Dec. 3 (Bloomberg) –- Falling oil prices, a collapsing ruble and
sanctions from the west are all major headaches for Vladimir Putin. But
can the Russian President get the country back on track? Bloomberg's
Ryan Chilcote reports on "Countdown."
(Source: Bloomberg)
Heard the one about Vladimir Putin, the oil price and the ruble’s value against the dollar? They will all hit 63 next year.
That’s
the joke doing the rounds of the Kremlin as the Russian government digs
in to weather international sanctions over the conflict in Ukraine.
According to at least five people close to Putin, pressure from the U.S.
and Europe is galvanizing Russians to withstand a siege on their economy.
The black humor is part of an image of defiance not seen since the Cold War.
As the economy enters its first recession in more than five years, the
ruble depreciates to records and money exits the country, Putin’s
supporters are closing ranks and say he’s sure to run for another
six-year term in 2018.
“We are becoming poorer, our savings
vanish, prices grow, however we see an opposite effect to the one that
is wanted by people who wish to see Putin knocked down,” said Olga Kryshtanovskaya,
a sociologist studying the elite at the Russian Academy of Sciences.
The jokes just underline their determination to stand till the end, she
said.
Putin celebrates his 63rd birthday on Oct. 7. The price of Brent crude
sank to a five-year low of $67.53 a barrel this week. The ruble has
dropped to near 55 to the dollar from as strong as 34 less than six
months ago, meaning it needs to lose another 13 percent to complete the
joke.
Photographer: Sasha Mordovets/Getty Images
Putin celebrates his 63rd birthday on Oct. 7. The price of Brent crude sank to a... Read More
No Surrender
A friend of Putin who spoke on
condition of anonymity said sanctions won’t work because the U.S. and
European Union don’t understand the Russian mentality. The country
endured the Leningrad siege for more than two years during World War II
and will survive this too, he said.
“The West is wrong in its understanding of the motivation Putin and his inner circle have,” said Evgeniy Minchenko, head of the International Institute of Political Expertise
in Moscow. “They think Putin is a businessman, that money is the most
important thing for him and that by pressing him and his allies
financially they will break them.”
The narrative of resilience is playing well with the public, opinion polls show.
One published last week by the Moscow-based Levada Center
found that half of the respondents saw no hardship arising from the
sanctions and another 31 percent saying any problems weren’t very
serious. A survey
by the same company a month earlier found 86 percent of Russians in 134
localities were mostly or definitely proud of living in Russia.
Feeling Patriotic
“People
think it’s not patriotic of them to feel or recognize that they are
suffering,” said Alexei Grazhdankin, deputy director of the Levada
Center. “This shows a mental focus to resist external pressure and
ignore sanctions. This mood in public can last not for months, but for
years.”
Russia’s economic fortunes have been pinned to oil since
the Soviet era. In the 1970s, after the Arab oil embargo sent prices
soaring, communist leader Leonid Brezhnev enjoyed relative prosperity and rising global influence.
Then a glut in the 1980s led to a six-year decline in prices and failure to keep shelves stocked with basic consumer goods. Putin has described the collapse of the Soviet Union as the greatest geopolitical disaster of the 20th century.
In a Nov. 13 interview
with state news agency TASS, Putin said it’s too early to say whether
he will run for another term. “I will proceed from the general
situation, the inner perception and my personal feelings,” Putin said.
No Alps
“Russia’s real problem is not a risk of a crisis, but the fact there is no way out of the current situation,” Konstantin Sonin,
a professor at Moscow’s Higher School of Economics, said this week. “A
catastrophe is possible only if some really dramatic decisions in
foreign or domestic policy will take place in the near term.”
According to the friend of Putin who evoked the Leningrad siege, the toughest thing for a lot of Russia’s elite is not being able to travel. Though there’s enough to do in Russia without having to go to other places, he said.
If they can’t go to the Alps, they’re happy to go to the mountains of Kamchatka, he said.
To contact the reporters on this story: Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net; Stepan Kravchenko in Moscow at skravchenko@bloomberg.net
To contact the editors responsible for this story: John Fraher at jfraher@bloomberg.net Rodney Jefferson
end quote from: Oil, the Ruble and Putin Are All Headed for 63. A Russian Joke -- for the Moment
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