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Larisa Pylhun * Deepening Economic Crisis in Russia: How Long will Socio-Political "Stability" Last?


Articles

Predicting socio-political processes in neighbouring countries is usually a tool of preventing and/or mitigating certain events and making the most out of any situation. Predicting socio-political processes in Russia is a major security issue not only for Ukraine and many other countries, but for the population of Russia itself. Danger for other countries is reflected in the annexation of the Crimea; war in eastern Ukraine; shooting down Dutch airliner, etc. The danger for the population of Russia is in the political repressions of opposition and extrajudicial reprisals; mass violence from the part of law enforcement authorities regarding the population; large probability of a full-scale war in which people will be the main victim. A most important issue of the forecast at the end of 2016 is: how long the socio-political "stability" of Russia will last, what impact it will have on its citizens and how the "stability" would affect relations with other countries.

Analyzing developments in Russia and predicting some political changes in the short term is extremely difficult due to the following:

1. Management solutions in Russia are not the result of democratic procedures. They also do not take into account the economic indicators and the interests of certain social groups. The management decisions reflect the desire of a small group of people to retain power.

2. Death of the West as a Russian national idea is distracting people from the worsening of the economic situation and focuses on external enemies.

3. Considerable part of Russians perceives stability as absolute value and is afraid of changes.

Recently, a lot of forecasts of socio-political processes in Russia have appeared, based on the economic performance of the country. However, there is reason to believe that the understanding of economic processes is more appropriate for long-term predictions about Russia. It is in this country that there is no relationship between economic indicators, public opinion and political processes. The economic problems in Russia are not converted in changing public opinion immediately and reduction of economic performance and living standards have little effect on people's attitude to power. Accordingly, the analysis of the economic situation cannot be the basis for conclusions about forecasts for the near future on the actions of the Russian authorities and the behaviour of the society. Any long-term predictions about the impact of economic indicators on the political situation are possible, taking into account the following factors:

1. The political and social activeness of Russians is in its infancy.

2. The change of political attitudes and political behaviour requires considerable time.

3. Protests, being an important mechanism to influence people's political decisions in a democracy, are severely suppressed by the authorities. The state removes from the political scene those people and those organizations that can act as catalysts for protest sentiments. The protests with economic demands without political slogans have low potential impact on the political situation.

Let us try to justify the above, referring to the relevant scientific theories and the results of public opinion polls by the organization that conducts regular mass surveys in Russia, but does not serve the interests of the Russian authorities and is committed to objectivity. [1] We shall also try to determine the impact of economic factors on the actions of the Russian political elite and on the attitude of the population to the political regime.

Formulating conclusions as for events in Russia, researchers and analysts seldom refer to scientific sources, some of them are traditionally oriented at political economy and Marxism. Although these theories do not work in Russia, because the economic well-being of the population has no effect on the socio-political processes in the country.

To determine the impact of the economic situation on the attitude towards the political regime, compare two indicators: approval of the activities (percentage of support) of V.Putin and the Consumer Confidence Index [3] for the period 2013-2016. In this case, equate the attitude to the Russian President with the attitude to power in general, because one-man rule of V.Putin has already established in Russia. Other institutions of power, including Parliament, are in fact controlled by V.Putin and perform technical functions. Democratic institutions, for instance elections, in such political regime are nothing but imitation. Table 1 shows a comparison of support for V.Putin and Russian consumer confidence index (figures are as of February each year).

Table 1

Comparative dynamics: attitude of Russians to V.Putin and Consumer Confidence Index


         

2013

2014

2015

2016

Support to V.Putin, %

65

69

86

81

Consumer Confidence Index

80

80

63

63


As we can see, a significant reduction in consumer confidence index in 2015-2016 compared to 2013-2014 occurred against the backdrop of growing support for V.Putin. This is a paradox of modern democracies. Usually, deteriorating economic expectations lead to a drop in support for the president. Public policy is the most important reason for the growth or deterioration in living standards. But we see the opposite result in modern Russia. A slight drop in support for Putin in 2016 compared to 2015 does not change the overall picture. V.Putin's support increased by 16%, and the Consumer Confidence Index for the same period fell by 17 points against the background of the economic crisis of 2013-2016!

Thus, we can confidently say that the economic factor does not influence the attitude of the population to power in the face of V.Putin. This is one of the reasons for the stability of the Russian political regime during the economic crisis and decline in living standards of Russians. One cannot expect that economic difficulties and reducing consumption will lead in the short term to the increase of protest sentiments.    

Influence of economic hardships on the actions of the Russian authorities can be assessed according to indicators of budget expenditures of Russia on national defence. Russia is not officially at war with any country. Neighbouring states did not and do not claim any part of the territory of Russia. The only exception is Japan, which suggests considering the return of some islands of the Kuril archipelago (they had belonged to Japan before 1945). However, that country has never planned a military solution to this issue. In real democracy, absence of external threats leads to a reduction in military expenditures during an economic crisis. Dynamics of expenditures for national defence of Russia (for 2013-2014 – after the materials of the Ministry of Finance of the Russian Federation, data on actual expenditures in 2015 have not yet been presented by the Ministry of Finance) are shown at Table 2.

Table 2

Dynamics of Expenditures for the National Defence of Russia in 2013-2016 (in trillion roubles)[5].

 

2013

2014

2015

2016

Expenditures for national defence

2.1

2.48

3.28[11]

3.14[13]


These data indicate that militarization of the economy increases even in times of acute economic problems. This trend has intensified this year. On 5 December, 2016 the Russian government supported the bill on amendments to the federal budget 2016.The budget deficit increased from 3% to 3.66% of GDP, or up to 3.034 trillion rubles. At the same time, budget expenditures for the National Security increased by 735.16 billion, i.e. by 23% up to 3.884 trillion rubles [9]. Moreover, the Finance Ministry has prepared amendments to the Budget Code - the agency offers to provide the Minister of Finance the authority to personally redistribute 10% of all expenditure in favour of law enforcement agencies without endorsement [6].

The costs of the federal budget for education, health and culture in 2013-2016 either did not increase or even decreased. Only the expenditures for social policy increased during that period, along with the military ones. It should be noted that the increase in expenditures on social policy will not improve the economic situation of the so-called "active minority" - the middle class, which was the basis of political protests in 2011-2012.

Thus, despite the economic crisis, the government increased the expenses of the defence budget in 2013-2016. Objective needs dictate otherwise, i.e. reducing military expenses. The need to reduce military expenditures is stressed by liberal politicians of Russia and experts. However, the real situation in the economy does not have a significant impact on the Russian authorities. It is safe to say that the influence of common sense and economic feasibility on the actions of the Russian authorities will be reduced. This is evidenced, for instance, by opening a criminal case against former Minister of Economy of Russia Alexei Ulyukayev in November 2016 and taking him under house arrest. Unofficial sources of information from the Federal Security Service prove that soon one can expect accession of several other high-ranking executive officials from " the economic block" to the process, who have the reputation of "system liberals": Arkady Dvorkovich, Deputy Prime Minister, Andrei Belousov, presidential aide, Oxana Tarasenko, Director General, Ministry of Economic Development, and Marina Romanova, assistant, first Deputy Prime Minister Igor Shuvalov [12].

The official idea that defines the activities of Russian authorities, is the idea of critically dangerous external threat. This idea was repeatedly presented by representatives of the Russian ruling group. Economic losses are treated as fairly reasonable fee for the protection of state interests. In particular, V.Putin said to Russian and foreign media on 18 December, 2014: "What is now happening to our economy is not a pay for the Crimea, it is a charge for our natural desire to preserve ourselves as a nation, as a civilization, as a state. After the collapse of the Soviet Union we became completely open to our partners. What do we see? Direct full support for terrorism in the North Caucasus. Can partners really act like this? On any issue, whatever we would do, we always run upon fighting with us ".[7] It should be emphasized that the idea of protection from external threats is only the external shape of the Soviet-imperial idea. In today's world no country can afford to declare the imperial idea, which necessarily contains territorial claims to neighbours, on behalf of the official authorities. This behaviour deprives the power of legitimacy in the eyes of the international community. Putin's regime cannot afford to openly state the need for the restoration of the Soviet Union, but in fact the Soviet-imperial idea is basic for the incumbent Russian political regime. It is a way of consolidating Russian society and provides a solid base of support for the regime.

The theory of relative deprivation is the most relevant to analyze developments in modern Russia.[15] This theory efficiently explains the dynamics of public sentiments, including all cases of mass protest mobilization of people - rebellions and revolutions. Relative deprivation in the sense of the author of the theory T. Gurr is the awareness of an individual or group of individuals that their position as for wealth, living conditions, relationships, power, etc. is unfavourable compared to other individuals or other groups.

Relative deprivation occurs when: 1) real opportunities of the individual diminish, and expectations are rising; 2) real opportunities of the individual diminish, and expectations are kept at the same level; 3) real possibilities of the individual are perceived as stable and expectations grow.

Unsatisfied expectations, increasing difference between the value expectations and value capabilities are a source of aggression of people, dissent, and actually revolutions. Even if the initiative and organizing any protest or resistance to authorities is always in the hands of a minority (organization, association, group, party, government, etc.), there is a need of a critical mass of supporters (or "insulted"), who can organize and direct against those who have something that can be taken away.

Most economic protests in Russia were registered in May, 2010: 18 thousand actions, and all 2015 saw only 300 protests.[4] Further growth of dissent in Russia is likely due to prolonged stagnation. The stagnation is actually predicted by the Ministry of Economic Development of Russia in the long term (until 2035) in the forecast of socio-economic development of the country, which took into account estimates of the Ministry of Finance as of October, 2016. The forecast envisages minor (up 2%) growth of industrial production [2] and low oil prices. Hence, a barrel of Brent oil will increase in 2025 by $ 5 (from $ 40 to $ 45) compared to 2017. The estimate price of oil for 2035 is $54.9 per barrel.[2]

The Russian government considers the theory of relative deprivation in the formation of public opinion involving the media. Russian authorities are aware of the possibility of growth of relative deprivation and take measures to prevent social resentment. Thus, the Government of the Russian Federation forbade 2 authorities to require 85 kinds of certificates from citizens in November 2016 - the authorities should share information with each other through the electronic system of interagency cooperation.[10] This action follows directly from the requirements of Federal Law  "On the Order of Providing Governmental and Municipal Services" of 2010, but previously the prohibition of on-demand information was not implemented. Bureaucratic requirements of officials are perceived as a manifestation of injustice, being one of the growth factors of relative deprivation.

Taking into account the above, attempts to predict actions of the Russian regime, referring to economic performance will not be efficient in the short and medium term. Any theory which predicts economic reductionism, i.e. the idea that actions of the Russian authorities are called forth by economic factors cannot explain what is happening in the country.

With regard to social and political forecasts for Russia based on the theory of relative deprivation, the expectations of most of the population are not related to the economy. These expectations are associated with a sense of belonging to a great empire, and they have been formed by the current authorities. The collapse of these expectations will definitely lead to mass protest sentiments.

Consolidation of the society around the authorities (the so-called "pro-power mobilization") is the cause of ignoring the deterioration of the quality of life by the society. It may take long, but it cannot last forever. Long-term "economic stagnation", especially against the background of economic success of neighbouring countries, will definitely increase relative deprivation of many social groups. Even today we can see the first changes in political sentiments of Russians. According to a representative survey by "Levada Centre" held on 23-26 September, 2016, the rating of trust in government made up 26%, the lowest figure in five years. Duma is trusted by 22% vs. 40%, President Putin - 74% vs. 80% in 2015[14].

There are different opinions as to how long the current relative social and political stability of the society will last. Russian political analyst Valery Solovey made the following forecast late in 2015: "The safety margin of the society, provided by propaganda as well, will be exhausted in the spring of 2017. How the society is going to react - we do not really know. There is no answer to this question yet. But we can assume that the new political mood will be implemented in some new behaviour of the society "[8]. Now we can confidently say that the socio-political dynamics in Russia cannot be expected soon.

Quantitative methods of surveying public opinion in Russia do not allow to predict significant changes in political activeness, even in the short term. According to Mikhail Dmitriev, who has recently headed the Centre for Strategic Studies, "...qualitative methods of observation and focus groups demonstrated in 2009-2010  increasing discontent and readiness to protest; quantitative survey did not indicate the activization of dissent "[4].

Mass protests are generated by the difference between reality and expectations of people. A critical threshold after which the mass protest mobilization begins varies in every culture. The assessment of this threshold and, therefore, the forecast of socio-political stability are possible based on the experience of mass protests in Russian metropolitan areas in 2011-2012. The gap between reality and expectations in modern Russia will increase for two reasons: 1) stagnant economy will worsen social health of Russians, especially urban residents, representatives of "active minority "; 2) the inertia of the period of high oil prices will be manifested in the growth of expectations for several more years. Based on extrapolation of current trends, keeping the access of Russians to Internet, the current price for hydrocarbons (up to $ 60 per barrel) and the current activeness of the Russian governmental propaganda, the beginning of mass economically motivated pressure of Russians on the authorities can be predicted in 2-4 years.

 

References:

  1. Автономная некоммерческая организация Аналитический Центр Юрия Левады [Еlectronic resource. Date of applying — 14.07.2016] — Access: http://www.levada.ru/nopisanie/o-tsentre.

  2. Застой продлится 20 лет. МЭР представило прогноз развития экономики до 2035 года //Газета.ru [Electronic resource. Date of applying — 20.10.2016] — Access: https://www.gazeta.ru/business/news/2016/10/20/n_9238241.shtml.

  3. Confidence Index reflects the buying sentiments of the public. It is calculated based on respondents' answers to five questions. Individual index is made for each question as the difference between the proportion of positive and negative responses, and 100 is added  to eliminate negative index values. The aggregate Consumer Confidence Index is calculated as the arithmetic average of individual indices. CCI varies from 0 to 200, with the index below 100 meaning negative ratings dominance in the society // Автономная некоммерческая организация Аналитический Центр Юрия Левады [Electronic resource. Date of applying — 17.07.2016] — Access: http://www.levada.ru/indikatory/sotsialno-ekonomicheskie-indikatory/indeks-potrebitelskikh-nastroenii.

  4. Михаил Дмитриев: Протесты мы вряд ли скоро увидим, на дне кризиса люди обеспокоены выживанием. //The Insider. [Electronic resource.Date of applying — 28.01.2016] — Access: http://theins.ru/ekonomika/19375.

  5. Ministry of Finance of the Russian Federation. Official site. [Electronic resource. Date of applying — 14.07.2016] — Access: http://info.minfin.ru/kons_rash.php.

  6. Нетреба П., Малышева Е. Бюджет готовят к войне. Правительству предложено увеличить оборонные расходы // Газета.ru [Electronic resource. Date of applying — 04.10.2016] — Access: https://www.gazeta.ru/business/2016/10/03/10229015.shtml#page1.

  7. Нынешняя экономическая ситуация не является расплатой за Крым, заявил Путин. Channel 1. [Electronic Resource. Date of applying — 14.07.2016] — Access: www.1tv.ru/news/2014/12/18.

  8. Политолог Валерий Соловей — о страхах власти, пределах эффективности пропаганды и возможности мирных перемен //Новости онлайн 24. [Electronic resource. Date of applying — 22.12.2015] - Access: http://newsonline24.com.ua/2016-god-putina-rasstrelyayut-v-kremle-vo-vremya-krovavoj-revolyucii-politolog.

  9. Правительство одобрило увеличение дефицита бюджета — 2016. // Ведомости [Electronic resource. Date of applying — 06.10.2016] — Access: http://www.vedomosti.ru/finance/news/2016/10/06/659878-pravitelstvo-odobrilo-uvelichenie-defitsita.

  10. Распоряжение Правительства РФ от 1 ноября 2016 г. № 2326-р [Electronic resource. Date of applying — 20.10.2016] — Access: http://government.ru/media/files/TCynGV2Fwqa1k3a3trGDa8wqcE4OiZAH.pdf.

  11. Defence expenses will exceed 3 trillion roubles in 2015. Interfax. [Electronic resource. Date of applying — 14.07.2016] — Access: http://www.interfax.ru/business/402157.

  12. Улюкаев: арест в доме с бассейном и спортзалом // Газета.ru [Electronic resource. Date of applying — 16.11.2016] — Access: https://www.gazeta.ru/social/2016/11/16/10337297.shtml.

  13. Федеральный закон от 01.12.2014 № 384-ФЗ «О федеральном бюджете на 2015 год и на плановый период 2016 и 2017 годов». Official Internet Portal of Law Information. [Electronic resource. Date of applying — 14.07.2016] — Access: http://pravo.gov.ru.

  14. «Левада-центр»: Россияне стали меньше доверять институтам власти // Открытая Россия [Electronic resource. Date of applying — 21.11.2016] — Access: https://openrussia.org/post/view/18519/

  15. Gurr T. 1970. Why Men Rebel. Princeton: Princeton University Press.



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* Information about the author:

Larisa Pylhun, MA, Public Administration, Deputy Chair, Board, Ukrainian Association of Evaluation.

The article is based on the address at the International Conference "Russian Statehood: Stable Instability".

30.04.2017 19:00:00