Update: Putin’s Useful Idiots
It takes a true chump to swallow the heroic narrative of Putin as the saviour of Russia.
If Putin was the heroic cause of Russia’s recovery since 1998, then there must have been a Putin in each of the eleven other republics, because they all recovered at the same time.
If Putin was not the cause, why did Russia’s economy recover after 1998? Scholars rightly attribute the recovery to the taming of inflation, the creation of minimal institutions of a market economy, and to the currency devaluations that accompanied the Russian economic crisis of 1998. These building blocks of growth were in place before Putin took the reins of power. They were also present in the other former Soviet republics, where the recovery began at the same time.
Second, Putin’s renationalization of Russia’s “national champions” raised the state’s share of the economy to one half. On the eve of Putin, the state owned ten percent of the oil sector. Now, it is between 40 and 45 percent. The Russian state controls half of the banking sector and three quarters of transport. If anything, these shares understate state control. The managers of the still-private large companies realize that they can take no steps that Putin opposes. Although not formally owned by the state, they are still controlled by the state.
Russia’s petro state lives or dies on the basis of energy production and prices. As Russia turned to privatized companies, such as Yukos, TNK, and Sibneft, oil production rose almost 50 percent between 1999 and 2004. After Putin’s renationalizations, both oil and gas production have stagnated to the present day. (See chart from International Energy Statistics.) __Much more at A Second Look at Putin’s Heroic Narrative
It is easy to buy into Russian propaganda, and not so easy to look more deeply into the carefully hidden facts.
The Kremlin’s gamble has gone horribly wrong. The eastern regions of Ukraine have failed to rise in mass support for Putin’s front organisations, led by political operatives from Moscow, and patently run by the Russian security apparatus (FSB/GRU) as even Russian newspapers admit. The latest report by the United Nations accuses these units of “eggregious abuses”, carrying out systematic intimidation through torture and execution.
… The International Energy Agency says Russia needs to invest $100bn a year for two decades just to stop its oil and gas output declining.
Russian companies and state bodies owe $610bn in foreign currencies. They must repay $84bn by the end of the year, and $10bn a month thereafter.
… if Mr Putin’s strategy of a Euro-Asia alliance with China succeeds, it will reduce Russia to a vassal state of China, a supplier of commodities with a development model that dooms it to backwardness. “It is a dangerous illusion. We are witnessing the funeral of Russia,” said Aleksandr Kokh, a former top Kremlin official.
Mr Putin is stuck in a Cold War timewarp, deaf to the shifts in world power. He has been obsessed with an imaginary threat from an ageing, pacifist Europe in slow decline, turning manageable differences into needless conflict.
Yet at the same time he is throwing his country at the feet of a rising power that poses a far greater threat in the end, and that will not hesitate to extract the maximum advantage from Russia’s self-inflicted weakness. __ Putin’s Big Gamble
Unless Putin can find a way to drive oil prices up at least 30% — without destroying the global economy — the future of his grand new empire will be precarious.
Putin has responded to international sanctions on Russia by imposing his own set of sanctions on Russian consumers:
Putin is promising to create new Russian enterprises to replace the embargoed food on Russian supermarket shelves. But all Putin has ever done for the Russian economy is to reduce its diversity, and focus almost all government attention on oil & gas profits — to be skimmed by cronies and quickly whisked away into Swiss bank accounts.
Backwash from Russian sanctions begin to hit Europe Germany may even see a recession before long — but for many reasons, including its disastrous Energiewende fiasco.
The Russian economy is growing increasingly unstable. But as long as Putin controls virtually all media inside Russia, he can saturate the minds of drunken and state-dependent Russians with his “heroic narrative,” certain to fire smoldering nationalist sentiments.
One of the main reasons for having more than 80 percent of the population’s support is his being able to control the public narrative, especially for the older population who rely heavily on Russian state-owned television for news.
While much of the Western world is criticizing Russia’s aggressive actions in Ukraine, Russians who watch TV or read state-owned newspapers believe that Russia’s recent agricultural ban will be a positive for its economy, particularly Russian farmers. __ Brink of Chaos
If the crops rot in the fields for lack of infrastructure, they will never hear about it from Russian state media.
An alternative viewpoint from a Russian economist, highlighting the sense of desperation leaking unintentionally from Moscow.
The exodus of Western capital from Russia following the annexation of Crimea has already made it harder for Russian companies to borrow. Higher interest rates would exacerbate the credit drought and force businesses to fall back on a government that could quickly run down its reserves. Hopes that Russia can dig its way out of economic stagnation would be dashed. __ Moscow Times
This conflict is, at its heart, an economic battle of wills between a neo-imperialist Kremlin, and a western world which would like for Russia to eventually become a civilised nation that refrains from invading and ethnically/culturally cleansing its neighbors.
As long as dupes, chumps, retirees, and drunks continue to believe in Putin’s heroic narrative and neo-imperialist appeal, Russia’s prospects are dreary.
Note: It is often argued that Putin is a better president than is US President Obama. And indeed it is difficult to argue which is the more destructive to his own and other countries. Each cultivates a “cult of personality” which takes in dupes and invites cronies. Fortunately, it is not necessary to dwell on which is the worse of the two evils. The important decision making rests on altogether different criteria.