The Curious Case Of Russian Pension Reform

Screenshot Youtube
Russian communists rally against pension reform

As the Kremlin’s desire to implement pension reform inside Russia makes its way through the convoluted legislative, and political process, Tsarizm thought it would be beneficial to outline the impetus behind the bill and the opposition to it.

Today, the Russian opposition internet magazine, Meduza, which had to move to Latvia to escape harassment and censorship, described an effort currently making its way through the Russian court system to hold a referendum on the issue of pension reform this way, Russia’s Central Election Commission says three groups’ proposals for national referendums on a plan to raise the country’s retirement age are perfectly legal. One of these initiatives comes from Ilya Sviridov (the Just Russia party’s mayoral candidate in Moscow), another is from the Communist Party’s branch in the Altai Territory, and the third is being promoted by the Moscow branch of the All-Russian Union of Public Organizations for Large Families. A referendum on pension reform will be triggered as soon as one of these groups registers 43 regional divisions and then collects two million signatures in support of the initiative (with no more than 50,000 endorsements in a single region). According to sociological studies, roughly 89 percent of Russia’s population opposes the plan to raise the retirement age. The last time Russia held a national referendum was in 1993.

Video: Thousands Protest For Second Day In Moscow Against Pension Reform

Obviously there is huge opposition to the changes, which essentially effect retirement age, moving from the current age of 55, to 63 for women and 65 for men. However, what is curious is that it is also obvious these changes need to be made, as the Russian pension system currently is not sustainable. Polls show great unity with 90% of the population against the changes. President Putin’s popularity rating has plummeted for even considering an increase in the retirement age.

Most developed nations have set the retirement age for monetary and healthcare benefits in the sixties. Today, most people in their fifties still feel very young, and very much able to work. However, Russian life expectancy is much lower than that in the West.

In Russia, there seems to be a nostalgia for the communist past, where citizens ‘received what they needed, and worked as they could’, retiring in the mid-fifties, no matter what. If the policy continues, Russia will go broke, even though the Kremlin’s financial management has been very good over the last decade, consistently building rainy day funds to cover future unforeseen liabilities.

Of course, this does not mean to say that Russia does not have a corruption and graft problem; of course they do. It is only meant to highlight that Russia has very little debt, not the $20 trillion in sovereign liabilities that America has accumulated.

Opposition figure and anti-corruption activist, Alexei Navalny, has come out against the reforms, repeatedly calling for nationwide demonstrations against the measure. Navalny is a very smart man. He must realize that Russia needs to make the changes to keep its retirement promises to the younger generations. So, his opposition is confusing.

Video: Putin Has Touched The Third Rail Of Russian Politics – Pension Reform

Perhaps perceptions of corruption explains the population’s and Navalny’s vehement opposition to changing the retirement age. The people see decades of oil money wasted on foreign policy entanglements overseas and are not happy.

This is the price of pervasive graft within a society. Officials, having lost the trust of the people as the consistent perception of theft and corruption take hold, are unable to implement required changes as needed. The people simply don’t think that working closer to death will help the common man, but just line the pockets of those in power.

The truth is somewhere in the middle.

Or perhaps Navalny senses a political opportunity; nothing else has dented Putin’s popularity or threatened his rule over Russia the way this proposed change has. Much younger than Putin, and prevented from running in the last election, perhaps Navalny sees this issue as one to force leadership change in Russia.

In any event, it will be very interesting to see how all this plays out.

Below is a video Navalny recently put out on the subject. You can turn on the subtitles if your Russian is rusty…

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