Kremlin's Cash Crunch Prompts A Winter of Discontent for Retirees
MOSCOW — A slightly prim, dignified woman in a wool flannel coat, she worked for more than 40 years at the same job as an accountant at a metallurgy plant in Tver, north of Moscow. Now she lives on her pension of $58 a month, which is just above the national average.
She last received it on Nov. 21.
The woman gets by with help of a friend in Moscow whose pension is paid on time. The friend just bought her a winter coat. "We're angry," she says with unaccustomed assertiveness, afraid to give her name. "We're blocking the roads."
Indeed, several dozen of the pensioners of Tver are blocking roads and even the St. Petersburg-Moscow railway line for hours at a time every Tuesday in protest against their unpaid pensions. But only a few of Russia's 37 million pensioners - 25 percent of the country's population - are making waves over their unpaid pensions, even though the delay currently averages about one month nationally.
With a growing population above retirement age and a declining number of workers, Russia is already drawing from its state pension fund faster than working-age people contribute. In addition, the inability to efficiently collect taxes has put the already cash-strapped Russian government into a fiscal crisis. Finding a solution is one of the top priorities of President Boris Yeltsin's new governing team.
For at least 10 million Russians, according the Laura Wolf, deputy head of the pension department of the Ministry for Social Protection in Moscow, their pensions are the only income in their households.
"Pensions are so small that I think some of them starve - and not just a few," says Ms. Wolf.
The vast majority of pensioners are getting by with the help of friends and family. But they are not happy, because this is not the life that they anticipated.
Vassily Rud, a ruddy-cheeked former oil and gas driller north of the Arctic Circle near Murmansk, and his wife, Tatyana, who worked in a state production facility and bore seven children, receive their pension checks on time. It gives them a monthly income of $117, half of which goes to pay for their apartment. The rest buys food at the expensive prices of the far northern outposts. They buy used clothes at second-hand stores or from families moving out and selling their belongings cheap.
The Ruds are among the hordes of Russians who followed high wages to work in the Arctic tapping the country's rich natural resources. Now they are trying to escape an economically dying community. This winter, gas was shut off to the town for a month and a half because of unpaid public bills. Indoors it averaged 48 degrees, there was no hot water, and no heat for cooking.
They hoped to sell their apartment and buy a small place in a southern region near relatives, with just enough land for a vegetable plot.
No chance. The price they can get for their apartment up north is less than a third of the cost of "the worst house in Volgograd." So now they are trapped in the stony, frigid, badly polluted north with 10 months of winter. Tatyana's eyes well up with tears when she considers the former doctors and teachers now reduced to the shame of searching garbage for bottles to sell.
RAISA ALEXANDROVNA has overcome the strong objections of her husband to lift her family's circumstances in central Russia. She collects an average pension, and her husband earns about the average Russian salary. The family once had saved nearly $100,000 in rubles, she says, but after buying a daughter a two-bedroom apartment in St. Petersburg they lost the rest to inflation - like almost everyone else.
Once a week, she drives with a son to Moscow's outdoor markets and buys cheap Chinese clothes and shoes to sell back in her hometown a hundred miles away. She makes more than her husband's salary and her pension together.
Her husband, she says, "prefers to live in poverty and not have people be able to point at him [in ridicule] as a shuttle trader."
But for her part, she explains, "I'm not accustomed to being poor."
In the provinces surrounding Moscow, pensions are hand-delivered in cash once a month. They are running two weeks late on average. But not in Khimki, a district just outside the Moscow city boundary. Lyudmila Tarasova, head of the local branch of the Russian pension fund, says she manages to collect just enough money every day for the scheduled pension payments.
"Every day begins with looking for money to pay the pensions," she says. She runs one of the few computerized pension departments in the country.
Each morning, her staff checks the e-mail from the 254 banks in the district for payments to the fund. Every enterprise must pay 28 percent of its payroll to the pension fund. Ms. Tarasova keeps track of each payment from each enterprise and prods them constantly. She monitors the banks so that the money transfers to her office are immediate. She calls the corporate directors. She uses the tax police and local prosecutors to help threaten reluctant companies. She uses local TV and newspapers to shame them into paying. She just arranged a bank loan to one enterprise so they could pay their pension debt.
"I believe it is only because of our enthusiasm that we pay our pensions," she says.
Ironically, Russian pensions are more uniform from person to person now than they were in the latter days of the Soviet Union. Those with the most generous pensions get far less now, but the poorest are faring better. Most pension officials feel that the standard of living for people on pensions is roughly the same as five or 10 years ago, or only slightly worse.
The main question that greets the pension deliverymen (most are men) is whether the amount has been increased. It hasn't since last May. Still, lately the pensioners have become more cheerful, says deliveryman Nikolai Ivanov, although he is not sure why. "It's our national character," says his colleague Gennady Kasyanov. "We have hope for the future."
But far from the bustle of Moscow, in the Arctic near Murmansk, the Ruds admit to no remaining hope. Says Mrs. Rud: "We worked all our lives and now we're almost doomed."