On ascending to the presidency in 2000, Vladimir Putin offered the Russian people a growing economy and higher living standards, the prospect of stability after the chaotic 1990s, and a vision for Russia's return to great power status. Twenty-three years late, he fails on all counts.
Russia's economy grew significantly from 2000 to 2008 but has essentially stagnated over the past decade and faces daunting future prospects. The proffered domestic stability has turned into authoritarianism on par with the worst of Soviet times and, as Yevgeniy Prigozhin showed in June, not necessarily lasting. Putin's policies have bogged Russia down in war with Ukraine, provoked NATO to rearm and enlarge, and increased Moscow's dependence on China.
Were a Russian citizen in 2013 to be told the situation his or her country would face in August 2023, he or she would conclude that Putin's policies for the coming decade would result in little short of disaster.
Economic Boom to Uncertainty
The eight years that followed the Soviet Union's collapse at the end of 1991 were not easy for Russia or for Russians. The transition from the Soviet command economy to one in which the market played a greater role meant economic dislocation and pain. Some estimates placed the cumulative economic contraction in the 1990s at 40 percent.
Boris Yeltsin stepped down as Russia's president on December 31, 1999. Prime Minister Putin became acting president and then won a special presidential election in March 2000. He got off to a good start on economic reforms, assisted by able advisors such as Alexei Kudrin. The Russian government adopted tax reform, a new civil code and deregulation, among other things.
Luck favored Putin. The prices for oil and natural gas, Russia's two largest export earners, began rising in 1999. The surge in revenues, on top of the reforms, helped the Russian economy grow at a rate averaging 7-8 percent per year between 2000 and 2008, nearly doubling its size. The 2008 global financial crisis struck just as Putin-constrained by the then-constitutional limit of two consecutive presidential terms-swapped places with his prime minister, Dmitry Medvedev.
Putin chose to return to the presidency in 2012. Perhaps understanding that economic prospects were not bright, he ran a campaign stressing nationalism and restoring Russia's place in the world, largely leaving the economy aside. That proved prescient. From 2012 to 2021, gross domestic product grew at an anemic rate of 1 percent per year, before contracting in 2022 following Russia's invasion of Ukraine.Stagnant growth and inflation meant declining real living standards.
The West applied broad economic sanctions in 2022. While the economy weathered the sanctions better than most had anticipated, the future holds little reason for optimism. The IMF, whose estimates tend to the high side, projects Russian economic growth at 1.5 percent in 2023.
The government has maintained growth by dramatically increasing defense and other spending, which was 50 percent higher in the first five months of 2023 compared to 2022. That may not prove sustainable. Government revenues from oil and gas sales fell 64 percent in May 2023 compared to May 2022, as oil was diverted to far-away markets such as China, and some oil sold subject to a price cap, while Europe weaned itself off of Russian gas.
Hundreds of Western companies have exited the Russian market or suspended operations there, and sanctions blocking hi tech exports-even if weakened by evasion- will have an impact. Moreover, tens of thousands of IT workers have left the country over the past 17 months. The technology gap between Russia and Western economies will grow. The Russian automobile industry has been particularly hard hit, with car production in May 2023 just 40 percent of the January-February 2022 level.
For many Russians, 2000-2008 were good years economically. but those lie 15 years in the past; the economic future looks cloudy at best, tending toward grim.
Political Stability to Authoritarianism
Yeltsin's tenure as a president during the 1990s was often chaotic, on the top of major economic dislocation and Russians' need to adjust to loss of an empire in the former Soviet space. Putin promised stability, and Russians in the early 2000s spoke of an implicit Putin deal with the public: they would not have a serious political voice but would see their personal economic situation improve (as it did, until 2008).
Putin built an autocratic system. The Kremlin used administrative resources to back Putin and, in 2008, Medvedev, in presidential elections and kept serious opponents off the ballot, as it did with Alexey Navalny, in 2018. The Kremlin ensured that United Russia, the pro-Putin party, scored victories in legislative elections. United Russia was joined in the Duma (lower house) by supposed opposition parties, such as the Communists and Liberal Democratic Party, but Putin and United Russia had their support on issues that mattered.
The Duma and Senat (upper house) demonstrated their rubber-stamp operation in 2020, when an amendment to the Russian constitution was proposed that would allow Putin, elected in 2012 and 2018, to run for two more terms as resident without stepping down, as he did in 2008. It took less than ten days for the amendment to win approval from both legislative bodies, as well as Russia's 89 regional legislatures. When Putin wants something, the legislature delivers.
The Kremlin has worked with the legislative branch to pass a series of laws that restrict civil society and human rights. These include laws on undesirable and extremist organizations, foreign agent destinations, limits on demonstrations and, in 2022 "discrediting" the Russian military. Under the latter, referring to the so-called "special military operation" that Russia launched against Ukraine in February 2022 as a "war" can mean serious jail time.
The personal autocracy that Putin has built is based neither on institutions nor law applied equally to all, and it matches some of the worst features of Soviet times. While the system for years had the appearance of stability, Prigozhin and his Wagner Group mercenaries challenged that in June. They conducted a military mutiny, seizing central Rostov in southern Russia and sending a military convoy to within 200 kilometers of Moscow before a settlement ending the mutiny was announced. Prigozhin has known Putin since the early 1990s and is very much a product of Putin's system. The state media claimed that the dénouement of the crisis showed the country's stability, but one has to wonder about the brittleness of a regime in which a private military force can shake things so badly.
Great Power Status?
Whatever progress Putin made in restoring Russia's great power status has been eroded by recent Kremlin policies. Most analysts believed that the 2011-2020 modernization program provided Russia with "a far more capable military." However, 17 months of grinding fighting against a smaller Ukrainian opponent have shredded that assessment. In June, the British Ministry of Defense estimated that the Russian military had suffered 220,000 casualties.
While causing widespread enmity toward Russia that will last for decades in Ukraine, the invasion has brought about Russia's near total isolation from Europe and the West. It accelerated changes in European security that began after the Russian seizure of Crimea in 2014, changes that have dramatically worsened the geopolitical scene confronting Moscow. NTO is united, rearming in a serious way, and has increased forces on its eastern flank opposite Russia.
In 2014, only three NATO members spent 2 percent of gross domestic product on defense. Today, eleven of the Alliance's members have hit that NATO-established goal, with more expected to meet it in 2024. All allies now meet the target of devoting 20 percent of defense spending to equipment purchases. Since February 2022, NATO members' cumulative spending on defense has jumped 8 percent in real terms. The Polish government set a target of at least 3 percent of GDP for defense and, in 2023, budgeted 3.9 percent, signing contracts to purchase hundreds of Abrams and K2 tanks from the United States and South Korea as well as other arms such as HIMARS rocket systems.
Prior to 2014, NATO deployed virtually no ground forces on the territory of countries that had joined the Alliance after 1997. Following Russia's seizure of Crimea and the start of the conflict in Donbras, NATO deployed multinational battlegroups in Estonia, Latvia, Lithuania and Poland, with additional battlegroups stationed in Romania, Bulgaria, Slovakia and Hungary after February 2022. In the first half of 2022, the U.S. military presence in Europe increased by 20,000 soldiers, sailors and airmen.
Shortly after the 2022 assault began, Chancellor Olaf Scholz announced that Germany would meet the 2 percent goal; create a 100 billionEuro fund for defense; change its policy of not sending arms to war zones in order to provide weapons to Ukraine; and purchase F-35 aircraft to sustain Germany's role in NATO's nuclear-sharing arrangements. The follow-up has dragged, but seems to be gaining speed. Defense minister Boris Pistorius has announced that Germany will augment the battalion-sized battlegroup it leads in Lithuania by developing a full brigade as soon as the infrastructure is ready. Berlin appears to have abandoned five decades of Ostpolitik.
Russia's invasion caused Finland and Sweden, after decades of neutrality, to opt to seek NATO membership.Finland is now a full member, with Sweden expected to be in the Alliance later this year. That will effectively turn the Baltic Sea into a NATO lake. The language on Ukraine joining NATO in the July 2023 NATO summit communique struck some as similar to the April 2008 NATO communique language that Ukraine "will" become a member. Still, more and more NATO members seem to have concluded that a stable and secure Europe requires a secure Ukraine-and that NATO membership is the best guarantee of that.
Putin has sought to balance his country's deteriorating situation in Europe with closer ties with China. However, his "no limits partnership" with Xi Jinping apparently has limits, particularly in the kinds of support Beijing is willing to provide Moscow in its war on Ukraine.
A Catastrophe for Russia
On each of the three areas where Putin held out the promise of something better to the Russian people-economic growth, political stability, geopolitical status- he has delivered failure. As CIA director Bill Burns aptly summed it up,
"Putin's war has already been a strategic failure for Russia-its military weaknesses laid bare; its economy badly damaged for years to come; its future as a junior partner and economic colony of China being shaped by Putin's mistakes; its revanchist ambitions blunted by a NATO which has only grown bigger and stronger."
Were a Russian citizen in 2013 to have forseen what a decade of Putin's policies would bring for Russia, he or she almost certainly would have regarded it as a shambolic catastrophe.