Russia Adoption Blog

10/19/07

Inflation Takes A Bite Out Of Russia

Posted by : Virginia M. Citrano in Russia Adoption Blog at 06:40 pm , 407 words, 144 views  
Categories: Russia, Economy

I've written before about how central potatoes are to the Russian diet. But there's one kind of potato that everybody wants to avoid, and that's a political hot potato. Which is why so many people in Russia are steamed up now over inflation.

The price of just about everything in Russia right now is rising, and at a pretty good clip to boot. According to the Moscow Times, milk prices have risen 16.5% over the last year, while butter is up more than 20%, vegetable oil has risen 17.1% and the cost of meat is up more than 7%. The Associated Press reported this week that bread prices have skyrocketed 50% or more of late.

All of which is putting Russia's leaders in something of a jam. The government had set an inflation target of 8% for 2007, but Finance Minister Alexei Kudrin said Thursday that a double-digit rate was much more likely. According to the Moscow Times, Deputy Economic Development and Trade Minister Andrei Belousov sees the full-year inflation rate as coming in higher than Kudrin does. Prime Minister Viktor Zubkov hasn't been in office very long, but he already has been shown on television touring farms and food stores. And when President Vladimir Putin appeared on a call-in television show on Thursday he faced several questions from people on fixed incomes about the jump in prices and what he was doing about them.

SPONSOR
Click Here for More Information

His government has done a few things so far. It has begun to sell grain from the national stockpile to flatten out bread prices and it has cut duties on imported dairy products.

But there's a problem. Economic reform let the genie of capitalism out of the bottle in Russia, and more than a few Russia companies like having market supply and demand determine prices--and not the Kremlin. The Moscow Times quotes a spokeswoman for Wimm-Bill-Dann, a leading Russian food company as saying that talk about price collusion had been "emotional." (For extra trivia points, name the sporting event that Wimm-Bill-Dann is named for. Hint: It involves a bouncing ball, racquets and a court in England.)

The connection between inflation and adoption is pretty straightforward. While I have not seen any adoption agencies raising their fees yet, I would not be surprised if some do before the year is out. And clearly, rising food prices will take a toll on orphanage budgets, which are reportedly already strained because inter-country adoptions have been limited by the slow pace of re-accreditations.

Comments, Pingbacks:

Comment from: John [Member] Email
Did Jimmy Carter take up residence there? That kind of inflation is going to do some real damage to state institutions without major political clout, they simply won't be able to get the larger budgets they need. What a mess. Doesn't sound good that they aren't doing anything about it yet, maybe they don't know what to do. John
PermalinkPermalink 10/19/07 @ 21:36
Leave a Comment: You need to login to leave comments.:

Login | Register

Login To AdoptionBlogs.com

Search

Sponsors

Related Discussions

    Misc

    Subscribe to Russia Adoption Blog

     Enter your email address:
     

     

    Who's Online?

    • cfjustice Email
    • joan_e109356
    • Marmy_4 Email
    • Guest Users: 92