As an American, it has been nice to go the pump and find gas under $2.00 a gallon. In fact, the last time we saw prices at these levels was in the fall of 2008.
Yet what has been saving me money has been a major factor in the slowdown in the Russian economy, and the decline in the value of their currency, the ruble. This in turn has been hurting my friend Vasily. When reading economic data and statistics, it is easy to dismiss others pain by following an “out of sight, out of mind” way of thinking. However, if we both, whether American or Russian, seek to follow the teachings of Christ, then we should want to understand if our neighbor is hurting from something that is benefiting me.
“Teacher, which is the greatest commandment in the Law?”
Jesus replied: “‘Love the Lord your God with all your heart and with all your soul and with all your mind.’ This is the first and greatest commandment. And the second is like it: ‘Love your neighbor as yourself.’ All the Law and the Prophets hang on these two commandments.” – Matthew 22:36 –40 [NIV]
I contacted Vasily right before the New Year and asked him to give me some details about how the sharp drop in the ruble had impacted their daily lives. As you can see, the changes have been substantial recently.
“For many people in Russia, life for recent weeks has been filled with fears and concerns about their future. The ruble plunged, losing about 72% of its value to the US dollar since the beginning of the year . In the beginning of the year it was 35 R/$, currently it is about 60 R/$, but in the middle of December it fell down to 85 R/$.”
If you are not familiar with currency conversations, consider what Vasily is saying. As the ruble devalued, anyone exchanging dollars for rubles had to come up with more and more rubles to exchange for 1 US dollar. The impact has been dramatic on the people in Russia.
“No wonder people rushed to the stores to buy various things from smart phones and flat-screen TVs to furniture and cars. People tried to use the fact that the prices in the stores stayed the same during those days, and buying could protect their money from fast devaluation. Stores, however, caught up within a week or two, and now many prices reflect the devaluated ruble. Milk went from 32 rubles per liter to 53 rubles per liter; meat from 240 rubles per kilogram to 480 rubles per kilogram; bananas from 35 R/kg to 65 R/kg: apples from 35 R/kg to 80 R/kg. Not as many people bought new furniture, TV, or a new car, but all people buy milk, meat or fruit on a weekly/daily basis. Many retail prices even though not directly connected with a dollar, began to reflect the increased dollar rate. So people now have to either spend more rubles if they can afford it, or buy less. People’s salaries stayed the same so far, although the government promised to increase pensions on 7-10% in 2015. It is clear that this crisis has cut in half the standard of living that people had become accustomed to over the last 5 years. The Russian government, the Central Bank, and the President work hard now to stabilize the situation on the financial and stock markets, but so far the prognosis people hear is not too positive, at least for 2015.”
His story could be seen by anyone keeping up with current events too.
Russians flock to stores as ruble remains volatile, Fox News, Dec 17 ‘14
“The Russian government looked at ways of easing the selling pressure on the ruble Wednesday amid fears the country may face a full-blown bank run and as consumers look to buy big-ticket items before prices rise.
Deputy Finance Minister Alexei Moiseyev was quoted by the Interfax news agency as saying that the government is going to sell foreign currency “as much as necessary and as long as necessary.” That, the hope is, would relieve the pressure on the ruble, particularly against the dollar.
The ruble has lost more than 50 percent of its value this year.”
Vasily also shared with me some illustrations, that make it clear that his work with other Russians doing missions work inside and outside the country has been greatly impacted by rising prices.
“Our short term mission trips to Israel became more expensive. For a group we took to serve in Israel for 10 days in November 2014, people paid 28,000 rubles. As the year progressed, a March 2015 trip was going to be more like 45,000 rubles. Some people decided not to go because the cost became prohibitive for them especially with the increased cost of their daily lives. So it is harder now to mobilize Russian believers for foreign missions with a weaker ruble.
Historically we have seen that such crises would lead to a cheaper ruble at first, but in 1-2 years the ruble would catch up and inflate prices in dollars too. That can be seen historically in the cost of e3 trips; for instance, it was $1,100 in 1992, then $1,800 in 1998, then $2,800 in 2004, then $3,800 in 2012.
Currently we are sadly observing panic in the financial markets because of the fall of the ruble, plunge in oil prices, sanctions, and speculative currency trading. We trust the Lord will help us through all this now and in the future.”
As nations the world over are impacted by a slowing global economy, struggling under increasing trillions in additional debt, most of which has gone toward unsustainable behavior in global markets, may we all remember our neighbors, not only next door, but especially those struggling under conditions far worse than our own in other nations.
May the people of Macedonia under the Roman Empire during the 1st century AD inspire us today. I hope the world of 2024 will read this, and immediately think of examples of this type of behavior by those who claimed to be followers of Christ.
“Now, brethren, we wish to make known to you the grace of God which has been given in the churches of Macedonia, that in a great ordeal of affliction their abundance of joy and their deep poverty overflowed in the wealth of their liberality. For I testify that according to their ability, and beyond their ability, they gave of their own accord, begging us with much urging for the favor of participation in the support of the saints…” II Corinthians 8:1-4
On a cold day in January,
A Curious Mind
PS – If you would like to make a financial impact on the lives of people in Russia, I encourage you to check out Vasily’s web page. I continue to believe that an investment in the lives of people is more rewarding that an investment in financial markets.