Following his triumph in the presidential elections last March, which saw him returned to power with 77 percent of the vote, Vladimir Putin began his fourth term by focusing on economic growth and budget consolidation. Among his efforts was a reform of the pension system, which, having significantly raised the retirement age, caused considerable discontent. The budget was set to ensure balance even with an oil price at $40 a barrel. An approach which, incidentally, was also useful in the discussions held with Donald Trump, who called for a reduction in oil prices. For Moscow, in fact, it was easier to agree to the cut demanded by Washington than for Riyadh, which can only balance its budget if the price per barrel is $80.
Despite the discontent about pension reform and the defeats suffered by his party, United Russia, in some local elections, Putin maintains a firm grip on power and broad popular consensus, a consensus also supported by controversies in the West regarding cases such as doping among Olympic athletes. The economic sanctions adopted following the annexation of Crimea in 2014 caused the national economy to contract significantly and led to a sharp drop in the ruble, which increased the cost of imports, but favored exports. The government has launched an extensive program of subsidies for agricultural and industrial companies in an attempt to encourage the production of good quality mass consumer goods and to reduce the country’s dependence on imports from abroad.
The military intervention in Syria has allowed Russia to resume a leading role in the Middle East, maintaining a strategic position in the Mediterranean. The conflict also showcased the country’s military, one of the few cutting-edge industries in Russia. Putin has also shown that he is able to deal with such diverse interlocutors as Iran, Turkey and Saudi Arabia, maintaining cordial relations and collaboration with all three.
His greatest failure lies perhaps in not being able to restart relations with Washington. The head of the Kremlin placed his bets on Donald Trump winning the 2016 presidential elections, but investigations into the so-called “Russiagate” have so far prevented Trump from starting a constructive dialog with Putin, and this is unlikely to happen before the end of the U.S. president’s current mandate.
Putin’s other serious failure lies in the ever closer relations between Kiev and the West. Despite annexing Crimea and controlling the separatist areas of the Donbass, Moscow has in fact lost its influence over Ukraine, a country which is crucial to Russia’s strategic security. Moreover, economic support for regions torn away from Kiev is adding to the costs that Russia bears for sustaining the separatist republics of Moldova (Transnistria) and Georgia (South Ossetia, Abkhazia and Adjara) and military intervention in Syria. The expenditure is considerable for an economy like Russia’s; its GDP in 2017 was just 57.46 percent of California’s.