The Financial Times (Great Britain): "Putin’s lucky run in danger of running out"
For the eight years that he ruled Russia as president, Vladimir Putin enjoyed a fantastic run of luck. He presided over constant economic growth, steadily rising commodity prices - especially for oil and gas - and weak political opposition.
Today, he remains the most powerful man in the country, although he has ceded the presidency to his loyal supporter, Dmitry Medvedev, and taken the job of prime minister. But that means he is directly responsible for the economy when a sharp recession is in prospect. For the first time since he came to power, Mr Putin seems to be losing his sure touch.
"What Putin achieved [as president] was control and certainty," says Masha Lipman, editor of Pro and Contra Journal at the Carnegie Centre in Moscow. "He had absolute political power. He felt so confident that he even ventured this change of power. Suddenly there is a tremendous and rapidly increasing uncertainty, that is not of his own making. To a control freak, this is a disaster."
The result is that suddenly the signals from the Kremlin, where Mr Medvedev sits, and the White House, just down the Moscow river, where the prime minister has his office, are confused.
A month ago, Mr Putin insisted there was no crisis. Then his ministers admitted to "certain difficulties". Last week, Mr Putin set up an anti-crisis commission, headed by Igor Shuvalov, his deputy prime minister and chief economic adviser.
Last week, Andrei Klepach, a deputy economy minister used the word recession. He was promptly reprimanded by Alexei Kudrin, finance minister, who forecast growth next year of 3 per cent.
There is clearly an effort to play down the problems. Economic analysts from the big banks and financial institutions in Moscow have been warned not to spread alarm, or risk losing their privileged contacts.
The overall picture is unclear, but most tangible indicators are gloomy.
Pavel Teplukhin, president of Troika Dialog Asset Management, points to a 20 per cent drop in railway freight traffic between October 2007 and October 2008, and a drop in electricity consumption of between 3 and 5 per cent over the same period. The iron and steel sector has been hard hit, with the big steel plant at Magnitogorsk, in the Urals, cutting production by up to 30 per cent.
There are two big dangers for Mr Putin. One is a substantial forced devaluation of the rouble. The other is a sharp increase in unemployment.
Mr Putin came to power after the last forced devaluation of 1998, which wiped out the savings of Russia's nascent middle classes. He has staked his political reputation on not having another, saying he would not be the prime minister who devalued the rouble.
In reality, the central bank has already allowed a gradual devaluation in recent weeks, amounting to 8.8 per cent. Instead of stabilising the currency, it seems to have aggravated the flight into dollars. Most bankers are convinced there will have to be a one-off devaluation early in 2009.
"The latest story is that Putin will quit as prime minister and become speaker of the Duma [state parliament], making Kudrin the man who will devalue," said one senior banker. But most observers think the "father of the nation" would lose all public confidence - still running at almost 80 per cent - if he dared to quit as such a critical time.
As for unemployment, Mr Putin is less sanguine: "I am still hoping that we won't have mass unemployment," he told TV viewers. "Although looking at the labour market, we can of course expect more people to lose their jobs temporarily."
Unemployment did not happen in Soviet times. Now dismissal is possible, and no one is sure the fledgling social security system can provide a safety net. But Masha Lipman dismisses the likelihood of mass political protests. "Society is extremely fragmented and apathetic. I am sure there will be more protest rallies here and there, but they will be local. For the Russian people to reach out to each other will take a tremendous shock."
The greatest political danger for Mr Putin is different. Hitherto he has kept power by maintaining a balance between the factions around him, representing different arms of industry and the security services. As long as the economy grew, they could all be kept happy.
Today, he may be forced to choose between them, who gets help in repaying the huge foreign debts accumulated by the likes of Gazprom and Rosneft.
There may not be enough to go round. That is when the factions will start fighting.
