The plummeting value of the Russian ruble is the inevitable outcome of the country’s shortsighted policies that created an economy based almost entirely on the oil and gas industry, according to Stephen Jones, a professor of Russian studies at Mount Holyoke College.
In an interview with Economy Watch, Jones said the precipitous decline in oil prices has exposed the shortcomings of the Russian economic model.
“Putin struck it lucky as president of Russia in the 2000s, when the price of oil and gas kept rising and economic growth was around 7 percent a year,” Jones said. “The problem today is that the Russian economy is still suffering from ‘Dutch disease,’ meaning the overdependency on one commodity.”
Russia’s decision to invade Ukraine despite its shaky economic foundation further exacerbated the problem, according to Jones, who described the move as an “enormous drain on their limited financial resources.”
The article went on to describe the fundamental shifts—not just economic, but political and social—that would have to take place to avert an all-out economic crisis in Russia—and possibly bring an end to Putin’s leadership. “He was given credit for the rise in the Russian economy and he could be blamed for its collapse,” Jones said.
Read more about Stephen Jones here.