Today, truck drivers across the country are staging protests in a variety of forms: from driving at 10 km/h (about 6 mph) to crossing the road together at an uncontrolled intersection.
The truckers are protesting the “Platon” system — a scheme invented by the government to impose an additional tax on heavy trucks.
What is happening is a perfect example of how an entire industry gets turned upside down and everyone around it gets harmed just so the sonny boy — the “businessman” son of one of Putin’s cronies — can make money. In other words, the very corruption that is destroying Russia.
Here’s why:
Let me remind you: I wrote before that the story of how “Platon” was created is the story of a project being invented and effectively seized specifically for Igor Rotenberg.
Of course, as always happens with projects carved out for a monopolist, when “Platon” launched, nothing was actually ready and it didn’t work. Everyone is supposed to pay, but drivers understand nothing, the equipment isn’t ready, and it’s chaos all around.
This whole mess exists in order to collect 40 billion rubles a year (about US$600 million) from truckers “for road repairs.” But on a national scale that sum is laughable: 622 billion rubles (about US$9.3 billion) will be spent on that this year, evidently without much success. Claims that this new levy will improve road conditions are false.
Out of the 40 billion rubles collected each year, 10 billion (about US$150 million) will go to the “concessionaire” — that is, Rotenberg and Co. And don’t forget that the driver-monitoring equipment for the entire country will cost 14 billion rubles (about US$210 million). Naturally, that too will be supplied by the “concessionaire” at an inflated price, booked as its expenses and reimbursed out of the levy.
It is important to understand that this is not just another cash grab hitting small businesses hard (a significant share of trucks are owned by sole proprietors), it is also a huge amount of hassle, extra administration, paperwork, oversight, and so on.
In other words, you have to buy the device yourself, submit your routes somewhere, run around paying in advance, and then the traffic police (GAI, the old name commonly used for Russia’s road police) will start pulling over every truck to inspect them.
The increased cost of shipping will, of course, be reflected in the final price of every product we buy. This is not exactly the best time for that.
As you can see, it means a huge headache for everyone — and for what? To create a steady stream of profit for little Igor Rotenberg. Simply so that this insatiable family can pocket another 10 billion rubles (about US$150 million).
If the goal is really to raise more money for roads, it would be simpler to increase the diesel excise tax by 10 kopecks per liter. That shouldn’t be done now either, but such a move would still be 146 times better than “Platon” — easy to collect and requiring no additional administration.
And if enriching the Rotenberg family is really so important to Putin, then a direct tax could be introduced on every citizen — 1,000 rubles a month (about US$15) “for the Rotenbergs.” That would add up to 145 billion rubles a year (about US$2.2 billion) — maybe that would be enough for them. As economics teaches us, if you are going to give a subsidy, a direct one is always better than an indirect one.
So the truckers are right to strike. They are striking against corruption, and we should support them morally. As for the Rotenbergs and the officials helping them, they ought to be sealed inside cruise missiles and dropped on ISIS — that would make for a terrifying weapon.