BOFIT Viikkokatsaus / BOFIT Weekly Review 2016/11
The road fee provoked a strong backlash from road transport operators and led to major demonstrations by long-haul lorry drivers. The government has now decided to freeze the fee at its initial level for the time being and give tax concessions to transport firms for compensation of the road fees. As a result of these decisions, the net revenue from road fees is likely to be rather modest, especially since the company operating the system charges the government 10 billion rubles a year. In the first four months of operation, the road fee raised nearly 5 billion rubles.
The road fee dust-up exemplifies the difficulties the administration faces in implementing even smaller unpopular reforms, especially in a recession with elections approaching. For the moment at least, the unrest has been limited to private actions protesting specific government measures such as road fees. Recent surveys have found nothing to suggest that widespread protests are in the wings, despite Russia’s poor economic situation. For example, the survey findings of the independent Levada research institute released this week show that only a quarter of Russian respondents regard protests related to the economic situation as possible. A similar survey in summer 2009 found that 40 % thought protests might be possible, but no major protests occurred during the 2009 economic crisis.
The international transit routes used by Russian road freight firms in Ukraine and Poland are again functional. According to Russia’s transport ministry, transit traffic in Ukraine restarted at the end of February. Poland and Russia, on the other hand, have agreed to a temporary transport permit quota that will stay in force until mid-April.