What is Abdullaev doing as a staff writer at the MT anyway? He's written some really wonderful stuff on the North Caucasus. Are there really two Nabi Abdullaev's? ;)
It's worth it in itself to see that an elementary school teacher earns $450 a month today. What was it in 1999, $150 with a wage delay of 6 months? I wonder if Abdullaev let that slip through on purpose. ;)
Tuesday, January 24, 2006. Issue 3337. Page 1.
Kremlin's Social Spending Gamble
By Nabi Abdullaev Staff Writer Svetlana Sakhno, a teacher for 29 years at a Moscow elementary school, is pleased to see her salary inching up, but she says the Kremlin's generosity is not enough to buy her vote.
"Thinking that I would vote for Putin just because of the increase in my salary would be too primitive," said Sakhno, whose monthly pay of 13,000 rubles ($450) will grow by another 1,000 rubles per month this year thanks to a social spending initiative backed by President Vladimir Putin.
"I would vote for Putin or for his heir because I just don't see any alternative, not because Putin is the only source of good for the country," she said.
Sakhno's remarks echo the findings of a recent authoritative study by two economists: There is no correlation between how much the Kremlin administration pours into social spending and its chances of hanging onto power past 2008, when Putin's second term ends.
In what is widely seen as a pre-election ploy, the Kremlin plans to pour $4.6 billion this year and next into raising the salaries of state-paid workers -- including teachers, doctors and museum personnel -- and improving health care, education, agriculture and housing.
Adi Brender, an economist at Israel's central bank, and Allan Drezen, an American economist at the University of Maryland, challenged the conventional wisdom that expansionary fiscal policies help governments remain in power.
By analyzing 347 election campaigns in 74 countries, including Russia, from 1960 to 2003, they found that increases in government spending in the years before an election do not secure the re-election of an incumbent or of his loyal heir. Moreover, in developed democracies, voters foresee the inflation hikes that often follow massive injections of cash into their national economies and tend to punish their leaders.
One factor that helps a leader to get re-elected or leave a loyal heir is the steady growth of the economy through all his years in office, the economists said. But this scenario only benefits a leader in a new democracy -- one that has seen no more than four election cycles after shedding a nondemocratic government.
Russia's economy has grown at an average rate of slightly more than 6 percent annually during Putin's six years as president.
The study, which was released last month by the U.S.-based National Bureau of Economic Research, places Russia in the category of a new democracy.
Securing the smooth succession of power to a Putin loyalist has been among the hottest topics in Russia's political discourse since Putin's re-election in 2004. Peaceful uprisings in Georgia and Ukraine that brought opposition figures to power have heated up the debate so much that Putin has repeatedly insisted he will not seek a third term. The Constitution would have to be changed for Putin to stay in power past 2008.
When Putin presented the $4.6 billion social spending plan last year and put chief of staff and longtime ally Dmitry Medvedev in charge of overseeing it as the new first deputy prime minister, many political observers rushed to speculate that Putin had picked Medvedev as his successor and was providing him with a way to boost his popularity.
The dramatic growth in oil prices during Putin's time in office has made the spending possible. Liberal economists had previously warned against such spending, saying it would spur inflation. But the treasury was cracked opened last year, perhaps not incidentally after nationwide protests over the monetization of social benefits rocked the country.
The two economists behind the study could not be reached for comment last week.
Russia analysts and workers on the state's payroll who were interviewed for this article agreed with the findings but differed in their explanations on how increased spending affected them personally and voters in general.
Leonid Sedov, a sociologist with the independent Levada polling center, said the immediate financial well-being of the population strongly affected its attitude toward the government. "Our people think with their wallets first," Sedov said.
He said voters overwhelmingly re-elected Putin in 2004 because they felt they personally were doing well.
Sedov said the Kremlin had made the right decision to increase social spending but was kicking off the plan too soon. "In the coming two years, people will stop feeling any gratitude for the improvements," he said. "Also, given the poor prospects of business growth in Russia, the additional cash is likely to boost inflation, and that may upset the Kremlin's hopes."
Sakhno, the teacher, said she would not back the Kremlin administration if she saw her salary being gobbled up by inflation. "I don't see any good alternative to Putin's people, but I would not vote for those who failed me," she said.
Another risk related to increased spending is a greater gap between the rich and poor, said former presidential economic adviser Andrei Illarionov.
"The more money that is spent on social projects and social support, the greater the social differentiation," he said in an interview published in the January-February issue of Russia Profile magazine. "It is because the wealthiest groups are more active in getting resources than the poorer groups."
Illarionov said a strong and effective government could provide for the equitable distribution of the money but said that was not happening.
Yury Korgunyuk, a political analyst with the Indem think tank, said that "bribing" voters through the social spending program was actually the only relatively safe strategy for the Kremlin.
"'Color revolutions' in Ukraine, Georgia and Kyrgyzstan stemmed from public protests over rigged elections there," Korgunyuk said. "No one in the Kremlin wants things to develop along this scenario here."
Russian voters still live in a volatile political and economic environment, and as such may not connect any improvement in their well-being to the increased federal spending, said Nikolai Petrov, an analyst with the Carnegie Moscow Center.
Also, the money needs to trickle down through many layers of bureaucracy before it reaches ordinary Russians, meaning that regional officials might end up receiving the thanks, Petrov said.
Nu, zayats, pogodi!
__________________________________________________ Do You Yahoo!? Tired of spam? Yahoo! Mail has the best spam protection around http://mail.yahoo.com