Putin: Russia just has to tough out economic storm

In his annual press conference, the Russian president set a clear tone over the country's ruble and oil woes: The Russian 'bear' needs to evade the (Western) hunters, and trust only in itself.

Maxim Zmeyev/Reuters
Russian President Vladimir Putin speaks during his annual end-of-year news conference in Moscow Thursday. The ruble edged lower against the dollar on Thursday, with traders saying President Vladimir Putin had offered few concrete measures at his end-of-year news conference to pull Russia out of a crisis.

Russia is like a bear prowling on its own territory, Vladimir Putin told about 1,200 journalists assembled in the Kremlin for his annual marathon press conference Thursday. The bear would prefer to just sit around eating berries and honey, bothering no one and hoping to be left alone.

But, alas, that is not to be, for hunters – the West – will always seek to catch it and chain it up, Mr. Putin said. "As soon as they succeed in doing so, they tear out his fangs and his claws, and then the bear is no longer necessary. He'll become a stuffed animal."

With that folksy metaphor, Putin sought to explain to his huge domestic TV audience that the causes of Russia's current economic plight are rooted in the hostility of outsiders, not any particular Kremlin mistakes. The only way out, he clearly implied, is for the bear to be not quite so nice, to defend his territory, and take steps to outwit the hunters.

It was a classic multi-hour Putin performance. Each year at this time, Russia's extremely well-briefed, uncannily relaxed, and articulate president meets the press, fields dozens of questions, and sets a tone that can sometimes prove a reliable guide to future Kremlin policy. There were no bombshells this year; last time, as he was going out the door after the conference, he casually dropped the news that he would be releasing jailed oil tycoon Mikhail Khodorkovsky.

He did field a couple of tough questions, including one from a Ukrainian journalist who demanded to know how many Russian troops the Kremlin had committed to the war in eastern Ukraine, and what he told the widows of those who were killed. Putin blamed Kiev for launching the conflict, admitted that some Russian "volunteers" may have participated, but otherwise dodged the issue.

Dissident journalist Ksenia Sobchak – who happens to be Putin's goddaughter – was permitted to ask why the pro-Moscow strongman in Chechnya, Ramzan Kadyrov, is being permitted to flout Russia's constitution by imposing collective punishments on the families of accused terrorists. Putin suggested that Mr. Kadyrov would be disciplined. Unfortunately, the Kremlin press conference format does not permit journalists to follow up.

However, concerning Russia's economic woes, Putin did set a clear tone. Like the bear in his tale, Russia needs to tough it out, evade the hunters, and trust only in itself, he said.

Putin insisted that Russia's economic fundamentals are sound, and that the current crisis – "or whatever you want to call it" – has been brought on by outside factors, especially slumping global oil prices, which he said may, or may not, be the result of an anti-Russian conspiracy between Saudi Arabia and the US. The other major external shock battering Russia's currency and putting a harsh credit squeeze on some of its leading corporations is Western-imposed sanctions, which Putin allowed were to blame for about "25-30 percent" of the current economic turmoil.

Hence, Russia needs to hunker down, wait out the sanctions, and hope that global energy prices will rebound. Some measures to stimulate small business and break Russia's dependence on petroleum exports are also in preparation.

"Our economy will come out of this situation," he said. "In a worst-case scenario, I believe that will take a couple of years. A growing world economy will require additional energy resources. However, by that time I have no doubt that we will be able to do a great deal to diversify our economy, because life itself will force us to do it."

Russia's ruble, which began this year trading at just over 30 to the US dollar and briefly careened to just over 80 earlier this week, has stabilized somewhat since the Central Bank jacked up interest rates to a staggering 17 percent in an emergency Monday night meeting. On Thursday, following Putin's presser, the ruble rate was hovering around 61 to the dollar.

Experts say that Putin's aura of optimistic confidence, combined with the apparent pause in the ruble's roller-coaster slide, might succeed in calming the public mood as Russia heads into the 12-day-long official New Year holidays, in which the entire country virtually shuts down.

"It was something like a collective therapy session. Putin is very good at that," says Nikolai Petrov, a professor at Moscow's Higher School of Economics. "He mostly ducked the hard questions, and offered almost no specifics. So, it may have worked as an exercise in mass hypnosis, but not much else."

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