The reason why putin regime is suffering economic recession is not only because of low oil prices (look at Norway who also is oil exporting country) and EU & US sanctions on putin regime – problem roots goes much deeper than that. It goes back into 2001 – 2003 when oil prices where booming and Russia economy just started to get on it’s feet from crisis that hit 1998.
Cash from oil was flowing in Russia economy and it kept that way for next 10 years which was a chance for putin regime to make decision what way will Russia develop. One option was to invest in developing: industrial complex, agriculture, science, democracy, free market, free media, civil rights, free elections, fight with corruption – that all would bring to Russia more foreign investment, differentiate economy structure, stabilize social structure, etc. But instead putin regime choose different path: create regime control over media, attack opposition till their leaders jailed, killed, silenced, etc. Court system works for regime, but regarding economy putin regime didn’t invest in: industrial complex, agriculture, science, etc. – because it was easier to earn money now from oil export and buy everything needed as import from EU, US, China etc. So year by year more Russian manufacturing companies closed because could not compete with EU, US, China import. In order to stop unemployment level from rising in Russia – putin regime made different steps, like increased bureaucrats, created different kind of projects that had nothing to do with economic reason. Of course all those projects where created in order to steal more and more Russian nation money that was coming in from oil.
So more cash to elite, more simple jobs to people of Russia and everyone put on blind eye on corruption and economic reason and that could work for 10 years. Because oil export was booming, price of oil was high and everyone get his share of a pie. If something was necessary – it was simply imported. So In result today Russia manufacturing industry can’t work without importing many parts that are produced in EU, US. Now what that means for Russia economy in future? It means that as RUB continues to collapse it’s more and more expensive for manufacturing industry to produce anything as they need to import parts from EU, US but they must pay more and more RUB. In result their products get’s more and more expensive and they loose the market share. So they have to lay off more workers and this problem only will increase.
There is no way out of this. RUB will crash because of low oil prices and because Russia economy structure is not differentiated (as for example Norway has) and linked to oil export. Problem with Russia economy started before putin regime invaded Ukraine. It goes back into 2013. So only way for putin regime to stay in power is to create artificial outside enemy in order to mobilize Russian patriotism so that Russian do not to attack putin regime who makes him self as only savior. This can be done only if putin regime controls main stream media – which is what putin regime does. Putin regime and it’s elite knows that there is no way out of this situation. They know Russia is heading for a collapse. But they have no options to solve this. They know they have been stealing oil money for more than 10 years, they know they have been breaking international law by invading other countries like Georgia and Ukraine. They know they can’t simply leave their positions. Because than they will be hanged. And they know they can’t escape Russia economy collapse.
They know they can’t start full open war with Ukraine or worse with NATO – that would only make Russia collapse faster. They are stuck. And have no way out of this situation. Of course China know that, US knows that, EU knows that. So everyone will take their actions to get more benefit out of this and to protect it’s interests. Time is not on putin regime side.
For those who do understand Russian:
My prediction is that putin regime will collapse in time frame something around October 2015 – June 2016. It will get ugly and bloody.