Berlin Vladimir Putin, otherwise self-confidence in person, is not so sure of his cause – twice in the past few days. Although the Russian president publicly announced that he had been vaccinated with the Russian corona vaccine “Sputnik V”, he recently went into self-isolation because of new Covid 19 cases in his environment.
And even more important: While Putin predicted a strong result in the Duma elections, which will take place from Friday to Sunday at a meeting of his party “United Russia”, he preferred to play it safe with many potential voters: he recently signed a ukase, which each of the 43.4 million pensioners per 10,000 rubles (the equivalent of 117 euros) granted one-time.
In a second decree, he sent 15,000 rubles to the millions of members of the army, employees of the Interior Ministry and the law enforcement authorities – also known as “siloviki” because they are the most important pillars of the Putin regime. It is primarily those groups that recently put down the protests of the imprisoned opposition leader Alexei Navalny with great violence all over the country.
Putin needs a clear absolute majority at the weekend. The real Russian miracle is that this cannot be taken for granted. And that is mainly due to the fact that the gap between Putin’s great power behavior on the outside and the economic sadness on the inside is growing ever larger. During his reign since 1999, growth was significantly lower than in other emerging countries, while inflation was much higher. And the high hopes resulting from the turn to China have so far turned out to be economic castles in the air.
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So Russia urgently needs a new economic policy. But there is no choice between economic policy alternatives. Even if they did exist, Putins took precautions to secure the election victory – in an emergency, also through election manipulation.
Decoupling from the West
Germany is still “one of Russia’s main partners”, Putin ensnared the outgoing Chancellor Angela Merkel recently during her farewell visit to the Kremlin. For his Foreign Minister Sergei Lavrov, however, relations between Russia and the EU, the “unreliable partner”, “have hit rock bottom”. The former colonel of the Red Army in the GDR and today’s analyst at the Moscow branch of the US Carnegie Foundation, Dmitri Trenin, sums up “Russia is in a state of confrontation with the West and will remain in this state for a long time”.
In the new national security strategy, signed by Putin in July, the West is even accused of “deliberately undermining traditional values, distorting world history, revising views on the role and position of Russia in rehabilitating fascism, making them inner-ethical and inter-religious To incite conflicts ”, as well as to use“ existing socio-economic problems ”to“ destroy the internal unity ”of Russia.
Throwing out Microsoft and SAP
As a result, there is now a decoupling from the West: the Russian Ministry of Industry has just banned government agencies from buying foreign computers, servers, other microelectronics and lighting technology. Large Russian corporations were also banned from buying foreign software from Microsoft or SAP from 2024.
The state leasing company GTLK is no longer allowed to procure foreign aircraft. Foreign pharmaceutical companies may only be included in the procurement of medicines if there are no two Russian suppliers. For government contracts, Russian companies will in future be paid 15 percent better than foreign ones.
Putin’s state party “United Russia” advertises its top candidates – such as Defense Minister Sergei Shoigu (center) and Foreign Minister Sergei Lavrov (right in the picture).
(Photo: dpa)
Russia also wants to make itself independent from the dollar. The central bank has significantly reduced the share of the US currency in its reserves, the FNB Federal Prosperity Fund, in which the state collects surplus oil export proceeds, will increase the dollar share from 35 “to zero percent”, according to Anton Siluanov, who is responsible for finance. shut down.
The reason is repeatedly threatened US sanctions against Russia. That is why Foreign Minister Lavrov had already proposed in early summer to decouple his country and China from the international payment processor Swift. Systems controlled by the West should no longer be used.
“Fortress Russia”
Financially, Russia could currently afford the decoupling: The central bank’s currency reserves amount to the equivalent of $ 620 billion. The state fund FNB has a further $ 190 billion (which corresponds to 12.1 percent of the gross domestic product). Ruchir Sharma, Chief Global Strategist of the US bank Morgan Stanley already speaks of the “fortress Russia”.
Economists criticize the fact that Moscow only uses its income from raw material exports to build up currency reserves instead of finally increasing its growth potential. “A more expansive fiscal policy would be necessary,” says Vasily Astrov, Russia expert at the Vienna Institute for International Economic Studies (wiiw). The institute expects growth of 3.5 percent this year and 3.0 percent in 2022. That is surprisingly little for an emerging market in the recovery phase after the pandemic-induced slump in 2020.
Russian experts now speak of “a lost decade” with an average of just under 0.9 percent economic growth. The world economy grew by an average of almost three percent over the same period. An analysis by the Institute for Economic Forecasts of the Russian Academy of Sciences complains that Russia has been left even further behind by the developed countries, in almost every field.
Analyst Trenin considers Russia’s current economic model to be “exhausted”. Because the current political elite consists mainly of people who primarily care for their own interests. There is “corruption in the state apparatus that is unprecedented in Russian history”. Above all else, the elites want to enrich themselves.
“The stagnating incomes and the increased proportion of the population living in absolute poverty in recent years endanger political stability in the long term,” warns Astrov.
Inflation is rising faster and faster
In fact, the average real income is only 411 euros, of which 15.2 percent went for rents, taxes and duties. Inflation rose to 6.7 percent in August, its highest level in five years. Food prices have increased even more.
Anyway, inflation is the big issue. In the two Putin decades it was a total of 571 percent, which is well above the global average of 208 percent. In order to avert the danger of inflation, the central bank has raised the key interest rate by 2.5 percentage points to 6.75 percent since March.
“That in turn will slow down lending and, with it, growth,” says wiiw economist Astrov.
Little help from China
The economic situation is more difficult than it has been in a long time – and the hoped-for help from China has so far not been received. Investors from the Middle Kingdom are even withdrawing from the gigantic empire. While the Chinese had invested $ 3.7 billion in Russian companies at the beginning of 2020, it was only 2.2 billion in April of this year – almost 40 percent less.
The only source of support remains the export to the People’s Republic. While Moscow was previously the main supplier of oil, coal and gas for Europe, Russia is increasingly supplying China via new pipelines.
But how much longer can Russia rely on these exports? The global demands for climate neutrality will have no impact on Russia and its raw materials sector before 2035, claims the Russian energy minister Nikolaj Schulginov.
But warnings are now even coming from government agencies: Russia’s business model “economic growth based on the oil, gas and coal sectors” is over, according to the experts at the Financial Institute for Scientific Research of the Russian Ministry of Finance (NIFI) in Moscow. Devastating forest fires, temperatures in Siberia higher than ever, a more drastic melting of the Siberian permafrost and the destructive sagging of pipelines, oil tanks and entire industrial plants make climate change more and more visible in Russia. But Russia, which is loudly protesting against an EU border levy on CO2 pricing, has so far itself had extremely cautious goals: by 2050, greenhouse gas emissions are expected to drop by just 25 percent.
On the other hand, Putin’s efforts to present himself as a world saver with the vaccine “Sputnik V” were more ambitious. But that too failed. Russia was not even able to meet its international delivery obligations. The vaccination campaign is also running slowly in their own country: just 27 percent of Russians have been vaccinated twice.
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