Russia’s Legacy Term: 2018 – 2024 and Beyond

Russia’s President Vladimir Putin, it is said keeps surprising Western pundits – not with any unexpectedly rash surprise announcements, but with his consistent political and diplomatic positions. His is not a cleverly sneaky “disinformation” campaign aimed at undermining democratic “values”. Quite the opposite, he has been consistent, which in the geopolitical dimensions of our time is an exceedingly rare quality.

Since 2000, he has been openly and repeatedly stating that Russia’s sovereign national interests head his agenda. No evangelizing, no regime changes, no funny business. Much criticism has been levelled at Putin for supposedly championing his own brand of “autocratic democracy” and disallowing any competitive opposition within Russia.

That may be true to a degree; however, it is also worth asking whether the Russian national interest is being well served by this approach, especially in this place and at this time.

While it is considered to be in exceedingly bad taste and politically incorrect to say anything positive about Putin, I will have to put my neck on the block. All things considered, and in our imperfect world he does what he says and that resonates positively with most of Russias citizenry. No mean achievement, especially when contrasted and compared to so many countries with far longer “democratic” timelines that are experiencing continually contradictory internal hissy fits, the he-said, she-said crowd.

Consider that since the fall of the Soviet Union there have effectively been only two elected administrations so it might make common sense to demonstrate restraint over any free-for-all power grab by a smorgasbord of parties and interests. This for many is also preferable, at least until the body politic fully matures. Recall that the dominant oligarchic era and its influence was with great difficulty and only recently brought to heel.

Many commentators who try to package Russia’s reality in bytes that can be easily and immediately consumed through various media mostly make similar errors; they view the playing field in Russia through their own national optics, preconceptions and perspectives. Very few make the necessary sacrifice of time and involvement to immerse themselves in the actual “on the ground” 21^st century Russian reality. Picturing the world from Des Moines is far different than seeing the world sitting in Omsk, this applies not only to geopolitical perceptions… doesn’t it?

Putin’s third period was eventful: Sanctions, demonization, accusations, polarization with the west, and maintaining the principles of steering an independent sovereign nation through constantly shifting currents and conflicting flows of internationalized political populism from the West.

Putin has now started on his fourth term, many inside the government call this his legacy term. He is not aligned with any political party, which in American political parlance I guess would brand him as an “independent”. He was obviously not elected by interests in the USA, Damascus, Beijing, Kiev, or Brussels, but by Russians with a mandate to continue serving the Russian national interest as best he can, maintaining engagement without submission, and getting down to succession planning.

Commentators and self-styled experts have written and spoken much about what that might mean, and much of that commentary is couched within an aura of sub-rosa plotting, mischief and hidden agendas. So much for expert commentary, the facts, statements and actions speak differently.

It only requires patience to objectively examine the track record of public statements made by the Russian administration on a number of subjects, from economics, Ukraine, Syria, missile strikes, nuclear treaties, Iran, Oil & Gas, NATO, Skripals, China, trade treaties, and the United Nations to get the impression that facts and simple truths no longer matter very much in the west. Diplomacy has been supplanted by unipolar target marketing, and all that it implies.

Some of the standout issues that Russia has been forced to battle include restrictions on their free trade opportunities, the unipolar erosion of diplomatic norms between nations and the increasing disregard of the UN. Underlying much of this is the increasingly urgent need to diversify away from restrictive US Dollar dominated banking and financial systems. In short, to become less reliant on self interested globalized geopolitical groups, and more self sufficient as an independent sovereign nation.

Since the recent March election, the new Russian administration is even now criticized for not doing enough to visibly and sharply reform itself. After all, “reform” is a positive word, isn’t it? It is a “must do” word and concept!

Reform therefore should be all the rage and implemented come what may, and damn the torpedoes! It might be useful to prioritize between “wanted and needed” when making assumptions about the lack or abundance of reforms in Russia.

The 4^th term administration under Putin can be described as being an implementation command. Over the past eight years, many of the directions the economy has to develop, diversify into and make operational have to a greater or lesser degree been tested in select regions of the country. Some of these “reforms” needed reworking, some have had to be re-thought, and those that have shown practical and pragmatic benefit will be implemented. Sadly very little was been reported on this in the English language press these past eight years, perhaps it is too practical to be deemed newsworthy?

The Russian saying, “measure twenty times, cut once” applies. The impasse of an “Obamacare” would not go down well if it happened in Russia, nor would trashing established, negotiated treaties be considered right, ethical or proper, but that is just the local Russian take on such developments even though it apparently clashes with the current fashion in some western countries.

On the economic front, the new administration includes several proven players including Elvira Nabiullina, central bank governor, who was responsible for the important economic moves between 2012 and 2018, including the switch to a free-floating ruble, the reduction of inflationary pressures, and the banking system clean up.

Finance minister Anton Siluanov, Kudrin’s former deputy in the ministry. His efforts to shift government borrowing to the domestic market helped Russia demonstrate its resilience under adverse sanctioned circumstances.

Alexei Kudrin now heads Russia’s Audit Chamber, which should appeal to international investors. He is the author of much of the program president Vladimir Putin has adopted for his next six years in office.

With the ever reliable Medvedev as PM, and re-designated insiders administering other branches of government several diversified directions in the economic and administrative fabric of Russia should be apparent in short order. This administrative team whatever it may lack in multi-party diversity, is certainly strongly united as a command structure and fully capable to bringing the planned new programs into being.

Trial programs have been tested in several regions of the country based on creating a unified digital platform for government. This platform will be operating at a nationwide level by 2020. It may cut the number of bureaucrats by as much as 25-30%. Other regional test programs should become national allowing Russia to reduce its commodity export dependence, relying instead on innovative businesses, deeper processing of agricultural, mineral, energy commodities locally and the export of services from financial to IT.

Putin recently said, just after this election, “We need breakthroughs in every area. I am deeply convinced that such a spurt can only be effected by a free society that accepts everything that’s new and advanced,  rejects injustice, backwardness, ignorant traditionalism and a deadening bureaucracy — everything that holds people back from opening up fully.” That sounds classically early 20^th century American to me, and looks to be in the sovereign national interest of the country, regardless of which brand of democracy is marketed or advertised. He went on to call for Russia to reduce its poverty level by half before 2024, raise the average life expectancy from 72.5 to 78 years and become one of the world’s five biggest economies.

So here we are, May of 2018. It is worth having a look at the new financial outlooks for the Russian Federation in view of the above, and what “expert pundits” did not manage to predict:

Russia should achieve a 2018 budget surplus of RUB440.6bn ($7.1bn), instead of the previously expected deficit of RUB1.27 trillion ($20.5bn), the government confirmed on May 10. This surplus is roughly 0.45% of GDP instead of the expected deficit of 1.3% of GDP, according to this years amended draft federal budget for 2018. The Finance Ministry also lowered its projected inflation levels, to 2.8% from the previously expected 4%. Inflation has been creeping up this year but remains on the level of 2.2%-2.3% – a record low for the Russian Federation. The recent tumble of the ruble against the dollar caused by the imposition of new US sanctions this past April may spark more inflation, but efforts are underway to mitigate such effects. The Finance Ministry also revised upward Russian budget revenues for 2018, from RUB15.157 trillion to RUB17.032 trillion.

It seems more than strange that this is being promoted in the west as somehow contrary to and subverting established western values. On the contrary, it looks like Russia’s values are exactly in the right place and steadily evolving to be better.