The ruble, Russia’s currency has hit a new low since 2014 and is on a rapid decline. The US dollar is worth just over 80 rubles.
Russia’s economy is highly tied to energy production. They are the second biggest oil producer after Saudi Arabia and have even passed them on several occasions. Russia’s oil companies produce around ten million barrels of crude oil a day.
The decline of their currency is connected to the decreasing price of crude oil. The drop in oil prices can be connected to the US’s increase in energy independence and domestic oil production. Obama worked throughout his presidency to make the US import less energy from other countries. This was one of the preliminary steps to increasing the renewable energy use of the United States. It is hard to rely on other countries to switch to clean energy so proactively making energy changes internally is much more reliable.
The Russian economy has been through many ups and downs, but the Putin administration has stayed strong. Typically, in the recession, the blue collar works experience pay cuts and when the economy slightly improves, their wages stay low. This has had a very strong negative impact on the middle and lower class in Russia.
Several members of the oil industry have speculated that the downturn in the oil industry may force Russia to become more competitive instead of relying on several large importers such as the US. The Asian market is growing, but there are many companies trying to market to them and Russia could not compete with their current prices. Additionally, the government of Russia makes around 50% of their revenue off of the energy sector. Forcing the government off of this money might make it more responsive to the people.
Russia had several large international power demonstrations such as their invasion of Crimea, but they have been fairly absent recently. I think this may be in part due to their steadily decreasing economy. I think that the Russian people may start to reconsider Putin as their leader despite his apparent high approval ratings. I also think that it may signal the start of major reform to the Russian economy as even more people are forced into poverty.
What do you think the future holds for Russia? Do you think the downturn is an important stage in a new country or do you think it will just hurt the lower class even more? Should other countries consider helping or does Russia not deserve the support after the attacks they have lead in Crimea?