Sorry, Haters: Russia Isn't 'Collapsing'

Russians ate dead bodies to survive WWII — and we have a sneaking suspicion that they will also survive $30 oil. But what do we know?

This post first appeared on Russia Insider


Russia's collapsing — again.

Yes, the west's most omnipotent wordsmiths are already so excited about the completely real, 100%-for-sure collapse of Russia. Did we mention that this time Russia is really going to collapse? The 10,000 previous times that Foreign Policy Experts have written about Russia collapsing were just false alarms.

But now it's finally happening. Try to imagine Alexander J. Motyl's unrestrained, oblivious glee as he wrote this:

Russian President Vladimir Putin used to seem invincible. Today, he and his regime look enervated, confused, and desperate. Increasingly, both Russian and Western commentators suggest that Russia may be on the verge of deep instability, possibly even collapse.

Let's very quickly summarize why Motyl is so sure that Russia is "on the verge of collapse", and then dig a bit deeper to find out what kind of medication he's on.

Motyl argues that a "perfect storm" of economic and political factors will not just topple Putin, but potentially tear apart Russia (the most wonderful of all neo-con dreams). Yes, it's actually the same boring fantasy that has been fantasized for the last ten years, now repackaged with some new and very shocking Nostradamus-worthy claptrap:

Russia is on the edge of a perfect storm, as destabilizing forces converge. Under conditions such as these, mass disturbances are highly probable. Revolutions, palace coups, and violence will be increasingly likely. The result could be the collapse of the regime or the break-up of the state. Whatever the scenario, Putin is unlikely to survive.

Just to be clear: this is all being written about a president with an 80% approval rating. Motyl's hero, Petro Poroshenko, enjoys a glorious 17% approval from his fellow Ukrainians. And according to Motyl, Ukraine is doing just fine.

Motyl's piece is a long, rambling ode to cluelessness, but his most clueless (amazing?) prediction involves Tatarstan seceding from the Russian Federation, and then killing Putin just for good measure:

Meanwhile, non-Russian elites—and especially those in oil-rich Tatarstan and diamond-rich Yakutia—may be the first to loosen their ties to Moscow, because they may have nationalist ambitions, and are farther from the center and thus less susceptible to threats. Once elites see that they can get away with criticizing the regime, things will reach a tipping point and anti-Putin bandwagoning could take place. Some may even plot against Putin and try to have him forcibly removed or killed.

What on God's polluted Earth did we just read? Alex, have you ever been to Tatarstan? Tatars are more pro-Putin than Muscovites are. There is no such thing as Tatar "nationalism". Yes, Tatarstan has unique culture and traditions, but so does Utah.

No one is arguing that Russia is going to sail through 2016. Last year Russia experienced a 3.7% GDP contraction, and forecasts for this year aren't very bright either. Progress has been made in developing Russian agriculture and manufacturing — but much more needs to be done. The upcoming parliamentary elections, as well as the looming presidential race, does leave room for potential political conflicts. But total collapse? Assassinations? Please.

Luckily, Forbes has presented a much more balanced forecast of what's ahead for Russia:

Russia’s economy has adjusted relatively well to lower oil prices thanks in large part to the ruble, which has tracked oil’s fortunes since 2014. But if oil falls below $30 for an extended period, then all bets are off and Russia’s economy will be in for a prolonged recession.

..

Russia’s federal government remains highly solvent. The country is run by a bend-don’t-break mentality in the economic  policy centers. Western sanctions have helped prolong a recession. Oil just made it worse.

Last year, Russian government accounts declined by around 900 billion rubles. But the Finance Ministry held 250 billion rubles on deposits with banks as of January 1, as well as some more cash not spent in 2015.

Investors have told FORBES that lifting of sanctions on Russian energy and finance will be a boon for sentiment, but won’t translate into economic growth overnight.

Sorry, haters: Russia isn't collapsing.


This post first appeared on Russia Insider

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