When Vladimir Putin tapped Mikhail Mishustin in January to become prime minister, the little-known tax official was meant to spearhead a push for stimulus spending to help Russia’s president remain in power. Four months later, coronavirus has meant there is no longer the money to spend, nor Mr Mishustin to spend it – the 54-year-old has temporarily resigned his post, reduced to holding meetings from a makeshift office in the state hospital where he is recovering from Covid-19.
The task for his stand-in Andrei Belousov, a longtime economic adviser to Mr Putin, borders on the impossible. Suppress the world’s second-fastest-growing rate of coronavirus infections while also lifting a six-week-long national lockdown that has paralysed the economy. Fail, and further dent public support for the president, whose approval ratings fell last month to a record low in his 20 years in power.
A collapse in oil prices – Russia’s key export – means a $165bn national reserve fund previously earmarked for Mr Putin’s stimulus programme was instead being rapidly used up to plug the resulting hole in the budget. Government officials expect the economy to contract by 6 per cent this year, the budget to swing to a deficit worth 4 per cent of gross domestic product, and unemployment to double.
“We are now actually entering a more difficult period from the point of view of the economy,” Mr Belousov admitted last week. Prime ministerial stand-in Andrei Belousov is an ardent supporter of state-run business
For much of his presidency, Mr Putin has concentrated on foreign, defence and security policy, and left economic and financial matters mainly to his prime minister and a handful of senior aides.
Since 2014, and Russia’s last financial crisis, their orders were to tighten up spending and swell Russia’s reserves. But that shifted in January when Mr Putin announced social spending measures aimed at bolstering his popularity and extending his rule beyond 2024.