Russia: ascent and dissent

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“Russia needs more successful young entrepreneurs, therefore, governors should have more children!”
At first it may seem a non-sequitur. But in Russia the joke is obvious, cutting to the heart of a growing source of discontent among the young: routes to professional success are fewer and fewer, while the offspring of top provincial officials and the like do well.
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“They’re just plain lucky” was the sarcastic headline in Moscow’s Vedomosti newspaper on an April exposé of the uncanny business success enjoyed by the children of provincial governors. Vedomosti (part owned by the Financial Times) uncovered the case of a 25-year-old daughter of the governor of Sverdlovsk province in the Urals who co-founded and made a Rbs126m ($4.5m) investment in a timber mill, after just a few years working for a Moscow accounting firm.
Many children of the elite find their route to the top an easy one. The son of the head of the Federal Security Service is president of the north-west regional branch of VTB, the second – largest bank in Russia. The son of the chairman of Russia’s national security council is president of Rosselkhozbank, another of the country’s largest lenders. The list goes on.
For many, the lesson is stark. While income distribution in Russia creeps towards Latin American levels of inequality, having widened notably since the turn of the millennium, the state has incubated an ever more entrenched and inaccessible elite that now controls government and business, and jealously guards its privileged domain.
Connections and nepotism are the rule and social mobility is grinding to a halt. “Unless you have connections it’s impossible to find a job,” says Vladimir Aleshkin, a recent graduate from Moscow State University with a degree in Arabic, who has spent months pounding the pavement and looking on the www. jobs. ru internet site for work, with little luck.
With an eye on the Arab spring protests in the Middle East, blamed by many experts on the lack of opportunities for advancement for a younger generation growing up in authoritarian regimes, some Russian politicians have started to examine the problem of weak social mobility in earnest. Some suspect that the entrenchment of an upper class may be behind the falling popularity of Dmitry Medvedev, the president, and Vladimir Putin, prime minister, as a presidential election approaches next year, as well as a rise in nationalist violence since late last year.
Economic reform

Moscow seeks to shift skilled into services
For educated Russians in search of skilled jobs to help them climb the economic ladder, Moscow’s drive to boost the service industries could offer some hope in the longer term, writes Charles Clover.
President Dmitry Medvedev has announced plans to turn the capital into a global financial centre by streamlining regulation and attracting foreign banks.
He is also trying to draw investment to Skolkovo, a technology development centre on the outskirts of the city intended to be up and running in 2013.
While the US and many other western countries made the transition from manufacturing to service-based economies in the 1970s, in Russia sectors such as finance and technology remain underdeveloped.



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Russia: ascent and dissent