Two Crises: Consequences and Outlook

The political status quo in Russia that allows Vladimir Putin to enjoy unquestioned decision-making authority is likely to remain in place for the foreseeable future despite unrest from the global economic crisis and the 2008 Georgia war. The full impact of the two crises, however, remains to be seen. Observers have projected widely divergent scenarios, ranging from a collapse of the current system to a consolidation of authoritarian rule. But a working group of leading Russian scholars, convened by the Carnegie Moscow Center, concluded that the crisis is unlikely to trigger sudden shifts toward democracy or authoritarianism.

Masha Lipman and Nikolai Petrov from the Carnegie Moscow Center discussed the outlook for Russia’s political and social system, assessing the various scenarios mapped out by scholars in the latest issue of Pro et Contra. Ambassador James Collins moderated the discussion at Carnegie’s Washington office.

Key points:

• Russia faces growing discontent over unemployment and other social issues, but discontent has not translated into political action and is unlikely to do so in the near future.

• Recent polling indicates that forty percent of Russians think the country is heading in the wrong direction, but approval ratings for Putin and Medvedev remain relatively high, indicating positive levels of trust in Russia’s state institutions.

• It would take a significant shift in the popular mindset to spark the large anti-government protests some observers envisioned when the economic crisis first hit Russia. The few scattered protests, including recent ones in the Far East, are local in scope and cause.

• Long-running squabbles among Russia’s governing elite will only become more intense and more visible as the economic crisis drains the government’s resources. The inefficiency of Russia’s governance system can no longer be concealed, but it remains unopposed by the public.

• The economic crisis may spark a “managerial crisis” in the regions outside Moscow, where regional leaders’ poor governance is fueling dissatisfaction.

• The banking crisis is only beginning to unfold in Russia, and Bloomberg Financial News estimates that the number of bad debts will quadruple by the end of the year.

• Putin’s system allows some freedoms. But public discussions and debate of policy are often used as pressure valves, allowing the government to give the impression of political freedom and defuse internal pressure to liberalize, and have little connection to the decision-making process.