Russia's way out of the vicious circle

Putin has a firm grip on geopolitics and external relations. If he wants to secure his future, he has to solve the economic dilemma.
What goals has Vladimir Putin pursued with the recent restructuring at the head of the Russian state? Three efforts were presumably decisive. First, Putin wants to prevent lawlessness and revolution from breaking out when he moves to a new head of state, as has often happened in Russia's political history.

Second, he wants to break the perpetual cycle of Russian economic history: heavy income losses due to wars, revolutions and anarchy, lightning-fast recovery and then a long era of stagnation. The Russian economy is currently stagnating. And third, Putin wants to preserve some important levers of power and avoid possible humiliation (such as criminal prosecution or house arrest, as Nikita Khrushchev experienced when he gave up power in the Soviet Union in 1964).

Many Western observers are so fixated on Putin that they either demonize or idolize him. They overlook the fact that the three goals mentioned are not particularly new and original. They correspond exactly to what the first post-Soviet President and Putin's predecessor in the Kremlin, Boris Yeltsin, was aiming for.

The fact that Yeltsin chose Putin paid off for him. Putin was able to clear up the chaos of the 1990s and end the economic downturn. Now Putin hopes to have made an equally brilliant decision.

The aging and sick Yeltsin realized that someone had to hold the (downsized) country together because he was less and less able to do it himself. That is why three of the last four prime ministers whom he appointed in quick succession belonged to the KGB. Only the secret service apparatus, he thought, could maintain order. The Politburo of the Communist Party of the Soviet Union had largely followed the same considerations in 1982 when, after Leonid Brezhnev's death and years of stagnation, KGB chief Yuri Andropov appointed it as a representative of the change to Brezhnev's successor.

Yeltsin also wanted to stop the decline of the Russian economy, not only the first slump, the "turnaround," for which he was largely responsible, but also the second. This was caused by the spread of the Asian financial crisis and the late payment of Russian government debt. And of course he wanted protection against criminal prosecution for himself and his family.

The fact that Yeltsin's choice of Putin happened by chance - he was protegé of Boris Beresowski, who later fell out of favor - paid off for him. All three goals were achieved: Putin was able to eliminate the chaos of the 1990s, ended the economic downturn and left “all of the wealth” to “the family” Yeltsin. Now Putin hopes to have made an equally brilliant decision.

Failure to grow, coupled with the same and uninspired government leadership, fueled protests in the urban middle class.

If Putin wants to strengthen his power and legacy and bring about a relatively smooth transition, the most pressing problem - since he already has foreign policy and "geopolitics" firmly in hand - is the state of the economy. The Russian economy has grown only slowly in the past ten years. A comparison with China shows that Russia is increasingly falling behind and even Putin's clever foreign policy will have to fail if it is based only on the threat of nuclear destruction and the export of oil and gas.

In the ten years after the global financial crisis, Russia's gross domestic product per capita grew by an average of 0.3 percent annually. This contrasts with Chinese growth of more than seven percent. In the past decade alone, the income gap between China and Russia has doubled: while in 2009 the Chinese gross domestic product in dollars was about three and a half times as much as the Russian, the ratio is now 7: 1.

Failure to grow, coupled with the same and uninspired government leaders, fueled protests in the urban middle class. Although many liberal opponents of Putin were prevented with a hard hand and unconstitutional bans, constituencies were manipulated and presumably even falsified elections, the last local election in Moscow resulted in a city Duma in which Putin's party "United Russia" has only a thin majority.

If Putin succeeds in generating an upswing, he could safely withdraw behind the scenes in four years in the Russian Security Council, which he is already leading today.

The main opposition leader Alexei Navalny has rightly argued for corruption at the top of the government