The Kremlin is in search of a “silver bullet”: experts sum up the results of the first year of Putin’s new term

The main result of the first year of Vladimir Putin's fourth term is a sharp deterioration in social sentiment, but it does not yet pose critical risks for the authorities: during the reign of Vladimir Putin, the regime has already successfully overcome similar crises several times, experts from the Liberal Mission Foundation conclude in their new report . But in order to cope with social depression in a stagnant economy, the Kremlin will have to look for new solutions to turn the atmosphere in the country in its favor.

Report “The fortress grows into the ground. The Year After the Election: Strategies, Challenges, Trends” (available from The Bell) is dedicated to the results of the first year of Vladimir Putin's fifth term. The authors are economist Sergey Aleksashenko, political scientists Kirill Rogov, Alexander Kynev, Nikolai Petrov and Pavel Baev. We retell its main theses.

Economy under sanctions. Adapting to Western sanctions, the authorities have moved from "inertial" to "dirigiste" economic policy - with a simultaneous tightening of monetary policy and the redistribution of resources in favor of the government and the dominant role of public investment. “In general, such an economic strategy is focused on the long-term and deepening isolation of the Russian economy and looks like a kind of economic policy of a “besieged fortress,” experts write.

In essence, the Kremlin's economic policy is the result of a crossbreeding of two programs that competed before the presidential election - Alexei Kudrin and the Stolypin Club. From the first, the state took an orthodoxly tight budget policy, from the second - the "conductor-investment concept."
This policy has not yet brought a serious change in the economy. A slowdown in economic growth, accompanied by a fall in real incomes, continues to be the main risk of the regime. The economy is growing sluggishly due to sanctions, even amid favorable factors such as rising oil prices, gas demand and economic recovery during the World Cup.
Putin listens to the advice of the "macroeconomic bloc" of the government headed by Anton Siluanov, but the bloc has actually withdrawn from solving the problem of economic growth rates. Putin "had no choice but to rely on an alternative team" led by his assistant Andrei Belousov - it is he who develops the topic of national projects and state investments and supports the dirigiste trend. The consequences are not only an increase in government spending: for example, during the 2018 gasoline crisis, officials for the first time in 18 years of Putin's rule went to freeze prices. This move could have far-reaching implications.
This shift did not particularly affect everyday life and remained hardly noticeable. “However, if the Kremlin takes this path further, the upcoming innovations may be much more noticeable and lead to serious changes in the entire structure of the Russian economy.”
In the well-known political economy dilemma, the “refrigerator” will continue to more confidently demonstrate an advantage over the “TV”: the Kremlin has not yet proposed a solution to the problem of falling incomes of the population. During the discussion of the May decree of Vladimir Putin, this topic went into the shadow of national projects and state investments.

Weakening of social support. Poll data show that the four-year period of the “Crimean syndrome” is over, and the level of support for the authorities has fallen almost to the “pre-Crimean” level. Social moods have become more depressed due to the pension reform, the ongoing stagnation in the economy, and the fall in real incomes. Even foreign policy mobilization and propaganda could not stop the drop in ratings.

The main reason for the fall in approval of the authorities is the deepening economic depression, and the main reason is the increase in the retirement age. The Kremlin even faced local crises — for example, the failure of some of the government’s candidates in the 2018 gubernatorial elections. But the margin of institutional strength in power is high. “By raising taxes and the retirement age over the post-election year, the Kremlin has demonstrated its ability to voluntarily redistribute resources of both businesses and citizens in its favor without encountering serious resistance,” experts state.
The current episode of declining support ratings is already the fourth in the history of Vladimir Putin's regime: similarly, the ratings sank in the spring and summer of 2000, in 2004-2005 and 2011-2013. The authorities each time managed to cope with the challenges, although not without the help of a favorable external economic situation. The last time the answer was a turn in foreign policy in 2014.
In an attempt to regain high social support, the Kremlin will be looking for a new "silver bullet". But this time, unlike Putin's three previous crises, the resources of the authorities are limited - in terms of the economy and foreign policy mobilization. It is still difficult to predict what exactly the Kremlin will choose to increase its ratings - a negative agenda with an escalation of foreign policy conflicts or a positive one with a unification process with Belarus.
So far, in response to a decrease in domestic support, the Kremlin has become more actively using "power practices" - it is pursuing a policy of "super-centralism" in relation to the regions (changing more than half of the regions' heads for "Varangians" in 2.5 years), strengthening control over the Internet (the law on sovereign runet , about fake news, etc.), actively applies the law on undesirable organizations, defiantly and selectively punishes the elites (the purge in Dagestan, the Magomedov case, the Arashukov case), and “sovereignizes” the business regime (the Baring Vostok case). It is these "repressive politicians" that are today a key factor in the stability of the regime.

The Kremlin's foreign policy has remained confrontational, while becoming more passive and isolationist. Putin did not use his "renewed legitimacy" to ease tensions with the West. It is beneficial for the Russian authorities to support it in order to confirm their special role in world politics, but no one wants to bring the situation to an escalation of sanctions either.

So far, Russia has failed to compensate for the problem with the West by turning to the East. For China, the priority in the last year has been to address the problems caused by the trade conflict with the United States. Discussion of the Kuril issue with Japan is also unproductive so far.
The only success was the World Cup, but it was an expensive soft power tool that only neutralized the consequences of doping scandals.
“Ambitions in foreign policy are increasingly at odds with the real reduction in its resource and intellectual base, which predetermines the inevitability of failures that will increase the risk of new voluntaristic decisions and even more painful defeats,” experts write.

Liana Faizova