So after Putin announced his plans to return to the Kremlin, and activists with cellphone cameras documented ballot-stuffing during Duma elections in December, something snapped. Subsequent street protests shattered Putin’s aura of invincibility and his image as a good czar. The ruling United Russia party, which took a drubbing at the polls, may be rebranded or dismantled. Medvedev, seeking to mollify the protesters, is reinstating elections for regional governorships; the incumbents will have every incentive to distance themselves from Moscow.
This treacherous political environment will force Putin to govern with real give and take, something he’s hardly accustomed to. Some in Moscow’s chattering class even suggest that he could be forced from office in the next year or two and that he needs to start grooming a successor who can help him exit with dignity — and with immunity from prosecution. That may be wishful thinking, but Putin is now fighting for his political life.
2. Putin can use Russia’s vast energy resources as a political weapon.
Russia’s oil and gas reserves have made the country fabulously wealthy and a crucial supplier for Europe and other energy markets. When a commercial dispute with Ukraine left hundreds of thousands shivering across Central and Eastern Europe in January 2006 after the Russian energy company Gazprom turned off the tap, many observers warned that energy had become Putin’s latest weapon.
But the Russian economy is the real hostage. In 2011, revenue from oil and gas accounted for about halfthe federal budget, and raw materials made up more than 85 percent of exports. Thanks to a huge trade surplus, enormous currency reserves and an overvalued ruble, Russia’s domestic industries have become uncompetitive against imports — a textbook case of what economists call “Dutch disease.”
Adding to these challenges are changes in the European natural gas market. With European demand depressed and stiff competition from cheaper liquefied natural gas from the Middle East and North Africa, Russia’s share of the E.U. gas market fell from 48 percent in 2001 to 34 percent in 2009. As government spending balloons because of a massive military buildup and Putin’s campaign promises of more robust social programs, Russia’s oil weapon will be increasingly pointed at itself.
3. Putin wants to re-create the Soviet Union.
Putin’s 2005 statement that the collapse of the U.S.S.R. was “the greatest geopolitical catastrophe of the century” — along with Russia’s war with Georgia in 2008 — provoked fears about his designs on Russia’s neighbors. So have his hazy plans for a Eurasian Union consisting of former Soviet republics and the recent launch of a customs union with Kazakhstan and Belarus.