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Putin reform suffers setback

Russia's top ministers asked forgiveness from pensioners for taking away their free privileges as one of President Vladimir Putin's main reforms suffered another embarrassing setback amid raging street protests.

Last Modified: 21 Jan 2005 20:29 GMT
The pensioners blocked streets in major cities across Russia

Russia's top ministers asked forgiveness from pensioners for taking away their free privileges as one of President Vladimir Putin's main reforms suffered another embarrassing setback amid raging street protests.

The political ramifications of one of Russia's great social experiments became more evident still when a poll published on Friday showed Putin's popularity taking a 5% hit over the course of the month.

At the start of the year Russia replaced free travel and access to basic medicines for pensioners and other disadvantaged groups with monetary compensation in a move aimed at introducing more cash into the country's economy.

The change affects tens of millions of people who live on meagre pensions and who had relied heavily on the Soviet-era social security benefits.

Pensioners irate

The system helped the poor but hurt the economy because it stripped it of circulating money that could help the government control the country's fiscal policy.

Communists and nationalists
capitalised on the situation

But Putin's move backfired badly when irate pensioners - most of them women bundled in wool scarves against the Russian winter - blocked traffic in major cities including the outskirts of Moscow.

They argued in dramatic scenes televised nationwide that the money paid did not compare to their old privileges and demanded that the law be revoked.

The protests marked the first spontaneous demonstrations of Putin's five-year rule and prompted the president to publicly berate his government on Monday - sparking speculation that some senior ministers might soon be dismissed.

'Our mistakes'

One of those ministers, finance chief Alexei Kudrin, appeared before parliament on Friday for a 90-minute session in which he admitted to miscalculations and mistakes.

"We need to make some timely conclusions and to admit our mistakes," Kudrin told a hearing of the State Duma lower house of parliament.

"We need to make some timely conclusions and to admit our mistakes"

Alexei Kudrin,
Finance Minister

"I can say this directly - both to the federal authorities and Russian regions - that the exchange of privileges for monetary compensation was unable not to hurt certain categories of people," he said.

Kudrin also hinted that he was ready to take the fall for the president, a move that would feed fear in Western investors who see the finance minister as one of the few remaining experienced liberals on Putin's team.

"If we made some mistakes, then we let down the Duma and the president," Kudrin told the chamber.

"In that case we are responsible for this, and then necessary decisions will have to be made," said Kudrin in reference to potential dismissals.

Hunger strike

Russia's pro-Communist and nationalist wing has tried to make the most of the situation.

Putin's popularity has dipped by 
5% over the month

The Duma's small nationalist Rodina bloc - holding 39 seats in the 450 seat chamber - announced that five of its members were launching a hunger strike until either the "monitarisation" law was revoked or the government steps down.

"We are going to launch a hunger strike right here in the Duma," said party leader Dmitry Rogozin. He set up five inflatable mattresses in a room and a live cam so that people could keep track of their strike.

"They are just trying to attract publicity," said Duma speaker Boris Gryzlov, who also heads the pro-Putin United Russia bloc that runs the chamber.

Road blockades to Siberia

Meanwhile the road blockades stretched out to Siberia on Friday with traffic reportedly coming to a standstill in the heart of Barnaul and other locations.

The ministers pleaded for understanding and time. They said a new plan that would simply raise pensions was in the works.

"The compensation plan does not resolve the problem of guaranteeing a normal standard of living for pensioners. That is why we have to raise pensions.

"We have to increase pensions year after year," said Kudrin.

But the raise in pensions would still see an end to free travel for pensioners and his comments prompted the Rodina hunger strike.

Russia's government fears that raising pensions will feed inflation at a time when prices rose in the country over 2004 faster than expected.

Source:
AFP
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