Fifty billion on the Winter Olympics here, fifteen billion to buy (or rather rent) Ukrainian loyalty there, and pretty soon you’re talking real money. Russia has not been exempt from the recent run on emerging markets, and its middle class is feeling the pinch as the ruble tumbles to new lows. The Washington Post:
A weakening ruble means that food, clothes, mobile phones, pots and pans, and everything else made abroad — products many Russians and especially the middle class rely on — are becoming more expensive. So is travel out of the country, an emotional escape valve for those who feel their lives are circumscribed in Vladimir Putin’s Russia.
It isn’t easy when you have champagne tastes for a superpower foreign policy but a beer budget. Thanks to Western inattention and incompetent policy making, Putin has been able to make the most of his resources. But the fragile Russian economy cannot long bear the weight of Russian nationalist ambitions. Putin’s big problem is keeping the nationalists happy without losing the middle class. And it appears to be a problem that’s difficult to manage and impossible to solve.