“Russia is redefining a hard landing,” says Lex in the FT. Having grown at an average of 7% for ten years, the signs are that the Russian economy will now shrink this quarter and next. Indeed, industrial output suffered its biggest fall in November since the 1998 economic crisis. The country’s reserves are being drained – $161bn has been spent to support the rouble since August. And Russian authorities are steeling themselves for a social backlash with 200,000 jobs losses predicted in the coming months.
“To a control freak like Putin, this is a disaster,” says Quentin Peel in the FT. But the truth is that much of Putin’s success can be put down to a “fantastic run of luck”. For eight years as president, Putin enjoyed constant economic growth, steadily escalating commodity prices and weak political opposition. He was also able to bring his absolute political power to bear on the Russian public, painting himself as “father of the nation” and enjoying 80% approval.
But now his luck has run out. Collapsing oil and metals markets have sunk his plans. And foreign investors balk at his determination to take control of any industry when he sees fit. Finally, having pledged never to devalue the rouble, he now faces the embarrassing prospect of going back on his word.
And it rankles. On Friday, Putin drafted a law classifying any government critic as a traitor, notes David Nowak of Associated Press. Defending the bill, a member of the Russian parliament, Andrei Lugovoy, added that, “If someone has caused the Russian state serious damage, they should be exterminated.”
Public discontent is also beginning to simmer, says The Economist. But don’t expect a revolution. “Russian society is extremely fragmented and apathetic,” Masha Lipman, Moscow magazine editor, told the FT. “For the Russian people to reach out to each other will take a tremendous shock.”