By Henry Meyer
Dec. 15 (Bloomberg) -- Russian Prime Minister Vladimir Putin is facing a rising tide of social discontent as the economy heads into recession after a decade-long boom driven by oil prices.
Thirty-nine percent of Russians express growing dissatisfaction with the government, according to a November poll released today by the Moscow-based Public Opinion Foundation. In some regions, the level of public discontent is more than 50 percent, it said.
“The worse the crisis gets, the more dissatisfaction will grow, especially with regional authorities,” Lyudmila Presnyakova, the poll’s organizer, said by phone today. “As unemployment rises, so will the potential for mass unrest”
Putin, 56, now has full responsibility for the economy as prime minister since backing his chosen successor for president, 43-year-old Dmitry Medvedev, in May. The economic crash provoked by the worldwide credit crunch and the falling price of oil is likely to damage the new premier’s popularity, analysts say.
“If the government no longer has money to throw around, this will affect Putin’s standing,” said Olga Kryshtanovskaya, an analyst from the Russian Academy of Sciences. “People had gotten used to living in a golden age.”
Yesterday, several thousand people blocked the main roads in Russia’s Pacific port city of Vladivostok to protest against plans to raise duties on imported vehicles.
Russia, the world’s biggest energy exporter, has seen its economy grow by an average of about 7 percent a year since 2000, the year that Putin came to power as president. Barclay’s Capital said last week that Russia will sink into recession in the first three quarters next year after oil prices plunged $100 from July’s record high of $147.27 a barrel.
Unemployment Rising
Unemployment will rise by 10 percent to 11 percent in Russia next year, from 6.1 percent currently, according to a report by VTB Capital. Putin said in a nationwide call-in show this month that he expected jobless number to rise by 300,000 to 2 million.
“I’m still hoping that we won’t have mass unemployment,” Putin said. “Although looking at the labor market, we can of course expect more people to lose their jobs for some time.”
Police detained 15 people during the Vladivostok motorists’ protest, state broadcaster Vesti-24 reported. It followed a measure to temporarily raise tariffs on foreign cars in order to help support Russian carmakers.
About 200,000 people are employed in the import, selling and servicing of foreign cars in and around Vladivostok, Agence-France Presse reported, citing Anastasia Zagoruiko, a protest organizer.
Yesterday, police detained dozens of protesters in street rallies organized by a pro-democracy opposition group led by former chess champion Garry Kasparov in Moscow and St. Petersburg, Vesti reported.
Dissatisfaction
The level of disapproval was the same among all social groups, regardless of income, education and profession, according to the survey of 34,000 people in 68 regions, conducted on Nov. 14-25. It marked a 9 percentage point increase in dissatisfaction levels from a poll in September, which indicated that 30 percent of Russians were critical of the government, primarily local authorities in the most developed regions.
Russia has drained 27 percent of its reserves, the world’s third-largest, trying to stem a 16 percent decline in the currency since August as the price of oil fell 69 percent.
Just as inflation has started to decline from a more than six-year high of 15.1 percent in June, a weaker ruble is pushing up prices for imports, which Russia’s Agriculture Ministry says account for 40 percent of the food consumed in Russia.
“Inflation is a major worry for people, more than the value of the ruble,” said Presynakova.
The protests should make the leadership commit to a “real modernization” to limit state control of the economy and political life, according to Yevgeny Gontmakher, a board member of the Institute of Contemporary Development, a Moscow-based research group set up to advise President Medvedev.
Otherwise, the crisis could undermine political stability, he said in a commentary published last month on the research group’s Web site.
To contact the reporter on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net
Last Updated: December 15, 2008 09:14 EST
HOME
