His salary has fallen by nearly half since last year. Rather than laying off people, employers are cutting pay. “They’re becoming more and more brazen,” he says of his erstwhile colleagues.įor Mr Kuznetsov, the combined effect of the government’s ban on imported Western food and the collapse of the currency has been devastating. He has just paid yet another bribe to avoid having his cargo (frozen Brazilian meat) impounded. At a dimly lit café near the border of the Moscow region, Nikolai Kuznetsov, a retired policeman turned lorry driver, fumes. Others point to a corrupt system that stifles commerce. Nonetheless, he, like many in Russia, sees no link between political leadership and economic woes. The slowdown actually started three years ago, Mr Mkrtchyan says. Retail sales have fallen for seven months in a row. “Now people have to eat.” Real disposable income dropped by 3.1% year-on-year in the first two quarters. “No one is buying this stuff any more,” he says. After ten years in business, he will close on September 1st. An eclectic ensemble of concrete lions, plastic dinosaurs and stone maidens crowds his yard. Gary Mkrtchyan, an Armenian, runs a store selling fountains and lawn ornaments. Foreign carmakers such as GM and Toyota have ceased or scaled down operations. In the first half of the year auto sales were down by 36%. “2009 was much worse,” he says.Ĭar dealerships nearby see few buyers. “You start to think, for that much money, do I really need Thailand?” At IKEA, a furniture shop, in the Moscow suburb of Khimki, once the beacon of an emerging middle class, Stanislav Vladikov says the recession means waiting to buy a washing machine. Pavel, who owns a chain of coffee shops, normally takes his family to South-East Asia for winter holidays, but not this year. It is Monday morning in the capital, and a snappily dressed businessman sips a grande cappuccino, flipping through messages on his iPhone 6 in a Starbucks near Red Square. “Russia’s great strength throughout the centuries has been that its people can seemingly adapt to any conditions,” says Maria Lipman, a political analyst. Nationalist rhetoric serves as a healing balm. Memories of earlier crises loom-a reminder of how much worse it can get. While many struggle, there is one constant: rather than panicking, Russians adjust. Falling oil revenues have forced the government to tighten its belt (with the notable exception of defence spending). Inflation has eaten away at family budgets. But as Russia’s recession deepens (the country’s GDP shrank by 4.6% in the second quarter measured year-on-year), the effects resonate across every stratum of society. The characters that populate the towns and cities along the way often live very different lives. The road that connects them begins as smooth asphalt beside the red walls of the Kremlin and ends as a rutted dirt track amid abandoned wooden homes. ALMOST 500km (310 miles) separate Moscow, Russia’s glittering capital, from its lesser-known namesake, a dying village deep in the forests of the Tverskaya Oblast.
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