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This all amounts to the first serious test of "Putinomics" - the domestic policies put in place by Prime Minister Vladimir Putin during the two terms of his presidency from 2000 to 2008, and continued by his successor, President Dmitri Medvedev. While oil money was pouring into the state's coffers, the Kremlin was able to dispense largesse to ordinary Russians through generous social spending programs and hefty pay raises awarded by the monolithic state companies that dominate the economy. Jobs were plentiful, and over the past five years, average wages have risen by 25% annually. Even then there was money...

Author: /time Magazine | Title: Russia's Big Chill | 12/11/2008 | See Source »

...weeks, as the stock market cratered and some private Russian banks wobbled, the official Kremlin line was: "This is primarily an American issue." Finally, on Nov. 20, Putin admitted that Russia, too, was in trouble. Announcing a $20 billion economic-stimulus package and an increase in unemployment benefits, he said Russians were asking "a fair question" when they wondered about what was happening. His answer: "We will do everything, everything in our power ... so that the collapses of the past years should never be repeated in our country." Says Alexander Kliment, a Russia analyst at the Eurasia Group...

Author: /time Magazine | Title: Russia's Big Chill | 12/11/2008 | See Source »

...September and October, it changed course in mid-November, and has since begun a policy of phased devaluation. That's calling up bad memories of the ruble's collapse in 1998, and prompting nervous talk around kitchen tables about what to do this time around. On Dec. 4, Putin fielded vetted questions from around the nation on a televised call-in show. One of the most poignant was a text message from an unnamed viewer: "What will happen to the ruble, and what is the best currency to keep deposited in the bank?" Putin's hopeful reply: "There will...

Author: /time Magazine | Title: Russia's Big Chill | 12/11/2008 | See Source »

Since that speech, Putin has begun talking a little more openly about the issue. In his Dec. 4 television appearance, the first question to him came from Dmitry Salnikov from the village of Tirlyansky, near the Urals region of central Russia. "We are a young and currently jobless family," said Salnikov. "Most locals are also unemployed because they used to work for the metallurgical sector. What are we supposed to do in this situation?" Putin's vague answer: "Private and public authorities will have to draft an entire range of measures in an effort to preserve jobs...

Author: /time Magazine | Title: Russia's Big Chill | 12/11/2008 | See Source »

...maternity leave, but had hoped to return to work soon. That's now looking impossible. What's more, prices keep going up, including her rent, she complains, and she's had to pay a $200 bribe to get her son into a local nursery. "You tell that to Putin and Medvedev," she says angrily, and then worries that she'll get into trouble for talking to foreigners...

Author: /time Magazine | Title: Russia's Big Chill | 12/11/2008 | See Source »

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