This is an example of the analytical insight available on Seerist, a Control Risks company.

Two years on since the full-scale invasion of Ukraine, President Vladimir Putin’s position appears to be largely stable ahead of the presidential election on 15-17 March.  

  • Putin’s victory is all but guaranteed given the tightly controlled political, security, and electoral environment. The likely use of electoral fraud, coercion, and repression is expected to deliver a high turnout and a landslide win for the president. 
  • Within Russia, Putin’s re-election will likely be perceived as less legitimate than previous polls, but his new six-year mandate will add more clarity to what the world can expect from Russia in the coming year. 
  • Russia’s relations with the West and the broader Russian business environment will remain extremely hostile – especially for Western companies. 
  • Post-election implications for the business environment include a further politicisation of the regulatory environment and a growing state takeover of mostly domestic – but also foreign – entities’ assets to strengthen the domestic economy, especially war-time production. 

Election environment 

Despite unprecedented sanctions, Putin is entering the 2024 election having largely stabilised the Russian economy. The war in Ukraine has shifted slightly in Russia’s favour in recent months, and the few remaining oppositionists and independent media outlets within Russia have been silenced. The economy is firmly on a war footing, with war-related fiscal stimulus driving annual growth of 3.6% in 2023, and energy exports continue to flow to alternative markets such as China and India. Russia has been adept at circumventing sanctions – including for its main cash cow: oil and gas exports. Western countries are unlikely to have the intent or capability to entirely sever Russian energy exports from the rest of the world given the disruptive impact such a move would have on global markets. 

No competition 

Authorities will use electoral fraud, coercion, and repression to deliver a high turnout and a landslide win for Putin, who is keen to look stronger than ever after Yevgeny Prigozhin’s lightning speed march on Moscow in June 2023. Opinion polls released in the days leading up to the election on voting intentions gave Putin 81%-82% of the vote. 

This will be the most controlled presidential election since Putin first assumed power in 2000. The list of candidates is unusually short: Putin and three little-known and unpopular male candidates from loyalist parliamentary parties. The Central Election Commission in February barred two anti-war candidates from running, Boris Nadezhdin and Ekaterina Duntsova, in a sign that the Kremlin wants to minimise even unlikely surprises or challenges to Putin’s already certain victory. Meanwhile, the opposition-in-exile is yet to take visible action following the death of Russia’s most prominent oppositionist and government critic, Alexey Navalny, in prison last month.  

It is also worth noting that Putin remains broadly popular among the population. According to the independent Levada Center’s latest opinion poll, 86% of Russians approved of Putin’s work as of February. That figure was 69% in January 2022, a month before the start of the large-scale invasion of Ukraine.  

Polls from Russia should be taken with a grain of salt. Repression and criminalisation of anti-war dissent likely skew the numbers. Frustration with the protracted war in Ukraine and the loss of human lives and economic degradation generated by the conflict has grown, and so has resentment of Putin. Anti-government protests during and after the election are likely, as is some voting for any candidate other than Putin – but these small acts of rebellion will not threaten Putin’s position or elite support for him.   

What next? 

Within Russia, Putin’s re-election is likely to be perceived as less legitimate than previous polls. However, his new six-year mandate will add more clarity to what we should expect from Russia in the near team. The militarisation of the economy and society is likely to be sustained for the next year at least, which is due to the Kremlin’s deployment of propaganda and repression; political apathy among the population; and the help of the country’s sufficient financial resources. During this time Putin is unlikely to face genuine threats to his power. Russian elites are expected to continue lining up behind him in the interest of preserving their wealth and privileged status.  

The coming year will also see Russia’s relations with the West and the broader Russian business environment remain extremely hostile. This hostility will be felt especially by Western companies. Entities with no direct presence in either market will remain exposed to the global ramifications of the war, whether because of fluctuating commodity prices, disrupted supply chains, or a growing compliance burden. G7 and other sanctions regimes are here to stay and will be tightened further, especially regarding their enforcement, as the prospect of a ceasefire – let alone a peace agreement – remains low.  

But Russia will still have plenty of countries to trade with. These trade partners include neutral countries that have not denounced the invasion of Ukraine, as well as explicitly anti-Western states such as Iran and North Korea. The process of decoupling from EU markets – combined with the building of new infrastructure to facilitate trade with countries in the east – will continue.  

Russia is also likely to continue finding ways to get around sanctions by obtaining banned Western technology and parts via third countries, albeit at a reduced scale compared with before the war. 

It is likely that domestic and foreign policy will be broadly sustained, including when it comes to retaining and deepening geopolitical alliances with China, Iran, Venezuela, and others. Putin will likely appoint some fresh faces to the cabinet and other key posts to lend his new term a veneer of freshness, but not so many as to make the elites worry about the possibility of a major rearrangement of the ruling establishment.  

Post-election implications for the business environment include a further politicisation of the regulatory environment and a growing number of state takeovers of mostly domestic, but also foreign, entities’ assets to strengthen the domestic economy and especially war-time production. Such moves will also be undertaken to reward elites' loyalty by handing over control of these assets. The authorities are likely to oversee work to expand the footprint of the state and Kremlin loyalists in the economy in strategic sectors such as oil and gas, defence, transportation, banks, agriculture, and food production.  

A post-election increase of corporate and personal taxes (for high-income households) to help fund record-high military expenditure for the expensive war is also likely, as is another wave of mandatory partial mobilisation of the male population. These tax hikes would be crucial for replenishing fiscal resources increasingly constrained by the decline in oil and gas revenues coupled with high military spending.  Both policies will be highly unpopular, but they will not directly threaten Putin in the short term. 

Beyond 2024 

Russia’s war in Ukraine is highly likely to continue into 2025 and to continue eroding political stability. Although Putin may appear mostly unscathed for now and will tout his re-election as a sign of public support for the war in Ukraine, he is risking political stability in the longer run.  

A major economic crisis, such as a sustained collapse in Russian energy exports or energy prices, major new sanctions, or the loss of Crimea to Ukraine, would likely make Putin’s position more untenable.

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