Russian President Vladimir Putin may insist that western sanctions hurt them more than Russia, but a rift may be opening at the top with his finance ministry sounding ever-more urgent warnings about the direction the Russian economy is taking. It may be the first sign not everyone in Moscow may be happy with his policies.
“Capital inflows to Russia are reduced now, first of all we are talking about credits and investments. The EU and USA put up capital inflow barriers for us everywhere which is costing us about $40 billion a year. This is a huge number, obviously. But if we are looking at the whole capital outflow that we had before, we had around $100 billion so far this year and now it could be $130 billion”,
said Finance Minister Anton Siluanov.
Sanctions have undercut the rouble along with the low oil price, currently contributing $100 million a year less than in 2013 to the state coffers. Russia only recently tabled a new three-year economic plan in which it budgeted oil revenues at 100$ a barrel. Today’s price is closer to 80.
There is even talk of Russia going to OPEC to press for a cut in production to raise prices.
What is clear is that the Russian economy is suffering at the moment, but politics, not economics, appears to be driving most of the Kremlin’s initiatives right now, and it is unclear how much Putin will allow economic realities to blow him off course.