More Bad News for Mr Putin

Most Russian citizens, unlike the family of Boris Yeltsin and their friends, lost out on the national lottery of privatisation. They viewed the share certificates issued by the industries that employed them as valueless and promptly sold them for a handful of roubles. These were scooped up en masse by the Russian oligarchs of the future and foreign privateers, including those with posts in the Western embassies who could not believe their luck. Even several years later the likes of the American financier Bill Browder could still come by and pick up such shares for a song. The grotesque disparity in living standards that now prevails between the most wealthy of the new rich – the novye russkie – and the man in the street is not a great deal different from that at the time of the revolution, except that they at least now have food in their mouths and heated apartments.

But, we are told, worse is to come. Alexi Kudrin, the economist who  worked directly under Putin as Minister of Finance from 2000 to 2011, has announced that it will take fifteen years for Russia to escape from the economic rut and that this will require a cut in consumption of some 30%. He must bear some responsibility for the wretched condition of the Russian economy: that between 1991 and 2015 the accumulated material losses amounted to no less than those in World War II. It will, he says, take 27-28 trillion roubles to put this right (O. Solov’eva, “Dlya vykhoda iz krizisa Rossii potrebuetsya 15 let”, Nezavisimaya gazeta, 13 February 2018.)

When President Putin first came into office in 1999 he made much of the fact that Russian standards of living were lower than that of the poorest country in the European Community (Portugal) and that Russia would have to grow consistently at a disproportionally high rate to raise itself above that position within fifteen years. He counted on massive exports of Russia’s raw materials, especially oil and gas, doing most of the job as the commodity cycle picked up from 1998 on the back of massive Chinese demand. Yet that cycle has long come and gone, but the resources earned have largely been squandered. Worse still, Putin counted on Russia’s pre-eminence in oil and gas providing the government with enormous political leverage over neighbouring energy poor countries to substitute for its strategic military superiority lost to the United States. And now he talks of rebuilding Russian military power to a level that it can once against match that of the United States.

Thus with the desperate need for the Kremlin to cut living standards merely to catch up, all the Americans have to do once again to rid themselves of Russian rivalry is to sustain their existing expenditure to bankrupt the Russian economy and precipitate massive unrest among the normally tolerant Russian population. Who wants to be president in these circumstances?