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Opinion
June 22, 2018 www.intellinews.com I Page 24
increased cost of living, which combined with a decline in living standards since the 2014 crisis will fuel political discontent.
Russia’s recent improvement on Verisk Maplecroft’s Civil Unrest index, from a high-
risk score of 4.80/10.00 in the forth quarter of 2017 to a medium risk score of 6.13/10.00 in the second quarter of 2018, is driven in part by a sustained fall in inflation. The index assumes that increases in the cost of living make people more likely to engage in protests and other acts of civil disobedience.
The upward pressure on prices will cause the score to deteriorate, significantly if accompanied by an increase in the frequency of protests. As regional protests have become increasingly eco- nomically motivated, this is a likely outcome if the Kremlin can’t keep petrol prices under control.
The higher you climb the harder the fall
That being said, the economic and industrial impacts of the manoeuvre may not be as impor- tant as the political impacts. Siluanov is the fig- ure most associated with the reform, and Putin’s approval is a clear signal of his rising place in Russia’s political hierarchy. As Siluanov’s profile grows, he will increasingly become a target for
those disadvantaged by, or ideologically opposed to, his economic liberalism.
The political transition underway in Putin’s fourth term is also perceived by most of the elite as a zero-sum game, with any rise in status for one player meaning a setback for others. Siluanov’s ascendance will be seen as a “win” for the faction of liberal economists, such as Alexei Kudrin and Elvira Nabiullina, and a ‘loss’ for conservatives and statists.
Siluanov’s rising favour is therefore something of a mixed blessing. It will give him the authority to push through greater economic liberalisation, while also making him a target for intrigue. Equally, the blame for any political fallout from the policy, such as greater civil unrest, will be laid as his door. As former economic development minister Alexei Ulyukayev – currently serving
an eight-year prison sentence – can attest,
the stakes in Russian inter-elite fights can be exceedingly high.
The views and opinions expressed in this article are those of Verisk Maplecroft and do not necessarily reflect those of the wider group of Verisk companies.