAME IS ON The authorities offer Russian citizens a game of survival Russians will not be able to afford full cost of rent and utilities Author: Mikhail Delyagin, Director of the Globalization Institute [from WPS Monitoring Agency, www.wps.ru/e_index.html] THE REFORM TO HOUSING AND UTILITIES PRESENTED BY GOSSTROI CHAIRMAN SHAMUZAFAROV WILL LEAVE MILLIONS OF RUSSIANS WITHOUT ELECTRICITY, WATER, CENTRAL HEATING, AND SO ON. REFORMERS PROMISE COMPENSATION TO ALL RUSSIANS WHOSE PAYMENTS FOR THE HOUSING AND UTILITIES EXCEED 22% OF THEIR INCOME.
The situation in housing and utilities is appalling. Around 12- 15% of apartment blocks need urgent repairs, wear of infrastructure is 60%, the number of emergencies and accidents increased five times over the last ten days. This is a sphere where a thorough and urgent improvement of economic relations is truly essential. Paradoxical though it is, reformers do not give a thought to it. Muttering the traditional phrases about facilitation of competition and necessity of investments, representatives of the government concentrate all their attention and efforts on a dramatic rise of tariffs.
Installation of heat-use counters in apartments is the only element in the sphere of energy saving the reformers talk of at length. Apparently, most authors of the draft reforms live in private houses, or at least in new apartment blocks, where these counters are already installed. The problem is that the presence of the counters does not result in any heat being saved. They are essentially needed for something altogether different - for determining how much heat is lost "in transit". Those who live in the new apartment blocks with the counters will not be required to pay for the loss, only for what they utilize. And the heat loss is to be charged to citizens with lower incomes. In other words, the more apartment blocks are built with the counters already installed, the more expensive central heating will be for citizens who don't have them. As for the money to repair the pipes by which heating reaches apartments, it is absent as it has always been.
Reformers promise compensation to all Russians whose payments for the housing and utilities exceed 22% of their income. At the same time, they absolutely ignore the impossibility of determining the real income of the poor who are forced to earn their living in the shadow sector of the economy all too frequently.
Besides, nothing is known about the financial sources budgets will be using to pay the promised compensations. As the matters stand, the population regularly pays for housing and utilities, and the sphere has encountered problems because of budgets' debts to housing and utilities companies that raise their tariffs whenever they see fit. It is their activities that should be brought under control but reformers do not want to deal in anti-monopoly policy. The population is forced to pay for their laziness and incompetence. In the wake of the reforms, citizens will get no money from the budgets which have not paid the housing and utilities companies for some reason. Everything will be much more simple. Budgets will not be paying money to the housing and utilities companies; they will not be paying it to the poor.
In other words, the planned reforms to housing and utilities make survival for the poor (no less than one-third of the whole population) extremely problematic. The situation is not much better for the "rich" who are supposed to pay in full for housing and utilities from as soon as January 1, 2002. The draft reforms include in this category citizens who earn over 4,000 rubles a month, or around $127 by the average exchange rate expected in 2002.
Needless to say, the reforms are not to be stopped now. The reforms are to be such that revenues of regional budgets will go down. Governors are to be deprived of their relative financial independence. According to specialists, the tax reforms will cut budget revenues in 2002 by 1.9%, 0.2% of them revenues of the federal budget, and 1.7% revenues of local revenues. It means that the regions will be forced to cut down their expenses...