Economists predict that Russia could turn on Putin as the country’s economic fortitude weakens and sanctions continue to intensify

Anjali Jain
Russian President Vladimir Putin at the Forum of Future Technologies in Moscow on February 14, 2024 . Getty Images

• Economists predict that Russia’s economic strength will likely weaken this year.
• Putin may lose support if ordinary Russians are forced to endure more hardships as a result of Western sanctions.
•If Joe Biden is re-elected in November, sanctions are likely to tighten, according to economists who spoke with Business Insider.

Economists predict that this year will test the resilience of Russia’s economy in the face of sanctions, and Vladimir Putin may lose the support of the people if the West intensifies sanctions and complicates life in the country.

Russia has thus far remained unaffected by Western sanctions; however, the November US presidential election could mark a turning point for the country, according to Yale researchers Jeffrey Sonnenfeld and Steven Tian, who believe the West will likely continue to support Ukraine while tightening sanctions on Russia if President Joe Biden is re-elected.

They claimed that increased economic pressure could increase Russians’ resistance to Putin’s leadership, following a protracted period of complacency during which the president continues to drag the country into its third year of conflict.

- Advertisement -

“People are living regular lives for now, but it’s a completely unsustainable strategy, and the fundamental growth drivers underpinning that economy are deteriorating in front of our eyes,” Tian reported to Business Insider. “And if Trump’s not elected, then all of that will rise to the surface … The house of cards [will come] crashing down.”

Sergei Guriev, a prospective dean of the London Business School and a Russian economist, concurs that social unrest in Moscow is possible. He said the state of the Russian economy is reminiscent of the late Soviet Union, just before the government’s concentrated economic support waned and certain sectors, such as manufacturing, descended into “deep recession” territory.

The economic illusion of Putin

The tailspin predicted by Sonnenfeld, Tian, and Guriev appears to contradict the outward appearance of Russia. The economy expanded by 3.6% in 2023, the Russian federal statistics service reports. A survey from 2023 reveals that an unprecedented 56% of Russian citizens hold the view that the economy is undergoing a positive transformation.

Sonnenfeld, however, argued that economic and polling data emerged from Russia that is “completely deceptive.” In the past, he has argued that the growth figures attributed to Russia are fabrications of “Putin’s imagination,” wherein the Kremlin selectively presents positive statistics while concealing the more alarming data points from public scrutiny. “There’s no confidence in the objectivity or the security of Russian polling,” according to him. “It’s fully propaganda.”

- Advertisement -

Putin has asserted that Russia is rapidly transitioning into the global center of economic expansion. That, too, is likely false, Guriev hypothesized.
Putin holds the view that Russia is not performing commendably. “Putin acknowledges the statistical inaccuracies, but he must persuade the Russian people that everything is in order,” he continued. “This is his job as a dictator, to distribute this.”

Additional economic indicators present an unfavorable portrayal of the financial state of Russia. In 2022 alone, the country experienced the departure of one million citizens, fifteen percent of its elites, and nineteen billion dollars in foreign direct investment. Furthermore, although substantial military expenditures have supported the economy of Moscow, this is not expected to persist for much longer; European scholars anticipate a comparatively decelerated growth trajectory for Russia until 2024.

Sonnenfeld previously stated that those statistics demonstrate the Ukraine conflict is “cannibalizing” the nation’s economy, regardless of how much Putin brags about the country’s resistance to sanctions.
Sonnenfeld and Tian both speculated that the wake-up call to this reality among Russian citizens could come in the form of Biden’s reelection and stricter sanctions. The West could potentially inflict severe damage on the Russian economy if it sanctioned metal commodities such as copper, steel, and others, which comprise an estimated 20% of the country’s total revenue, in addition to the oil trade.

- Advertisement -

Meanwhile, the standard of living in Russia has already begun to decline. The deterioration of civilian infrastructure is attributable, in part, to Russia’s excessive war expenditures. Inflation in Russia is also elevated, standing at 7.58%, as reported by the economic ministry of Russia.
“[There] would be massive unrest when people in Russia realize that Putin’s promised path to victory is not going to materialize the way he’s promising, when people realize that in terms of Ukraine, there is no pathway to victory.”

Guriev maintains that the Russian economy will not entirely collapse, as central bankers will exert considerable effort to mitigate the repercussions. However, inflation and growth restraint will be enormous obstacles for Moscow, necessitating a harrowing economic restructuring.
“It’s unlikely the Russian economy will spiral into a macroeconomic meltdown, and that the Russian political system will,” according to him. “The necessary condition for the end of this war is of course the change of the political regime and in particular the departure of Mr. Putin.”

Subsequent economists have posited that Russia’s economy is presently incapable of withstanding the consequences of a war, being precariously reliant on military expenditures and thus incapable of supporting itself.

TAGGED:
Share This Article
Follow:
Hello, I'm Anjali Jain, a passionate writer navigating the dynamic realms of entertainment, politics, and technology. My blog serves as a digital canvas where I explore the intricate threads that weave together these diverse spheres, offering readers a comprehensive and engaging perspective. Entertainment Aficionado: As an avid consumer of all things entertainment, I delve into the worlds of movies, television, music, and more. Through my blog, I share insightful analyses, reviews, and behind-the-scenes glimpses into the ever-evolving landscape of pop culture. Political Explorer: I'm not one to shy away from the complexities of the political arena. From local issues to global affairs, my writings aim to unravel the intricacies of political events, fostering meaningful conversations about the societal impact of policy decisions. Tech Enthusiast: With an insatiable curiosity for technology, I keep my readers abreast of the latest innovations and trends in the tech world. My articles break down complex concepts, making technology accessible and exploring its profound influence on our daily lives. Narrative Architect: Through my writing, I craft narratives that bridge the gap between entertainment, politics, and technology. Each blog post is a journey, offering readers a thought-provoking exploration of the forces shaping our world. Join me in unraveling the stories that define our culture. Connect with me on Facebook, Instagram and X for real-time updates, discussions, and a shared passion for the fascinating intersection of entertainment, politics, and tech.
Leave a comment