The volatile turbulence that battered the world economy last week should have passed Russia by, but it did not.
It is exactly Putin’s confident steering that has made the Russian economy so vulnerable to the swings of markets’ moods because he took particular pride in rising pensions and other social programs, which has made the budget seriously over-loaded with irreducible obligations.
Anxiety about Russia’s entry into a new phase of economic crisis is inevitably influenced by the reflections on the collapse of the USSR, because this week marks the twentieth anniversary of the military putsch that sought to rescue the imploding super-power and instead precipitated its demise. Public opinion remains divided and more sour than celebratory about that event, and Putin is hardly going to orate about it, but it has definitely left a deep scar on the national psyche (Ekho Moskvy, August 11). The shock from seeing tanks in Moscow streets has long been erased by impressions from too many other tanks burning in the squares of Grozny or rolling towards Tbilisi, but the sinking feeling of living through a state failure is back. It was the military-industrial complex that bankrupted the oil-based Soviet economy in the 1980s, and now it is the corrupt bureaucracy that proceeds along the same track. Putin is both the master and the servant of this system that has extracted from Russia value exceeding the limits of economic self-reproduction, and he is set to preside over the unraveling.