Virus in the System: Russia and the Corona Crisis

CSS Analyses in Security Policy CSS ETH Zurich No. 266, July 2020

The coronavirus crisis is a strain on the Russian economy and constitutes a stress test for the popularity of the regime. Its political system will be busy managing the domestic consequences of the pandemic for some time, which could result in foreign policy being more strongly guided by economic considerations.

By Jeronim Perović

Russia reacted quickly, closing its land border with China early on at the end of Janu- ary 2020, after information became avail- able about the extent of the outbreak of the virus in the Chinese city of Wuhan. By the end of March, the administration had closed all national borders and air traffic was also completely suspended. Despite these strict measures, the virus spread throughout Russia too. The Russian administration reported the first official- in fection with the novel coronavirus on 2 March. One month later, the number of cases had shot up. By the end of June, the country already had over 600,000 infections, placing it third in the world in terms of the number of cases, behind the US and Brazil.

As opposed to the Belarusian President From his residence in Novo-Ogaryovo outside of Moscow, President Vladimir Putin holds a video conference on the latest development of the pandemic in April 2020. Kremlin.ru Alexander Lukashenko, Russian President Vladimir Putin never tried to deny the danger posed by the virus. However, for a long time, the Russian leadership sought to convey the impression that the situation ed parts of the country, in particular the ID-19 at the end of June, which corre- was completely under control. It took until city of Moscow, the regional authorities in sponds to a mortality rate of 1.4 per cent. 25 March for Putin to address the popula- some cases went as far as to impose radical This means that the rate was significantly tion in a long televised speech to make restrictions, including full curfews. lower than in most other European coun- them aware of the dangers facing Russia. tries or in the US, which had a mortality The President encouraged citizens to self- However, the administration continued to rate of 5 per cent at the end of June. isolate for a week. Important events such as try to gloss over the true extent of the crisis the constitutional reform referendum and by reporting strikingly low death rates in Russia sought to explain its low death rate the Victory Day military parade on 9 May the official statistics. Russia reported more as proof of the “high quality” and thus ulti- were postponed. In especially badly affect- than 9,000 deaths attributed to COV- mately the superiority of the Russian

healthcare system over that of the West, as to increases in public spending taking the ing elections to the State Duma (the Rus- Kremlin Spokesman Dmitry Peskov ex- form of support measures for the economy sian parliament) in 2021. Back in autumn plained in an interview with the TV station and the people. Russian Minister of Fi- 2019, during the regional elections, candi- CNN. In reality, the low figures are actually nance Anton Siluanov also made it clear dates from opposition parties managed to due to the cause of death for many corona- back in the beginning of April that the achieve notable success against the state virus patients being recorded as “severe “golden years” for the Russian economy are party United Russia, primarily in Moscow. pneumonia” or being attributed to another over. Despite the curtailment of democratic disease. However, surveys of the population freedoms, elections are still the basis of the at the beginning of April showed that It is true that the forecasts paint a rather Russian regime’s legitimacy and are also an around half of Russians did not trust the bleak picture. The fact that Russia’s export- indicator of the population’s loyalty. official statistics and assumed that the oriented industry – in particular, the raw numbers of infections and deaths were ac- materials sector – will also be forced to deal The fact that Russia’s autocratic regime is tually higher. with low revenues in the near future due to struggling to deal with the coronavirus cri- the expected global recession and the per- sis is reflected in the handling of the num- The Russian healthcare system may not sistently low oil price is likely to have a par- ber of COVID-19 deaths, but also by the have fallen apart — but serious shortcom- ticularly negative impact. In accordance attempts by state media to play down or ings cannot be covered up despite state with other estimates, the International completely cover up the failings of the propaganda. Reports of a lack of protective Monetary Fund is predicting that econom- Russian health care system. However, Rus- equipment, ventilation equipment, and ic output in Russia will decline by over 5 sia’s handling of the crisis also gives in- medical staff predominantly reached the per cent in 2020. depth insights into how the Russian politi- public on social media and independent cal system works. news sites. After a local mufti in Dagestan However, the extent of the economic crisis drew attention to the catastrophic situation should also not be overstated – the Russian Russia is a federal state according to the in his republic in mid-May, Putin himself economy is used to crises. Unlike during constitution and organizing healthcare ser- the global financial crisis in vices lies largely within the remit of the in- Today, Russia seems better 2008 and the recession in dividual “federal subjects” (regions), of equipped to withstand the 2014/2015, today Russia seems which there are 85 today. However, taking better equipped to withstand into account the extent of the crisis and the double shock brought about the double shock caused by the fact that the political system is highly cen- by the low price of oil and low price of oil and the corona- tralized in practice, we could have expected virus crisis. The country has a that the federal center would have been the coronavirus crisis. low level of foreign debt, large more active in coordinating measures to currency reserves, and a Na- combat the spread of the virus throughout was forced to admit to the Dagestani au- tional Welfare Fund that amounts to the country. Above all, the Russian popula- thorities during a virtual conference on around ten per cent of GDP. A significant tion should have been surprised that their state television that the situation in the part of this state fund is stockpiled by the otherwise ever-present “leader” was largely North Caucasus republic was “complicat- Central Bank of Russia in the form of gold absent in the first few weeks, leaving the ed” and required close attention. and currency reserves. These reserves as specific handling of the crisis to the admin- well as the strict financial austerity pursued istration and governors of individual re- Economic Consequences in recent years should help to absorb the gions. Putin also refrained from declaring a The coronavirus crisis has hit the Russian negative effects of the crisis, at least for a national state of emergency, which only he economy at one of the worst possible times. certain amount of time. If the actual dis- as President can do and which would have Since 2014/15, it has been impacted by low posable income of citizens keeps decreas- brought in curfews across the entire coun- oil prices and Western sanctions and has ing as the crisis continues, the unspoken try. The energetic leader was not Putin in recorded only moderate growth rates over “pact” between the state and society – loy- this case, but his Prime Minister Mikhail the past three years. Oil prices fell to his- alty to the regime in return for security and Mishustin and, to an even greater extent, toric lows in March and April, right at the prosperity – could be destabilized. To avoid the Mayor of Moscow Sergey Sobyanin. time the coronavirus crisis began. This was this, pressure to increase spending in the due to a decline in demand and a global public sector is likely to grow in the short The fact that Putin largely stayed away at surplus, fuelled by a dispute over produc- to medium term. first and only became more active from tion volumes between Russia and Saudi mid-April onwards can be interpreted as Arabia as part of the cooperation format Effects on Domestic Policy an expression of the President’s clear dis- with the Organization of the Petroleum To prevent even greater damage to the comfort with this kind of crisis. For once, Exporting Countries (the so-called economy, various Russian regions – includ- Russia was confronted with a problem that OPEC+). The price only levelled out at the ing the city of Moscow, which was worst could not simply be blamed on an external beginning of May, at around 40 USD a hit by the virus – eased restrictions at the or internal “enemy”. In any case, Putin feels barrel. The Russian state budget, a good beginning of June, probably in response to uncomfortable when bearing bad news. In- third of which is financed by taxes on oil pressure from the Kremlin. The reason be- stead of taking responsibility and then hav- and gas exports, requires this benchmark as hind this is also political: Putin needs the ing to accept the blame for any mistakes, he a minimum to remain balanced. Therefore, support of the population for the constitu- delegated powers to fight the pandemic the country’s financial means were already tional reform referendum on 1 July, which down the chain of command. This behavior stretched to the limit before the crisis be- allows him to contest a further two tenures by Putin has not met the Russian popula- gan and are now being strained further due as president. In addition, there are upcom- tion’s expectations – according to surveys

Oil Price and Russia’s Economy superpower China that are shaping world order. However, from a Russian point of view, increased tensions between the US and China bring only limited advantages. A new bipolar global order dominated by the US and China does not correspond to the idea of a multipolar world that Moscow has been promoting since the early 1990s.

In this light, it could be expected that Mos- cow will uphold its “strategic partnership” with Beijing, while trying to avoid becom- ing China’s junior partner due to its in- creasing economic dependence. Instead, we can assume that Russia will step up its ef- forts to expand relations with other regional powerhouses in Asia, particularly India and Japan. In accordance with this balanc- ing policy, Russia could also seek a closer relationship with Europe, which remains its most important trading and economic partner. Whether this would mean a greater willingness to make concessions on the conducted by the non-governmental policy and geopolitical considerations Ukrainian question is difficult to assess at Levada Center at the end of April, his ap- clearly took a back seat. this time. Russia’s focus on solving domes- proval rating has fallen to under 60 per tic problems should, however, gain impor- cent for the first time since his first tenure The prominence of internal economic and tance during the coronavirus crisis and give as president began. Less than half of those social affairs also had an impact on Russia’s a boost to those forces within the Russian surveyed were satisfied with the work of dealings with the countries in the Russian administration during the the Eurasian Economic Union Russia’s handling of the crisis same period. (EAEU). When Russia closed gives in-depth insights into how its borders with neighboring Implications for Foreign Policy countries, it became clear that the Russian political system At first, Russia sought to make foreign pol- in times of crisis, only limited works. icy gains from the global pandemic by of- solidarity could be expected fering assistance to numerous states in the from Russia. The border clo- fight against the disease. As a result, the sures not only restricted the movement of elite that advocate a pragmatic foreign pol- Russian military delivered coronavirus test goods, but also prevented tens of thousands icy based on cooperation and economic in- kits, masks, and protective equipment to of Central Asian workers from entering terests. countries including Italy, Serbia, and even Russia to help with the harvest. This will the US, and presented this to the media as not only lead to a crisis in Russian agricul- Outlook a selfless act of charity. Alongside this aid ture, but also problems in Central Asia, Given the economic and social conse- campaign, Russia intensified its disinfor- where economies depend largely on remit- quences, it is currently difficult to see how mation campaign via state media and other tances from migrants. In the future, Russia Putin can come out of the coronavirus cri- channels in order – like China or Iran – to will continue its involvement in the EAEU sis on top. His position of power was al- use the crisis to its advantage in its system- and push forward integration, but its be- ready largely consolidated before the pan- ic struggle with the West. A typical exam- havior during the crisis has also shown that demic. If the crisis persists in Russia for a ple of this was a false report on a Russian this project, driven up to now by Russia long time, discontent may spread among news portal that the virus was created as a primarily for geopolitical reasons, is cur- the population – however, one cannot ex- NATO weapon to weaken other countries. rently of secondary importance given Rus- pect a coup. As ever, the people see no clear sia’s own economic problems. alternatives to Putin and Russia is lacking a However, as the crisis continued to deepen united and organized opposition. In addi- within Russia, these arguments became The international repercussions of the pan- tion, despite dissatisfaction among a sig- rapidly less and less important in the do- demic have made one thing abundantly nificant minority, the regime can still count mestic political discourse. Putin’s live dis- clear to Moscow: Russia continues to have on the support of the majority of the peo- cussions on state television with members enough power and resources to exert a re- ple. Not least, its supporters include the of the administration or the governors were gional influence and to play a selective role many people employed in the state sector essentially about technical measures, or in- in global conflicts, whether in Syria, Libya, – around a third of all employees – and volved talks about how to structure support or Venezuela. When it comes to shaping people who depend on social services, par- for Russian companies and aid for the pop- the international order, however, the coun- ticularly pensioners, who have received the ulation. In this respect, discussions within try can only have a limited influence due to most state help during the crisis and are Russia were not dissimilar to those taking its reduced economic and financial resourc- thus unlikely to withdraw their support for place in other European countries. Foreign es. Above all, it is the US and the emerging the state.

The behavior of those in command at this of individual elite groups in the system are ly in Europe. Perhaps the crisis can also of- time reflects the uncertainty of a regime hard to determine. Within the administra- fer an opportunity for constructive dia- whose power seemed inviolable until re- tion or among the ranks of powerful busi- logue and overcoming existing tensions. cently. The fact that social criticism is pos- ness representatives, those who advocate a pragmatic and business-orient- Russia’s focus on solving ed course can currently be heard domestic problems should give above all. Nevertheless, as is al- ways the case, other groups are a boost to those forces within active in the background, pri- the Russian elite that advocate a marily in the intelligence services and security forces, whose pragmatic foreign policy. main interest lies in preserving the status quo and in develop- sible to a certain degree even in times of ing an even stronger grip on society by ex- For more on the security policy implications of crisis clearly proves that Russia is not Chi- panding state surveillance systems, for ex- the corona crisis, see CSS core theme page. na. Putin’s absence has prompted multiple ample, in order to be able to nip any voices to make themselves heard, which is agitation by the opposition in the bud. unusual for Russia and has shown that Russia’s political elites are more fragment- How the situation develops further not Jeronim Perović is professor at the University of ed than was commonly assumed. However, only depends on these internal factors, but Zurich and Director of the Center for Eastern the actual interests and position of power also on the reaction in the West – especial- European Studies (CEES).

CSS Analyses in Security Policy is published by the Center for Security Most recent editions: Studies (CSS) at ETH Zurich. The CSS is a center of competence for Swiss and Artificial Intelligence for Cybersecurity No. 265 international security policy. Each month, two analyses are published in Digital Technologies in Corona Crisis Management No. 264 German, French, and English. The Western Balkans between the EU, NATO, Russia and China No. 263 The Swiss Candidacy for the UN Security Council No. 262 Editors: Benno Zogg Nuclear Non-Proliferation in a Deadlock No. 261 Language editing: Lisa Watanabe Integrating AI into Civil Protection No. 260 Layout and graphics: Miriam Dahinden-Ganzoni

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