From Economic Crisis to Political Crisis Changing Middle-Class Attitudes in Moscow and St. Petersburg, 2008–2012

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During the 2011–2012 electoral cycle, Russia saw unprecedented mass protests by representatives of the country’s growing middle class calling for more democracy and less corruption. Political scientists point to the unraveling of an unspoken “social contract” between Vladimir Putin and Russian society. In this study, Sasha de Vogel, managing editor of the Journal of Globalization and Development, analyzes the causes and nature of the Russian middle class’ protest.

In early December 2011, protests began in Moscow that would eventually culminate in the largest public demonstrations since the fall of the Soviet Union. Organized in response to the Duma elections, which were widely viewed as fraudulent, the first protests attracted 5,000 to 7,000 participants but grew to 100,000 to 120,000 participants in the lead-up to the presidential election. Demonstrators brought the demand for free and fair elections out into the streets on a large scale for the first time. As the presidential election neared, their rhetoric became increasingly critical of then–Prime Minister Vladimir Putin, openly mocking him and calling for his removal from power.

The protests seemed to break with the longstanding trend of political apathy that characterized the middle class during the 2000s. Gudkov, Dubin, and Zorkaia (2009: 44) found that only 6 percent of middle-class young people at this time would “definitely like to take part” in political life.

One of the most widely referenced explanations for the political apathy of the Russian middle class theorizes an informal social contract between society and Putin, wherein the public is politically quiescent in exchange for stability and economic success. Entering office after the tumultuous 1990s, Putin quickly enacted a series of reforms that eliminated open political competition, led to an increase in election fraud, curtailed civil liberties, and impinged upon human rights (Gelman and Ryzhenkov 2011: 451). At the same time, the Russian economy enjoyed a consistent period of growth driven by rising oil prices, and living standards rose for most Russians. It appeared that an informal quid pro quo had been arranged: the public accepted or ignored Putin’s steps toward semi-authoritarianism in exchange for a higher standard of living, a respite from economic and political upheaval, and the promise that Russia would return to the great-power status it once had.

Economic, Liberal Democratic, and State Efficacy Concerns

I have used survey data collected between March 2008 and March 2012 to test increasing concern for economic, democratic, and state efficacy issues. Respondents (N = 1,600) of a variety of backgrounds from across Russia were able to select multiple responses to the question, “Which of the following issues are most important to the country?” For the purposes of this study, I looked at responses from (1) respondents with three or more years of university; (2) respondents working as businessmen or entrepreneurs or specialists with higher education, excluding state employees; (3) respondents earning 50,000 rubles or more per family member per month; (4) respondents easily able to purchase medium-priced consumer durables or expensive durables; and (5) respondents from Moscow or St. Petersburg. This study assesses problems that were identified as being of increasing concern during the time period in question.

I have separated the possible survey responses into three categories, corresponding to three hypotheses (Table 1). [1]

Table 1. Classification of Responses to “Which of the following issues are most important to the country?”

H.1. Economic H.2. Liberal Democratic H.3. State Efficacy (a) Delays in payment of salaries* (b) Economic crisis* (c) Inflation, rising prices of goods and services (d) Unemployment (e) The standard of living of the population (a) Corruption and red tape (b) Democracy and human rights (c) Ecology and environment (d) Influence of oligarchs on economic and political life of the country (a) Pension benefits (b) Terrorism (c) The situation in the army (d) The situation in the education sector (e) The situation in the health sector (f) The situation in the spheres of housing (ZhKKh) and utility services (ZHKU)

Note: *Response option not available for October 2006 and March 2008 surveys.

Response options classified as economic concerns pertain directly to the economy or directly address economic issues that impact individuals’ lives [2]. The second category of liberal democratic concerns encompasses issues that address the protection of citizens’ rights and the independent functioning of government. The third category addresses the state’s ability to effectively deliver services, administer its programs, and guarantee the security of its people.

Hypotheses:

(H.1) Economic issues since the global financial crisis have become an increasing concern for the urban, private-sector middle class, leading to protest activity.

(H.2) The urban, private-sector middle class was becoming increasingly concerned about liberal and democratic issues leading up to the electoral cycle protests of 2011–2012.

(H.3) Problems with the efficacy of the state were of increasing concern for the urban, private-sector middle class, which led to a drop in regime support based on performance legitimacy.

The Economy and the Global Financial Crisis

As president from 2000 to 2008, Putin oversaw an economy that underwent considerable growth. As Russia emerged from the repeated devastating crashes and skyrocketing inequality of the 1990s, rising prices for oil and natural gas buoyed the economy. By 2008, incomes had risen by 250 percent. Poverty, unemployment, and inflation were falling, and Russia was one of the world’s seven largest economies. This growth was accompanied by increased foreign direct investment (FDI) and increased embeddedness in the global financial system, particularly as oil and natural gas exports accounted for an ever-larger share of GDP. Though it is debatable how directly Putin’s policies were responsible for this economic growth, Russians viewed economic development as the greatest achievement of Putin’s first two terms in office, followed by higher living standards (Feklyunina and White 2011: 386). Putin himself emphasized his economic successes, making promises of future growth in GDP and salaries.

When the global financial crisis hit Russia in October 2008, many of the economic gains of the previous decade were reversed. As oil prices fell, Russia’s GDP plummeted by 13.5 percent, contracting at a rate below even that of 1998 (World Bank Development Indicators [3]). The exchange rate fell, while inflation shot up by 5 percent, leading to a sharp increase in the consumer price index (Rose and Mishler 2010: 42; World Bank Development Indicators). Workers faced unpaid wages and forced leave, and the unemployment rate nearly doubled between summer 2008 and March 2009 (Teague 2011: 420). By mid-2009, the government had managed to arrest the economy’s decline, and, with the stabilization of and increase in oil prices that accompanied the recovery worldwide, GDP growth returned to positive territory in 2010.

Given that one of the pillars of Putin’s popularity was economic growth and prosperity, there was considerable reason to believe that the economic crisis would have a deleterious effect on his support. Feklyunina and White have argued that support for the Putin regime stems almost exclusively from positive evaluations of the economy, so any indication of the reversal of economic gains should trigger a deficit in regime legitimacy and a collapse in support (2011: 387). McAllister and White have applied theories of economic voting to Russia to predict that people most affected by the financial crisis will withdraw support from the regime, particularly if there is clear attribution for the problem (2011: 482). Chaisty and Whitefield note that economic crises can give rise to protest when several preconditions are met, such as high income inequality, an inflexible nondemocratic regime, and a resource-driven economy, all of which pertain to Russia (2012: 189).

Economic issues frequently give rise to protest around the world and in the past have correlated with increased protest sentiment in Russia. The 1998 economic crisis saw a spike in worker strikes, with future events also linked to economic concerns such as wage arrears (Robertson 2007: 784). The Kremlin, too, was concerned about regime support and carefully spun the crisis, shifting from initially denying its existence, to blaming the West, to representing it as an opportunity for modernization and building a multipolar world (Feklyunina and White 2011).

Economic issues frequently give rise to protest around the world and in the past have correlated with increased protest sentiment in Russia. The 1998 economic crisis saw a spike in worker strikes, with future events also linked to economic concerns such as wage arrears.

Despite expectations, the crisis had a minimal immediate effect on regime support. Street demonstrations did not occur, and the incidence of strikes declined during the crisis, reversing a two-year trend (Teague 2011: 423). Positive evaluations of Putin’s performance fell only slightly, from 81 percent in June 2007 to 79 percent in June 2009 (Rose and Mishler 2010: 43). Neither survey respondents’ negative feelings about their economic position, recent unemployment, nor pessimistic expectations for the economic crisis had a negative effect on regime support, though wage arrears had a marginally significant effect (Rose and Mishler 2010: 49, 52).

Several explanations for the continued support of Putin have been offered. Russians may not have viewed the economy in a negative light, instead interpreting the crisis as a normal event in the economic development of a capitalist system, which, despite its hardships, is considered preferable to the deprivations of the communist system (Rose and Mishler 2010: 53). Similarly, Russians may not have blamed the government for the crisis; 40 percent were unable to identify any domestic or foreign agent responsible for the financial crisis (McAllister and White 2011: 484–486).

These studies on the financial crisis and regime support were conducted immediately after the crisis. A longer view of the effects of the crisis suggests that the threat might not have been so neatly neutralized. In 2009, several significant demonstrations were held, beginning with a protest by car owners and importers in Vladivostok, who objected to a protectionist tariff increase on imported cars. This protest culminated in demands that Putin step down from his position as prime minister. By summer 2009, workers’ rallies were increasing, and protests in the single-factory town of Pikalevo drew Putin’s attention (Teague 2011: 423–424). January 2010 saw the largest demonstration since the fall of the Soviet Union, when 10,000 protestors in Kaliningrad rallied against unemployment, the rising cost of living, and corruption and again demanded Putin’s resignation (Teague 2011: 424). The Public Opinion Foundation’s (FOM) protest sentiment indicator (Figure 1) shows that negative assessments of the economic situation between 2010 and 2012 tend to be correlated with general protest sentiment in the country.

Figure 1. Negative Assessment of Russian Economy, Protest Sentiment Index

Source: FOM Indicators [4, 5].