Russia Now in the Midst of Its Longest Period of Stagnation Ever, Eidman Says

Paul Goble

            Staunton, July 12 – The Russian economy has been in stagnation for eleven years, the longest such period without economic growth in the history of the country, and a slump that appears likely to continue to for some years to come, according to Rosbalt commentator Sergey Shelin.

            Russians have seen their standard of living fall much more sharply than this at many points in the past, “but such a long period of economic stagnation is something that the country has never seen, not even once,” he continues – and that means Russia is entering into uncharted territory (rosbalt.ru/blogs/2019/07/12/1791925.html).

                While there are disputes about aspects of this situation, Shelin continues, “the fact of economic stagnation is generally recognized including at the top of the Russian political system.”  And he surveys the earlier periods of stagnation both at the end of the tsarist period and in Soviet times. The latter, being closer to Russians’ consciousness, are especially instructive.

            One can describe the first 30 years of Soviet power in various ways, but no one would categorize them as a period of stagnation, Shelin says.  In 1948, the Soviet economy began to expand significantly. At first, its fruits were devoted to the military in the first instance but after the death of Stalin some of them were shared with the population.

            Khrushchev’s experiments interrupted this growth, but after his ouster, economic growth resumed.  “That which it is customary to call the Brezhnev stagnation, from the middle of the 1970s to the middle of the 1980s,” at least a year less than the current Putin one. The standard of living stagnated and at the end actually declined.

            Then came Perestroika and “the transition to the second Russian capitalism” period. Its price was high but “incomparably less than the Lenin-Stalin leap to socialism,” even though by the end of the 1990s, the real incomes of the population had fallen by half.  But after that began “the legendary Putin flourishing,” which lasted from 2000 to 2008.

            Over that nine-year period, disposable incomes increased 2.5 times, a leap comparable to what happened in the 1950s and 1960s,” two periods of rapid growth for which there are no other precedents in Russian history, Shelin says. Memories of that growth are “one of the main causes for the stability of the Putin regime.”

            But because that growth was fueled by the export of oil and gas rather than industrial development and because the Kremlin used it once again to build up its military capacity, a new period of stagnation was almost inevitable. And so it has happened but with a twist as far as the population is concerned.

            Because Russians have suffered so often from economic decline, Shelin points out, many in the population viewed “stagnation Putin-style almost as a good thing, a solution of immemorial Russian problems.” That has meant so far that its length has not become the political problem may have expected it to be.

            The Kremlin has counted on this and even played to it, “but every bluff has its expiration date,” Shelin continues, and today’s record stagnation is no exception. “It may still last for awhile longer, but already people aren’t considering it a good thing any more” and aren’t going to back those they think are responsible for it, however much they did earlier.