By Renfrey Clarke
MOSCOW — When Russians these days hear promises of "reform", they often grit their teeth and brace themselves for something thoroughly unpleasant. One of the latest such shocks befell residents of St Petersburg in the last days of January, when Mayor Vladimir Yakovlev announced a comprehensive reform of municipal rents, housing repair payments and utility tariffs. From February 1, these charges almost doubled.
The tide of this reform, it appears, is now to sweep the country. At a press conference on April 28, first deputy prime minister Boris Nemtsov announced a package of new presidential decrees.
These included an instruction to municipal authorities throughout Russia to wind down the subsidies that traditionally have kept the price of housing and related services relatively cheap.
From a current figure put by Nemtsov at 27%, the proportion of housing and utility costs borne directly by Russia's urban population would rise to 35% this year, 50% in 1998 and 100% by 2003.
If regional and local administrators declined to implement the decree, Nemtsov suggested, they "would do well to forget about money from the federal budget".
According to the news service RIA Novosti, the cost of subsidies for housing and communal services now amounts to 100 trillion roubles a year — about US$17 billion, corresponding to about one-fifth of federal budget revenues. For a country with the economic problems of Russia, Nemtsov and his supporters maintain, these subsidies are an absurdity that has to be ended.
Within the general scheme of Russian society, however, the subsidies are not altogether absurd. Historically, the Soviet state compensated itself for providing benefits to the population by paying low wages.
The Soviet Union is gone, but the low wages remain. Indeed, their real value has fallen sharply since Soviet times, to a current average of about US$150 a month.
Now that the subsidies for housing costs are to be withdrawn, are wages to be increased? On this point, Nemtsov and his fellow ministers are keeping their silence. It is suggestive, though, that at the same time as Nemtsov outlined the plans for housing and communal services reform, Russia's cabinet was drawing up plans for drastic cuts in state spending.
Special subsidies for the hardest-up citizens are supposed to guarantee that the share of costs paid by residents will not exceed 16% of their total incomes in 1997, 20% in 2000 and 25% in 2003. The government, Nemtsov told journalists on April 28, would pay the subsidies to the needy citizens rather than to cities and towns.
If low-income earners are to be protected, however, the federal government will have to prove dramatically more efficient than the municipality of St Petersburg. When rents and utility charges were raised on February 1, the city administration was totally unprepared for a large increase in the number of households seeking assistance.
According to the English-language Moscow Times, it was only after lengthy queues appeared that the authorities quadrupled the number of district offices.
As the federal government tries desperately to cut its outlays, it will have a strong incentive to place nearly insurmountable obstacles in the way of residents seeking subsidies. Here again, it has the example of the St Petersburg city administration to draw on.
In 1996, St Petersburg residents needed to obtain and present a total of nine documents in order to prove their eligibility. According to the Moscow Times, three of every four households applying for subsidies were refused, and only 1.2% of the city's households finally received assistance.
It is not excluded that the efforts to shift the bulk of the cost of housing and communal services onto the population will blow up in the government's face. The rent and tariff increases in St Petersburg, despite being from a low base, have provoked angry demonstrations of thousands of people.
In a speech on April 25, Moscow's populist Mayor Yury Luzhkov warned that sharp rises could cause "gigantic upheavals and the dismissal of the government".
On May 1 Luzhkov told a trade union rally: "If housing and municipal services are reformed, this needs to be done while first of all guaranteeing wages at a level which will put people in a reasonable financial position, without deprivation, without loss".
Luzhkov's position on this issue can be seen as self-serving, since it is an ill-kept secret that the Moscow mayor hopes to succeed Boris Yeltsin as Russia's next president. Moreover, Luzhkov is much better placed than most chiefs of Russian municipalities to baulk at the government's schedule for rent and tariff increases.
His city administration is the best financed in Russia, and one of the best able to maintain its present subsidies. These in any case are not particularly great; rents and utilities charges in Moscow have been increased regularly over the past few years, and are among Russia's highest.
But there are many other cities, much poorer than Moscow, where the government's demands for increased housing and service charges could have an explosive impact.
Even if the protests do not extend to the civil mayhem suggested by Luzhkov, resistance to the increases is likely to be extremely broad. This will be aided by a simple fact of Soviet-era architecture: most apartment blocks in Russia are constructed so as to make cutting off water, gas and heating to individual apartments impossible.
The pledge of "Can't pay, won't pay", familiar in the west, could now find a place in the front-line slogans of opponents of the Russian government.