Putin on a perilous rodeo ride of connected crises

Illustration: Eric Lobbecke

Russia is experiencing a triple ­crisis that threatens to undermine the authoritarian leadership of President Vladimir Putin. The coronavirus is starting to hit ­Russia very hard indeed, world oil prices have collapsed and the ­Russian economy has stagnated for six years.

Any one of these would be a serious matter. Taken together, the question is whether Putin can survive. Last month, he told Russians the coronavirus was under control. Last week, however, he warned that the country was facing “perhaps the most intense stage in the fight against the epidemic”. The country is now registering the second highest spread of infection in the world with more than 10,000 new cases daily, bringing the official tally to more than 170,000 with 1500 deaths. This reported death rate must be seriously questioned.

Russia’s health service is a shambles with Soviet-era hospitals suffering from a shortage of doctors, leading to long waiting times. Its badly underfunded national health system is at risk of being overwhelmed. Putin now acknowledges that the situation inside the country “remains very difficult”.

Prominent Russian scholar Lilia Shevtsova observes that the coronavirus crisis was not the kind of challenge the government was expecting. While Russia was preparing for threats, real or imagined, from geopolitical rivals and internal opponents, the pandemic has struck and paralysed the system of personalised power. A state accustomed to surviving by means of mobilisation and militarism has suddenly demonstrated that it cannot function in an emergency. Shevtsova considers that the Russian state’s failure of personalised power to govern in a crisis may be a disastrous sign of things to come.

While other states have offered their populations emergency aid packages amounting to as much as 10 per cent to 12 per cent of gross domestic product, the Kremlin has been prepared to spend only 2.8 per cent of GDP, with most of it going to state-owned industries, including companies with close ties to the Kremlin.

Small and medium-sized private sector businesses accounting for about a third of the workforce, or 40 million people, have been promised only 3 per cent of the state’s total financial assistance package. Even if this virus is contained before the end of the year, Russia will not avoid serious economic damage. Experts predict Russia’s GDP will fall 10 per cent this year with unemployment reaching 11 per cent. Already, 30 per cent of small and medium-sized businesses are on the verge of bankruptcy. Russia’s response to this pandemic has been late and inconsistent, and it is clear the disease is racing across the country.

Added to this is the collapse of world oil prices, which will undermine Russia’s state budget. Its federal budget only breaks even at a price of $US42 a barrel. In response to the global pandemic, world oil prices have plunged from $US64 a barrel last year to not much more than $US20 today. The combination of COVID-19 and this collapse in oil prices is ­creating an unprecedented financial shock.

All this comes on top of a broader economic crisis over the past six years. Russia’s economy has been facing tumbling growth rates and declining living standards since Western sanctions were imposed in 2014 in response to the invasion of Crimea and the occupation of eastern Ukraine. At the end of last month, 54 per ­cent of respondents to a poll complained about falling incomes, while a quarter had no income at all.

Such a severe economic and health crisis will provoke growing social unrest. Approval ratings for Putin’s response to the crisis already are below half, according to an independent survey last month, while a state-funded polling agency found only 28 per cent of respondents picked Putin when asked to name a politician they trust. The fact 38 per cent say Putin represents the interests of oligarchs, 37 per cent say he represents the interests of the power structures, and 28 per cent say he represents the bureaucrats is a warning, Shevtsova says, that “mass support for his leadership is not guaranteed”.

The first half of this year was to have been the decisive breakthrough to enshrine Putin’s presidential power via a revised constitution. But the coronavirus pandemic has derailed that and compromised his authority.

Reports suggest the public mood is shifting from shock to anger. None of this is to argue that Putin is about to be overthrown. But for a man who paints himself as having personally led the ­Russian people out of “a time of troubles” into an era in which Russian greatness is being restored, the future now looks grim.

Putin’s essentially Soviet paranoid world view is obsessed by what he fears are Western plots to see him overthrown, which is what he believes happened to the elected president of Ukraine, ­Viktor Yanukovych, in 2013. Shevtsova predicts that widespread fear of the virus, the state’s failure to cope with it and the rage of ordinary people could become explosive. But she warns that if Putin is replaced, the nature of any future power centre in Moscow most probably will again be ­authoritarian.

All this leads me to the question of whether Putin might strike out militarily when the US and European NATO countries are totally preoccupied with the pandemic.

An obvious target would be Ukraine, given that Putin proclaims Russians and Ukrainians are one people. The Kremlin has a pathological fixation with Ukraine, which is shared by the mass of Russians including much of the educated elite.

For Putin, Ukrainian independence over the past quarter of a century has been a grievous geopolitical mistake.

Paul Dibb is professor of strategic studies at the Australian National University and a former senior intelligence official whose intelligence target was the Soviet Union for more than 20 years.