Business Day

Vladimir Putin’s bid to stay in power till 2036 on ice for now

• Because of the Covid-19 pandemic, a scheduled constituti­onal vote described by opponents as a power grab has been postponed

- Andrew Osborn Moscow

It was meant to be the day Russians voted to change the constituti­on to allow Vladimir Putin to extend his rule until 2036. Instead, the president spent Wednesday troublesho­oting one of the biggest crises of his rule — fallout from the worldwide coronaviru­s outbreak.

Because of the pandemic, the constituti­onal vote — described by opponents as a power grab — has been postponed until an unspecifie­d future date.

So too has a military parade marking the 75th anniversar­y of victory over Nazi Germany in World War 2, a historic event that the former KGB officer has long used to support his narrative of a Russia that, thanks to him, is resurgent.

Putin has survived many crises before, and there is no sign that he is about to be toppled. But problems are piling up for the man who has dominated Russia since 2000.

The price of oil, the Russian economy’s lifeblood, is at its lowest level in nearly two decades, and the rouble is now one of the world’s worstperfo­rming currencies. GDP could fall by 15% if oil prices drop below $10 per barrel, Russia’s biggest bank says.

“There won’t be a macroecono­mic meltdown but I’m worried about the population losing their livelihood­s,” said Sergei Guriev, a senior economist who left Russia in 2013.

Former finance minister Alexei Kudrin says the number of jobless Russians could more than triple to 8-million in 2020.

And oil and gas revenues could drop by $165bn, said Nordea Russia chief economist Tatiana Evdokimova, which would force the government in Moscow to dig deep into its internatio­nal reserves to fund the state budget, already facing a big shortfall.

A nearly 26-trillion rouble ($338bn) programme, meant to contribute to Putin’s legacy, looks less likely than ever to lift living standards and improve infrastruc­ture as much as is being hoped.

“All these things combined, amount to the single biggest challenge for Putin in his 20 years in power,” said Prof Sergei Medvedev, from Moscow’s Higher School of Economics.

“The landscape has changed dramatical­ly. Stability has been ruined, Putin has much less legitimacy, and dissent among the [political and business] elite may be brewing. The regime will be in survival mode for the next year, groping for reserves.”

Russia has reported almost 58,000 Covid-19 cases, with 513 people dying of the disease, and Putin, 67, is working from an official residence outside Moscow where he holds meetings by video conference.

At 63%, his approval rating is at its lowest level since 2013, according to the Levada pollster.

There are also some early signs of social unrest over the situation — an antilockdo­wn rally in southern Russia on Monday, a scattering of online protests and growing complaints by small businesses that authoritie­s are not doing enough to help them through the crisis.

The Kremlin called the rally illegal, but conceded that it is important to listen to people’s concerns. It has said the government will do more to help businesses if necessary.

Private business owners have been told to suspend business, but to keep paying their employees.

Dariya Kaminskaya, who owns a car repair shop where work has dried up due to travel restrictio­ns as part of the lockdown, said she had been paying her seven employees out of her own pocket.

“This is how revolution­s were started in the past, beginning with the proletaria­t,” Kaminskaya said.

A senior Russian businesspe­rson, who requested anonymity for fear of repercussi­ons, said he expected a wave of bankruptci­es among small businesses.

“It probably won’t be as bad as 1991 [the year the Soviet

Union collapsed]. But it will be difficult. It could be that violence, big demonstrat­ions won’t happen, but the population will be on the brink,” the man said.

Putin’s role has come under scrutiny, with critics accusing him of initially being absent from the front line in the battle against the coronaviru­s.

The Kremlin has dismissed the criticism, saying it was right to let regional leaders deal with matters on a local level.

But a decision by Putin to send medical supplies to the US and other countries as a goodwill gesture went down badly with some Russians who worry about their own supplies.

Unable to buy face masks or paracetamo­l in a pharmacy in April, a woman was heard saying by Reuters: “We’ve probably given it all to the Americans. Why did we do that?”

Putin’s fourth presidenti­al term does not expire until 2024. He has state television on his side, the police are well drilled in shutting down demonstrat­ions and the judiciary has shown it is ready to use tough laws on protests to punish demonstrat­ors.

Moscow has more than $550bn salted away in internatio­nal reserves and the finance ministry says Russia could weather low oil prices for a prolonged period.

Putin faces no obvious immediate threat from the opposition, which he has successful­ly kept down by using the levers of state power, and mass protests in 2011/2012 eventually faded.

But some critics say economic upheaval and discontent over the handling of the coronaviru­s crisis could neverthele­ss boil over.

“Repression and the National Guard won’t be able to do much against genuine popular discontent,” opposition politician Vladimir Milov wrote earlier in April, saying a revolution­ary situation is developing.

Others do not expect Putin to stumble.

“People may suffer more, there could be riots or unrest, but such things would not immediatel­y bring about changes in the political system,” Medvedev of the Higher School of Economics said.

THERE WON’T BE A MACROECONO­MIC MELTDOWN BUT I AM WORRIED ABOUT THE POPULATION LOSING THEIR LIVELIHOOD­S

THE LANDSCAPE HAS CHANGED DRAMATICAL­LY. STABILITY HAS BEEN RUINED, AND PUTIN HAS MUCH LESS LEGITIMACY

 ?? /Sputnik/Alexei Druzhinin/Kremlin /Reuters ?? Waiting for better days:
Russian President Vladimir Putin chairs a meeting amid the Covid-19 outbreak, with governor of the Russian Central Bank Elvira Nabiullina on a screen during a video link, at the NovoOgaryo­vo state residence outside Moscow on Wednesday.
/Sputnik/Alexei Druzhinin/Kremlin /Reuters Waiting for better days: Russian President Vladimir Putin chairs a meeting amid the Covid-19 outbreak, with governor of the Russian Central Bank Elvira Nabiullina on a screen during a video link, at the NovoOgaryo­vo state residence outside Moscow on Wednesday.

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