In Russia, economic decline isn't translating into dissatisfaction with Putin. Here's why.
- By Nathan GamesterNathan Gamester was until recently the Program Director for the Prosperity Index at the Legatum Institute. His writing has been published in numerous outlets including the Wall Street Journal, Forbes, and the Harvard Business Review., Peter PomerantsevPeter Pomerantsev is a Senior Fellow at the Legatum Institute's Transitions Forum. His writing regularly features in the London Review of Books, the Atlantic, the Financial Times, Foreign Policy and elsewhere, focusing largely, though not exclusively, on 21st century propaganda.
In Russia they call it the “battle between the television and the fridge” — the tension between propaganda-fueled patriotic euphoria and a darkening economic reality. Which of these will matter more to the Russian people? Which will influence their opinion of their government?
First, the case for the fridge. Most of the objective data point to Russia doing badly. Inflation is up. Wages have fallen. Economic growth is not just lower but shrinking. Falling oil prices have hit the country’s economy hard (oil constitutes 50 percent of government revenue and 70 percent of exports). People and businesses are defaulting on loans. The currency has gone to the dogs. Life expectancy is still very low. And the IMF has predicted that Russia could lose up to 9 percent of GDP due to the economic sanctions imposed by the U.S. and EU.
When it comes to how people perceive their country, on the other hand, things are looking positively balmy in Russia. According to Gallup World Polls, confidence in the military is up 13 percent. Approval of the government is up 27 percent. Despite the objective reality, satisfaction with living standards is up 13 percent while confidence in financial institutions is up 6 percent. Put simply, despite living in a country in decline, the Russian people are responding to surveys more positively than they did a year ago. As a result, Russia has surged in the Legatum Institute’s recently released Prosperity Index in 2015 — from 68th to 58th place in just one year. (The Prosperity Index measures overall prosperity as a combination of material wealth and subjective impressions of wellbeing. Both authors are associated with the Legatum Institute.)
And so how can we square the difference between Russia’s objective reality with the optimism of its people? Which is the real Russia? In many respects, they both are. The way people feel about their standard of living is often as important as the reality of their “objective” conditions. If a person is afraid to walk the streets at night, it can be as debilitating to their quality of life as living in a high-crime area even if, in reality, crime rates are low. The perception of a problem (however unfounded) can be as crippling as the reality. In Russia, the opposite is true. Putin’s increasingly muscular approach to foreign policy — and his effective modern-day propaganda machine — diverts Russians’ attention from their deteriorating living standards.
But the wide gulf between perception and reality can only be sustained for so long. In the same year that Russia annexed Crimea, Ukraine overthrew a widely despised government. But the sense of euphoria did not last long. With inflation currently running at more than 50 percent and the economy shrinking, only 28 percent of Ukrainians are satisfied with their standard of living — the eighth lowest such ranking in the world. In Ukraine, it seems, the optimism of the “Revolution of Dignity” could only last so long in the face of economic disaster. Ukraine now ranks 70th on the Prosperity Index, down seven places since last year.
There is, however, another factor worth bearing in mind: the difference not only between reality and perception, but perception and behavior. For all the official public support of the Kremlin, the EBRD has shown that capital outflow from Russia doubled between 2013 and 2014, from $61 to $151.5 billion. That doesn’t sound all too patriotic, after all. A problem with perception polling in authoritarian regimes is it can be hard to tell how honest respondents are being. In a society such as Russia’s, propaganda is not always about indoctrination; it can also be a signal sent to the population to follow a certain code, defining what you should and shouldn’t say in public if you want to stay safe — especially when you’re talking to a pollster.
Unlike his enemies in Kiev, Putin is a master of misdirection and manipulation. The television, it appears, can be more powerful than the fridge. Or to choose a different metaphor: Putin is a toreador using propaganda as his cape to avoid the bull of reality. So far, he’s doing it successfully — though this strategy begs the question of what new patriotic and military victories he will need to keep the bull at bay.
In the Kremlin’s militant propaganda, the great enemy is the United States, which is allegedly controlling both “fascists” in Ukraine and ISIS in the Middle East. In one way, at least, the U.S. is indeed Russia’s great opposite – though not quite in the way the Kremlin argues. If polling in Russia shows high subjective and low objective ratings, then U.S. polls show the reverse — a population that feels depressed even as, objectively, things are going pretty well.
In 2014, U.S. GDP grew at 2.43 percent. US inflation is at 1.62 percent — better than Russia’s 8 percent. U.S. life expectancy is 79 years of age: not great by developed world standards, but better than Russia’s 70. When it comes to subjective criteria, though, the country seems to be in a much worse position. Only 35 percent of Americans say they have confidence in their government, compared to 73 percent of Russians. When questioned, 42 percent of Americans said they had worried a lot in the previous day, compared to 20 percent of Russians. And to top it off, only 40 percent of Americans have confidence in the honesty of elections, compared to 48 percent of Russians. (All data, both for Russia and the United States, is from the 2015 Legatum Prosperity Index.)
In many countries, objective and subjective data track one another: when conditions are good, citizens perceive them to be good (and vice versa). But sometimes, it is the gap between perceptions and reality that tells the most interesting story. Oftentimes this is easily explained. For example, perceptions of corruption may increase in countries that are successfully tackling the problem, as the media covers prosecutions and draws attention to corrupt officials.
In Russia’s case, the gap between perceptions and reality is most likely explained by the sophistication of the Kremlin’s propaganda operation. In the U.S., by contrast, the data reflect that citizens in developed democracies tend to demand a lot from their government. This is why perceptions matter. Economists are taught that demand often begets supply — if people do not (or cannot) demand better government, they won’t get it.
In the photo, a woman watches Russian President Vladimir Putin’s annual press conference at her home in Stavropol on December 18, 2014.
Photo credit: DANIL SEMYONOV/AFP/Getty Images