Tuesday, December 23, 2008
Providing that you still have a stable income, you've probably seen mostly good things from the global financial crisis. The most obvious benefit is the price of oil, which has lost two thirds of its peak value. It's a good thing for us, but it's been playing havoc in Russia, where the state suddenly no longer has near-unlimited disposable income to pacify discontent. The Russian budget is designed with a market price of $70/barrel in mind; I've seen numbers that suggest a fall to $30 in 2009 would create a budget deficit big enough to swallow up all of Russia's foreign-exchange reserves. Even with oil at $40-45, and a fundamentally uncompetitive industrial base, the Russian economy is screeching to a halt. People are already quite unhappy.
One of the things that the Kremlin has done is try to protect the car industry. The VAZ factory, one of the biggest integrated manufacturing facilities in the world, has only survived on lasting demand in the domestic market because of trade tariffs. Importing a three-year-old family hatchback into Russia will cost several thousand Euro just in excise fees. Anything older than seven years old is prohibitively expensive - and yet a VW Golf that's spent a decade trundling along the autobahns and villages of Westfalia is still immeasurably superior to a factory-fresh Lada.
Still, not everyone in Russia buys Russian cars. A number of assembly plants have opened inside the country, some - like the Ford factory - providing not only jobs but subcontracts to local parts suppliers, others simply attaching bumpers and seats to semi-knocked-down vehicles to satisfy a loophole. But there is another source of cars in Russia: Japanese imports.
Russia's a ridiculously big place, and a lot of it is quite remote, but probably the most isolated city is Vladivostok. Established largely as a base for imperial Russia's Pacific fleet, it is located in the southeastern corner of the country, closer to China, North Korea and Japan than any other significant Russian enclave. After the fall of the Soviet Union and the collapse of infrastructure, Vladivostok turned out to be of little interest to anyone out west. The population, some half a million people, survived through a single revenue stream. Vladivostok became the staging area for used Japanese cars, popular throughout Siberia, but as far as Moscow and St. Petersburg as well. Japanese tax laws mean that keeping cars past a certain age is more expensive than replacing them, so there is a steady stream of perfectly serviceable vehicles that need to be taken off the island. China and Korea have their own auto manufacturing industries, Australia is too far for shipping, but Vladivostok is right there - and a five-year-old Toyota that was a salaryman's pride and joy beats the hell out of a domestic deathtrap, even if the wheel is on the wrong side.
One way or the other, everyone in Vladivostok earns a living from the steady stream of cars being loaded onto freight trains and shipped westwards. So when new tariffs were announced, to be introduced from the beginning of 2009 and shutting down the nearly-new import business almost completely, the city would not have it. When Putin and Medvedev said they'd replace the Russian East's Nipponese fleet with discount Ladas, it was received as an insult.
People took to the streets. As a response, Moscow sent its crack troops: the Ministry of the Interior's own, personal SWAT team. On December 20th, after earlier protests, the people of Vladivostok assembled in a central square, around a Christmas tree, and sang carols. Understanding the rules of the game, they did not bring anti-government banners or bullhorns. As long as the crowd didn't get overtly hostile or political, the local law enforcement would not stop them; everyone in the city was equally worried.
Except the federal government could not tolerate any organization, any large mass of people standing up for their rights. On December 20th, the cops on scene were not locals, but OMON Zubr. This was Moscow SWAT, the same group used to guard international summits and crack the skulls of marching skinheads.
When, shortly after the Bronze Soldier riots in Tallinn, the Kremlin roughly shut down opposition protests in its big cities, it was an ironic contrast to their accusations against Estonia. But I said back then that we should not be complaining too loudly about the treatment of the Marches of the Dissenters, as they were called; most of the people involved were decidedly unpleasant characters, with whom we emphatically did not need to align ourselves. The actions of the federal police at that point showed simply that Russia had no moral right to complain about anyone else; they were no better.
But the protesters in Vladivostok were not neonazis or anarchist radicals, nor even people with a deep-seated hate of the Putin administration. These were apolitical folks, enraged not by propaganda, but by a howlingly terrible decision that would rob them of their livelihood. It wasn't even the result of incompetence or mismanagement, nor the loss of windfall oil profits, that was going to do them in, but a conscious decision by the ruling clique to protect a rotten industry that is spewing inferior product, which nobody in their right mind would buy, given a choice. The people of Vladivostok had every right to take to the streets; and the central government's reaction proved that they aren't just no better than us - they are, self-evidently, far, far worse.
Photo source, video source. Bonus story: the moderator of Russian LiveJournal's biggest car community apparently was contacted by the FSB and asked nicely to delete any posts about the import tariff protests.
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Not only the traders in Vladivostok will be affected. Often during a week I pass Busan station (Korea). This is the biggest port city and Russian sailors visting the Russian-Usbekistan-etc shops in that area frequently. You can buy Riga Zelts and stuff like this. I will ask about this when coming back end of January. It's always somehow strange to realise that Vladivostok is not far from here. It feels as far as Europe. Though in fact not far from Korean borders.
I have heard about the protests in Vladivostok. I am only worried about the degree to which they are hyped. I guess we'll have to wait and see what comes of it.
Again, Vladivostok is news in Korea. And it seems it might COULD be a beginning of something. Let's see.
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