Russia Continues To Cope With Sliding Economy

Transcript

ARUN RATH, HOST:

For the next 10 days, Russians will be getting ready for their biggest holiday, the new year. It has many of the trappings of Christmas in the West, including decorated trees, feasting, shopping and exchanging presents. But for most Russians, there's a realization that beyond the holiday, they will be facing a long, cold and difficult time. NPR's Corey Flintoff joins us from Moscow to talk about what Russians are doing as their economy slides into a financial crisis and a deep recession. Corey, this is going to be your third New Year's in Moscow. How is it different from the past?

COREY FLINTOFF, BYLINE: Well, you know, despite the fact that oil prices have dropped and the ruble has lost about 45 percent of its value over the past year, things actually look pretty festive on the surface. You know, there's holiday light displays everywhere, stores are all decorated, and there's holiday music in the streets. Last night, for instance, I walked past the Nikulin Circus, which is not very far from my apartment. And there was a brass band, all dressed as Santa Clauses, playing on the front steps, and little kids were dancing. So the holiday mood is really prevailing.

RATH: So decorations and music, but are people shopping at the usual rate?

FLINTOFF: We've been hearing that there's been a lot of people buying cars and appliances because they're afraid that their money will lose if they just leave it in the bank. You know, for a while there, there were real bargains to be had because the price of some things, like electronics, didn't keep up with the falling value of the ruble. And stores like Apple and IKEA actually had to suspend selling for a while because the ruble was so unstable, they couldn't figure out how much to charge. I'd say that people who can afford it are out there buying cars and appliances and even real estate because they know the ruble may keep falling and that prices will go up in the new year.

RATH: You say people who can afford it, but is that the typical Russian? What is life like for the typical Russian?

FLINTOFF: Right now, I'd say that ordinary Russians probably can't afford to buy a lot of extras. I'm hearing that people with smaller incomes are buying and hoarding products when they can. A friend of mine told me just today that her neighbor has been buying cases of canned goods, cat food and cigarettes. And she stores them on the enclosed balcony of her apartment because she's betting that the prices of all of these things will go up. And she's probably right. My friend is a woman who grew up in Soviet times, so she knows how to get by on very little. But she told me that young people today are going to have to learn some money-saving skills, like how to darn their own socks.

RATH: And getting by back in Soviet times meant something different. Russia now is part of the globalized economy. Can they still do that? Can they still get by?

FLINTOFF: I'm not sure they can. My friend's a good example. She's a schoolteacher. She gets paid in rubles. She shares an apartment with her mother, who's a pensioner. And they're getting squeezed because prices for food and medicine are going up, and they're getting squeezed in another way, too. You know, my friend has a teenage son who's very bright, and she's trying to guarantee a good future for him by sending him to school in Germany. She has to pay those school fees in euros. And because of the fall in the ruble, those fees are now costing twice as much as they did last year.

RATH: Corey, the Russian economy had kind of a one-two punch. There's low oil prices, which they can't do anything about, but the other punch is the Western sanctions. Western leaders are saying that if Russia would return Crimea and quit supporting separatist in eastern Ukraine, those sanctions could go away. Any sign of anyone in the Kremlin might be listening to that?

FLINTOFF: No. This week, President Putin had his annual news conference, and he said there's no way that Russia will give up Crimea. And yesterday, he gave a speech to Russian intelligence officers. You know, he's a former KGB agent himself. And he was even more explicit. He said the West is out to get Russia because Russia stands up for its independence and its right to exist. So he's not sounding conciliatory at all.

RATH: That's NPR's Corey Flintoff on the line from Moscow. Corey, thank you.

FLINTOFF: My pleasure, Arun. Transcript provided by NPR, Copyright NPR.