Russian President Vladimir Putin’s Fifth Term Echoes Absolute Monarchy and Internal Collapse

For nearly 20 years, the position of “emperor” as Russia’s supreme leader has finally begun to waver.

Russian President Putin (71) formed his fifth cabinet on May 14th. Just two days later, he visited China, where President Xi Jinping (70), whom he calls a close friend, awaited. This visit reaffirmed their close relationship to the world once again.

However, Defense Ministry Research Director Shinji Hyodo sees this “speedy visit to China” as a sign of President Putin’s anxiety.

 

“China has become a lifeline for Russia to continue its prolonged war with Ukraine. The reality is that Putin hurriedly visited China to maintain ties and support from Beijing after forming his cabinet.”

 

Both countries share a border and for strategically important Russia, alliance with China is crucial to avoid being isolated. Economically, China is also a significant partner. Due to economic sanctions from NATO countries, Russia relies on imports from China, including essential electronic components like semiconductors needed for weapon manufacturing. Last year, 89% of imported “dual-use goods” that can be used in both military and civilian sectors, such as drones, came from China.

 

“Last year, Sino-Russian trade amounted to about 37 trillion yen, accounting for about 30% of Russia’s total trade volume. However, for China, trade with Russia represents only 4% of its total trade, indicating an asymmetrical relationship. Russia’s dependence on China has become increasingly apparent.” 

The biggest concern in the current Russian economy is that Gazprom, a state-owned natural gas company that contributes nearly 20% of national revenues, is facing significant losses. This highlights a clear difference in stance between China and Russia.

“The inability to export natural gas to Western countries has had a major impact, with Gazprom reporting a deficit of approximately 1.8 trillion yen in its December financial statements last year. Currently, China is its largest market, but the price at which China purchases natural gas from Russia is discounted by 46% from international standard prices.”  (Professor Itsuro Nakamura, Emeritus Professor at Tsukuba University)

 

The support of the wealthy class is critically endangered.

However, the reason why the Putin administration must continue the unequal trade with China is because they fear “national collapse from economic collapse.” In the 90s, about 30% of the national budget was allocated to defense spending, leading to economic policy failures such as delayed supply of daily necessities and the collapse of the Soviet Union, and President Putin’s desire to avoid this.

 

Yoko Hirose, a professor at Keio University, says that “the intent to protect the economy and prepare for prolonged war can be inferred from the cabinet personnel changes.”

“They replaced Shoigu, who served as Defense Minister for 12 years, with economist Belousov. This move seems aimed at optimizing the budget allocated to the military. Russia is now facing a situation where they must prevent economic collapse while figuring out how to continue the war.” (Hirose continues)

The challenges aren’t just economic. Following the March 22nd terrorist attack near Moscow that claimed 145 lives, public distrust has been mounting.

“Islamic State, suspected perpetrators of the attack, had been preparing in Moscow since early March. Despite warnings from the US, the Putin administration dismissed them as conspiracies. Even after the attack, President Putin effectively denied Islamic State’s involvement and suggested Ukrainian culpability. Such attempts to link security failures to Ukraine’s actions are raising doubts among the public.” (adds Sasaki)

The possibility of being abandoned by the wealthy oligarchs who have contributed to Russia’s development has emerged. As mentioned earlier by Mr. Nakamura:

“Currently, assets owned by oligarchs outside Russia are frozen. At the upcoming G7 Summit in Italy in June, there are discussions about selling these assets to fund Ukraine’s reconstruction. If adopted, this move will inevitably further diminish Putin’s support base. Since the start of the war, there has been no restraint on the exodus of oligarchs and elites who were supposed to shape Russia’s future economy and politics. There are concerns about a shortage of talent making future governance increasingly challenging.”

With increasing dependence on China and growing discontent within the country, the time is approaching for President Putin to reckon with the consequences of his aggressive war policies.

From the June 7-14, 2024 issue of FRIDAY