Putin’s Parade May Be a Casualty of the Pandemic
COVID-19 has hit Russia at a time when the Putin regime was already under stress. At home, a stagnant economy will be buffeted by the plunge in oil prices. A central bank report last year forecast that a drop to $25 per barrel would push the economy into recession. The stock market is down by about 20 percent since the beginning of the year, a fall that began before the pandemic. The package of vague and confusing constitutional measures the Kremlin has put in place to prolong Putin’s rule have prompted widespread uncertainty and unease. Abroad, tensions with Turkey and Saudi Arabia have been on the rise while strains with the West are continuing.
After a late start, the Russian government has taken measures to combat the coronavirus but has so far been unable to prevent its rapid spread. Russian health officials announced that they recorded 52 new cases in the previous 24 hours, bringing the number of confirmed infections to 199. A dozen of the latest cases were detected in Moscow, where there are 98 confirmed cases so far.
In addition to taking steps to prevent foreign citizens from profoundly affected countries from visiting Russia, the Kremlin has steadily tightened preventive measures to slow the spread of COVID-19 by imposing quarantines, banning the export of medical masks, instituting random checks on the Moscow Metro, and cancelling large public events. Moscow has started the construction of a special hospital for the coronavirus patients near the city.
On the economic front, the central bank has stepped in to stop the plunge of the ruble—one of the world’s worst-performing currencies against the dollar this year. It has set up a $4 billion fund to help companies hurt by the virus and also softened some lending. On March 18, the bank and government unveiled a package of measures to protect the economy. They include the provision of currency liquidity, state support for the most vulnerable economic sectors, and delays in the recovery of taxes. Steps to preserve the social safety net will include giving priority to the payment of salaries. The price will be high: about 300 billion rubles, but it will be taken from the National Welfare Fund, not the current budget.
Putin’s approach, as usual, is to encourage competition and then choose the best proposals. Deputy Prime Minister Tatiana Golikhova’s initial lead has given way to three working groups: under Dmitry Medvedev in the Security Council; the State Council, under Moscow Mayor Sergei Sobyanin; and the government, under new Prime Minister Mikhail Mishustin. (Mishustin has already come under criticism for indecisiveness, as has Central Bank boss Elvira Nabiullina). Clan politics, an endemic feature of Putin’s court, has inevitably accompanied the coronavirus response. Businesses close to the Kremlin have received lucrative contracts.
Some cracks are showing. On his Telegram channel the metals magnate Oleg Deripaska recently compared the effects of the pandemic to the collapse of the USSR. Some key siloviki—Defense Minister Sergei Shoygu, Security Council Chairman Nikolai Patrushev, and FSB head Alexander Bortnikov reportedly favor declaring a state of emergency to forestall mass panic. The government is said to oppose this, fearing an economic collapse. Even some of Putin’s supporters are unhappy with the new constitutional changes, which reset the count on his presidential terms and could prolong his presidency to 2036. A State of Emergency invoked in response to the COVID-19 pandemic could easily be invoked to justify a crackdown on protesters.
Despite its role in promoting disinformation abroad, the Putin regime is suffering from it at home. On March 2, edited audio began to spread across Russian social media claiming a Kremlin cover-up of the virus spread in order to “focus on adopting the new constitutional amendments.” Rumors abound that the authorities are disguising the actual total: the wildest claims are of up to 5,000 infections.
The authorities have rejected these reports as fake news from foreign sources designed to foment instability. Putin has pinned the blame for the pandemic on foreign countries.
An expert consulted by Kommersant said that the virus could continue to spread for two to three months. The first confirmed case in Russia was in February. The authorities began to take measures in March. By that count, the coronavirus could last into the early summer. But Putin is in a hurry. This week the Russian leader signed a decree setting April 22 as the date for the referendum, despite calls that it be postponed due to public health concerns. There is no turnout requirement for the vote to be valid, so theoretically the changes would pass if only one voter went to the polls and voted yes. The Russian leader wants to get all of this out of the way before the May 9 celebrations marking the 75th anniversary of the defeat of Nazi Germany.
Given the pandemic-related uncertainties, it is hard to imagine which world leaders will actually show up for Putin’s parade.
Donald N. Jensen20 March 2020
Common Crisis is a CEPA analytical series on the implications of COVID-19 for the transatlantic relationship. All opinions are those of the author and do not necessarily represent the position or views of the institutions they represent or the Center for European Policy Analysis.