Covid-19 will 'damage Russia's finances and also its political elite'

Before the pandemic, Russia’s longtime leader Vladimir Putin was preparing the country for a sweeping constitutional change, which aims to extend his rule until 2036 through an April referendum. 

But with the deadly pandemic hitting the country in unexpected ways, the planned referendum was delayed indefinitely, which could mean several months in light of the virus’s complexity. Russia feels compelled to celebrate its Victory Day on May 9 in a low-profile manner. 

The pandemic has been a setback to Putin and his entourage, clouding their political plans. Many Russians, particularly those from the country’s medical sector, are now more concerned about their lives, thinking Moscow’s medical response was ill-equipped and could be self-destructive in the end. 

“Like many other countries, at first, Russia has approached the virus problem as a Chinese issue, thinking that it would be over after sometime there,” said Esref Yalinkilicli, a Moscow-based Eurasia analyst. 

But even after it turned into a pandemic across the world and the first confirmed cases began emerging in Russia in late January, Moscow continued to be a laggard, as it prioritised economic concerns over public health, according to Yalinkilicli. 

“That was their mistake in my opinion,” Yalinkilicli told TRT World. 

Over the last two days, Russia has reported more than 10,000 cases per day in big jumps, exceeding its confirmed cases by more than 150,000, which includes the country’s prime minister, the construction minister, and some other top officials, who are working for the Kremlin.

In addition to the increasing trend of virus cases, bizarre events are happening in different locations of the country. 

Three Russian doctors, who apparently had voiced reservations against the government’s virus response plan, reportedly fell from windows of their hospitals to their deaths. All three deaths were described as accidents by Russian authorities. 

According to Yalinkilicli, Russia’s inadequate response has been reinforced by another trend, the major big drops in oil price as Russia wages an oil war with Saudi Arabia and other OPEC countries, making the leadership more concerned about economic prospects than a proper pandemic response. 

But since late March, the virus has forced the country to follow a lockdown process anyway, further squeezing the country’s economy.  

"I don't recall anything like this," confessed Russian Finance Minister Anton Siluanov last week in a rare acceptance of the country’s economic troubles. 

Some prominent economists agree with the finance minister’s assessment. 

"This is an unprecedented shock. Oil prices are at a level that Putin has never seen, so it's something completely new. Then you have the pandemic, then you have the economic crisis, which is also domestic, not just because of the oil prices," said Sergei Guriev, an economist and professor at the Paris Institute of Political Studies, who was also former chief economist at the European Bank for Reconstruction and Development. 

Since January 30, Russia’s closure of its 4,300 km border with China over epidemic concerns has also compounded the country’s economic pains. 

Before the border shutdown, Russia had a trade surplus with China, an economic luxury many countries including the superpower US could not have with Beijing, the world’s second biggest economy. 

Several surveys have already started highlighting Russian pessimism over the country’s prospects. 

Research conducted by the All-Russian Public Opinion Research Center (VCIOM) found that an overwhelming majority of Russians, up to 84 percent, were worried about an economic crisis. Another 70 percent of Russians fear that the worst is yet to come.

Furthermore, Russia's GDP could decline by 5.5 percent, the International Monetary Fund (IMF) estimates. The Russian central bank also predicts an economic decline between 4 percent and 6 percent. 

Under the pressure of both the virus and economic decline, more than a million residents of the country’s capital have left Moscow, the epicentre of the Russian pandemic, which accounts more than half of the confirmed cases, to run away from the virus and lockdowns, indicating people’s uneasiness, according to Yalinkilicli. 

“The only optimistic data, with which they could hide their failure, is their low fatality rates hovering around 0.9,” Yalinkilicli says. 

But he also adds: “No one knows about what’s going on in other federal areas, particularly, in the country’s east.” 

There are reports coming from different parts of the country which indicate that medical staff do not want to work anymore in hospitals to treat virus patients over fears that they will catch the virus and pass on to their families, Yalinkilicli recounts. 

The coronavirus has also forced the Russian health minister to accept the painful fact that the country’s health system is not ready to deal with a pandemic like this one.

“The minister made a rare self criticism saying that the pandemic made the need for a health reform apparent in Russia,” Yalinkilicli said. 

All of the Russian troubles could have a lasting effect not only for the country’s population but also for Moscow’s recent assertive and expensive foreign policy adventures extending from Syria to Libya, raising question marks about Putin’s leadership, according to experts. 

“The coronavirus is therefore an unprecedented test of the Russian social contract of renunciation of freedoms in exchange for stability and improved living standards,” wrote Michel Duclos, a former French diplomat, who was the country’s ambassador to Syria between 2006 and 2007, referring to Putin’s hard power politics. 

According to Levada-Center survey, less than half of the respondents said that the government responded adequately to the pandemic, signalling possible political troubles for Putin. 

“His approval ratings have recently decreased. Putin also suffers from this process,” Yalinkilicli observed. 

“As the lockdown continues, it will damage not only the country’s finances but also its political elite,” he added.