Ruble won't topple Putin
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By Chris Monday
Russia’s 1998 financial meltdown ushered in the Putin era. The current ruble tumult, many hope, will end Putin’s rule. But the two crises, while similar economically, bare little resemblance politically. This time is different.
Russians in 1998 perceived the financial crisis as the logical finale for a putrid regime. The Yeltsin movement never enjoyed avid support. Russians felt that the collapse of the Soviet Union was something that happened to them, not something they brought about. Worse yet, privatization appeared to be designed without regard to regular citizens. In contrast to Gorbachev’s empty reform talk, the privatizers put little stock in words. Boris Yeltsin’s storming of the Duma in 1993 led to an implicit bargain: democracy must be subdued, and the nationalists suppressed, to clear the path for “needed” reform.
This bargain quickly unraveled. Living standards plunged, while those who prospered seemed to be corrupt insiders or compromised hucksters willing to make shady deals with the state. As the ‘self-made man’ became an illusion, men gave themselves to sloth. Through grueling hours, a few self-made women managed to claw themselves into the lower rungs of the patriarchy.
I remember how Russians during the Presidential Election of 1996 complained that Yeltsin was nothing but an American stooge; they voted for him only because an alternative was lacking. The more the West preached, the more despised it became. Yeltsin’s boasts of his connections ― “Friend Bill” and “Friend Helmut” ― remain comedy-skit invective.
The media, universally pro-Yeltsin, convinced few. Watching TV in Russian households, I observed how viewers fumed; today Putin adroitly recalls and channels their frustrated gripes. Although there is a certain nostalgia for the television of the 90s, in reality, media was a vehicle for eccentric oligarchs to discredit one another with risqué material. Because of their illegitimacy, these tycoons were capable of ‘capturing the state’ only in the naïve writings of western academics. Instead, the oligarchs clawed at one another for a place in the pecking order.
At the university, in the library, on the subway, in the village, on dates, I heard only how Yeltsin had sold out Russia. The default of 1998 appeared as a virtually ordained day of reckoning.
Russians cheered the fresh leadership of Evgeny Primakov and the communist, Yuri Maslyukov. Despite the dire warnings of a communist revanche, the Primakov team implemented the most successful policies in modern Russia history. Primakov, moreover, stood up to the Americans in Serbia. He seemed to prove that more firmness with the West led to palpable economic growth. This became Putin’s prototype.
Russians regard today’s crisis completely differently from 1998. The West, in their eyes, has retaliated to just actions by provoking market mayhem. I have never seen the population so gripped by an issue as the Ukrainian standoff. Russians discuss its twist and turns as if it was a soap opera. Many seem to actually relish the ruble’s drop: it’s the latest installment of a reality drama. Now everyone can sacrifice for the holy fight. (Perhaps this sentiment owes something to the dearth of independent entrepreneurs. The Ukrainian confrontation has not greatly harmed the pocketbooks of Russia’s brigadiers, police officers, professors, and pensioners.)
Putin in his annual news conference repeated what I have been hearing Russians say all year. This is not by chance. The KGB in the twilight of Soviet ideology became skilled at molding public opinion. Putin’s advisers thus know what people want to hear. He is also mindful of the fate of his mentor, Anatoli Sobchak, who was hounded out of office for being overly friendly with the West. It helps that Putin believes much of what he says.
Unlike 1998, Putin determines the pecking order so that there is no incentive for the oligarchs to mount a challenge. With their tentative property rights and deep unpopularity, the power elite have no choice but to support the state.
The crisis may actually be a lucky break for the regime. The determinants of the ruble crisis were fixed long before Crimean annexation. As epitomized by the boondoggle Skolkova, a Muscovite “Silicon Valley,” the government botched its chance to diversify the economy. The oil industry, run by Putin henchmen, scoffed at fracking, instead sponsoring a legion of vanity projects. This mismanagement can now be conveniently swept under the rug.
The ruble crisis brings other benefits. Without any totalitarian measures, Russians have been effectively isolated from western influence. The state, moreover, can pay off its devalued pension obligations with its dollar-denominated oil income. Russian companies most of which have amassed significant amounts of debt are at Putin’s mercy.
Putin knows the West has no end game. Because of its nuclear arsenal, Russia can never be allowed to collapse. In his press conference, Putin stressed the ‘bear’s claws.’ As opposed to Yeltsin, Putin has full control of the military and the Soviet-era internationalists are long gone. This makes the bear all too dangerous.
Chris Monday is an associate professor at Dongseo University.