THEIR VIEW: Putin's big problem

Published on Sunday, 2 September 2018 20:15
Written by Bloomberg View

Vladimir Putin faces an enormous challenge. He wants to deliver prosperity to Russians before 2024, when the constitution says his presidency must end, but the economy is no longer cooperating. For this unhelpful economic outlook, Russia’s president has only himself to blame.

After dipping into recession in 2015, Russia remains in a rut. Private investment and productivity are sluggish.

Economists don’t expect growth to exceed 2 percent a year in the foreseeable future - a far cry from the 5-percent-plus pace of Putin’s first two terms.

If things keep going this way, Russians might get fed up by 2024.

That’s dangerous, because the transfer of power - or a constitutional amendment to let Putin stay - will stir more dissatisfaction, given how little say voters will have in the process.

The last time Russians took to the streets, in 2011 and 2012, the economy was doing well.

Putin’s answer is to decree that Russia will have an economic miracle. He has ordered the government to boost fertility, longevity, incomes, housing, innovation, digitalization, education and health. It’s an impressive collection of goals, yet less than inspiring, because this future is so implausible.

The problem is more political than economic.

Meanwhile, Putin’s grip on power throttles the domestic economy. His lack of regard for property rights and personal freedoms - he decides who may take assets from whom, who gets prosecuted, and what people are allowed to say - pervades officialdom.

As long as people fear that their lives and livelihoods can be confiscated, entrepreneurship will be stifled and many of the best and brightest will leave.

In the end, the dilemma is plain: Putin can have Putinism or a more prosperous Russia, but not both. The odds aren’t good that he’ll make the right choice.

Posted in New Britain Herald, Editorials on Sunday, 2 September 2018 20:15. Updated: Sunday, 2 September 2018 20:17.