Claims about Russia

by on November 29, 2014 at 1:45 am in Current Affairs, Economics, Political Science | Permalink

Sergei Guriev, a former ­adviser to Prime Minister Dmitry Medvedev and a former board member of Russia’s largest state bank, said: “If nothing changes, if sanctions aren’t removed and the price of oil does not go up, then in two years the Russian government will have a major problem — it will lack cash and it will not be able to borrow it.”

The luxury goods market may contract up to eighteen percent this year in Russia.  There is more here, via www.macrodigest.com.

1 Silky November 29, 2014 at 1:55 am

Cry me a Volga River, Ruskies.

2 So Much for Subtlety November 29, 2014 at 3:03 am

The problem is that Putin cannot really back down. Napoleon said that his enemies could lose any number of battles because, as legitimate Kings of long established dynasties, they had popular legitimacy. But he could not lose a single one.

Putin finds himself in the situation of some previous Russian Tsars – a single political loss and he will be overthrown by the Guard Regiments. Putin has to win something from the mess of Ukraine or he will be hanging from the rafters.

It is an interesting set of priorities. I would think Putin cares a lot more about losing than Merkel does about winning.

3 Simplicio November 29, 2014 at 4:22 am

I think the risk to Putin from unrest due to a poor economy is a lot greater than the risk from backing down in the Ukraine. Especially since I suspect NATO would be pretty happy to work with him to find a face-saving way to do it.

(also the quote from Napoleon seems a little odd, given that being part of a long established dynasty didn’t seem to do his immediate predecessor much good).

4 Barkley Rosser November 29, 2014 at 3:52 am

Sorry, SMS, but Putin has “popular legitimacy.” He has been elected president of Russia three times now, and while I think there were some shenanigans in the voting, most polls show him to be very popular in Russia, far more popular than most of the leaders in countries that are opposing his aggressive actions in Ukraine. Indeed,there is no way he is going to back down on Crimea, even if he does so in “Novorossiya.” Crimea is a done deal, for better or worse, even if US and UK signed that Budapest Accord that had both of them guaranteeing the territorial integrity of Ukraine as of 1993, which put Crimea in Ukraine, even if one can argue that from a longer perspective it really should be part of Russia.

This does not mean that he might not lose popularity if the economy becomes much worse. But note that he has already successfully spun the decline that has already happened as necessary to fight the evil foreigners, invoking World War II successfully so far, which puts many Russians into a “sacrifice for the Motherland” mentality, and with his control of the media getting stronger all the time, he can probably pull this off for some time to come and some economic decline to come as well.

No, I do not think he is remotely in danger of what you suggest, that if he has “a single political loss…he will be overthrown by Guard Refiments…hanging from the rafters.” Again, he has already won something from “the mess of Ukraine,” namely Crimea, and that he will definitely keep. Nobody is going to make any serious move to take it away from him.

5 indisguise November 29, 2014 at 6:36 am

Shenanigans is not the word. The vote is rigged, and everybody knows. The pay of the staff at the polling stations is slashed by half if they fail to substitute a report prepared the day before for the actual results. One school teacher in St.Petersburg dared speak up, got sued for libel, fined what she makes in like a year, since then everybody has been keeping quiet. If Mr. Putin is the most popular kid on the playground anyway, why go to all the trouble?

6 Ray Lopez November 29, 2014 at 6:58 am

@indisguise–I never heard the RU vote is rigged, quite the opposite, that Putin is very popular, much more so than challengers like Garry Kasparov for example. I’m not defending Putin, just stating the facts.

7 indisguise November 30, 2014 at 12:26 am

I know about the polling station arrangement from two people who worked there in recent years whenever some sort of election was taking place. A pair of university students, couldn’t care less about politics, just there for the cash. So not terribly many data points, but also doesn’t seem likely that this is an exception.

8 Alex Zuzin December 2, 2014 at 12:22 pm

Putin’s popularity with the population (sorry :)) is quite a bit less important than his ability to maintain a guaranteed regime for his chain of command. Legitimacy in Russia emanates from a guarantee of orderly access to the spoils for the few, not an ability to win an election.

9 ladderff November 29, 2014 at 9:16 am

Good. Government by school teacher is not working out so well here in glorious USA.

10 So Much for Subtlety November 29, 2014 at 7:01 am

Barkley Rosser November 29, 2014 at 3:52 am

Putin does not have popular legitimacy because Russia does not really have elections and it certainly does not have a democratic tradition. The Russians do not feel particularly attached to elections and so they are unlikely to feel bound by them.

He probably is popular in Russia – they have never been happy except under a Tsar.

He may not back down on Crimea but let’s see if his successor is in the same frame of mind. I suspect he may not be. He can evoke World War Two all he likes. That works as long as Russia is winning and the KGB is there to shoot anyone who shoots off their mouth. We will see how his kleptocratic friends take it once they start to lose money.

He has not won anything and there is no reason to think he will definite keep Crimea. Any more than Russia definitely kept the Baltic states.

11 Jan November 29, 2014 at 7:23 am

Even if there were shenanigans, Putin almost certainly would have still won in elections that were 100% free and fair. But his support is almost all due to the fact that people’s living standards have consistently risen the past 15 years. Now, there have been some bumps in the rode for Putin (2011-2013) and he has had to slowly manufacture this nationalist fervor to counter dissatisfaction and the stagnating economy. But he’s gone too far now. The economy is declining and doesn’t look set to improve for a while unless sanctions are removed or oil rallies. At the same time, he’s told so many lies and convinced many people that nazist baby-eating Ukrainians are at their doorstep that it will be really hard to walk back his aggressive foreign policy.

12 Corvus November 29, 2014 at 8:50 am

Hmmm – where to insert the reply. Some very good comments above on Russia and Putin.

From my perspective – having lived and worked in Russia for a short time – I would agree with the following opinions:

* Putin is popular. I would say massively so.
* He was elected, in real elections, with perhaps as much shenanigans as we might have seen in Daley’s Chicago, or Huey Long’s Louisiana. I would say the Putin regime methods of repression are somewhat more subtle and long term. Real opposition is discouraged and penalized (jail, fines, but always validated for some other reason, and the occasional assassination).
*In his 1st 2 terms, Putin did indeed preside over economic growth that probably, at least to the eye of the common man, exceeded the US growth under Clinton. They were coming out of anarchy and major depression.
*Nationalist feelings have been growing amongst Russians. Putin did not manufacture the nationalist mood – but I would say he (along with a much broader segment of the ruling elite) have certainly encouraged them. You could say inflamed them.

13 Axa November 29, 2014 at 5:34 am

2 years is a long period to make predictions any commodity. The fundamentals of oil have not changed. Emerging markets need more of it everyday.

14 Ray Lopez November 29, 2014 at 7:00 am

@Axa – true, but the markets have a tendency to stay ‘irrational’ longer than you, betting against them, can stay solvent, said a great economist named Keynes (and ironically a brilliant speculator, he had a feel for markets).

15 carlolspln November 29, 2014 at 9:41 pm

‘brilliant speculator’

The second time. The first?

Keynes lost his shirt.

16 The Other Jim November 29, 2014 at 9:18 am

Brought to you by US shale oil companies, over the howling protests of Al Gore.

Nice.

17 Andre November 29, 2014 at 1:19 pm

Also without Obama destroying everything, despite howling protests of Republicans, and without destroying the Arctic National Wildlife Preserve.

18 Cliff November 30, 2014 at 12:20 am

“Destroying”? “Everything”? Please turn in your blue team card and check back in with reality

19 Just Another MR Commentor November 29, 2014 at 10:23 am

Lots of immigrants from Central Asia could help boost Russian economic growth.

20 Mark Thorson November 29, 2014 at 12:15 pm

Yes, displacing Russian workers and dragging wages down to central Asian levels would be a very good idea. If you want to see Putin hanging from a lamppost.

21 Jan November 29, 2014 at 12:15 pm

Unclear to me just how many additional Central Asians would go there and whether the general Russian populace would tolerate it. There are already massive amounts of them (something like half of Tajikistan’s GDP is remittances from Russia) and they are widely discriminated against. That said, it is not hard to move to Russia from Central Asia and do menial labor under the table if one wants to. I don’t see it happening, even as bad as Russia’s demographics look.

22 jerseycityjoan November 30, 2014 at 2:34 am

Yes, let Russia get just as rich as we have from low income immigration!

Whenever I hear about Russians and immigration, it’s usually about a raid or attack on illegal immigrants.

Clearly they need us to educate them on this, as we must do on so many other things.

23 Chuck November 29, 2014 at 8:24 pm

We’ll see I suppose. Large countries seem to be able to absorb a lot.

24 athEIst December 1, 2014 at 3:05 pm

The price of oil plummeted in late 1985 and stayed low. In 1991 we attended the funeral of the USSR.

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