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Opinion
August 2, 2019 www.intellinews.com I Page 18
drifting towards large population centres and while posing no immediate danger, clearly this is a situation than may deteriorate quickly, as has been seen many times with the extreme weather events of August.
While watching two potentially dangerous events coming into August, there is always the possibility of unexpected good news. For those with an incli- nation towards optimism, the always active rumour mill in Moscow suggests that there may be some announcement with regard to Ukraine in the com- ing weeks. One such rumour is that the Ukrainian sailors, held since the Kerch incident last Novem- ber, may be sent home as an overture to Kyiv now that President Zelenskiy’s party also controls the Rada. That opens the possibility for at least a more pragmatic engagement with Moscow on such is- sues as the gas transit renewal contract, which
is due to end later this year, or on a re-opening of trade and transit routes between the two countries.
The fact that Putin so quickly and emphatically dismissed demands from the Russian parliament to punish Georgia for the recent anti-Russia ac- tions shows that he is now much more interested in resolving, or containing, conflicts than in start- ing new ones. The reason for that is because he does not wish to create another excuse for US Congress to push ahead with ever more danger- ous sanctions and because one of the key foreign policy priorities is to improve relations with the European Union over the next year.
The key to ensuring domestic social and political stability is to deliver improved economic performance over the medium term. The key
to that is progress with the so-called national projects, a $400bn investment programme aimed at boosting and diversifying sustained economic growth and exports and in improving people’s lifestyles. National projects require much greater investment and a lot of that will have to come from foreign investors and private sector Russian investors. Hence the need to avoid any further damaging geopolitical events and to try and minimise the catalysts for sanctions escalation.
Beware the idles of August
As stated, historically, major political events,
both domestic and geopolitical, have not been uncommon in August. The Molotov-Ribbentrop Pact was signed in August 1939, and construction of the Berlin Wall started in August 1961.
Soviet troops entered Prague in August 1968,
and in August 1991 there was an attempted
coup against Mikhail Gorbachev by those
looking to prevent the break-up of the Soviet Union. August 1999 was when Boris Yeltsin promoted a still relatively unknown Vladimir Putin to the post of prime minister. The Russia-Georgia war provided the backdrop to August 2008. History is certainly on the side of the Doomsayers.
As this July draws to a close the economy is showing a stable but unsatisfactory picture. The country’s finances are in good shape but growth is modest across almost all sectors. But a quiet economy has not always been the case in August, with arguably the two biggest macro events in the history of the state initiated in August 1998 and
in August 2014. The former was the default on domestic debt and the collapse of both the ruble and a big portion of the banking system. In 2014 the sectorial sanctions were met with a retaliation that banned the import of food from most Western nations.
August 2014 also saw the start of the collapse of the oil price, which directly pushed the economy into recession and, in combination with sanctions, led to 25% food inflation and some shortages the following winter. On a more positive note, Russia ended almost 19 years of stop-start negotiations and was finally admitted into the World Trade Organisation in August 2012.
Nature has also been very unkind to Russia
in August. In August 2002 widespread fires raged in the peatlands around Moscow and blanketed the city in a toxic haze. August 2013 brought
very destructive flooding to much of Russia’s
Far East, which led to both expensive economic disruption and loss of life. The worst weather- related disruption came in August 2010 when