Sanctions and oil market squeeze Russian leader.
Author: Ayça Yildirim
In February of 2014, with the fall of former Ukrainian President Viktor Yanukovych, the Maidan Revolution set sail; it left Ukraine in a vulnerable position. Seizing the opportunity, Russia invaded and took control over the Crimean Peninsula. Russia’s decision ignited disapproval, as the U.S and NATO all heavily criticized and condemned the take-over. In retaliation, both the U.S. and NATO laid sanctions and reduced oil prices in order to break down the Russian economy. The sanctions increased inflation, causing the Central Bank of the Russian Federation to increase interest rates three times in 2014 in order to balance their books. The Central Bank also predicts the year 2015 as one that will likely weigh down heavily on the government, as they expect GDP to shrink by 4.8 per cent.
In response, Russian President Vladimir Putin strained his ties with the West. The Russian government laid importation restrictions for all Western food products. Sending inflation to staggering heights, food prices almost doubled in Russia, and the currency plummeted compared to the US dollar. Yet, through all of this, a survey conducted by an independent Russian pollster, Levada-Center, indicated that patriotism was higher than ever. Why so?
The Russian government has strict control over the main sources of media, and continues to feed what most would call propaganda to its citizens, increasing patriotism in the case of war. Russia continues to blame America for its economic position, and its citizens are lead to believe so as well. However, the blame game doesn’t end with that. Recently, French President François Hollande urged the sanctions against Russia be lifted in exchange for development in peace talks concerning Ukraine. The Russian newspaper Komsomolskaya Pravda recently published a conspiracy based on the current events relating to the terror attack on Charlie Hebdo. Komsomolskaya Pravda stated after the attack that America should be held responsible. The famous newspaper outlined that the attack was punishment from America due to France considering the dropping of the sanctions. This version of the event, and many others like such, is indication that the Russian population is exposed to biased media coverage.
Putin continues to blame the West for the misery of the Russian economy. However, can he and the Russian government survive this pressure? Russian critics believe that the shrunken budget, plummeting oil prices, depreciation of currency value and the overall economic decrepitude, is too big of a price tag for Russia’s interest in Ukraine. The depreciation of the Russian currency has naturally resulted in increased exports, and the government has resorted to increasing interest rates up to 17 per cent, in order to leverage the economic downfall.
As the events between the West and Russia continue to unfold, the possibility of a war breaking out between Russia and NATO seems more likely.
Putin has signed off on an amended doctrine that labels NATO as an ‘existential’ threat to Russia. He also occasionally sends warplanes lurking over NATO airbases in efforts to show his legitimacy and bloated military ego to NATO allies. Striving for maximum extension of Russian power, Putin continues to showcase actions suggesting that he is ready to go to war with all that which limits him.
The European members of NATO spend four times the amount on defense-based industries than Russia. Due to realities such as this, Russia’s concealed intimidation is unquestionable. Yet the degree of intimidation is unknown, as NATO’s European allies would be disinclined to counter-attack a nuclear-armed Russia.
Putin obstinately continues with the path he has set out for himself and the Russian Federation. His actions are partially ignited by the support he is receiving from Russian citizens; support that will predictably depreciate depending on Russia’s economic fate. With the restrictions that the Russian markets are facing, I am doubtful if Russia could surpass without economic scars. The level of intensity that both the Russian government and its people are willing to support Putin will evidently determine how successful he will be in pushing forward dicey decisions. Russia will have a hard time restoring economic stability; however, with time and new economic opportunities, natural resource-rich Russia will surely find a way to ascend.