The Kremlin cannot just wait for a global upturn and no obvious fixes are to hand at home. In the 2000s the lingering effects of the 1998 devaluation made Russian goods attractive at home, and unused capacity from the Soviet era let firms produce more with little new investment. Oil wealth was redistributed via consumption. This worked, says Natalia Orlova of Alfa Bank, only until Russia had no more spare capacity: “no one in power prepared for the end of this model in advance.”
