Russia's middle class feels pinch as boom times end
Wednesday, 4 March 2009
MOSCOW, March 3 (AFP): Russia's economic boom could not have ended at a worse time for Vyacheslav Aksyonov, whose wife is about to give birth as the couple is struggling to pay off a mortgage they took out last summer.
Their monthly payments have soared since last fall as the Russian ruble has lost over half its value against the dollar. Like many middle-class Russians, Aksyonov's mortgage was taken out in dollars but he is paid in rubles.
On top of that, Aksyonov's bonuses have shrunk because the sector in which he works, metals, has been hit especially hard by the global economic crisis.
"Before I used to pay 40 percent of my salary to pay off the loan, and now I pay more than 80 percent. It is impossible to live in these conditions," the 35- year-old milling machine operator complained. "The 20 percent left over is not enough to support my family and pay bills."
Millions of others from Russia's nascent middle class have found themselves in a similar plight after taking out loans during the country's economic boom, which was driven by high prices for oil, metals and other commodities.
But the devaluation of the ruble and a drastic plunge in the price of oil has left them high and dry. Russia's central bank says that unpaid mortgages increased tenfold in the country in 2008.
Aksyonov has been more active than most: he set up a website that urges the government to bail out indebted citizens rather than large companies. Its name, Grabegu.net, translates roughly to "No to theft."
The fall of the ruble means that day-to-day expenses have risen sharply for Russian consumers, who became accustomed to buying imported goods from Europe during the boom years.
Their monthly payments have soared since last fall as the Russian ruble has lost over half its value against the dollar. Like many middle-class Russians, Aksyonov's mortgage was taken out in dollars but he is paid in rubles.
On top of that, Aksyonov's bonuses have shrunk because the sector in which he works, metals, has been hit especially hard by the global economic crisis.
"Before I used to pay 40 percent of my salary to pay off the loan, and now I pay more than 80 percent. It is impossible to live in these conditions," the 35- year-old milling machine operator complained. "The 20 percent left over is not enough to support my family and pay bills."
Millions of others from Russia's nascent middle class have found themselves in a similar plight after taking out loans during the country's economic boom, which was driven by high prices for oil, metals and other commodities.
But the devaluation of the ruble and a drastic plunge in the price of oil has left them high and dry. Russia's central bank says that unpaid mortgages increased tenfold in the country in 2008.
Aksyonov has been more active than most: he set up a website that urges the government to bail out indebted citizens rather than large companies. Its name, Grabegu.net, translates roughly to "No to theft."
The fall of the ruble means that day-to-day expenses have risen sharply for Russian consumers, who became accustomed to buying imported goods from Europe during the boom years.