The economic crisis and its political consequences for Russia

The rumours about the death of this blog are hugely exaggerated, although updates have admittedly not been done with much frequency lately. Running a blog of this kind takes a great deal of effort and unfortunately this author has not felt it to be within his powers to regularly sit down to produce a written analysis of anything. Encouraging comments and demands from a few regular readers have, though, finally provided him with something of an incentive. Readers shouldn’t expect this blog to be updated with the same frequency as when it was started, but at least shouldn’t feel that there is no reason to stop by now and then. Deal?

What better could one do on New Year’s Eve than take a quick look on what might be expected in the year 2009? The present economic downturn is likely to have large consequences for Russia, despite earlier claims to the contrary made by the political leadership. Already, the central bank has spent more than a quarter of its currency reserve just to prop up the rouble, and still during December it has had to silently make it slip by one percentage point eight times. Talk about a larger devaluation to come is about and a Russia analyst at one of the major investment banks, with whom this author had a chat, confirmed this perspective as very likely. There could be a 30% devaluation soon, which would obviously hurt both the Russian public and the business community, which in some notable cases has taken large loans in foreign currencies. The capital flight is in fact on the scale of the 1998 rouble crisis, according to an analyst at an asset manager specialising in the region. 

Another major issue is of course the crash of the oil price. With Russian oil trading at $32 a barrel it isn’t enough to support the federal budget, which for 2009 is based on an oil price of $95 a barrel.  The result will be a deficit of $52 billion to $86.5 billion, or up to 6% of GDP. In the short run such a deficit can be sustained by milking the stabilisation fund set up by the government to take care of excess oil revenues in the past; this fund, though, only holds $132.6 billion, so if worst comes to worst, it would not last even two years. Even if initially spending won’t be cut, an inflation rate that, even without the currency continuously being devalued, has never entered the area of single digits is likely to be felt. The car industry’s crisis is also likely to affect Russia directly, considering that several foreign manufactures have set up facilities in the country. It seems we have a recipe for both increased unemployment and diminished spending power.

This is a troublesome situation for those in power. The popularity of the sitting political leadership is based upon living standards having improved considerably since the chaos and misery of the Yeltsin era. That official propaganda has moved on from Soviet-style “telling people what to think” to “telling people what they want to hear” isn’t the same as saying Russians are fools, conveniently in the hands of their masters. On the contrary, they can be very eager to express their opinion, when they find current developments to be unpleasing. It has been seen lately in Vladivostok with its inhabitants protesting against meddling in their much beloved second-hand car imports from Japan. In 2006, pensioners took to the streets of Moscow to object to a decision aimed at replacing privileges such as free medication and public transport with monetary cheques. Despite the government’s effort to curb these hot feelings through the use of news coverage of how well the new system worked throughout the country, the ground was indeed trembling under then Prime Minister Fradkov. In the end they had to walk away from the reform. There is therefore absolutely no reason to suspect the Russian public to react differently this time, when their economic well-being is under threat. The difference is in the sheer amount of people affected, because this time we are not talking about a community of pensioners and war veterans. This time we are looking at an enraged population and a government that has so far failed spectacularly at reforming an ailing business environment and burdensome economic system when it had the opportunity to do so.

Now, the most interesting question seems to be how this will affect the issue of when (rather than if) Prime Minister Putin aims to retake the presidency from his protégé. It is the prime minister who is in charge of economic policy, thus a likely failure in this area would fall upon Putin’s shoulders. This could seriously hurt his reputation and credibility as national leader. With President Medvedev resigning from his office, citing the need for a more experienced hand at the wheel in this time of crisis, such a development could easily be avoided. As prime minister, Putin would in that case automatically assume the responsibilities of acting president in the same way he did when Boris Yeltsin stepped down on New Year’s Eve 1999. Russia was then facing a different crisis, one of terrorism and national humiliation. Putin was then able to restore the confidence of the Russian public and self-esteem of the country, earning him a truly remarkable level of popularity. If history were to repeat itself, now would be a good time, some might think.

Medvedev, then what?

Now, when it seems pretty obvious that Dmitri Medvedev is on his way of becoming the next president of the Russian Federation, it would be interesting to think a little about what this will mean for Russia and, perhaps most importantly, its relationship with the West. An analysis of this would be important because this, if anything, seems to be what might change quite fast. Foreign policy is rather naturally an obvious part of the domain of the president and also where the present establishment is most likely to give him any opportunities to have a real impact. Going after domestic issues at first would undoubtedly make things feel a bit uncomfortable for many people within this group, something which of course could have repercussions for the new president. To make certain he would remain supported by the establishment, Medvedev expressed his desire for Putin to become prime minister after the election, this way reassuring these people he would not constitute a threat to them. Putin, to my knowledge, still has not accepted this offer in public and my hunch is that he will not for some time. He might even wait till after the election itself, just to keep people a little on their toes. All the same, this is a clear sign of Medvedev’s weak position. Will it ever grow stronger so that he will be able to govern on his own? I see no reason to doubt that; Putin did not pick someone simply because in this way he would be able to control him. Putin has been working with Medvedev for years and given him important portfolios to look after. He is obviously trusted. If Putin wanted to remain in power indefinitely he would have picked someone with a weaker position, such as present PM Zubkov. The office of the president is so powerful in itself that there is a good chance things will work out for Medvedev, so long as he does not try anything stupid before he has had the time to build for himself a proper power base, which is not solely dependent on his predecessor. Given Putin’s strong position at the moment, he will though have to remain as the guarantor of a smooth succession, as prime minister or something else.

With Putin in the background (or perhaps even in the foreground), it is very likely that the only part where Medvedev in the beginning will be able to exercise much influence will be on foreign policy. The sad truth is we do not know what this will mean. Medvedev has been exceptionally quiet on the issue, perhaps not too perplexing given the fact that he has always held positions of more domestic substance, such as head of the presidential administration and then first deputy prime minister. This, however, never stopped the person always thought to be his main contender for the presidential blessing, Sergei Ivanov, too first deputy prime minister. That Sergei Ivanov has been fairly active within foreign policy might perhaps not be too surprising, since he used to be minister for defence and as such far more involved in bilateral and multilateral issues than Medvedev, at least in public (Ivanov even once met with the King of Spain, somewhat obscure since he was then merely a member of the cabinet). There are analysts suggesting that Medvedev’s silence on the matter might have been because of disagreement with the path chosen. Even though he for a long time has been a member of Putin’s inner circle of co-workers and friends, there could be something to it. Let’s explore why. 

The most obvious reason is that Medvedev never served in any branch of the security services, in contrast to Ivanov who spent his career within first the KGB and then the heir of most of its part, the FSB. Medvedev, being the son of academics and himself briefly a law professor, does not perhaps have the instinctive mistrust of the West that has so poisoned many of the people in the Kremlin. This in combination with the election of an American president more keen on multilateralism and international co-operation might result in a much-needed improvement of Russian-American relations. If you compare him to Ivanov, the latter is by far more likely to make references to Nazi-Germany while talking on American hegemony.

Medvedev is also a liberal when it comes to economics, so he will probably put more emphasis on things such as trade. As president of Gazprom he is also likely to understand that Russian gas is not only a tool for exercising pressure on one’s customers, but that there is also a business perspective on all this. This will be important especially in dealings with the European Union. 

 All this is not to suggest that Russia’s stand on the main geopolitical issues of our time is likely to change. But with a new president in the Kremlin there might at least be some room to maneouvre. 

Medvedev for President

Finally, it seems we know. At a meeting with the leaderships of United Russia, A just Russia, Grazhdanskaya sila and the Agrarian Party President Putin announced he will support their joint candidate for the presidential elections next spring. Dmitri Medvedev is a long-time co-worker of Vladimir Putin, the head of Gazprom and a first deputy prime minister. The choice, however not unexpected, had been losing in popularity for quite some time amid speculations that Putin would himself run after having temporarily resigned. Even before this, he was also trailing his, among many analysts, somewhat more popular opponent Sergei Ivanov, when they were both considered to be the main contestants.

There are a few things to be considered here. Firstly, Dmitri Medvedev lacks a background within the security services, unlike many of the people considered to be viable candidates.  This means that the support of Putin becomes extremely important, since this will be the only factor constituting his presidential authority, at least in the beginning. This also serves as a guarantee for Putin’s continuous influence. Secondly, the choice of Medvedev probably means this is not a temporary arrangement. Medvedev is a fairly powerful candidate, though he will obviously not be as mighty as Putin for the foreseeable future. The circuits that have formed around Putin during his presidency will continue to fight for influence and Medvedev will have to rule in the shadow of his predecessor. On the other hand, this sounds a little like the situation for a certain Vladimir Putin when he ascended to the throne.

Why does the Kremlin seem so worried?

This weekend we again saw opposition protests being stopped by the police in Moscow and St. Petersburg. This time prominent opposition leaders, namely former Chess world champion Garry Kasparov and former Deputy Prime Minister Boris Nemtsov, were also arrested; Kasparov for organising an illegal protest and Nemtsov for… crossing the street in an way not in accordance with the law. While Nemtsov apparently was able to convince the police to let him go, Kasparov will have to spend the next five days in jail. Five days from now is December 2nd, election day. No more pre-election rallies for Mr. Kasparov, it seems.

With United Russia continuously polling at some 68 % of the vote, one might ask oneself what all the fuss is about. It is obvious that neither of the opposition parties will have the slightest chance of claiming any successes this coming Sunday, so why the harsh treatment from the government side? Could it be that people farther down the chain of command have started to take the initiative, either out of fear that anything less will prove to be unfavourable from a career perspective, or as a way of proving their worthiness to the people above? It could be so, but that of course does not take away the responsibility from the people that have set this trend and encouraged its implementation. These are the people with the highest authority.

It might also be the case that the Kremlin is simply determined to state an example to everyone watching, that there is not even worth trying voicing a differing opinion. It is very timely to do that at this moment, when the present leadership is popular and nobody really cares about the fate of the opposition. It gets a lot harder when it grows stronger, as has been witnessed in the Ukraine and Georgia. The grip on society is hard, but not so hard as was the grip of the old Communist Party in the Soviet Union. It does not have to be and it is probably not something they want. People do not vote for United Russia or reply that they would like to see Putin seek a third consecutive term out of fear, but because they wish so, even though the foundation of their popularity is the fact that nobody ells gets to say anything.

The thing is opinion polls also show that Russians like the right to choose their leader and whom to represent them in parliament. Putin and his entourage know this very well and they do not want to make too strong an impression that this liberty is being eroded, even though this is exactly what is happening. They want to keep people wishing to vote for them, which is a lot easier if they are the only ones being heard. But this is for now, what the situation will look like a few years from now is highly uncertain. People that stay in power for too long have a tendency to at some point lose most of their popularity, which makes a popular uprising more likely. Better then to set the standard now to scatter what little opposition there is and not take any chances.

Putin at the rally – pointing the finger

With the parliamentary, and later the presidential, elections getting closer and closer, the sense that a decisive moment for Russia is coming up has intensified. That is, of course, nothing but an illusion since there will be no surprise results emanating from these events. Nevertheless, the leading figures at the Kremlin continue to do their best to create the illusion that the moment when Russia’s destiny will be decided is approaching.

One of the most telling stunts was organised this week, when President Putin participated in 5,000-people rally, organised by the Za Putina movement. During the meeting Putin went out of his way to convince people that his opponents want a weak and divided country that would let them “plunder” it yet again, in the same way as the oligarchs did in the 1990s. He also criticized foreign intervention in Russian elections, thus creating not only a domestic enemy but also a foreign (read: Western) one. This propaganda is part of a larger attempt to make the saying of history’s unpredictability come through once more. Even though Russia is no longer embracing the ideological foundation of the Soviet Union, it certainly has no intention of letting go of its Soviet past. The chaos of the Yeltsin era was something of a modern version of the time of troubles to Russia, which is now fast reclaiming its independent, self-sufficient and influential position on the world arena. Or so it is said. The United Russia party more and more resembles the former almighty Communist Party, the successor of which in return is being more and more marginalized. The great accomplishments during World War II are especially commemorated (in itself definitely nothing wrong, the soviet sacrifices were huge), but small details, such as the Molotov-Ribbentrop pact and the attack on Finland, are seldom mentioned.

But seeing this as merely an attempt to knit together today’s Russia with the Soviet Union is making things a little too easy. You could also look upon this as a new revolution with Putin as its leader. The oligarchs (or at least a few of them, the disloyal kind) are today’s kulaks and ruthless capitalists, sucking the resources out of the Russian soil, stealing what belongs to the Russian people. Or perhaps its leaders, the most important of which, without any competition, remains Vladimir Vladimirovich Putin. He is the party leader (though not a member) and the balancing factor in the struggle between different factions. Something of a modern Brezhnev, however in obviously better health. Not only is he the only thing apparently holding Russia together; he is also the only one able to defend it against the evils of the West. Putin has for quite some time been invoking the image of West – the aggressor, which is endlessly pursuing its attempt to encircle the Russian nation, stealing and redistributing its natural resources and installing a weak, helpless regime. However, he who rules this country will not let that happen. He will continue to stand up for Russia and protect her interests, in much the same way as Stalin, who coincidentally is experiencing something of a rebirth, protected the Soviet Union and defeated its enemies. Putin, unlike Stalin, however does not have the luxury of an invading enemy against which to unite. He has to make one up, against which there obviously will not be any Stalingrad-like monstrous tank battles. He is instead recreating the sentiments of the Cold War, targeting foreign diplomats and their governments as interventionists and, then quite naturally, anyone who meets with such people as a suspect, a spy and a traitor. Apparently, this kind of language goes well with the Russian electorate. A direct confrontation, something Putin will be cautious enough to avoid, fearing perhaps its outcome, is not in anyone’s interest. At the moment, pointing the finger is enough to win this election.  

Putin criticizing United Russia

Yesterday President Putin apparently filed some severe criticism of the Kremlin-loyal United Russia party, while on a trip to Krasnoyarsk. He is reported to have uttered that the party is in lack of any clear ideology and that it attracts “crooks” of various kinds. In the light of Putin a few weeks ago surprisingly stating that he would lead the United Russia party ticket in the upcoming elections to the state duma, this might seem just a little odd. Not necessarily.

It is true the party has no real ideological basis; its only opinion seems to be that whatever Putin says is good. One excellent example of this is Oleg Kovalyev, a deputy and member of the party leadership, who immediately after Putin’s statement replied with ”as usual, the president said the right thing”.  In fact, the election platform consists of a collection of speeches by the president that they have branded “Putin’s Way”. But why is Putin criticizing this lack of ideological foundation, then? One reason could be that he needs to reassure the public who is in charge. Even though United Russia was created by the Kremlin and has done nothing but offered its support to the present leadership, Putin might want to emphasize that this is a party circulating around and lead by him, not any possible successor as president. Putin is their leader, not whoever sits in the Kremlin.

Another reason for affiliating the party even closer with Putin is probably the fact that it has not been able to maintain its high popularity ratings in the latest opinion polls. There was an immediate positive reaction upon Putin’s announcement that he would lead their ticket, but that trend is no longer continuing. In fact, there are reports about its support shrinking. Putin also stated that a strong victory for the United Russia would provide him with the moral right to continue exercising a strong influence on the country. This is a powerful message, directed to the Russian voters, who continue to endorse their president. When he tells them to vote for United Russia, there is no doubt they will, and to make sure the words of the president were heard loud and clearly, they were given some eight minutes of coverage on the evening news, according to The Moscow Times.

A third reason might have been to send a message to the party itself. Not that it should form its own, independent ideology (heaven forbids!), but perhaps is the president not alltogether happy with its performance and the candidates it has put forward.

While he obviously had a lot to say about the party, Putin gave no further information on his own political future. When asked about why he had chosen United Russia, when it is so full of crooks and without an ideological base, the answer was simple: Because we do not have anything better. That is a strange way of trying to convince people to vote for you. Unless the party is going to win anyway and you are the only one who can change things to the better. To remain influential, you must deliver the votes, so that the party continues to be dependent on you. At the moment there is little doubt Putin will. It is just that he is not likely to take any chances.

No thank you, OSCE

Last week Russia did something apparently unprecedented. In a letter to the Organization for Security and Co-operation in Europe, the Russian leadership, at this particular time represented by the Central Election Commission, made an attempt to dictate the size (i.e. make it very small) and composition of the team of election monitors that would be monitoring the coming parliamentary elections. Since the OSCE has no possibility of forcing its will upon the Russians, it seems likely there will be either a diminished OSCE mission going to Russia, or none at all. The Russians are hoping for the latter.

Russia’s reasons for attempting this scheme are several. For years it has been fighting what it sees as the OSCE focusing more on domestic democracy issues than regional security, failing to see the connection. On a number of occasions it has voiced its concern and criticized this development and, in the light of these past events, this is nothing but a natural escalation of the conflict. By trying to reduce the number of observers to as little as 70, Russia is in effect making it impossible for the election monitors to come up with any kind of definitive conclusion, even thought the mere fact that this is happening should serve as evidence that something is a bit fishy. Not that the United Russia party will have to cheat in order to bring home the election trophy, especially not after President Putin’s announcement that he will head their ticket. Opinion polls show there will be a landslide victory, much thanks to Putin’s now even closer affiliation to the party, which also seems to have been the reason for his candidacy in the first place. 

The thing is the OSCE does not only monitor the actual elections, but also whether campaigns are conducted freely. This is from where most of the alleged criticism would stem. There will basically be no ordinary election campaign; most of the televised debates will even be hidden from the public eye on time slots that could only with the maximum amount of generosity be referred to as prime time. Coverage of the United Russia, though, will as always be extensive, while the remains of the opposition will have severe difficulties getting their message out. Harassments are also likely; only last week the regional branch of the FSB in Novosibirsk conducted an investigation into the distribution of Communist Party leaflets (even though the Central Election Commission firmly rejected the security service’s claim that election laws had been violated). The treatment of the opposition movement Another Russia’s attempts to voice their opinions at city rallies also should not have gone unnoticed. An OSCE mission would recognize all this.

Despite the fact that most Russians love their present president and would vote for anyone or anything he would tell them to, opinion polls do show that they also value their right to choose. The Russian opinion does not seem very interested in returning to a truly autocratic dictatorship but would prefer to be able to cast their votes now and then. Therefore, the illusion of a democratic process remains important to the Kremlin. An OSCE report would without a doubt be critical and a blow to this illusion. That is why Russia is hoping its monitors will not show up at all, under the pretext that they would not be able to conduct their work anyhow.  

Russia and the West

This week we have been reading senior leadership quotes about foreign management and western spies. First it was President Putin, who in a speech in front of the Federation Council, the upper house of parliament, wanted Russian companies within the energy and raw material sector to rely less on foreign management. Later, the director of the Federal Security Service (FSB), Nikolai Patrushev, told the readers of weekly Argumenty i fakty that western intelligence operatives were actively trying to influence the outcome of the coming parliamentary and presidential elections by trying to influence protests and demonstrations. According to Patrushev, the goal of Western governments is to dismember the Russian Federation. Some analysts see this as nothing but electoral propaganda, but I disagree. It is more of a sincere belief that the world is still bi-polar and international politics a zero-sum game being expressed. This sort of opinions has been voiced regularly for quite some time and not only when the country is approaching elections. E.g., in 2004 after the awful terrorist act aimed at a school in the North Ossetian town of Beslan, President Putin went on the air to tell the Russian people that foreign powers that still considered Russia a threat, being a nuclear power, were aiding the terrorists to tear off a large piece of Russia.

While nobody is better at spotting a conspiracy than the Russians, regardless of whether there is one or not, it should be interesting to consider whether there is any proof to all this. No doubt were the Rose Revolution in Georgia and its orange counterpart in Ukraine supported, morally and financially, by Western powers. But on the other hand, there are strong indications that Russia assisted yesterday’s Ukrainian regime in poisoning then opposition presidential candidate Viktor Yuschenko. Now, if that is not meddling, I do not know what is. 

NATO enlargement has also given Russia a sense of becoming more and more surrounded by enemies and, thanks to growing self-esteem that comes from its increasing wealth, the fight to retain its influence of what used to be the Soviet Union has become more intense; hence the struggle to keep Georgia and the Ukraine out of NATO.

It is not difficult to see from where Russia gets its ideas of a Western conspiracy, but we should put one thing straight: no Western government would like to see Russia dismembered, with all the chaos that would stem from such a development. That very senior Russian government officials still claim this is seems to be because they see Western intrusions in what they consider to be Russia’s sphere of influence as a sign that Russia itself is up for grabs. Frankly, there seems to be confusion about where the boundaries of Russia really go. That neighbouring countries are invited to join NATO is not proof of any conspiracy against Russia, but rather of a desire among these countries to distance themselves from their past, when they were either members or satellite states of the Soviet Union. That they no longer feel a connection to Russia is basically Russia’s own fault, even though they are masters at failing to admit this. We should also look upon this in the light of Russia’s own actions in Moldova and Georgia, where so called Russian “peacekeepers” are in effect supporting the rulers of non-recognised states that have broken away from the central government of these countries. Now, if that is not dismembering, I do not know what is. 

Putin’s remarks, too, should be read in the light of this sense of conspiracy. Putin wrote his doctoral thesis on the use of natural resources as a strategic tool for governments (even though there are doubts about whether he actually wrote it himself) and he has proven ready to use this weapon on several occasions. With the continuing consolidation of energy suppliers within the hands of the government, there should come as no surprise that foreign (read: Western) management is not very appreciated.

Russia still does not trust the West. It will never do so as long as it continues to see the former Soviet Union as being present day Russia’s sphere of influence and as long as Western criticism of the troubling state of Russian democracy is seen as meddling within its internal affairs. And sensing this conspiracy, whether real or not, Russia will continue to carefully guard its most powerful tool of exercising influence. And no doubt will they continue using it. 

Fradkov The New Spy Chief

Just a few words on the fact that Mikhail Fradkov, who was forced to resign as prime minister in the last government shake-up, was appointment head of the Foreign Intelligence Service (SVR), replacing Sergei Lebedev (in turn made Secretary-General of the Commonwealth of Independent States, the organisational heir to the Soviet Union). This should serve as proof that Fradkov was not relieved of his duties as prime minister because of any incompetence. Incompetent people seldom end up as intelligence bosses. Let us not forget that President Putin himself started his career within the then KGB foreign intelligence directorate.

Since obviously Putin still has trust in Fradkov, the question arises why he was kicked out of his White House office. (If you don’t know your way around Moscow; the White House is most famous for being shot at with tanks in 1993 on the orders of then President Yeltsin, when it was the home of Parliament; it is now the house of the federal government). It could be because attempting to breed Fradkov as a potential presidential candidate for next spring was a no-brainer. Without any charisma and seen as a political nobody, the up-hill battle might have been considered too great. Also, his government were responsible for trying to reform the system of social benefits for pensioners, veterans and the like; this was something that brought huge crowds out on the streets to protest (a rare view of Russian democracy!) and did hurt the regime. These memories could prove to become a severe liability.

Fradkov’s successor, Viktor Zubkov, on the other hand has taken a rather colourful stand on several issues, yelling at cabinet members for not completing the tasks awarded by the president and even sending a senior government official off to remote Sakhalin to speed up the distribution of relief funds after an earthquake there. This last thing was widely recognised as merely nothing but a populist measure to show strength, but it is still quite hands-on. It might be,  and I know I’m about to contradict myself here with regards to an earlier article, that the Kremlin is trying to create a positive image of Zubkov, so that he could run for president when Putin steps down. At 66, he would probably not last long, and with Putin as his prime minister he could quickly make him acting president again by resigning due to, say, health reasons. Or, it could all be a smoke-screen and someone else, previously known or not, might pop up and make a run for it. Russian politics are, as we all know by now,  nothing but an endless row of complete surprises. There is never a dull moment.

Russian Democracy in 2050?

With President Putin’s announcement this Monday that he intends to be the first name on the United Russia party list in this autumn’s parliamentary elections and that he does not exclude the possibility of becoming prime minister after he steps down as head of state, confusion about what is going to happen now is everywhere. To sort out this mess and perform anything more than qualified guesswork with regards to the coming months of Russian domestic politics would demand more insight on what goes on in the long corridors of the Kremlin than most analysts have been able to come by. But while we are at it, it is, however, tempting to take a closer look on the longer perspective of Russian democracy; what will the situation be ten, twenty or even forty years from now?

When looking at Russia one is always reminded of the fact that evolution is not taking place on merely one level. When asked about how Russia is evolving, it is sometimes tempting to slip into the ordinary mood of pessimism, which is always present whenever the fate of this fascinating country is debated. Merely leaving it at that, which is often the case, is a mistake. There is a democratic, or political, evolution that admittedly leaves much to be desired. But there is also an economic evolution that is, I dare to say, astonishing. We must keep that in mind.

According to a report by the Research Institute of the Finnish Economy (ETLA), income levels in Russia will exceed 90% (up from some 37% today) of the levels in EU15 member countries by 2050. (The report can be found at http://domino.sampo.fi/external/sbd/ks.nsf/liitteet/ETLAtutkimus.pdf/$file/ETLAtutkimus.pdf.) Already, the desire for consumption goods among the members of the middle class is enormous. That is not too surprising, considering history. After some seventy years of communism when there was nothing to buy and nearly ten years of economic chaos when there was no money about, the desire to buy stuff will not go away easily. The same goes for the wish to travel and see the world, something that was denied these people during communist reign. There might be setbacks along the road, but there is no doubt about Russians getting richer and their middle class growing bigger.

These improvements are not distributed evenly across the country. There is also a serious demographic issue that has to be dealt with, either through higher birth rates or immigration. Nevertheless, the future looks very bright from an economic point of view and this will have consequences also for the evolution of Russian democracy. We are looking at decades of impressive economic growth and it will simply not go unnoticed.

Up until things started to go their way at about the turn of the century, Russia was in chaos and despair, also known as democracy. While people in the West consider democracy to be a prerequisite for stability, among Russians these expressions are often thought of as opposites. While this is understandable, history has proven to us many times that memory is short. Increasing wealth and a growing middle class should eventually lead to people starting to question their lack of genuine influence, when they can no longer remember the turmoil of Chapter One of A Democratic Russia. Some fifteen years from now, we will see a generation that was not even born then and did not have to live through the pain. Many of these people will be in universities and they will have opinions, take economic well-being for granted and not be satisfied by it. Far from everyone will agree with them, but that is the whole point of democracy.

And yes, there might not be nation-wide support for democratic change. Many people will likely resort to the often expressed opinion that such a vast country cannot be ruled by anyone but a strong, autocratic leader. But then again, such a luxury might not be needed. Power sits in Moscow, where most of the money is and where income levels are the highest. In the Ukraine, things were changed thanks to protests in Kiev, the capital, and against the wishes of the entire eastern part of the country. It is not by coincidence that the Russian authorities are closely watching everything that could turn into a popular movement like the one that stopped Viktor Yanukovitch from obtaining the presidency. They know. Real change might not happen in 2020, perhaps not even in 2030. But eventually, protests will arise and, given the speed of economic growth, it is very likely this will happen sooner rather than later. How the government will react then might provide us with new opportunities to slip into that old pessimism for a while, but we will see. Change has come in even more unexpected countries, such as the Soviet Union.

While we wait, I would not run for office anywhere in Russia. Risks are too high and the chances of succeeding are slim. I would, however, invest some of my money there.