Russia: Putin's Back for a New Term, but the Problems Are Piling Up

5 MINS READMay 7, 2018 | 22:04 GMT

Not since Josef Stalin has anyone ruled Russia for so long. On May 7, Russian President Vladimir Putin was inaugurated for his fourth term, ushering in another six years as leader of the global power. Putin lauded the country during his elaborate swearing-in ceremony at the Kremlin, praising it as a "strong, active and influential participant in world affairs." But despite his bold tone and familiarity with his post, uncertainty over the pressing challenges facing the country will dominate his latest — and perhaps last — term in office.

The Big Picture

As we noted in our 2018 Annual Forecast, Russian President Vladimir Putin's victory in this year's presidential elections was a foregone conclusion, even as we predicted that the leader would confront difficult challenges after the polling. These challenges include a stagnant economy, a more active opposition, increased Kremlin infighting and an enduring standoff with the West. As Putin enters his fourth term, these problems are only growing.

  • Key among Putin's challenges is combating the country's economic stagnation, which is a product both of Russia's commodity-dependent economy and its standoff with the West.
  • Russia's economic problems have fed a more active protest environment. The younger generation, which matured in the post-Soviet era and has greater expectations of the government, is driving protests that have come to encompass broader issues such as corruption and general anti-government sentiment.
  • The standoff with the West has showed no signs of abating, because Moscow remains at odds with Washington and its European allies in Ukraine and Syria.
  • Tensions are particularly high with the United States, which imposed expanded sanctions at the beginning of April. Those sanctions targeted key oligarchs and their companies — particularly aluminum giant Rusal — and have served as the strongest signal yet that Washington has the power to restrict business and sever the financial flows to Russia's largest firms.
  • As its elites fight over dwindling spoils, Putin may find it increasingly difficult to maintain a balance between the Kremlin's security-minded "siloviki" and the reform-oriented "civiliki" power factions.

These challenges could cause Putin the most headaches since he acquired power at the beginning of the millennium, although the longtime leader is not without options on these problems.

He could choose to reshuffle his Cabinet to better respond to the evolving domestic and international pressures facing Russia. While Dmitri Medvedev is likely to retain his post as prime minister, former Finance Minister Alexei Kudrin, a reform-minded politician, may grab a high-level Cabinet post to aid Putin in resolving the country's economic weaknesses and its financial isolation from the West. Kudrin has championed reforms to Russia's budget and public administration, as well as spending increases on education, health care and infrastructure. But because Putin will wish to maintain equilibrium within the Kremlin, he may appoint someone from the more conservative and nationalist faction of Rosneft chief Igor Sechin to balance out Kudrin. Other changes to high-level posts — including the foreign and defense portfolios — are possible in the coming term as well.

When it comes to tackling dissent, Putin could take a hard line on demonstrations and public protests through crackdowns or could offer concessions to relieve the pressure in the streets. In practice, however, he is likely to pursue both avenues selectively by permitting certain demonstrations and making tactical adjustments to assuage public ire, while also adopting a harder line when necessary. Indeed, the president has demonstrated the second option in the runup to his inauguration, when police detained more than 1,600 people across Russia at unsanctioned protests spearheaded by opposition leader Alexei Navalny. While Putin's rule is not under serious threat, coping with the persistence and uncertain evolution of protests and public discontent will present a key challenge for the Kremlin.

On the foreign front, Putin has a number of options when dealing with the West. Russia has honed its ability to scale down or ramp up its operations in Ukraine and Syria — as well as bring its leverage to bear in North Korea, Afghanistan and elsewhere — as necessary. Putin's course of action will depend on whether the United States chooses to take a harder line on Russia — either in the form of sanctions or arms buildups — or exert far less pressure as it is currently doing. If the United States chooses the former route, Russia could reprise its spoiler role in areas of strategic interest to Washington. But if the United States dials down its actions, Moscow may cooperate more in such theaters and display a more conciliatory and constructive position in negotiations with the West.

Regardless, the long and interconnected list of pressing issues facing Russia — including economic stagnation, intensifying tensions with the West, power circle conflicts in the Kremlin and a more active and dynamic protest environment — will present a daunting challenge for the president. His strategy in dealing with these problems will go a long way toward shaping not only his term but also the decades to come in Russia.

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