Russia’s pandemic/political update: seeking points of no return
As the restrictions imposed by the Russian authorities in 2021 to counter the pandemic were moderate, selective, and short-lived, the country’s economic performance turned out to be better than expected. It now looks as though the 2021 GDP growth well exceeded 4.0%. Economic activity looked strong in November despite a week's lockdown at the beginning of the month. Interestingly, the lockdown produced some results. Russia’s daily incidence rate topped 41K people some two months ago but then started declining gradually and fell to 16.3K on January 3. In early January, the daily incidence rate may remain relatively low as the omicron strain has not yet really arrived in Russia. However, upon the return of holidaymakers from countries affected by the omicron variant, the daily incidence rate is likely to start rising soon. The authorities are fully aware of such a possibility, but it is not clear how severe new restrictive measures could be.
Even though last year was not a bad year either for Russia or the global economy, the events that dominated the world of politics globally appeared increasingly more Kafkaesque, therefore elevating risks in 2022 to higher levels. Risks and volatility will be particularly high in Russia’s case as one has to be very skeptical about any success in the forthcoming talks between Russia and the US/NATO. The two parties are thinking in terms of two different narratives and have almost no common interests so far. The US officially declared Russia its adversary, and NATO defined Russia as its main threat in its 2019 strategy. The Western side is talking about Russia’s threat to Ukraine these days, while the Russian side is talking about its own security as it sees corresponding threats in the growing activity of NATO forces close to its borders. The West is ready to continue talking with Russia on various issues but there is a kind of deadlock as Russia does not want ever-lasting talks and threats of sanctions but instead wants legal guarantees of mutual security, according to the country’s Foreign Minister, Sergei Lavrov. Given the diverging narratives, any legally binding agreements look unlikely. Tensions and mutual accusations are likely to keep rising – the two sides will keep seeking points of no return.
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