Page 42 - RusRPTJun24

2.19 Putin & government’s popularity
Following the Russia’s invasion of Ukraine just over two years ago, more than a million young Russian fled the country and a hope that those that stayed at home, appalled at the decision and cost, would rise up and throw Russian President Vladimir Putin out of office.
Fast forward to today and it appears that not only have the extreme sanctions failed to empty the Kremlin’s coffers and so stop the war, but it has created a boom in Russia that is lifting average wages and making Putin more popular than ever.
As bne IntelliNews reported, Russia’s poorest regions have been the biggest winners from the massive $140bn of war spending and gone some way to undoing Russia’s vast income inequality. Typically, defence factories are located in small towns deep in the interior, but now the economy is on a full war footing those same factories are working three shifts a day 24/7 and the acute labour shortage has sent nominal wages up by 14% since the war started, while inflation fell from 11.9% in 2022 to 7.4% last year, which means average Russian real wages have been growing strongly for the first time in more than decade, according to the latest Central Bank of Russia (CBR) macroeconomic survey.
The war in Ukraine has put money in working class pockets and the amount has increased noticeably in the last year. People are going shopping, fuelling a feel-good consumption boom. And that is lifting support for Putin. Four out of five Russian now say they trust Putin and the last Levada Centre poll show that Putin's popularity has risen since the war started and currently stands at 86% with only 11% disapproving.
“While the full-scale invasion of Ukraine was a major shock for the middle class, it has also channelled wealth to many people who were previously struggling to make ends meet, political analyst Ekaterina Kurbangaleeva argued in a recent paper for Carnegie Endowment for International Peace.
Real incomes rose 5.8% in 2023 and at the same rate in the first quarter of 2024, according to Rosstat. On top of that, figures from the Federal Tax Service show that the Russian state’s income tax revenues in 2023 were 40% higher than in 2021 (the lion’s share of this increase took place in 2023), Kurbangaleeva reports. And none of the big net contributors to the budget have seen their income increase by much, while all the top spot big winners are occupied by regions that before the war were traditionally net recipients from the federal budget, such as republic of Chuvashia (a rise of 56% over two years), Bryansk region (54%), Kostroma region (52%), Kurgan region (50%), Smolensk region (49%), and Zabaikalsky region (47%). There were only three
42 RUSSIA Country Report June 2024 www.intellinews.com