Alexei Kudrin, the chairman of Russian Finance Minister between 2000 to 2011 warned in “All-Russian Civil forum 2020” that an economic output this year of 4.5% would push 1 million Russians into poverty. It was an unusual since Russia tries to boost the economy before 2022.
Russia has to keep projecting influence in the post-Soviet states. It has to provide assistance under development programs i.e. financial assistance to Kyrgyzstan for economic reason or financing of project Uzbekistan or loans to Belarus. Moreover, it has to help the stability in Nagorno-Karabakh conflict and secure long-term presence in South Caucasus. To do so, it has to present in the region including Russian peacekeeping force. Russia is also concerned with the aging population. In 20 years, the projections emphasize a decline in Russian population from 145 m to 135 m people. In order to stop this loss, President Putin has initiated a social program that would bring prosperity. However, President Putin also is aware that it has to keep a balance between Russian oligarchy and population. While the financial resources are getting less, it will be hard for Russia to assert influence and even control in Russia.
In the short-term, Russian economy will survive. However, Russian economy needs a substantial change to survive. It might depend on oil & gas revenues but the oil prices will be be on floor by 2040 and it is predicted to stay on this level then. While the pandemic presents many opportunities to countries, it might help Kremlin to initiate a change in economic model. Unless, Russia develops an economic model not only bounded by oil & gas revenue in future, Kremlin will face with a choice of its key imperative; to preserve unity and power of the State.
