Putin’s Brezhnev Syndrome

PARIS – The winner of Sunday’s legislative election in Russia was a foregone conclusion: United Russia, organized by Vladimir Putin. Likewise, there is no doubt that Putin himself will win the presidential election due in March 2012. But the public enthusiasm that ratified Putin’s rule for a decade has vanished, something demonstrated by the poor performance of his party, United Russia, in the just concluded elections to the Duma.

Unlike Europe, beset by a sovereign-debt crisis, and the United States, whose leaders are wrangling over how to stem the deficit, Russia may look like an oasis of stability and continuity. But that continuity is more reminiscent of the zastoi, or stagnation, of the Brezhnev era.

Eight years of 7% average annual GDP growth during Putin’s previous presidency (2000-2008) allowed Russia to repay its debts, accumulate almost $600 billion in foreign-currency reserves, and join the leading emerging economies. A decade after the 1998 crisis brought Russia to its knees, its leaders boasted that the country could weather the 2008 financial crisis.

Given Russia’s economic fundamentals, Putin’s diminished popularity might appear surprising. The International Monetary Fund’s forecast of 4% growth in 2011 and subsequent years puts Russia well behind China and India, but far ahead of average growth rates in the rich G-7 countries. Moreover, Russia’s budget will be balanced as long as oil prices remain above $110 per barrel.