RUSSIA:Leaders are playing down the severity of this oil-rich land's economic troubles, writes Megan Stackin Moscow
FUEL SUBSIDIES for farmers, cash for small businesses, housing upgrades for residents of dilapidated homes - all courtesy of the government, and plenty more where that came from.
Facing down the most perilous Russian financial crisis in a decade, the Kremlin has not flinched. The nation's leaders are playing down the severity of this oil-rich land's economic troubles as they unveil a string of populist projects, taking pains to show ordinary people they will not be left behind.
Behind the optimistic statements, uncertainty is deep in Moscow. The stock markets have plummeted. There are fears that oil prices will stay low; that the federal budget will have to be redrawn; that the ruble is cruising for further devaluation. Economists and businesspeople are asking themselves how long Russia's massive cash reserves, padded by previously high oil income, will hold up.
Many analysts regard the possibility of prolonged economic troubles as the most serious challenge Putin has faced in eight years of virtually unquestioned authority. First as president, and now as prime minister, the former KGB agent became increasingly popular as Russians watched their salaries and pensions climb.
This has been the unwritten social contract that rules Putin's Russia: the public enjoys improvements in living standards and, in exchange, stays out of the way of an increasingly autocratic Kremlin. Falling oil revenues could threaten the balance.
"The Russian government has been spoiled by this bonanza, by basically unlimited resources and the ability to pour money onto social problems," said Masha Lipman, analyst at the Moscow Carnegie Centre. "I think the country is moving toward a situation in which there may not be resources for everyone, and that's a huge change."
Middle-class workers who bustled along the boulevards of Moscow under a chilly drip of rain said that, despite reassurances from state media, they were deeply worried about the economy.
"The only thing we want is for our salaries to keep going up," said Piotr Zalpalov, a 53-year-old stonemason. "We listened to what they promised before the elections. If they don't deliver it, then our respect for them will decrease."
In March, when Russians elected Putin's hand-picked successor Dmitry Medvedev, they enthused about the economic stability their families finally were enjoying.
Earlier this month, as the stock market flailed, Putin pledged a pension hike of 37 per cent in 2009. And in the last week, he has promised billions of dollars in new housing for military personnel, new homes for tenants of rundown apartment blocks and fuel subsidies for farmers.
Putin has talked up the importance of paying attention to the parts of the economy that are "of direct relevance to resolving social issues," and lashed out at his government for failing to bring quick enough credit relief to consumers.
Medvedev, too, has stood up for ordinary citizens. When he ordered the repair of thousands of schools, he pointedly added: "It is easy to find this money, even in this period of financial difficulties."
Oil companies' failure to lower domestic fuel costs? "Simply disgusting," snapped Medvedev, the man who this time last year reigned at the head of the massive Gazprom, Russia's gas and oil giant.
As the price of oil continues to slump and global finances remain dim, the Russian government is spending heavily to keep the economy moving.
"The lower the oil prices, the more pragmatic the policies in the country are," said Yevgeny Gavrilenkov, chief economist of the Troika Dialog investment company.
"People will start counting money, both in the private sector and in the government itself."
Instead, the government is playing two hands at once - struggling to damp down panic and boost confidence, all the while using cash to soothe early manifestations of economic discontent. It might not have a choice.
"While Russian people are generally indifferent to constraints of political freedoms or civil liberties, they are absolutely not indifferent to encroachment on their economic interests," Lipman said.
"If people feel in their wallets that living standards are going down instead of up, there's bound to be discontent."