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article imageOp-Ed: Forget Forbes, Putin is far from the world's most powerful person

By Matthew Turner     Oct 31, 2013 in World
Bratislava - Russian President Vladimir Putin ousted President Obama at the top of Forbes' 2013 list of the "World's Most Powerful People". Putin's true situation, however, is much more fragile.
On Wednesday October 30th, Forbes revealed its 2013 list of the ‘World’s Most Powerful People.’ The big surprise: Vladimir Putin took the number one place, bumping President Barack Obama down to the number two spot.
According to Forbes, the year 2013 has seen Putin solidify his control over the Russian Federation and demonstrate his power on the global stage, in granting asylum to NSA whistle blower Edward Snowden and leading the United States away from a military intervention in Syria. The recent government shutdown, however, seems to have left Obama with little authority in his own country let alone internationally.
While the idea of Putin holding much greater executive power than his American counterpart has gained a strong foothold in the present context, there are several reasons that Forbes’ attention-seeking decision to place Putin first on their list is erroneous.
It’s the oil, stupid
While Putin is often applauded inside and outside of Russia for his role in bringing the country’s economy out of prolonged recession, this economic success is in many ways a mirage. It is true that Russia has experienced remarkable economic growth ever since Putin came to power as Prime Minister in 1999 and then as President in 2000. However, the impressive 7% growth average that the country has maintained from 1998 until the global financial crisis in 2008 is overwhelmingly inflated by Russian oil and gas exports.
When Putin took office, oil prices stood at around $30 dollars a barrel. Today, oil prices have skyrocketed to over $100 a barrel, allowing Russia to make unprecedented returns on the sale of their natural resources. Moreover, Russia’s oil-fueled boost in GDP has rarely translated to better welfare for the majority of its citizens. An excellent New York Times piece describes how public money has been concentrated in big cities such as Moscow and Saint Petersburg while Russia’s rural interior has been left to rot.
Indeed, the returns from Russian oil have mostly lined the pockets of the country’s ruling elite, fostering a new generation of oligarchs. Putin himself has skimmed so much off the top of his country’s dealings that he is now likely the richest man in the world, with an estimated fortune of between $40 and $70 billion.
The problem with a regime that is entirely dependent on its oil sales is that it is not sustainable in the long term. The current price is being maintained artificially high through unregulated speculation and turmoil in the Middle East. The Russian energy sector, and consequently Putin, profit handsomely from both. Such unrealistic prices, however, cannot last forever and, when they fall, so will Putin’s regime.
During Putin’s victorious 2012 presidential campaign, the Russian President made a series of elaborate promises to his electorate. Among these promises is the popular ‘baby bonus’, a payment of up to $8,300 to mothers to help with childcare costs, and a whopping $775 billion revamping of the Russian military by 2022. According to a Citigroup study, the Kremlin will only be able to afford these promises if the price of oil reaches $150 a barrel, a price it has thus far never attained.
Today, Putin finds himself backed into a corner, faced with the increasing pressure to keep his country high on oil by any means necessary. Many fear that this desperate position is already causing the Russian leader to lash out aggressively, displaying the ‘power’ that Forbes readily worships against neighbouring countries. In the last few months alone, Putin has started a trade war with Ukraine when the latter refused to join Russia’s ‘Eurasian Customs Union’ and has revived arms deals with Iran.
In 2003, the United States invaded Iraq in a move that most now recognize was motivated by oil. Now, as the fragility of Putin’s Russia becomes increasingly apparent, one can only hope that the ex-KGB agent does not use the power he does have to further destabilize the geopolitical status quo.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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