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The Politics of the Economic Crisis in Russia:

The financial crisis and especially the recent decline in oil prices have hit the Russian economy hard, and have shaken previously strong popular support for Vladimir Putin's regime. In late January, there were widespread anti-government demonstrations organized by a variety of opposition groups. Russia's growth during the 8 years of Putin's rule has been overwhelmingly based on revenues from oil exports, which boomed as oil prices rose. Now, however, the game seems to be up. Although oil prices might go up again, they are unlikely to regain their pre-recession levels anytime soon.

Putin's popularity has suffered enough that even Russian President Dmitry Medvedev - whom Putin handpicked for the post - is beginning to distance himself from his longtime patron - criticizing Putin's economic policies and tabling a Putin-sponsored law that would have criminalized most political dissent as "treason."

Until now, both Russian and foreign opinion has mostly seen Medvedev as a lackey that Putin installed in the presidency last year so as to circumvent term limits. If this particular rat is considering jumping ship, that means the vessel in question might really be in danger of sinking.

Anders Aslund, a leading expert on the Russian economy, says that the nation has arrived at a crossroads:

Russia is at a crossroads. There are basically two choices. Either it becomes more authoritarian, with state capitalism and protectionism — [and] then it has no need for cooperation with the European Union. Or we see a political and economic liberalization, which is the opposite direction.

I suspect that Aslund is right. It's possible that the regime will now be forced to liberalize, and Medvedev has been making a few gestures in that direction. Liberal democratic opposition leaders, such as Garry Kasparov, might be able to turn the crisis to their advantage.

However, it's also possible that the economic crisis will ultimately play into the hands of Russia's communists and ultranationalists. The latter have also been out in force lately, blaming Russia's economic woes on the West (as Putin has also done) and on the Jews. Unfortunately, anti-Western and anti-Semitic sentiment has been bolstered in recent years by the Putin regime's nationalistic propaganda, which even went so far as to sponsor a TV "documentary" claiming that the US government itself organized the 9/11 attacks so as to manufacture an excuse to assert dominance over the world. The influence of Putin's propaganda might outlast Putin himself.

As bad as the authoritarian Putin regime is, there are nationalist and communist forces in Russia that are even worse. It remains to be seen whether they or their liberal rivals become the main political beneficiaries of Russia's economic crisis.

The Cabbage (mail):
I don't follow the ins and outs of kreminology all that closely. But I read a lot about the election of the new Russian Patriarch, and there was noticeable absence of Putin. I'm pretty sure he was around, but the press focused -- to a surprising degree -- on Medvedev.

Not to say that they were involved with the election, but they usually had a press heavy press presence duirng the associated ceremonies.

BTW, does anyone else accidently type Mendeleev instead of Medvedev?
2.12.2009 4:44pm
...Max... (mail):
The popular sentiment in Russia appears to be skewed heavily against the West, especially against the US (based on both anecdotal evidence and Russian TV). I am not at all sanguine about liberalization prospects in the country that I happily escaped from... the post-Gorbachev rapprochement remains a fantasy of Tom Clancy :(
2.12.2009 4:45pm
M (mail):
Nationalist groups are a very serious problem in Russia, and support for "liberalism" (in the European sense) is quite low (in part because the liberals were such obvious criminals and fools during the 90's, in particular those associated with the "Union of Right Forces" party.) But the Communists have no significant support and are not a serious party. No one young at all supports them and there is no serious chance of the Communist Party of Russia making a serious comeback. Their trajectory has been consistently down since '96 and will continue that way, as their leaders are old buffoons without either the slightest plausible plan or convincing sounding rhetoric. Russia faces many serious problems but a return of the actual Communist Party isn't one of them.
2.12.2009 5:17pm
Ben Franklin (mail):
Medvedev had best be careful. Things have a way of "happening" to those that get on Putin's bad side. If the economy gets bad enough they can always gin up another crisis on their borders and invade some part of the Ukraine etc... There are plenty of people in the west who will cover for them... witness Georgia recently. Heck, Obama might even send troops to help them.
2.12.2009 5:26pm
keypusher64 (mail):
Does anything in Russia matter besides demographics?



Will the improvements of the last couple of years continue with oil at $40 a barrel?
2.12.2009 5:45pm
A. Zarkov (mail):
"In late January, there were widespread anti-government demonstrations ..."

That's something we need too. Why do Americans sit passively as they get fleeced by Corrupt Government II?
2.12.2009 5:50pm
autolykos:

The popular sentiment in Russia appears to be skewed heavily against the West, especially against the US (based on both anecdotal evidence and Russian TV).


Do you blame them? How many movies have you seen where we completely embarress them? If another country made the equivalent of "Red Dawn" about the US, I probably wouldn't be happy either.
2.12.2009 6:04pm
Randy R. (mail):
Everyone loves their leader then times are good.
Everyone turns their back on the leader when times get tough.
None of this is surprising.

What is surprising is that Putin &Co. seem to have not learned this, despite it being a constant throughout history.

I suspect that if Putin is still pulling the strings, he will find a "distraction", like a little war or invasion, to take people's minds off their economic troubles, and rally around the flag. It won't be a long term fix, and will probably make matters worse, but it usually works in the short term.
2.12.2009 6:22pm
CDU (mail) (www):
Zarkov wrote:
That's something we need too. Why do Americans sit passively as they get fleeced by Corrupt Government II?


Unlike the Russians, Americans can take their grievances to the voting booth in free elections, which lessens the need to take them to the streets.
2.12.2009 6:35pm
PubliusFL:
autolykos: Do you blame them? How many movies have you seen where we completely embarress them? If another country made the equivalent of "Red Dawn" about the US, I probably wouldn't be happy either.

I always kind of assumed that fiction with similar (role-inverted) themes was produced in the USSR during the Cold War, and never thought to harbor hard feelings against Russians because of it.
2.12.2009 6:51pm
James Gibson (mail):
Ah, for the old days of the Cold War. We could always expect to find a good job in the military industrial complex cranking out Abrams Tanks, Trident Subs, B-1s, carriers, etc. to match the numbers being built by the Russians. As some people have noted Obama needs a good conflict to get the economy going again as during WW2. Putin also needs to revitalize his nation and conflict has done it before. All we have to do is keep from dropping the bomb anywhere and it just might work.

Of course given the changing world, the freedom loving democracy this time will be Russia and the hardline socialist will be the United States. Unless its the Socialists that take over in Russia at which time the situation will be more like Russia verses China in the 60s and 70s. Someone else will have to figure out who will play Russia and who will be China in this scenario.
2.12.2009 6:51pm
byomtov (mail):
does anyone else accidently type Mendeleev instead of Medvedev?

Periodically.
2.12.2009 8:43pm
Jonathan Rubinstein (mail) (www):
Reform in Russia has always been a very dicey business, usually resulting in some truly great writing and otherwise terrible results. Now that the same geniuses we sent to Russia and helped turn it into a kleptocracy, have destroyed three decades of wealth in a eyeblink, we had best watch our comments about the nasty Russians lest they distract us from dealing with our own mess. In terminal decline, possibly; anti-Semitic and xenophobic, definitely and possibly terminally, it has tons of nuclear weapons and for that reason alone we need to engage them, offer to help them restore their oil fields and drill in the far north. We helped loot the place when we should have been prudent, but we are looters as we proved. We can be very happy that we do not have to live there, but we have little to be proud of and much to be ashamed for. We at least claim to be better. Putin is hardly hiding what he is.
2.12.2009 8:53pm
byomtov (mail):
In terminal decline, possibly; anti-Semitic and xenophobic,

Anti-Semitism? In Russia? Unheard of.
2.12.2009 9:08pm
A. Zarkov (mail):
CDU:

"Unlike the Russians, Americans can take their grievances to the voting booth in free el
ections, which lessens the need to take them to the streets."

Only in theory. In practice Americans have little to choose from as special interests control both parties. The same special interests. Thus we are denied any real choice and anyone who tries to run against both parties will have to run a gauntlet of law suits and challenges to get on the ballot. Ask Ralph Nader. On the other hand mass demonstrations and violence do make an impression. Throw enough tantrums and the politicians give in a little.

You need to face reality. American democracy has become a farce. Just study what's happening right now.
2.12.2009 9:12pm
Andrew Maier:
Man, I remember when Zarkov was saying these same things when Bush was president.


Wait a tick...
2.12.2009 10:20pm
BGates:
If another country made the equivalent of "Red Dawn" about the US

The American military portrayed as a rapacious instrument of tyranny through the medium of film? The deuce, you say!
2.12.2009 10:44pm
Gregory Conen (mail):
While I was not a fan of Bush II, and some of Obama's first actions are not impressing me, and I realize that many facets of American governance are broken, but comparing it to Russian corruption is inane. When was the last time we had a government assassination of a critic?
2.12.2009 10:59pm
Steven M (mail):
I have been waiting patiently and with a twinkle in my eye since the election to see how Zarkov would "adjust" his one-note bleating to the new realities of an Obamanation.

Having lost Bush as principal actor in his Amerikadammerung seems to have left him wheezy and three pints low on his dipstick. Shame that. And the best is yet to come...
2.12.2009 11:10pm
Nekulturny (mail):
Jonathan Rubinstein - here, you dropped your Party card, tovarishch.

Sure, American democracy has been caught in her shift, but is essentially healthy. Russia has TB and does not seem to like the nasty medicine, nor her doctor - a fixation perhaps - but that won't cure consumption, nor infertility, nor the other diseases suffered by the Rodina.
2.12.2009 11:35pm
A. Zarkov (mail):
"Man, I remember when Zarkov was saying these same things when Bush was president."

Of course-- same problem new actor, only this one looks worse. When one party controls both houses of the legislature and the executive, we lose the checks and balances of divided government. Of course there remain strong differences between the US and Russia. It's the trend that's upsetting.
2.13.2009 3:10am
A. Zarkov (mail):
Steven M:

I don't understand your problem. Would you like US to become a virtual one-party state similar to Mexico under the Partido Revolucionario Institucional (PRI), which ruled continuously for 70 years?
2.13.2009 3:17am
AL (mail):
Make no mistakes.

Russia began to enroll mega-profits from oil export in 2004, when oil prices were less than current 36$/bbl. Current prices for NG are still at all time high. Not counting mega investment in oil$gas in last 3 years, which will assure profitable operation for couple of years even at 20$/bbl. Plus super-mega profits from gold, uranium, platinum, rhodium, nickel, etc.

Plus generally resilient and self-supporting population, used to economical malaises.

All in all, Russia is destined to proliferate economically for decades to come. Get used to it.
2.13.2009 6:34am
Brett Bellmore:

When was the last time we had a government assassination of a critic?


I'd put Peter McWilliams on that list. And he might have preferred a bullet to the back of the head to the way they did kill him.
2.13.2009 7:02am
...Max... (mail):
All in all, Russia is destined to proliferate economically for decades to come. Get used to it.

Ever been there? Preferably, a bit deeper in the country than Moscow?
2.13.2009 8:44am
wolfefan (mail):
Hi -

This may hijack the thread; please accept my apologies and ignore at will.

I'm not sure McWilliams would have agreed that he was intentionally assasinated; he seems to take a different view in "Ain't Nobodys Business If You Do." Do you have evidence, Brett, beyond your own opinion that the prosecutors, etc. were intentionally trying to kill McWilliams, as opposed to his death being the (arguably forseeable) outcome of enforcing the law? Is there no difference for you between McWilliams's death and a government specifically targeting someone? Isn't McWilliams's death more comparable to, say, the "collateral damage" deaths of civilians in Iraq?
2.13.2009 9:05am
Nekulturny (mail):
I daresay McWilliams killed himself, when you come to it.

Commie, what do you mean, "proliferate economically?" They sure ain't proliferating numerically. In 50 years the Russian population will be smaller than Iran's. Then they will get really used to hardship.
2.13.2009 9:59am
A. Zarkov (mail):
Russia is one of the least happy countries on earth.


Two metrics guage the happiness of a country: the suicide rate and the fertility rate. Unhappy people look to their past with remorse and to their future with fear. A high suicide rate and a low fertility rate make for one very unhappy place and Russia comes out on top. Only Lithuina and Belarus top Russia for suicide rate (34.2). At 1.4 Russia is at the far low end for fertility.

By this metric Israel comes in as the happiest (6.2,2.77). The US comes in very good (11.0, 2.1). You can find a plot and the data in this essay by Spengler.

With a declining population and non-renewalable resources Russia's future does not look bright. In a 100 years Russian cound be a dead language.
2.13.2009 12:40pm
Karina:
Anybody who has actually been to Russia could never believe that American democracy is dead. We have nothing like the bureaucratic authoritarianism that Russians have always had regardless of regime. We have far more freedom to criticize, to speak out, to protest, to debate. Our courts are not corrupt and subject to official orders and bribes. Our media is vibrant.

Last year I lived there on my own (I speak Russian) and found it a place full of bizarre and inhumane contrasts. I saw my office raided by the FSB. I met the skinheads who roam the streets of the "banlieues". I visited the decadant clubs where $10,000 gets you a VIP table for one night. It's a mixture of Third World and First World conditions.

Of course, the First World aspects are largely built on oil and gas revenues (and a few other raw materials). Now, the budget is being rebalanced for $40 a barrel oil, when before it looked like the sky's the limit. Putin has declared that he won't cut defense spending by one kopeika -- so the social spending, one deduces, has to be cut.

I think a crackdown of authority in Russia is inevitable when times are tough economically -- any restlessness among the people, and the hammer will fall.

In other words: Reform in Russia is not an option. Liberalism was stillborn in the 1990s. Young educated people generally admire the European and American systems -- as they always have -- but it is the security services and the Party types who have the stomach to govern, and so they are the ones who rule.
2.13.2009 1:54pm
A. Zarkov (mail):
Karina:

I agree with you 100%, the US is absolutely nothing like Russia. While American democracy is certainly not dead, it's getting sick. The more immigration we get from the Third World the more we are going to resemble a Third World country. It's absolutely absurd to think that 100 million Latin Americans migrating to the US is not going to make fundamental changes to American society. Even the Russian "Thieves World" is beginning to appear here. The Russian Mafia has invaded The American Hockey League and the LA furniture industry as well as the usual organized criminal activities like drugs, loan sharking etc. The trends are ominous.
2.13.2009 2:51pm
Harry Eagar (mail):
'we are looters as we proved.'

We did? Where's mine?
2.13.2009 7:51pm
...Max... (mail):
The Russian Mafia has invaded The American Hockey League and the LA furniture industry

Worry not, we've invaded and suborned the IT industry loooooong ago :-D~
2.13.2009 9:10pm
Alexx (mail):
The silent horror cut out words "normally and"perfectly" from our everyday conversations and pasted cautious
"while" and "so far" instead.

The former schoolmate whom I hadn't seen for 15 years asked me not about my family and our pals but shouted the foolish request to write about "this son of a bitch, my boss, who stopped paying four months ago". He thought that would matter. Sorry, lad, I will not write, that doesn't makes sence. And he told me in a back -- "fat bustard". I ran away with no offence, and not being insulted, but ashamed. For what, for whom?
2.16.2009 12:53pm

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