The Political and Economic Results of December 2013

Abstract

In December, the Russian authorities made several symbolic gestures designed to sway public opinion both at home and abroad in favor of their policies. Thus, they pardoned Michail Khodorkovsky, Russia’s number one political prisoner, and declared a large-scale amnesty marking the 20th anniversary of the Russian Constitution. The amnesty could be applied to some of the defendants in the so-called Bolotnaya Square Riots case initiated in the aftermath of the Moscow street protests of May 2012. The same conciliatory trend can be detected in Vladimir Putin’s annual Presidential Address to the Federal Assembly. The address did not contain any political ideas (although Putin’s proposal that that the powers of local self-government bodies should be clarified was rather alarming because all the previous clarifications of that kind had inevitably led to curbing the authority of those bodies). On the other hand, the Presidential Address contained a number of proposals concerning economic issues. Some of them were rather radical. Thus, the President promised that companies registered in offshore tax havens would be denied access to government procurement contracts and state guarantees. Also he promised tax holidays to ‘new small businesses working in the manufacturing, social or scientific sectors’, and called for tax breaks and improved investment conditions in Siberia. As far as the Near Abroad is concerned, Russia lavished Ukraine with a bailout package worth at least $20bn, seen as a quid pro quo for the suspension, by Kiev, of signing the Association Agreement with the EU.

Keywords: Russian economy, political sciene

JEL Classification: K0, K1, K4, D73, D74