As nations worldwide face repercussions from COVID-19's effects, cases in Russia have reached the triple digits this week with one recorded death.
In an attempt to mitigate economic losses, Prime Minister Mikhail Mishustin unveiled Wednesday an emergency fund initiative of 300 billion rubles, the equivalent of $4 billion U.S. dollars. Despite President Vladimir Putin telling his cabinet that the situation is "generally under control," Russia's efforts to protect its economy could prove ineffective and costly.
Andrey Makarov, head of the Duma's Budget and Taxes Committee, has drafted legislation that would allow the federal government to increase spending without parliamentary limits. Consequently, Mishustin ordered that 11.8 billion rubles ($150.6 million U.S. dollars) be allocated for stimulus payments to medical workers. Additional funds would go toward income compensation and pension payments for citizens, with small and mid-sized businesses receiving financial relief in the form of halting audits and extending tax payments.
Legislators also want to give the federal government absolute control over medical products. In an attempt to address shortages of hand sanitizer, surgical masks, and other products, the Duma would be allowed to freeze prices on such products for up to 90 days. Meanwhile, the Ministry of Industry and Trade is seeking to implement price controls on all domestic products.
There are no food shortages, said Deputy Prime Minister Veronica Abramchenko, only "unjustified excitement." Alexei Nemeryuk, head of Moscow's Department of Trade and Services, merely said that store employees don't have enough time to restock products because people "take more than usual."
As libertarian activist Mikhail Svetov lamented on Twitter, freezing prices will have the opposite of the intended effect: People will not be able to procure essential supplies.
To fight the spread of the disease itself, Putin has begun implementing travel restrictions. From March 18 to May 1, the government will ban foreign nationals from entering the country, with the foreign ministry halting visa processing. The travel impediments will likely impact the airline industry, harming the national economy.
Despite the incoming barrage of stimulus measures, it's apparent that Putin regime doesn't have a solid grasp on Russia's economic situation. In a recent interview with TASS News, Putin described 70 percent of Russian citizens as "members of the middle class" because they earn more than 17,000 rubles annually. That comes out to just $209 per year.
Price controls—which are reminiscent of the failed Soviet command economy—and ongoing disinformation campaigns about COVID-19 do not bode well for either the health of Russia's economy or its people.