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Tuesday, 30.12.2008
Russia, year in review – this was 2008
Moscow. A new president, but the old one is still in power as Prime Minister. Russia in a five day war with Georgia. The world financial crises rocks the so called 'island of stability'.
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These are probably the three most important events of the past year in Russia. Of course there were also other major stories throughout 2008. The most important ones are summarised below:
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Domestic Politics
After eight years in office, Vladimir Putin clears his office as head of state in the Kremlin. His preferred candidate Dmity Medvedev is being elected president at the predictable elections on the 2nd March. The 43 year old newly elected President immediately installs his predecessor and mentor as Prime Minister, who now enjoys far greater powers than his predecessor.
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At the same time Putin takes over the presidency of the Kremlin supported majority party, United Russia.
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Unlike Putin, who always resisted making changes to the 1993 adopted constitution, Medvedev announced a constitutional change; after the next election the presidential and parliamentary terms will be extended to six years and five years respectively. The changes were implemented with immediate effect.
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International conflicts
After only three months in office Medvedev, as Commander in Chief over the Russian army, has to take the decision to intervene in foreign affairs; the Georgian attack on South Ossetia. On the 8th August Russia responded with a massive counter attack.
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Within days the Georgian troops are forced to retreat from the break away province and Russian troops move deep into central Georgia. At the same time Russia and Abkhazia oust the remaining Tiblisi loyal groups from the Abkhazian territory. This five-day war cost several hundreds of lives on both sides.
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As per the six point peace plan, negotiated by French President Nicholas Sarkozy, Russian troops move out of occupied Georgia but remain in the separatist provinces of South Ossetia and Abkhazia.
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Diplomatic recognition of independence for South Ossetia and Abkhazia is not part of the peace plan which Russia announces on the 26th August regardless.
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The majority of Western countries heavily criticize Russia for its actions. In protest Nato and the EU suspend temporarily their collaboration with Russia.
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Economy
In early 2008 the economic boom is pushing Russia to new found heights. Russian oligarchs are happily purchasing stakes in businesses and invest billions in new projects within Russia and abroad.
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Russia is close to overtaking Germany as the largest car market within Europe. High profits through the export of crude oil and raw material help finance the boom. In spring 2008 the oil price reaches astronomical heights with $150 per barrel.
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At this stage nothing predicts that by the end of the year the price of crude oil and the complete Russian stock market is only worth a quarter of it highest value.
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In autumn the whole economy is in a downward spiral. In view of the early signs of the real estate and financial crises in the US, Russia however, described as an Island of stability by Putin and Medvedev, is hit by the tsunami of the economic crises. Above all, the up to now booming real estate market and car sales collapsed.
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Unemployment, an expression virtually forgotten in Russia, is suddenly known again as many companies are downsizing and are letting people go. Production and the transport industry shrink dramatically, by 20 percent compared to the previous year. Many companies are announcing extended holidays over the New Year break.
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Nevertheless, Russia will still announce an economic growth of above 6 percent for the year 2008.
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The ruble exchange rate, kept stable against the Bivaluta basket of Dollar and Euro by the central bank, has become victim to the economic downturn and cannot be supported any longer. In November depreciation is taking place and by December is gaining pace. By the end of the year the rubel has lost 15 percent of its value and the Euro exchange rate breaks all records.
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Deaths
Twice bereavement is headline news in the Russian media; early August the Nobel Prize in Literature winner and former Soviet dissident Alexander Solzhenitsyn dies at the age of 89 and at the beginning of December the Russian Orthodox Church loses it's patriarch Alexy II,. At the age of 79 and in the final phase of the Soviet Union he assumed church leadership.
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Disasters
Russia was spared any major disasters this year. Two serious accidents however will be remembered for some time to come. In September an Aeroflot North plane crashes on landing, 88 people are killed and in November 20 marines die from gas poisoning on a nuclear submarine on test dive .
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Sports
Football is the sport that attracts most Russian sport fans. First there is the rise of St Petersburg's FC Zenit. First, after an eternity, the Neva team wins the national championship then the unknown International team wins dramatically the UEFA Cup. Finally, Zenit beats Manchester United, the Champion league winners, in the Supercup.
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The Russian national team is also in the limelight at the Euro Cup in Switzerland and Austria. The supposedly outsider plays a new sort of game and reaches the semi final where it is playing Spain for the second time in this tournament. Russia lose and Spain reaches the final to become European champions.
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