Russia has not become the European-type national state, but it is not yet an isolated totalitarian state of the North Korean model. The present-day Russia is a huge remnant of the red empire, fallen to ruin in 1990-1991. The remnant which has been rushing between attempts to transform into a democratic republic and to realize its imperial ambitions for 30 years. For all the complications these movements led to, the Russians silently tolerated the Kremlin’s political experiments due to the satisfactory state of the Russian economy.
But, it seems, in view of the upcoming economic shocks, these movements are coming to an end. Russia will no longer be able to balance in acrobatic leg-split between the values of the Euro-Atlantic world and the dictatorship of the kleptocratic minority. Economists predict, during the period of 2020-2023 the pendulum of its political development will inevitably swing in one direction or another. The key factor will be the fate of the sanctions imposed against Russia after Crimean Peninsula annexation and the outbreak of war in southeastern Ukraine in 2014.
And that’s why! Trying times have come for the Kremlin – four horsemen of the Apocalypse, having escaped from the most famous engraving by Albrecht Dürer, appeared on the horizon of Moscow.
Firstly, the six-year recession of the Russian economy is affected by a sharp drop in global economic growth rates. And the fact that Russia owns colossal gold and foreign currency reserves is nothing. The question is whether the Kremlin will be able to dispose of them correct-a-mundo. It should be noted that Russia’s gold and foreign currency reserves have seriously dwindled recently, since their significant part was in securities, the value of which has dropped significantly for recent days.
Secondly, after the fall in oil prices, Russia’s revenues from energy exports have sharply reduced. Currently, the cost of a barrel of Russian Urals oil dipped to $ 13, which is half the cost provided for by the Russian budget. This means that the Russian budget will face a revenue shortfall not only from profit tax of oil companies, but also from export duties and revenues from barrelage tax. For Russian companies, oil exports at such a price are, in fact, commercially unfeasible. Of course, depending on market condition, the price may rise to $ 20 or $ 30, but so far all experts have been unanimous that it is unlikely to rise above $ 50 per barrel.
In addition, against Russian gas demand contraction in Europe and China, Gazprom, by decision of the Stockholm arbitration court (in November 2019), owed $ 2.6 billion to Ukraine, and then (in March 30, 2020) – $ 1.5 billion to Poland. Moreover, from January 1, 2022, Warsaw, for reasons of energy security, will completely stop buying gas from Russia, while Moscow lost the Ukrainian gas market several years ago. At the same time, Moscow is not able to influence the increase in production of slate oil and liquefied gas, as well as the policy of Central and Eastern Europe on the diversification of energy sources.
Thirdly, Russia may face domestic political instability. Since August 9, 1999, Putin has been either the prime minister or the president, and de facto has been running the state for over 20 years. And although ritual elections are held in the country from time to time, both V. Putin himself, and Russian citizens, and Western democracies understand that the permanent leader of Russia has long been deprived of internal legitimacy. A mysterious constitutional maneuver, the essence of which no one fully understands, is connected with this. But, it makes no matter the direction of the reform of the highest bodies of state authority in Russia, the internal political situation in the country remains very alarming. And Moscow cannot stop the process of internal political changes: V. Putin is 67 years old and needs a successor, and various clans, security agencies and financial-industrial groups are fighting for power around him; fair elections have not been held in the country for a long time, and proper political culture has never existed in the country.
Fourthly, Covid-19 has overtaken Russia. Whether the Russian economy and its healthcare system will be able to cope with the situation at a more or less acceptable level: to ensure an adequate level of testing, to successfully localize focal points of infection, to reduce the level of infection contamination and mortality is unknown. So far, the mood of the citizens of the Russian Federation is far from optimistic because of the total credibility gap in general and official statistics in particular. According to experts, Russia will not be able to stop the epidemic in the short term.
So, the Kremlin is helpless in face of the four horsemen of the Apocalypse. Moreover, as soon as their silhouettes had loomed on the horizon, experts warned: the safety margin of the current regime is three years maximum (2020-2022). However, the situation at any time may dramatically worsen. The only factor that Moscow can and hopes to change is the Western sanctions regime.
In a recent television interview, the President of the Russian Federation confirmed that due to sanctions Russia had lost about $ 50 billion. At least $150 billion was spent by the Kremlin on the Crimean occupation, military invasion of Donbas, subsequent support of Crimea and the separatist quasi-republics of the “DPR” and “LPR”. The amount of $ 200 billion is steep indeed, and Moscow has its own interests in Venezuela, Syria, Libya, Sudan, Chad and the Central African Republic. But if earlier Russia could afford to spend like a drunken sailor, now Moscow will watch money, because it really wants to continue its ambitious foreign policy further.
By the way, in connection with Сovid-19, Russia closed its border around the entire perimeter except for one single segment – the border with Donetsk and Lugansk regions of Ukraine. What other evidence should be provided that this territory of a neighboring state is, in fact, annexed by Russia? At the same time, Moscow cynically refuses to recognize itself as a party to the conflict. She resorts to stratagems to organize direct negotiations between Kyiv and the militants (the so-called “people’s militia” with 2/3 of the regular units of the Russian army), while trying to take an observer position.
The last ingenious ploy of Moscow was to force Kyiv to participate in the so-called Consultative Council within the framework of the Trilateral Contact Group for peaceful settlement of the situation in Donbas. This Advisory Board was to include 10 delegates from Ukraine, 10 members from the “DPR”/“LPR” and one representative (with an advisory vote) from the OSCE, Germany, France and Russia.
The implementation of this project would be a decisive argument for Moscow in favor of its interpretation of events in southeast of Ukraine – that this is supposedly a purely internal conflict. On this basis, the Russian Federation could demand that sanctions be lifted.
Fortunately, due to the balanced and cautious position of Berlin and Paris, as well as the stormy protest reaction of civil society in Ukraine, this Russian project was postponed “till things go better”, that is, in fact, buried.
Of course, Russia will keep trying to push through the agreement on the Consultativ
Russia at the epicenter of the storm
Russia has not become the European-type national state, but it is not yet an isolated totalitarian state of the North Korean model. The present-day Russia is a huge remnant of the red empire, fallen to ruin in 1990-1991. The remnant which has been rushing between attempts to transform into a democratic republic and to realize its imperial ambitions for 30 years. For all the complications these movements led to, the Russians silently tolerated the Kremlin’s political experiments due to the satisfactory state of the Russian economy.
But, it seems, in view of the upcoming economic shocks, these movements are coming to an end. Russia will no longer be able to balance in acrobatic leg-split between the values of the Euro-Atlantic world and the dictatorship of the kleptocratic minority. Economists predict, during the period of 2020-2023 the pendulum of its political development will inevitably swing in one direction or another. The key factor will be the fate of the sanctions imposed against Russia after Crimean Peninsula annexation and the outbreak of war in southeastern Ukraine in 2014.
And that’s why! Trying times have come for the Kremlin – four horsemen of the Apocalypse, having escaped from the most famous engraving by Albrecht Dürer, appeared on the horizon of Moscow.
Firstly, the six-year recession of the Russian economy is affected by a sharp drop in global economic growth rates. And the fact that Russia owns colossal gold and foreign currency reserves is nothing. The question is whether the Kremlin will be able to dispose of them correct-a-mundo. It should be noted that Russia’s gold and foreign currency reserves have seriously dwindled recently, since their significant part was in securities, the value of which has dropped significantly for recent days.
Secondly, after the fall in oil prices, Russia’s revenues from energy exports have sharply reduced. Currently, the cost of a barrel of Russian Urals oil dipped to $ 13, which is half the cost provided for by the Russian budget. This means that the Russian budget will face a revenue shortfall not only from profit tax of oil companies, but also from export duties and revenues from barrelage tax. For Russian companies, oil exports at such a price are, in fact, commercially unfeasible. Of course, depending on market condition, the price may rise to $ 20 or $ 30, but so far all experts have been unanimous that it is unlikely to rise above $ 50 per barrel.
In addition, against Russian gas demand contraction in Europe and China, Gazprom, by decision of the Stockholm arbitration court (in November 2019), owed $ 2.6 billion to Ukraine, and then (in March 30, 2020) – $ 1.5 billion to Poland. Moreover, from January 1, 2022, Warsaw, for reasons of energy security, will completely stop buying gas from Russia, while Moscow lost the Ukrainian gas market several years ago. At the same time, Moscow is not able to influence the increase in production of slate oil and liquefied gas, as well as the policy of Central and Eastern Europe on the diversification of energy sources.
Thirdly, Russia may face domestic political instability. Since August 9, 1999, Putin has been either the prime minister or the president, and de facto has been running the state for over 20 years. And although ritual elections are held in the country from time to time, both V. Putin himself, and Russian citizens, and Western democracies understand that the permanent leader of Russia has long been deprived of internal legitimacy. A mysterious constitutional maneuver, the essence of which no one fully understands, is connected with this. But, it makes no matter the direction of the reform of the highest bodies of state authority in Russia, the internal political situation in the country remains very alarming. And Moscow cannot stop the process of internal political changes: V. Putin is 67 years old and needs a successor, and various clans, security agencies and financial-industrial groups are fighting for power around him; fair elections have not been held in the country for a long time, and proper political culture has never existed in the country.
Fourthly, Covid-19 has overtaken Russia. Whether the Russian economy and its healthcare system will be able to cope with the situation at a more or less acceptable level: to ensure an adequate level of testing, to successfully localize focal points of infection, to reduce the level of infection contamination and mortality is unknown. So far, the mood of the citizens of the Russian Federation is far from optimistic because of the total credibility gap in general and official statistics in particular. According to experts, Russia will not be able to stop the epidemic in the short term.
So, the Kremlin is helpless in face of the four horsemen of the Apocalypse. Moreover, as soon as their silhouettes had loomed on the horizon, experts warned: the safety margin of the current regime is three years maximum (2020-2022). However, the situation at any time may dramatically worsen. The only factor that Moscow can and hopes to change is the Western sanctions regime.
In a recent television interview, the President of the Russian Federation confirmed that due to sanctions Russia had lost about $ 50 billion. At least $150 billion was spent by the Kremlin on the Crimean occupation, military invasion of Donbas, subsequent support of Crimea and the separatist quasi-republics of the “DPR” and “LPR”. The amount of $ 200 billion is steep indeed, and Moscow has its own interests in Venezuela, Syria, Libya, Sudan, Chad and the Central African Republic. But if earlier Russia could afford to spend like a drunken sailor, now Moscow will watch money, because it really wants to continue its ambitious foreign policy further.
By the way, in connection with Сovid-19, Russia closed its border around the entire perimeter except for one single segment – the border with Donetsk and Lugansk regions of Ukraine. What other evidence should be provided that this territory of a neighboring state is, in fact, annexed by Russia? At the same time, Moscow cynically refuses to recognize itself as a party to the conflict. She resorts to stratagems to organize direct negotiations between Kyiv and the militants (the so-called “people’s militia” with 2/3 of the regular units of the Russian army), while trying to take an observer position.
The last ingenious ploy of Moscow was to force Kyiv to participate in the so-called Consultative Council within the framework of the Trilateral Contact Group for peaceful settlement of the situation in Donbas. This Advisory Board was to include 10 delegates from Ukraine, 10 members from the “DPR”/“LPR” and one representative (with an advisory vote) from the OSCE, Germany, France and Russia.
The implementation of this project would be a decisive argument for Moscow in favor of its interpretation of events in southeast of Ukraine – that this is supposedly a purely internal conflict. On this basis, the Russian Federation could demand that sanctions be lifted.
Fortunately, due to the balanced and cautious position of Berlin and Paris, as well as the stormy protest reaction of civil society in Ukraine, this Russian project was postponed “till things go better”, that is, in fact, buried.
Of course, Russia will keep trying to push through the agreement on the Consultative Council, or some other stratagem. For example, Moscow will talk about the threat of a humanitarian catastrophe in Crimea or in the separatist republics, or in Russia itself, following the example of how it is trying to use the coronavirus pandemic to lift sanctions. Tomorrow, the Kremlin will say anything, everything that you want, if only the restrictions were lifted, as the four horsemen of the Apocalypse are already clearly visible on the horizon of the Russian capital.
e Council, or some other stratagem. For example, Moscow will talk about the threat of a humanitarian catastrophe in Crimea or in the separatist republics, or in Russia itself, following the example of how it is trying to use the coronavirus pandemic to lift sanctions. Tomorrow, the Kremlin will say anything, everything that you want, if only the restrictions were lifted, as the four horsemen of the Apocalypse are already clearly visible on the horizon of the Russian capital.
