Putin S Economy Is Starting To Crack And Russian Public Opinion May Soon Follow

WASHINGTON – In more than 30 cases, the US government has imposed sanctions on Russia in response to its invasion of Ukraine. The sanctions have targeted oligarchs and banks, the sale of Russian resources, the flow of capital. They also include bans on corporate flights and travel, all actions aimed at stifling the Russian economy and making the Kremlin reconsider its aggression. Russian President Vladimir Putin has called sanctions a form of economic warfare. Even as the Russian economy becomes more isolated, the Kremlin believes it can overtake the West, which is not accustomed to the kind of deprivation – inflation, shortages – that has been routine in both recent and distant Russian history. So far, this calculation has proven to be correct, and the Russian economy has confused expectations as Putin’s war enters its fifth month. Russia’s currency, the ruble, is booming, with its appreciation rising to a seven-year high earlier this month. Energy exports to China and India are as strong as ever. Abandoned McDonald’s stores have been transformed into almost identical Russian fast food restaurants. Customers line up outside the Russian version of a former McDonald’s restaurant on June 13, the day after the opening ceremony in Moscow. (Kirill Kudryavtsev / AFP via Getty Images) However, clear signs of economic strength may mask a growing – and well-founded – concern in Russia about the state of the economy, some experts say. They say the sanctions have had the desired effect, both in shaping public opinion and in restricting Russian leadership and industry from continuing to operate effectively. “THE [Russian] “The economy is not yet showing any signs of crisis,” Oleg Itskhoki, an economist at the University of California, Los Angeles, told Yahoo News. “There is no collapse yet. But everyone is expecting a deterioration. “ Russia’s recent bankruptcy of its international debt underscored the argument. The Russian finance minister dismissed it as a “prank”, but Western observers compared the development to the most catastrophic moments of the post-Soviet economy. Putin himself became famous during the turmoil of those years. Now, the financial chaos is his. The story goes on Critics of Putin’s regime, such as Alexei Navalny, a jailed dissident politician, say it is time for sanctions to impoverish and impoverish the Russian people to the point where they are no longer tolerated by the Kremlin. Russian opposition leader Alexei Navalny appears from prison in a video link provided by the Russian Federal Penitentiary Service at a court hearing in Petusky, Russia, on January 17. (Denis Kaminev / AP) “They do not want this war. “They need to live better,” Navalny said after an organization he founded, the Anti-Corruption Foundation, published a poll showing Russians showing growing anxiety about the economy, if not outright dissatisfaction that could portend problems for the Kremlin. . “But they know full well that because of Putin’s war, things will get worse.” When the United States and its Western allies first imposed restrictions on Russian imports, American credit card companies fled and governments seized the assets, such as the yachts, of Moscow-favored oligarchs. There were hopes that the isolation of the Russian economy from the West would shake the Kremlin so badly that it would reconsider the war. “Russia’s impending economic collapse,” read a headline in the Atlantic. No such collapse has occurred. The Central Bank of Russia raised interest rates to 20% to repel the bank run (since then it has been steadily lowering interest rates to 9.5%). Meanwhile, Russians who can no longer use their American Express or Visa cards have turned to the domestic Mir payment system. President Biden discusses gas prices at the South Court Auditorium on the White House campus with a photo of President Vladimir Putin on a screen behind him on June 22. (Evan Vucci / AP) The Russian economy can survive largely because it has always been sustained by energy exports. After European nations stopped buying Russian energy, China and India made the difference. Russia continues to earn about $ 1 billion a day from energy exports. In May, China bought Russian crude oil for a record $ 7.47 billion. Robin Brooks, chief economist at the Institute of International Finance, recalls the famous joke of the late Senator John McCain, R-Ariz., That Russia is “a gas station disguised as a country” after failing to . “If you are hoping for a Big Bang for a moment, this can hardly happen in Russia by default,” Brooks told Yahoo News, noting that its exports continue to serve as a lifeline, despite growing pressure from the West. “We never got to the point of closing the gas station, which would be an energy embargo.” A gas station selling fuel from Russian oil company Gazprom Neft in Moscow on May 11. (Natalia Kolesnokova / AFP via Getty Images) So far, a direct embargo seems to be more than what energy-thirsty European countries are willing to support. Thus, “they are swimming a bit,” Brooks says of Russia, which uses tight monetary controls to stabilize the ruble while looking for new customers in Africa and Asia for its natural resources. “There are many countries in the world that are still willing to work with Russia,” said Christine McDaniel, an economist at George Mason University who has studied the effects of Western sanctions on Russia. “They are moving towards this new state where their ties to the world economy – especially the Western economies – are becoming increasingly weak. But they have not been cut off yet. “ Nor was the severance of European ties a surprise to the Kremlin, which viewed the West with growing suspicion following the failed economic privatization plans of Putin’s predecessor, Boris Yeltsin. Having been sanctioned since the first invasion of Ukraine in 2014, Russia is preparing for the kind of isolation it has experienced since launching its second invasion earlier this year. It is doubtful, however, that the Kremlin was prepared for the severity of the new sentences or the unity of the Western coalition. The mourners gather at the funeral of a Ukrainian soldier, Ruslan Skalskyi, at Lychakiv Cemetery in the city of Lviv in western Ukraine on June 11. (Yuriy Dyachyshy / AFP via Getty Images) Much attention has been paid to Russian oil, but the question of whether it can find new buyers and the drowning of imports into the country could prove even more important, given how badly Russia relies on Western technology for both war effort and for its domestic production. “There is no going back to normal,” said Itskhoki, an UCLA economist, noting that the lack of basic spare parts is wreaking havoc on the Russian car industry and other Western import-based sectors. Last month, Russia’s Aeroflot flagship announced it would have to use spare parts from older aircraft to upgrade its fleet. Russia’s efforts to “import substitution” – that is, to find new sellers in East Asia and elsewhere – have only been inactive, according to a think tank, Geopolitical Intelligence Services, recalling the assessment of a Moscow-based economic think tank: “There has been virtually no progress in import substitution in recent years.” A Swiss police vehicle passes in front of an Aeroflot Airbus A321-211 aircraft in a long-haul parking lot at Geneva Cointrin Airport on March 9. (Denis Balibuse / Reuters) Ordinary Russians are in the middle of an economic war between the Kremlin and the West. Whether they will continue to support the war in Ukraine as they continue to experience financial hardship has been a matter of great interest to the West. Polls have shown that Russians generally support the invasion, but dissidents believe the support is excessive. It is difficult to accurately measure public opinion in societies where the fear of retaliation forces people to simply say what official power expects of them. The Kremlin and state media refer to the invasion of Ukraine as a “special operation” and Russians who refer to it as a “war” could be prosecuted, subject to a 15-year prison sentence. A poll conducted by the Navalny Anti-Corruption Foundation looked for cautious ways to discern Russian attitudes, revealing not only lukewarm support for the invasion but also deep reserves of financial concern that are likely to worsen as the tensions persist. “We all know that the polls show that the vast majority of Russians support Putin’s aggression against Ukraine,” Navalny wrote on his website. “We think you can not trust these numbers: People are intimidated, refuse to talk to sociologists or do not tell them the truth.” A supermarket of the Russian chain Mere that recently opened in Opwijk, Belgium, on June 25, 2022. (Nicolas Maeterlinck / Belga Mag / AFP via Getty Images) Among the questions posed by the poll was what the Russian government should do if it were to make extra profits. Of the Russians surveyed, only 7% said they supported an increase in military spending, and the vast majority called for increased funding for education (15%), healthcare (27%) or state pensions (32%). %). “Putin’s propagandists call what is happening World War III, which Russia opposes all over the world. But are the Russians “buying” this rhetoric? “Obviously not,” Navalny commented. In addition, the sanctions seem to be biting: While only 28% stated that their sanctions had personally affected them in early April, by the end of May the percentage …