Antony said:
Kniall - Yes, the country has indeed changed, but only from the "shop-front" (витрина). The oil/gas revenues led to the big expenditures for non-productive, non-innovative projects which are supposed to be a locomotive of the economy. Yes we have a boom in housing building (the prices though are among the highest in the world (Moscow and all the major regional cities - миллионики) and unaffordable even to middle class- mortgage and credit rates are at best 15-20%).
It is naive to expect that after almost total collapse in the 90s, Russia could turn into innovative country within 15 years, don't you think? In this respect I agree with Gennady Zyuganov, leader of Russia's communist party, saying that before any innovations we should first restore our basic industries. You simply cannot jump from level 1 to level 3, you have to build the basis first.
You say about the "boom in housing building". And it really is: enormous amount of newly-built housing. But isn't this the obvious fact of rapidly developing economy? Construction makes a huge part of our economy now. And the fact that oil and gas industry still comprises the major part of our revenues doesn't mean other sectors are NOT developing, it only means that BOTH oil and gas sector AND other sectors are developing simultaneously.
As for the "major cities", I live in one of them. Novosibirsk is he 3rd largest city in the country. Here is the photo of the district where I live.
ALL these houses were built within the latest 3 (maximum 5) years. As you can also see, not only houses are being built, but also new modern schools and kindergartens, which is also government expenditure. For example, in my district, part of which you can see on the picture above, two new kindergartens were built this year. Also, this year two other kindergartens were transformed from the private property into the state property. Is it not development?
As for the fact that these apartments are "unaffordable even for middle-class".. Well, I can tell you that about 80-90% of the residents of these apartments (on the picture above) are young families with children, including yours truly. As I have already mentioned, we have a Mother's Capital program in Russia. Every family who gives birth to a second, third, etc. child receives a lump-sum payment of $ 12,000. It may not sound much in dollars, but in Russian rubles it is 429,408. For this money you can buy such car as Chevrolet or Renault in basic complectation, for example. It is a very good money. Notice, that EVERY family in Russia receives this money for a second (and next) child. Now just imagine, how much money it comprises for the national budget expenditures! Millions of Renaults and Chevrolets. Is this not a good social program? Did we have anything like this in the 90s?
No wonder that, for example, in the department where I work 2/3 of women are on their maternity leaves now. Maternity leaves, as I have already mentioned, are 3-year long with 1,5 years paid. This is also a very good social program. Not many countries actually provide such opportunities. The result of these social programs is that in 2013, for the first time since the collapse of the USSR, the number of new-born babies exceeded the number of deaths. The number of deaths in Russia is also decreasing significantly, by the way, but that is a separate topic, I'll cover it later, if needed.
Let's get back to "unaffordable appartments". Besides the Mother's Capital program, we have a very significant tax deduction program in Russia. EVERY citizen in Russia has this right: when you sell or purchase an apartment, you are entitled to have a significant amount (13%) of money returned to you. Since 2014, both husband and wife can receive it for the same apartment. For example, if your apartment costs RUB 4.5 m, each husband and wife receives RUB 260,000. That's RUB 520,000 in total. Add here the Mother's capital, and you have almost 1 million rubles from the government.
But this is not all. In our region we have a Young Family subsidy program. And the amount of this subsidy is.. 40% of the apartment cost! So, if you are a young family with two or more children, then your RUB 4,5 m apartment is 40% covered by this regional subsidy plus RUB 1 m from the federal government. All the rest money (about RUB 1 m) you can either earn or borrow, but this doesn't necessarily must be a mortgage, because the rest amount is not extremely big.
Btw, RUB 4,5 m apartment is actually a very good one in Novosibirsk: 3 rooms (plus kitchen) in a new house. If you cannot afford it for some reasons, you can always choose a smaller one. :)
All these programs already greatly contribute to the fundamental changes in Russian economic and social development. Later I will describe other measures of our government, so that to make it clear what has actually changed in Russia.
