Russia Corona Lockdown: economic left alone, the economy

The freedom came faster than I thought, the diary of Julia Duchina is full “like before the holidays”. For ten weeks in Moscow, were imprisoned, were allowed to leave their homes only according to strict rules. On Monday, the mayor surprised all with negative slack. Julia Duchina was allowed to open her beauty salon from today to tomorrow. And now want to cut so many customers, the hair or the nail varnish that she is booked out for weeks.

Of course, Duchina is happy about that. A little heads up would have helped her but. Many employees were not even in Moscow, had to travel back. The whole paperwork for the health authority, in less than 24 hours that was to lift impossible. Duchina operates a whole beauty salon chain. In the vicinity of the white house, the seat of the Russian government, she also has a very special Salon, which offers organic products and aromatherapy – or at least in normal times. Because Corona is not allowed to serve now, even a Cup of coffee and instead of five only two customers in the Salon. Their employees wear white full body suits, in the middle of it she stands in a summer blouse and with a protective visor. Normality looks different.

Their reserves were sufficient for another three to five months, had Julia Duchina said last week on the phone. “As long as we can keep our heads above water. After that, it will be very difficult.” Surprises she is used to that by now. At the end of March Vladimir Putin was initially reluctant to talk about curfews. Instead, he prescribed a surprisingly “work free” for all, with full pay. How the employer should pay for it, and the President said nothing at first. The rule was almost to the middle of may.

The pandemic is hitting the Russian economy in an already difficult time. Since 2014, since the annexation of the Crimea, the Eastern Ukraine conflict and subsequent sanctions, have decreased the real income significantly. Even before the pandemic, the Russians could less and less afford for your money. Now, more than 60 percent have lost their income, in whole or in part, due to the Virus. The number comes from a study by the Higher School of Economics (HSE) in Moscow. Every Tenth has lost his Job, the almost ten million unemployed. The official figure: 1.9 million.

The government now helps with more money for children and the unemployed. But anyone who has a Job, which in the meantime has tripled the unemployment assistance is nearly 60 Euro will not be rescued. Add to that 15 to 21 per cent of Russians are working without a contract, estimates the world Bank. Other estimates are even higher. As the impact of the crisis but to those who depend on gray or black on salaries, is not foreseeable.

At the same time, but also to help limited-sized companies on tax deferral and interest-free loans. Per employee, you get so much designed that you can pay for a year and a half the minimum wage of the equivalent of just under 160 Euro. It is a short-term solution, which in any case only a third of the company is entitled to.

Small and medium-sized businesses in Russia, only about a fifth of economic output. Instead, Russia will be defined largely by state holding companies. From the years after the reunification, a lot of distrust remained towards private entrepreneurs. In March, Putin said there were “specific reasons” to look at business people as a swindler.

The state budget is funded in great part from the oil and gas business. The falls of this year, leaner than usual. The Kremlin is not too stingy with economic aid, because he didn’t care that the money is not enough. A “National welfare Fund”, currently at 159 billion euros, is intended to protect Putin in the times in which he can’t rely on the oil business. Now, pandemic, and oil price crisis but. The Finance Minister has already warned that one should not turn to the Fund within two years “wasted”.

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Julia Duchina has at least the minimum wage-get help. Rather you would be if taxes or rent will be adopted. That large corporations and state-owned enterprises were allowed to open much earlier or not even had to close, not to understand. “That hurts,” she says, the state concern mainly large and state-owned enterprises. And she’s lucky. Only one in ten SMEs have ever applied for crisis assistance, said Putin’s competent Ombudsman at the end of may. More than two-thirds have suffered damage due to the pandemic, their work setting, or need to reduce. More than half of the surveyed companies could not pay wages.

It was also Alexander Satuliwetrow, when he published in April, his call to Rebellion on Facebook. He is going to open its Restaurants in St. Petersburg, he wrote, and appealed to other restaurateurs to join in. If only he is open, he’ll be arrested. “When we tithe, we are punished. If we are 100, then you will perceive us.”

In the meantime, he regretted the call, in the social media, he was criticized for heavily. The day before the guests should come back, called him also to the police, explained to him what he was risking: those infected in Russia, the other from negligence on the part of with Covid-19, the threaten in the worst case, several years of imprisonment. “This has made me sensible,” says Satuliwetrow on the phone. He has closed up today.

Instead, he had to give up two of his four Restaurants now. The landlords were not willing to negotiate, he says. After his Facebook call, he received an anonymous donation, about 2500 euros to allegedly pay the penalty, if he would have opened. Instead, he had distributed the money among his staff, says Satuliwetrow, at that time, the 40 people were. Of the two remaining Restaurants that he could save probably about the autumn. The other was for a younger audience, “the young people have it bad now”.

And not only the. Who will be able to afford Restaurants, and beauty salons at all? Julia Duchina fear that the business will continue to suffer, because of the fear of contagion and because the money is running out. The Russian women, says one of her employees laughing, would rather have money for manicures, as for food. But what if it is not enough for this?

The stylists in the Salons of Julia Duchina earn a Pro rata basis to each and every customer – without guests, so nothing. She is Worried about her Team, told the Boss in front of the Opening, some had to seek other Jobs behind the cash register, as a taxi driver. “As long as their supplies last, and how many of our employees come back, we don’t know.” The same applies to the Restaurants that may open in Moscow next week, their outdoor terraces. According to estimates by the industry Association, half of all Russian catering establishments will be gone until the new year – and half of all jobs in the industry.

The Prime Minister wants to help the economy, with 64 billion euros, again on the legs

In St. Petersburg restaurateur Satuliwetrow hopes that he can soon get started, the authorities tell him in advance. “We need to buy food, the staff will collect, wash Windows,” he says. He will now get to hear that he only “stupid food” speech, while people are dying of the Virus. “This is for us but also important.” The government have treated the company as “an unfortunate step-daughter”.

Prime Minister Mikhail Mishustin want to rebuild the economy after the crisis, with a 64 billion dollar program. It is only since January, Premier, and many suspect that he was hired for money to spend. At the time, however, it went to Putin’s “National projects”, a long cranking time program, the private investment and growth, but never came in.

Probably the hasty with these relaxations explain. The number of new infections has decreased in Russia. Nevertheless, the Moscow Parks as good as every summer: full of Park benches, people sit on the water, without distance, without mouth protection. In three weeks, the population has to vote on the constitutional reform, the Putin’s Power after 20 years at the helm continues to expand. To wait until the autumn, would be risky. Until then, will probably be for many finally realised how hard the crisis actually hits.