The Old Die, the Young Flourish

In 2003 Russia will fall to bits. That, at least, was the prediction of a parliamentary commission hastily as­sembled in September 2000 to decide what more per­ils threatened the country, after the Kursk nuclear submarine sank drowning 118 crewmen, a bomb killed 12 in a Moscow metro station, and a fire wrecked the city's 1,700-foot television tower, all within a month. The commission decided that 2003 was the year in which swathes of Russia’s infrastructure would collapse, a peak in foreign-debt repayment would overwhelm public fi­nances, and a decline in population would provoke na­tional despair. The “existence of Russia” was at stake, said Yevgeny Primakov, a former prime minister.

On that basis, the good news in 2003 will be that Russia continues to exist. It shows no signs of disappearing, even if it will lose people at a worrying rate. The population will shrink by another 750,000 people as stress, pollution, bad diet and poor health care take their toll.

There is good news though for Russia’s foreign cred­itors. They will get paid on time. Russia even made some payments for 2003 a year early, with cash from booming oil exports. The "spike" in foreign-debt obligations has thus been reduced from a feared $17 billion to perhaps $14 billion. Russia can find that sum comfortably enough if oil prices stay high. And if they fall sharply, Russia is now deemed a sufficiently reformed character for the IMF to risk helping it out with another loan.

With luck, Russia’s economy, hobbled as it is by struc­tural problems, will have another fair-to-good year in 2003, growing by 4% to 5%. The tycoons who grabbed state assets in the 1990s are feeling confident enough now to re-invest their profits, instead of hiding them offshore. The 13% flat rate for income tax, which some people even pay, means that risk-takers get to keep their rewards. Russia remains a miserable place for the old and weak. But in 2003 it may be one of Europe's best spots for the young and pushy.

The trends are less encouraging on the national-dis­aster front. More seem inevitable as Russia’s infrastruc­ture continues to peel and rust. Half the gas stoves in Moscow are more than 20 years old – so beware of more ex­plosions there, like the one that brought down a block of flats in August 2002. And expect Russians to be especially apprehensive in August: the country's disasters do seem to congregate in that month. To add to their anxiety, more terrorist attacks by Chechen rebels are feared, fol­lowing the siege of a Moscow theatre in 2002.

The mood should be more cheerful in May, however, when St Petersburg celebrates the 300th anniversary of its founding by the tsar, Peter the Great. The incumbent tsar, President Vladimir Putin, is a native of the city, and will enjoy welcoming dozens of world leaders. Privately, Putin will not be as pleased as he looks. He will be wish­ing the city government had made a better fist of its preparations. The paint slapped on some historic build­ings will scarcely be dry, and big infrastructural projects that might have been at least ceremonially opened – a flood-barrier, a ring-road, a renovation of the metro ­are far behind schedule. Expect some fierce local poli­ticking in St Petersburg in the second half of the year, once the main celebrations are over, as the Kremlin shops around for a candidate capable of unseating the city gov­ernor, Vladimir Yakovlev.

There will be fierce politicking in Moscow too, as elections for the Duma, the lower house of the Russian federal parliament, approach in December. The Kremlin’s spinners and fixers will be looking for ways of cutting the Communist Party's share of the vote. The Communists remain, for all the predictions of their demise, much the most popular party in Russia. If they win more votes than the pro-Krenilin block, United Russia, that will be an em­barrassment for Putin, though not enough of one to upset his own prospects of re-election in 2004.