April 30, 2012
By Habibe Ozdal
Putin, who in the March 4 elections was elected with the support of 64% of the electorate, is getting ready to establish himself in the post of president again. International actors are working on the road map of Putin’s Russia for the six years ahead of us. Because for many circles and in particular for Western countries, Russia’s domestic and foreign policy preferences constitute significance. Many books, reports and analyses were published anticipating the conditions Russia will be facing when 2020 arrives. Up-to-date studies were published in addition to the studies mentioned above after the presidential elections that took place in March. If we are to have a look at the recent studies, while experts who evaluate the coming six years emphasize the demands for democracy by the dissident sectors of Russian society, they make the observation that the process of “the beginning of the end” has begun for Putin. Indeed, there is no sufficiently strong data to put support behind the conclusion of this analysis, of which the point of origin relies on important data. Because the changing contexture of society and changing habits of consumption prioritize economic stability, which is still fragile.
The policies which introduced the term “Putin’s Russia” to the relevant literature have a common point. Putin is by far ahead of his predecessors in assessments, usually made retrospectively of the preceding term. In view of the economic breakdown and political instability experienced during the Yeltsin era, Putin is identified with the word “stability” in both the international arena and Russia.
During Putin’s first term, the Russian economy recovered with the impact of increasing energy prices and secessionist movements in Chechnya having been suppressed through the utilization of disproportionate force. In the mid-2000s, Russia’s middle classes consolidated their power again, in an opposite fashion in comparison to the developments during Yeltsin’s term. The efficiency and activity of Russia in the international arena remarkably increased as it grew stronger economically. In this manner, Moscow, which was not paid any regard at all in the international arena during the 1990s, has become an actor to be reckoned with since the middle of 2000s.
This short journey by Russia in the 2000s is meaningful for the Russian people in that illustrates from where Putin brought Russia to its current shape. Nevertheless, Russia’s current conditions as well as the needs of the country and demands of the people differ from those of the early 2000s. People’s mobility has increased in Russia where 60 million internet users reside. According to The Economist, more than 9 million Russian tourists traveled abroad in 2009. Experts who predict the scenario of “the beginning of the end” for Putin depart from this point.
The social reflection of Russia’s economic growth transpired as the middle classes that melted down in the early 1990s reemerged again. This aforesaid social class, which according to The Economist constituted 25% of the population and 40% of the workforce by the late 2000s, has some economic and social demands. In particular, the inability since the beginning of the 2000s to make progress regarding the struggle against corruption and bribes, which became an organic component of the country’s economy, and the fact that some bureaucrats take part in corruption, has drawn public reactions. Moreover, the middle classes are raising their voice against the income disparities in the country no matter the increase in household income. The discomfort of the social sectors which have been pouring into the streets with the slogan “Russia without Putin” since the elections for the Duma—the lower chamber of the parliament—took place in December 2011 relies upon these points. But there is no other leader in which these social sectors can have faith. With this in mind, it should be visible that there is no alternative for Putin in Russian politics. 65% of the Russian public is constituted by on one side a faction of society that said “Putin” so as not to lose what it had gained as a result of his policies which they find successful, and on the other side another faction that voted for Putin since no other alternatives existed.
While the most fundamental reason behind the support given to Putin was economic development and political stability, economics comes ahead of all variables that will constitute the utmost importance from Putin’s perspective in the near future.
Among other challenges, the energy-dependent structure of the country’s economy is the most important for Putin’s Russia. During the period between 2000 and 2008, when energy prices peaked as a result of rising demand, an atmosphere of optimism was dominant over the Russian economy. Throughout the period mentioned above, the GDP of Russia recorded a 6.9% growth average annually, and a rather significant recovery of living standards took place among Russian people. During Putin’s term, GDP per capita grew more than five-fold and investments increased more than 125 percent.
Despite all these achievements, with a careful analysis it is not difficult to notice the structural deformity in Russian economics. The global economic crisis that erupted in 2008 and affected Russia to a significant extent laid bare the fragility of the Russian economy once again. In this aspect, the Russian economy resembles a matryoshka doll whose weakness lies in its strength. The rise in energy prices transforms Russia into a more energy-dependent country; and the increase in energy-dependence paves the way for deeper structural imbalances in the long run although it initially gives birth to positive consequences in the short run. Russia generating a budgetary surplus as well as a positive balance of payments depends to a large extent on the rise in oil prices, a diminishing trend in demand for hydrocarbons which constitute the main export branch of the economy and a decrease in energy prices in general constitute inherent dynamics beneath vibrations in the Russian economy.
The reliance of the Russian economy upon raw material exports constitutes the Achilles’ heel of the rhetoric of “Russia as a Great Power.” Therefore it seems that there is no other alternative than to diversify the economy for the Russian political elite. Ever since the beginning of the 2000s, emphasis was often made at a level of discourse on the necessity of the Russian economy to free itself from the model based on exports of raw materials. However, it is hard to say that substantive steps were taken in shifting from rhetoric to action.
In conclusion, Putin is going to be a president of new Russia which differs in many aspects from that of the early 2000s. The new terms will probably be more crucial for not only the public support for Putin, but also for the future of Russia. The main determinant however is not the so-called effect of the Arab Spring, but the Russian economy. First, the Russian economy and the lack of alternative political figures to Putin destroy the hopes for a regime change in Russia. Putin’s awareness of the mentioned situation can be seen from Russia’s preparations. Recently, many experts have been working on getting Russia ready for 2020. Taking action on many areas such as diversifying the economy and fighting against corruption is necessarily important for Putin not to hasten the “beginning of the end.”
Habibe Ozdal, USAK Center for Eurasian Studies
 Maria Lipman & Nikolay Petrov, Russia in 2020, (Washington D.C; Carnegie Endowment, 2011); Andrew C. Kuchins, Amy Beavin, Anna Bryndza, Russia’s 2020 Strategic Economic Goals and the Role of International Integration, CSIS, July 2008, available at http://csis.org/files/media/csis/pubs/080731_kuchins_russia2020strat_web.pdf; Russia 2020, New York University Center for Global Affairs, Spring 2010, available at http://www.scps.nyu.edu/export/sites/scps/pdf/global-affairs/russia-2020-scenarios.pdf.
 Стратегия-2020: Новая модель роста – новая социальная политика, available at http://www.hse.ru/data/2012/03/14/1265002218/itog.pdf; Стратегия 2020, available at http://strategy2020.rian.ru/g1/; http://strategy2020.rian.ru/expertgroups/.
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