Russia's embattled economy pushes more into poverty

Natasha hides her face from a journalist's camera and won't reveal her last name.

As layoffs began to bite in Russia this January, she lost her administrative job. Now, she waits for the so-called Night Bus in St. Petersburg, a kind of meals on wheels for those on the fringes of society. Steaming hot soup, ladled out of Soviet-era army canisters from the back of a bus, accompanied by bread and tea.  

"At least it's something," Natasha, 57, says, her face obscured by her parka's hood in –11 C temperatures.

"I don't need to spend money for bread. I can buy something else with this money. There's not enough money for life." 

As Russia's economy stalls, more Russians are being pushed into poverty. Three million more Russians fell below the poverty line last year — meaning they made less than 9,452 rubles, or $180, a month — pushing the total to more than 19 million.

That's a record high in nearly a decade, and some analysts from the Russian Academy of Sciences suggest the poverty rate is as high as 25 per cent.

Some see the current situation as reminiscent of the 1990s, when the collapse of the Soviet Union saw wages drop drastically, and 29 per cent of the country fell below the poverty line.

Russia's economy, heavily reliant on oil, has been battered by low oil prices and international economic sanctions, including those from Canada, imposed in the wake of Russia's annexation of Crimea and its role in the conflict in eastern Ukraine.

"Our country faces serious economic challenges," said President Vladimir Putin Tuesday, speaking to business people at a large engineering congress in Moscow. "Investments have decreased, the demand for your production has reduced. I can understand well your anxiety for the future."

When the economy is not healthy, more people become homeless.- Gregory Sverdlin, head of Nochlezhka homeless shelter

The average rate of inflation last year more than doubled to 15.5 per cent before falling back this year, to 7.3 per cent in March. Real incomes have fallen at least 10 per cent. Russia's currency, the ruble, has devalued by roughly 50 per cent.

"When the economy is not healthy, more people become homeless," said Gregory Sverdlin.

Sverdlin runs a St. Petersburg charity named Nochlezhka, meaning "shelter." It's the largest homeless shelter in St. Petersburg but has only 52 permanent beds. Some estimates put the number of homeless in Russia's second largest city at 50,000. 

The fallout from the depressed economy has lagged behind the economic indicators but is now beginning to show — everywhere. In a recent call-in show with Putin, many complaints were about the economy, delayed or unpaid wages and  job losses.

But Sverdlin says authorities have not paid much attention to the homeless problem.

"That [neglect] goes back years," he said.

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The Night Bus travels a 100 km route around St. Petersburg every weeknight, stopping under overpasses or next to train tracks. At every stop, a group of people huddle in the cold and darkness. They did not get rich on Russia's rising fortunes over the last decade, when government officials filled their coffers with oil revenues.

Today, Russia is pumping oil at record levels, but with the price of crude at less than $50 US a barrel, the government has been forced to make budget cuts. 

As the Night Bus parks at its second stop under an overpass,  men emerge from the shadows, some carrying their own plastic containers for extra soup.

Slava Kukushkin, 55, shivers, waiting in line for soup. He has a four-year-old.

"We don't have enough money," he says.

He brushes off the severity of his own situation with a stoicism common in Russia.

"We survived in even worse situations," he said. "We survived during Brezhnev's time, survived during Yeltsin's time. We are Russians; we will survive."

He challenges a reporter's questions with one of his own:

"Maybe you are waiting that I'll accuse Putin?" he says.

"No, I  don't accuse him, I support him and his policy. I like how he fights terrorism. Of course, we have some thing wrongs, but what country doesn't have? Take Ukraine, they are fighting, even at the Rada (parliament)." 

Russia's economic troubles have spurred some small protests this winter, but there has been no widespread outcry or blaming of the Kremlin.

If we have to survive in the present situation, we will survive.- Natasha

More often, Russians blame the West, the sanctions, the perceived enemies at their borders. Independent polls show the number of Russians feeling uncertain about their future has risen, but the sentiment isn't sticking to the president.

Not even with Natasha, as she waits for soup in a plastic bowl.

"We will not let anybody offend us," she says. "I raise my hand for Putin – two, three of my hands are for him.  

"If we have to survive in the present situation, we will survive. We survived during the awful Second Word War. We will survive in this situation, too." 

This winter, Sverdlin's charity erected two big army tents on the outskirts of St. Petersburg. Homeless people come in at night and leave in the morning. Men and women sleep side by side on mats on the floor, pulling blankets over themselves. There are young men and senior citizens, each with a story.

Sergei Solovyov, 63, struggles to get up from his mat to talk with us. He's a pensioner trying to survive on the equivalent of $160 a month. He has no family and feels safe here in the tent, better than in his one-room apartment, which he lost. Pensions went up last year in Russia, but with high inflation, seniors actually lost money.

"If it weren't for this place, they'd sleep in attics, basements, any warm places," says Konstantin Koryakin, who is in charge of the tent shelter.

He says over the last few years, as the economy has worsened, people have become more tolerant of the homeless. 

"They don't kick them out from the entrances to their apartment buildings," he said. "They even bring food or blankets for them. Everywhere there are kind people."