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Bullish Putin dismisses fears over Russia’s economic blues

President Vladimir Putin said yesterday the worst was over for Russia’s crisis-hit economy as he shrugged off widespread concerns over the impact of the Ukraine crisis in his annual phone-in, AFP reports.  Russians from around the country sent in questions in record numbers with many focused on financial hardships and others worried about ties with war-torn Ukraine.  Putin ruled out a war with Kiev and played down the economic troubles as he sought to portray Western sanctions over the Ukraine crisis as a blessing in disguise.

“In fact, these sanctions only helped the government and the Central Bank,” a bullish Putin said. The Kremlin strongman, who in March marked 15 years since first being  elected president, fielded questions from farmers, grandmothers and children with a confident demeanour and the occasional smile.  Organisers of the four-hour phone-in said the president received some three million questions, although this year’s televised session appeared to lack the razzmatazz of Putin’s past performances.

Predictably, concerns about the spiralling cost of living dominated his 13th Q & A.  “Putin send us some money,” screamed one scrolling message on the television screens. “How is one supposed to live on 10,000 rubles ($199)?” asked another.
— ‘Peak of problems passed’ —
Putin indicated that the worst of the fallout from the Ukraine crisis was over, insisting the ruble exchange rate would have changed irrespective of sanctions.  “The ruble has stabilised and strengthened,” he said. “Experts believe that we have passed the peak of the problems.”  After the shock collapse in the ruble last year, the currency has bounced back to a five-month high as fighting in eastern Ukraine has waned and oil prices have steadied.

The ruble pushed below the psychologically important threshold of 50 rubles per dollar on Wednesday, its most robust level since November.  Putin touted his government’s 2.3 trillion ruble plan to turn around the economy, saying his ministers had performed a “highly professional task”.  He downplayed soaring inflation and capital flight — estimated at more than $100 billion last year — saying it was not “catastrophic”.

However former finance minister Alexei Kudrin, who is believed to have Putin’s ear, challenged the strongman in an apparently choreographed exchange. Russia’s economy risked lagging behind the rest of the world, said Kudrin who was sacked after a dispute over the government’s plan to increase military spending in 2011.  The new model of growth has outlived itself and a new one is nowhere in sight,” he said.

Putin promised last year the economy would bounce back in two years and said on Thursday that the recovery could happen sooner.
He said, however, that Russians should not expect the lifting of Western sanctions anytime soon.  “It’s all about using all of this to our advantage.”  Russia has been under sanctions from the West ever since Moscow annexed Crimea last March and was then accused of supporting militants fighting Kiev forces in eastern Ukraine.

The poor economic outlook presented a challenge for Putin, whose pact with voters has been based on years of economic stability and relative prosperity underpinned by high oil prices.  The crisis has hit Russians hard but has so far failed to affect the  sky-high approval ratings of a leader who many across Russia praise for standing up to the West.  But some analysts have warned of the brewing discontent over growing unemployment and shrinking salaries and pensions, and accused authorities of deliberately downplaying the scope of the problem.

Kremlin critics accused Putin of pulling the wool over people’s eyes.  “How many synonyms are there for ‘bullshitting’ in Russian and are there printable words among them?” political observer Maxim Trudolyubov said on Facebook after the phone-in.
— ‘Coolest guy in the world’ —
On Wednesday, six Russians went on hunger strike in Moscow to draw attention to the plight of dollar-mortgage holders. Tens of thousands of Russians who had taken on lower-interest foreign  currency-denominated mortgages, are now unable to repay the debt because of the weakened ruble.  Putin said holders of foreign-currency mortgages should be helped but not at the expense of those who took out ruble-denominated loans.

Putin ruled out a war with Ukraine but accused Kiev of violating a peace deal with pro-Russian rebels by “cutting off” separatist areas with an economic blockade.  In a rare move the president also admitted that Russia had sought to forcibly impose the Soviet model on Eastern Europe after World War II. “After WWII we tried to impose our model of development on many Eastern European countries and did it by force,” he said. “And there’s nothing good about it.”

“The Americans are acting in a similar way by trying to impose their model around the world,” Putin said. “They will also fail.”  Political analyst Stanislav Belkovsky quipped that during the phone-in Putin addressed just three people: US leader Barack Obama, Germany’s Angela Merkel and himself.  “We’ve seen in front of us an absolute superman and the coolest guy in the world,” he said with heavy irony.

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