Russia’s Far East says: “No New Taxes!”
By Sean at 15 December, 2008, 9:01 pm
In Russia, December 14 is remembered as the day of the Decembrist Uprising of 1825, but today’s dissenters are marking it as a annual day of protest. While most international reporting has focused on the arrests of some 90 demonstrators at the sparsely attended the Dissenters’ March in Moscow, on the other side of the country thousands of people paralyzed the city of Vladivostok for five hours in a protest against taxes on the purchase of foreign cars. The increase set to take effect on January 11, 2009 will increase the price of an imported car by 10 to 20 percent.
The action pits the Russian government and citizen against each other in the form of a classic tax revolt. Ironically, the government’s attempt to protect the fledgling Russian auto industry from foreign competition has found its greatest foe among the very people Russia’s economic boom has benefited: those Russians who now have enough disposable income to buy a new car. According to one figure, about 90% of small cars in Primorya are Japanese models. Much of the protesters’ anger was directed at Putin with slogans like “Improve the standard of living, but no taxes!” and “Mr. Putin help the oligarchs from your own pocket!” Given the protest’s constituency, economic theme, and target is why Russian television was silent about the protests. According to one report, no central television station–NTV, Pervyi, or Rossiia–reported on the protests. The Russian print media and blogosphere, however, continues to be abuzz with reports and discussion of the significance of the protests.
The protest, which was organized by the Society for the Defense of Drivers of the Primorya, appeared to catch local authorities off guard. Sure, the Vladivostok city administration gave a permit for the action, but it seems that they didn’t realize that it would garner that much support. According to Kommersant, the action was a two pronged attack. About half of the protest gathered in the center of the city in front of the city administration while a chain of cars caused a traffic jam to the airport. According to Igor Pushkarev, the mayor of Vladivostok, the action paralyzed the city and “caused serious problems for tens of thousands of people” including delays in emergency vehicles, disruption of businesses, and deliveries to grocery stores. It took the cops several hours to get control of the situation. In the end, several tens of people were arrested, fined 2,000-2,500 rubles, and then released. The organizers were fined 1,000 rubles.
The protesters can say that their action was a success. They may have been dismissed by the national television media, but they got the attention of their intended target: local and national leaders. Today, deputies from Primorya voted unanimously to appeal to Medvedev, Putin and the State Duma to reverse the planned tariffs on foreign cars. The Federal Council has already promised to help the protesters. One council member, Vyacheslav Fetisov, put it this way: “Once Primordtsy went out on the street it means that [the tariffs] will seriously affect their lives.” Funny how that didn’t cross his mind until now.
The protestors are serious. So much so that they aren’t going to take any empty words or gestures from goverment officals. They are already thinking about increasing the pressure with a repeat performance on December 21.
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I think there will be a small revolution in February, I’d call it a “February bourgeous democratic revolution”.
When the majority of people get a good portion of their income from the transporting of cars from the East to the West of Russia, such undeliberate action from the gov is just another reason to honk and block down the city’s thoroughfares. Taking account of crappy condition of Russian “automobile products” and “gifts” like Ford mills in Mocsovy.
Local “state-controlled” TV company was more proliferous:
http://www.ptr-vlad.ru/news/ptrnews/9927-akcija-protesta-avtomobilistov-vo-vladivostoke..html
Strange things are afoot at the CircleK.
The opposite action has been happening in the airline industry. Russian airlines have been starved of modern airliners as there is an importation tax of 20 odd percent, but it is damaging the growth of national champions like Aeroflot. Some of these airlines have to register these purchases abroad or use wet leases. It’s a real pain in the a** for them.
Even with the soon to be certified (2009) Sukhoi SuperJet and upcoming MS-21 project, the capacity problem is far from solved so from next year these importation taxes on foreign aircraft are set to practically disappear. So expect nice, new fancy boeings and airbuses on internal flights and not just international routings.
Russia still collects several hundred million euros in fees from foreign airline overflights every year… One of the EU’s many complaints against Russia.
On a side note, Daimler has recently agreed to take 10% of Kamaz for 200mEUR…. They’ll do much better out of it than the ill fated DaimlerChrysler deal.
Funny. I don’t see a big problem. The American government is trying to protect its “Avtoprom”, the Russian government is trying to do the same. Both the American and Russian auto industries cannot compete with imports. In both cases it is being done with not-free market means. The Russians smell “BS” so they are on the streets. One of the slogans suggested that “Putin should drive a “Volga”, while “Medvedev should drive a “Lada”.
(Russian car models). Of course, neither of them (as well as the army of government workers) wishes to do that. They all drive imported cars.
http://thepresidentofrussia.blogspot.com/2008/09/my-automobile.html
While the ordinary Russians are being forced to drive domestic cars.
Aleks, SuperJet is the middle-distance plane and it cannot compete with long-distance planes by default. To compare SuperJet and,say, Airbus is incorrect.
So the same problem goes with cars. Japanese ones are the best in their niche, their quality is excelled over Russian “buckets with bolts” or American “coffins on the wheels”.
How else the Russian government can support its “Avtoprom” if not by imposing higher taxes on imports? The Russian made cars cannot compete with imports by free-market means, they literally fall apart:
http://thepresidentofrussia.blogspot.com/2008/12/russian-car-is-falling-apart-literally.html
That’s right.
Short-distance vehicle.
Heh.
The American government is trying to protect its “Avtoprom”, the Russian government is trying to do the same.
Incorrect ‘Fact’ – The US market is not protectionist regarding the import of foreign cars (2.5% import tariff). Foreign-made trucks do have a 25% tariff, but manufacturers tend to get around that by producing them in the US.
To date, the US Congress has not resolved the issue of any financial assistance to the US auto-industry, and any result is very unlikely to be protectionist in nature.
Incorrect Correlation – The article in question was about Russian protestors acting-out against a proposed Russian import tax on foreign-made cars.
Pardon me for being vulgar, but WHAT IN HOLY FUCK’S NAME DOES THAT HAVE TO DO WITH US TARIFF LAWS?!?
You can’t even make a reasonable comparison between the two – it is like comparing a complaint about a new tax on your phone bill to the price of new mobile phone in Istanbul.
Had the article been regarding the efficacy of import tariffs, and the author’s opinion of such laws and regulations, it might have been fair to make a comparison between the Russian Federation and the USA.
Had the article been about protests in both nations against increased taxes, that also might have made for some fair discussion and comparison between the two nations.
But to object or counter an article about locally-organized protests in far east Russia against increased tariffs (and government reaction to those protests) by stating “Doh, the US does the same thing” is both factually incorrect (i.e. WRONG) and logically impaired (i.e. STUPID.)
When the majority of people get a good portion of their income from the transporting of cars from the East to the West of Russia, such undeliberate action from the gov is just another reason to honk and block down the city’s thoroughfares.
I used to hear that many of the Japanese cars in Far East Russia were … not imported legally … from Japan. In other words, stolen cars from Japan were shipped to Russia and resold.
I haven’t heard quite so much about that in recent years, but when it comes to organizing a protest like this, it does come to mind that criminal elements do tend to have structure and organization in place to improve or supplement the nature of protests.
Such criminal influence has played a role in organized labor movements and protests in the past around the world. (Some of that admittedly is because organized labor leaders were criminalized, but some were simply thugs.)
Khabar,
?Que? Yes I know that. The SuperJet is aimed mostly at the domestic market (which is booming) to take the place of almost phased out Tu-154s and stop companies like S7 buying boeings or airbuses for internal flights and Aeroflot for european flights. It isn’t rubbish either with over 55% foreign content (Honeywell, Thales etc.) and has notched up over 30 foreign sales (Italy, Indonesia and…). It just can’t come online fast enough and this is really hurting domestic airlines.
If anything, it is a clear recognition that despite the ‘economic nationlism’ that is preferred and practiced (backed by massive currency reserves), the powers that be recognize that they still need help from the outside, unlike those regional powers in the far east of Russia….
…by stating “Doh, the US does the same thing” is both factually incorrect (i.e. WRONG) and logically impaired (i.e. STUPID.)
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Shedd,
Your message is rude and impolite that I think I’m 100% right. The US government DOES try to save its “Avtoprom” by non-market means. Why? The American cars cannot compete with the imports. Plain and simple.
And you can insult people who say reasonable things, but it reflects badly on you.
[i]I used to hear that many of the Japanese cars in Far East Russia were … not imported legally … from Japan. In other words, stolen cars from Japan were shipped to Russia and resold…[/i]
Shedd, my staunch thinking is that every business whether in Russia or elsewhere is grey. I don’t believe in such a combination of words like “white business”.
As for the cars from Japan, from Japanese dealers, bought in such great numbers, frequently at (internet) auctions, your statement is loosing any semblance of veracity, except that yakudza and Japanese government has merged.
>>>>>If anything, it is a clear recognition that despite the ‘economic nationlism’ that is preferred and practiced (backed by massive currency reserves), the powers that be recognize that they still need help from the outside, unlike those regional powers in the far east of Russia….
Aleks, what kind of help are you talking about? I suspect Russia is not hungry Africa and regional authorities have their part of freedom to carry out business with the “outside world”.
Are you just trying to hint on some local “color revolution” for the purpose to turn Vladivostok into Hong-Kong?
From most important in Russia auto website drom.ru and several other forums was deleted topics of planning and organising new actions on 21 december. Democracy is only abstract idea. Ever and forever.
It will hardly change anything.
drom.ru has a new thread ” Not only drom deletes threads”, three pages by now
http://forums.drom.ru/general/t1151122872.html
Democracy is a clone/clown of itself.
Here’s a good, unbiased article about the problems of the Russian Avtoprom and the related protests:
http://www.utro.ru/articles/2008/12/19/788292.shtml
I used to hear that many of the Japanese cars in Far East Russia were … not imported legally … from Japan. In other words, stolen cars from Japan were shipped to Russia and resold.
I’m pretty sure that’s not the case now. Nowadays, the Japanese hold government-run auctions of older cars, which by law (I am told) must be removed from the streets once they are over 8 years or something. Russians go to the auctions, pay the price, pay the 100% existing customs tax to import, and sell the car locally (more often, a buyer is found before the auction).
I bought a 2002 Toyota Surf (basically a Hilux with a cab) for $25,000 all in including registration. I think the auction price was about $12,000. It’s not as if the tax on imported Japanese cars is low as it is.
Incidentally, it is far safer to buy a Japanese car you’ve never seen, safe in the knowledge that it’s been driven and maintained by a Japanese and driven on Japanese roads for 6 years, than to buy anything which has been driven by a Russian on Russian roads for more than a week.
Once a Russian has driven the thing in Russia, it halves in value. Expat-owned cars tend to hold their value better.