What do the anti-Russian riots in Georgia have to do with the economic policy of Moscow? Why has President Putin‘s internal approval rating collapsed to historic lows? The answer to these and other questions provides a picture of today’s Russia that is not at all idyllic, and the reasons for this situation lie in the marginalizing policy of the West that the Kremlin has tried to cope with, albeit with a culpable delay.

Before going into an analysis of the socio-economic situation in Russia, we should give an overview of the current situation, and Georgia represents a relevant starting point.

The Caucasus: centre of the Russian sphere of influence

Georgia, a small Caucasian republic and part of the former Soviet monolith, has represented for Moscow, in recent years, the centre of its concerns regarding the control of its immediate geography, and as such it is closely linked to the fate of Moscow.

Thousands of people took to the streets of Tbilisi in recent days to protest against the presence of a deputy from Moscow in the Georgian parliament, turning back the clock by about ten years, when Russia took control of some autonomous regions of Georgia that it considered vital, which were occupied by the Georgian army at the time. The brief conflicts in South Ossetia and Abkhazia in 2008 were resolved, like many other conflicts in former USSR countries, in a freezing of the situation, which stalled with no solution.

Historically, the whole turbulent Caucasian region has always been considered vital by Moscow and not just because of the presence of endless fossil fuel fields. The Caucasus is the southern gate of Moscow, the bridge between Russia and the Middle East, and above all the first “barrier” that protects the boundless expanses of the Sarmatic lowland, just as Ukraine is the gateway – and barrier – to the West.

The Chechen conflict, which has lasted for several decades and is still not completely resolved, with the last pockets of Islamic fundamentalist resistance still to be eliminated, is a good indicator of Moscow’s mood in dealing with the tensions that affect its fundamental sphere of influence, and Georgia, like the other republics of the former Soviet Central Asia, has the same importance.

Fear of the domino effect

The stability of those former USSR independent states under Kremlin domination is important, indeed essential, to Moscow’s politics and to its strategy to control its borders.

The reason for this particular posturing, which we could call imperialist, lies in the Russian fear of a “domino effect” which, starting in the periphery, could lead to a subversion of the internal order of Russia with a socio-economic revolt violent enough as to cancel Russian political/cultural structure.

Directly controlling neighbouring states, such as Georgia, Ukraine or Belarus – which will probably be the next crisis front for Moscow – becomes vital to curb “Western” penetration that would result in the end of the Russia created by President Putin, and the cultural leadership currently in power.

This concern is also, in part, key to the Russian intervention in Syria. Supporting and saving the government of al-Assad is not only conducive to the control of oil export routes or to safeguard the Russian fleet’s access to the Mediterranean through its base in Tartus, but it is also a way of stabilising an area very close to its own borders. This region, if it fell into the hands of the United States-friendly petro-monarchies of the Gulf, would become a foothold for penetration into Russian territory.

An economic war

With the attempt to subvert the regime in Damascus having failed, and with a conflict in Ukraine at a stalemate through Moscow’s desire not to let go of a region it considers vital, the United States can only try to isolate Russia economically. They can do this by leveraging on its intrinsic economic fragility, while at the same time trying to forge links with those former Soviet republics, such as Georgia or the Baltic Republics, which are rife with strong Russo-phobic sentiment.

International sanctions post-annexation of the Crimea have been detrimental to President Putin’s economic revival process, and have created a real socio-economic time-bomb, whose effects are only now emerging.

President Putin’s approval rating, even in the face of unpopular measures such as raising the retirement age by 5 years, has fallen to historic lows in the last 12 months, going from 77% in the last election to 64% last May, then down to a current 51% as reported by some opinion polls.

Russia seems to be going through a phase of profound popular discontent, which translates into street demonstrations, strikes and protests by certain employment sectors that until 2014 were solidly aligned with the President.

It cannot be ruled out, in fact we consider it highly likely, that this is the result that the United States hoped international sanctions would have, and as such the Kremlin has tried to remedy it, albeit with some culpable delay.

Putin’s “May Decree”

Is the economic situation really so grave? Russia is not Iran or Venezuela, which, despite depending on fossil fuels, have an economic/industrial system classed as backward not only by Western standards. The process of relaunching industry and the economy through new shipbuilding, infrastructures and social safety nets has been strongly penalised by the international sanctions but has nonetheless given a boost, from an organizational point of view at least, to the Russian economy.

However, what was done from 2014 to 2018 was not enough to circumvent the sanctions and some choices, such as the raising of the retirement age, were forced in order try to put a stop to the financial suffering caused by a similar manoeuvre, as we know, accompanied by a heavy devaluation of the rouble.

Therefore, social tensions, whose first signs may have perhaps been underestimated, are manifesting themselves in a serious way and the latest provision of President Putin to try to revive the economy further, the “May Decree”, could have come too late.

In the decree, the Kremlin plans to earmark 391 billion dollars (25,700 billion roubles) until the end of its mandate to give new impetus to the economy. In particular, between now and 2024, 8,000 billion roubles will be put aside to build infrastructure and deal with various social problems.

Infrastructure not connected to the energy sector will receive most of the funds (about 6,400 billion roubles), followed by the road network with 4,800 billion, the environment with 4,000 billion and demographics 3,100 billion. Within the Kremlin’s plan, 13,100 billion roubles will be allocated from the federal budget, 4,900 billion from the regional budget and 7,500 billion from “extra-budget sources”.

On paper this is a real economic revolution, which outweighs, in real terms, even the “five-year plans” of the old Soviet Union. A programme that is certainly ambitious but that seems, in our opinion, to arrive late given the current Russian social situation, struggling with tensions never before seen in the Putin era.

There is a serious risk that for the population these will remain only empty promises, as the fruits of this new Russian economic strategy will be seen in at least five years – if ever – too long for a population that wants reforms and quality of life now.

 

Translation by Laura Flower

It's a tough moment
LET'S STAY TOGETHER