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Ruble’s Collapse Spells Trouble for Vulnerable Putin


The stability that Russians have long associated with Vladimir Putin’s presidency collapsed in December, along with the value of their currency, their savings and their stock markets. The country’s Economy Minister called it “the perfect storm.” The high oil prices that had fed the Russian petrostate dropped by more than 40% in the second half of 2014, just as Western sanctions over Ukraine bore down on the Russian financial system.

The result was Russia’s Black Tuesday–Dec. 16–when the national currency shed a fifth of its value in a matter of hours, bringing the ruble’s losses for 2014 to more than 50% against the dollar. The central bank restored some stability with emergency measures a day later, but the damage had been done. Russia’s economy is now poised to enter a long, deep recession.

Putin has offered no plan to fix it. He promised only that “growth is inevitable” after Russia endures a looming period of hardship. Lower oil prices will become “a fact of life,” he said at a Dec. 18 press conference. But he cautioned his citizens not to bow before the West’s desire to “tear out the teeth and claws” of the “Russian bear.” “We must decide whether we want to keep going and fight,” he said, “or whether we want our pelt to hang on the wall.”

Putin would prefer to continue the fight, of course, but even he now realizes Russia’s struggle with the West has undermined its economy. He admitted as much during his press conference, saying that up to 30% of Russia’s economic troubles were the result of Western sanctions. Accordingly, his stance toward Ukraine has shifted. On Dec. 16, U.S. Secretary of State John Kerry praised Moscow’s “constructive moves” toward resolving the conflict. Not constructive enough, however, to stop President Obama from pledging the same day to sign a new sanctions bill.

That might allow Putin to continue blaming the West for the crash, but his defiant nationalism will buoy his approval rating for only so long. As inflation rises in 2015, the poorer and less-educated citizens who adore their President will see their circumstances worsen. Deputy Prime Minister Olga Golodets warned on Dec. 16 that poverty would “inevitably rise, especially among families with children.” The myth of Putin the stabilizer is now as debased as the value of the ruble.


‘We have seen, in the worst of times, the best of people.’

TONY ABBOTT, Prime Minister of Australia, paying tribute to his country’s resilience on Dec. 16, a day after an Iranian-born self-declared Muslim cleric took 17 people hostage in a café in Sydney’s financial district. Two hostages and the gunman were killed as police brought the 16-hour siege to an end.



Weapons sales by the world’s largest producers fell 2%, to $402 billion, in 2013, according to a report from the Stockholm International Peace Research Institute. Here’s a sampling of where sales increased and fell:

[The following text appears within a chart. Please see hardcopy or PDF for actual chart.]




South Korea







Pakistan Unites in Pain

On Dec. 16, seven gunmen stormed a military-run school in Pakistan’s northwestern city of Peshawar and killed 148 people, most of them children, in what officials said was the deadliest terrorist attack in the nation’s history. The militant group Tehrik-e-Taliban Pakistan (TTP) claimed responsibility, saying the act was retaliation against Pakistan’s military operations in North Waziristan, a militant hub on the border with Afghanistan. But in the wake of the attack, Pakistan’s leaders vowed to step up their fight. Here’s a look at how the country is overcoming its differences to respond to the militant threat:

History of violence

The TTP, informally known as the Pakistani Taliban, has struck both military and civilian targets in its campaign to set up an Islamic state. American officials have accused Pakistan’s military, led by Army General Raheel Sharif, of dragging its feet against militants as U.S. drone strikes attempt to keep the TTP and other groups at bay. But after two deadly attacks on Pakistan’s largest airport in June, the military launched a ground offensive in the militant stronghold of North Waziristan, claiming at least 1,500 deaths.

A common enemy

The nation, bitterly divided by political infighting, has come together after the attack. The government, led since 2013 by Prime Minister Nawaz Sharif, declared three days of national mourning, and opposition leader Imran Khan, who has staged a series of antigovernment protests across the country, canceled the demonstrations on Dec. 17 and condemned the attack. Khan had earlier criticized the Waziristan operation and called for fresh peace talks, drawing accusations of appeasement with the Islamist militants.

Crackdown begins

The Pakistani military responded hours after the attack with air strikes on TTP positions. General Sharif met with Afghan President Ashraf Ghani to discuss how to strike against the group’s leaders, in a rare show of unity against the Islamist threat facing both countries. Meanwhile, Prime Minister Sharif lifted a moratorium on the death penalty for terrorism-related cases and said the government would end a tacit policy of support for “good” extremist groups whose goals it shares.

What’s next?

It’s unclear how long the détente between Pakistan’s political factions will last once the shock of the atrocity has worn off. Past attacks, including a suicide bombing in November that killed over 60 people along the Indian border, led to no letup in unrest. Victims of the Peshawar attack hope this time will be different. “We have to present a united front to the terrorists to combat them,” said Farooq Sah, a doctor whose son was killed in the attack. “This is not an individual problem anymore–our entire nation is under attack, and we have to act.”

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