Tomasz

Why Putin is popular in Russia

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(edited)

I know that people in the West think that the Russians unreasonably support Putin, so let me describe the situation so that it becomes clearer why he still enjoys the support of 2/3 of Russians 

Maybe it would be fair to consider the situation in 1999, before to tell what Putin could have done and did not do.

In 1999 Russia was more or less on the brink of desintegration. The Governors had been virtually free to transform the “regions” in personal feuds, the oligarchs were running the economy (and the State) very more than the Government, and the Government had followed the line of IMF, of the US “advisers” and of the “assistants” (Mrs Nuland) with lackadaysical results: default, hyperinflation, fall of all the indicators (life expectancy, birthrate, GDP) way below the Soviet level, privatization and virtual deindustrialization of the economy.

The only industry still working was the energetic industry, and it was NOT in the hand of the State, but of the “democratic" oligarchs like the “marthyr” Khodorkovsky, who were ready to sell the control of their firms to the foreigners (especially USA) to make money and become politically untouchable.

So there was no time and no way to think about “diversification”: first, there were the foreign debts (Soviet and Russian, together) to repay to escape from the foreign debt trap, and the only source of the money to pay those debts were the oil and the gas, since almost all the other industries were in a shambles, including the huge military industrial complex, and the same former-red-army (see first Chechen war for details) .

So to concentrate the efforts to retake the control of the oil and gas industry, and then to make it as profitable as possible, was not else but common sense. But it took some years: 4 at least, just to complete the phase of “retaking” of the sector (Khodorkovsky case) and to get the “oil-igarch” to follow the line (steer clear of the politics and mind your own business, or else…). And after that, let's be realist: yes, Putin could even influence the oligarchs which led those big firms (Rosneft, Lukoil, etc.), but just to some extent. There was no more a Communist state, after all. There's free enterprise. If the oligarchs wanted to keep investing in the oil, the Government could not do so much to change their minds (fiscal leverage, etc.).

Since undoubtedly there were these serious priorities, it’s hard to say what could Putin do in favor of diversification, and even against big corruption, without adopting the Chinese model (execution line for the more corrupt officials) or reserving to ALL the oligarch the Khodorkovsky treatment. In both cases, this could create more problems, both within the country (oh, evil Putin starts purges!) and in the relations with “Western partners” (not only Khodorkovsky has his friends in the west…). Definitely, a too much ambitious project.

Surely some more things to “diversificate” and to fight corruption could have been done later, and Putin has rested a bit too much on his laurels till the crisis of 2014, when the fall of oil price and the sanctions have been a tough revelly. The country has gained many positions in such rates as the World Bank business ranking,

Fighting corruption is easier said than done, especially when the problem is systemic. There simply are too many people involved in corruption all the way to the top. As we have seen with the post-2008 banking crisis, all but one attempt to prosecute any banker in the USA failed despite the frauds seemed so clear-cut at the beginning. Ultimately all the fines levied at the banks were minuscule compared to the huge sums of money the US government (and taxpayers) had to put in to save the financial system.

The Russian economy HAS become more diversified, just not nearly enough. I think Putin does want diversification, it is pretty much an axiom for everyone. And it’s not really a problem for oligarchs to switch to other sectors. The problem probably is that diversification means investing into the long-term and getting smaller returns in the meantime, whereas the business and the government always want the quickest bang for the buck. That’s a problem of all commodity-based economies. They seriously want to diversify when commodity prices are low, but then they don’t have money and no one wants to invest. But when prices are high, they just keep on pumping since it’s the easiest thing to do.

Perhaps Putin did not have much of a choice as the money flowed where the profits were, but certainly he could have done more to ensure a transition to a more diversified and as a result more stable and developed economy. That would have protected Russia’s fortunes from the unpredictable swings in global commodity prices but if we start back in 2000 its rather good 20 years.

Russia advances in global Doing Business rankings to 31st position...

but the problem remains.

There is a Russian proverb: “if you hunt two hares, you will get neither of them". You better never divide your forces.

Especially if you are hunting not two hares, but four lions: the State’s corruption, the oligarchs' greed, the necessity of economic differentiation (the smallest lion, indeed, but always a lion), and islamist “separatism”.

Putin concentrated his action first on the “democratic" oligarchs (first Berezovsky -finance-, then Guzinsky -media- and “martyr" Khodorkovsky -oil-), becaise there was where the cash was. And the real power too (I don't want to be anecdotical, recalling how those gentlemen -especially the first- entered the Kremlin offices kicking the doors, but it helps to get the picture).

When he threw the biggest oligarchs out of the ring, and got the others to toe the line (and sent the biggest “separatists" -Basayev and Umarov- to Allah's Heaven), he started to take care of corruption, which has been not eliminated, but quite trimmed (see World Bank and other foreign above-any-suspect sources for details), and he has even improved the situation regarding the independence of the courts, though it's not ideal yet (the international boards lamented that the “interferences from outside" in the judicial matters are “yet" not so rare, though less than they were in the “democratic" Eltsin's years).

Just remember that in 2000 Russia was on the edge of default, all the resources in hands of oligarchs and even salaries were not paid reguralry.

Compare Russia under Putin, his 20 years with any other country after default.

I think he did quite well.

 

Edited by Tomasz
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(edited)

I get it. Late 90s Russia was indeed a mess. It's why sometimes there is popular support for coup d'etats against Democratically elected governments who have bungled things up sufficiently.

That being said, Putin's first few terms coincided with a historic supercycle in many commodities in general, especially oil, something that seemed to one of the main drivers to get Russia back in track.

Putin could have simply pushed many reforms to break the oligarchs and end the chronic corruption that coincided with desovietization of the russian economy. He could have ridden into the sunset as a savior of the country who turned the country back towards a better future.

Instead, he's gone gone the path that many strongmen tend to go after they consolidate power: replace one set of corruption with another, and institute propaganda campaigns, laws, and use foreign boogymen/wars to prevent any opposition from ever gaining strength. Russia has declined in many ways since, and it's not very clear to me that it's future will be bright.

Ever since the last commodity supercycle grinded to a halt in 2008, the Russian economy has not done so well:

bne1.png

In a real democracy with a real opposition and a robust free press that holds people in positions of power accountable, there is no chance that Putin would hold 2/3s of the country's popular support during a period of such stagnation.

Instead, he's basically president for life. No way to maximize chances of good governance.

Edited by surrept33
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Joe Biden will be more popular than Putin in Russia because he will revoke oligarch travel visas, freeze their foreign bank accounts, and seize their chalets. 

 

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(edited)

7 hours ago, surrept33 said:

In a real democracy with a real opposition and a robust free press that holds people in positions of power accountable, there is no chance that Putin would hold 2/3s of the country's popular support during a period of such stagnation.

You would think, but trump has about 43% support even with extreme losses (record deficits, deaths, riots, impeachment, international embarrassment, lawsuits.)

When you spend more time working the media than fixing the country this is what you get.

Like a mistreated dog; only cares for attention - good or bad.

 

ratings.png

Edited by Enthalpic
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20 minutes ago, BradleyPNW said:

Joe Biden will be more popular than Putin in Russia because he will revoke oligarch travel visas, freeze their foreign bank accounts, and seize their chalets. 

 

Good! Send Biden to Russia! A win-win solution!

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On 7/13/2020 at 5:53 PM, Tomasz said:

I know that people in the West think that the Russians unreasonably support Putin, so let me describe the situation so that it becomes clearer why he still enjoys the support of 2/3 of Russians 

Maybe it would be fair to consider the situation in 1999, before to tell what Putin could have done and did not do.

In 1999 Russia was more or less on the brink of desintegration. The Governors had been virtually free to transform the “regions” in personal feuds, the oligarchs were running the economy (and the State) very more than the Government, and the Government had followed the line of IMF, of the US “advisers” and of the “assistants” (Mrs Nuland) with lackadaysical results: default, hyperinflation, fall of all the indicators (life expectancy, birthrate, GDP) way below the Soviet level, privatization and virtual deindustrialization of the economy.

The only industry still working was the energetic industry, and it was NOT in the hand of the State, but of the “democratic" oligarchs like the “marthyr” Khodorkovsky, who were ready to sell the control of their firms to the foreigners (especially USA) to make money and become politically untouchable.

So there was no time and no way to think about “diversification”: first, there were the foreign debts (Soviet and Russian, together) to repay to escape from the foreign debt trap, and the only source of the money to pay those debts were the oil and the gas, since almost all the other industries were in a shambles, including the huge military industrial complex, and the same former-red-army (see first Chechen war for details) .

So to concentrate the efforts to retake the control of the oil and gas industry, and then to make it as profitable as possible, was not else but common sense. But it took some years: 4 at least, just to complete the phase of “retaking” of the sector (Khodorkovsky case) and to get the “oil-igarch” to follow the line (steer clear of the politics and mind your own business, or else…). And after that, let's be realist: yes, Putin could even influence the oligarchs which led those big firms (Rosneft, Lukoil, etc.), but just to some extent. There was no more a Communist state, after all. There's free enterprise. If the oligarchs wanted to keep investing in the oil, the Government could not do so much to change their minds (fiscal leverage, etc.).

Since undoubtedly there were these serious priorities, it’s hard to say what could Putin do in favor of diversification, and even against big corruption, without adopting the Chinese model (execution line for the more corrupt officials) or reserving to ALL the oligarch the Khodorkovsky treatment. In both cases, this could create more problems, both within the country (oh, evil Putin starts purges!) and in the relations with “Western partners” (not only Khodorkovsky has his friends in the west…). Definitely, a too much ambitious project.

Surely some more things to “diversificate” and to fight corruption could have been done later, and Putin has rested a bit too much on his laurels till the crisis of 2014, when the fall of oil price and the sanctions have been a tough revelly. The country has gained many positions in such rates as the World Bank business ranking,

Fighting corruption is easier said than done, especially when the problem is systemic. There simply are too many people involved in corruption all the way to the top. As we have seen with the post-2008 banking crisis, all but one attempt to prosecute any banker in the USA failed despite the frauds seemed so clear-cut at the beginning. Ultimately all the fines levied at the banks were minuscule compared to the huge sums of money the US government (and taxpayers) had to put in to save the financial system.

The Russian economy HAS become more diversified, just not nearly enough. I think Putin does want diversification, it is pretty much an axiom for everyone. And it’s not really a problem for oligarchs to switch to other sectors. The problem probably is that diversification means investing into the long-term and getting smaller returns in the meantime, whereas the business and the government always want the quickest bang for the buck. That’s a problem of all commodity-based economies. They seriously want to diversify when commodity prices are low, but then they don’t have money and no one wants to invest. But when prices are high, they just keep on pumping since it’s the easiest thing to do.

Perhaps Putin did not have much of a choice as the money flowed where the profits were, but certainly he could have done more to ensure a transition to a more diversified and as a result more stable and developed economy. That would have protected Russia’s fortunes from the unpredictable swings in global commodity prices but if we start back in 2000 its rather good 20 years.

Russia advances in global Doing Business rankings to 31st position...

but the problem remains.

There is a Russian proverb: “if you hunt two hares, you will get neither of them". You better never divide your forces.

Especially if you are hunting not two hares, but four lions: the State’s corruption, the oligarchs' greed, the necessity of economic differentiation (the smallest lion, indeed, but always a lion), and islamist “separatism”.

Putin concentrated his action first on the “democratic" oligarchs (first Berezovsky -finance-, then Guzinsky -media- and “martyr" Khodorkovsky -oil-), becaise there was where the cash was. And the real power too (I don't want to be anecdotical, recalling how those gentlemen -especially the first- entered the Kremlin offices kicking the doors, but it helps to get the picture).

When he threw the biggest oligarchs out of the ring, and got the others to toe the line (and sent the biggest “separatists" -Basayev and Umarov- to Allah's Heaven), he started to take care of corruption, which has been not eliminated, but quite trimmed (see World Bank and other foreign above-any-suspect sources for details), and he has even improved the situation regarding the independence of the courts, though it's not ideal yet (the international boards lamented that the “interferences from outside" in the judicial matters are “yet" not so rare, though less than they were in the “democratic" Eltsin's years).

Just remember that in 2000 Russia was on the edge of default, all the resources in hands of oligarchs and even salaries were not paid reguralry.

Compare Russia under Putin, his 20 years with any other country after default.

I think he did quite well.

 

 

On 7/14/2020 at 1:37 AM, Enthalpic said:

You would think, but trump has about 43% support even with extreme losses (record deficits, deaths, riots, impeachment, international embarrassment, lawsuits.)

When you spend more time working the media than fixing the country this is what you get.

Like a mistreated dog; only cares for attention - good or bad.

 

ratings.png

Absolutely!

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This has been going on for a long time in Russia. Russia needs to align with the West. 

https://www.themoscowtimes.com/2020/07/18/tens-of-thousands-stage-anti-kremlin-protests-in-russias-far-east-a70916

https://docs.google.com/document/d/1TNLgFNBS_jURlZiqkdZfYjG6DoGiYbcwcdn1e-62rUM/edit

Tens of Thousands Stage Anti-Kremlin Protests in Russia's Far East

 

By AFP
12 hours ago
    
khab.jpg

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(edited)

Also from the Moscow Times:

Russian Police Major Falls From Window After Testifying Against Boss

Seems to happen quite a lot over there.  Those Police Majors tend to be clumsy around windows. 

https://www.themoscowtimes.com/2020/07/16/russian-police-major-falls-from-window-after-testifying-against-boss-reports-a70895

Unconfirmed reports citing anonymous sources in law enforcement agencies say that Mishkina was a witness in a criminal case against her former boss, who’s suspected of extorting from subordinates. She was reported to have testified against him some time before her death.

Edited by Jan van Eck

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On 7/18/2020 at 8:14 PM, Jan van Eck said:

Also from the Moscow Times:

Russian Police Major Falls From Window After Testifying Against Boss

Seems to happen quite a lot over there.  Those Police Majors tend to be clumsy around windows. 

https://www.themoscowtimes.com/2020/07/16/russian-police-major-falls-from-window-after-testifying-against-boss-reports-a70895

Unconfirmed reports citing anonymous sources in law enforcement agencies say that Mishkina was a witness in a criminal case against her former boss, who’s suspected of extorting from subordinates. She was reported to have testified against him some time before her death.

Meanwhile in the US:

Son of US District Judge Esther Salas killed, husband shot

https://app.tmxmoney.com/news/cpnews/article?locale=EN&newsid=a06457&mobile=false

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I do not want to be malicious, but if we look at what is happening in the USA nowadays, Americans should be really more restrained in criticizing other countries because in my opinion no country compromise itself more than the USA in the fight against the coronavirus.

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