Mikhail Klimentyev / Kremlin via REUTERS Russian President Vladimir Putin addresses the Federal Assembly in Moscow, Russia, February 2019

Can Putin Fix Russia’s Sputtering Economy?

Why Stagnation Is the New Normal

“Blatant disrespect” for Russia’s government can now land you in jail, under a new law the country’s legislature has passed. Worried that Russians are increasingly inclined to criticize the state or protest against it, the government is tightening the screws.

Public support for the Kremlin and for Russian President Vladimir Putin has slumped in recent months. The government’s popularity had spiked after Russia annexed the Ukrainian territory of Crimea in 2014, catapulting Putin’s approval rating to near 80 percent, where it remained for nearly five years. Yet that political magic is wearing thin. Over the past six months, Putin’s rating has crashed. True, the most recent poll by the Levada Center, an independent Russian polling organization, suggests that 64 percent of Russians continue to approve of Putin’s work as president. Yet that is the lowest number since 2013, when Putin returned to the presidency amid anti-regime protests.

THE KREMLIN’S EMPTY PROMISES

Russia’s citizens are gloomy about politics because of the country’s sputtering economy. Russia has had a miserable past five years. In 2014, two external shocks buffeted the country. First, oil prices collapsed, falling from above $100 per barrel in 2014 to barely $30 per barrel in early 2016, slashing Russia’s largest source of export revenue. Second, the United States and Europe imposed tough financial sanctions that forced Russian firms to reduce investment and raised borrowing costs across the economy. As the ruble tanked, investment and consumption also declined.

At the time, Russia’s leaders could, with some justification, blame outside forces for the economic downturn. Russia has no control over oil prices, which are set in a global market. And sanctions were the result of confrontation with the West. If you approved of the annexation of Crimea—as most Russians did—then you could not blame Putin for sanctions. Western financial restrictions were the cost of reasserting Russia’s stature on the world stage.

Now five years have passed since the imposition of the first round of sanctions and the collapse of the price

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