There are signs that the Kremlin’s current obduracy in the face of the international reaction to its invasion, occupation and partial annexation of Georgian territory has roots in something other than a desire to show the world how big its muscles are. On Friday, Vladimir Putin gave another interview to German television, in which he speculated on the likely economic consequences of Russia’s recognition of South Ossetia and Abkhazia, and its military presence on the ground.
“What, can we not protect the lives of our citizens there? And if we defend our lives, will they take away our sausage (kolbasa – the word also has the connotation of “bread and butter”). What is our choice – between life and sausage? We shall choose life,” Putin exploded.
This response appears to indicate that Putin inclines towards the anti-modernizing Kremlin trend recently alluded to by Pavel Felgenhauer:
…presidentlal adviser Gleb Pavlovsky has said in a radio interview (on Ekho Moskvy) that there is a “party of war” inside the Kremlin – a group of high officials that are pressing for a direct attack on Tbilisi to overthrow the Georgian government. Pavlovsky states the alleged “party of war” wants to use the conflict with Georgia to undermine President Dmitry Medvedev’s plans of modernize Russia, that “they say we must go further than Tbilisi,” apparently indicating possible plans of further military action to subdue other pro-Western Russian neighboring nations like Ukraine.
If Russia continues along the path of international isolation, the economic consequences for the country are likely be catastrophic. In a recently-published article in Grani, former Russian prime minister Mikhail Kasyanov outlines some of the probable results:
In all likelihood, we can expect a decline in the volume of purchases of imports, our dependence on which has grown strongly. in recent years. The risks are growing. Once again, as in the 1990s, there is a flight of capital from Russia. The banking sector will not be able to supply our industry and middle class with the credit they need.
Meanwhile the rate of inflation will not grow less because of these actions. Moreover, I am certan that from January 1 next year, the tariffs for gas, electricity, and transport will once again be increased. The increase in tariffs will automatically affect all other goods in production. As soon as the authorities feel the worsening of economic situation, as it will be necessary to maintain the profits of the state corporations, we will all be told to tighten their belts, and come together, because we now live in a state of cold war. And then we will all be summoned to the trenches.
It is probably safe to assume that the tightening of the belts will apply first and foremost to Russia’s enormous, hard-pressed civilian population, and last of all to its small, affluent political and financial elite.