Putin is Bust So Who Won the Pot?
If Putin is the world's puppet master he's not doing very well. Russia's economy has been in crisis since 2014, with no end in sight. The Kremlin has been in the doldrums for two reasons: the continued decline in oil prices and economic sanctions imposed on Moscow for its incursions into Ukraine.
Trends have worsened rather than gotten better. Initial hopes the Trump administration would cut Russia some slack were dashed. "Enormous amounts of money have flowed in and out of Russia over the past several months as oil prices and U.S. policies turned from favorable to seemingly unfavorable".
Markets began to doubt the certainty that Trump would shift policy on Russia and President Obama in January extended sanctions, set to expire in March, until March 2018. The European Council had already extended its economic sanctions against Russia until July 31.
In March, the oil rally also ended with a plunge to below $48 per barrel, near its lowest price since November, when OPEC struck a deal to reduce production. Driving the cutback was a 400,000 barrels per day increase in U.S. crude oil production since September and leftover excess from OPEC before their cutback agreement.
Putin has been forced to slash his defense budget by 25.5% for 2017. Jane's notes "the reduction represents the largest cut to military expenditure in the country since the early 1990s". This comes as Donald Trump begins a military buildup.
President Trump’s first budget called Thursday for a dramatic shift from the “soft power” diplomacy of the Obama era to a “hard power” military buildup, cutting the State Department by 28 percent in a slashing of foreign aid, boosting Pentagon spending by 10 percent and budgeting more than $4 billion to start construction of a border wall with Mexico. ...
Some of President Obama’s cherished programs, such as federal support for alternative energy and climate change initiatives, are on the chopping block. The EPA is slated for a cut of 31 percent.
Russia is facing a tough Nikki Haley in the UN, something that has left the New York Times baffled. " In recent weeks, Ms. Haley has condemned what she called Russia’s “aggressive actions” in eastern Ukraine, vowed to maintain sanctions over Russia’s annexation of Crimea and, in her Senate confirmation hearing, went as far as saying that Russia was guilty of war crimes in Syria."
Her comments on Russia have sometimes contradicted the more conciliatory language of Mr. Trump, who has made clear his desire to increase cooperation with Russia. Ms. Haley, by contrast, has often echoed the talking points of the previous administration, as well as the concerns of Republicans in Congress who distrust the Kremlin.