Putin: Four Moves to Remain World Tzar

24.12.13 Publication:

Vladimir Vladimirovitch Putin will celebrate the end of 2013 and the arrival in early 2014 of Christmas—in Russia’s Orthodox Church Christmas will be on January 7th 2014—in a good mood. The Russian President will feel that he has just finished a good year, one in which he outwitted the Americans on several pleasing occasions, and in February he can look forward to presiding over the Winter Olympics in Sochi and thus basking in international attention.

Yet President Putin will not forget his training as a senior officer in the KGB, the Soviet Union’s spy service. This will have taught him at least two important things: that appearances can easily deceive, making it vital always to look below the surface; and that potential enemies are all around you, waiting for the right opportunity to attack.

For President Putin’s successes have been largely of an old-fashioned, Soviet Union sort: any chance to beat the West and make the Americans look bad or, even better weak, is a chance that must be grabbed in order to make yourself look powerful. His achievements in Syria fall firmly into this category.

Yet where will those achievements lead? Certainly, they led to embarrassment for President Barack Obama as his talk of bombing Syria in response to the use in its civil war of chemical weapons was shown to be empty: unlike the powerful Putin, he couldn’t even take the decision on his own. Revealing a US president to be weak would always have delighted a Khruschev or a Brezhnev when they were leading the USSR. But did this exercise of power actually make Russia stronger? Only by preserving for some unknown amount of time longer the government of its ally and arms-customer, Bashar Al-Assad.

Meanwhile events concerning Syria’s much closer ally, Iran, were developing in a way that could prove quite harmful. Throughout the negotiations with Iran over its nuclear programme, Russia was involved—all the five permanent members of the United Nations Security Council (USA, Russia, China, Britain and France) took part, along with Germany and the European Union. But its role was minimal. The key negotiations which led to November’s interim agreement were made, of course, by America’s Secretary of State, John Kerry, but also by the EU’s High Representative for foreign affairs, Lady Ashton.

That is fine for Russia: it shares the West’s desire that Iran should not hold a nuclear bomb. But what is not fine is the possible future course of events: the lifting of sanctions on Iran’s oil and gas industries, the resumption of foreign investment by western oil companies in Iran, a big increase in the supply of oil and gas on world markets, markets which are already becoming quite over-supplied thanks to America’s fast-growing oil and gas output.

Russia is not alone in feeling uncomfortable about a rapprochement between Iran, the US and the EU: Saudi Arabia is mad as hell about it too. But there is zero chance of Cold War-style power games being played, with the Saudis suddenly becoming friendly with the Russians as a substitute for America. And the Saudis, like the Israelis too, can at least be consoled by the possibility that Iran might become less of a trouble-maker in the region, through its friends in Syria and Lebanon, now that it is on a path to international rehabilitation.

So saving Bashar Al-Assad and outwitting Obama could prove pretty short-term victories: ones that show tactical power but strategic weakness. If trends in oil markets lead next to a downward slide in the price of oil, which has stuck stubbornly at around $100 a barrel for the past two years, then Russia could begin to look very weak indeed—just as it did in 1998 when the oil price last plunged, leading to Russia’s default on its sovereign debt.

If that should happen, then President Putin’s other power-play in 2013, his struggle with the European Union over Ukraine, could turn from a triumph into a burden. It might do so even sooner than that, if the pro-EU and anti-government protestors in Kiev and other cities regain strength and end up overthrowing the government. But let us assume that that does not happen. How would the Russia-Ukraine deal look if oil prices fall, and Russia’s own public finances collapse with them?

Expensive, is the simple answer. Ukraine is itself very economically weak, and Russia has now promised it cheap gas and a $15 billion loan. It will only become more dependent on Russia and more of a burden as the years pass.

All this explains, perhaps, why the mood in Moscow is not at all triumphant or confident, at least outside the Kremlin. It has been a good year for President Putin, as he has shown himself to be decisive, experienced and capable—as through the pardoning this week of the Pussy Riot singers and the oil tycoon Mikhail Khodorkovsky—to turn the news headlines in his favour. But it has been a mediocre year for Russia itself. That is in turn eroding President Putin’s domestic power.

Opinion polls suggest that Putin now shares Obama’s situation: his support rating has fallen below 50%. There are no credible rivals at present, but the success of a leading opponent, Alexei Navalny, in getting 30% of the votes in Moscow’s mayoral election showed that there is certainly opposition and discontent.

London is now filled with political exiles from Putin’s Russia, all no doubt plotting their possible returns. And slow economic growth, combined with fears about falling oil prices, call into question the future flow of cash to the cronies and oligarchs who surround and support Putin. He had better enjoy the vastly expensive Sochi Olympics: 2014 might well be an uncomfortable year.