Putin, Roldugin, Shamalov, Patrushev and the Rest of Homeowners

Apartment building in Moscow / Photo by apb1.ru
Apartment building in Moscow / Photo by apb1.ru

The widely known problems in Russia’s housing and communal services sector are not new. The entire sector is slowly but steadily deteriorating. This is no surprise since the average age of the Russian housing stock exceeds 40 years. Several tragedies happened over the last year. A residential building partially collapsed in Mezhdurechensk; household gas explosions occurred in Omsk, Perm, Yaroslavl and Volgograd; a bridge collapsed in Vladivostok; cars regularly get stuck in potholes as pavement collapses. Well-known Russian blogger Ilya Varlamov has repeatedly supplied evidence of dire housing conditions of ordinary Russians.

The federal authorities do not at all seem concerned about this situation. In 2016, federal allocations for the repair and replacement of utility lines as well as for the upgrading of the housing stock will amount to around 75 billion rubles or about half of the obviously ill-gotten $2 billion belonging to Putin’s close friend violinist Roldugin. There are plans to further cut federal spending on the housing and communal services sector in 2017 to more than half its 2016 amount.

In fact, why should Russia’s budget be spent on housing around 85 percent of which is privately owned? On the other hand, despite the mass privatization of apartments in the 1990s, public spaces and communal services of most apartment buildings such as entrance halls, courtyards, stairs, gas, electrical and plumbing have not been privatized and remain the responsibility of municipalities. The budget situation on the local level is obviously much worse than on the federal one. Read More “Putin, Roldugin, Shamalov, Patrushev and the Rest of Homeowners”

Useless Services

Photo by Vadim Akhmetov / Znak.com
Photo by Vadim Akhmetov / Znak.com

The production of what goods and services accounts for the largest share of Russia’s gross domestic product (GDP)? That is a simple economic question. Amateurs would be wrong as usual in claiming that the right answer to this question is oil and gas. In the modern market economy – and in the last 20 years, Russia has been classified as a market economy unlike, for example, North Korea – the largest share of GDP is attributed to various services. Banking and transportation services, healthcare and education, lawyers and auditors, Internet and cell phone services together account for 55 percent of Russia’s GDP. Just for comparison, in the United States, the same services account for as much as 80 percent of the country’s GDP. The rule is simple: The more developed a country is and the higher the living standards of its population are, the larger the share of the service sector in its economy is.

Legal and auditing services without which private business cannot exist or develop occupy a special place in the variety of services. Businessmen use the results of independent legal analysis and audit to reduce risks and avoid losses. Read More “Useless Services”