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Factory demise symbolizes rot at core of Russian economy
The central Russian city of Orsk is struggling after losing more than 50,000 jobs at 30 factories in the past two decades.
Once beyond the metro areas of Moscow and St. Petersburg, it becomes very apparent how the bulk of Russia remains poor and backward. For a nation blessed with abundant natural resources and spanning 11 time zones, this situation boils down to a government uninterested in governing for the betterment of all citizens, and endemic corruption that permeates nearly all Russian strata.
The central Russian city of Orsk is struggling after losing more than 50,000 jobs at 30 factories in the past two decades.
Financial Times
12/2/18
Evgeny Sidorov knew things were bad when the heating at the factory he worked at in central Russia was switched off in midwinter. The temperature was about minus 15C and many of the building’s windows were missing. Since then, things have only got worse at the Ormeto-YUMZ machinery factory in the city of Orsk. The facility has been closed since September, salaries for its 3,000 workers are in arrears and as its banks, lenders and management argue over its debt load, many think it may never start up again. “There are no materials, there is no money, there are no customers,” said Mr Sidorov. “There is nothing . . . They do not care about us.”*Away from Moscow’s Michelin-starred restaurants, Bentley showrooms and glistening granite pavements, Russia’s regional industrial belt is struggling. Expected gross domestic product growth of about 1.7 per cent this year would be far worse without strong oil and gas revenues, suggesting other sectors of the economy are stagnant or in retreat.*“Only people who deal in oil think that everything is all right in Russia,” said Vladimir Gudomarov, head of the Orsk branch of the Russian Communist party. “We are left here with the little that remains. The authorities are only interested in their own pockets . . . And they just look to oppress and suppress the public anger.”*
“The policies, the attitudes of people are set by those at the top. And they do not care,” said Mr Gudomarov, a former employee of the Orsk factory. “It feels as if the government has given up on investing for the future. They just care about surviving today.”*Such attitudes are a test for Mr Putin, whose popularity ratings have fallen sharply since he increased the country’s retirement age this autumn. A poll this month by the Levada Centre, Russia’s independent pollster, showed 61 per cent of Russians hold the president personally responsible for the country’s problems.*While strong diplomatic ties with countries such as China, India and Saudi Arabia have allowed the Kremlin to maintain global clout despite the sanctions, domestic anger over jobs and livelihoods is likely to be harder to mask.*“There is a feeling across the whole city of crisis. No money, no jobs, no hope,” said a person whose family has worked at the Orsk factory for generations. “It is a very dangerous situation for the authorities to have 3,000 angry people out on the streets.”
Once beyond the metro areas of Moscow and St. Petersburg, it becomes very apparent how the bulk of Russia remains poor and backward. For a nation blessed with abundant natural resources and spanning 11 time zones, this situation boils down to a government uninterested in governing for the betterment of all citizens, and endemic corruption that permeates nearly all Russian strata.