Video shows Russians crowding supermarket amid 'egg crisis'

CNN
29 Jan 202405:01

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Highlights

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Transcripts

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As the war grinds on in Ukraine, Russian

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President Vladimir Putin

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is trying to project

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an image of economic stability in Russia.

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But it's proving difficult.

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Joining us now is Claire Sebastian.

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You've been looking into this. Yeah.

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So obviously inflation is a problem

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in Russia.

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We've seen it accelerating

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since the summer.

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At the same time

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as the rest of the world has seen it

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coming down.

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So this is obviously unique to Russia.

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It's directly linked to the war,

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which we're going to in a minute.

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But I think

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what is more important about this

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is that it's

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not just about a gradual rise

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in overall prices,

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but what we're seeing

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is that certain supermarket staples

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and in particular we're looking at eggs

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have gone up dramatically.

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It's something like 60% every year.

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It was almost 20% between November

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and December.

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That increases

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the likelihood

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that people are going to notice it

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and they're going to start

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to make the connection

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between their grocery baskets.

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And the war.

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And what we're seeing is that

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that is a situation

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that the Kremlin has not been able

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to ignore. Look,

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there are higher.

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The dollar is awash in money.

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When your husband spoils

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you with expensive presents,

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reads the caption,

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and social media brimming with egg means

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they're making light of a new feature

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of Russia's upside down war economy.

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A sudden and unexpected price rises.

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President drive

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an hour outside Moscow, though,

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and it's no

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laughing matter for these pensioners.

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Yes, it is not.

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Of course we know it.

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The pension is 13,000 rubles, says ruble.

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That's less than $150 per month.

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More meals.

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Maybe we buy less meat, says Nadezhda.

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There's still enough for medicines.

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Egg prices rose 18% in December alone.

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Russian official data shows

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more than 60% over the year,

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far outstripping

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overall inflation at 7.4%.

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These are still more questions

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there as images spread of lines

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forming outside supermarkets.

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This purportedly

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from Belgrade in December.

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Russia's president

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forced into damage control mode

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socially precociously is union.

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I am sorry about this

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and want to apologize for this problem.

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This is a setback

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in the government's work,

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although they say this is not the case.

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I still think it is.

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The problem

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is related to a failure to increase

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imports enough.

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The government took

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the not-so-subtle hint.

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Eggs were exempted

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from import duties for six months

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and shipments started arriving

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from Turkey, Azerbaijan

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and staunch ally Belarus.

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Also ramping up supplies.

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Its president

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unable to resist a rare dig.

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A new term

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put through our own production covers

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our needs in terms of grain,

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pork, chicken, milk, vegetable oils

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and chicken eggs.

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No. Stop stuffing.

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Send some to us.

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Don't be greedy.

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In Putin's surprisingly resilient war

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economy, the egg crisis reveals

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the biggest problem is not decline,

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but overheating.

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Sees,

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Putin says this is about higher demand

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because of slightly higher wages.

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Partly true, economists say.

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But what Putin doesn't say is

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why wages are up.

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This labor shortage is a huge issue.

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Where does that come from? Mobilization.

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I think to me,

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the key issue

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here is the fact

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that there are a lot of deaths at war

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and then they have to be replaced

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as people have to be replaced.

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The Russian officials

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are trying to keep it very quiet.

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The numbers of how many people have died.

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The weak

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ruble, a direct

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result of sanctions

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has also pushed up import

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costs for poultry producers.

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And then there's the war time spending.

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The budget for 2024 envisages

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even adjusted for inflation,

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record levels

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of federal government expenditure.

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So when you put that alongside

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a supply side tightness

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with a massive increase

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in demand driven by the state,

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you've got a recipe for inflation.

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Chile's President

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Putin now poised for the next price

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spike A threat

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to his image of stability

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ahead of March elections,

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though likely not

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his presidential shelf-life

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So it's not exactly a crisis

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for Putin yet,

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but it is

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something that we are going to continue

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to see the sort of Whac-A-Mole situation

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where the Kremlin has to deal

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with these pockets

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of overheating as they happen

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Now, obviously,

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what this shows us deep down,

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especially if you look

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at the Russian budget

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this year,

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is that they are putting the wheel first

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and the people are going to have to keep

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paying the price.

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Defense spending

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according to projections for this

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year, will be triple

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what it was before the war.

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They're paying more

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to service their debt,

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which they didn't even have

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for any before the war

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than they are on health

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care and education.

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Interest rates

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are back up at some 16%,

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which is close to the peak that we saw

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at the start of the war.

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So people are increasingly

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paying for this.

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And I think the question is

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how many people

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when people start to make the connection

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between this

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and the war,

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especially as we're starting

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to see the seeds of that already,

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some sort of pockets of anti-war

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sentiment rising.

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And I think this is why the Kremlin

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cannot afford to ignore this.

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Okay. Thank you so much.