Saving Vlad
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talkpolitics20 years ago, a small group of Russian business-people prevented their country from sliding back to communism. The physically and politically weak president Boris Yeltsin almost lost the election to Gennady Zyuganov back then. He was leading by a tiny 3% margin after the 1st round of the election, but then the huge financial and organizational resources that the oligarchs unleashed in his favor, provided the edge on the 2nd round: a 13% landslide.
Now the situation might seem different, but the oligarchs' help could again turn out crucial for Putin's legacy. Russia is in a dangerous situation: the real income has dropped by a staggering 10% in a single year, and the Ruble has lost 37% of its value. The GDP has slid by 3.7%, and the household income and the investments have plunged as well. Overall, 2016 has been a disastrous year for the Russian economy.
One might get a different impression if we're to look at Putin's constant manly boasting, geopolitical muscle-flexing, and the military operations in Ukraine and Syria. But none of this could conceal the fact that the former superpower is in deep decline at this point.
The plunging oil prices have hurt a lot of economies for the last year, granted, but few have felt so much pain as Russia has. It's because of Russia's dependency on the energy sector, the income from oil and gas providing half of the country's budget. The effect of the dropping oil prices was additionally amplified by the shrinking gas production and prices. Europe is Russia's key market for these resources, and the demand for gas has dropped there by 20% for the last decade. This, combined with chronic overproduction, has led to a 65% decline of the gas prices.
Furthermore, the sanctions about Crimea have compelled Russia to review its policy, because they inevitably have a negative effect on the economy - and this effect continues to grow over time. Foreign companies that have long stayed in Russia, are now laying low, hoping that the circumstances would somehow improve. And they're reluctant to bring new investments into the country. The best indicator for the situation is the way Russia's wealthy tend to vote with their feet: leaving the country in throngs.
Putin, who has managed to retain his grip on power for the most of the last 17 years, mostly thanks to the high oil and gas prices, and with the support of the oligarchs, may've realized now that the only pillar he has left to lean on is dangerous nationalistic rhetoric that's designed for domestic consumption but can't provide much in terms of essence, let alone workable solutions to the country's many problems.
The bloody (and unnecessary, might I add) conflict in Syria offers no practical gains for Russia. The Russian interests, including the keeping of their naval base at the Mediterranean coast, could'e been defended with a peace agreement. But in fact Putin needs a continuation of this confrontation, which would allow him to excuse his power grab back home.
But why would the oligarchs want to take huge risks by attempting to initiate a change of the guard in Kremlin? Well, just like in 1996, their primary motivation is egoistical. Many of them have lost a lot of money because of the economic crisis. Although lots of them have managed to move their families and much of their capital to London and Paris, they often have significant physical and economic assets left back in Russia. Now these assets are suffering from the declining trust in the Russian economy, and these business-people remain vulnerable to possible expropriations in case the government starts to feel too desperate and needs urgent funding. Some are even concerned that Moscow's long arm could look for ways to force some of their assets back into Russia.
Then, there's the reputation problem. Right now, "Russian" is not the label that grants you lots of trust and a warm welcome around the world. Many doors have been shut to Russian investment. During the second presidential debate in the US, Hillary Clinton said that new ways should be found to force Russia to change its behavior. For instance, the right of Russian citizens to enter the US could be affected. As the US gangsters learned in the 19th century, once you've accumulated some wealth, you already have personal interest in fortifying the rule of law that would protect your assets, otherwise you become a victim of the same disease that propelled you to wealth in the first place.
More than a decade ago, Putin's oligarchs, after a series of internal conflicts that saw a number of businessmen being sent behind bars or driven out of the country, finally reached a settlement: Putin agreed to make Russia safe for their money, and allow them to do fine business both in and outside of the country - in exchange for their support. And now this balance has been disturbed, and the president has violated these arrangements.
So what would a change of the guard really mean? Firstly, a change of priorities. The economy takes the front position, and the military adventures and nation-building (or rather, nation-chopping), and the geopolitical race with America and Europe would take the back-seat. We all remember how Reagan basically brought the Soviets down to their knees in an economic race they couldn't possibly win - which is the main reason the USSR collapsed. So, giving priority to the economy over politics would be task number one. Then, new agreements would have to be reached to regulate the conflicts in Ukraine and Syria, so that the sanctions could be lifted. And the possible restoration of the relations with Europe would again be on the agenda.
But let's not fool ourselves: changing Russia from within would not be that easy. Most likely, the first step will be to select a pragmatic technocrat as Putin's successor. The state security machine will probably remain intact. In exchange, new stimuli for domestic investment will be introduced. This would help stabilize the Rouble, and establish a more economically predictable political regime. This would likely be coupled with the inevitable new privatization wave. No doubt the oligarchs will be the main players there - they will bring some of the funds back home from all over the world.
Of course, Russia won't change into an open liberal democratic economy overnight. It'll just quietly start scrapping its old illusions that it could become the superpower it once was - and that realization will make the world a tad safer than it is now. Given the scope and size of the Russian problems, and the current risk of escalation, a flawed change of the guard increasingly seems like the far better option than keeping the status quo that would only keep making things worse. And the point is, the powers-that-be in Russia have now started giving signs that they've begun to realize this.
...Although, given the rumors about Putin's likeliest successor, things might spiral even further down the abyss instead. Question is, will the oligarchs allow this to happen.
Now the situation might seem different, but the oligarchs' help could again turn out crucial for Putin's legacy. Russia is in a dangerous situation: the real income has dropped by a staggering 10% in a single year, and the Ruble has lost 37% of its value. The GDP has slid by 3.7%, and the household income and the investments have plunged as well. Overall, 2016 has been a disastrous year for the Russian economy.
One might get a different impression if we're to look at Putin's constant manly boasting, geopolitical muscle-flexing, and the military operations in Ukraine and Syria. But none of this could conceal the fact that the former superpower is in deep decline at this point.
The plunging oil prices have hurt a lot of economies for the last year, granted, but few have felt so much pain as Russia has. It's because of Russia's dependency on the energy sector, the income from oil and gas providing half of the country's budget. The effect of the dropping oil prices was additionally amplified by the shrinking gas production and prices. Europe is Russia's key market for these resources, and the demand for gas has dropped there by 20% for the last decade. This, combined with chronic overproduction, has led to a 65% decline of the gas prices.
Furthermore, the sanctions about Crimea have compelled Russia to review its policy, because they inevitably have a negative effect on the economy - and this effect continues to grow over time. Foreign companies that have long stayed in Russia, are now laying low, hoping that the circumstances would somehow improve. And they're reluctant to bring new investments into the country. The best indicator for the situation is the way Russia's wealthy tend to vote with their feet: leaving the country in throngs.
Putin, who has managed to retain his grip on power for the most of the last 17 years, mostly thanks to the high oil and gas prices, and with the support of the oligarchs, may've realized now that the only pillar he has left to lean on is dangerous nationalistic rhetoric that's designed for domestic consumption but can't provide much in terms of essence, let alone workable solutions to the country's many problems.
The bloody (and unnecessary, might I add) conflict in Syria offers no practical gains for Russia. The Russian interests, including the keeping of their naval base at the Mediterranean coast, could'e been defended with a peace agreement. But in fact Putin needs a continuation of this confrontation, which would allow him to excuse his power grab back home.
But why would the oligarchs want to take huge risks by attempting to initiate a change of the guard in Kremlin? Well, just like in 1996, their primary motivation is egoistical. Many of them have lost a lot of money because of the economic crisis. Although lots of them have managed to move their families and much of their capital to London and Paris, they often have significant physical and economic assets left back in Russia. Now these assets are suffering from the declining trust in the Russian economy, and these business-people remain vulnerable to possible expropriations in case the government starts to feel too desperate and needs urgent funding. Some are even concerned that Moscow's long arm could look for ways to force some of their assets back into Russia.
Then, there's the reputation problem. Right now, "Russian" is not the label that grants you lots of trust and a warm welcome around the world. Many doors have been shut to Russian investment. During the second presidential debate in the US, Hillary Clinton said that new ways should be found to force Russia to change its behavior. For instance, the right of Russian citizens to enter the US could be affected. As the US gangsters learned in the 19th century, once you've accumulated some wealth, you already have personal interest in fortifying the rule of law that would protect your assets, otherwise you become a victim of the same disease that propelled you to wealth in the first place.
More than a decade ago, Putin's oligarchs, after a series of internal conflicts that saw a number of businessmen being sent behind bars or driven out of the country, finally reached a settlement: Putin agreed to make Russia safe for their money, and allow them to do fine business both in and outside of the country - in exchange for their support. And now this balance has been disturbed, and the president has violated these arrangements.
So what would a change of the guard really mean? Firstly, a change of priorities. The economy takes the front position, and the military adventures and nation-building (or rather, nation-chopping), and the geopolitical race with America and Europe would take the back-seat. We all remember how Reagan basically brought the Soviets down to their knees in an economic race they couldn't possibly win - which is the main reason the USSR collapsed. So, giving priority to the economy over politics would be task number one. Then, new agreements would have to be reached to regulate the conflicts in Ukraine and Syria, so that the sanctions could be lifted. And the possible restoration of the relations with Europe would again be on the agenda.
But let's not fool ourselves: changing Russia from within would not be that easy. Most likely, the first step will be to select a pragmatic technocrat as Putin's successor. The state security machine will probably remain intact. In exchange, new stimuli for domestic investment will be introduced. This would help stabilize the Rouble, and establish a more economically predictable political regime. This would likely be coupled with the inevitable new privatization wave. No doubt the oligarchs will be the main players there - they will bring some of the funds back home from all over the world.
Of course, Russia won't change into an open liberal democratic economy overnight. It'll just quietly start scrapping its old illusions that it could become the superpower it once was - and that realization will make the world a tad safer than it is now. Given the scope and size of the Russian problems, and the current risk of escalation, a flawed change of the guard increasingly seems like the far better option than keeping the status quo that would only keep making things worse. And the point is, the powers-that-be in Russia have now started giving signs that they've begun to realize this.
...Although, given the rumors about Putin's likeliest successor, things might spiral even further down the abyss instead. Question is, will the oligarchs allow this to happen.
(no subject)
Date: 24/10/16 11:39 (UTC)(no subject)
Date: 24/10/16 19:38 (UTC)(no subject)
Date: 25/10/16 03:36 (UTC)(no subject)
Date: 25/10/16 06:01 (UTC)(no subject)
Date: 25/10/16 15:36 (UTC)(frozen) (no subject)
Date: 24/10/16 22:37 (UTC)You're standing in a line of (usa paid?) guys crying "West will give a lot of money to those who will betray Putin".
Shame.
(frozen) (no subject)
Date: 25/10/16 03:31 (UTC)You WILL refrain from personally attacking people this way, though. Do not paint yourself into a cartoonish Russian-troll caricature, will you? Something tells me you know better than that. If not, well...
(no subject)
Date: 25/10/16 06:00 (UTC)(no subject)
Date: 25/10/16 17:21 (UTC)(no subject)
Date: 25/10/16 06:06 (UTC)(no subject)
Date: 25/10/16 12:41 (UTC)It may even be too late for that. War tends to be popular initially, due to the various madness of the ape for national identity. When it drags on it becomes unpopular and I suspect there is at least some of that in Russia now.
However, I don't know whether Zyuganov can gain power. I suspect his time has past. The question is who is going to be the opposition and replacement to Putin.
(no subject)
Date: 25/10/16 15:39 (UTC)Well, that's a good idea. Can we, first, replace USA bases in Europe and Japan with peace agreement?
(no subject)
Date: 25/10/16 17:21 (UTC)Are you still following?