Putin’s Lower Vodka Prices Won’t Offset Russian Economic Woes in 2015

Russian President Vladimir Putin lowered vodka prices last week for the first time since the Kremlin adopted pricing standards in 2010 that nearly doubled the price of a half-liter bottle. While the discount may allow Russians a more raucous New Year’s celebration, the morning after is bound to be painful. Russia’s economy is set to begin 2015 with greater uncertainty than at any time during Putin’s reign.

Putin’s move decreases the minimum cost of Russia’s national alcoholic drink by 16%.  And the reduction is needed. Russians today face far more difficult financial conditions than half a decade ago. Continuously falling oil prices, international sanctions and an extremely weak ruble have hammered Russia’s economy.

Putin’s vodka price adjustment is taken right out of the playbook of one of his Soviet predecessors. Yuri Andropov was, like Putin, the head of the KGB (now FSB) state security service before assuming the Soviet Union’s highest office (1982 to 1984). It was Andropov who first reduced the price of vodka during economic downturns.  To this day, cheap bottles of Vodka are known as “Andropovka.”

Putin has displayed a certain affinity for Andropov, unveiling a statue of the former Soviet leader in St. Petersburg and a commemorative plaque at the Lubyanka – the KGB’s infamous Moscow headquarters.

The ills of the Soviet Union, however, could not be cured by Andoprov’s cheap vodka. Likewise, Putin will be unable to mask the problems of today’s Russian Federation with neo-Soviet cures. As Russians celebrate the New Year, they should prepare themselves for a hangover from Putin’s military adventurism, with effects that could linger long into 2015.

Boris Zilberman is deputy director of congressional relations at the Foundation for Defense of Democracies, where he also focuses on Russia.