US, WASHINGTON (ORDO NEWS) — Russian President Vladimir Putin enjoys a well-deserved reputation as a visionary tactician, as well as a person who calmly makes decisions. However, over the past few weeks, he has demonstrated a lack of ability to manage Russia’s actions in response to two serious crises: the collapse of the oil market and the coronavirus pandemic. Now he is faced with one of the most formidable challenges of his power – and precisely at the moment when, in his opinion, it will be safe to extend his presidential term through a referendum on constitutional amendments.
The Kremlin made its first mistake in early March, when it reacted to a drop in oil prices, rejecting the call by Saudi Arabia to cut production. Russia’s decision to act to oversaturate the oil market turned out to be extremely untimely.
Putin, apparently, hoped that a sudden drop in prices would lead to the bankruptcy of many independent American shale oil producers, which operate with minimal profitability. And since balancing the Russian budget requires an oil price of about $ 40 per barrel, and Saudi Arabia seeks to achieve a price that is about two times higher, the Kremlin decided that it could annoy the Saudis, thereby compensating for the short-term decline in revenues.
What Putin conceived as a knockout blow turned out to be a blow to himself. Although the US shale industry has indeed suffered, the recent wave of business combinations has made it more adaptable than it otherwise would have been. By April, when the bottom of the oil market had lowered and negative prices had set, it was President Trump who threw Putin a life buoy by signing an agreement with the Saudis to reduce production. Many in the Russian energy sector considered this a humiliating concession.
However, not only Russia’s reputation as a player in the oil market is at stake. For an oil-dependent Putin state, whose budget and currency are closely tied to global hydrocarbon markets, oil prices are a vital issue. Accordingly, the economic outlook for Russia looks bleak. Although the Kremlin currently has a foreign exchange reserve of about $ 430 billion, budgetary support for companies in a difficult situation can quickly devastate this reserve in the coming months.
To make matters worse, the government may continue to require companies to provide paid leave to employees in the midst of the coronavirus pandemic, without providing the necessary financial support to companies in difficult situations. Because of this, many companies will be forced to resort to dubious tactics to force workers to quit or sharply reduce wages. This may well lead to a sharp increase in unemployment in the country and a wave of bankruptcies.
The Kremlin’s second big mistake was that he allowed his propaganda machine to create an atmosphere of invulnerability, although the entire Russia like the tsunami was covered by the COVID-19 pandemic. On January 31, the Kremlin closed part of its border with China, which is almost 4,200 kilometers long. This lulled vigilance, a false sense of security arose, aggravated by a conscious reluctance to pay attention to what was actually happening. At the same time, the Ministry of Defense, demonstrating its arrogance and ignorance, began in late March large-scale exercises on the border with Ukraine, despite the fact that NATO had long ago refused to conduct its exercises Defender Europe.
Throughout February and most of March, processing of tests for coronavirus was carried out in a single laboratory in Siberia. And this means that most cases of COVID-19 coronavirus infection in the vast territory of Russia with its 11 time zones were mistaken for pneumonia, bronchitis, flu, and so on. It did not help either that the authorities criminalized the dissemination of “false information” or arrested a well-known doctor for questioning official statistics, trying to deliver masks to an impoverished rural hospital.
Now, when users of social networks post videos in which you can see ambulances lining up in a multi-kilometer queue to place patients in crowded Moscow hospitals, it’s already impossible to say that everything is under control. The Russian health system was already struggling to cope with a number of chronic diseases (tuberculosis, cardiovascular disease, alcoholism and others). And many health experts fear that because of the coronavirus pandemic, the situation could worsen to the limit. In addition, Russia is one of the few countries that simultaneously overcomes the problem of low life expectancy and the problem of population aging, which is why it is especially vulnerable to the coronavirus COVID-19. It is possible that,
All this jeopardizes Putin’s plan to amend the Constitution, which would allow him to remain in office for another two terms – until 2036 (when he turns 84). Although the parliament has already approved these amendments, Putin was going to submit them also to a referendum, which was first scheduled for April 22, but has now been postponed indefinitely.
The referendum was a risky undertaking even before the pandemic began. A survey conducted in March by the Levada Center showed that only 48% of respondents support these amendments. In the coming months, this figure is likely to decrease significantly. (According to a poll released this week, citizens’ confidence in Putin fell to a 14-year low). On April 20, in protest against the lack of reliable information about the spread of the coronavirus COVID-19, 500 residents of Vladikavkaz took to the streets, violating the order of local authorities on self-isolation. Also, protests took place in Rostov and in small cities, in which mass opposition demonstrations are usually not celebrated.
What will happen next is difficult to predict with any certainty, but one thing is clear: the legitimacy of the Putin regime will be tested as never before.
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