Putin, faced with ratings slump, offers Russians financial sweeteners

MOSCOW - President Vladimir Putin offered a raft of financial sweeteners on Wednesday to hard-pressed Russians after opinion polls showed trust in him has fallen to a 13-year low and almost half the population believe the country is on the wrong track.

In his annual speech to the Russian political elite, Putin set out how he planned to raise people's living standards and boost healthcare and education, promising he would find extra money to back the pledges.

Among his promises: More money for pensioners, mortgage and tax relief for families, and financial incentives for women to have more children.

Putin also laid out deadlines to close huge and sometimes apparently spontaneous landfill sites that have become a political sore for the Kremlin and angered many Russians who have seen them spring up near their homes, polluting the air.

"You can't deceive people. They keenly feel hypocrisy, disrespect and any injustice. Bureaucratic red tape is of little interest to them," Putin told lawmakers and regional leaders.

"For people what's important is what has actually been done and how it improves their lives and their families' lives. We need to change the situation for the better now."

Putin also spoke of a new arms race with the United States, something that could potentially reduce funds available for social spending if it continues to escalate.

But for now, Putin said Russia was well able to afford to spend heavily on lifting people's quality of life. He said the country's foreign currency reserves covered the entirety of its external debt obligations for the first time and forecast the economy would be growing by over 3 percent by 2021.

"...We can now invest and focus colossal, at least for our country, colossal financial resources on (Russia's) development. Nobody handed them to us, we did not borrow them - these funds were created by millions of our citizens. They (the funds) should be used to increase Russia's wealth and the well-being of Russian families."

Oil revenues mean Russia is not short of money. Its budget surplus this year is projected to be 1.932 trillion roubles ($29.3 billion) or 1.8 percent of gross domestic product. Russia's foreign exchange reserves stand at $478 billion, the fifth largest in the world.

But if Putin had to scale back social spending plans to fund a wider arms race, that could further dent his ratings.

In power as either president or prime minister since 1999, Putin was re-elected last year by a landslide to another 6-year presidential term. He is not under immediate political pressure and enjoys an approval rating of around 60 percent.

But his rating used to be nearly 90 percent and an opinion poll in January showed public trust in him had fallen to its lowest level in 13 years, while another survey showed this month that the number of Russians viewing the country as moving in the wrong direction was at its highest since 2006.

Pollsters attribute the souring mood to people fed up with 6 consecutive years of falling real incomes and unpopular government moves to raise the retirement age and hike value added tax.

source: news.abs-cbn.com

Russians, in peaceful protest, call for Putin to quit

MOSCOW - Several hundred Russians lined up in central Moscow on Saturday under the gaze of riot police to hand over handwritten appeals for President Vladimir Putin to quit, as similar protests took place in other cities.

Putin, who has dominated Russian politics for 17 years, has not said whether he will run in presidential elections in March 2018. But the 64-year-old politician, who enjoys high popularity ratings, is widely expected to do so.

Saturday's protest in the capital -- called "We're sick of him" -- was organized by the Open Russia movement founded by Kremlin critic Mikhail Khodorkovsky. Once Russia's richest man, he was freed by Putin in 2013 after spending a decade in jail for fraud, a charge Khodorkovsky said was politically-motivated.

One of hundreds shepherded into a queue behind metal barriers by police before handing over their petitions one-by- one, Anna, a 16-year-old Moscow schoolgirl, said she hoped Putin would get the message and not run again.

"Nothing positive has happened in our country on his watch and I have the sense that things are getting worse, and that the main problem is the fact that those in power are the same," she told Reuters.

Her preference for president was opposition politician Alexei Navalny, who spent 15 days in jail last month after helping organize the biggest anti-government protests since 2012, which ended with over 1,000 arrests.

Saturday's event, held in bright sunshine, was more modest, though authorities were taking no chances. A Reuters reporter counted at least 30 police buses and coaches in the area, packed with hundreds of riot police.

Videos posted by Russian media showed police in riot gear detaining protesters in St Petersburg, where activists reported over 100 arrests. There was no official confirmation of the arrests.

STEPPING UP PRESSURE

Police said 250 people had showed up in Moscow, the Interfax news agency reported, while Maria Baronova, an Open Russia activist, said at least 500 people had handed over a petition.

Irina Glushkova, 64, standing in the same line as the schoolgirl, said she and many others simply didn't agree with how Putin governed.

"I'm sick of the situation," she said. "I'm the same age as Putin and I don't think I'm less intelligent than him, but my opinion is not taken into account at all."

Authorities have stepped up pressure on Open Russia in recent days. The General Prosecutor's Office ruled on Wednesday that the activity of Open Russia's British arm was "undesirable" and accused it and other organizations of trying to discredit the election.

On Thursday, police searched the Moscow offices of Open Russia's Russian branch. Activists said they confiscated 100,000 blank appeal forms which the foundation had hoped to hand out to people encouraging them to call for Putin to quit.

On Friday, REN TV, a Russian TV channel, broadcast a documentary about Open Russia activists, some of whom it accused of having criminal records, of being drug addicts, and of cultivating close links with the U.S. government.

Activists dismissed the program as a cheap stunt designed to discredit them, with at least one noting that REN TV had somehow obtained video footage stored in his mobile phone.

(Additional reporting by Andrey Ostroukh and Dmitry Solovyov; Editing by John Stonestreet)

source: news.abs-cbn.com

Dollar mortgage holders urge Russia to end 'financial slavery'

MOSCOW - When Olga Savelyeva took out a $226,000 mortgage to buy a small apartment on the outskirts of Moscow in 2008, she could never have imagined that the ruble would lose more than half its value in a few short years.

But Savelyeva's $2,090 monthly instalments have skyrocketed in ruble terms due to the Russian currency's dive against the dollar. The resulting jump in monthly payments from 49,000 to 115,000 rubles now devours most of her family's income.

The 30-year-old mother of a young daughter and her husband have tried to honour their repayment commitments but despite their best efforts, December's instalment was $400 short.

"We're left with 3,000 rubles ($56) this month," Savelyeva told AFP.

"We won't be able to make the January payment in full... "We also have other obligations," she added, referring to her retired mother and cancer-stricken father.

Savelyeva is one of tens of thousands of Russians who took on lower-interest foreign currency-denominated mortgages in the years before the financial crisis and now struggle with repayments as the ruble's value shrinks.

Russia's central bank says that as of November 1, foreign exchange mortgage debt totalled 120.5 billion rubles ($2.28 billion).

According to the state-run Agency for Housing Mortgage Lending, those loans represent 3.3 percent of the total volume of outstanding mortgage debt.

Critics say the government is deliberately downplaying the scope of the problem and claim some 100,000 to 150,000 people are likely affected.

Hundreds of Russia's hard-currency mortgage holders have created a social media group, attracting members from Yekaterinburg in the Urals to the exclave of Kaliningrad on the Baltic Sea.

In a letter to central bank chief Elvira Nabiullina, the group threatened a "powerful social explosion" if assistance isn't provided.

Some 100 homeowners picketed the central bank this month and around 500 people plan to take to the streets this week, the first significant protests over the collapse of Russia's currency -- down some 40 percent against the greenback this year.

'Left alone with misfortune'

With Russia's mortgage industry still in its formative phase, taking out a loan to buy a home is considered risky business.

Even before the crisis, interest rates of 10 to 12 percent on foreign currency loans -- and 12 to 14 percent on ruble-denominated mortgages -- mean many Russians will wind up paying double to triple the principal borrowed on 15- to 20-year loans.

The group of foreign currency mortgage holders says Russia's financial crisis, exacerbated by falling oil prices and Western sanctions over Ukraine, has transformed their loans into "financial slavery".

To make matters worse, interest rates are expected to rise further still in the wake of the central bank's decision this month to hike its key rate to 17 from 10.5 percent to prop up the ruble.

"Why have ordinary borrowers been left alone with their misfortune?" asked members of the social media group in their letter to the central bank.

They said some of them have "ended up out on the streets" and warned they would be ready to go on hunger strike if no solutions were found.

A representative of the Bank of Russia said it had repeatedly warned clients of the risks associated with dollar-denominated mortgages.

The bank added that "a restructuring of such loans, including converting them into rubles at a reasonable exchange rate, would be in the interests of both borrowers and banks".

Zoya Kuliyeva, who borrowed $120,000 to buy a Soviet-era apartment in Moscow in 2008, said banks have so far refused to come up with an acceptable solution.

The bank has offered to extend her loan until she turns 70. "It means my children and grandchildren will be paying it off," Kuliyeva, chief accountant at a Russian firm, told AFP.

'State help needed'

Economist Yevgeny Gontmakher said the collapse of the ruble was a huge blow to Russia's middle class, which includes many holders of foreign-currency loans.

"It's a catastrophe for them," said Gontmakher, deputy director of the Institute of World Economy and International Relations of the Russian Academy of Sciences.

The government, he added, would likely pass the buck by putting pressure on the banks, which are already struggling with a liquidity squeeze.

This year Hungary faced a similar scenario, with banks forced to convert foreign currency debt into forints to bail out hundreds of thousands of borrowers.

Russian lawmakers this month passed a personal bankruptcy law that will come into force next July.

A legislator from A Just Russia party, Andrei Krutov, suggested that foreign currency-denominated loans be banned altogether.

Krutov also said the state should bail out holders of those mortgages by allowing them to pay off loans at pre-crisis exchange rates.

"They won't be able to get by without state support," he told AFP, adding that he was preparing legislative initiatives to that end.

But Kuliyeva said such assurances offered little consolation.

"I am just trying not to follow the dollar exchange rate," she said. "It's very scary, it's depressing."

source: www.abs-cbnnews.com

Ruble plunges but Russians are going on shopping spree

MOSCOW - Russians are feeling the pinch from the slumping ruble, but one somewhat paradoxical result has been to unleash a spending spree as consumers snap up electronics, furniture and cars before prices soar.

In general, Russians' spending power has gone down with the ruble -- which this week hit a record low against the dollar and has lost more than half of its value against the euro due to falling oil prices and Western sanctions over Ukraine. In addition, inflation is forecast to soon climb above 11 percent.

But for those with savings who were planning to buy big-ticket imported items, now is the time to hit the shops, before prices go up drastically to reflect the new cost of imports. And for Moscow's large stores and malls, it is boom time.

In an Ikea shop on a weekday afternoon, the section selling fitted kitchens -- the highest-priced items in the store -- was packed with customers. Ikea has announced that it will put up its prices for kitchens and other goods on December 18.

At a peak time for shopping ahead of the New Year, the country's main holiday, "the number of people in the stores has gone up also because of prices going up", the Swedish chain, which has annual turnover in Russia of more than one billion euros ($1.25 billion), said in a statement sent to AFP.

Ikea had previously promised to keep its prices the same for 2014, but the chain then explained it "could not be independent from external factors".

Apple in late November upped its prices in Russia by 20 percent, without warning, after its products had suddenly become cheaper than in Europe, an opportunity that some canny consumers spotted.

Interest rates have shot up from 5.5 percent at the beginning of this year to 10.5 percent on Thursday and then 17.5 percent on Tuesday, but the central bank has not been able to keep a ceiling on inflation nor a floor under the ruble.

Many Russians are experiencing deja vu -- they have lived through several serious economic crises in the last 25 years, when many saw their savings go up in smoke.

Rush to buy

Household electronics chain M.Video confirmed it had seen footfall rise in early December, partly because of a trend to start shopping earlier for New Year gifts, but also due to the ruble's plunge.

"Customers are trying to lock in the value of their ruble savings and invest them in electronics," said spokesman Anton Panteleyev.

When the chain held a "Black Friday" event in late November, sales went up sharply and the best-selling items included flat-screen televisions, washing machines and smart phones.

"People rushed to buy expensive things like plasma TVs, tablets, notebooks and so on, trying to save their rubles that are drastically losing their value," said Maria Vakatova from Watcom consultancy group, which tracks high-street trends.

The tactic of going shopping when the economic situation gets tough may distinguish Russia from the West, analysts said.

"In this way, Russia is different from developed countries... There, when a crisis begins, people immediately start saving," said Igor Nikolayev, head of the FBK Strategic Analysis Institute.

"In our country, when a crisis comes, it is accompanied by a steep loss of value of the national currency and people abruptly start spending and for a time this softens the situation somewhat."

Such behaviour is "rational: everyone understands perfectly well that prices are going to change," Nikolayev said.

The popular weekly Argumenty i Fakty recently advised its readers to buy electronics, cars, clothes, which are generally imported and therefore directly affected by the falling ruble.

The car market also experienced a boom, with sales of the main foreign makes sold in Russia soaring in November after having been in a deep rut for most of the year.

The Association of European Businesses, which logs car sales, said the retail demand was "extraordinary".

Economist Nikolayev forecast this consumer boom will last "another couple of months, until people have spent all the rubles they are ready to spend."

After that "the most difficult period begins," he said.

The Russian central bank warned Monday that the Russian economy could contract by nearly 5 percent in 2015 if global crude prices remain at their current levels, which would cut sharply into government spending in the highly oil-dependent country.

source: www.abs-cbnnews.com

Videogame 'Demokratia' mocks Russian politics

MOSCOW -- Buy voters, divert public funds, become an all-powerful tsar: it's all part of the fun in videogame "Demokratia," whose merciless take on Russian politics has made it a runaway success in the land of Vladimir Putin.

"Begin the ballot-stuffing!" and "Voter participation is 146%!" announce the characters in Demokratia, who bear more than a passing resemblance to well-known Russian politicians.

The game has already been downloaded by 1.5 million Russians, and is picking up around 100,000 new users every month according to its creator, NeskinSoft.

To build a Russian democracy, the player combines elements to create new objects -- similar to the smash US puzzle game Triple Town.

Three currency notes secures a sheep, three sheep make a voter, three voters make an election office -- and so on until you've reached the summit of power.

Players can also learn to ignore budgets, violate the constitution and pay off parliamentarians.

'A KGB colonel'

Some elements, like the "jailed lawyer" -- an apparent reference to opposition leader (and lawyer) Alexei Navalny -- can be used to combat pro-regime bad guys like the "colonel of the KGB," which happens to be President Putin's former job.

Navalny, a fierce critic of Putin, became famous after publishing leaked documents on his blog exposing corruption in high places and ran unsuccessfully for mayor of Moscow last year.

The game's creator, Valentin Merzlikin, has openly supported Navalny.

The 37-year-old computer programmer, originally from Moscow, has made the strange decision to move to Belarus -- hardly known as a bastion of democracy.

With so many anti-government activists being hounded by the authorities, he wanted to "give them something to amuse them," he joked in a phone interview with AFP.

"Demokratia" was released on December 10, 2011, the same day as allegations of rigging in parliamentary elections triggered a wave of protests that continued until Putin's re-election as president the following May.

"We got 100,000 downloads in the first week," recalled Merzlikin.

Pussy Riot

Since then, there have been around 20 new versions of the game, featuring new personalities each time, from female activist group Pussy Riot to US singer Madonna, who has publicly backed the group.

Gamers will find that the pinnacle of the game does not stop at Putin. They can keep going up to "Mahatma Gandhi," "Jesus" or Russian icons such as poet Alexander Pushkin and cosmonaut Yuri Gagarin.

"Demokratia is very popular because it's a game that is both provocative and without propaganda," said analysis firm Hungry Shark.

In Russia, where nine out of 10 people regularly indulge in gaming, "videogames have become more important than cinema or literature," said blogger Dmitri Goblin Poutchkov.

Recognizing the threat, the state has tried to fight back. Two popular social media sites -- Odnoklassniki and Mail.ru -- have blocked Demokratia.

The government has also tried to create its own games with a more pro-regime slant. One example, touted in state-backed media, is "Snowdev Run" where an ex-KGB agent saves Moscow from zombies. A gaming website described it as attempting to "glorify Vladimir Putin, but it ultimately fails."

Not everyone is enamored of Demokratia's mocking tone, however.

"Regardless of what I think of Putin, this game is amoral and cynical," wrote one reviewer on the MacRadar website.

source: www.abs-cbnnews.com