Putinomics on Life Support
Streetwise Professor reports:
The monthly GDP indicator data suggested the Russian economy continued to contract in August. However, the annual rate of decline slowed further from May’s revised record -9.9%. In August the GDP Indicator registered -3.9%, the highest reading in 2009 so far. The Indicator has now spent nine months in negative territory, a longer sequence than the previous seven-month spell from September 1998 to March 1999. The currentaverage rate of decline is also much sharper than in the previous downturn, at -6.4%.
Worse than 1998!
When the epitaph of Putin’s Russia is written, surely this moment will have a prominent place therein. SWP adds:
To put things in perspective, Russia’s best monthly reading of -3.9 percent is between the US first quarter contraction of -6.4 percent and the second quarter contraction of -1.0 percent. In output gap terms, however, the Russian performance is even worse given Russia’s substantially higher pre-crisis growth rate. The unfavorable comparison to 1998–the supposed nadir of Russian economic fortunes, and the standard by which Putin wants to be evaluated – is particularly dreary. is growing at 8 percent–although as I’ve written repeatedly, I consider that to be 9 parts mirage, 1 part reality. India is growing at about 6 percent. Brazil is contracting at about a 1 percent rate and may eke out 1 percent growth for 2009.
The Russian economy as managed by Vladimir Putin is, in other words, an abject disaster. In the World Economic Forum’s most recent ranking of economic competitiveness, Russia fell a shocking 12 places from its already pathetic rating of #51 out of 134 nations to an abysmal #63. This is a nation that purports to deserve a spot on the G-8 panel!
In fact, just as SWP suggests, Russia doesn’t even deserve it’s “BRIC” membership — it’s WEF rating is the lowst of the four nations that comprise that entity (Brazil is at #56, India at #49 and China leads the way at #29. Mexico is ahead of Russia, and the United States is #2 in the world.
And yet, the lemming-like denizens of Russia go on favoring the Putin regime with nosebleed-high levels of approval, just as they did in Soviet times. How can they, then, expect any other fate than what the USSR experienced?