Economy in free fall
as Russian leader’s
popularity peaks
President Vladimir Putin is trashed by global money managers as Russians applaud.
As the Russian economy was slammed on global financial markets, the man at the center of the storm had a big smile on his face.
The Moscow Times reported Tuesday that Russians had just named President Vladimir Putin the ‘politician of the year’ for the 15th consecutive time.
As investors ran for the exits and the currency collapsed, a whiff of panic swept financial markets from east to west after the failure of a dramatic, midnight attempt by the Russian central bank to stem the flood with a massive interest rate hike.
The irony is rich. As his political popularity at home reaches new heights, Putin is getting trashed by money managers everywhere.
Just five months ago it seemed like Putin was riding the tiger of ever-higher oil prices and expanding territorial ambitions, as we reported in Russia has global economy over a barrel.
What a difference a 50 percent drop in the price of a barrel of black gold can make.
Speaking on the BBC World News on Tuesday evening, Sir Andrew Wood, the UK ambassador to Russia from 1995 to 2000, summed up the day’s events succinctly.
The Moscow Times story on Putin winning the ‘politician of the year’ title.
“This is a political crisis as much as it’s an economic crisis. Russia has overreached itself considerably in Ukraine … Putin has ramped up defense expenditure … and the Russian economy has been suffering for a long time from lack of investment and its overdependence on the price of oil.”
Reporting from Moscow, Steve Rosenberg said: “Only a few days ago, the Russian government told the people not to get hysterical over the falling ruble, to be patient. Ever since, it has been falling and falling.
“The Russian economy is being squeezed by falling oil prices and by western sanctions and that’s putting pressure on the president.”
Commentator Vladimir Pozner, put it this way on the BBC: “If there’s a real economic catastrophe, it will be blamed on [Putin] and he will fall from hero to zero.”
Meanwhile, the picture from Moscow was strikingly at odds with the global view. Among the top stories at the Moscow Times on Tuesday, was Putin Crowned ‘Politician of the Year’
“Russians have named President Vladimir Putin politician of the year for the 15th year running, a poll revealed Tuesday,” the paper reported.
“The survey, conducted by state-run pollster the Public Opinion Foundation, found that 68 percent of Russians chose to name the president as their “Person of the Year” in politics.”
The disconnect is glaring, but the explanation not difficult to discover. It was reported on the BBC and buried a little further inside the Moscow Times in the story Russian State Media Downplays Extent of Ruble Crisis
“While the ruble collapsed 10 percent on Monday, making headlines around the world, some Russians may have been unaware of the recent intensification of their currency’s woes,” the report said.
“A prime-time news bulletin broadcast by state-owned Channel One at 9 p.m. on Monday only featured a short segment on the currency drop — the fifth item on the news program — after reports about the terrorist attack in Australia, the killing of a terrorist suspect by law enforcement authorities in Russia and two announcements by President Vladimir Putin on military parades and construction targets.”
With an iron grip on the media, Putin can for a time control the perception of the fallout from the economic meltdown at home. But it is temporary, at best.
As the financial crisis spreads to the real economy, it will become impossible to conceal from Russians confronted with spiraling prices, government cutbacks and a worthless currency.
Putin’s popularity will plummet, along with the price of a barrel of oil and the implosion of the Russian economy.
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