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Editorial: Russia's problems are world problems

 
Published Dec. 20, 2014

Russian President Vladimir Putin used his marathon end-of-year news conference last week to blame everyone for Russia's problems but the person most responsible: himself. It was a vivid picture of the instability wracking the country — one that doesn't serve Putin, the Russian people or the global community.

Putin uses the annual event to flex his rhetorical muscles and to attempt to keep Russia's superpower status on an even keel with the United States and a resurgent Asia. But he couldn't avoid the elephant in the room, going to ridiculous lengths to deny any connection between his belligerent foreign policy and Russia's political problems and economic free fall.

In less than a year since Moscow annexed the Crimean peninsula from Ukraine, Russia has felt the double pinch from Western economic sanctions and the fast-falling drop in oil prices, a principal export. The United States and Europe have imposed several rounds of sanctions since the annexation of Crimea and the downing of a civilian airliner in July over territory controlled by pro-Russia rebel forces.

But the collapse in oil prices is creating an unprecedented crisis for the Russian leader. Earnings from gas and oil account for two-thirds of Russia's export revenue, and half the national budget. But oil prices are down 40 percent this year, to $60 a barrel. Russia could lose $140 billion this year through oil losses and sanctions. The ruble is tanking, sanctions are squeezing the Russian banks and the country is facing double-digit inflation.

This self-inflicted crisis, though, is no cause for joy. The Russian public is increasingly voicing its discontent over the state of the economy. Putin has doubled down, vowing to his top commanders Friday that Russia will continue to modernize its nuclear forces. The market is still searching for a floor in oil prices, which means Russia soon could face years of recession along with increased domestic instability.

This is a lose-lose for Russia and for the Western powers who need Moscow's help in the fight against global terrorism, civil unrest and natural disasters. The Obama administration should keep the sanctions in place but look for diplomatic openings to reduce the escalation of tensions with Russia. Putin needs to feel ownership of a crisis he made, and the United States needs to maintain the pressure without getting drawn in as the enemy. That can happen if the U.S. continues to send the message that Russia's aggression makes it a pariah on the international stage. It may take time for ordinary Russians to turn that sentiment into a vehicle for change, but history has a way of finding opportunity.