Russian President Vladimir Putin has been scoring brownie points lately with conservatives.
In September, his diplomatic prowess crippled a blundering Obama over his ‘red line’ in Syria and spared us what would have been a costly and disastrous military intervention.
Over the summer, he stood up to intense international pressure to usher through a bill many on the left unfairly denounced as ‘anti-gay’.
Putin, however, largely owes his political success to historically high oil prices and there is little the former-KGB spy will stop at to get his way.
We all still have warm and fuzzy memories of the mutual respect Bush and Putin shared when they first met in 2001. In 2009, when Putin met Obama for the first time at his Dacha, he saw straight through his high-handedness and they have had frosty relations ever since (who said an autocrat can’t be a good judge of character?).
If political relations have become progressively worse with Russia since Putin took power though, it’s not only because of Obama. As the country has become increasingly addicted to petro-dollars to stave off collapse, it is becoming more belligerent abroad.
The secret to Putin’s success has been creating the semblance of stability and prosperity. Politically, he has brought relative calm to a country trying to piece itself together after the disintegration of the Soviet Union, by either buying enemies off or sending them to the country’s 21st century equivalent of gulags.
Russia’s leader has also brought cash flowing back in to State coffers in a country that was on the precipice of collapse at the end of Yeltsin’s term as president. When Putin was enthroned in late 1999, the Russian State was bankrupt and inflation hovered at 37 percent. Today, public debt is almost non-existent and growth sluggish but positive.
Both his perceived political and economic successes, however, are dependent on constantly rising oil prices. Oil and gas play a vital role in the Russian economy, accounting for two-thirds of its exports, half its budget revenue and nearly a third of economic output. Putin assumed office right as global oil prices sky-rocketed from prices in the mid-$30 range to well over $100 per barrel today. Putin himself has enriched himself handsomely, amassing a personal fortune, between $40-$70 million, putting him in the running with Muammar Gadhafi for personal enrichment from public office.
In Russia, historically high oil prices is the only thing that stands between Putin and political demise. According to a study conducted by Citigroup Russia, in order for Putin to fund all of his campaign commitments and keep the government’s budget balanced, he will need to maintain oil prices at $150 a barrel or higher. When global prices crashed briefly in 2008-2009, so too did Russia’s economy, contracting sharply before slowly recovering with the price of oil.
With Russia’s economic fortunes, and Putin’s future, so closely tied to the price of oil, maintaining it artificially high has become an imperative of the country’s foreign policy. In order to do this, Russia has engaged in a reckless and dangerous policy in the Middle East, attempting to make the region’s current instability permanent. It has continually supported Iran’s nuclear program and backed the Assad government with political support and an endless supply of weapons. Fearful of the shale-driven oil boom that began in the United States, Putin has even stooped to secretly financing the Astroturf anti-fracking movement, making the Russian president one of the world’s most unlikely environmental crusaders.
In Eastern Europe, he has launched a twenty-first century Cold War against its oil-dependent neighbors attempting to escape their former master’s geopolitical orbit. Flush with oil money, Putin has revived the old Soviet dream in the form of his Eurasian economic union and is attempting the coax neighboring countries into his sad club, with the likes of Belarus and Kazakhstan. Countries giving the Kremlin the cold shoulder are finding themselves targets of his bullying diplomacy.
Over the summer, tensions with its largest neighbor, Ukraine, came to a boiling point when Russia halted practically all flows goods from entering its market to punish the country for sending signals it planned to sign a free trade deal with Europe. In Moldova, also snubbing Russia for Europe, the country has seen its wine exports to Russia banned. At the beginning of the month, the Kremlin also announced it would be blocking all milk exports from the small Baltic state of Lithuania.
Despite popular images of him abroad, Putin’s position as Russia’s modern-day czar is extremely fragile and the continuing existence of his corrupt regime depends on geopolitical instability and the fragility of other oil-producing countries. The problem is that sowing chaos in countries around the world has real consequences for everyone. Putin may be able to watch the world burn as long as he can lines his pockets and those of his allies with petro-dollars, but America shouldn’t be.
Feature Photo Credit: AFP/Getty Images
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