Page 8 - Russia OUTLOOK 2022

While domestic politics will probably be quiet in 2022, the main danger for investors in 2022 is the growing geopolitical tension between Russia and the west.
In the two-hour December 7 virtual summit between Putin and US president Joe Biden, the Russian leader laid out a set of demands for Nato to commit to “legally binding” guarantees of no further expansion of Nato to the east and a promise that Ukraine and Georgia would never be offered Nato membership, as well as a list of other security arrangements spelled out in a five point list from the Ministry of Foreign Affairs.
bne IntelliNews has reported on this in depth, but briefly Putin is conceding that there will never be good relations between East and West and is proposing a return to the Cold War arrangements of security guarantees that are backed up by the threat of force.
Putin has been complaining about Nato fairly continuously since he took office and in 2008 the Russian Foreign Ministry drew up a draft plan for a new pan-European security deal that included a fair specific framework proposal released by the Russian Foreign Ministry in 2009. But that, and all Putin’s other complaints, have been ignored by the west. In October the build up of Russian forces on Ukraine’s border was designed to force the issue of security talks between East and West onto the international agenda.
And it was successful. A few days after Putin and Biden met a high level meeting was held between Nato members and Russia to get the ball rolling.
However, actually a new security deal, or even getting the West to agree to talks on drawing up a new security deal, will be extremely difficult. Russia will retain the right to ratchet up tensions at will if the Western resolves to negotiate flags. And it will as any concessions to Putin will appear as “appeasement” and be a very hard sell at home.
This means that 2022 could see further bouts of showdowns and military tension, depending on how accommodating Biden chooses to be. And with domestic pressure at home not to pander to Putin, Biden finds himself in a difficult position.
Having said all that, the Russian population is increasingly unhappy with the Kremlin’s increasing aggressive stance, which is undermining Putin’s popularity and limits how tough he can be. State propaganda has overused its powers of mobilisation. Instead of mobilisation, it has created a fear of world war.
While 86% of Russians were happy with the annexation of the Crimea – and remain happy – a Levada Center poll shows that only 25% approve of the military action in Donbas. Russians are uncomfortable with Russian troops in a territory they clearly consider to be Ukrainian.
At the end of 2018, 56% of respondents to a Levada Center survey said there was a significant military threat from other countries. This year, the fear of a world war has increased dramatically, reaching a solid second place in a Levada Center list of the top issues causing Russians to worry. The other fears
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