Putin upbeat on Russian recovery, but doth he protest too much?
In a four-hour marathon call-in show, the Russian president focused heavily on the country's sanction-beset economy, which he claimed could return to growth within two years.
Russian President Vladimir Putin spent much of his marathon TV call-in show on Thursday reassuring the nation that better times are just around the corner. But a pointed comment from a dairy farmer briefly deflated his sanguine tone.
"You say everything is going well. Sorry, that's not true," said the farmer, who complained that he hadn’t made a profit in 15 years of raising cattle. "I have five children,” he added from his seat in the studio audience. “I need some assurance about their future in Russia.”
The farmer is reportedly John Kopiski, a British man who has lived in Russia for nearly two decades. Yet despite his Western roots, he proved well adept at summarizing his adopted country’s collective angst over its economic troubles.
In an attempt to calm such lingering fears – and to address growing complaints about his fiscal stewardship – Putin talked exclusively about the economy for the first hour of the four-hour live program. He said Russia has seen the worst of the economic downtown caused by Western sanctions over the conflict in Ukraine and plunging global oil prices.
As for the farmer, the president responded with a detailed discussion of the obstacles facing the country’s milk industry – including cheap imports of powdered milk from Belarus – and the steps the government is taking to improve it.
Of course, the economic challenges Russia faces extend far beyond the agriculture sector. Official estimates predict that the country’s economy will shrink by 3 to 5 percent this year in its steepest decline since Putin took office 15 years ago, reports The Associated Press. Despite Putin's defiant optimism, experts say the Kremlin will need to enact some fundamental reforms if it hopes to avoid an even deeper recession. As the Monitor's Fred Weir reported in January:
Russia's economic model for the past 15 years has been based on export of the country's vast raw materials, primarily energy, by big state-owned and Kremlin-friendly businesses. Then the proceeds are used to buy back Western consumer goods and foodstuffs favored by the population. Those business tycoons, known as oligarchs, made money coming and going on that cycle, but didn't bother to plow much of it back into domestic industry or agriculture.
The Kremlin, its revenues buoyed by expanding oil prices, redistributed much of that through higher pensions and public sector salaries, leading to a fourfold increase in popular living standards that is still the basis of President Vladimir Putin's stratospheric public approval ratings....
That model has been showing strains for some time. But with oil prices plummeting and Western sanctions biting, it is facing its toughest test since the 1990s.
Now, Putin has suggested Russia may turn to small businesses to help boost its struggling economy. But the country's predatory, state-connected oligarchs have traditionally blocked such efforts, and would likely resist Kremlin efforts to level the economic playing field.
Putin’s confident performance on Thursday made him appear unfazed by challenges ahead. While short on specifics, he said the slump would likely be less significant than expected and that the nation's economic performance had remained strong. He even stood by his earlier prediction that the economy could return to growth in two years.
“I think that it may happen faster, Putin said, “but somewhere in the region of two years.”
The upbeat president pointed at the ruble's recent recovery from its 40-percent plunge against the dollar last year as a sign of a renewed investor confidence in Russia. He added that there were encouraging signs that Russian agriculture was growing and replacing imports of Western food.
But Putin did acknowledge that tough times still await and asked for the understanding and patience of the Russian people. While the government plans for 10 percent budget cuts in most areas of spending, he said he would try to ease their financial pain, Reuters reports.
"To carry out a competent economic policy you have to use your head, of course, but if we want the people to trust us, we also have to have a heart. And we have to feel how the ordinary person lives," he said.
The Washington Post reports that Putin mentioned the conflict in Ukraine only once in relation to the sanctions during the first hour of the call in.
Putin told viewers that he expected sanctions against Russia to last for years. But the challenges will ultimately strengthen Russia, he said, not weaken it.
“It’s highly unlikely that sanctions will be lifted anytime soon, because it’s a politicized issue,” Putin said. “They want to restrain our growth.”
Putin’s remarks on Ukraine reaffirmed his stance that the United States and Europe are largely to blame for Russia's economic problems. Amid continuing sanctions, the Kremlin has been pushing hard to wean the county away from its dependency on Western imports – including McDonald's.