Will Soccer Carnival Cover up Russia’s Highly Unpopular Pension Reform?

Nice summer weather in Moscow and in most of European Russia, in addition to the surprisingly good performance by the Russian national soccer team, have added to the carnival feeling of euphoria on the streets of the Russian cities hosting the 2018 World Cup. The Russian team defeated Saudi Arabia and Egypt, securing a place in the playoff stage of the tournament. President Vladimir Putin has basked in the limelight of this success, meeting with foreign dignitaries like Saudi Arabia’s Crown Prince Mohammed bin Salman, Portuguese President  Marcelo Rebelo de Sousa and United Nations Secretary General António Guterres. South Korean President Moon Jae-in and other world leaders are expected to come to Russia later, as the tournament progresses (the final game is set for July 15).

The Russian team, which played rather dull matches all the way up to the World Cup kickoff, on June 14, has now become everybody’s darling, playing briskly, demonstrating lots of stamina and scoring plenty of goals. The soccer victories bring to mind the 2014 Sochi Winter Olympics, when Russia also did surprisingly well and collected more gold medals than any other country. Granted, it eventually turned out that much of the success, which filled the nation with patriotic fervor, was the result of illegal use of performance enhancement drugs, with government support; but those revelations came much later, and the Russian public and authorities refuse to accept them as true (see EDM, July 21, 2016; December 11, 2017). The streets of Russian cities are filled with tens of thousands of colorful soccer fans from many countries, singing, dancing, drinking beer and having fun. The Russian police has been given instructions to act nice, allow peaceful unauthorized street activities and permit outdoor alcoholic beverage consumption. The Russian public is friendly, as well, at least for as long as Russia continues to be victorious on the playing field. Russian state propaganda, meanwhile, is in overdrive, circulating reports about how all foreigners like it in Russia (RIA Novosti, June 14).

Putin’s gamble on investing billion of dollars into infrastructure and stadium construction to host the World Cup seem to be paying off. Even if the Russian soccer team is kicked out early during the playoff stage, so little was expected from its players beforehand that many in Russia will still be happy and proud. The tournament will continue to attract international limelight to Russia. World leaders will keep arriving to attend crucial matches of their national teams. And Russia, together with Putin, will gather more international prestige and recognition as a “normal,” benevolent entity—just like during the Sochi Olympics. In 2014, however, this accumulated “soft power” capital was quickly squandered as Russia annexed Crimea and ignited a war in Donbas. Today, the World Cup extravaganza seems to have an immediate and practical internal, political application: to distract from the discontent caused by plans to reform Russia’s notoriously inept pension system by gradually extending the retirement age to 63 from 55 for women and to 65 from 60 for men.

Alexei Kudrin (57), the former finance minister and deputy prime minister, who, in May 2018, rejoined Putin’s cabinet as chief of the Budgetary Accounting Office, has been publicly calling for a significant increase of the basic retirement age to begin as soon as possible. Otherwise, he predicted, the pension system could go broke in the coming decade. Kudrin and his liberal economic allies in government, including First Deputy Prime Minister and Finance Minister Anton Siluanov (55), have apparently convinced Putin of the paramount importance of starting to extend the retirement age in 2019. The retirement ages will be increased by half a year each year; the process will take 10 years for men and 16 for women, ending in 2034. More than 90 percent of Russians are against raising the retirement age, but a majority believe it will happen anyway (Romir.ru, June 14).

Putin was reelected for another six-year presidential term in March 2018. Not once during the campaign, did he publicly mention, in print or in a speech, any plans to immediately start increasing the retirement age. Many voters now feel tricked, believing the Kremlin never secured an explicit public mandate to begin this highly unpopular reform. However, the Putin administration is playing dumb: Kremlin spokesperson Dmitry Peskov recently told journalists, “The president is not involved in the pension reform; it is a government initiative, and the draft legislation has been sent to the parliament for further deliberation.” According to Peskov, Putin does not “at present” plan to meet with the cabinet to discuss the reform (Interfax, June 19). That narrative is not gaining much traction in Russia. Putin is a known micromanager, and of course he personally appointed the cabinet (only the prime minister, Dmitry Medvedev, was officially endorsed by the parliament). As such, Putin will be forced to “own” possibly the most unpopular reform of his political career since 2000. Though his approval ratings are over 80 percent, it is an open question as to whether they will survive if the nation turns decisively against the retirement age extension.

The government is arguing the reform is overdue and inevitable. The average old-age pension in Russia is officially around 13,300 rubles (just over $200) per month. Deputy Prime Minister Siluanov has promised that, starting in January 2019, as a result of the reforms, present pensioners will collect an extra 1,000 rubles ($16) per month (RIA Novosti, June 21). That modest amount certainly has more purchasing power in the outlying Russian provinces. But will it be enough to prevent public unrest?

The official opposition parties in the Duma have declared they are against the retirement age extension. However, the ruling United Russia wields a commanding majority and has already pledged to support the reform (Kommersant, June 21). The extra-parliamentary anti-Putin opposition, led by Alexei Navalny, are planning to organize street protests. The authorities have already forbid them, citing security concerns because of the World Cup (Kommersant, June 19). The government apparently believes it will be able to split the opposition and different social groups diversely affected by the reform and, thus, weather the discontent. Yet, if the World Cup fails to work as an effective distraction, something else may be needed to boost patriotic fervor at home. The 2014 invasion of Ukraine serves as one possible blueprint for the Kremlin.