2015 Crisis in Russia: Provincial Notes

For some years I have been living in Balakhna, a small town 30 km from Nizhny Novgorod. We moved here in the good 2012 year. So, now Russia is in crisis, and here you can read how it goes here: no statistical figures, just real-life observations.

If we turn away from unemployment rates and listen to street talk, we might learn that there are two economic mainstays in the town, and one of them is on the edge of bankruptcy — I mean the Balakhna paper mill (JSC Volga), one of Russia's largest newsprint producers. Current owners found an investor who said that the deal would be made if the stuff didn't exceed 200 persons. So 850 people were fired. It happened quietly, with no signs of panic or buzz in the media.

I don't know if the rumor was true. There's a news saying nothing about the acquisition of the factory and promising that people would be hired back later.

The other company is a military plant. A year ago it got a significant increase in orders (it happened after the well-known events in the Ukraine), but some months later the additional orders were downsized. Typically, the increase was spreadly discussed and the downsize was quiet.

Therefore, unemployment is definitely high, and here some more reasons to think so.

Take this: a job poster on the front door of our five storey house. You know, it's an 8x5 inch ad with a dozen of labels each showing a phone number, that people can tear up and take with them. The poster reads that the post office needs a courier. The job is hard and low-payed one. Nevertheless, 5 labels were taken. Knowing that no more than 100 people have walked through this door since the poster was sticked to the door, it means that no less that 5% of people are interested in any job, even a hard and low-payed one.

We see yet another change in everyday life. Balakhna can be defined as a very distant suburbia of Nizhny Novgorod, a big city. Lots of locals found jobs there. So this year, every morning and every evening from Monday to Friday we see long lines of cars moving slowly to the city (morning) and back (accordingly, evening). The road wasn't meant to cope with such a large traffic, and it resulted in everyday jam.

But is the employment situation in the city better?

I can judge about it based on the life of my relatives living in Nizhny Novgorod.

My dad, a chief civil engineer in a civil design company, is loosing his job, as the employing company filed for bankruptsy in September. Since January 2015, the stuff hadn't been receiving salaries, and in May they started a strike. He found another place recently with lower wage in ship-building industry.

My father-in-law was in the same situation from spring to autumn. He's an engineer, too, working for a communication company, highly dependent on the building market. His company survived and now is working to cut salary payment delays.

My income, as of freelance journalist, happily didn't change (here I'm knocking on wood). But it's value fell twice in two years, with the exchange rate of Russian ruble.

This year, we see a significant increase in berry and mushroom gathering in the nearby forests. That isn't bad, I suppose. People are starting to live happier, though poorer lives. But my wife and I, we don't benefit. We spend much time in nature and aren't delighted with lots of noise that the gatherers make, disturbing forest's transcendence. Besides, our own harvest of berries and mushrooms was compromised.

But there are certainly good things in this crisis. This year, Balakhna has got a boost of car service market. Garage repair shops and car washes appeared in different parts of the town. Just a year ago, I knew only 3 shops for the town with 50 thousand people - too little. I don't know exactly what was the reason for the boom, but I assume that many specialists previously had a garage and repaired friends' cars in free time, as a part time job. Now they lost their main jobs, pushing them to become full-time enterpreneurs and to enter the independent car service market.

Officially our government claims that social expenditures won't be shortened. My friends and ex-colleagues from schools and sport organizations tell the opposite. True, wages remained unchanged, but the budgets of all organizations were cut dramatically. Even pens and paper the employees buy themselves. Juniors' trips to sport competitions are funded by parents.
Real estate prices are quickly falling down, and every day we see confirmations of the market shrinkage, lots of sale offers. But I consider it as a good thing, as the market was certainly overheated. Now sticker for a usual apartment much more fits pockets of Balakhnians.
From time to time, my wife looks through offers of houses at one regional RA web site. It's a middle class marketplace, with cheap or moderate price stickers. A curious thing happened in July, when lots of very expensive houses were put for sale at that website. The stickers were up to $1 mln and even higher. I assume that it was a desperate attempt of many Russian investors to turn their actives to money. Typically, in recent years they were washing money by building that properties. Now many of them are trying to move abroad. Maybe these tendencies are tied.
Anyway, after a month, luxury properties disappeared from the site, with no sign that any one was sold.
The most wonderful thing about the crisis is that we notice a significant increase of repair and building activity в дачах and in the part of the town with one-family houses. Why? We don't know.
What else can I say? In 2011, my family spent 200 rubles per day for food. Now we're spending 500 rubles, with shortage of some more expensive kinds of food.

As it's a real-life reportage, I won't make any conclusions. Just a question: have you learned something new from it, and was it helpful or not?