Russia’s crisis – what it means for regime stability and Moscow’s relations with the world By Bobo Lo ★ The global recession has hit Russia hard. The economy is deteriorating rapidly, the government appears to have no answers, and the mood of the elite is one of growing anxiety. ★ But despite its troubles, the regime will survive. There is no popular will to challenge Putin’s hold on power, while self-interest and the lack of alternatives will ensure elite loyalty. ★ There is a renewed desire to engage with the West. However, the fundamentals of Russian foreign policy remain unchanged. Moscow harbours a strong sense of strategic entitlement and will assert its ‘rights’ energetically. ★ The West should respond to Russia on a case-by-case basis – avoiding preconceptions, focusing on substance, and exercising strategic patience. There is no doubt that the global financial crisis has had a tremendous physical and psychological impact on Russia. In August 2008, following its military successes in Georgia, there appeared to be no limit to Moscow’s self-confidence. The mantra, ‘Russia is back’, was reiterated ad nauseam, while the West fretted about a new Cold War and the difficulties of managing an ever more assertive ‘partner’. Russia became the centre of attention, if often for the wrong reasons, and its resurgence as a global great power was seen as part of a ‘new world order’. Fast forward to today and the transformation in Russia’s fortunes is striking. The extraordinary developments of the past six months have undermined many assumptions. While the advanced industrialised economies of the West are suffering considerably from the global recession, it is Russia that has arguably been the greatest casualty. Internationally, it has become a largely peripheral presence, while domestically there has been a radical shift in mood. Russia’s once buoyant economy has suffered major shocks and the seemingly unassailable regime of Prime Minister Vladimir Putin has become
Centre for European Reform 14 Great College Street London SW1P 3RX UK
the subject of feverish speculation about its viability and even survival. Russian policy-makers have lost their swagger. Putin continues to inveigh against the failings of the ‘AngloSaxon’ economic model and to blame America for the global financial crisis, most recently at the 2009 World Economic Forum in Davos. But these days the climate in Moscow is one of mounting anxiety. The illusion of near-invincibility has given way to an acute sense of vulnerability and a renewed awareness of Russia’s dependence on the outside world.
Two key questions This policy brief addresses two questions. The first is the impact of the global financial crisis on re g i m e stability and on Putinism itself – the Russian leader’s brand of semi- or ‘soft’ authoritarianism. Putin has consistently argued that Russia’s current problems a re largely a function of the wider global malaise, and that its economic fundamentals are sound. But critics point to deep-seated weaknesses: rampant c o rruption, dysfunctional governance, flimsy rule of
T: 00 44 20 7233 1199 F: 00 44 20 7233 1117 info@cer.org.uk / www.cer.org.uk