NOTE: This is the third part of a serialized translation of Boris Nemtsov's white paper critiquing the Putin years. It includes the third and fourth chapters of the work. Part 1 (introduction and chapter one) appeared on Monday, Part 2 (chapter two) on Wednesday; look for Part 4 on Sunday. You can display all the parts in reverse sequence on a single web page by simply clicking the "nemtsov white paper" link at the bottom of this post.
by Boris Nemtsov
First Deputy Prime Minister of the Russian Federation, 1997-1998
Deputy Minister of Energy, 2002
Translated from the Russian by Dave Essel
Oh Dear, the Roads
Bad roads are an eternal issue in Russia. Recently, however, with oil money rolling in, the country has at last had an opportunity to modernise its road system. But the opportunity has been missed.
Under Putin’s rule, the road system has degraded at a fantastic rate. During his presidency, the overall length of hard roads has fallen by about 50,000 kilometres, from 750,000 to 700,000 kilometres. This has happened in the main as a result of wear and tear to roads that were officially counted as hard-surfaced – for example graveled – but which are subject to quick wear. More than a third of Russia’s roads are of this kind; if they are not regularly maintained, the only thing left of their hard surface is the designation.
That the length of hard-surfaced roads has fallen should be a matter of shame to a country with pretensions of being a “great power”; even some African countries have better roads than ours. Russia’s backwardness in the matter of roads is quite shocking. The total length of surfaced roads in Russia is 60% of France’s, half that of Japan, and a tenth of USA’s. Only about 35,000 kms of highway meet the standard for high-quality road (width greater than 7 metres and able to accommodate speeds of over 100 kph, i.e roads of no less than 2 lanes with a normal road surface). Finland has more surfaced roads of normal width than the whole of Russia does!
Only 40% of federal highways meet the standard for surface quality, width, and other parameters. Many of the federal highways have a capacity of not more than 40-50,000 vehicles per day, while real traffic amounts to 100,000+ vehicles per day. The drive from Moscow to the country’s main port – Novorossiisk – takes almost 48 hours; it would take only about 15 hours on a normal European motorway.
The road network provides poor links between cities and regions and many highways suddenly come to an end on reaching the frontier of the RF’s regions.
This is a problem which absolutely must be solved: without an effective road network, Russia remains broken up by region and its territorial unity is thus more phrase than fact. The poorly integrated transport system makes it difficult to balance the economies of the regions and makes them more depressed than they need be.
The Russian road network is in urgent need of modernisation yet the system for financing road repairs and building has to all intents and purposes collapsed under Putin. New roads opened have fallen from 6,600 kms in 2000 to a mere 2,400 kms in 2006. The proportion of worn-out roads in the network has risen from 26% in 2000 to 46% in 2005 – this while funding of the road system has actually increased: the 2000 consolidated budget for the road system was 60 billion rubles in 2000; in 2006 it was more that 220 billion [FN1]. It is easy to work out from this that the cost of opening one kilometre of new road has risen tenfold (or fivefold if one corrects for inflation). The scale of embezzlement in the road industry can thus be see to have increased fivefold.
Government money, of which there is much more thanks to oil exports, is being swallowed up by corruption. The much advertised Investfond [FN2], which the government hyped as the future main mover in the development of the country’s infrastructure, has been spent in the strangest of ways: of the $7 billion it released for use in 2007, $4 billion were paid out as contribution to commercial projects undertaken by large financial/industrial groups in Eastern Siberia and the construction of a petrochemical plant in Tatarstan. These are surely commercial projects that have no need of state financing. Furthermore, they can in no way be said to have anything to do with infrastructure developments of national importance. As far as road projects are concerned, practically all the money directed towards such matters –$2.5 billion – will go to projects connected with St. Petersburg: the Western High-Speed Link and the Orlov tunnel as well as a motorway linking Petersburg and Moscow.
St. Petersburg does of course need to modernise its infrastructure. But so too does the rest of the country. Investfond money could have been used to build decent highways linking the main towns of Central Russia – Moscow, Samara, Nizhny Novgorod, Perm, and Voronezh. But the money went to oligarchs and Petersburg regional projects instead.
It is much more efficient to attract private capital to road financing. However, under Putin, private business involved in infrastructure works has been decimated and long-term contracts with investors have been ‘reviewed’. One recalls in this connection the story of Domodedovo airport. This was modernised by Ist Lain, making it Russia’s first up-to-date and spacious airport. Following this modernisation, Putin’s civil servants managed to have the terms of the contract with Ist Lain reviewed in the government’s favour. This case (not to mention that of Yukos and other occasions when the government has revised its obligations to, and taken back assets from, investors) has seriously affected the mood of private investors. They now worry that the government will break its long-term contracts as soon as projects are completed and start to bring in income. One should therefore not hope too seriously for private investment in the road sector. This sector is financed solely from budget monies which are then for the most part embezzled.
We need to revive and develop our road system. The Soviet road network cannot meet the needs of a modern economy. We need a modern transport system that provides passengers and freight with high mobility, integrates Russia as an genuine economic whole, and put puts an end to the conditions leading to regional inequality. To do this, we need to improvem the quality of government development planning for the country’s transport system, put a stop to corruption in the allocation of funds to finance the road system, and be more active in attracting private investment in the transportation infrastructure. This will require of the government iron-disciplined observance of the law and contractual obligations. This cannot be achieved without a genuinely independent judiciary.
Russia will have to go living with bad roads while Putin’s team remains in power.
[FN 1] Source: Sub-programme Vehicular Roads of the Federal Expenditure Programme for the Modernisation of the Russian Transport System (2002-2010),
Russia is Dying Out
We are told that – as a result of “efforts” by the government – the birth rate is rising in Russia. In fact, Russia is continuing to die out under Putin: for example, about one and half million Russians were born in 2006 but 2,166,000 died. The Russian birth rate in 2006 was 10.4 per 1000 but the death rate was 15.2/1000! The population of Russia is falling nearly twice as fast as in the 1990s. Between 1992 and 2000, the total population fell by 2 million. Between 2000 and 2006 – by 3.5 million.
The key reason for this is a catastrophic mortality rate and Putin has not even tried to do anything about it.
The mortality rate in Russia began to rise in the 1970s and continued to do so up to the mid-1990s. Russia’s ranks 22nd in the world in mortality, ahead of Equatorial Guinea, Rwanda, and Burkina Faso, and 157th in life expectancy. Average life expectancy in Russia is a smidgen over 65 years, on a level with the world’s least developed countries (average life expectancy in the developed Western countries is 78+ and 74-76 in Eastern Europe). Most striking is the average life expectancy for males: while Russian women can expect to live to the age of 72, men can expect less than 59 years of life! This is on a par with life expectancy in underdeveloped African countries.
Reasons for this high mortality include the high illness rates to be found in the population, brought about by alcohol abuse, smoking and unhealthy living. Meanwhile, under Putin people are drinking and smoking still more. In 2000, alcohol sales amounted to 8 litres of spirits equivalent per person per year. Now, at the end of his rule, the figure is nearly 10 litres. This is more than in the 1990s. According to Rospotrebnadzor [FN 1], the real figure is closer to 15 litres per year [FN1]. For the record, the World Health Organisation considers alcohol consumption of over 8 litres per person per year to be critical as mortality begins to increase sharply when that amount is exceeded. Over forty thousand people die of alcohol poisoning every year and Rospotrebnazor estimates the number of alcoholics in the country at 2.5 million.
Cigarette sales to the population have risen in both absolute terms (400 billion compared to 355 billion in 2000) and consumption terms (2700 per per person per year as against 2400 in 2000). This is considerably more than in the 1990s when average consumption was 1500 cigarettes per person per year (for a total of over 200 billion). Smoking is Russia’s most common harmful habit: according to Rospotrebnadzor 65% of men and 30% of women smoke; of these 80% and 50% correspondingly began smoking in their teens. Smoking is the cause of 27% of male deaths from cardiovascular diseases, 90% of deaths from lung cancer, 75% of deaths from respiratory diseases, and 25% of deaths from heart disease. About 25% of smokers die prematurely: smoking reduces life span by 10-15 years[FN1].
The most frequent cause of death in Russia – in nearly 60% of cases – is circulatory disease. About 1,3 million people die of circulatory disease every year – 200 thousand more per year than in the 1990s.
What has Putin done to reverse this trend or to engage in a real fight and smoking and alcoholism? Nothing. Russians continue to die from unhealthy lifestyles.
The mad attempts to combat alcoholism by prohibition under Gorbachev or in Tsarist Russia are not a method and all failed. This is because alcohol consumption is, on the one hand, a social thing, and on the other a way of life. Research has shown that there exists a U-shaped dependency between quantity of alcohol consumed and income: both the poor drink more (drowning sorrows) and the wealthy (living the high life). Moderate use of alcohol and a healthy lifestyle in general is the way of the middle class. We therefore believe that, besides spreading the word about the need for a healthy lifestyle, we should also stimulate and support the middle class. This means changing the nature of the country’s economic policies (see Chapter 10 – Deepening Inequality Chapter 11 – The Economic Bubble). Regarding smoking and combating it, there’s no need for originality: we simply need to borrow from the many years of experience of the USA and Western Europe.
Another important reason for our high mortality is the low quality of health services (already mentioned in the chapter on national projects) and the high number of people who die of illnesses. Circulatory problems are not all that Russians suffer from: under Putin mortality has not gone down for infectious diseases and cancer (330,000 deaths per year) and there has been a sharp rise in deaths from disease of the digestive tract (up from 65 thousand to 100 thousand deaths p.a.). The only drop in the death rate has been for respiratory problems – from over 100 thousand in 2000 to just over 80 thousand in 2006. This is a direct result of the move to natural gas for electric heat and power generation since this results in a reduction of harmful emissions (although the authorities, at Gazprom’s urging, are looking at reversing this positive move and force the energy generation industry to go back to ecologically dirty coal).
It is not just of diseases that people die in Russia. We hold one of the leading places worldwide for deaths by external causes. Over 300 thousand people die annually from external causes, a rate of 200 per 100 thousand of population. This is twice as high as in China or Brazil and 4-5 times higher than in Western countries. Russia is far from being a physically safe place in which to reside. We are among the world’s leaders in murders at 20 per 100 thousand population per year. This has moved us since the 1980s into the top 10 of the world for murder, joining a list that includes Columbia, Jamaica, Honduras, South Africa, and Brazil. In developed democratic countries, the murder rate is in the range of 2 to 4 per hundred thousand population per year.
Crime rates in general, which had been going down in the second half of the 1990s, are on the rise again. There are about 30 thousand murders every year, as many as in the the worst years (1994-95) of the decade. The murder rate went down in 1996-98. We have already mentioned the sharp rise in spending on security and law enforcement under Putin. This has risen from $4 billion in 2000 to a planned $39 billion in 2008. This, however, has had the opposite to the intended effect since serious crime numbers have constantly risen under Putin. The rise in crimes against the person has been especially striking: in 2006, according to Rosstat, these rose by 170% from a year 2000 base, with cases of GBH up by 50%, and robbery by 30%. Not a very pretty picture for the ‘happy 2000s’.
Many people die in road accidents: 285 thousand people were injured or killed in traffic accidents in 2006 (a 60% rise against 2000). On average, 33 thousand people were killed each year on the roads in the year 2000-2006. Recently, Putin’s “successor” Dmitri Medvedev said of the scale of the death and trauma rates on the roads that it bore comparison to military attrition. Something could have been done to combat this but the atrocious quality of the roads as a result of the embezzlement of funds for their maintenance, the flourishing corruption in road policing, poor and slow emergency services, and low standards of maintenance of vehicles are all leading only to a worsening of the situation.
The problem is not just one of high mortality but also of low replacement rates. The modest rise in the birth rate in recent years is mostly to do with the post-war demographic curve and it is evident that steps taken by the authorities will not actually influence the birth rate to any great extent: this is a problem of traditions, customs, and the effects of urbanisation. Television drives to encourage people to have more children are just a con: on average, the birth rate under Putin has remained the same as in the 1990s at about 1.4 million live births per year. The authorities boast of “measures” taken in this field although they are of doubtful use. Who is going to be encouraged to have a child because of a “maternal grant” of 250 thousand rubles? Obviously, only the very poor, “lumpenised” members of society. How far does such a sum – about $10 thousand – go? That is the price of 2.5 square metres of housing in Moscow, five in the provinces.
Russia does not need to increase the numbers of its lumpen-proletarians. It needs to stimulate births in the active sections of society, in the middle class, and it needs to do this by somewhat cleverer means – for example, by writing down mortgage debt at government expense when children are born: 15% for a 1st child, 30% for a second. 50% for a third. This would simultaneously help resolve housing problems for those wishing to have children and stimulate the birth rate mainly amongst the well-to-do, since they, unlike lumpen-proletarians, are the ones who are able to get mortgages in the first place.
People are physically undefended in Russia and this lack of protection has only got worse under President Putin. We lack protection from illness, we are seriously at risk during and after road accidents, we are victims of crime. Hand-outs from the authorities stimulate births among the lumpen-proletariat while no one is doing anything to increase the birth rate in the country as a whole. So Russia goes on dying out.