How Russian Pension Reform Could Spell the End for Vladimir Putin

As Putin approaches nearly two decades of power, he faces a new problem: Russian pension reform.

For almost a century, the retirement age in Russia has been 55 for women and 60 for men, upon which many depend on weak yet steady government pensions to pay their living expenses. Now, however, Putin has raised the retirement age by five years, a particularly unpopular decision in a country where the average lifespan for men is 67 years–a number that dips even lower in many regions.

In many ways, this policy was unavoidable. The Russian economy has been harmed by American economic sanctions that preceded the collapse of the ruble, stagnation in GDP growth, and exclusion from international credit markets. Years of expensive policies countering economic sanctions from the West and increasing military spending have depleted the Russian government’s reserves. Russia now finds itself in peril of economic collapse and hyperinflation, concerns which have deeply impacted Russia’s pension fund, which is approaching bankruptcy despite subsidization from the federal budget.

So-called demographic problems create additional difficulties with pension funding. The collapse of the USSR created a population dip that is felt today with a lack of young workers who can support the pension fund. This gap is aggravated by Russia’s rapidly decreasing population: government statistics show that Russia’s population decreased by 164,000 in the first six months of 2018, in comparison with 119,000 during the same time the prior year. An aging population further complicates matters; by 2044, the number of pensioners could equal the Russian workforce and therefore place massive pressure on the pension fund.

Additional cuts to essential social services have aggravated these preexisting frustrations among the Russian population. This effect is most prominent amongst Putin’s most ardent supporters. Discontent has dramatically risen amongst public-sector employees who form Putin’s traditional base, and protest has arisen from middle-aged rural and urban working poor who are most impacted by changing pension laws and the slashing of government services.

The 2018 gubernatorial elections reflected broader discontent, with protest votes upsetting United Russia candidates in four regions. Polls from October 2018 show that Putin is supported by a fragile 60% of the Russian population and that 38% of Russians do not trust their president. These numbers are likely even lower due to the nuances of Russian opinion polling. Recent surveys emphasize the scale of this discontent: this month, an independent pollster found that more than 50% of Russians want the government to resign.

Against this background of simmering unrest, many analysts view the pension debate as the prophetic “straw that broke the camel’s back.” Russians are increasingly demanding better jobs, stronger infrastructure, and more just and effective government services. The share of the population willing to participate in political or economic protest has increased by 16-22% over the course of 2018 to reach levels higher than during the protests against electoral fraud in 2011-12 and 45% of Russians believe the country is headed in the wrong direction rather than the right one.

Widespread discontent does not necessarily ensure Putin’s fall from power, but it presents fresh complications as he approaches his final years in office. The Russian Constitution limits presidents to four terms in office, meaning that by 2024, Putin must pass along his role as Russia’s leader. With no clear successor and plummeting support for Putin and the United Russia party, opposition candidates have a rare window of opportunity for the Russian presidency. Indeed, Alexei Navalny, the leading opposition politician, has capitalized on widespread frustrations and launched a union for public-sector workers in the hopes of fracturing United Russia’s traditional base.

Whether Navalny or other opposition groups can gain the support of the Russian people has yet to be seen. Upcoming gubernatorial elections will provide an additional gauge of popular support for the United Russia party. Until then, however, Russia–and the world–must wait to see if changing pension policies have truly spelled the end for Vladimir Putin.

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