Putin, Oil and Ruble All Headed for 63 May Be No Russian Joke – Bloomberg
Heard the one about Vladimir Putin, the oil price and the ruble’s value against the dollar? They will all hit 63 next year.
That’s the joke doing the rounds of the Kremlin as the Russian government digs in to weather international sanctions over the conflict in Ukraine. According to at least five people close to Putin, pressure from the U.S. and Europe is galvanizing Russians to withstand a siege on their economy.
The black humor is part of an image of defiance not seen since the Cold War. As the economy enters its first recession in more than five years, the ruble depreciates to records and money exits the country, Putin’s supporters are closing ranks and say he’s sure to run for another six-year term in 2018.
“We are becoming poorer, our savings vanish, prices grow, however we see an opposite effect to the one that is wanted by people who wish to see Putin knocked down,” said Olga Kryshatanovskaya, a sociologist studying the elite at the Russian Academy of Sciences. The jokes just underline their determination to stand till the end, she said.
Putin celebrates his 63rd birthday on Oct. 7. The price of Brent crude sank to a five-year low of $67.53 a barrel yesterday. The ruble has dropped to near 54 to the dollar from as strong as 34 less than six months ago, meaning it needs to lose another 14 percent to complete the joke.
A friend of Putin who spoke on condition of anonymity said sanctions won’t work because the U.S. and European Union don’t understand the Russian mentality. The country endured the Leningrad siege for more than two years during World War II and will survive this too, he said.
“The West is wrong in its understanding of the motivation Putin and his inner circle have,” said Evgeniy Minchenko, head of the International Institute of Political Expertise in Moscow. “They think Putin is a businessman, that money is the most important thing for him and that by pressing him and his allies financially they will break them.”
The narrative of resilience is playing well with the public, opinion polls show.
One published last week by the Moscow-based Levada Center found that half of the respondents saw no hardship arising from the sanctions and another 31 percent saying any problems weren’t very serious. A survey by the same company a month earlier found 86 percent of Russians in 134 localities were mostly or definitely proud of living in Russia.
“People think it’s not patriotic of them to feel or recognize that they are suffering,” said Alexei Grazhdankin, deputy director of the Levada Center. “This shows a mental focus to resist external pressure and ignore sanctions. This mood in public can last not for months, but for years.”
Russia’s economic fortunes have been pinned to oil since the Soviet era. In the 1970s, after the Arab oil embargo sent prices soaring, communist leader Leonid Brezhnev enjoyed relative prosperity and rising global influence.
Then a glut in the 1980s led to a six-year decline in prices and failure to keep shelves stocked with basic consumer goods. Putin has described the collapse of the Soviet Union as the greatest geopolitical disaster of the 20th century.
“Russia’s real problem is not a risk of a crisis, but the fact there is no way out of the current situation,” Konstantin Sonin, a professor at Moscow’s Higher School of Economics, said this week. “A catastrophe is possible only if some really dramatic decisions in foreign or domestic policy will take place in the near term.”
According to the friend of Putin who evoked the Leningrad siege, the toughest thing for a lot of Russia’s elite is not being able to travel. Though there’s enough to do in Russia without having to go to other places, he said.
If they can’t go to the Alps, they’re happy to go to the mountains of Kamchatka, he said.
To contact the editors responsible for this story: John Fraher at email@example.com Rodney Jefferson