Analysis
Economic stagnation spooks Russia’s modern tsar
The social crisis in Russia has led Vladimir Putin to call an interview with Mir television and assuage concerns over the federation’s many problems.
Putin is worried not only about the Syrian crisis and the complicated relations with the West. The still feverish state of the economy and Russia’s social stability have long gotten his and Medvedev’s attention.
The interview he granted to the Mir television channel this week is not a coincidence. Putin focused on the difficult situation the country, stating that “the sanctions have played a relative role … the key factor was the change of circumstances in the world market.”
The Russian economy is heavily dependent on oil prices, and the strong fibrillations of the ruble are known. This year, after two years of recession and a drop in GDP of 5 percent, the economy is expected to grow by 1.5 percent.
However, the recovery is still hampered not only by the weakness in crude oil prices but also by structural problems: The massive corruption in public administration and in the health system, a flight of capital to tax havens that exceeds $50 billion a year, the anemic dynamics of small and medium businesses, and the decline in wage and salary income.
The former Minister of Finance Alexei Kudrin, dismissed in 2011 because of his disagreements with Putin on reforms, has recently declared that “we are at a historically low level of growth, even lower than the stagnation in Soviet times.”It was a tough affirmation, which must have made Medvedev’s government team knock on wood.
The reforms, postponed since the presidency of Medvedev 2008-2012, in order to prevent the fragile balance on which the Putin social bloc stands from breaking, no longer appear in demand. Not even nationalism, as a tool for social cohesion, is working any more.
The events organized by the institutions after the assassination attempt in St. Petersburg were not massively attended, while public opinion is increasingly demanding to block migration of Muslim labor force from Central Asia. At the same time, strikes are being resumed: The aggressive strike of road workers has been going on for weeks, and it is just the tip of the iceberg.
According to the Center for Economic and Social Reforms “in 2016 there were 544 strikes in Russia in comparison to 263 the previous year.” The main claims were wage related.
The first serious alarm bells for the Russian government were the elections for the Duma, where not even the opposition parties were able to intercept the protest directed toward abstention, which reached peaks of 75 percent in Moscow, St. Petersburg and Vladivostok.
This is a smaller version of the same ill-feeling and the same stomach aches that were channeled in Navalny’s pro-Western opposition demonstrations but transcend by far the influence and political weight of the liberal Moscow.
The Kremlin understood the political significance of these events. After wielding the stick with arrests during the demonstrations, it showed the carrot declaring its intention “to listen to the voice of citizens dissatisfied with the growing corruption.”
It is hardly feasible that, in the year prior to the Russian presidential elections, an alternative leadership, capable of challenging the reelection of Putin, will arise.
The fact remains that Putin can no longer count on the extraordinary economic growth in the first decade of the millennium, which was the driving force for his exceptional popularity and the consolidation of power.
If “the Kremlin’s Tsar” knows his history. He knows that Russian emperors, far more powerful than him, fell just 100 years ago.
Originally published at https://ilmanifesto.it/putin-in-difficolta-tra-scioperi-fuga-dei-capitali-e-calo-dei-salari/ on 2017-04-16