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Putin Has A Serious Problem: Sanctions Are Smashing Russia’s Economy

Jack Buckby — Sat, 09 Apr 2022 15:54:48 +0000

How Much Are Sanctions Hurting Russia? – On Wednesday, the United States issued a slew of new sanctions against Russian banks and elites, which included a ban on Americans investing in Russia. The new sanctions specifically targeted Russia’s Sberbank, which holds around one-third of the country’s bank assets.

Sanctions also targeted Russian President Vladimir Putin’s two daughters and Alfabank, the fourth-largest financial institution in the country.

But with the invasion of Ukraine still ongoing, many are asking whether sanctions are hurting Russia enough to have any effect.

How Sanctions Are Hurting Russia’s Economy

J.P. Morgan economists believe that Russia’s Gross Domestic Product is likely to shrink by 7 percent on the year, and by 35% this quarter. The same economists also believe that inflation in Russia could hit 14% by the end of this year. That’s double the level of inflation that the United States has seen over the last year.

“A peak-to trough decline in Russian GDP is now expected at around 12%, comparable to 1998 (~10%) and 2008 (~11%) crises and COVID-19 shock (~9%)”, Anatoliy Shal from JPMorgan explained in a memo to clients.

“What is clear though, is that Russia’s economic growth and political isolation will lead to lower growth in the long run,” she added.

Beyond GDP, inflation, and general quality of life, sanctions are also putting indirect pressure on major industries like airlines. A ban on the export of American technology, including spare parts and tools for aircraft in Russia built by Boeing and Airbus, prompted Russia to announce new legislation allowing for the confiscation of foreign airplanes at Russian airports. The confiscated planes are expected to be used for domestic flights in Russia and could be used to salvage parts for other airplanes while Russia sources alternatives – likely from China.

Aside from whether or not the sanctions are hurting Russia – and they unquestionably are – it has become increasingly clear that the sanctions have not worked in the sense that Russian President Vladimir Putin has not reversed course and his invasion of Ukraine continues.

Former NATO Supreme Allied Commander Gen. Philip Breedlove said in a recent podcast interview that the sanctions have caused harm, but haven’t worked.

“Sanctions have hurt Russia. They’ve hurt the Russian people. They’ve hurt the Russian economy. But they have never changed Mr. Putin’s actions,” he said.

Sanctions Impact Daily Life for Russian Citizens

Sanctions not only impact the Russian government and major industries but also its citizens. In the first week of the invasion, consumer prices increased by 2.2%, with food seeing the biggest rise in costs.

Since sanctions were implemented, the value of the ruble has plummeted, consumers have begun to lose access to American-made products, and major American brands have left the country potentially forever.

From McDonald’s withdrawal from Russia to the end of American-designed Apple iPhone handsets and computers sold in the country, sanctions are putting extreme pressure on Russian citizens.

Yellen Aims for “Maximum Pain” for Russia

The pain inflicted on the Russian economy is by design. While the Biden administration denied ever believing that sanctions were a “deterrent,” new sanctions have been announced and implemented week after week since the beginning of the invasion of Ukraine.

Treasury Secretary Janet Yellen said on Wednesday that the United States will continue to implement the sanctions against Russia to inflict “maximum pain.”

“Our goal from the outset has been to impose maximum pain on Russia, while to the best of our ability shielding the United States and our partners from undue economic harm,” Yellen told legislators, adding that Russia should continue to be isolated from the geopolitical system and even kicked out of the Group of 20 (G20).

Jack Buckby is a British author, counter-extremism researcher, and journalist based in New York. Reporting on the U.K., Europe, and the U.S., he works to analyze and understand left-wing and right-wing radicalization, and reports on Western governments’ approaches to the pressing issues of today. His books and research papers explore these themes and propose pragmatic solutions to our increasingly polarized society.

Source: https://www.19fortyfive.com/2022/04/putin-has-a-serious-problem-sanctions-are-smashing-russias-economy/

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Putin will soon have ‘no choice’ but to stop his invasion of Ukraine, former US general says

MSN — Sat, 26 Mar 2022 05:30:57 +0000

—Putin will likely be forced to stop his war against Ukraine, a retired US general told Insider.
—It’s “not because he wants to halt his military operation but because he has no choice,” he said.
—Putin “has basically reached the capacity of what his military can do for him in Ukraine,” he added.

Russian President Vladimir Putin will likely be forced to bring his failing monthlong war against Ukraine to a halt, a retired US general and Russia specialist told Insider — a scenario that may happen within weeks after Russian forces have sustained heavy losses and subjected Ukraine’s cities to indiscriminate attacks.

Retired US Army Brig. Gen. Kevin Ryan said he believed this to be the “most likely scenario” to play out, as Putin has already “failed to accomplish” his “main military goals” in Ukraine — a lightning strike to seize Kyiv, Ukraine’s capital, and other big cities and remove their elected leaders — and Russia’s economy continues to be decimated by sweeping Western sanctions over its war with the Eastern European country.

Source: https://www.msn.com/en-us/news/world/putin-will-soon-have-no-choice-but-to-stop-his-invasion-of-ukraine-former-us-general-says/ar-AAVuccT

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Putin’s Paranoia, More Than Nuclear Weapons and Oil, Make Russia Dangerous

Pavel K. Baev — Wed, 04 Aug 2021 15:14:11 +0000

The remarks by United States President Joseph Biden at the Office of the Director of National Intelligence last week (July 27) made a strong but ambivalent impression in Moscow. His warning regarding Russian misinformation and interference in the 2022 mid-term elections in the US was countered with the usual denials (RIA Novosti, July 28). Instead, the most emotional protests came in response to Biden’s assertion that his Russian counterpart, Vladimir Putin, was dangerous because he presides over a weak economy. Russia boasts “nuclear weapons and oil wells and nothing else,” he argued (Izvestia, July 28). This was certainly a deliberate oversimplification: the US president was addressing an expert audience that surely knew better, and so the offense to Moscow was most probably intended. Indeed, Putin’s troubles are far more complicated than overseeing shrinking petro-revenues and an aging nuclear arsenal. And that complexity of challenges to his autocratic regime is key to understanding what actually makes the Kremlin leader dangerous (Ezednevny Zhurnal, July 29).

Russia’s nuclear might is beyond doubt. The nuclear sphere has been prioritized in successive armament programs over the last ten years, with massive funding channeled into the modernization of its key elements. These colossal investments yield scant political dividends at home. But the newly established strategic stability talks with the US have granted Russia the desired status of an equal counterpart and boosted its self-confidence on the international stage (Izvestia, July 28). Russian officials confirm their readiness to discuss even such formerly non-negotiable matters as non-strategic nuclear warheads, and they suggest expanding the format to include France and the United Kingdom—though remaining conspicuously mum about China (Nezavisimaya Gazeta, July 28). New data on the fast buildup of Chinese strategic missiles has come as a surprise for Moscow, proving that political declarations about the ever-tightening partnership with Beijing are mostly rhetorical (Kommersant, July 28). China’s intercontinental nuclear strike capabilities, however, are set to transform the global strategic balance, creating new risks for Russia, whose territory would necessarily be crisscrossed by the planned flight paths of these new Chinese missiles (Novaya Gazeta, July 29).

Meanwhile, in the world of oil and natural gas markets, Russia’s positions are quite vulnerable. Even though the oil and gas industry makes up only 15 percent of Russia’s GDP, according to the Kremlin’s riposte to Biden’s comments (RIA Novosti, July 28), the national dependency on the inflow of energy export revenues is much more profound, making up between roughly a third and a half of the state’s annual budget each year since 2005 (Warsawinstitute.org, August 25, 2020). Yet China is interested in pressing the benchmark oil price down, and Russia is wary of acting against this interest (Izvestia, July 31, 2021). The main target of Moscow’s instrumentalization of gas export for political purposes is Europe. Therefore, the US-German July compromise on the controversial Nord Stream Two pipeline is perceived as a major success (see EDM, July 21). Ukraine has every reason to expect that in the next round of tensions, Moscow will shut down the gas transit through its territory (Gas & Money, July 23). However, such crude pressure might backfire severely in the situation where the European Union places a strong priority on reducing emissions. The proposition on cutting down energy imports from Russia could be converted into a political directive (Carnegie.ru, July 26).

The Russian economy certainly has sources of strength beyond the production of oil, gas and coal: agriculture is benefitting from state subsidies aimed at ensuring self-sufficiency; timber remains a valuable export resource; and the bosses of metal corporations sit at the top of the list of Russian billionaires (Forbes.ru, April 23). The Russian IT sector is also blossoming notwithstanding persistent government efforts to expand control over the virtual economy, justified by an informational security doctrine that treats the cyber domain as part of state sovereignty (see EDM, December 16, 2016 and March 27, 2018; Kommersant, July 30, 2021). Russia also has solid financial reserves estimated at $600 billion, and the state budget remains balanced even in the situation of protracted stagnation (RBC, June 30).

This complexity of Russia’s economic structures and interactions renders “simple” political instructions, like the prescription to minimize the holdings of US dollars in the national currency reserves, unfeasible or counterproductive (Carnegie.ru, July 29). The Russian economy has shown remarkable resilience against Western sanctions, but it cannot—despite whatever orders are issued by the Kremlin—achieve a strong recovery from the contraction caused by the still spreading pandemic (Nezavisimaya Gazeta, July 27). Macro-economic statistics can be carefully doctored, but the continuing contraction of household incomes translates into worsening demographics. It is impossible to hide the plain fact that in 2020, Russia’s population declined by 700,000 people. This year may see an even sharper drop (Rosbalt, July 27).

Putin is eager to simulate firm leadership in economic policymaking while delegating the responsibility for setbacks to lower levels of the monumental bureaucratic pyramid (Ezhednevny Zhurnal, July 20). He advertises a package of technological innovations designed by “technocrats” in the government. Still, he relies far more on traditional bureaucrats, who manage the distribution of funding according to an informal balance of interests (Forbes.ru, July 30). Corruption is the fundamental principle of this management of stagnation, and the occasional punishments of some “excesses” only illuminate the scope of this phenomenon (Novaya Gazeta, July 29). The working assumption in the Kremlin is that the system of bureaucratic corruption has sufficient reserves of stability and capacity for self-reproduction, while public discontent can be effectively suppressed (Republic.ru, July 28). Protest activity in Russia has been all but eliminated by the escalation of repressions; but what this enforcement of autocratic order cannot deliver is a capacity to mobilize society and the economy for a sustained struggle against the much castigated external “enemies.”

Official discourse on the irreducible confrontation between a “besieged” Russia on the one hand and an “aggressive” West on the other serves the interests of the beneficiaries of institutionalized corruption just fine, until the state starts to demand a concentration of all available resources—including their ill-gotten fortunes—for the task of military buildup. Putin is caught between the greed of his “oligarchs” and the ambitions of his siloviki (security services personnel). He may be enjoying every luxury his status as “great leader” provides, but dark visions of inescapable global violent conflict increasingly cloud his judgment. Biden’s reference to a “real shooting war” was intended as a warning about the risks of cyberattacks, but Putin apparently believes that Russia’s interminable war with the US-led West can remain “hybrid” for only so long. It is this conviction, exploited by the top brass and fueled by self-deceiving propaganda, that makes Russia dangerous.

Source: https://jamestown.org/program/putins-paranoia-more-than-nuclear-weapons-and-oil-make-russia-dangerous/

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Kremlin’s Efforts To Blame Economic Problems Exclusively On Pandemic Drawing Fire – OpEd

Paul Goble — Thu, 10 Jun 2021 17:20:01 +0000

The Kremlin and its allies have argued for more than a year that the economic problems Russia is facing are almost exclusively the result of the pandemic. But now, ever more experts are suggesting that the pandemic isn’t the only or even primary cause and that decisions by the Putin regime are instead responsible.

This reversal of fortune comes in response to record inflation in May, a development that some Russians fear may lead to a revival of the kind they suffered from during the wild 1990s (finanz.ru/novosti/lichnyye-finansy/rosstat-zafiksiroval-novy-rekord-inflyacii-v-rossii-1030500786 and profile.ru/economy/postvirusnyj-sindrom-vysokih-cen-vernetsya-li-v-rossiju-inflyaciya-90-h-874980/).

A panel discussion by Russian experts at the St. Petersburg International Economic Forum said the current upsurge in inflation as well as other economic problems in Russia should not be blamed on the pandemic to the exclusion of other causes. And one of the main ones of these is “distrust in the authorities” (nakanune.ru/articles/117055/).

Kseniya Yudayeva of the Russian Central Bank suggested that Russia had adapted to the covid restrictions and that a combination of high demand and breakdowns in the supply chains are today “the two main factors” behind the upsurge in inflation in Russia’s consumer sector. The explosive demand was to be expected, Oleg Vyugin of the Moscow Bourse adds.

Vladimir Mau, the rector of the Russian Academy of Economics and State Service, argues that a much bigger problem now in Russia than inflation is stagflation, in which prices are rising while the economy fails to grow, a problem that the world encountered once before in the 1970s.

Ruben Yenikolopov, the rector of the Russian School of Economics, points out that the pandemic hasn’t been accompanied by inflation everywhere. It is high in places like Russia where trust in the authorities and the independence of the central banks is quite low. If Russians trusted their rulers, they would behave differently and inflation would be less.

In the decade before the pandemic, people had gotten used to low levels of inflation which were in many cases the product of the expansion of globalization, Yudayeva says. Not, as countries have pulled back into themselves, that limiting factor has been reduced or even disappeared and so inflation is again a problem.

What this means, of course, is that deglobalization which the Russian authorities have welcomed is playing on the country an evil joke. Yes, Russia is more isolated from the rest of the world in ways that the Kremlin wants; but the price of that is rising prices at home, something it doesn’t want lest these have political consequences.

Russia’s other problems, including its reliance on too few sectors and radical inequality of incomes and wealth, also play a role, the experts say. But these too are the results of government policy rather than some hidden hand of market forces or the impact of the coronavirus.

Paul Goble

Paul Goble is a longtime specialist on ethnic and religious questions in Eurasia. Most recently, he was director of research and publications at the Azerbaijan Diplomatic Academy. Earlier, he served as vice dean for the social sciences and humanities at Audentes University in Tallinn and a senior research associate at the EuroCollege of the University of Tartu in Estonia. He has served in various capacities in the U.S. State Department, the Central Intelligence Agency and the International Broadcasting Bureau as well as at the Voice of America and Radio Free Europe/Radio Liberty and at the Carnegie Endowment for International Peace. Mr. Goble maintains the Window on Eurasia blog and can be contacted directly at paul.goble@gmail.com .

Source: https://www.eurasiareview.com/10062021-kremlins-efforts-to-blame-economic-problems-exclusively-on-pandemic-drawing-fire-oped/

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Russia’s Size And Economic Model Mean It Will Collapse In A Generation Unless Depopulation Slows – OpEd

Paul Goble — Fri, 04 Jun 2021 09:16:52 +0000

Russia is the largest country in the world, has few people in many of its regions, and has adopted an extensive approach to economic development, Oleg Apolikhin says. As a result, if it is unable to slow or stop the current trend toward depopulation, it will face collapse in 20 to 30 years.

The chief specialist on reproductive health at the Russian health ministry says that that makes demographic change not only a problem for the society but also a very powerful challenge to the national security of the country (profile.ru/society/health/oleg-apolihin-esli-my-ne-ostanovim-depopulyaciju-strany-cherez-20-30-let-nas-zhdet-kollaps-871866/).

The population is declining because deaths exceed births and older people for the first time ever in Russia form roughly the same share of the population as younger ones. Because the older ones don’t work and because the Russian economy depends on new inputs rather than greater efficiency, that puts a burden on the young and depresses the economy.

And young people are ever less inclined to have children because they are increasingly shaped by consumer psychology which leads them to ask what benefits them directly rather than indirectly via helping the country as a whole, Apolikhin says. Russian men are exercising an even more depressive effect in this area than women.

In recent decades, the gap between sexual debut and marriage has widened and is now almost ten years. For that decade, young Russians have sex but without any intention or desire to have children. The attitudes formed during that period also extend into married life and people put off or even decide not to have children ever.

Russians are beginning to become sexually active ever earlier, and they are marrying later. Consequently, even pairs who want children are having them much later. In the 1995-1999 period, the average age of mothers at the time of the appearance of a first child was 20.9 years. In 2015-2017, it had risen by more than five years to 26.1.

Among other things, that means there are fewer years left for people to have more children; and the likelihood that women or men will suffer from problems affecting their fertility only increases. Women over 35, for example, are not only less fertile overall but likely to suffer from more diseases that make pregnancy problematic.

Paul Goble

Source: https://www.eurasiareview.com/04062021-russias-size-and-economic-model-mean-it-will-collapse-in-a-generation-unless-depopulation-slows-oped/

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Not just Navalny: economic pain also behind Russian protests

Katya Golubkova, Polina Nikolskaya — Thu, 04 Feb 2021 14:18:50 +0000

MOSCOW (Reuters) – The trigger for some of the biggest protests to sweep Russia in years was the arrest of opposition politician and Kremlin critic Alexei Navalny, who was detained on his return to the country last month after surviving poisoning by a nerve agent.

The anger runs deeper, however, and some protesters, young and old, say they have also taken to the streets to vent their frustration over declining living standards and the perceived gap between a small, wealthy elite and ordinary people.

Real incomes fell 3.5% last year, unemployment is at its highest since 2011 and the economy in 2020, hit hard by the pandemic, is estimated to have suffered its sharpest contraction in 11 years.

Disenchantment over inequality was targeted by Navalny in a YouTube video, released shortly after his detention and viewed more than 106 million times, which showcased a 100 billion-rouble ($1.31 billion) palace complex in southern Russia.

Navalny alleged its ultimate owner was President Vladimir Putin, an allegation the Kremlin denies. Since then Putin’s former judo sparring partner has said he owned it.

Alexandra, who protested in Moscow on Jan. 23, said she was shocked by the video, especially at a time when medics were battling the coronavirus pandemic.

“I can imagine what kind of bonus doctors get: about 17,000 roubles ($223),” said the 24-year-old student, who declined to give her surname for fear of repercussions with the authorities.

“And it (the video) really got to me, it was the last straw, and I decided to protest.”

Tens of thousands of people took to the streets of major cities across the country on Jan. 23, and just over a week later, although numbers were smaller. Officials say protest leaders’ estimates of the crowds were exaggerated.

Police arrested thousands of people on both days, and over the weekend in central Moscow, hundreds of riot police were deployed to quell dissent.

‘HERE FOR MY GRANNY’

While many protesters rallied under the banner of Navalny, who they say has been persecuted by authorities because of his opposition to Putin, it was not the only reason for risking arrest. The Kremlin denies treating Navalny unfairly.

Sonya, a young protester in Moscow on Jan. 31, said she supported the opposition firebrand but was also motivated by an economic squeeze.

“(Our) country is in complete chaos … look at how pensioners live,” she told Reuters, as she wielded a golden toilet brush, a symbol of protest inspired by the alleged presence of such brushes in the property that Navalny showcased.

“I am here for my family, for my granny. I will live in this country for many years to come, but I want my relatives to live better than now.”

The rouble is falling on fears of new Western sanctions over the Navalny case. That threatens to push up inflation, which hit 4.9% last year, further above the central bank’s target of 4%.

Putin himself has expressed concern about rising food prices, a phenomenon that prompted the government to introduce export taxes on some foodstuffs to keep them in the country and cool prices.

Re-elected for a fourth time in 2018, Putin pledged that real disposable incomes would steadily rise and that the poverty rate would drop to 6.5% by 2024.

Those two goals have now been postponed by six years to 2030, with officials citing the pandemic as the reason.

The number of people in Russia living below the poverty line hit 18.8 million, or 12.8% of Russia’s total, in the third quarter of last year, official data show. The number of people in that category rose by 700,000 compared to 2019.

($1 = 76.0552 roubles)

Reporting by Katya Golubkova and Polina Nikolskaya; Additional reporting by Polina Ivanova, Gabrielle Tetrault-Farber, Tom Balmforth, Maria Tsvetkova, Anton Zverev and Andrey Ostroukh; Editing by Andrew Osborn and Mike Collett-White

Our Standards: The Thomson Reuters Trust Principles.

Source: https://www.reuters.com/article/us-russia-politics-economy/not-just-navalny-economic-pain-also-behind-russian-protests-idUSKBN2A13GY?rpc=401&

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Russian billionaire warns of economic collapse caused by Russia’s isolation

Michael Armstrong — Sat, 16 Jan 2021 23:48:14 +0000

Russia is critically dependent on exports and imports, and economic isolation will be a “disaster”, said the chairman of the board of directors of the Russian conglomerate Severstal, the 4th richest man of Russia, Alexei Mordashov during Gaidar Forum.

“We are a country that is very dependent on exports and imports. If it stops tomorrow, the national economy will shrink twofold. We will simply physically stop, just because almost half of the budget depends on oil and gas export revenues,” Mordashov said when asked by the session moderator whether Russia needed foreign economic activity.

According to Mordashov, whose fortune, according to Forbes, is worth $16.8 billion dollars, at least 50% of Russian GDP is in one way or another related to foreign trade.

“Such industries as energy, oil and gas, metallurgy, and in many respects machine building, will simply stop if we no longer have the opportunity to export,” he warned.

The same goes for imports: Russian consumers are used to foreign goods, and no longer imagine life without Coca Cola or foreign cars. “That’s why all the talk about the economic self-sufficiency, about the isolation of the country – they are very artificial, it is next to impossible. Any economic self-sufficiency will turn into a complete economic disaster for us,” Mordashov warned.

In 2019, Russia gained $419.8 billion in exports. Three commodities – oil, petroleum products, and gas (including liquefied gas) accounted for 67% of this amount.

60% of foreign currency earnings, almost $254 billion, were used to pay for imports. Most of the imports consisted of foreign “machinery and equipment.”

In the first nine months of 2020, Russia’s export revenues fell by 24%, to $234.9 billion. Imports shrank by 7% to $170 billion.

Mordashov, Russia

Source: http://uawire.org/russian-billionaire-warns-of-economic-collapse-caused-by-russia-s-economic-isolation

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NATO: Russia has significantly increased number of frigates and submarines in Black Sea

Ukrinform — Thu, 30 Jul 2020 12:43:54 +0000

Russia has lately significantly increased the number of its frigates and newest submarines in the Black Sea.

Commodore Jeanette Morang, Commander Surface Forces NATO made this statement on the air of Ukrainian DOM TV channel.

According to her, the Black Sea is of great value for international trade and, therefore, freedom of navigation and access to trade routes and coastal infrastructure remains an urgent need of the Black Sea countries and a necessary condition for their economic well-being. “As you probably know, about 80% of all trade operations are carried out by sea, and our goal is to ensure that every nation has a right to free access to the sea,” Morang added.

At the same time, she noted, the Black Sea has its own peculiarities. “First of all, it should be mentioned that the passage of vessels is regulated by the Montreux Convention. Pursuant to the Convention, the countries lacking access to the Black Sea cannot remain in it for more than 21 consecutive days. Another feature is Russia’s desire to change existing borders and rapidly build up its military presence in the region. The Russian Federation has lately significantly increased the number of its frigates and newest submarines in the Black Sea. This activity came as no surprise to the Alliance. We are convinced that it is important to strengthen our presence in the region as well,” Commander Surface Forces NATO said.

She added that the Alliance stood for stability in the region and the economic well-being of the countries bordering the Black Sea. NATO is convinced that all countries of the Black Sea region share these views, Morang stressed.

Source: https://www.ukrinform.net/rubric-defense/3072941-nato-russia-has-significantly-increased-number-of-frigates-and-submarines-in-black-sea.html

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What the Protests in Russia Mean for President Putin

Ian Bremmer — Thu, 01 Aug 2019 09:05:58 +0000

Over last weekend, the decision by Russian electoral authorities to bar independent and opposition candidates from running in Moscow City Council elections prompted protests that turned violent as Moscow police cracked down hard on those that turned out, leading to the arrests of nearly 1,400.

Meanwhile, the opposition figure and anti-corruption activist Alexei Navalny—who had urged people to turn up at the protests and had been jailed for 30 days in the run-up to them as a result—mysteriously developed an “allergic” reaction while in police custody. He has since been treated at a hospital and returned to his jail cell.

Why It Matters:

Protests are not new to Moscow. But the intensity with which these protests were met by Moscow police caught many political observers off guard. Why? A couple of reasons. The first is that the stakes were low, as Moscow City Council elections have little impact on national, let alone international, politics. And yet the police responded as if these protests directly threatened the Russian state—this was the most arrests at a Russian protest in more than a decade. Secondly, the Kremlin had seemed more responsive in recent months to public outcry—see the decisions to release an investigative journalist who was arrested on suspicious charges, or to pause plans to build a church on park grounds in Yekaterinburg. The Kremlin under Putin is not known for backing down, so the recent moves seemed to be an acknowledgment that a struggling economy, falling salaries, an unpopular pension reform plan, higher taxes, continued corruption and declining living standards hit Russians hard; some have gone so far as to hope a degree of political liberalization was forthcoming. The response to the protests this weekend—as well as that mysterious “allergy” that opposition-leader Navalny developed while in custody—put an end to any such optimism.

What Happens Next:

The intensity with which the protesters were put down is a troubling sign that rather than allowing some space for liberalizations, the Kremlin has decided to go full-bore on repression, signaling its approach ahead of the 2021 national elections. In the more immediate term, Moscow is looking at a City Council packed with Kremlin loyalists—they’re in too deep to do anything else at this point.

More interesting is what happens between now and those Duma elections in 2021, especially as a Russian economy propped up by energy exports faces serious headwinds. Putin and his United Russia party will win those elections—it’s possible that the Kremlin will introduce electoral changes to make sure its preferred candidates win. But it’s getting harder for them to use the same tools to stay in power that they used to. Moscow understands the daily lives of citizens are becoming harder, which makes increased social spending to satisfy the public more likely, but that just causes bigger economic problems down the line.

The Key Statistic That Explains It:

Putin’s party, United Russia, is polling at 33 percent—still ahead of its political rivals, but far below the 54%, it won in 2016 elections. Why is that so important? Because…

The One Major Misconception About It:

That the fall of Putin’s popularity is driving the harsh crackdown. Putin’s popularity, while having tumbled some from its summer 2015 high of 89 percent, is still relatively strong at 68 percent, according to the independent Levada Center. More concerning to the Kremlin are those plummeting United Russia numbers. Given the party’s current standing, some party members opted to run as independents in City Council elections. The party’s lackluster polling is a particular problem for the Kremlin as Putin needs a successful United Russia to control both the parliament and the regional governments.

The One Thing to Say About It at a Dinner Party:

In a world without a properly functioning geopolitical order, rogue states and non-state actors have the fewest constraints on their domestic behavior; Putin has been taking advantage of that for years. But he also loved being able to free outspoken critics like Mikhail Khodorkovsky and letting Navalny walk the streets; it was a sign of his power, the generosity, and goodness of spirit of the all-powerful Putin. But when his popularity starts sinking, the economy starts stalling, and demonstrations start appearing, even Putin starts to feel the heat. And while still powerful, it turns out Putin has a thinner skin than he typically presents to the world. If it’s proven that Navalny was poisoned—which, to be fair, is pretty much impossible to prove—it means there’s more instability at home that people had presumed.

The One Thing to Avoid Saying About It:

The only thing worse than being in a democracy with just one party? Being in a one-party democracy when that one party starts collapsing.

Contact us at editors@time.com.

Source: https://time.com/5639451/what-the-protests-in-russia-mean-for-president-putin/

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Putin on brink: Russian President under threat as he faces new unexpected domestic dilemma

Bill McLoughlin — Wed, 10 Jul 2019 10:56:56 +0000

RUSSIA’s Vladimir Putin is under severe threat as some have criticized the President for the running of the Russian economy and there is one specific problem he is now facing.

Russia news: Putin under severe domestic pressure (Image: GETTY)

The Government has been accused of trying to cover up the rising rate of inflation. The current official figures put the rate of inflation at 4.7 percent but in a report published by Rosstat, the state statistical agency has disputed that figure. Rosstat specifically referenced food such as cabbage – a staple of the Russian diet – has increased seven times faster in the last year.

Moreover, the report also stated that everyday goods such as eggs have risen by six times the official rate of inflation.

Moskovsky Komsomolets, a newspaper that is usually supportive of the Government also savaged the officials for supposedly lying about the rue rate of inflation in the country.

The tabloid said: “They are pulling the wool over our eyes.

“It’s as if these products came from another planet!

Russia news: The Government has been accused of undercutting the true inflation figures (Image: GETTY)

“Why do we need a method of calculating inflation that no one, not even the authorities, believes?

“There’s no point in indulging in illusions.”

Adding more speculation that inflation rates have been altered, Russians had also found that certain supermarkets had also begun to reduce the number of eggs sold but still charge the same price.

Last month in Putin’s annual conference with the public, the President promised to stop the rising poverty in the country whereby 20 million people live below the poverty line.

Russia news: Russian polls have also shown Putin to be at his lowest approval rating (Image: GETTY)

According to officials at the Russian Presidential Academy of National Economy and Administration, the 20 million does not reflect the true figures.

Experts have instead stated that in fact, a quarter of the population of Russia’s estimated 144.5 million actually lives below the line.

Following the economic difficulties within the country, Putin has suffered his worst approval rating since he took office in 2000.

In a poll produced by state pollster, Vtsiom, Putin has fallen to 30 percent.

That rating is down from 33.4 percent in 2015 according to the data shown in January.

Source: https://www.express.co.uk/news/world/1151400/Russia-news-Vladimir-Putin-latest-update-economy-Russian-President-Moscow-Europe

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