ST PETERSBURG, Russia - Political protest is the "new norm" in Russia and the government has to have a dialogue with the rising middle class, First Deputy Prime Minister Igor Shuvalov said on Friday.
Tens of thousands of Russians took to the streets to protest
against alleged ballot fraud after a parliamentary election last
December and rallies had continued, although less frequently,
since Vladimir Putin’s presidential election victory in March.
The end of the election cycle does not mean that
increasingly affluent urban Russians will lose their appetite
for change and the new government will need to respond to their
demands, Shuvalov told Reuters in an interview.
“We are passing the way of all developed countries and we
need to learn how to live with a situation where the middle
class is active and wants to be loud if they don’t like
something,” Shuvalov, 45, said during an international economic
forum in Putin’s home city, St Petersburg.
“It’s the new norm for us … It’s a major risk for us if we
try to avoid that kind of protest. We need to learn how to live
with this, and what we should do to meet people’s needs.”
Shuvalov kept his job as the government’s number two in May
when Putin swapped roles with his protege Dmitry Medvedev, who
became prime minister last month.
With the political transition complete, Putin has moved to
contain political protest with new legislation allowing for a
sharp increase in fines for protesters who violate public order.
Security forces also searched the homes of opposition
leaders, including blogger and lawyer Alexei Navalny, and called
them in for questioning before the most recent anti-Putin rally
in Moscow on June 12.
Many of the protesters are from the middle class, who
Shuvalov said made up 30 percent of the population. A research
centre that works for the government has described the middle
class as people whose income is enough to buy housing using a
mortgage, or at least 25,000 roubles ($750 dollars) a month.
Shuvalov, echoing a speech by Putin to foreign investors on
Thursday, made clear that calls for change in Russia should not
pose a threat to the country’s stability.
“We are changing our political system,” Shuvalov said. “The
president was very clear – this is very good, this is normal.
But whatever we are doing, we should do within the law.”
PLAN B
Shuvalov, the government’s point man for economic policy and
privatisation, said the Russian economy was in good shape –
highlighting annual inflation at a post-Soviet-era low of around
4 percent and solid growth.
But Russia remains overly dependent on the price of oil and
other commodities, he added, warning that Europe’s sovereign
debt crisis could trigger a worse slump than the 2008 financial
crash. Russia’s economy shrank by 8 percent the following year.
He said the government would prepare a “Plan B” budget that
foresees a slide in oil prices to $60 per barrel – from below
$90 now. This year’s budget is based on an oil price forecast of
$115 per barrel.
If such a slide happened, the government would draw on its
fiscal reserves to finance current spending this year, but would
next year be “very frugal, tight and responsible”.
“We understand that, with all the instability in Europe and
questions about fiscal union, and Greece, Italy, Spain and
Ireland, it can touch us in one day,” he said.
“We are part of the global market. We need to be prepared.”
Shuvalov said that he did not expect the euro zone to break
up, but that the region’s banking crisis would act as a drag on
the economy. Large emerging markets such as China and India are,
meanwhile, slowing in contrast to the strong growth they showed
through the 2008-09 slump.
“You can imagine what happens if, at the same time, in Asia
growth slows down and in Europe there will be something awful,”
he said. “If it happens, Russia will be in between, and we will
all be in a very difficult position.”
(Writing by Douglas Busvine, Editing by Timothy Heritage and
Jon Boyle)
