Putin rides on borrowed time
The Kremlin policies can be summarized as: “Undermine democracies so the world keeps buying Russian oil and gas.”
The Economy of Russia is poor and in shambles. It’s easy to overlook this reality, if you focus on Putin’s exploits on the global stage. But no braggadocio can change the fundamentals.
Look at the following chart.
The economy of Russia has been stagnating or shrinking for years in a row now, while Europe and USA grew consistently in the last two decades, with the only exception of the aftermath of the 2008 crisis.
The GDP does not tell the whole story: other indicators are even bleaker for Russia.
The investments in research, lifeline of a modern economy, are barely above 1% of GDP, half of the average of developed countries. (In a bad year, the US invests in R&D 2.5% of GDP; South Korea, a leader in innovation, invests more than 4%).
Moreover, a combination of cronyism, widespread corruption, uncertain rule of law, increasing crackdown on free speech, international isolation, and other factors, have turned Russia into an economic Pariah.
Forbes Best Countries for business, a prominent ranking of business friendliness, puts Russia at #79 in its most recent list, worse than Rwanda, Moldova and Trinidad and Tobago.
Poverty is on the rise, with an 8 percentage points increase last year in the share of the population with per capita incomes below 10 USD/day.
The national reserves are being burned at an unprecedented rate.
There is essentially no good news in Russia’s economy today.
But the worst news of all, certainly, is the Russian dependency on oil, coal and natural gas exports.
Oil, gas and coal provide the bulk of Russian exports, they finance the State bureaucracy, its military and geopolitical ambitions, its system of oligarchs and political affiliations. There is no economic alternative to the export of fossil fuels in Russia today.
Without the money coming from oil, gas and coal, Putin’s Russia would simply collapse. The bad news for Putin is that fossil fuels have now renewable alternatives.
It takes an idiot not to notice that the world is trying to reduce its dependency on fossil fuels. And whatever you think of Putin, he’s certainly not an idiot.
Every spin of a wind turbine in Bavaria or Iowa, is a blow to Putin’s future. Every solar panel in California, is more kilowatts robbed from Putin’s ambitions.
Today’s world stage can be seen as a race between oil and democracy.
To survive, Putin needs a world that keeps using fossil fuels. He won’t be seen in public directly advocating for an oil binge — he’s too shrewd for that, and it’s not his style. Rather, he prefers to be seen as a mild supporter of the Paris Agreement (while also dragging his feet on its ratification).
Much more importantly, he works behind the scenes to destroy the world pillars of environmentalism and renewables policies. It turns out that such pillars largely coincide with the pillars of liberal democracies.
The Kremlin policies can be summarized today as: undermine democracies so the world keeps buying Russian oil and gas.
So far, this strategy has worked fine for Putin. His cyberarmy and new media diplomacy has helped install a Climate Denier at the White House. The same tactics helped the rise of anti-EU sentiment in Europe — with successes beyond expectations that include the Brexit vote and populist parties gaining power especially in Eastern Europe.
He’s determined to replicate the success in more European Countries facing upcoming elections, including France, the Czech Republic, and especially Germany.
Is Putin going to be fast enough in undermining democracies, or will renewables bankrupt his plans first?
While resourceful and determined, Putin is facing hundreds of millions of smart people, in the US and in Europe, who are determined to keep the Earth breathing, and their countries free.
And importantly, time is not on Putin’s side, because renewable energy is becoming cheaper every year.
