Thursday, October 9, 2014

Window on Eurasia: Putin isn’t Paying Attention to Russia’s Economic Crisis and Thus isn’t Ready for a Political One, Stanovaya Says

Paul Goble


            Staunton, October 9 – Vladimir Putin’s decision to cancel his required budgetary message to the Russian parliament, at a time of falling oil prices, rising capital flight, and increasing threats to growth, suggests that he is “really sincerely convinced” that the situation does not require significant change, according to Tatyana Stanovaya.


            On the one hand, that means, she suggests, that more and more of those who are directly hit by these changes are going to begin to think how they should act in order to save themselves if not the national economy. And on the other, it means that the economic crisis now in evidence could thus become a political one (


            And she poses but does not provide an answer to the question: “What then would have to happen for the president finally to take up the economy” as a policy and political challenge?


            In her commentary on, Stanovaya details the ways in which Putin has failed to pay attention to the situation in the economy not only since the beginning of the Ukrainian crisis but with the brief exception of the situation that arose in 2008 throughout his entire presidency when he became briefly but actively involved.


            Since the annexation of Crimea, Putin has seemed disconnected with economic questions, but that doesn’t mean everyone is – and not just the opposition and “fifth column,” Stanovaya says. Instead, “those who ‘make’ economic policy or more precisely could make it are becoming nervous, including Economic Development Minister Aleksey Ulyukayev, Finance Minister Anton Siluanov, and Sberbank head German Gref.


            Stanovaya points out that Putin’s Council for Modernization of the Economy and the Innovative Development of Russia has met a grand total of one time, the Economic Council has met only four times over the last two years, and the informal club of economic advisors hasn’t been summoned to the Kremlin for some time.


And it isn’t as if the government of Dmitry Medvedev has picked up the slack. Putin has little interest in the opinion of the government and in recent months in particular has ignored the proposals that have come from one or another ministry.


“If the economy were agitating Putin,” Stanovaya says, “then he would already have had to take at a minimum five inevitable steps:” change the Medvedev government make an economist or administrator head of the new one, strengthen the economic ministries, “talk about problems and not just achievements,” and meet with economic officials more often.


None of this has happened, and “probably will not happen,” the Moscow commentator says. Indeed, “judging from everything, Putin really is sincerely convinced that the situation in the economy is not tragic and the sources of its problems are external not domestic.” Thus, for him, “there is no need to change anything.”


            That creates real problems, Stanovaya suggests, especially because “Putin is a president who has not had to deal with issues of extreme anti-crisis management at a time of low oil prices and a significant budget deficit.”  And his unwillingness or inability to take measures in this area has the effect of creating the conditions for the economic crisis to grow into a political one.


            But Putin’s apparent disinterest in economic issues has another consequence, although it is one Stanovaya does not mention: Western leaders have decided that the best way to influence Putin is through economic sanctions, but what if, regardless of the impact of those sanctions, the Kremlin leader isn’t focusing his attention on that?




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