There has been a lot of talk about ‘containment‘ and the need to do so with Russia, but nobody can agree on what that looks like. Meanwhile, Russia continues to play games in Eastern Europe, and the Baltics, in particular.
Reuters conducted a discussion on Tuesday of experts on Russia about Putin’s ambitions, and goals. The panel included Masha Gessen, and Garry Kasparov:
“All the experts in attendance warned that Putin’s recent moves in Ukraine might only be the start of new territorial ambitions.”
“We’re talking about a man who doesn’t have a plan. So we’re trying to figure out what his plan is, but he doesn’t have one.”
I remember writing back before the war in Georgia in 2008, “there is an element where you just do not know if Putin might wake up one day and decide to bomb Tbilisi, and actually do it.” And we still do not know. The unpredictability of these actors is dangerous.
This conversation pops up periodically. But we always seem to rehash the same arguments about where this all goes/ends.
It has been calculated that Russia have until September 2016 before their reserves run out. But I believe that is based on the dual premises that they have as much as they say they do, and if rates stay steady.
The Kremlin is still trying to act like this is just a bump in the road, and sanctions will be lifted soon. But we are more than 6 months into the sanctions now. And a report leaked today says that the EU will not lift them when they meet on Monday. So if the Kremlin is banking on that, they will be in for disappointment.
Crude keeps falling, and so does the rouble. But those two numbers somehow end up balancing each other out. The two big risks now are inflation from the counter-sanctions and debt refinancing. A lot of corporate debt is due in December ($191 billion due this year), including for companies like Rosneft who have been hit by the sanctions, and are hard-pressed to find replacement funding.
The other big risk for the economy is inflation, now up above 8% nationwide, but higher in some regions. But inflation may be ignored by the street because Russians are used to tightening their belts for the sake of patriotism. A recent poll by Russian pollster Levada revealed just such a trend. At the same time, however, Levada have admitted previously that their polls may not be a true indicator of Russian attitudes, and that society could snap at any moment.
The rhetoric from the government on the “Novorossiya” project continued this week with interviews from Prime Minister Dmitry Medvedev, Putin’s Chief of Staff, Sergei Ivanov, & Security Council Chief Patrushev. But it’s not enough for certain segments of the political class. Sergey Markov criticised Patrushev’s recent interview, and implied that the government is weak on Novorossyia, and not doing enough to make it a reality.
There is a real risk that Russian society will eventually get frustrated because they want something to show for their sacrifices, and demand that Putin act. And when Putin won’t or cannot deliver, they will turn on him. And what Russia is left with is a crazy nationalist like Strelkov, who charges ahead and makes some grand gesture to consolidate power.
Putin is in “Survivor” mode: ‘outwit, outplay, outlast’. His second threat of nukes indicated that he is worried he is not being taken seriously. But in a world of the 24-hour news cycle, and threats like ISIS, and Ebola, who has time to worry about some dictator threatening to go nuclear?