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In recent weeks, President Vladmir Putin has made two big speeches in December: one annual address to the Federal Assembly on 4 December and one annual press conference on the 18 December. Even between the two, a worsening currency situation deteriorated rapidly. On 15 December alone, Russia’s Central Bank said it had made $1.961 billion worth of foreign exchange market interventions. That day constituted black Monday, where the Rouble lost almost 19% of its value, followed by an even darker Tuesday.
On the 16 December interest rates were lifted from 10.5 to 17 per cent in a bid to stem the currency depreciation. The Russian government has blamed falling oil prices and Western sanctions for the economic problems recently felt, but flawed fiscal policy and Russia’s failure to diversify economically also contribute.
A key question for many at the moment is whether severe economic problems in Russia could threaten Putin’s position as President. The prospect of further economic hardship, and the government’s visible difficulty in tackling it, will bring the government’s effectiveness under question. It is easy for the media to manipulate events of a war Russia denies it has been fighting in neighbouring Ukraine, but it is impossible to mask economic issues that are felt by Russian voters on a daily basis. The fervour of patriotism and high popularity ratings for the President are surely breakable if the Russian people begin to really suffer economically?
A Russian Maidan?
The idea of popular discontent turning into coherent political protest that could truly threaten Putin’s position looks unlikely. According to an October survey by the Levada Centre, an independent polling organisation, 81% of those asked said they were ‘unlikely’ to participate in mass protests if they were to occur, even If it was regarding a drop in their standard of living. .
The failure of opposition leaders to challenge the political status quo through election was highlighted by anti-corruption blogger Aleksey Navalny’s loss in the mayoral elections, albeit disputed, in 2013 Under Putin’s rule broader popular political protest has been relatively unsuccessful in Russia. The crackdown on the Bolotnaya protests beginning in 2011 may be indicative of how popular protest might be dealt with. Some have placed hope on formerly imprisoned, now exiled oligarch Mikhail Khodorkovsky’s chances of returning to become an opposition leader, but it is hard to see how he would currently launch a competitive support base from afar.
Obviously, the urgency of the economic situation has intensified since even the very recent Levada poll, and economics may be a far more powerful catalyst for change than dissatisfaction with the political status quo. There is a layer of society that would certainly like to see regime change from what is perceived to be a system of corruption and economic mismanagement.
However, for the majority, Russia’s new prominence in the international arena and reinvigorated national identify since the start of the Ukraine crisis, and the importance of Putin’s image as a strong leader, means there is a lot riding reputationally on both Russia and Putin’s success. To admit that their strongman is not up to the job of ensuring stability would be a psychological blow to the population itself, much of which has internalised the rhetoric produced by Russia’s media machine. Moreover, a ‘colour revolution’ type scenario in Moscow would be uncomfortable, as it would place them on par with pro-Western Georgia and Ukraine.
Always Someone to Blame
In the face of any opposition, Putin still has others to blame for Russia’s current economic problems. His recent press conference demonstrated how he can differentiate himself personally from economic decision-making within the government. When addressing such issues, he said ‘I believe I made it quite clear that the Central bank and the Government are generally taking appropriate measures in this situation. I believe some things could have been done sooner, and this is actually what the expert community are criticising them for…of course, I see the criticism levelled at the Central Bank and its Governor. Some of it is justified, some is not.’. This deflection of blame onto others whilst simultaneously removing himself to a position apart from “the government” means that there are still internal elements to blame before the President.
A consistently effective and much-used blame tactic goes to outside factors. In his 4 December speech, Putin maintained the semi-conspiratorial line that the economic problems are due to ‘speculators’ who are ‘playing on fluctuations of the Russian currency’. Other top officials are happy to echo this. Aleksandr Bastrykin, the head of the Investigative Committee, recently ordered more criminal cases to be brought for currency speculation. America is also, of course, to blame. Deputy Minister of Foreign Affairs Sergei Ryabkov said ‘there is no doubt that Washington has purposefully and intentionally had a hand in the creation of complications for the Russian economy.’ . In his Federal Assembly speech Putin also said that, even if Ukraine had not happened, the West would have found a reason to ‘contain’ Russia anyway.
The System Itself
This does not necessarily mean that the general population links economic deterioration with weakness in Putin. There are plenty of other people to look to for scapegoats first both within the government and outside. Although a deterioration of the economic situation will certainly lead to discontent amongst the population, it remains to be seen how that will manifest itself on the whole. There are, of course, sections of the Russian population that desire economic reform to ensure stability, but their power to enforce that change is weak.
The Rosneft deal on 12 December demonstrates how the system is mobilised to protect certain interests and close associates of Putin over others. To achieve fiscal and economic reform in Russia, it will need an overhaul of the current political system. Given what’s at stake for those within the upper echelons of the Russian political elite, such change seems unlikely.