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The undoing of Vladimir Putin

Our editorial: Russia is on the march, but its economy is crumbling. No party can survive once the money runs out.


 
Dmitry Lovetsky/AP

Dmitry Lovetsky/AP

During Catherine the Great’s tour of Crimea in 1787*, Russian Prince Grigory Potemkin is said to have created entire plasterboard villages and hustled the same group of happy peasants back and forth along her route to impress the empress with a vision of prosperity. Recent scholarship suggests the tale of the Potemkin village is largely apocryphal. The prince probably just put some ribbons and banners on existing buildings and hid a few beggars out of sight. Yet the myth persists, largely because it says something useful about Russia and its fixation on outward appearances. It still holds some truth today.

Since welcoming the world to the lavish 2014 Sochi Winter Olympic Games, Russian President Vladimir Putin has embarked on an ambitious and calculating campaign to return his country to global prominence through military strength. He began by invading Ukraine and seizing the Crimean Peninsula, drawing immediate condemnation and sanctions. Russian bombers and submarines now regularly test the defences of Western countries, in a reprise of Cold War tensions. And NATO has serious concerns about protecting member Baltic states Estonia, Latvia and Lithuania from a Crimean-style blitzkrieg. A recent RAND Corporation wargame scenario found Russia could likely capture all three capital cities in under 60 hours. Canada’s plan to send a 450-soldier battlegroup to Latvia next year is a small bulwark against this possibility.

Related reading: Putin’s War 

In the Middle East, Russian jets have pounded the Syrian city of Aleppo to rubble while Russia’s only aircraft carrier, the aging Admiral Kuznetsov, makes its way to the Syrian coast where it will be the centrepiece of a large Russian naval force in the Mediterranean—a military build-up unprecedented since the collapse of the Soviet Union. “Russia has no intention of attacking anyone,  Putin said in a speech last week. No one believes it.

Russia has even inserted itself into the United States’ presidential election, as it is widely accepted that a cyberattack on the Democratic Party was the work of Russian hackers. Republican nominee Donald Trump, a fan of Putin’s aggressive political style, has gleefully seized upon the purloined information.

Russia has returned as a foil to Western democratic ideals. But how deep does the threat run?

It is a lesson of geopolitics that military force is merely a reflection of economic strength. Without a strong and growing economy behind it, no military can project power over the long term. While Putin has engineered a stunning reversal of Russia’s international reputation, there remains a massive hole in his economic defences. In many ways, Russia is a Potemkin country.

The collapse of oil prices and sting of Western sanctions has thrown Russia into a severe recession. According to the World Bank, between 2013-15, Russia’s GDP fell a stunning 40 per cent. Despite a population four times our size, the Russian economy is now smaller than Canada’s. Last year, Russian inflation hit 12 per cent. Poverty is up significantly, wiping out more than a decade of progress. Putin has decreed the national deficit cannot exceed three per cent of GDP next year, but with state pensions and other public spending programs rapidly losing ground to inflation and cuts, he has so far avoided significant reductions in the massive military budget. But a new budget proposal this week contemplates a 27 per cent cut in defence spending.

Putin’s autocratic rule is not in any immediate danger; his United Russia party won a resounding victory in parliamentary elections this September and there are slight signs of an economic recovery. Yet no party can survive once the money runs out. During the glory days when oil fetched more than $100 a barrel, Russia socked away its surpluses in a reserve fund. Denied access to conventional bond markets due to Western banking sanctions, Russia has come to rely heavily on this nest egg to cover its shortfalls. From US$85 billion in January 2015, the fund will sink to $15 billion by the end of this year. According to Ondrej Schneider, chief economist at the Institute of International Finance, “at the current rate, the fund would be depleted in mid-2017, perhaps a few months later.” The outlook for Russia, says Schneider, is “sombre.”

There’s no denying the large shadow Russia currently casts over global affairs. But having rebuilt his military during an oil boom, Putin is now facing a struggle to maintain this reputation as Russia’s economy weakens—a prospect that may make him even more dangerous and unpredictable over the short term. Containing Putin will require continued and united opposition to his bullying tactics. Sanctions have clearly had an impact and will bite deeper over time. It’s also necessary to meet military feints with equivalent chess moves, as in Latvia. Finally, we can’t neglect the role of economic growth as a strategic weapon. The collapse of Communist Russia was ultimately brought about by its failure to keep pace with Western capitalism. The same thing will likely be the undoing of Putin too.


CORRECTION, Nov. 3, 2016: This post originally stated that Catherine the Great’s tour of Crimea took place in 1878. In fact, it took place in 1787.


 

The undoing of Vladimir Putin

  1. “During Catherine the Great’s tour of Crimea in 1878…”

    Surely you meant to write “1778.”

    Just sayin’

    • Glad you straightened that out. As the only even potential ‘fact’ that appears in the article, it is very important that it at least be correct.

  2. I’m using it now and it’s awesome! I’ve signed up for my account and have been bringing in fat paychecks. For real, my first week I made $306 and the second week I doubled it and then it kinda snowballed to $120 a day.H%4.

    Just follow the course>>>>>> MsTrends3.Tk

    • A bit of history.
      Crimea had been part of Russia for 200 years until 1954, when it was gifted to the Ukraine by Nikita Khrushchev. This was to commemorate the 300th anniversary of the historic decision by Ukraine to unify with Russia. At that time, it would have been impossible to foresee that Ukraine would become an independent country.
      Crimea has a 2 million population, of which about 80 percent consider themselves Russian. This is the only region in Ukraine where Russians are in the majority and has the highest number of Russian speakers.
      Russia conquered Crimea in 1783. For over three centuries, Crimea had been ruled by the Tatars (A Turkish ethnic group) subjected to the Ottoman Empire, who had used the region as a base for their sizeable slave trade with the Ottoman Empire. They deported somewhere in the region of 2 million slaves from Russia and Ukraine.

  3. So when is the Russian money supposed to run out? Domestically Russian money seems to be doing fine enough to be maintaining a whole whack of ‘obligations’ that Putin didn’t have when he last became President again. And as far as foreign trade goes Russia seems to have trimmed back on unneccesaary foreign cash transfers out of the country for the European luxury market. Consumers haven’t started to suffer – unemployment remains much unchanged, government spending hasn’t impinged on the dependent and new business has arisen to take up the slack on imported food and consumer goods. Russia has a good relationship with its understandable ‘allies’, as well as with a surprising number of countries that shouldn’t be friends – if they know what’s good for them.

    Do keep us posted on Putin’s imminent demise, but I feel pretty sure that Trudeau’s ‘sunny ways’ might make Canada a new pal, again.

  4. He began by invading Ukraine and seizing the Crimean Peninsula. Who told you that? When has Russia invaded Ukraine? Why are you lying? Do you get paid for lying? You should be ashamed and the dates are wrong to.

    • This is basically common knowledge.
      See:
      h$$p://www.bbc.com/news/world-europe-26644082
      h$$ps://en.wikipedia.org/wiki/Little_green_men_(Ukrainian_crisis)
      h$$ps://en.wikipedia.org/wiki/Russian_military_intervention_in_Ukraine_(2014%E2%80%93present)

      The real question is, why do you claim Russia didn’t invade and annex Crimea?

        • http://www.history.co.uk/shows/articles/10-facts-about-russias-history-with-crimea

          Yes, “Crimea was Russian” until the leader of the day gifted it to the Ukraine decades ago. In negotiations in the 1990’s Russia did not ask for it back. It alway leased the port from the Ukraine. When it didn’t like that the Ukrainian citizens were ridding themselves of their leader, Russia took back Crimea in a very suspect election as present to all of us on television by the BBC and CBC’s Susan Ormensten. Fabulous coverage to. There were two plexiglass boxes, one for “yes” (I want Crimea to leave Ukraine and join Russia) and one for “no” (I want Crimea to remain in Ukraine). Russian soldiers stood by monitoring how every person voted. Those who voted no were detained. That is how a person gets over 90 percent consensus in a referendum, which is otherwise unheard of.

        • At one point Crimea was part of Russia. Then it was handed over to Ukraine. Crimea was part of Ukraine at the time that Russia invaded/annexed it in 2014.

          • It was Khrushchev who did the gifting

            And Russia had signed a multi-year deal about Crimea when the Ukrainians went berserk

            Belongs to Russia…and Russia will keep it no matter what because they need that traditional southern port…..

      • Firstly I’m not claiming there wasn’t a Crimean Annexation, because there was one, which was done thru a legal referendum. What I’m claiming is that there wasn’t a Russian Military invasion of Ukraine, the reason being that if there had been one, by this time the Ukraine would not be ruled by a fascist, corrupt government which is destroying a wonderful people and which was installed by the US of A and NATO, and if it hadn’t been for Russia been that close, the Ukraine would now resemble another failed state like Libya, Iraq, Afghanistan, Syria and the many others around the globe, and especially in Central America, The Caribbean and South America which by the way is considered US sphere of influence and have being enduring this kind of terrorism for at least two hundred years.

  5. Is a computer software writing this POS.

    The (Taurida Voyage) was a six-month (January 2, 1787 — July 11, 1787) inspection trip of Catherine II of Russia to the lands of New Russia and Crimea, gained as a result of the victorious wars against the Ottoman Empire (1735–39 and 1768–74)

  6. All these editorials predicting the imminent collapse of Russia smells of desperation to me. The sanctions on Russia haven’t worked. Russia’s EU partners are suffering more from the sanctions than Russia and it’s causing disunity in the EU. Russia is resurgent in the Middle East with Egypt being the latest country to align militarily and economically with Russia while countries like the Philippines and Turkey abandoning the USA. China’s one belt one road plan is moving along at breakneck speed with the goal being a unified Eurasia from Germany to the Pacific which scares the USA.

    The question is does it scare the USA to the point of starting WW3?

    Powerful countries are at their most dangerous when their power begins to wane…… it’s going to be very interesting to see what happens after the US election.

  7. Russia is the largest country on the planet. Siberia alone is larger than Canada

    They have a population of 143.5 million

    They’ve been around for centuries. Through wars and famines and coups……and space shots

    And you…YOU…..a pipsqueak upstart…..have the nerve to tell them what to do??

  8. That is pile of crap! Your head is burred deep in the neocons ass. I suggest you write some ideas for the international community to work together. My grandparent suffered greatly under Russian occupation but what you are talking is a share nonsense. Journalism based on fear-mongering, gossip is form of ‘terrorism’

  9. This ‘opinion’ is a joke. Facts wrong start to finish. Ashamed to find this in Macleans.

  10. One can only hope that Russia runs out of cash to fund these pro Russian trolls that come out immediately after a bad news story about Russia.

    Everybody underestimates the ability of the Russian citizen to suffer. As the screws tighten it will not be the military that gets the cuts.

  11. I do not know who wrote this “brilliant” editorial based on fictional facts in one of my favorite magazines? Bravo you started to compete with Sun and FOX news media.
    Why do not you write what is happening in Syria in the past couple of weeks instead? Since October 18, Russian air force stopped bombardment of Eastern Aleppo and created two safety corridors for Jihadist to leave and four corridors for trapped civilians to escape. Very few civilians left and rebels and Jihadists refused the offer to leave peacefully!!
    When Russians and Syria’s regular army resume bombardment there will be outcry by US/NATO that Russians and Syrian armies killing civilians!!

  12. I know that the U.S. Authorized Version is a farce, but most fans could come up with a hardier version than this, unless the article was written as a guide to the right answers for a child’s catechism.

  13. Dear me, MacLeans. Neocon propaganda masquerading as editorial is hardly likely to convince your readership that the magazine is able or willing to uphold either an illusion of dispassionate detachment or the level of journalistic standards expected from the publication. This article really is bogeyman journalism of the worst sort.

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