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Russians inured to financial crises

world Updated: Dec 12, 2008 23:52 IST

A panicky world may be slipping into its first big economic disaster since the Great Depression but it’s all deja vu for Russians, who’ve been through it all twice before in recent memory.

But except for the Russian government, which has banned publication of bad economic data for fear it might spark social unrest, few Russians seem very worried about the onrushing crisis.

“As a society, Russians have been traumatised repeatedly,” says Martin Gilman, a former official of the International Monetary Fund who now teaches at Moscow’s Higher School of Economics.

“There’s a psychological component here, unlike with most people in the West, which has inured them to what’s happening now,” he says.

The early 1990’s, which much of the world views as a pretty prosperous time, saw Russia’s economy collapse amid a storm of hyperinflation, plant closures and mass impoverishment. During subsequent years, Russia’s gross domestic product fell by a whopping 50 per cent.

Then, just as many Russians were getting back on their feet, came the financial crash of 1998, in which the government defaulted on much of its debt, the banking system imploded, the rouble plunged and the savings of millions of people evaporated.

Moscow’s stock markets have lost 75 per cent of their value since May, more than $200-billion in foreign investment has fled and the rouble’s exchange rate is slipping daily.

So, the expectations of many Russians are not very high as the entire world drifts into what could be a long and hard economic winter.

“I just want a piece of bread and a warm place to sleep,” says Olga Savolyova, a recently laid-off advertising executive. “I’ve already been through personal bankruptcy before, and I know it’s not worth sweating out my blood for. Whatever happens, I’m not going to worry.”

But in anticipation of social turmoil, the Kremlin last month ordered police to monitor the economic coverage of news outlets, and to prosecute anyone guilty of spreading “misinformation” under Russia’s stern press laws.

Several editors in economically hard-hit regions have already been called-in for “conversations” about their coverage with security officials, according to the Russian Union of Journalists.

“Under the pretext of struggle against panic, they’ve opened an attack on all fronts,” says Oleg Panfilov, of the Moscow Centre for Journalism in Extreme Situations.

“Fear makes journalists stop writing about certain subjects, and the list of these subjects is already rather long,” he adds.