Russia Reform Monitor: No. 2037

Related Categories: Russia; Ukraine

January 13:

Russia is once again attempting to expand its influence in Afghanistan. The Washington Post reports that the Kremlin is poised to expand shipments of small arms to the war-torn state, now fighting anew the resurgent Taliban movement. The decision, the Post notes, is driven by concern in Moscow "that extremist factions in Afghanistan could spill over the northern borders into former Soviet Central Asian countries where Russia has a major military presence."

[EDITORS' NOTE: Russia's strategy in Afghanistan is multi-faceted and, at least on the surface, contradictory in nature. Even as it arms the government Mohammad Ashraf Ghani in Kabul, the Kremlin is also sharing intelligence and cooperating tactically with the Taliban, which is fighting not only against the Afghan state but also against the Islamic State terrorist group, now making inroads into the country as well.]

Russia's premier is warning of still greater economic turbulence to come. The Voice of America reports that, in remarks before the annual Gaidar Forum in Moscow, Dmitry Medvedev admitted that "the piling of the problems of this year resulted in the contraction in the volume of production and reduction in business and entrepreneurial activity." "Many people have become poorer," Medvedev admitted. "And, the middle class has suffered. And, this is probably one of the most painful aftereffects of the last years."

The worst, moreover, still lies ahead. "The reserves have managed to balance the budget for this year," Medvedev said. "But, if the oil price keeps falling and dropping, we'll have to adjust our fiscal parameters." As a result, Russians must "brace ourselves for the worst scenario, as other countries do."

January 14:

But while Medvedev may be taking a sober look at Russia's fiscal fortunes, the country's president doesn't seem to be. The Daily Beast reports that, in his recent interview with German newsmagazine Bild, Vladimir Putin made some wholly unrealistic economic predictions. These include calculating that the country still has $450 billion in reserves - something which has been entirely debunked by state experts and independent financial analysts alike. Putin, moreover, minimized the impact that low world oil prices and Western sanctions are having on Russia's economic outlook, which is now believed to be worse than that of 2008 - and still declining.

January 16:

The U.S. intelligence community is turning its attention to Russia's pervasive influence over European politics.London's Guardian newspaper reports that, under the direction of Congress, "American intelligence agencies are to conduct a major investigation into how the Kremlin is infiltrating political parties in Europe" and how Moscow has influenced politics on the Continent over the past decade. The instruction reflects mounting fears among policymakers in Washington that Moscow is seeking to undermine NATO by exacerbating divisions in Europe as part of what many have dubbed a "new Cold War."

January 17:

Russia's deepening domestic malaise is generating widespread discontent among those who could previously counted as the political "base" of Russian president Vladimir Putin, the Washington Times reports. With the ruble having lost some 60 percent of its value over the past year-and-a-half, the purchasing power of ordinary Russians has declined precipitously and "at least 23 million Russians - 16 percent of the total population - are now living below the official poverty level of less than $170 a month," the paper reports, citing official Russian statistics. This has created growing signs of unrest among workers and small business owners. In the words of one trucker, who participated in the recurring trucker strikes that have taken place in and around Moscow in recent weeks, "Uncle Vova [Vladimir] has lost my trust."