Russian President Vladimir Putin

How Much Do We Really Know About Vladimir Putin?

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President Vladimir Putin hosted the G20 summit on September 6, 2013 in St. Petersburg, Russia. Photo by Iliya Pitalev/Getty Images

Who Is Vladimir Putin?

Vladimir Putin has been either the President or Prime Minister of Russia since 1999. Boris Yeltsin appointed him Prime Minister in 1999, then acting President on December 31 that same year. The country confirmed that position in a March 7, 2000, election. He won re-election in 2004. He could not run for President in 2008, so his colleague Dmitry Medvedev became President. Putin took the office of Prime Minister.

Putin was re-elected President to a six-year term in 2012.

When Putin took over, Russia's economy was growing at 7 percent a year. That was due to Yeltsin's push to transform the country from a command economy to a mixed economy. It was a rebound from Russia's 1998 debt default.  Russia's growth continued thanks to high oil prices. But it has since slowed to 3.9 percent due to economic sanctions and low oil prices.

Cyberattack on U.S. Presidential Election

On December 30, 2016, President Obama sanctioned Russia for cyberattacks during the 2016 Presidential campaign. The CIA accused Russia of hacking emails from the Democratic National Committee and Hillary Clinton's campaign. It published the results, negatively impacting her election bid. (Source: "Russia 'Grizzly Steppe' Hacking Started Simply," Bloomberg, December 29, 2016. "Obama Orders Review of Russian Election-Related Hacking," CNN, December 9, 2016.)

Attacks in Syria

On September 30, 2015, Putin launched airstrikes against ISIS in Syria. But U.S. officials said the Russian strikes were nowhere near known ISIS locations. Instead, it appeared Russia supported Syrian President Bashar al-Assad. The attacks put Russia in conflict with the United States, who supported local Syrians fighting ISIS and Assad.

 (Source: "Russia Launches First Airstrikes in Syria," CNN, September 30, 2015.)

Attacks on Crimea and Ukraine

Putin invaded Ukraine's port of Crimea in March 2014. He said he was defending Russia's only warm-water port after the overthrow of Ukraine's President and Putin's ally, Viktor Yanukovych. Russia then positioned troops on Ukraine's eastern border. He supported pro-Russian insurgents who attempted to take over that section of the country. The United States and the European Union imposed sanctions. But Putin's popularity with Russians soared for defending his country against the West. For more, see 3 Ways Ukraine's Crisis Affects You.

Putin's Economic Policies

When Putin became President, Russia was bankrupt. It owed more to the International Monetary Fund (IMF) than it owned in foreign currency reserves. 

In 2001, Putin pushed through many reforms. He instituted a 13 percent flat income tax. He reduced the corporate tax from 35 percent to 24 percent. He cut Social Security contributions from 39.5% to 26%, and allowed deductions for business costs. He unified tax collection into one agency, and decriminalized small tax violations. In 2002, he deregulated small business licensing.

He also and allowed privatization of farmland (they had been collectives before.) This reform boosted entrepreneurship in Russia, furthering growth.

Putin felt threatened by the power of some corporations and reversed course in 2003. He nationalized the Yukos oil company. He sent its owner, Mikhail Khodorkovsky, to jail for tax evasion and fraud. He combined Yukos with the national oil company Rosneft. Putin then sold shares of Rosneft to private foreign investors in 2006. In 2007, he did the same with the bank VTB. 

The Secret of Putin's Power

Companies like Rosneft are managed by an oligarchy of Putin's allies and supporters. As a result, they have become wealthy. They are also the secret to Putin's power.

According to the New York Times, Russia has been ruled by an oligarchy in one way or another since the 1400s.

This impediment to a true free market economy is the biggest drag on Russia's growth. As a result, the nationalized industries of oil, gas, banking, and machine building have stagnated. Foreign direct investment has dropped, also slowing Russia's economy.

The only saving grace is privately-held industries. These growing industries include retail, construction, and metals industries. (Source: "An Assessment of Putin's Economic Policy," Peterson Institute, July 2008.)

Putin remains popular in Russia because he restored national pride. In 2007, Time Magazine named him its Man of the Year. Putin successfully applied for Russian membership in the World Trade Organization (WTO) in 2012. That sent a message to the world that Russia adheres to international trade rules. It also has eradicated socialism and is a legitimate global world power.

Putin's Pipeline Politics

Thanks to Putin's pipeline politics, Russia became the world's leading oil producer in 2011. It even surpassed Saudi Arabia. Russia is also the second-largest producer of natural gas, since it holds the world's largest reserves. It also holds the second-largest coal reserves, and the eighth-largest crude oil reserves. Russia also exports steel and aluminum.

Russia was hard-hit during the 2008 financial crisis, but high oil prices helped it recover quickly. In 2012, it's economic output (GDP) rebounded to $2.6 trillion. But its growth rate slowed since the 1990s to 3.4% in 2012. (Source: "Russia's Economy," CIA World Factbook.)

The resurgence of U.S. shale oil and gas production threatens Russia's economy. Gazprom, the state-owned gas company, supplies a quarter of Europe's needs. As U.S. production rose, oil and gas prices fell. That combined with the sanctions further slowed Russia's economy.

Russia's reserves will only supply another 20 years at current levels. It requires expensive investments to access further reserves in the frozen tundra. Putin needs to expand reliance on other industries, such as information technology, airplanes, and engines, where Russia has a competitive advantage. Whether Putin can step up to the challenge remains to be seen. (Source: "Can Putin Survive America's Energy Boom?" Businessweek, August 29, 2013.)

Putin's Drive to Make Russia a World Leader

In 2013, Putin hosted the G-20 meeting in St. Petersburg. The discussion centered around whether the U.S. should send in missile strikes to warn Syria against any further use of chemical weapons, which were banned after their use in WWI. Putin opposed any military intervention against its ally Syria, which Russia supports with arms and trade. 

In 2006, he hosted the G-8 summit, using it to strengthen his role as world leader and to take significant steps to advance Russia’s economy. Before the event, Putin:

  • Liberalized the ruble, allowing the currency to be transferred in and out of Russia.
  • Allowed Rosneft, the state-owned oil firm, to sell shares on the London Stock Exchange.
  • Established trade agreements with Canada regarding Liquified Natural Gas and uranium.
  • Announced with the U.S. the Global Initiative to Combat Nuclear Terrorism, reiterating Russia’s offer to sell enriched uranium to Iran. 

Putin's Early Career

Putin was born on October 1, 1952, in Leningrad, now St. Petersburg, Russia. He became a martial arts expert at an early age. He earned a law degree at Leningrad State University in 1975. He joined the KGB, and recruited foreigners to gather intelligence for the spy agency. 

He lived as an undercover agent in Dresden, Germany, from 1985 - 1990.  In 1991, he left the KGB to work for the major of St. Petersburg and became deputy mayor in 1994. He joined President Boris Yeltsin's "inner circle" in 1996. He was the deputy chief administrator of the Russian government building, the Kremlin. In 1999, he became Secretary of the Security Council. Later that year, Yeltsin appointed him the Prime Minister.  (Source: "Vladimir Putin Biography," Encyclopedia of World Biography.)