On this overcast morning in Moscow there is one prevailing feeling about the place: a sense of normality. It is over a week since Prime Minister Vladimir Putin announced his candidacy for next year’s presidential election, but to walk around the city, you would never guess it. There are no mass protests, no banner headlines proclaiming the end of democracy, nothing indeed to let an outsider know that anything of significance has occurred.
In fact, the main element of surprise about Putin’s announcement was the timing. Until this weekend, it was generally anticipated that his candidacy would be confirmed after December’s parliamentary elections. If it is an attempt to bring the timetable forward, it suggests that the Putin’s party, United Russia, is perhaps more concerned about its prospects than has been appreciated outside the party.
Putin is currently more popular than his rival, according to a recent poll from the independent Levada Center. Gazeta.ru, a Russian online newspaper, reported that Putin with 49 per cent approval is 9 points ahead of the incumbent Dmitry Medvedev with 40 per cent. Yet both men have seen their ratings fall sharply this year, a development that Alexei Grazhdankin, Levada’s deputy director, puts down to a mistrust of official pronouncements that the economic crisis is over.
This last point could be crucial to understanding why Putin has seen fit to throw his hat back into the ring after only four years out of the presidency. Growing dissatisfaction with politicians during a period of supposed economic health is very unusual and poses a major problem for the administration.
Unlike other emerging economies Russia has only just caught up with its pre-recession levels of output. Neil Shearing, chief emerging markets economist at Capital Economics, spells out the country’s challenges:
“As things stand, the spending increases contained in the government’s draft budget plan for 2012-14 will push the breakeven oil price (i.e. the price required to balance the budget) to $125 per barrel, up from $40 per barrel five years ago.”
To put this in perspective crude oil is currently trading at just over $80 per barrel—it will be interesting to see whether a sense of normality can still prevail if the money isn’t there to support it.