The good news for Vladimir Putin – as a keen skier – is that the snow in Switzerland is close to perfect, says The Times. The bad news is that he opened the World Economic Forum in Davos as a diminished figure on the world stage, laid low by the financial crisis and “challenged at home as prime minister in ways he never was as president”.
Peddled at last year’s Davos meeting as “an island of stability”, Russia is now tipping into recession. The stockmarket is down by 72% from its highs, unemployment is soaring and the oil revenues on which the country based its bellicose grandstanding have collapsed – in six months, the price of Urals crude oil has dropped by 68%. Meanwhile, the Russian central bank has had to spend $201.9bn, or 34%, of its reserves in the last six months buying the rouble, says Bloomberg, which has nevertheless slid 30% against the dollar since July. Government figures show that the economy shrunk by 0.7% in December, the first annual decline since the 1990s. Real incomes are falling, and people are taking their anger to the streets.
The normally supportive Communist Party, for example, has called for countrywide protests on Saturday. It’s threatened to harness “a wave of popular rage”, according to Adrian Bromfield in The Daily Telegraph, as cracks in Putin’s once formidable popularity begin to show. Having built his reputation on rebuilding the economy and pursuing an aggressive foreign policy, last month he was forced to send troops 5,750 miles cross country to crush anti-tax riots in Vladivostok, after local police and government officials refused to quell them. Placards denounced Putin, while others called for colonisation by the Japanese (where most of Russia’s cars are imported from).
Putin is now trying to paint Russia as a willing global player, “looking to deepen its integration into the global economy and eager to attract global investors,” says James Beadle, chief investment strategist at Pilgrim Asset Management in Moscow on Bloomberg. “Sadly, Russia has berated and abused many of its global partners, and now that the stakes have balanced, few will trust this new, benign rhetoric.”