THAT'S NOT THE HORIZON, JUST THE LAY OF THE LAND:

For Russia, A Dark Horizon (Masha Lipman, January 3, 2009, Washington Post)

Putin was blessed with rising energy prices that enabled him to build his oil-greased authoritarianism. He delivered generously to the nation, and the people readily withdrew from politics and rewarded him with high approval ratings. Likewise, the Russian elite stayed loyal, since the abundant oil revenue produced lucrative opportunities and comfortable lifestyles. In this environment, any remaining political opponents were easy to marginalize; only in very rare cases did Putin resort to repression.

The price of oil is now about a quarter of what it was only a few months ago, and economic problems are building within Russia. Investors are gone; the stock market barely exists. After nine years of surpluses, Russia will have a budget deficit in 2009, and the solid economic growth of recent years may give way to a contraction. An increasing number of enterprises are shifting to two- or three-day workweeks, sending their employees on unpaid vacations or laying them off. Unemployment, which had been very low in recent years, is rising, and the country lacks an adequate social infrastructure to help those who are losing their jobs. The situation is especially grave in the numerous company towns where new jobs are almost impossible to find. Meanwhile, geographic mobility is strongly limited by Russia's underdeveloped housing market.

It is commonly believed that we haven't yet seen the worst. Economists expect Russia to be hit much harder in February and March.

Even with high oil prices, which blinded Realists to the reality of Russian decline, they had a male life expectancy that's dropped to 59 years of age and a death rate that exceeds birth by 50%.

Posted by Orrin Judd at January 4, 2009 8:38 AM