Putin’s Predicament

It is an old English joke that a traveller in Ireland asks someone on the road how to reach his destination and the Irishman responds “I wouldn’t start from here.” Well, generally speaking, one has no choice. And this is certainly the case with a statesman who has been in power long enough so that what goes around comes around. This rarely happens with American presidents who are constitutionally denied a third term but frequently happens to African dictators, notoriously addicted by custom to becoming “presidents for life.” It is also happening to Vladimir Putin who circumvented the Russian constitution to take a third term after his stand-in Mr Medvedev had held the fort. It certainly bears reflection that the idea of a two term maximum has the inadvertent benefit that one’s successors are left to clean up the mistakes of the two preceding terms of office. But Putin does not have that luxury. He has been facing the music for some time. It does not sound good.

It is partly, as government is usually, a matter of money; or, to be more precise, lack of money. It is also about making grandiose promises, taking on extravagant commitments and making the wrong sort of enemies. At the end of the nineties Putin committed the first two errors. In the last decade he committed the third mistake. The United States is most definitely the wrong kind of enemy. Even if it takes on wars it cannot win because presidents assume they can afford them, everyone who is sent in risks life and limb, vast amounts of treasure are expended, and all those at home have to borrow to pay for it all; and then when they pull out eventually the very people they went in to help are unceremoniously dumped. Who can forget the image of the helicopter leaving Saigon? That said, for Russia to get entangled in a hostile relationship with the United States was an error of the first magnitude. And it was avoidable. President Obama and Secretaries of State Clinton and then Kerry were desperate to salvage this and every other relationship. Why else did Obama sit back and do nothing while the Russians took the Crimea?

With the onset of the commodity boom in the late nineties the stage had seemed to be set for a burgeoning Russian economy on the back of a boom in energy exports. Control of natural gas supplies was then used brutally to force unruly neighbours in the Baltic and Ukraine to behave themselves. The EU under Chancellor Gerhard Schroeder would take the easy option, put everyone on Russian gas and reap in retirement the profits therefrom. Meanwhile stashing the gains from commodity exports away in a sovereign wealth fund and re-financing much needed military-industrial investment would see that Putin’s siloviki could stand tall on May Day or V.E. Day.

But declining energy and other commodity prices and the astonishing attainment by the United States of energy self-sufficiency abruptly reversed the balance of raw material power between Moscow and Washington decisively to Russian disadvantage. Bad enough, perhaps. But the United States is not just a major raw material producer, it is also the world’s largest economy and the ultimate source of the world’s greatest technological innovation. So forays into Ukraine and the seizure of the Crimea might have made resentful Russians feel better about their country but it led to NATO sanctions and since President Trump’s election, for one reason or other, to a succession of further sanctions that have all but crippled Russia’s economic prospects. When the Stockholm Institute for Peace Research published its annual report on world military expenditures, Russian civilians not usually briefed on such matters were shocked to find how low their country had fallen in the ratings. Weapons were always something they were good at. Putin has since been rushing around the country visiting military-industrial plants in obscure, out of the way places in order to deliver uplifting words of comfort.

One of the most recent sanctions directed at countries that buy Russian weapons has combined with low energy prices to squeeze the most vulnerable part of the Russian financial anatomy in that these are a major source of foreign exchange. Another source is gold, which the Russians used to sell with gay abandon on the world market but which they have recently been accumulating in a Chinese manner, stacking it for a rainy day. A further devaluation of the rouble will keep the economy ticking over, but this cannot go on forever.

Russians are not to be underestimated. They have been circumventing the US sanctions on arms exports by devious manipulation of what are called “end user certificates”, so that arms for Syria somehow look like they are destined for Saudi Arabia etc. This dodge was well described in the liberal business newspaper Vedomosti on 14 May (Aleksei Nikol’skii, “Rossiya nashla sposob obkhoda sanktsii SShA pri prodazhe oruzhiya”.) However, even though the Pentagon has obviously known of this for some time, the fact that it becomes public knowledge means that the White House will be forced to do something about it. And President Putin will then have another problem on his hands. But surely the nice Mr Trump will come to his aid?

It was always an absurdity that the ridiculous Steele memorandum designed to keep President Trump out of power should be taken as genuine by anyone of sound mind, even in Washington DC, and certainly anyone who knew any Russian. The word went out that the Russians had Mr Trump over barrel. Was this what former head of Russian foreign intelligence, Mr Trubnikov, perhaps hinted to Dr Halper? But the fact that President Trump, who has a fateful attraction to “strong men” in power, is now clear of these preposterous claims does not mean he can take the charm offensive and make up with Mr Putin even if he controls both houses of Congress, which he does not. He has to get re-elected first. And by then he might have gone off the idea.