RENEE MOTAGNE, host:
It's Morning Edition from NPR News. I'm Renee Montagne. Russia is among the countries hardest hit by the world's financial turmoil. Only recently, Moscow was boasting that its oil-rich economy was an island of stability amid global uncertainty. But now, many ordinary Russians are worried about losing their jobs and their savings. NPR's Gregory Feifer reports from Moscow.
GREGORY FEIFER: Outside on one of Moscow's busy main streets, the gray fall weather reflects the general mood. Small-business owner Vladimir Kuzavloff(ph) says he's worried about his future.
Mr. VLADIMIR KUZAVLOFF (Small-Business Owner): (Through Translator) I fear something very serious may happen to the economy. I'm already considering canceling a vacation, but I still hope that Russia will somehow come through the current crisis.
FEIFER: Russia's stock market saw record highs only last May, but shares have plunged more than 60 percent since then with prices now at a three-year low. The ailing banking system has been hit by fears of a global financial crisis. President Dmitri Medvedev has promised to inject more than $200 billion into the financial system.
President DMITRI MEDVEDEV (Russia): (Russian spoken)
FEIFER: This week, Medvedev said the government must act as quickly as possible. There was a brief rally on the markets after his announcement, but it didn't seem to have done much to restore confidence. Few Russians invest in the country's small stock market, but economist Mikhail Delyagin says the credit crunch is already affecting average Russians.
Mr. MIKHAIL DELYAGIN (Russian Economist): (Through Translator) Many Russian companies have unproductive workers on their payrolls. They're already being fired. Management will also see cutbacks. And that's just the start.
FEIFER: The country's biggest mobile phone retailer has announced thousands of job cuts. Delyagin says the layoffs will come as shrinking credit for retailers drives prices on store shelves higher. Back on Moscow's streets, it's not surprising to hear mention of the year 1998. Ten years ago, Russia suffered an economic crisis that wiped out most people's savings and ended the country's brief period of democratic reforms. Russia is very different today. The authoritarian government is bursting with cash from the country's booming oil and gas industry which has fueled a huge consumer boom. But many Russians haven't forgotten the long lines at banks and empty store shelves back in 1998. Industrial painter Nadiazde Rastopchiniz(ph) says she's begun cutting back on everyday purchases.
Ms. NADIAZDE RASTOPCHINIZ (Russian Industrial Painter): (Through Translator) Everyone is concerned they may lose their jobs tomorrow, and prices for everything just keep rising. I'm already putting aside money in case I need it for food.
FEIFER: Moscow has one of the most expensive housing markets in the world, but even that's being affected. Real estate agent Ludmila Akusminaz(ph) says people can't get the mortgages they used to.
Ms. LUDMILA AKUSMINAZ (Russian Real Estate Agent): (Through Translator) There are fewer buyers because banks have made it harder to get credit. Apartments aren't selling, and that means prices will soon begin falling.
FEIFER: Despite some signs of recovery on the stock market, economist Delyagin says the financial crisis will probably get worse, and that may soon affect politics. Prime Minister Vladimir Putin's high approval ratings have been buoyed by Russia's economic boom. The current financial turmoil could pose his biggest challenge yet. Gregory Feifer, NPR News, Moscow. Transcript provided by NPR, Copyright NPR.
