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Editorial Last Updated: Apr 11, 2017 - 2:17:40 PM


Putin And The Rise of Social Unrest
By Dr. Gary K. Busch 10/4/17
Apr 11, 2017 - 7:02:30 AM

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In recent months, there has been an increasing level of social unrest in Russia. There are major recurring labour strikes across Russia as well as demonstrations against the pervasive effects of corruption in the system. Wages have not been paid in many industries for months. Major construction projects, like the Sochi Olympics and the World Football stadia, are behind schedule. There has been stagnation in wage levels and a drop-off of social services as money has been withdrawn from the system to fund the continued aggression and occupation of the Ukrainian East and Crimea as well as funding Russia’s growing financial commitment to the war in Syria.

This has had major consequences for the lives of Russians across the country. One of the key areas of social concern has been the shrinkage of the hospital care system which has led to massive hospital closures and a decrease in the quality of medicine in Russia. By 2021–2022, the number of hospitals in the country is likely to drop to the level of the Russian Empire. Between 2000 and 2015, the number of hospitals in Russia halved, dropping from 10,700 to 5,400, according to the Center for Economic and Political Reform (CEPR), based on data from Rosstat. In a report entitled “Burying Healthcare: Optimization of the Russian Healthcare System in Action,” CEPR analysts note that if the authorities continue to shutter hospitals at the current pace (353 a year), the number of hospitals nationwide will have dropped to 3,000 by 2021–2022, which was the number of hospitals in the Russian Empire in 1913. [i]

It is not only the hospital closings which have affected Russian lives, the number of hospital beds also decreased during the fifteen-year period: on average by 27.5%, down to 1.2 million, according to the CEPR’s calculations. In the countryside, the reduction of hospital beds has been more crushing: the numbers there have been reduced by nearly 40%. This is not because there have been alternative health care provisions made; even out-patient clinics have ben closing. During the period from 2000 to 2015, their numbers decreased by 12.7%, down to 18,600 facilities, while their workload increased from 166 patients a day to 208 patients.[ii]

The CEPR’s analysts write that the lack of medicines in hospitals reflects another problem in Russian healthcare: its underfunding. The Mandatory Medical Insurance Fund has seen its actual expenditures falling by 6% in 2017 terms of 2015 prices. Compounding these shortfalls of hospitals, clinics and medicines is the suppression of wages among medical professionals. Taking into account all overtime pay, physicians make 140 roubles [approx. 2.30 euros- $2.43] an hour, while mid-level and lower-level medical staff make 82 and 72 roubles [approx. 1.36 euros $1.43 and 1.18 euros $1.25] an hour, respectively. The report continues, “A physician’s hourly salary is comparable, for example, to the hourly pay of a rank-and-file worker at the McDonald’s fast food chain (approx. 138 roubles an hour). A store manager in the chain makes around 160 roubles an hour, meaning more than a credentialed, highly educated doctor” According to a survey of 7,500 physicians in 84 regions of Russia, done in February 2017 by the Health Independent Monitoring Foundation, around half of the doctors earn less than 20,000 roubles [approx. 330 euros $349] a month per position.

Despite the compulsory health insurance scheme by the government, compulsory medical insurance rates do not cover actual medical care costs, which means that patients have to supplement the insurance coverage with cash. The report cites the fact that a basic blood test costs around 300 roubles, whereas outpatient clinics are only reimbursed 70 to 100 roubles on average for the tests under the compulsory medical insurance. Hence the growing number of paid services. Thus, the amount paid for such a shortfall grew between 2005 and 2014 from 109.8 billion roubles to 474.4 billion roubles.

There is a more immediate problem facing Putin. Despite heavy-handed tactics by the government there is a nationwide truck strike in Russia. More than a million trucks have gone on strike across the country. The latest strike started on 28 March 2017 and is continuing to a showdown on April 15 when even higher charges on the trucking industry take effect. The origins of the protest were the unilateral imposition of a new tax on trucking by the government in 2015. This system (known as the ‘Platon’ system) was introduced to offset what the government said was ‘wear and tear’ on the nation’s road which is so dependent on trucks. The Platon tax applies to all trucks over 12 tons. This is in addition to all the other taxes paid by the truckers. The truckers have resisted paying this tax because they see the revenues earned going, not to repair of the roads, but directly to the pocket of Putin’s closest friend (and judo partner) the billionaire Arkady Rotenberg whose son owns the Platon system.

The current protest was sparked following a government decision to double the Platon fee to over 3 roubles per kilometre ($0.05) starting in mid-April. However, Medvedev was forced to reduce the hike after protests. Drivers argue that the taxes are constraining their incomes and the situation is set to get worse. On April 15, the tax will increase from 1.53 roubles per kilometre ($0.027) to 1.91 roubles ($0.033). The government initially planned to increase the rate to 3.06 roubles ($0.05), but has since abandoned the idea. Russia's transport ministry said the Platon system could gather 23 billion roubles ($406 million) in 2017.

On March 27, the truckers began the rollout of the strike. The police responded with violence and jailing of the leaders. Andrei Bazhutin, chair of the Association of Russian Carriers (OPR) and the duly elected leader of the long-haul truckers opposed to the Plato road tolls payment system, was subject to the harshest crackdown. On March 27, he was put under arrest for 14 days. He spent five of them in a jail before he was released, but during that time the authorities nearly removed his four children from their home and almost caused his pregnant wife to have a miscarriage.[iii] On April 5, Rustam Mallamagomedov, leader of the Dagestani truckers, was detained in Moscow.

According to Bazhutin, Dagestan is a particular hotbed of protest. “In Dagestan, 90% of the drivers are private carriers. The republic is small, and so the strike is in everyone’s face. We have strikers spread across the entire country, but Russia is so vast that it’s not so noticeable, although a huge number of people are on strike.” Across Russia the roads are filled with truckers blocking lanes. They are stopping traffic in many of the cities by stopping their trucks in the roads. They have filled all the parking lots with trucks. Despite this there is poor coverage in the state-controlled press and media but it is obvious to anyone in the country who drives. As April 15 approaches, there is some hope that the government will back down. Meanwhile there are shortages of goods and produce across Russia.

The truckers are not the only protestors in Russia. Recently there were nationwide strikes against the corruption endemic in the Russian system. The main participants were the young, the students and the professionals disgusted by the revelations of the vast wealth accrued by Medvedev and, sotto voce, Putin as the rest of the country suffers. In the wake of the March 26 demonstrations. The International and European Federation of Journalists (IFJ and EFJ) have reported the detention of at least 13 international and local journalists by Russian authorities during that nationwide anti-corruption protest.

The demonstrations were not officially authorised in many Russian cities including Moscow and Saint-Petersburg which led to the detention of hundreds of people. Six journalists – among them two international correspondents – were detained in the capital Moscow, three in Saint-Petersburg and four more in other Russian cities. Reports added that the police also threatened and hit some reporters to prevent them from covering the demonstrations.

There are strikes all over Russia, primarily among workers who haven’t been paid their wages for months at a time. This has been going on for over five years; including doctors, construction workers, teachers, car workers, and factory workers. Currently there is a desperate strike in the pizzeria restaurants who are on a hunger strike in Moscow. It is a good example of the problem, where workers have not been paid for a long period and management refuses to deal with the problem constructively. The workers are desperate because they do not know how to get their hard-earned money. They have been kicked out of rented flats and have no way to pay back their debts, and there is no one and nowhere they can borrow any more money. Instead of doing everything they can to pay the money they owe their workers, the real employers have been hiding behind “strange” managers, straw men they have put into notional ownership of the restaurants. Practically speaking, there is no one with whom workers can negotiate. Trade union members of their Novoprof union suspect the Yelashvili brothers (Murab and Georgy) are still the actual proprietors of the chains despite pretending they are no longer the owners. The union says it wants to negotiate with the new owners who say that back wages are not their responsibility. The union has discovered that the former Sbarro, Yolki-Palki, YamKee, and other chains have been re-registered as new legal entities with names like Italian Eatery, Ltd., One-Stop Service, Ltd., and so on. These legal entities have different executive directors, but surprisingly they have the same official address. They do not have their own websites.  When pressed, the former owners say they are bankrupt and the workers will get nothing.[iv]

This situation is common across Russia and is a source of a great deal of social unrest. Rather than address the problem the Russian Government has turned to the import of foreign labour to fill in the gaps. One of the major sources of foreign labour is North Korea; the Far East and Siberia are filled with North Korean labourers sent  to work under contract with the North Korean Government as a source of earnings for the country. The conditions under which they live are unspeakable. The Center for Investigation & Documentation on Human Rights in North Korea, established in November 2016 in Seoul is investigating this problem. The North Koreans contract with the Russians through a state corporation, External Construction Guidance Bureau (ECGB). In January 2017, the Center produced a document which detailed the case of one North Korean who had worked in construction in Russia. His testimony is interesting, if appalling.

How many North Korean laborers were at your construction site?

There were about 500 laborers in our company and four companies stationed at the site I was sent to. Three of those were construction companies and the other was a clothing manufacturer that employed female ECGB workers. Of the construction companies, two were affiliated with the ECGB, and the other was affiliated with the army. I’m not sure of the manufacturer’s affiliation. Each construction company employed about 500 workers and the clothing company had about 200 workers.

So about 1700 laborers were in one city. How much did you earn a month?

I received roughly 5000 roubles each month, which is equivalent to 100 USD.

So were you able to earn 1000 USD a year?

No. The pay was different each month, sometimes 3000 roubles and 5000 roubles other times. The money was also expected to cover living expenses, transportation, cigarettes, and alcohol. After this, almost nothing was left over. The only way to save any money was to do nothing and stay in your room all day, which is impossible. Many think that they can earn a lot of money if they go abroad, but this is certainly not the case.

I know that wages are never fully received because the authorities always take a portion. What pretext did the authorities provide for skimming your wages?

First, we had to pay 850 USD a month to the company, this was mandatory. Of that amount, the government took 180 USD a month for each person. In other words, the authorities collected 180 dollars monthly from each foreign labourer. So, the company took the rest of the money under a variety of pretences including taxes, building maintenance, insurance, etc. But we workers understand little about this. We didn’t care much nor did we know how to calculate the amount of money taken. To us, this was just one more excuse to extort money, so asking for an exact accounting statement would have been useless anyway.

So how much was left over for the laborers?

It was almost impossible for there to be anything left. Russia is a very difficult place for foreign laborers to earn 850 USD monthly. It’s easy to earn a lot of money in summer because there’s a lot of work, but there’s almost no work in winter. Regardless of the conditions, you still have to pay the company each month, and this has to come out of the money that you’ve saved during the summer. All the money earned eventually winds up in someone else’s hands.

What would happen if you couldn’t pay your monthly fee to the company?

For the first month or two, we would work hard to earn money to make up the deficit. However, after taking our monthly fee of 850 USD, the company would also hold back any remaining amount owed to us except for a small amount critical for daily expenses. The company promised us that we would be paid what was kept back at the end of the year. However, this was a scheme to keep enough money on hand in case a worker became injured and could not earn money to pay the monthly fee. If the money kept back ran out or the worker hadn’t returned to work, the worker would be sent back to North Korea.

How many hours did foreign laborers in Russia work?

Workers have no concept of time or rest. We would wake up at 7 AM and eat, starting work by 8 AM, which would then end around 11 PM. A 15-hour workday was the norm but there were many days when we would work even more. In the two years that I worked in Russia, there were almost no instances where work ended before 11 PM.

That must be have been extremely tiring. How many rest days did you have?

We only had one or two holidays per year - Kim Il Sung’s birthday and Lunar New Year’s Day. I only remember resting on those days. Outside of those days, we worked.

Russia must have domestic laws on labour regulations, but do they not apply to North Korean workers?

Russia probably has its own domestic laws, but the Russians delegate the work to the North Korean companies and don’t force them to abide by Russian laws or place any safety measures at the work site. The companies emphasize workplace safety, but it’s just talk. In reality, nothing is followed.

The first thing that the authorities did upon your arrival was seize your passport. Why did they do that?

When someone has their own passport, they have the ability to move about freely. As they do so, they get the opportunity to see the world, and that experience really opens their eyes. This could influence them to try to escape. To stop this chain of events from happening, the authorities seize the labourer’s passports as soon as they arrive on site. Instead of a passport, workers are given a simple piece of paper with a stamp. The passports are only returned when the laborers return to North Korea after serving their time abroad.

Laborers live in group units. I’m curious about the lodging. How was it?

The workers spend the duration of their time living in a shipping container [converted into a trailer]. All 500 workers usually just go back and forth between home and the construction site. About five or six individuals live in one container. None of the laborers have the chance to live in an apartment. The Russian companies that hire North Korean laborers install the containers right next to the construction site. The workers eat and sleep in them. An electric furnace is used to heat water. We used to dream about using a proper bathroom or a bathhouse to wash.

How strict were the SSD’s controls? Did you see or hear about workers who were punished or repatriated?

The agents used to punish us for the smallest transgressions. They would gather a few of us in a room and curse us out for “pursuing liberalism” or not showing up at an agreed upon time. If you fell outside of their surveillance for a given period, they’d inquire and pressure you to admit that you had contact with a Russian person or a South Korean person.

What happens to workers who try to escape and get caught?

They send you back home if they catch you trying to escape. But before they send you back, they put your arms and legs in casts, and fix them in place using iron bars. Then they cover it all up with bandages. This makes it very difficult to move. To Russian people who might happen to see, it looks like an injured person. They are sent on an airplane with the casts in place, and will be executed as soon as they arrive back in North Korea. [v] There is not much anyone can do to assist these Korean workers.

There is a growing unrest in Russia over the corruption, the lack of adequate services, the cutbacks on social spending, the delays in getting paid and the crackdown on public protests as the next election approaches. This is a long way from creating any sort of realistic prospect of removing Putin or his favoured oligarchs from power but is an indication that the pace of public protests seem destined to grow.



[i] Polina Zvezdina, "Experts Predict Reduction in Number of Hospitals to 1913 Levels" RBC, April 7, 2017

[ii] Ibid

[iii] Nina Petlyanova,  "“More than a Million Trucks Have Stopped Running Nationwide”" Novaya Gazeta April 7, 2017

[iv] Novoprof, "Pizzeria Workers on Hunger Strike in Moscow", Moscow Times 3 February, 2017

[v] Unification Media Group, "Unspeakable conditions for N. Korean laborers in Russia" 2/2/17

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Source:Ocnus.net 2017

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