Better or Worse after the Crisis?

The Economist believes that soon the Russian government will have to pay the piper for all the bullying and stealing of years past – but whether or not this improves relations is by no means guaranteed.

The West may not have much leverage over Russia, but the rift in the relationship is coming at a time when Russia can least afford it. One reason Mr Putin was able to ignore Western opinion on human rights or the worsening business climate was that Russia was swimming in money. The Kremlin never paid the price for destroying the Yukos oil company or revising the terms of produc­tion-sharing agreements with foreign firms. Rising oil prices and a steady flow of cheap credits from foreign banks made Mr Putin feel all but invincible and masked structural problems in the economy.

In 2009 Russia will face a much tougher economic reality. (…)

Russia’s economic growth will become a lot more dependent on foreign investments. The optimistic scenario is that Russia’s economic needs will tame its hostility towards the West and that the political system created by Mr Putin and inherited by Mr Medvedev will become more flexible. The war in Georgia makes this scenario less likely than it would have been a year ago. Instead, the self-sustained logic of the Putin regime suggests that Russia will continue to search for enemies both outside the country and within. This may mean more hostile rhetoric and possibly actions in the former Soviet republics which Russia considers its own sphere of influence.