For more on these topics, see the Library of Economics and Liberty articles "Russia Fails Once Again: Putin Must Punch Above His Weight", by Anthony de Jasay, February 2, 2015; "For an Ever Closer Union", by Anthony de Jasay, October 3, 2016; and "Russia's Economy: Putin and the KGB State", by Paul Gregory, September 5, 2011.
Vladimir Putin made his first opportunistic foreign policy move in 2014 by annexing the Crimea, which was hardly at all defended by the Ukrainian Army. He then organised an uprising in the mostly Russian speaking population of Eastern Ukraine, the Donbass. The uprising was armed and supported by the Russian army, although its key role was never openly avowed by Moscow. The Ukrainian government in Kiev was manifestly unable to defend Eastern Ukraine and would have been only able to defend Kiev. Vladimir Putin has, however, preferred to leave the remaining Ukrainian state in a precarious independence because its occupation by Russia, restoring the status quo that has existed since 1954, may seem to him to have created too much of a risk coming from United States and Europe.
As part of the Arab Spring that ran from North Africa to the Middle East from 2001 onwards the majority population of Sunni Arabs in Syria has tried to emancipate itself from the minority Shiite government and its Alawite dynasty with Bashar el Assad as its dictator. The Sunni uprising was given an apparently modest military equipment by Saudi Arabia, some French light artillery, and even more modest US equipment which was politely called "command and control" equipment, and impolitely "walkie-talkies". The Syrian government could rely on the Alawite militia, its mainly Shiite army, its helping hand in the Lebanese Hezbollah, and the united front of the Iranian army. Very soon it was also able to count on the Russian air force as well.
By mid-2012, the Sunni uprising had a clear upper hand and the government of Bashar el Assad was near collapse. Some of the suburbs of the Syrian capital of Damascus were in Sunni hands. The government forces attacked them with a nasty kind of nerve gas, with no regard for the civilian population. At this point, President Obama publicly declared that he was considering this as a "red line". Vladimir Putin no doubt understood this declaration as something that he need not take seriously. Both in the Pentagon and the State Department, there was an expectation of some penalty, some military action to punish Bashar el Assad, but as the uncontroversial evidence of nerve gas attacks became available, the White House apparently considered that "red line" as little more than a sign of disapproval. President Obama became a laughing stock among Arabs and perhaps also among Russians, who thought crossing a "red line" that you yourself have drawn deserved more action than speeches at the United Nations.
Vladimir Putin has clearly understood the opportunities that the resigned apathy of President Obama has offered him. The military balance in Syria was therefore gradually tilted back in favour of the Shiite forces and particularly by the increasing offensives of the Russian air force as it bombarded the Sunni occupied areas. Russian forces have understood a new doctrine, according to which cities were most economically subdued, not by bombing housing, but by destroying all the hospitals above everything else. This the Russian air force has done meticulously in many Syrian towns. The latest and most spectacular victim of this economical tragedy was the destruction of practically all medical facilities in Aleppo, which is nearing its end phase right now. Vladimir Putin, clearly understanding the lesson he learnt from what became of the "red line," had nothing much to fear from America when completing the conquest of Syria, or rather a condominium that he will from now on exercise jointly with Iran, maintaining Bashar el Assad at his head. Russia is without any doubt gaining some prestige from terminating this long war, but its tangible advantage seems to be limited to the use of a naval base on the Syrian cost at Latakia, which is hardly of great importance for a navy which is itself of second class value.
A probably more important gain Vladimir Putin is about to reap has really been handed to him by none other than German chancellor Angela Merkel. The Syrian war has uprooted 4.79 million refugees, of which about 3.6 million have currently found some shelter in refugee camps in Lebanon, Jordan, and Turkey. With an overflow above the official data that gave the total number as 1.19 as of September 30, 2016, there were 1.5 million refugees trying to reach shelter and a new life in Europe- the greater part landed in Germany, with the balance in Sweden, Austria, Greece, and Italy. Germany was in no way prepared to accept this influx either morally or materially; a serious effort was made to stand up to the task that was imposed on the German people by its own government, which did not have a previous mandate for doing so. The flood of refugees and the expectation of what may be many more to come has brought serious consequences. It was probably the cause of "Brexit," a serious weakening of the European Union by a referendum in Great Britain whose narrow outcome could hardly be expected if it had not been for the menace of Syrian and other refugee arrivals. There were also populist upheavals in Italy, France, the Netherlands, and Sweden, with a demand to recover national sovereignty that has slipped to Brussels as well as a very serious national movement in the so called Visegrad countries of Poland, Hungary, the Czech Republic, and Slovakia, where they came closer to a wish to follow the English example and reassert their national independence from "ever closer union". Moscow, which has always regarded the European Union as a rival and a menace while it was expanding from 6 to 28 countries has now the perspective of facing individual countries, each of which are smaller than Russia, instead of a European Union three time as large.
When in 1999 he was entrusted with the government of Russia, Vladimir Putin was not relying on any party or political mechanism. Despite his lack of distinction, this ex-KGB officer was chosen via complicated and confidential negotiations among senior army and police officers, administrators, "red directors" of industry, and surviving leaders of the Communist Party, because any more distinguished candidate for the post was excluded by the jealousy of the others. However, Putin was still indebted to this elite and this debt has never failed to influence his policy. At least during his first term and perhaps his second term as President, he tried to work toward the ideal of a modern economy with its industry in private hands under the rule of law while obeying the guidance of the government. He was expecting industrial growth that would emancipate the economy from its dependence on the country's natural resources, especially oil and gas. Industry in private hands and protected by the rule of law, however, did not really satisfy the elite that administered the state and had the power to turn the rule of law in its own interest. The century-old Russian tradition of easy lies did not help the businessmen who tried to defend their property. There was thus the widespread development of what was called "the roof"—that is the defence of a business by a powerful functionary of the state, who protected it from other functionaries who would seek to ruin them via exorbitant taxes and regulations or to force them to sell out to a competitor who was enjoying the protection of his own "roof". Oligarchs would have Putin himself as their "roof". Under the rule of law that was not what it was said to be, Russian industrial development was also not what it was said to be. Except for rocketry and nuclear weapons, the dream of an advanced industrial economy remained as distant as ever. This was and remains the great and fundamental defeat of Vladimir Putin.
The year 2014 brought major changes in recent Russian history. The price of oil fell from over $100 a barrel to about $30 a barrel, and the Russian budget had to move from plenty to austerity, with a considerable drain on the currency reserve. As luck would have it, Russia felt the need to shift from a peaceful to an aggressive foreign policy just when it was financially the least able to do so. The absorption of the Crimea and the organisation of an uprising in the Eastern Ukraine against the government of Kiev, powerfully assisted by the Russian army, were necessary against the danger of all of the Crimea slipping under the influence of the European community. The year also saw the widespread intervention of the Russian air force on behalf of the Syrian government and its Sunni allies, an intervention that has prevented the Sunni uprising from being victorious.
Both in the Ukraine and in Syria, Vladimir Putin succeeded in having his own way and earned considerable prestige abroad. Becoming prestigious abroad made him doubly prestigious at home; there is nothing the Russian people appreciate more than to be admired, and perhaps also to be feared in the world. After all, even Stalin was reluctantly admired by the Russian people because he was the much feared rival of America. Besides being victorious abroad (although his victories were neither great nor particularly fruitful) Vladimir Putin earned the affection of his people by his turn-around at this time from modernism to the old tradition of an Orthodox church and the patriotism of pre-Soviet times.
There is a substantial minority of intellectuals who see Vladimir Putin as someone who has restored the prestige of Russia as a great power. They would be well-advised to reflect on an index number published by the OECD that gives you the rate of poverty in Russia as 11% in 2013 and 15% in 2015.