The Covid-19 pandemic fuels the Russian economy and plunges families into crisis | World news
As countries around the world face the worst collective economic downturn since the Great Depression, Russia appears to be particularly hard hit by the double whammy of the coronavirus pandemic as well as the collapse in oil prices.
Russia depends on taxes from the oil and gas sector for 40 percent of its budget.
The Washington Post reported that Russian charities and nonprofits, since March, have seen an increase in the type of clients they had never had before – families who had never been in financial crisis, but who are now desperate. Some of them were unable to even buy food. Some found themselves homeless.
According to the Russian federal statistics agency, Rosstat, around 4.5 million people were unemployed at the end of May, a number that has jumped 85% since March. Before the double crisis, Russia had 1.3 million people registered as unemployed, according to official figures.
The unemployment rate now stands at 6.1%, up from 5.8% in April. In the United States, the unemployment rate in June was 11.1%, the Bureau of Labor Statistics reported, from a peak of 14.7% in April.
In May, Russia’s industrial production fell 9.6% from May 2019, as restrictions on oil production under an OPEC deal hit home. The auto industry was particularly hard hit, down 42.2% in May compared to the same period last year.
The International Monetary Fund (IMF) expects the Russian economy to contract 5.5% this year. The Russian central bank said it could decline as much as 6%. By comparison, the US economy contracted 5% in the first quarter of this year, the Commerce Department reported in late June.
Thousands of small businesses in Russia have gone bankrupt. The government has been slow to respond and belated and uneven action has left millions of people adrift.
“You are alone,” said Ivan Molchanov, a welder who spent 20 nights on the streets after his employer suspended his activities and stopped paying both his monthly salary of 75,000 rubles (about $ 1,070 USD). and his accommodation in a cheap youth hostel. .
Yekaterina Gorbunova, her husband, Alexander and their four children have lost almost everything. She even wrote to President Vladimir Putin and the Moscow mayor’s office asking for help in securing an apartment. But no help came in time.
“We feel completely abandoned. It’s like you’re in a boat and it’s sinking. No one will come to rescue you, ”she said after her husband lost his job and the family were evicted from their apartment.
“No one pays attention to those in need. Instead of doing good, nobody cares, ”she added.
As Russia eased its period of isolation, some people returned to work, including the beautician and the chef. But many small businesses have closed and many jobs have been lost.
Putin has often promised to support families with many children, but many feel abandoned. During the crisis, families received payments of 10,000 rubles ($ 142) per month for each child under 16, but Gorbunova said the payment does not cover a week of expenses even without rent.
“All families with a lot of children feel this,” she said.
“President Putin is a nice person. But as it happens very often, a fortress is shattered inside. There are worms digging inside the fortress, ”she added.
The number of Russians who filed for bankruptcy in the first quarter rose 68% from the same period last year, according to RBC News, with at least one million Russians expected to file for bankruptcy within months. to come.
But even though many middle-class and small business families struggle, it’s harder for vulnerable families, the homeless and low-income people, many of whom work informally in the ‘gray economy’. , a category excluded from government assistance.