One year and one day ago, on 7 May 2018, Vladimir Putin was sworn in for his fourth term as president of Russia. The newly elected Russian leader arrived at the inauguration ceremony directly from his office, showing the people that he was busy with current state affairs and at the same time demonstrating to an entire army of high-ranking officials waiting in the Kremlin’s royal halls that the objectives he planned to accomplish during his fourth tenure could not wait, writes James Wilson.
Putin is indisputably a very popular figure in Russian society — he enjoys a level of trust and respect that is hard to attain for a politician. What is more, Putin has been able to achieve this consistently for many years. This is partly because he brought back a feeling of national pride for the Russian people. His controversial foreign policy is still largely met with enthusiasm and support at home, and with rejection, but fear mixed with respect in Western democracies.
Putin is smart, and is well aware that to win people’s devotion one needs more than “a sharp pen and a sword” — a true historical figure and beloved leader of the nation should also bring meaningful changes to the country’s life. With this in mind, on the first day of his office last year, he issued a decree on national goals and strategic objectives for the development of the Russian Federation until 2024.
By signing this document, he tasked his government with one of the biggest objectives in the 20-year history of his rule. He launched nine national projects to develop key areas of the country’s life, which by the end of his current term should bring about sustainable population growth, increase life expectancy to 78 years, place Russia among the world’s five largest economies, achieve higher than global average economic growth rates, improve environmental protection and most essentially maintain the famous “Putin’s macroeconomic stability”, which would be difficult to accomplish under the constant pressure of sanctions.
Putin’s national projects have a domestic focus and aim to renovate infrastructure, develop human capital and entrepreneurship, create conditions for comprehensive development of the digital economy amongst other objectives. On the instruction of the President, more than US$ 380 billion — a considerable amount by any measure — has been allocated over the year for these purposes.
The commissioning of a bridge across the Kerch Strait to the annexed Crimea was a prelude to Putin’s future success in this field. This large-scale infrastructure project was completed on time, just a week after the inauguration, setting a political precedent, opening up a new logistical channel and creating a great number of jobs in related industries. The successful experience of implementing a particular task in such a difficult economic and foreign policy environment spurred discussions on launching an additional national project to modernise old and build new major infrastructure facilities, such as those built as part of an integrated northern mega-project for gas production and liquefaction in the Yamal Peninsula, north of the Arctic Circle, which reinforces Russia’s status as an energy leader in the Arctic.
Today, many things depend on geopolitics and infrastructure — however, it is the financial sector that continues to be the lifeblood of the modern world. Accordingly when taking stock of the first year of Putin’s 4th term, it is necessary to take into account his financial policies. Despite heavy external pressure and negative attitude of the majority of Russians towards the government’s economic team, Putin managed to keep the ruble stable, contributing to overall macroeconomic stability against a backdrop of a sharp decline in other national currencies.
A new round of devastating sanctions by the US financial authorities announced this spring only temporarily slowed down a series of successful placements of Russian government bonds. Besides, as the US has been holding off on introducing the new set of sanctions, the demand for Russia’s government debt obligations from foreign investors has only increased due to their high yield. In March and April, non-resident investments in Russia’s debt obligations grew by more than 15%, exceeding the value of US$ 7.5 billion. Also noteworthy is Russia’s surplus budget generated in 2018. Today, even skeptical experts give an optimistic forecast for the Russian budget until 2020. Thus, Putin’s provident budget policy helped him to comply with his ambitious pledges in the social sphere despite massive external pressure without resorting to populism whilst simultaneously ensuring macroeconomic stability and a stable ruble exchange rate. All of the above can objectively be called Putin’s achievements during the first year of his fourth term of office.
But improving the perceived well-being of Russia’s population, which has been falling over the recent few years, has been a real headache for the Russian leadership. Putin seemed to realise that the only way to deal with this issue is to stabilise the country’s relations with the West. Better cooperation would benefit both sides, and this is understood by a number of actors in Western countries. Austria is signing another contract with Gazprom up to 2040; Germany, despite considerable pressure from the United States, continues to support the construction of Nord Stream 2, viewing it as an exclusively commercial rather than geopolitical project.
Many countries supporting Euro-Atlantic solidarity also believe cooperation with Russia is mutually beneficial. Hungary and Turkey seek to strengthen their energy security through new units of their nuclear power plants built by Russia’s Rosatom Corporation, which during the last two presidential terms of Vladimir Putin has become a world leader in the nuclear power market. The business communities of Italy and France have also called for lifting sanctions, as European companies have lost an estimated €100 billion since they were imposed, arguing that Europe has failed to attain the political goals it had set, paying a steep price for no political achievement.
Security remains the Russian leader’s strong point. Putin, for his part, has repeatedly indicated that he is ready to search for compromise and engage in equal and mutually beneficial dialogue, yet will never sacrifice Russia’s sovereignty and national interests. This was demonstrated at the Helsinki summit between Putin and Trump held in summer 2018, where the Russian President put forward a number of arms control proposals, including one on negotiating nuclear arms limitation. Despite Russia’s nuclear arsenal and a range of new weapons commissioned over the past year, Putin showed initiative and, guided by the logic of global security and stability, forewent geopolitical ambitions and mistrust towards the United States fostered by his many years’ KGB experience. However, six months later, President Trump’s administration answered by the decision to suspend the country’s participation in the INF Treaty, thus undermining the strategic stability so often cited by them and virtually sending the world 30 years back to the epoch of James Bond and the Cold War.
In conclusion, it was presidential elections in the neighbouring Ukraine that delivered Putin a surprise public retains coup. Former President Petro Poroshenko appeared to have chosen Russia as his personal enemy, and throughout his electoral campaign appealed to Ukrainian people with a “Me or Putin” slogan. But in the second round of the election the voters favoured Vladimir Zelensky who won the presidential elections with 73%. Whilst it is too early to make far reaching conclusions about the result, what is clear is that Poroshenko’s anti-Putin platform achieved nothing and this provides food for thought. Whether you like it or not, the era of Putin marches on.