Russia's National Projects: Economic Reboot or Mucky Bog?

While Moscow has been aggressively advancing its interests on the international stage, Russia's stagnating economy means the country risks gradually falling behind the rest of the world and possibly facing social unrest at home. President Vladimir Putin is well aware of the danger and has launched a $390 billion spending program intended to “transform” the Russian economy, with 12 so-called national projects at its core. While this new supply-side economic model is meant to boost the pace of Russia's economic growth above the global average, and would build on impressive reforms in the banking and tax sectors, the effort's success is far from assured. One obvious obstacle is Western sanctions, but potentially far more damaging to Russia's long-term economic prospects is the crisis of confidence among entrepreneurs and investors. What's worse, Putin's national projects, if ever they get off the ground, are likely to “bake in” some of the very problems leading to that lack of confidence—including the state's heavy hand in the economy.