Analysis

Russian old age pension furor cuts sharply into Putin's popularity

Russia wants to raise the age when people get their pensions, meaning millions of people may not live long enough to get them.

Pensions are offered early in Russia, but people die so much younger that less money is paid out

Russian women in Moscow will see their pensionable age gradually rise to 63 years from 55. The change has affected President Vladimir Putin's popularity. (Pascal Dumont/CBC)

Russian President Vladimir Putin ought to be enjoying a tidal wave of popularity about now.

The World Cup is going on across the country, and unexpected wins by the home team are generating moments of national euphoria not seen since the end of the Second World War. At the same time, he can look forward to a one-on-one summit with his admirer U.S. President Donald Trump on July 16 in Helsinki.

And yet, even usually Kremlin-friendly polling companies are reporting ominous signs of trouble for Putin. His popularity ratings are in something of a free fall.  

Since the start of the World Cup in mid-June, his support has dropped 14 percentage points to 64 per cent from 78 per cent. Those are lofty numbers by the standards of Western leaders, but not for Putin.

Russian President Vladimir Putin and FIFA president Gianni Infantino, rear, visit the World Cup Football Park in Red Square in central Moscow. (Sergei Karpukhin/Reuters)

The reason for the decline appears to be an intensely controversial proposal by Russia's parliament to reform the national pension system, costing millions of pensioners millions of roubles over their lifetime — if they ever get to collect the pension money at all.

Russia, which has one of the lowest retirement ages in the developed world, will see the pensionable age for men gradually rise to 65 years from 60, and for women to 63 years from 55.

While most bills before Russia's parliament pass with few changes, there has been speculation that the intensity of protests over this one may lead to it being watered down by either Putin or the Duma, the Russian parliament's lower house.

A young girl holds a Russian flag in Red Square, Moscow July 3. The Russia team's victories have brought moments of euphoria, but no joy for Putin (John Sibley/Reuters)

"This is absolutely unfair," labour leader Boris Kravchenko told CBC News in an interview.    

His concern is that while Russians tend to collect their old age pensions earlier than elsewhere, they also tend to be far less healthy and die much younger. Starting pensions later will mean much less has to be paid out.

I think it shows that the whole economy of the Russian federation is in a deep crisis.- Boris Kravchenko

The average life expectancy for a Russian man was 66.4 years in 2016, according to the World Health Organization — just 1½ years beyond the proposed new retirement date. For Russian women, life expectancy in 2016 was 77.2.

In Canada, men could expect to live to 80.9 in 2016, according to the WHO data. For Canadian women, average life expectancy in 2016 was 84.7.

"The change for men will mean the majority of Russian men won't get any pension," said Kravchenko,  who leads the country's second largest labour group, the Confederation of Labour of Russia.

"In Russia, we have 89 regions … and in the majority of regions, men don't achieve this age.  They die at the age of 63 or 62 in 50 regions of Russia."

Watch Alexei Navalny talk about the Russian pension proposals:

Pensions in Russia vary, but on average, people in Moscow or St. Petersburg get roughly $250 Cdn a month, an amount that barely lets them scrape by.  

Surreptitiously introduced on the first day of the World Cup, when much of the country was focused on soccer — and when political demonstrations in host cities were banned — the new pension proposals have nonetheless generated intense opposition.

Boris Kravchenko leads Russia's second largest labour union, the Confederation of Labour of Russia, which has 2.5 million members. (Pascal Dumont/CBC)

On Wednesday, about 200 people in Moscow defied the ban on political rallies and came to demonstrate outside one of Putin's offices. They handed in a petition demanding an end to the changes and calling for a national referendum.

"Putin is personally responsible for stealing from the Russian people," Sergey Udaltsov told the crowd. Udaltsov previously served four years in a Russian prison for organizing mass protests against Putin in 2012 that led to violent confrontations with police.

Political activist and Putin critic Sergey Udaltsov speaks to a gathering of media and protestors outside the presidential offices Wednesday. He spent four years in Russian prison for organizing mass protests against Putin in 2012. (Sergey Udaltsov/Facebook)

Last weekend, thousands of Russians in more than 30 smaller communities also came out to local protests.    

Some carried signs blaming the pension issue on government spending, especially the cost of vanity projects such as hosting the World Cup, which will run to an estimated $15 billion Cdn. Russia also recently opened a bridge to the contested Crimean peninsula at a cost of more than $5 billion.

Foreign investment in Russia has been crippled by sanctions imposed by many Western nations after its annexation of Crimea and its ongoing role in the conflict in Eastern Ukraine.

A petition against the pension changes circulated by Kravchenko's organization has already drawn more than 2½ million signatures.

Many of those who have signed it have included biting comments aimed at the government.

Svetlana Vinogradova from Novorossiysk, a port city on the Black Sea wrote: "We are the richest country in the world with the most poverty stricken population. This means they want us to work until we climb into the grave."

Inna Muravyova from Moscow pointed out the near impossibility of older Russians finding work to make up for the lost pension money: "I'm 50 years old. A year ago, I was fired. I still can't find a job as this is a big problem. Where will people work when they turn 60?"

In St. Petersburg and around Russia, seniors often sell homemade items and food to supplement their pensions. (Corinne Seminoff/CBC)

Yulia Saharova of Kaliningrad echoed that in a Facebook posting:

"People who are only 40, with lots of experience, can't even find jobs. No one is hiring. So how will someone who is 60 ever find a job?"

And like many others, she blamed a political system rife with corruption and cronyism.

Tax benefits

"Everything is being done against the people so that they die sooner and pension funds will go somewhere else. They've already stolen so much of our hard-earned money."

Union leader Kravechenko says even as oil prices plummeted in recent years, and Russia's oil-dependent economy suffered heavily, huge tax benefits still flowed into the pockets of those running state-controlled companies.

"We calculated that these tax benefits are more than 10 trillion roubles ($207 billion Cdn). This money could be (used) to directly pay social benefits."

While Russia's labour movement has been at the forefront of the protests over the pension changes, the unrest has also opened up a political opportunity for the Kremlin's political foes.

Alexey Navalny — Putin nemesis and Russia's most visible opposition figure — has organized protest gatherings of his own and released social media videos condemning the changes.

"[The money] was stolen by Vladimir Putin, his friends, relatives and Dacha neighbours," Navalny said in a recent video.

Russian state TV has steadfastly avoided any criticism of the pension changes, never mentioning the protests, the petitions or those pushing against the legislation, which is now being discussed in Parliament.

In one recent broadcast, TV host Dmitry Kiselov implored Russians to see the positive in the pension reforms — that those working now will eventually get larger cheques, because the pension fund will eventually be self-sufficient.

No change since Stalin

Russian economists are in broad agreement that Russia's pension system is badly broken and something must be done to fix it.

The retirement age hasn't been touched since the Stalin-era and with a sputtering Russian economy generating too few jobs to pay into the pension fund, it runs a roughly $60 billion Cdn deficit every year.

Russia's Ministry of Economic Development and Trade reports that by forcing older people to keep working longer, Russia's workforce will be increased by 1.8 million people within six years, and the country's gross domestic product will increase by 1.3 per cent.

With the World Cup's final game on July 15, Kravchenko says Putin's government will no longer have the soccer tournament for cover.

"I think it shows that the whole economy of the Russian federation is in a deep crisis."

About the Author

Chris Brown

Moscow Correspondent

Chris Brown is a foreign correspondent based in the CBC’s Moscow bureau. Previously a National Reporter in Vancouver, Chris has a passion for great stories and has travelled all over Canada and the world to find them.

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