 Welcome to CSIS. My name is Andy Kutchins, and I'm director of the Russia and Eurasia program. And I'm very pleased to welcome to CSIS an old friend and colleague, Dr. Mikhail Dmitriev, the president of New Economic Growth. Dr. Dmitriev has become known of late in Moscow and even referred to by the Moscow Times as Russia's Nostradamus. He doesn't like it when I say that because it puts a lot of pressure on him. But he and his colleagues several years ago wrote a couple of reports in 2011 that on the basis of working with focus groups and also a lot of empirical research, sociological, economic, demographic, and looking at how the social attitudes in Russia are changing and what their implications were for political change and political stability in Russia. And I think it is fair to say that nobody came closer than Dr. Dmitriev and his colleagues to predicting what could possibly happen if there were a sense that the Duma elections of 2011 would be falsified. It's quite remarkable. But Dr. Dmitriev has a long and distinguished history of both research and policy making in Russia. From 2000 to 2004, he was the first deputy minister of economic development and trade and very, very active in beginning to implement what was then known as the GRF program, which he had worked together with German and others to develop before taking that position. He was also first deputy minister of labor and social development from 1997 to 1998, a member of the commission on economic reforms of the government of the Russian Federation in 1994-1985, and a People's Deputy of Russia to the first democratically elected parliament in Russian history. He's also worked in a number of Russia's leading think tanks, the Carnegie Moscow Center, the Institute for Economic Analysis, and the Center of Strategic Research where he served as the president. He's played a major role in designing Russia's public sector reforms, pension, health, education, and administrative reforms. And I can only say that every time I have a discussion with Mikhail Dmitriev, I learn a lot, and I think you will too this afternoon on a very interesting topic of changes in social attitudes in Russia and their political implications. Nisha, welcome to CSIS. Thank you. Thank you, Andrey. Very recently we have completed our new report, which was focused on something which seems to have appalled many observers and Russians themselves. Why did the Russian public opinion and the political situation in Russia was subject to such wild series of fluctuations, which leave an impression of something near to chaos, which is so randomized, that difficult to predict and explain. And on the other hand, the situation in which Russian society finds itself today prompts to somewhat simplistic explanations of what has happened. And the simplistic explanation is something which is reflected in the world values map, which you see on this chart. Basically, that Russia has slide into a sort of value divide with the West, which is almost insurmountable. And this gap is the major reason why Russian society is somewhat stepped away from the mainstream social modernization pattern, which was so promising during the previous decade. In my view, both extreme agnosticism, which suggests that it is almost impossible to explain and predict the current developments in Russia, and this extremely pessimistic oversimplification of a sort of the clash between the Russian and the Western civilizations, both are not the best ways to understand and explain what's happening in Russia. And our recent report attempts to try to more thoroughly scan the data available. And what we did, we did some sequencing of all the information which we have for the period which begins from the year 2000. This is not only the year when Vladimir Putin was first elected President of Russia, but this is also the year which preempted the period of very fast economic growth. And what we discovered is that many dimensions of Russian social dynamics, including social priorities and attitudes, approval of the authorities, protest propensity, and the role of official media, do really change in some sort of synchronization with some fundamental changes in public attitudes. But these changes are not about values. Russian values were somewhat inert. They were actually converging with the values of the advanced economy, but very slowly. It may take a couple more generations to full conversions, which I'm quite confident will happen with time. But what was changing more fast and less predictable were the current economic attitudes and priorities. This attitude change was very closely linked to economic growth and growth of Russian consumption. And these changes in economic priorities of the Russian population somehow coincided with many other political and economic changes. So this sequencing seems to be quite promising, not only in explaining what happened with the Russian society during the last few years, but may also be quite useful in making some scenarios which may help to predict and understand not for the long term, but at least in the medium term for the next couple of years. So my final part of the presentation will be focused on these scenarios, but to really understand why these scenarios seem to be feasible and plausible. I would first try to go along this sequence of change which the Russian society undergone. And this is where it all began in the year 2000. This chart plots the priorities of Russians according to one of the opinion polls of the Publication Union Foundation in 2002. And there were many similar polls during that time which indicated the same set of priorities. These priorities reflect the outcome of the deep and protracted recession of 1990s, when Russians suffered so much that the only emphasis in their expectations was current consumption. Everything else was of much lesser priority, particularly the issues of development such as education, here anything related to problems of culture, science, health and education, only 5% of respondents. Housing 2% of respondents. Even the threat of civil war with regard to the Chechen agenda, which was quite important at that time, it was no longer important at all. Everything was focused on current consumption. And that was the major dimension which changed in the aftermath due to a very simple development. What followed was an unprecedented period of the growth of current consumption. There were many changes in the Russian economy, but nothing changed so fast as current consumption of the Russian population. In just 13 years from 1999 to 1913, Russian household consumption, in real terms, as a component of national accounts, increased two-point style. This is incredible for Russia. It never happened before in the whole history of the country. And as we discovered, it turned to be a sort of defining point in the attitude change and political behavior which followed it. As soon as 2012, we discovered that Russian public priorities had somehow shifted towards a very different set of issues. Here's the chart which reflects our own survey carried out in 2012. Such a distribution of priorities before was observed only among the middle class, which was still a minority of the Russian public. Not a negligible minority, but still a minority. But by 2012, we suddenly discovered that majority of the Russian public expressed as a number one priority, housing and utilities agenda, then health, good governance and education. Current consumption, here is the smallest circle in the lowest part of this diagram, was mentioned only somewhere around the lowest quartile of the whole list of problems. It suddenly stopped to be important. And the reason is clear. Current consumption of Russians by that time has already been nearly saturated. 2013 was the year when Russia's per capita incomes on purchasing power parity achieved a historic ever maximum by comparison to those of the United States. 46%. It was never achieved before. And if we take current consumption in this regard, the gap was even smaller. In fact, in many dimensions of current consumption, it has already neared the levels of advanced economy. For example, the motorization of the large and medium sized cities in Russia. Some of them, particularly the largest ones like Moscow, St. Petersburg and Yekaterinburg, have a larger number of cars per 100 households than Paris, Helsinki or London. By the number of cell phones per 100 households, Russia number number two or three in the world. And as well ahead of the vast majority of the advanced economies too. And there were many other areas including the consumption of expensive electronic gadgets like smartphones, flat screen TVs, computers where Russia was catching up very rapidly. And quite naturally with per capita GDP, 24,000 dollars on purchasing power parity today, this excessive emphasis of current consumption could no longer have delivered any more marginal utility. Basically, you can't just consume more of these smart gadgets or computers if you have already two or three of them in the households as many Russian households do really have. But on the other hand, there was a clear lag behind this progress in those areas like health, education and housing. And of course the rule of law and quality of governance. And when the priorities of Russians began to shift towards those areas of public good, which were under-delivered and under-consumed, what we discovered that the capacity of the economic and social system to deliver them was rather poor by comparison with the growing demand. Here we have two similar surveys which were carried out with support of the Erhard Foundation and the Institute of Sociology in 2003 and 2014. Both surveys were focused on the middle class. And this spreadsheet indicates how large share of the Russian middle class registered any of their achievements in different areas in three years preceding the poll. And as we see from this table, the ability of the middle class to achieve something on improving their education, getting a better job and promotion, starting new business and improving housing, all these possibilities have considerably deteriorated in the three years preceding 2014. Exactly when the priorities shifted towards those issues of human development and self-achievement and expression. And in some areas like starting a new business, getting promotion or, for example, improving education and qualification, this decline was somewhere between two to three times. Very considerable. So when these issues were not at all the priorities for majority of Russians at the break of the millennium, the possibilities to achieve in those areas was much larger than when these issues became a priority. No one that at least generated a lot of tension and frustration. This is by no coincidence that exactly during this period we had a mass wave of new type of political protests, which for the first time erupted in the larger cities like Moscow and St. Petersburg and were focused not on current consumption, incomes and social transfers as the Russian protests before, but were focused mostly on the civic agenda, better governments, reduced corruption, fair elections, better environments and improvement of health and education services. So this was coming hand in hand, very closely all together. And provided that protests didn't help and the ability to achieve improvements in such areas as health, education or housing were not making any further progress during these three years. We've got a sort of climax of disappointment, not during the protests of 2011-2012, but by the end of 2014, exactly before Russia incorporated Crimea and exactly before this dramatic turning point in the public opinion. By the end of 2015, both the survey data and here we have various charts which reflect this shift by the end of 2014. There was a Levada sensor pulse to slide those charts which indicate that by 2015 social sentiments have deteriorated to record low, approval of authorities declined, support for the centralized political system has declined, support for Vladimir Putin, at least according to Levada data, was reaching the lowest points in the previous three years. And the respondents were somehow losing, almost completely losing faith in the ability of Russia to develop. It was a very gloomy pessimistic period. Our own qualitative survey was carried out exactly at that time in December 2013 and after this, the data collection, we even decided not to publish it because the shift in public opinion was so radical that we thought we need to verify the data and we were planning for a more comprehensive quantitative study in spring of 2014. But in spring of 2014 this confirmation study was no longer sensible because the public opinion has already switched towards a completely different agenda. And what we feel that without this very gloomy, most, I would say, pessimistic point in the history of public attitude change in Russia in the end of 2014, the extreme overshooting of the public opinion which happened around the incorporation of Crimea was accompanied by the boost to record high of approval of Vladimir Putin political system, consolidation of the society around foreign policy agenda and enormous, incredible increase in the influence of the official media. This overshooting would not have been possible if not for this particularly gloomy period which preceded the incorporation of Crimea in 2014. The peculiar feature of this period was that public frustration began to be redirected towards some specific subjects at home. We suddenly discovered both in our data and this is the divided data which is pretty consistent with what we discovered from our own service was that suddenly an aggression towards ethnic migrants increased quite dramatically. And there were two particular social categories to which the aggression of respondents was redirected at that period. One were ethnic migrants and the second were public officials, not the top of them, not Vladimir Putin himself, but just rank and file civil servants whom the respondents were blaming for many of the troubles which were blocking in their view the sustainable progress in countries economic and social development. And then suddenly we had this sudden swing of public opinion when Russia carried out Olympic Games which were considered as a great success and a huge reputational benefit for Russia. At least the Russian public considered it that way, that Russia was really a big success. Russian team was unprecedentedly effective and over performing throughout the whole history of Winter Olympics and the majority of the public was very proud and then suddenly just less than a month from this event Russia managed to incorporate Crimea and at that time it happened rather smoothly without any large-scale military confrontation it was an easy event which triggered a lot of symbolic resonance in the public opinion. Basically the Russians, this is the date from September the same year it indicates which were the major sources of approval of the Russian government from the majority of the public opinion. We see that the public was particularly appreciative at that time on the achievements of the government in the foreign policy area. So lack of progress at home with all the development agenda with the economic growth with social environment and effective governance suddenly was compensated by a flow of achievements outside in foreign policy. The perception of Russia as a proven world power which prevailed at that time in the Russian consciousness was associated with compensating achievements outside the country which somehow distracted public concerns at home and this is why there was so much overshooting. Public pessimism has found a sort of rewarding area where they found a lot of opportunities for countries self-esteem and self-assertiveness and for some time it really was boosting public opinion in a very optimistic way. But this period was quite short historical. What happened next was that in the second half of 2014 the negative side of foreign policy developments began to show up. Economic sanctions, decline of oil prices, and the beginning of economic crisis particularly a deep rubble currency devaluation strongly affected the state of public mind and majority of Russians at that time reassessed their attitude towards foreign policy. It was no longer considered as a source of successful achievements. It was reconsidered more as a source of existential threats, the source of potential war, conflict and economic crisis. And at that time the issue of foreign policy and Ukrainian conflict has already become part of new national ideology. So because of that the public opinion in the polls was somehow self-sensitive. People were inclined to give on those issues sort of normative answers not because they were afraid to be suppressed by the officials. This was not right and we saw that from our own sociological data as well but because they thought it was morally improper to give different answers. This is why to somehow measure more accurately how the economic crisis and adverse developments around international conflict affected Russian public opinion we used psychological methods, standard projective tests which we applied to the public to test the attitude, the perception of the effectiveness of the foreign policy. What we did is that was in December 2014. Waxed our respondents to associate Russia and the president of Russia with any animals of their choice. And we asked them to do this for two specific periods of time, the beginning of the year and the end of the year. What we discovered was that relative informal statute of the animal in the animal kingdom has declined by majority of respondents. Animals were bigger and stronger in the beginning of the year but they were smaller and weaker in the end of the year. And two thirds of respondents really associated Russia with weaker animals in the end of the year. We must remember that by that time rubble divided by almost 50%. And that was a shocking event. People were quite frustrated. Focus of public opinion was shifted towards economic problems at home and basically this on a subconscious level was reflected and associated in the assessment of Russia's might as a great international power. When we used another proxy, when we measured the weight of each particular animal on Wikipedia and calculated average wage of an animal in the beginning of the year and in the end of the year we received this chart. Actually the decline in the average wage almost neatly coincided with currency devaluation from January 10 to December 10 that year which really indicates how closely the economic difficulties of Russia were translated into perception of the foreign policy and ability of the country to achieve as a great power at the international arena. And this sort of disappointing outcome was accompanied by growing frustration. But this time these were not any social groups at home which became the focus of this aggression. The aggression switched towards outside. And here's the chart from Levada data which indicates attitudes of Russians towards the United States. Just within nine months between January 14 and September 14 negative share of Russians which indicated negative attitude towards the United States jumped more than four times from relatively small 18% to 82% which was record breaking for the whole history of observations. And to some extent the West became a sort of lightning rod which refocused on itself in aggression and dissatisfaction with an ability of achievement not just at home but also in the foreign policy which has become already clear by the end of 2014. That was not the only development because another important development in the attitude change which closely correlated with political behavior was that economic crisis and growing foreign threats as they were perceived by majority of Russians in that period they have crowded out completely the development agenda from the public consciousness. Here we see the public opinion foundation questionnaires which were pulled from September 2014 to January 2015 several times and we see that the agenda which was gaining in importance was consisting of just two components the issues of economic crisis and the issues of foreign policy threats. Everything else particularly the development issues were coming down quite dramatically for example the issues of health and education were among the highest priorities very recently in September 2014 but by January 2014 they were entirely crowded out by the foreign policy crisis the threats of war and the economic agenda. And these concerns all other issues related with development roads, efficient governments, health, alcoholism, drug addiction, culture, moral effects everything was going down to low single digit figures. Basically here is a sort of comparative chart which gives an idea how Russian public opinion has made a sort of U-turn during the last 15 years. We started from the chart which I have already shown at the beginning the priorities of Russians in 2002 and the chart at the right side are the priorities of Russians which were revealed in the same type of questionnaire by the public opinion foundation which type of questions the Russians were prepared to ask to Vladimir Putin during his recent direct line which took place on April 16 this year and we see that these charts are in a way quite identical number one priority in both of them are current consumption because of the crisis current consumption declined and it crowded out all the rest of the agenda even the problems of foreign affairs are no longer so important at least according to this poll. The health education once again they are in low single digits 3% are concerned with health education and housing this more complicated advanced development agenda is not important until there is a recession and until the issue of declining income will not have been resolved but the difference perhaps is the lowest column in the left chart the lowest column it's quite big 26% indicates no answer or irrelevant answer but the meaning of the same column in the right chart is very different and we must notice that this is the largest column in the chart 46% what happened with that column in April 2016 was that it reflects the number of Russians which were not interested to ask questions to Vladimir Putin and the public opinion foundation specifically mentioned that one of the most widespread reasons why Russians were reluctant to ask questions as they themselves explained was that they considered Putin's direct line as a sort of window dressing the event which doesn't give real answers to the most important problems which are of public concern today so people were quite skeptical and this skepticism was not observed in 2002 that's perhaps the major difference between the two charts which we see in this table all these changes were somehow synchronous with the changes in the protest behavior and here are the main findings from the protest data which we can find what was happening is that Russia during the last 25 years experienced several big waves of protest activity but until 2011 these waves of protest activity were very similar to what was happening in other medium income countries with more or less non-democratic political regimes these were economic protests scattered outside the capital with almost exceptionally economic demand wage areas, higher wages, lower inflation, lower utility tariffs, higher social benefits that's it, not about politics, not about human development, not about environment, not about anything else and the prevalent repertoire of protests were somewhat self-damaging forms of protest like hunger strikes, strikes or road blockades what happened recently when the public priorities shifted towards the development agenda from survival and current consumption was that we had an outbreak of very different type of protests in 2011-2012 these were the protests which were centralized in the capital in Moscow or at least in major, larger metropolitan areas in cities like St. Petersburg, Katerinburg, Konizhny Novgorod they were the protests which were focused not on economic agenda but on political and civic problems like good governance, fair elections or environment and in the protest repertoire the demonstrations dominated over any other type of protests this pattern is pretty similar to the type of protest activity which is typical to advanced democracies this is not our own survey, this is the paper series of research which was carried out by Graham Robertson during 2010-2012 he worked with pretty comprehensive databases on protests and these are his conclusions and we see that the transition to a more modernized pattern of protest behavior in Russia coincided with a shift towards priorities of development from current consumption and priorities of survival what was also particularly interesting that very recently in the end of 2014 we discovered that when the priorities of Russians detached again from the development agenda and the maiden U-turn towards more traditionalist agenda of survival and current consumption Russians re-evaluated retrospectively their attitude towards the protests of 2011-2012 towards the modernized wave of protests typical to advanced democracies development agenda was no longer a priority and majority of Russians turned their attitude to this wave of protests into a negative we were quite surprised by that but when we mapped this with the attitude change it was quite understandable, development priorities were no longer an agenda and the type of protest which was focused mainly on human development and modernization was no longer relevant and majority of Russians were now associating the protests in Moscow which took place during the election period of 2011-2012 with the Ukrainian revolution on Maidan in early 2014 they associated this protest with a sort of pretty politically disruptive event which caused huge economic problems for the country actually generated a very deep economic recession was disruptive in political terms and eventually brought the country to the edge of territorial disintegration so now Russians associate this completely different type of protest technically it is hard to associate the protests of 2011-2012 with Ukrainian Maidan because Russian protests were nonviolent and they pursued pretty different agenda from what happened in Maidan but in mass conscience they are associated and the general attitude turned to the negative and still does it mean that Russians are no longer going to protest? Not at all economic sentiments because of the crisis has gone down to record low here are different measures of economic sentiments of Russians one to the left is the chat of Frostat and another is the index of financial sentiments by Sberbank both are very low and because everything is focused on economic performance the major motivation for protest which stands still very high this is the date of October 2014 are the protests on economic reasons the protests which were typical for Russian society in late 1990s and immediately in the aftermath of 2008-2009 economic crisis we had similar wave of protests in 2010 22,000 protest events in just two months May and June 2010 so now once again Russian society is focused on traditional type of economic protests not typical to advanced democratic societies but rather typical to medium income non-democratic economies and all other reasons for protests stand very low clearly propensity for economic protests is associated with economic sentiments if you look at the right chat at the extreme end of the lines in the right chat we see the dense green line which is going very very low these are the financial sentiments of Moscovites Moscov by February this year was the most strongly negatively affected by the crisis in terms of economic perceptions and this is by no accident that's Levada opinion polls carried out in February indicated that protest intentions in Moscov were much higher than in any other major type of settlements across Russian Federation economic sentiments were down and protest intentions were also rising when Russia may be hit by a new wave of economic protests however there is usually a lag we are still at the lowest point of economic recession but from our past experience for example from the experience of 1990s and from the previous crisis of 2008-2009 we know that usually the protests envelope by the end of recession then when economy already begins to exit from the recession enters the recovery period and then economic protests envelope so it's a little bit too early to expect immediate wave of economic protests in Russia but still they may quite possibly happen later not before the autumn of this year but maybe in the end of the year or in spring of 2016 how all this affected the dynamics of political ratings the approval ratings of the Russian president until very recently all the evidence collected by Daniel Trisman on the basis of Levadas and opinion polls and here is pretty similar evidence from the FCM servers plotted by the GP Morgan analysts they indicate all the same that approval ratings of the Russian presidents are closely linked to economic sentiments of Russians as soon as economic sentiments declined approval ratings of the presidents usually go down as well historically in the past there was not a single period when approval ratings of the president did not decline after the economic sentiments considerably declined here we see that during 2009 this happened with a lag according to FCM survey economic sentiments went down rapidly this is the thin black line going down in 2009 and the approval ratings of the president were declining somewhat slowly but in three years the lines came together once again to a standard trend level which means that approval ratings of Russian presidents did eventually adjust to economic sentiments but if we look at the extreme right part of the scale here is somewhere around 2015 we shall discover that for the first time we have some sort of departure from this trend that is economic sentiments are already very very low this is a measure it doesn't show too dramatic decline but according to all other measures the decline is very deep compatible to what happened in 2009 but the approval ratings of Vladimir Putin did not decline on the contrary by March this year and he is one of the measures of electoral rating of Vladimir Putin by public opinion foundation they reached historic maximum ever 75% electoral rating, approval ratings over 80% this can no longer be explained by economic sentiments and the reason why it happened we see with the overshooting of the public opinion which happened because of international crisis we actually discovered that defensive patriotism was already quite important in terms of defining some sort of damage proof ceiling for the presidential approval in 2013 we carried out a number of psychological tests which indicated that Russians were very serious about associating Vladimir Putin with a leader who is capable of defending country from the foreign threats and this was very important in defining how many Russians do really approve the president but at that time no foreign threat was considered as activated this defensive patriotism attitude was still in a latent form but during 2014 foreign threats became real at least as they were perceived by majority of Russians so the defensive patriotism factor was converted into an activated form and this is the main reason now of you which sustains approval ratings of the president and record high level in spite of declining economic sentiments and before we are turning to trying to formulate possible medium term scenarios of political and social change in Russia I would like to make a few comments on the role of official media as I have already mentioned official media has suddenly surprised everyone in 2014 by how much influence it suddenly obtained up to 95% of Russians were responding in the polls that were exceptionally receiving information about the Ukrainian international conflict which is associated with Ukraine through the major official television channels this is particularly striking because just couple of months before in the end of 2015 opinion polls indicated that the influence of official television channels was standing at record low basically the balance of individuals who trust and mistrust official TV was only 1% only 1% more trusted official TV than mistrusted it if we take for example news websites FM radio or printed media which was much more independent and less affected by the official ideological control the approval ratings or trust ratings of this channel were much higher the balance of trust for example for the websites printed media and FM stations were right between 14% to 20% much much more than the official TV channel and suddenly they became just a few months later they become much less trusted than the official TV this overshooting could only have happened because the messages which the official propaganda was channeled during 2014 resonated very naturally with the prevalent public attitudes public attitudes switched to foreign policy agenda it was initially interpreted as in terms of enormous achievements of Russia which compensated for the lack of achievements at home and the official media very skilfully resonated to this public attitude and this explanation now of you seems to be quite convincing if we plot the periods of declining and increasing influence of official media retrospectively we actually had a sort of roller coaster game roller coaster ride of official media influence during the past 15 years of Russian history and if we take the periods when the influence of the media stood very low these were the periods when the media was trying to influence public opinion against the tide, against the direction of the tide against the fundamental change, direction of change of the public opinion which was generated by some basic social and economic factors for example one of the striking periods was the privilege monetization in 2005 when the government attempted with one strike to abolish the traditional Soviet social privileges for the vulnerable groups which were inherited from the Soviet social security system this proved to be so that unpopular that any efforts of the media were completely rare because the survivor status of the population run completely against this type of reforms and the media was entirely helpless, presidential ratings went down there was a wave of public protests, authorities were pretty concerned nobody listened to official media the same happened by the end of 2013 at the peak of public disappointment with development agenda official TV channels proved to be completely helpless and were losing influence very rapidly but on the other hand when their impact coincided with fundamental change for example when Dmitry Medvedev in 2007 launched priority national projects which were the topics of these priority national projects which were health, education and housing in five years from that health education and housing came to the top of the priority agenda of majority of Russians not because of the official propaganda or official policy priorities because these official propaganda and priorities nicely coincide with fundamental vector of change of the public opinion and in 2014 it happened the same way the excessive strength of the official media which was appalling simply became possible only because it very naturally resonated with the fundamental attitude change of the Russian public at the eve of Ukrainian crisis and because of growing foreign threats and official media is still trying to ride this wave, to serve this wave in the direction of growing anxiety with the foreign threats and aggression towards the West as the population perceived the West as an adversary but what may happen if for example the conflict in Ukraine is diffused that there is a sort of peaceful settlement tension around Ukraine goes down and the priorities are fully focused on the current economic recession most likely the support towards all of official media and presidential ratings which stems from the foreign policy agenda will go down and then negative economic sentiments will work their way the influence of media in that case will become to diminish as it happened during the monetization reform or during 2014 simply because the media will try to run against the mainstream direction of the wave it will try to change the fundamental vector of the public opinion and it was never successful in doing that so if we turn to the medium term scenarios I'm strongly skeptical that we can make confident assumptions of what can happen in Russia for longer than a couple of years this is our focusing horizon for the moment but in this relatively short to medium term the major switching factor which can affect political and social scenarios in Russia is the Ukrainian conflict if the Ukrainian conflict is diffused it is very likely that public opinion in Russia will pretty soon shift once again towards the mainstream development agenda why will it happen? because Ukrainian conflict at the moment drags down Russian economy which creates an atmosphere of uncertainty for the business and economic sanctions also work quite negatively in terms of economic performance so if the sanctions are lifted and the anxiety with regard to the foreign policy uncertainty comes down most likely exit from the recession will be rather fast and as soon as economic growth resumes excessive focus on current consumption and current economic survival will disappear with the current per capita incomes of 20 per capita GDP of $24,000 per person in Russia it's impossible to get focused too much and for too long on current consumption anymore once again priorities which switch to a more broad and more complex development agenda health education, effective governments, rule of law, housing and so on and the government will be confronted once again with the challenges of delivery on these issues this also means that the approval ratings of the president are likely to go down first because of very low economic sentiments and later on possibly because of the disappointment with the delivery on human development priorities but what may happen next will strongly depend on the ability of the government to refocus their own agenda on the development priorities whether or not the government will be able to come up with a credible development agenda which will seem to be credible to the majority of the public and we don't know if this will happen or not and that will define the public environment around presidential elections of 2018 so we don't know what may happen still the worst scenario is a sort of modernization and middle-income trap in which Russia may find itself if the Ukrainian conflict is protracted in a sort of hot form without long-term lasting peaceful settlement in that case Russian society may easily slide into a sort of visual circle of international conflict combined with economic underperformance they will come hand in hand together and international threats and intense perception of international threats will feed the isolationist attitudes of the public will block trade and cooperation with the advanced economies and also complicate technological transfer public sentiments will stay focused and home on survival without development agenda and basically the society for a sustainable period of time will remain quite disinterested in development and modernization most likely that will mean that in spite of relatively high approval ratings of the president which may be possible in this environment because of foreign threats remaining strong influence of the official media which will be sustained because the perception of the foreign threats will be a dominant factor in the public opinion still we shall have mounting longer-term problems and longer-term problems will be a conflict fatigue people will simply get tired of intense international conflicts and foreign threats and with time they will be more and more concerned with the economic underperformance and these are the longer-term challenges of this scenario it may be tempting to sustain the intensity of foreign conflict in the short term because it really boosts approval ratings of the president and helps to sustain the influence of the official media but in the longer run this will gradually erode and will not working anymore so these are the potential scenarios still I repeat again we cannot make any reliable predictions for the longer horizon this is only about a couple of years ahead no more because indeed Russian society is highly volatile it is in the state of transition and this transition can generate a lot of unpredictable swings thank you Misha that's a remarkably insightful and comprehensive presentation let me take the prerogative of the chair and ask you a couple of questions because it seems to me that we are very close to an inflection point which could lead Russia into one of the two scenarios that you just outlined or perhaps even a more dark scenario than you outlined and by that I mean that the situation today on the ground militarily in Ukraine the question is to whether the Minsk-2 ceasefire agreement will hold and I think that if there were an attack on a clear offensive on Badi Opel by the insurgents or another large city but Badi Opel seems to be the most likely candidate on the Black Sea then that would be interpreted by the West as a breakdown of the Minsk-2 ceasefire and likely tougher sanctions, economic sanctions both by the United States and the Europeans although the Europeans would be somewhat more reluctant and probably likely also the decision on the part of Washington somewhat reluctantly by the Obama administration for sure to start sending lethal defensive weapons to Kiev and my sense is that this would send Russia into the second darker scenario with a longer economic downturn, a longer period of conflict with the West, etc. whereas if the ceasefire agreement manages to hold then there is certainly greater possibility that there could be a de-escalation of the conflict and the more positive scenario that you outlined which one do you think is more likely right now and secondly what would be your advice since we're here in Washington to the policy community, specifically the Obama administration about how to, is there a way that we can somehow influence the outcome to the more positive first scenario as opposed to the second what would be your counsel to policymakers here? Well with regards to the likelihood of the outcome of various outcomes of Ukrainian conflict basically the problem is complicated that no one is in control and the conflict may escalate by a sequence of events in which many sides can be engaged and many sides may contribute in different ways for example there may be some sort of escalation of hostilities in Mariupol which may be accompanied by sending the lethal weapons to Ukraine by United States this will in its turn serve as another boost to escalate the conflict and it will be a sort of self-perpetuating circle of escalation and nobody alone could have been blamed for this outcome because there are many parties and each has a stake and each has an influence in the process so I wouldn't be brave enough to say which probability is higher sustainable peaceful settlement and that means two ceasefire holds or escalation of hostilities in Mariupol both outcomes still remain possible and because the situation is so unpredictable this is the major switching factor between scenarios this is the factor on the outcome of which other elements of Russia's social and political development depend very closely and what the West can do in my view it's important to avoid a sort of considering Russia as an adversary any shift I would say any shift in the attitudes towards Russia as basically the sort of threats would be only contributing to the invigorating of forces inside Russia which isolationist and anti-Western and in this regard it will help to close the counter-modernization trap in which Russia might find itself as a result of Ukrainian crisis so in my view the attitude of the West needs to be highly balanced it should really always keep in mind that Russia society is not lost for economic and social modernization and that in the end there is a high probability of continued convergence economic and social convergence of Russia with the advanced economies they're already considerable wealth accumulated by Russians and relatively advanced state current state of Russian society prompts the continuity of modernization and convergence okay we have some time for questions and discussion please identify yourself for the Dr. Dmitriev and those that are watching our video we have yes right here then Alex say Rick my name is Richard Burt consumption fulfilling consumption needs on the one hand and broader longer-term developmental needs on the other and the different constituencies maybe for those attitudes my only concern here is in terms of your discussion of the last two options because I'm not sure that they're equivalent in the sense of I understand the case you make or the likely implications of a worsening of the situation and escalation and what might flow from that but your first option isn't actually an alternative which would be an overall settlement on the whole question of Ukraine because that really isn't being discussed or on the table now we've talked you and Andrew talked about the Minsk-2 Accords but that's not a settlement that's simply trying to put in case put in place a kind of stable ceasefire for the short term it doesn't address the bigger questions of where Ukraine fits into Europe whether Ukraine is going to migrate into the western orbit whether it will ever become a member of NATO and some of the broader issues that the Russian side has raised for example in the past about some maybe new security framework or structure sorry my phone's just ringing right now how embarrassing but so given that fact isn't there a middle option that's the most likely which analysts are talking about now which is a frozen conflict where there's neither a de-escalation on the one hand but there's neither a settlement on the other and that the Russian government decides that it wants to keep the pot boiling not too much but enough to keep the Ukrainian side off balance to make it impossible for the Ukrainians to carry out kind of deep reaching economic reforms and other reforms they need to do at home it's going to block them from moving closer to Europe and give in a sense the Russian side a kind of permanent voice and maybe even a veto in important questions taken in Kiev so you've got this kind of continuing migraine headache in Europe that continues to keep everyone a little bit off balance intense and concerned and in that case how does that affect Russian opinion over time? Would you like me to ask a question? That's quite a possible outcome but from the point of view of domestic policy perspective this outcome is still likely to detach public attention from foreign policy because public attention today is drawn to foreign policy simply because of intensity of existential threat which means a threat of war if the conflict is outfrozing this means that public is likely to refocus on a pretty hot priority domestic issue which is a recession and current consumption decline this means intensifying economic protests and decline of approval ratings of the president as well as the declining influence of official media so this scenario may seem to be more close to the first one when the public attention will switch to the agenda at home and sooner or later as soon as the country exits from the session and the exit from the session in this scenario is quite likely the public opinion will public attention will switch again to development agenda because high incomes, high level of consumption today does really dictate that this agenda still is the major long to medium term priority that's how I understand these type of developments around Ukraine Alexei? Alexei Sapchenko and my question is the following on one of your charts there was a fascinating bifurcation between the popularity of the president and drop of economic expectations and it happened exactly in 2014 when presidential popularity went up while economic expectations went down which was a contradiction contradicted to the previous trends in other words I have a hypothesis and please tell me if I'm wrong or right but my hunch is that Putin is a very astute political animal he has a very good sense of what Russians want and he is not an imperialist he couldn't care less about Ukraine or Crimea or Ossetia what he does he would like to basically he does what the society wants him to do and in this case he plays a nationalistic card because he knew that the prices were going down he knew that the socio-economic expectations would go down too and basically he was throwing this nationalistic monkey wrench to keep himself going up instead of going down with the economic expectations am I right or wrong? I think you are quite right in terms of the issue of patriotism and the kind of nationalistic attitudes of Russians was taken into account in the whole agenda of decisions around Crimea and Ukraine but as I think what happened a year ago was that the sudden consolidation of Russian society around the Crimean agenda has overshot even the wildest expectations of anybody including the top Russian politicians nobody really expected such an outburst of enthusiasm and in my view it only can be explained because just a few months before the Russian society has found itself in a very depressed state almost hopeless and this sort of sun shining through the dark clouds as Russians perceived Crimea and the Olympic Games was a sort of sign of hope which brought quite a dramatic overshooting of expectations and in my view nobody could really expect that including Vladimir Putin this was a nice surprise for him but it was still a surprise We have time for one other question David As you were talking about the impact David Sedney I'm a senior associate here at CSIS a non-resident you were talking about the validation that the Olympics provided on the positive foreign policy side I was wondering what do you think of the potential for the upcoming celebration of the end of the Second World War as being used in the same kind of way Well of course the Second World War agenda is strongly resonating with this new wave of patriotism and emphasis on foreign policy and it really in a sense should be considered as an attempt to boost this emphasis on foreign policy on the appreciation of the role of Russia as a great international power and boost the pride for the past historic achievements which the parallels can be drawn with what happened in the eyes of Russians in 2014 This is right but in my view as soon as the foreign policy agenda today stops being in the focus of public opinion even the Second World War agenda will also not be so much mobilizing to the public opinion not so much resonating as it would be when everybody is thinking about foreign policy So it of course helps to consolidate public opinion but up to a point until public opinion in itself is naturally focused on foreign policy As soon as it switches to domestic economic problems even the Second World War celebrations will not help to refocus public opinion on more positive aspects of the situation Okay one last question right here on the front please Thank you very much Mr. Dmitry if my name is Daniel Kadribyakov visiting scholar at SIS My question is regarding the newly created economic union and where do you see that union considering that foreign policy foreign policy has been setting the agenda for the Russian people and Putin how is it related to this because Central Asians and former Soviet countries are very negatively viewed by the Russians at the moment because they always think that this is a burden they need to get rid of but in the light of creating and putting putting really hard pressure on the leaders of those countries to get inside of the union and what do you make of this whole situation Thank you Symbolically this economic union which is comprised of certain small former Soviet Union states is important for Russians as we see from opinion polls but the problem with that is that economically this union is not so much important because most of Russia's foreign trade and trade and investment today is with Europe and in the future it will be with China but not with these small economies so the major real problems for Russia are the balance between economic integration with Europe which is now somehow blocked because of the Ukrainian conflict and the future potential for economic integration with China and the states of the former Soviet Union particularly if you deduce the largest economy in Ukraine are sort of economically relatively small factor in this problem and they themselves are also facing the same dilemma they have not just thinking about integrating with Russian economy but also integrating with Chinese economy or partly with European economy so it's the same trade-off for all the countries of the region and even if they somehow converge in some kind of economic integration process this dilemma will go nowhere the problem is with whom this economic union will trade and cooperate more with China or with Europe Thanks I noticed that some of you were taking photos of some of the slides let me just say that Dr. Dimitriyov has agreed to have the slide presentation available on the CSIS website and we will get that up as soon as possible and secondly the report in Russian in which much of this presentation is based is going to be translated shortly into English It is already translated we are doing some final editing and we shall make it available as soon as the editing is ready Ok, great Let me take this opportunity to thank Dr. Dimitriyov for a remarkably insightful, comprehensive and really sophisticated presentation and interpretation of changing social attitudes in Russia and impact on politics Thanks so much for sharing your thoughts with us