I'm not personally of the opinion that Putin is the most effective head of state on the Globe, but there's no doubt Russians love him, and for good reason. From wikipedia: He didn't even have to take his shirt off to do it. That's just the icing on the cake. The most sensible criticism of Putin I've seen (and I agree with it) is that he failed to effectively take advantage of the tremendous wealth pouring in from the energy sector to transform and diversify the economy to make it more broad based. His administration may have missed the boat on executing economic reform of the type that could more effectively insulated them from what is happening right now. This line I didn't quite understand. Gains momentum from what? Haven't inflation hawks been predicting a manifestation for over half a decade now? Why have they been wrong for so long, and what is different in this instance? Not saying it won't/can't happen, I just don't understand the mechanism clearly this time. I've read a few economists discussing the exposure to Russian debt in the European market since 'Red Monday', -I'm most curious about this. I wonder how long it will take to see if there's a major issue there that manifests...Few will disagree that Vladimir Putin is easily the most effective head of state on today’s world stage. Americans may not like him, but Russians love and adore him.
During Putin's first premiership and presidency (1999–2008), real incomes increased by a factor of 2.5, real wages more than tripled; unemployment and poverty more than halved, and the Russians' self-assessed life satisfaction rose significantly.[9] Putin's first presidency was marked by high economic growth: the Russian economy grew for eight straight years, seeing GDP increase by 72% in PPP (as for nominal GDP, 600%).
As US capacity utilization returns to pre-2001 levels, and inflation gains momentum...
Almost all of Russia's foreign debt is held privately. Russia has something like 12% of it's sovereign debt denominated in other currencies, which is pretty enviable. I don't have the numbers but I can remember the important ones I heard in a CFR discussion earlier this week. $60bil in foreign currency debt comes due this year and another $100bil next year (kinda makes holding 1.5bil in gold seem unimportant). Russia is sitting on about $223billion in sovereign wealth holdings denominated in foreign currency, not all of which is liquid but mostly liquid enough to to be useful. Russian companies have something like $20bil more in foreign assets than they have in outstanding debt that will come due in the next two years. Oil will probably edge up to mid to high $70's low $80's in the next year or so (anyone's guess but these guys guess was probably better than mine). Firms will either have to divest external holdings to pay debt, beg Putin for bailouts or go under if there isn't some kind of big turnaround. The two sources of a quick turn around would be the lifting of sanctions 25% of the problem or oil having a big uptick. Because firms will be beholden to Putin for bail outs it probably means that they won't be a significant force of friction for him in the next few years. As long as oil stays low the boost to the rest of the world economy will more than make up for the knock on effect from a Russian depression. There will be a Russian depression. Some banks and other firms that are heavily invested in Russia will suffer, might need a domestic bail out of their own but it's probably not going to infect the rest of the financial system. Fuck if I know how true that all is but it was the basic stance of a few Russian financial experts. They also thought Putin could weather the storm and that it'd be rough time for the average Russian. They did think that Russian love for their ruler would be sorely tested.
I seriously wonder if it's possible to genuinely diversify economically when you are consolidating political power in the manner Putin has. The Skolkovo innovation center is never going to turn into Y-Combinator. I think evidence suggests that dictatorship isn't fertile ground for economic diversification; I don't think Putin ever could have caught that boat. No doubt dictators can be effective stewards, but diversification doesn't seem to be a tool in their box.The most sensible criticism of Putin I've seen (and I agree with it) is that he failed to effectively take advantage of the tremendous wealth pouring in from the energy sector to transform and diversify the economy to make it more broad based. His administration may have missed the boat on executing economic reform of the type that could more effectively insulated them from what is happening right now.