CounterPunch Exclusives

CounterPunch Exclusives

War, Economic Crisis, and Discontent in Putin’s Russia

As this article was being prepared for publication, the Russian state designated those associated with the website Posle as a “foreign agent.” Russia’s “foreign agent” law is highly repressive, and places the editors at significant risk of criminal prosecution and other threats to their basic civil rights. Russia’s law is a model of what Human Rights Watch has identified as a critical tool in the authoritarian playbook. “The primary target of these laws are civil society and media organizations” whose activities are “aimed at influencing public policy…[and] organizing public debates, events, rallies and demonstrations.” Thus, among other purported sins, the Putin regime has based its decision on Posle’s alleged “promotion” of “LGBT relationships”. This is part of a broader attack on democratic rights internationally. It has its own parallels in the U.S., as the authoritarian creep has been escalated by Trump. Tempest stands in unconditional solidarity with Posle and its editors. We see in Posle fellow “agents”, not of any state, but of a democratic project of international solidarity which is the antidote to a future of unbridled capitalist barbarism. 

Ashley Smith:The U.S. and Israel have expanded their joint genocidal war on Gaza into Lebanon and Iran. They expected a quick victory, but it has turned into yet another disastrous forever war. The Iranian regime has launched asymmetrical warfare; it has struck the region’s oil infrastructure, shut down the Strait of Hormuz, and thereby disrupted the flow not only of oil but also petrochemicals, fertilizers, and helium, which is essential for the manufacture of microchips. While stagflation threatens every corner of the world economy, it appears that Russia has benefited from the war: President Trump has lowered sanctions on Russia oil and increased fossil fuel prices have poured profits into Putin’s coffers. Is this an accurate assessment? What impact is this having on the Russian economy?

Posle: Indeed, in the short term, Russia has benefited from the surge in oil prices and the lifting of sanctions. For example, Russian budget revenues from oil exports in April doubled compared to March. However, these additional revenues are not enough to halt the catastrophic rise in the budget deficit (for instance, the deficit currently stands at 2.5%, exceeding the government’s planned threshold of 1.6% for this year).  This has a  negative, knock-on impact on other government spending and the strength of the rouble.This adds further pressure on the creaky financial system.

Furthermore, almost all of the windfall profits were channeled to oil companies to modernise infrastructure (which has been severely damaged by effective attacks from Ukrainian missiles). It is worth noting that Ukraine’s attacks targeting oil refineries and oil loading terminals have seriously undermined Russia’s ability to export raw materials. In recent months, ports on the Baltic Sea, for instance, have reduced oil shipments by a third.

At the same time, a sustained increase in oil prices will inevitably lead to a decline in global oil consumption, which could seriously damage the Russian economy that is already in recession. Therefore, the ongoing war in Iran and the blockade of the Strait of Hormuz are not in Russia’s economic interests, although they undoubtedly offer it political advantages.

AS: Trump’s war on Iran has further disrupted the so-called rules based order, already discredited by the U.S. and Israel’s genocidal war on Gaza and Russia’s imperialist war on Ukraine. Trump launched the attack on Tehran without consulting or even alerting Washington’s NATO allies. Now that alliance is fraying with Trump increasingly threatening to pull U.S. troops out and abandoning support for Ukraine. As a result, Europe, especially Germany, is rapidly re-arming. Given this reality, what do you believe is the current perspective of the Putin regime regarding the inter-imperial rivalry within Europe, and that between NATO and Russia, and Ukraine’s struggle for self-determination?

Posle: In fact, declining support for Ukraine in the U.S. and America’s further distancing from European security issues due to the war in Iran represent Putin’s main political gain to date. In this sense, it is clear how the interests of Russia and its population (suffering from a falling standard of living and........

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