Global Themes /

Predictions of Putin's demise are overplayed: Precedents from EM

  • The Russia-Ukraine War has set Russia on a path to autarky (economic isolation) and conventional military impotence

  • Iran et al. suggest this is not sufficient for regime change; it may reinforce authoritarianism and non-conventional war

  • It makes Russia an even more unpredictable geopolitical actor for its relative foes (US, EU) and allies (India, China)

Predictions of Putin's demise are overplayed: Precedents from EM
Hasnain Malik
Hasnain Malik

Strategy & Head of Equity Research

Tellimer Research
22 November 2022
Published byTellimer Research

The Russian invasion of Ukraine has not gone anything like to plan from the perspective of President Vladimir Putin. Even if Russia holds on to all of the territory annexed, the war has led to a number of negative outcomes:

  • Russia's increasing economic and financial isolation (as a result of sanctions applied by the US, the EU, Japan, the UK, Switzerland, Canada and Australia);

  • The long-term loss of the largest customer (the EU) for its most important product (gas) because, despite the differing levels of dependency on Russian fuel imports among the EU member states, which has delayed the agreement and enforcement of fuel sanctions, there is consensus that Russia is no longer a reliable supplier;

  • The rejuvenation and enlargement of NATO, with a common, clear and immediate security purpose re-established (in sharp contrast to public criticism of the organisation from former US President Donald Trump and French President Emmanuel Macron in recent years), and with Finland and Sweden in the process of joining;

  • The re-armament plans of Germany, which now finds the gas diplomacy policies of previous governments untenable;

  • The medium-term decline of the Russian economy, with recent GDP boosted by the spike in the price of fuel exports, which likely transitions to significantly lower export volumes (as fuel sanctions bite) and/or significantly lower-than-market prices (as discounted sales grow as a share of exports), and with the official currency rate flattered by capital controls;

  • The loss of military personnel and equipment during the war, which is likely not easily replaced, and the loss of technology inputs (eg sanctions reducing access to semiconductors) to build next-generation weapons;

  • The loss of human capital, either because it has been mobilised for the war effort or because it has fled the country in order to evade conscription;

  • Divisions between President Putin and members of his defence forces, particularly as Ukrainian forces have regained territory;

  • The loss of personal popularity for President Putin, an indicator that turned down with a delay, only once territory was ceded and additional troop mobilisation was announced;

  • The unwillingness of China, in whose interests are not a rejuvenated NATO, a weakened Russia and a world more sensitised to any friction around Taiwan, to publicly support Russian invasion;

The only thin silver lining is the diplomatic and economic reaction of India, which has abstained from UN resolutions critical of the initial invasion of Ukraine and subsequent annexation of territory, citing the mantra of self-interest.

This list of woes, however, does not necessarily make regime change within Russia more likely.

The examples of Cuba, Iran, North Korea, Syria and Venezuela suggest that diplomatic isolation, economic sanctions and stress, and losses in the conventional military sphere are not sufficient to dethrone authoritarian elites.

Instead, internally a closing of the ranks (greater authoritarianism), populist invocation of a 'resistance economy' and privileged access to and control of contraband trade and hard currency, can, for some time, reinforce their position. 

President Putin has been leader since 1999. He remains unrivalled for the March 2024 presidential election. The 2020 constitutional reform means Putin is not required to step down in 2024 and can run again in 2030 (he would be 83 years old by the time his term limit expires).

Putin's de facto party, United Russia, controls 72% of seats in the State Duma. 66% is needed for constitutional reform. The next legislative election is due in 2026.

Externally, the inability to project conventional military power likely leads to a shift to greater emphasis on non-conventional conflict: cyberattacks, misinformation, battle via proxies and non-state terror groups, assassination, and, nuclear.

The response is ultimately a closing of the ranks by all external geopolitical players, whether initially foes or allies. The example of the unification of interests, in opposition to Iran, across the Middle East, from Turkey through to Israel, through to Saudi Arabia and the rest of the GCC has taken decades of proxy war and financial crises, may be pertinent.

That long lead in the Middle East may be far shorter given the effect of the threat of secondary US sanctions on the likes of India and China, if they show no signs of reducing their trade with Russia; this remains to be seen.

Putin's popularity turning down as Ukraine War drags on

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