EDITORIAL: Vladimir Putin’s Wake of Failure

EDITORIAL

Vladimir Putin’s Wake of Failure

Yana Ryzheva, a 20-year-old student, was one of 150 people fired from a Web publication on Thursday. It’s “practically impossible to find another job,” she said. “People are being cut everywhere.”

— The Associated Press, October 18th

In English, a language of strange homonyms, the word “wake” can mean either the backwash of a marine vessel or a funeral commemoration.  The language achieves unique power when a pair of contrasting definiations are both applicable, as is the case in regard to the use of this word in regard to Russian dictator Vladimir Putin.

Former Kremlin insider Andrei Illarionov has shown that even an oil-dependent African nation like Nigeria is better governed than is Putin’s Russia (international surveys routinely show Russia, a supposed G-8 nation, in the company of African backwaters when judged for quality of governance and civil society).  Student Ryzheva was speaking about Moscow, and even there the apocalyptic pain of Putin’s mismanagement of the Russian ecomony is already being felt at street level.  But Moscow is the center of Russia’s wealth and power; in more remote regions, the population was already suffering brutal poverty that led to Russian men not living to reach their 60th year on average, a lifespan that excludes Russia from the top 100 nations of the world in that category.  The wake of failure, pain and humiliation created by Putin’s pathetic inability to understand basic realities of market economics is laid out chapter and verse by the AP story.

Just look at the horror:

• “Cranes stand idle around Moscow, industries have slashed production and many companies have laid off staff. High-end retailers are already noticing a slowdown in trade. At the same time, inflation is in double digits.”

• Lending has all but frozen up. Despite government pledges to pump billions of dollars into banks, many companies find credit either inaccessible or too costly.  “The absence of lending puts companies into a very difficult situation, which in turn will lead to an enormous amount of real estate not being completed,” said Nikolai Koshan, head of the Association of Russian Builders. “As a result, we will have … a huge army of bankrupt companies.”

• “If oil falls below $50 a barrel for a long time, “the Russians will burn through their pile of cash pretty fast. Already [Russia’s] reserves have fallen from $600 billion to $530 billion in just two months, and many of their largest energy companies are heavily indebted.”

• Russia’s benchmark Urals crude dropped to $65 a barrel Friday, a critical level. Russia’s budget assumes $70-a-barrel of oil. If prices stay low, that would not just end Russia’s recent big budget surpluses; it would damage the case for long-term investment here.

The specific consequences of these events are predictable, and only just beginning.  Mcclatchy-Tribune reports:

A year ago, Yevgeny Chichvarkin was the very picture of Russia’s rollicking vanguard of young millionaires in a nation of seemingly endless stacks of cash and lines of credit. The 34-year-old’s cell phone company, Euroset, began with one retail shop in 1997. A decade later it had an annual turnover of more than $4 billion. “During the first eight years we didn’t count money,” Chichvarkin said in a recent interview, to which he wore a yellow sweatshirt with red skulls on it that referred to “the poor” with an obscenity. “If we counted money, we would never have done what we did.” But last month, they had to start counting — and there wasn’t enough. So he and his partner sold the firm for a reported profit of $400 million, one-tenth of its annual business. Chichvarkin said he and his partner sold the company because of worries that they couldn’t find a bank willing to refinance Euroset’s loans. While he wouldn’t detail the sale price, other than to say it was far less than he could have gotten earlier in the year, the Russian press has said that the $1.25 billion deal included the buyer assuming about $850 million in debt.

This is happening all over Russia, more and more every day.  As businesses shut down, wages will fall and unemployment will rise.  The value of the ruble will fall, fueling inflation and denying Russians access to foreign products they are incapable of manufacturing themselves.  More and more every day, Putin’s Russia will begin to resemble Brezhnev’s USSR, with shortages and rationing and an ever-consticting standard of living.  Just like Brezhnev, instead of adopting radical reforms to improve the lives of ordinary Russians, Putin will make things still worse by diverting precious resources to a new cold war with the United States.

The word wake, of course, has a third meaning:  To arise from slumber. And that meaning is richly applicable in this context as well, giving a true Shakespearean flavor to the proceedings. The people of the world, and of Russia most especially, must arise from their slumber and realize that a neo-Soviet state has arisen in Russia and a neo-Iron Curtain has descended across the contintent.