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What Putin Is Costing Russia
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Ilan Berman, vice president of the Foreign Policy Council in Washington D.C., cites former finance minister Alexei Kudrin about capital flight from Russia reaching as high as $160 billion in 2014. This is a result of Russian policies in Ukraine that are creating a high degree of uncertainty and investor fears about the Russian economy. The result Kudrin says would be a stagnating economy. This follows the emerging market crisis in the beginning of 2014, which hit Turkey, Argentina, and Brazil. Kudrin is respected for his efforts to strengthen Russia's finances in Putin's first term in office, and left the administration over disagreement with prime minister Medvedev on damage to finances from higher defense spending. This suggests Putin and Medvedev in their first terms as president conducted more prudent policies for the economy than they are doing in Putin's second term. A certain recklessness seems to have crept in as many respected advisors from that period have left over differences in policy, including how protests and the opposition's views should be handled. This includes Medvedev's early efforts after elections for dialogue with the opposition parties which were set aside by Putin. The danger with having a Bolivarist class of tycoons as in Venezuela and some developing countries, instead of wiser heads around him for Putin, is that he will lose the advice and counsel he so badly needs to conduct policies without letting emotions getting the better of a sound judgement. A large foreign exchange reserve is a buffer for Russia, but this needs to be used to diversify the economy away from dependence on oil and commodities by investing in technology industries to create jobs in other fields, and not wasted in higher defense spending and fighting investor sentiment for the value of the ruble. It also shows that there is an inherent value in having a "loyal opposition" and "shadow cabinet," and these institutions were not invented over centuries of practice in government without a reason, in that they actually help the governing administration pursue prudent policy without arbitrary actions. The irony is that the very fears of 1998 repeating itself with the "chaos" of western style democracy and politics and manipulation by oligarchs- a Putin complaint- is reversing the gains made by Russia since then, with another set of tycoons and vested interests in place. Russians, like the Germans can learn to make democracy work without a centuries long history of democratic traditions, elections and free media. Czarist traditions can be overcome just as the Prussian traditions were overcome, and Russians can come up with their own Wily Brandts and Gaucks, leaving behind the old history of suppressing contrary opinions. For this to happen Russians including Mr. Putin need to leave their own fears behind, and trust the Russian people for the right instincts and values and maturity of judgement, just as the Germans have done and succeeded.
Alexei Kudrin and other experts see the potential for a deep political and economic crisis in Russia 2011-2015
01/25/2008
Fears expressed by Kudrin and other experts at a Moscow conference about the impact of a recession in the eurozone and Greece's exit from the euro. Kudrin was a key figure in Russia anticipating and setting aside reserves in the sovereign fund to meet the adverse effects of the 2008 global financial crisis. The views expressed were that Russia's economy is shaky and could be seriously affected if European banks reduce their loans. Earlier he strongly opposed increases in military spending in a disagreement with prime minister Medvedev because of concerns about financial stability.
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The current account deficits are high in Thailand and Turkey, and this is coupled wth political uncertainty. Argentina faces high inflation at over 20%. Investors have focussed on Argentina and Turkey. Countries that failed to learn from the 1997 crisis such as Argentina, Turkey and Thailand, are seen in a different light from Mexico and Poland. India faces inflation of about 10%. Other countries affected are Russia, Brazil and South Africa. Most of the countries have flexible exchange rates in 2014 compared to fixed exchange rates in 1997, and higher dollar reserves in 2014 which helps cushion the effects of overseas borrowing. The effects on Europe and the U.S. in 2014 are seen as limited to how this affects the global economy.
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Putin Pledges Stimulus for Russian Economy
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Russia's Growth Pace Continues to Weaken
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Russia Looks to Borrow to Plug Funding Gap
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Russia Is Facing Stagflation, Central Banker Says
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Russia's Power Play Hits Economic Weak Spot
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Frank-Walter Steinmeier Meets With Vladimir Putin
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Russia's finance minister, Alexei Kudrin, and Russia's finances
01/25/2008
Kudrin on higher military spending of 3% of Russia's GDP, exceeding the amount spent on education. He sees this as endangering Russia's finances. Kudrin's focus on building the Russian Stabilization Fund helped Russia weather the 2008 global financial crisis. He is one of the St Petersburg officials who helped bring Putin to the Presidency. A slowing economy and a decline in oil prices would have an impact on the Russian economy. Analysts say Russia needs an oil price of $120 to support the current level of spending.
Grouped Articles
Putin Pledges Stimulus for Russian Economy
Wall Street Journal 06/21/2013
Russia Looks to Borrow to Plug Funding Gap
Wall Street Journal 09/19/2013
Russia Prepared to Let Ruble Slide
Wall Street Journal 01/30/2014
Red Alert on Russia Is Premature
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Russia's Power Play Hits Economic Weak Spot
Wall Street Journal 03/04/2014
Russia Economy Worsens Even Before Sanctions Hit
New York Times 04/16/2014
Russia's economy- 2010-2014
09/10/2011
Grouped Articles
Putin Pledges Stimulus for Russian Economy
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Russia's Growth Pace Continues to Weaken
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Russia Looks to Borrow to Plug Funding Gap
Wall Street Journal 09/19/2013
Russia Prepared to Let Ruble Slide
Wall Street Journal 01/30/2014
Red Alert on Russia Is Premature
Wall Street Journal 02/03/2014
Russia's Power Play Hits Economic Weak Spot
Wall Street Journal 03/04/2014
The impact of the Ukraine crisis on the Russian economy in 2014 with western sanctions
08/11/2013
Grouped Articles
Russia's Power Play Hits Economic Weak Spot
Wall Street Journal 03/04/2014
As Prime Russian Trading Partner, Germany Appears Crucial to Ending Crisis
New York Times 03/03/2014
The World's Riskiest Stock Market?
Wall Street Journal 03/22/2014
Russia Says It Has Weathered the Worst of the Economic Storm
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Russia's Growth Pace Continues to Weaken
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Russia Plotting for Ukrainian Influence, Not Invasion, Analysts Say
New York Times 04/09/2014
Russia's effort to fight western sanctions in 2015, Euroskeptic parties and the European Union
04/25/2014
Linked Articles
Russia Wields Aid and Ideology Against West to Fight Sanctions
New York Times 06/07/2015
Wall Street Journal 04/25/2014
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