Putin: Russia, the “Bear,” Will Survive Economic Pain

December 18, 2014
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by Priyanka Boghani Digital Reporter & Producer

Two days after the ruble fell to a record low, Russian President Vladimir Putin delivered his annual press conference on Thursday, hitting on many of the themes he expounded upon in his state of the nation address, delivered two weeks ago.

Putin tried to assuage worries about the stumbling economy, blaming “external forces” for the falling value of the ruble and a projected recession. He staunchly defended Russia’s foreign policy actions in Ukraine and Crimea, pointing his finger at the West for erecting a “virtual wall” between itself and Russia. He conceded that Russians would face some hardships, but said the country’s economic struggles were not likely to last more than two years.

Here is a brief overview of Russia’s circumstances and what Putin said about them.

THE RUBLE AND THE ECONOMY

Earlier this month, the government warned that Russia was heading towards a recession, and in his press conference, Putin said that he expected it could last for at most two years.

Among the causes: the weakening ruble, sanctions imposed by the West after Russia’s invasion of Ukraine and sinking oil prices. On Monday, the country’s central bank said the economy might contract by as much as 4.5 percent in 2015 if oil prices remained at around $60 per barrel. Energy exports make up 70 percent of the country’s annual exports.

What Putin said: Putin’s comments on the economy were optimistic if vague:

The current situation was obviously provoked primarily by external factors. However, we proceed from the view that we have failed to achieve many of the things that were planned and that needed to be done to diversify the economy over the past 20 years. …

We will need to focus on assistance to those people who really need it and on retaining – this is something I would like to highlight – retaining all our social targets and plans. This primarily concerns pensions and public sector salaries, and so forth … We would certainly be forced to make some cuts. However, it is equally certain – and I would like to stress this – that there will be what experts call a positive rebound. …

How long will this take? In a worst-case scenario, I believe it would take a couple of years. I repeat: after that, growth is inevitable, due to a changing foreign economic situation among other things.

UKRAINE

Fighting in eastern Ukraine between government soldiers and Russia-backed rebels came to a fragile halt in mid-December after seven months of constant conflict.

In all, more than 4,700 people have been killed, according to an estimate by U.N. human rights investigators. On Tuesday, Ukrainian President Petro Poroshenko said the next step was implementing a peace plan.

However, International Crisis Group warned that the risk of “further hostilities” in eastern Ukraine remained high, and the approach of winter also increased the risk of a humanitarian crisis.

During Thursday’s press conference, a Ukrainian journalist asked Putin about allegations that Russian soldiers were among the separatists fighting Ukrainian soldiers.

What Putin said: Russia has insisted before that any Russian soldiers found fighting in eastern Ukraine were volunteering on holiday, and not representing the army. Putin’s comments hewed to the same line, while he pointed to the authorities in Ukraine as the instigators of the conflict:

All those who are following their heart and are fulfilling their duty by voluntarily taking part in hostilities, including in southeast Ukraine, are not mercenaries, since they are not paid for what they do.

Russian public opinion holds that what is now happening in southeast Ukraine is actually a punitive operation, but it is conducted by the Kiev authorities and not the other way around. The self-defense fighters of the southeast were not the ones who sent troops to Kiev. On the contrary, the Kiev authorities amassed their military forces in the southeast of Ukraine, and are using multiple rocket launchers, artillery and fighter jets.

On the larger conflict, Putin commended Poroshenko, saying he seemed interested in pursuing a peace plan, and offered to play the role of intermediary in political dialogue. But Putin warned that Poroshenko was not the only actor in Kiev.

We have been hearing statements from other officials, who advocate basically a war to the end. The implication is that all of this is likely to lead to a continental crisis. We hear many bellicose statements. I still think that President Poroshenko is oriented towards settlement. But concrete actions and steps are needed.

THE WEST

The United States and European Union imposed sanctions on Russia after its annexation of Ukraine’s Crimean peninsula in March and again after Malaysian Airlines Flight 17 was downed in eastern Ukraine in July.

In the last month, Putin has been seen pursuing closer ties with non-Western nations such as India and Turkey. Fiona Hill, a senior fellow at the Brookings Institute, interpreted these actions as Putin “associating with countries that want to dilute the political influence and economic leverage of the United States.”

What Putin said: Putin re-iterated his familiar anti-Western stance, comparing the current situation to a “virtual” Berlin wall.

Didn’t they tell us after the fall of the Berlin Wall that NATO would not expand eastwards? However, the expansion started immediately. There were two waves of expansion. Is that not a wall? True, it is a virtual wall, but it was coming up. What about the anti-missile defense system next to our borders? Is that not a wall? …

They decided they were the winners, they were an empire, while all the others were their vassals, and they needed to put the squeeze on them … This is the problem. They never stopped building walls, despite all our attempts at working together without any dividing lines in Europe and the world at large.

Later, Putin illustrated Russia’s relationship with the West using the classic symbol of Russia as a bear:

… Sometimes I think that maybe it would be best if our bear just sat still. Maybe he should stop chasing pigs and boars around the taiga but start picking berries and eating honey. Maybe then he will be left alone. But no, he won’t be! Because someone will always try to chain him up. As soon as he’s chained they will tear out his teeth and claws.

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