Feb. 10 – Rising anti-establishment sentiment is a theme that is increasingly prevalent, and risky, in Russia, Citi Global Perspectives & Solutions analysts write in their report: “2012 Investment Themes. Navigating Towards a Growth Course.”
The emergence of more globalized public expectations (such as demands for enhanced civil and political rights) that was in evidence during protests in December and over last weekend in many Russian cities will only accelerate, in the view of Citigroup political analysts.
Investors would like the election in March to draw a line under the current political uncertainty, but “many matters could spur further protests,” considers Tina Fordem, co-author of the report and senior global political analyst at Citi.
Revolutions are relatively rare, requiring the masses to overcome differences in pursuit of a common goal, but increased access to information and communication technology – the monthly audience of Russian internet users grew by 18 percent in 2010 – has narrowed the distance between the people and has helped them overcome fear of the authorities, the paper says. In December, large protests of the post-Soviet period were prompted by disputed parliamentary elections. Riots on February 4 were also begun and managed through social networks.
Analysts register “a reduced willingness to tolerate the perceived excesses of elites and the old social order, and heightened potential for protests to cause disruption, violence, and pressure to alter the legislative agenda.”
Moreover, the authors suggest revisiting assumptions of long-term political stability even “where living standards are improved.”
The election period ahead is unlikely to see policymakers attempt reform. With currentl Prime Minister, and most likely next President, Vladimir Putin struggling to maintain public legitimacy, “a focus on short-term populist, nationalist and protectionist policy measures instead of comprehensive long-term reforms will likely increase in Russia.”
“In this environment, the potential for self-inflicted policy failure remains the most significant risk.”
At the same time, some of the “liberal” or “moderate” faction of Kremlin insiders sympathetic with Russia’s fragmented opposition, who prefer not to be named, warned the country’s ultimate leader Vladimir Putin may soon lose power if he doesn’t undertake sweeping reforms.
Others, including attendees of the World Economic Forum in Davos which took place in January, speak openly about the massive political challenges Russia faces nowadays.
“We have a chance to hear clear and tough voices that the current situation is intolerable and needs to be changed,” Putin’s first deputy Igor Shuvalov said in Davos.
“Things can be changed in such a way that power can be lost like it was for Gorbachev in 1991,” he said. “We shall not lean towards conservatives, who want to cork the bottle and not release any gas, or do the opposite and give so much freedom that it leads to chaos.”
“The authorities need to learn to listen to the unpleasant truth about them, rather than put pressure on the people,” German Gref, CEO of state-owned Sberbank said.
Current President Dmitry Medvedev’s economic aide Arkady Dvokovich described Russia’s main problem as “oversized and constant pressure from the state,” which according to the First Deputy Central Bank Chairman Alexei Ulyukayev “way too often” intervened in the private oil and banking business.
“Investors are anxious about the political situation in Russia,” Vladimir Tikhomirov from financial group Otkritiye said to Russian business daily Vedomosti. The main point for them is not election, “but what would follow it — whether reforms will be carried out or not.”
Till the election, scheduled for March 12, “investors will keep concerned on Russia’s unpredictable future with unexpected effects,” Chris Weafer, chief strategist of Troika Dialog said to Vedomosti.
Tags: Russia 2012 Elections, Russia Politics, Russia Protests, Vladimir Putin
