People’s resilience helps Russia dodge deeper crisis

MIASS, Russia: In Russia’s industrial heartland, people are finding ways to cope with an economic crisis that has stretched household budgets to breaking point.

The stories told in Miass, a mid-sized city in the Urals that is home to a sprawling truck factory and a plant that makes missiles for submarines, show how people’s tolerance and resilience have helped avert a deeper economic slump.

Nikolai Matveev, a trucker, said his family had saved on food by eating home-grown vegetables and meat from the animals he shoots while hunting.

"Our wives are also experts at saving a few kopecks here and there," he told Reuters." Shortages in Soviet times taught them well.

"Other workers have moonlighted as taxi drivers to supplement incomes slashed in real terms by soaring inflation and bought cheaper products as prices have risen.

Some have had their nominal wages cut, too: lower pay has been an important safety valve for the Russian economy, helping businesses keep costs down as demand flags.

The weaker rouble, which helped drive inflation to 12.9 percent last year, has meanwhile cushioned the blow to government finances from the collapse in oil prices and made some Russian goods more competitive overseas.

Economists say firms in the West typically fire more staff during crises as workers, supported by their stronger trade unions, would not stand for wages sliding so much.

"In Russia it’s different, it’s much more important to work even if you work for less," said Ivan Tchakarov, a Russia-focused economist at US bank Citi.