A Russian spring is still a long way off

Are we on the verge of a Russian spring? Not likely. Angry citizens have taken to the streets to protest the lack of genuine democracy in their country and the economic opportunities they hope it might bring. But the ability of Russia’s party of power to weather this storm is much stronger than in Hosni Mubarak’s Egypt. Russia’s government holds more than $500bn in hard currency reserves – $120bn of which can be injected quickly into popularity-enhancing social projects. Nor is there the sort of division within Russia’s military or security forces that we saw in Cairo, or the Arab world’s demographic swell of unemployed young men.

The country’s political opposition does not pose much of a threat to the current system. In fact, A Just Russia and the Liberal Democratic party – the parties that ran third and fourth in the December 4 parliamentary elections and captured almost one quarter of the vote – are Kremlin-created. Their leaders may begin to push for a semi-independent legislative agenda, but they will not become a focal point for any co-ordinated challenge to Vladimir Putin’s rule. He will again be elected president in March and take office in May.

Much more likely is a slow erosion of Mr Putin’s longer-term legitimacy. The dissent is real and the protesters have demonstrated some backbone. His pivot back to the presidency leaves them worried that if nothing has changed in Russia’s politics, nothing will change in its economy. An explosion of social media inside the country has made vote-rigging much more visible.

But Mr Putin can still rise to the occasion. Once re-elected, will he undertake real reform, the kind he allowed outgoing president Dmitry Medvedev to promise but not deliver? The return of Alexei Kudrin, a respected former finance minister, would be a hopeful sign. So would an honest effort to tackle Russia’s endemic corruption and to streamline its bloated bureaucracy. Or will Mr Putin simply appease some Russians with increased social spending and bully others with the heavy hand of the state?

The signs are not encouraging. Without a credible opponent, Mr Putin apparently feels little need to make new promises. Since announcing his return to the presidency, he has used speeches and interviews to boast of past accomplishments rather than to offer a vision of the country’s future. But Russians want more than stability; they want progress.

Perhaps worries that turmoil in the eurozone will weigh on trade flows, oil prices and Russia’s immediate future have increased Mr Putin’s aversion to the risks that come with change. But the need for economic modernisation and diversification is becoming more urgent. Social spending and defence now account for 60 per cent of Russia’s budget, and reform of taxes and pensions is fast becoming a priority. Gross domestic product growth next year is forecast at about 4 per cent. That is not bad, but it is not enough to keep pace with more dynamic emerging countries such as China, Brazil or Indonesia. It is also probably not enough to satisfy an increasingly restive electorate.

Mr Putin can still turn this around, but so far he has provided no plan. He will not need one to win the next election. But he will if he is to provide Russians with the change they have begun to demand.

The writer is the president of Eurasia Group, a political risk consultancy, and author of ‘The End of the Free Market’