Posted on 08/07/2014 8:33:31 PM PDT by 2ndDivisionVet
In July, the United States and the European Union finally bridged their differences and slammed Russia with severe sanctions in the wake of the shootdown of Malaysia Airlines Flight 17. The pincers and scalpels of the previous rounds were discarded; this time, it was whole industries—defense, finance, and energy—that were targeted, including Sberbank, Russia’s largest commercial bank.
If the first round of U.S. sanctions was met with ridicule among the Kremlin elite—Vladimir Putin’s gray cardinal Vladislav Surkov, sanctioned back in March, joked that what he likes in the United States is Tupac Shakur, dead since 1996—there’s not much bluster this time around. Now, Gennady Timchenko, who magically became a billionaire many times over since his old friend Putin came to power, is overcoming his allergy to the limelight to moan publicly about how he can’t go on vacation to southern France with his family or visit his 19-year-old son at university in Switzerland. “Our public opinion is given to underestimating them, but these sanctions are much more serious,” says Sergei Markov, a Putinist hawk who sits on the foreign affairs committee in the Russian Civic Chamber. “They’re not personal, they’re sectoral. So they’ll affect a fairly large number of people. Additionally, they will affect businesses that are most crucial to the Russian economy. And they’ll hit the population. Maybe it won’t be immediate, but it will happen.”
However, leaving aside the question of whether or not sanctions are necessary punishment for Putin’s reckless policy in eastern Ukraine, has the West really considered what will happen if they are successful? The reservations expressed on both sides of the Atlantic have mostly been about the impact on Western economies, rather than on what would happen inside Russia. Here’s a hint: “Russia’s economy would collapse faster and quicker” than Europe’s, says Chris Weafer, a prominent (and normally bullish) Russian market analyst and senior partner with Macro-Advisory.
And that brings with it a huge problem. Putin’s tacit social contract with the Russian people is based on a very basic exchange: Putin makes sure the Russian people become materially better off, and the Russian people leave the politics to Putin. So far, both sides have delivered. The crushing majority of Russians support the Kremlin’s line or avoid politics like the plague, and the GDP per capita has increased from $1,771 when Putin came to power in 2000, to more than $14,000 today. That’s a faster growth rate than China’s. “If there were a material change in the way people live in Russia,” says Weafer, “we’d see a change in the political dynamic like we’ve never seen before.”
Geopolitics and the economy are Putin’s two sources of strength, and both are failing him now. In eastern Ukraine, he is increasingly boxed-in, and the economy has been sputtering for about a year, thanks to corruption, inefficiency, and the Sochi Olympics. Capital flight has already reached $75 billion for the first half of 2014, according to the Russian government’s own data, and that’s before the real sanctions were introduced. (By comparison, capital flight for all of 2013 was $63 billion, and in 2012, it was $49 billion.) Russia is not technically in a recession, but that’s because growth has been hovering at zero all year. The Ministry of Economic Development has been using the term “stagnation” since December. Stagnation felled the Soviet Union, and, if the economy dips into recession, it could easily topple Putin, too.
But before the West celebrates the possibility of Putin being forced from the throne, we should consider what might come after him. This is not an argument against sanctions or against political change in Russia. But the country’s history tells us that prolonged economic malaise often brings about political turmoil, the result of which has never been a democratic Russia.
This has been a summer haunted by invocations of 1914, with analogies drawn between the season’s geopolitical chaos and the beginning of World War I exactly 100 years ago. But for Russia, it’s worth recalling that 1914 ended in 1917. The corrupt and overly centralized regime of Czar Nicholas II blustered its way into the Great War, which created massive food and fuel shortages back home. Nicholas bankrupted the country fighting his cousin Wilhelm, and bread riots soon forced Nicholas’s abdication. The brief and confused rule of the bourgeois provisional government in turn quickly gave way to the brutal and bloody Soviet regime. To this day, Russians, especially the anti-Soviet Moscow intelligentsia, look back fondly to the czarist era, even though those were days of poverty for the overwhelming majority of the population.
The Soviet regime collapsed like the one before it: bankrupted by a war, one that existed mostly in the jungles of the Third World and in the minds of Washington and Moscow. Lines for food and other essentials took up an increasing proportion of the average Soviet’s workday, further slowing the already moribund economy. It was not Ronald Reagan who brought about the regime’s collapse, nor was it the dissidents, not for all their diligence cobbling together reams of samizdat. It was the economy.
And when the Soviet system vanished in December 1991, what replaced it was more economic chaos, with people turning into kings or paupers seemingly overnight. The oligarchs used the increasingly frail and unsober President Boris Yeltsin to become ever richer, stashing much of their money abroad. It was such a rough time for most Russians, especially pensioners whose savings and pensions evaporated as the currency ballooned, that many still think back to the privations of the Soviet era with longing. To them, it was a time of stability. Even if the country wasn’t rich, everyone was basically poor, and at least the country was still a force to be reckoned with internationally. That is why the Communist Party of the Russian Federation is still genuinely popular, scoring a consistent second behind Putin’s United Russia.
It was out of this mess that Russia created Putin, a man promising to reverse Russia’s humiliation and rein in the oligarchs stripping the country bare. He delivered on those promises, but he simply created new oligarchs, like Timchenko, from his childhood friends or KGB comrades. He also eviscerated, with Surkov’s brilliant engineering, the fledgling forms of democracy and free speech that had developed in the nine years that preceded him. Which is why certain bourgeois urban liberals now miss the freewheeling 1990s, even though many of them voted for Putin in 2000.
Given this history, the Western narrative of an evil, shirtless tyrant suppressing a society hungering for freedom and democracy is a wild fantasy. Putin is not popular only because he controls the television. He is also popular because he is giving Russia something that is quintessentially Russian. Putin is just a variation on the Soviet Union, which was just a variation on the monarchy.
What made the Soviets so ruthless and Manichaean was the czar. Nicholas was fiercely averse to any kind of political sphere between him and the peasant masses. He created a parliament only to immediately disband it and relied heavily on censorship and the secret police. And so, when he handed in his crown, there was nothing there to replace him. The only people strong enough to fill the vacuum were the Bolsheviks, hardened and disciplined by years of underground resistance. After all, it was the czars who instituted forced exile; Joseph Stalin, who escaped from Nicholas’s exile five times as a young revolutionary, simply improved upon their brutality in his gulags.
Similarly, when the Soviet Union fell, it wasn’t the pro-Western dissidents who replaced Gorbachev, but a high-ranking Party boss named Yeltsin. No one else had the organizational or political know-how; nobody else had been allowed to learn.
And so it is now. The liberal opposition that rose up from the Internet ghetto in December 2011 was only 100,000 strong in a city of twelve million. Six months later, Putin cracked down. Now, the only plausible leader of the opposition, Alexei Navalny, is under house arrest, barred from using the Internet and thus from talking to the people who want political change. Which will make things all the worse when Putin inevitably leaves the Kremlin. Knowing the weakness of the liberal opposition and the strength of Putin’s security apparatus, it’s hard not to fear that his replacement will make us long for the days of his thuggishly predictable unpredictability.
Last December, I met up with Gleb Pavlovsky, the man who helped Putin cruise to victory in 2000. “It’s impossible to say when this system will fall, but when it falls, it will fall in one day,” he told me. “And the one to replace it will be a copy of this one.”
Back in February 2012, a month before Putin was elected president of the Russian Federation for the third time, his supporters released a YouTube video that indulged the desire of the tens of thousands of Muscovites protesting in the streets that winter. “The opposition is chanting, ‘Russia without Putin!’ ” the narrator says. “So let’s imagine that there is no more Vladimir Putin.” The immediate result, says the narrator, is elections, hundreds of parties, and the West praising the dawn of real democracy in Russia. But then the hypothesis gallops on through 2013: the rise of militant Russian nationalists, their clashes with Russia’s large Muslim population, nato troops in Kaliningrad, the Chinese in Khabarovsk, the Georgians in Krasnodar, and skinhead rule in St. Petersburg. A hungry winter, chaos and inter-ethnic violence, the departure of major international companies, and hyperinflation. The leaders of the opposition beg for asylum in the United States. By February 2014, there is no electricity, mobile service, or Internet in Moscow. Russians are advised to stay in their homes. “Russia without Putin?” the narrator concludes. “You decide.”
It’s extreme and, to a non-Putinist, even laughable; the sun will not stop shining if Vladimir Putin is no longer president. But this is a key part of the Putin worldview when it comes to both foreign and domestic affairs: There’s not much separating you, or anyone, from the void. And, ironically, it’s this fear of the future that keeps Putin in power. It’s a fear that’s not all that ridiculous when you consider that all of the footage illustrating the horrors of a Putinless future is the real footage of Russia’s recent past.
Reagan went full bore with the arms race as soon as he came into office.
Remember the “Strategic Defense Initiative” which was referred to as “Star Wars”? It scared the hell out of the Russians. This was about the time that the IBM PC came out. We were crushing the Russians with huge technology leaps. It pushed the Russians over the edge economically.
I've been hearing that meme for decades. The Russians had an ABM system already. The were also investing in a blue water navy. That was the big demand for cash, particularly for upkeep. They paid for it with oil revenues, their only source of foreign exchange at the time. When the price of oil dropped, that revenue dried up.
BTW, other than China, name one enemy we face today that is not funded by oil revenues.
Some pretty decent real estate in New York City could go on the market--after the building is stripped of all the stray bugs.
lol
bump
“That was GOOD!!! I’d never heard that story, thanks!”
Any time. I remember hearing a report on it when the book came out. That is how you fight an enemy. You don’t want to be anywhere near a 3 kiloton blast, it’s only a bit smaller than Hiroshima.
Here’s some more on it.
http://en.wikipedia.org/wiki/Siberian_pipeline_sabotage
http://www.freerepublic.com/focus/news/1071087/posts
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