Opinion: A Change In The Weather Brings A Chill To Russia’s Ambitions
Oil Drops Below $50 Again
Originally Posted At The Washington Times
Image by Kremlin.ru
After writing about Russia and its adventures abroad for almost a decade now, I’ve developed a personal barometer for how things are going inside the country — and how they’re being perceived from the outside. Over the past several years, especially since the Sochi Olympics, Moscow has been on a roll, with President Vladimir Putin skillfully playing a weak hand to almost single-handedly return Russia to a position of respect and prominence on the world stage.
But my barometer is now sensing a change in the air.
It’s fitting that it is still snowing in Moscow in May. There seems to be a tiredness, or at least a pause, in the Kremlin juggernaut of propaganda and PR successes, not to mention the sobering facts on the ground in Syria, Ukraine and elsewhere.
The Russian economy may no longer be contracting, but it is not growing rapidly either. There is still an annual hole in the federal budget that needs to be filled. Military spending is taking much-needed funds from social priorities. No matter how many new weapons or shiny new armored vehicles the Kremlin parades through Red Square on Victory Day, you can’t change reality.
The government needs money, so it is raising taxes anywhere it can.
Recent protests by truckers upset over new fees to distribute goods shine a rare light on social unrest bubbling under the surface. Legislation being considered would tax “self-employed” individuals in Russia 20,000 rubles — about $400 — annually. If they don’t pay, they won’t be able to leave the country. Many of those facing the tax operate in the shadow economy, receiving cash for their services and paying no taxes to the government. Preventing overseas travel is a serious issue especially for Muscovites, who already have to adjust to the realities of $50-a-barrel oil.
Speaking of oil, the Russian economy is still not diversified away from its dependence on the energy sector. There have been attempts around the edges, but you cannot magically encourage innovation and entrepreneurship in an oligarchy. It simply isn’t possible. American shale oil is keeping the price of crude in a trading range with no upside in sight. Whenever OPEC and Russia cut production or talk up the market, North Dakota turns on the taps — checkmate.
The Trump administration is not going to relieve sanctions anytime soon, if ever, for Russia’s actions in Ukraine. It doesn’t take a rocket scientist to see that Mr. Trump is reinforcing NATO’s eastern border, standing up to Russia’s old client-state North Korea with force, and lobbing dozens of cruise missiles into a Russian base in Syria. Some Manchurian candidate Mr. Trump turned out to be.
Russia’s vaunted meddling in foreign elections is also not going so well these days. France’s Marine Le Pen lost her race, Mr. Trump is promoting American interests only and Balkan states still pine to join NATO. Global public opinion seems to have turned against Moscow in many ways, with Western governments putting money behind efforts to counter Kremlin propaganda.
Mr. Putin is stuck. Where does he take Russia in the future? What is his next move? How does he move the country out of the doldrums? Is there another foreign adventure up his sleeve? Syria and eastern Ukraine seem to be military stalemates, costing Russia money every day that it doesn’t have. The price of oil is below $50 again.
Social media was abuzz this week over Russia’s Victory Day parade, where once again thousands of troops and vehicles were shown off to commemorate the defeat of Nazi Germany by the Red Army. Many Russians were asking online why a parade is still necessary, noting that only Russia and North Korea still organize such expensive displays. The money, they tweeted, could and should be spent elsewhere.
Adding indignity to injury, the Russian air force’s participation in the Victory Day celebration was canceled this week because of bad weather. It seemed fitting for the mood.
Russia seems to be at a turning point. It will be interesting to see what is to come.