How Long Will Putin Last?

There was a blog post in the Washington Post yesterday asking “How Long Will Putin Stay in Power?”

The author (whom I have never encountered before) did not really answer the question, only suggesting that Putin will manage to hold on through the 2018 “and beyond”. That is, barring a coup.

Now I know I’m the only one arguing this (in English anyway), but I don’t believe that Putin is really in charge of Russia. If a coup did take place, it took place a long time ago, and nobody realized it.

Putin is still useful to the Regime at the moment and will remain in place until they feel he is no longer useful to their purposes. I suspect what that means is that Putin will die in office, something the author of the blog post neglected to offer as an option.

Putin is part of a system that was created long before he was selected to be Russia’s president. And the system will remain in place long after he is gone unless the Russian people stand up and protest it.

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Kadyrov

Back in January when the drama surrounding Kadyrov started to heat up again, Ruslan Khasbulatov gave an interview about the current situation in the country. He blamed just about everybody in the Kremlin (including Putin & Medvedev) for the economic ills society was facing.

But what struck me most in the interview was this quote:

Our government is too afraid of any criticism at all. Without criticism there can be no positive movement. But the phenomenon of Kadyrov is in the fact that he does a lot of useful things. He needs help, but he doesn’t always find support.

As I wrote earlier, I think that a lot of what is happening is just for entertainment. And the fact that Kadyrov made his announcement on the same day that Ilya Yashin released his report on Kadyrov seems to indicate that it was nothing more than a distraction.

The social media response begging Kadyrov to stay is just another ploy. It gives the Regime and Kadyrov the chance to say and show people that Kadyrov is actually a popular figure, who must not be replaced. And the Kremlin can say, well, what can we do? Kadyrov is popular. People want him to stay. We are acceding to the will of the people, to their wishes.

And so Kadyrov will stay.

Central Bank Scheme

Former Russian Economy Minister Andrei Nechaev wrote on his blog today that more than 2 trillion rubles was printed in 2015. The Central Bank bought this currency from the Russian government.

But the rubles in the economy have at some point reached 2 trillion more because the notes did not stay in the treasury, but went to finance the federal budget deficit. In practice, the money took the form of payments to public procurement, pensions, public sector wages, etc.

The Central Bank’s primary task right now is to keep inflation low. This has been stated quite clearly. But adding 2 trillion rubles to float freely on the market would do the opposite. So, Nechaev says, the Central Bank began “dramatically reducing lending to commercial banks. Basically it affected the most widely used forms of credit – the “weekly repo” operations.”

Nechaev continues:

In the words of the Central Bank chairwoman, the Bank of Russia has consistently reduced the provision of liquidity to the banks in this form. The volume of repo transactions fell from 2.69 trillion rubles in late 2014 to 840 billion rubles at the beginning of 2016 and to 490 billion rubles for mid-February.

But, he says:

Obviously the currency acquired by the Central Bank will eventually be given in some form to the Russian banks and large companies for the settlement of Western loans under the closing capital of Western markets due to sanctions.

The Central Bank is conducting “this elaborate scheme”, Nechaev alleges, for two reasons:

  1. “…the sale of such significant volumes of currency strengthens the exchange rate, and therefore the Ministry of Finance will receive less of the rubles badly needed to carry out budgetary commitments.”
  2. “…in buying currency, the “irresponsible” Russian bankers and businessmen could get it out of Russia, where capital is inconvenient.”

And so the Ministry of Finance and the Central Bank have made everything comfortably, relaxed and home-like.