In 2017, Putin faces his toughest challenge: Russian pessimism

The outgoing year was a series of extraordinary events, including many genuine shocks, by anyone's standards.

But for many Russians, it also may be the year that country began to come in from the cold – overcoming three years of international sanctions and isolation, demonstrating their national unity behind President Vladimir Putin, and even rolling back the worst economic recession in almost two decades.

Kremlin policies appear to be triumphing in Syria and even Ukraine, while Moscow's adversaries in the West seem to be mired in disarray. Most economists believe Russia's beleaguered economy will return to at least anemic growth in 2017. Mr. Putin enjoys public approval ratings of higher than 80 percent, and voters handed his party a massive victory in last September's parliamentary elections.

And in what seems to many Russians an almost surreal swing of the pendulum, official Washington is now all but accusing the Kremlin of being behind the election of Donald Trump. Some in the US even claim that Putin is engineering the downfall of the West – a goal the former Soviet Union signally failed to accomplish over 70 years of trying.

"My head is spinning, I simply cannot credit what I'm hearing," says Olga Kryshtanovskaya, a leading Russian sociologist. "But many Russians do appear to believe [that Putin has wide influence], or at least that Trump's victory was somehow a triumph of Putin's logic. Putin champions anti-globalism, traditional values, and putting national interests first. Maybe this is catching on."

Doubt about the future

But despite all that seemingly good news, many Russians seem extremely wary about the coming year. 

Most adult Russians have seen roller-coaster ups and downs in the past 25 years, from the harrowing collapse of the superstate of their birth, the USSR; to a decade of economic despair and social decay; to several years of revival under Putin that came to a screeching halt amid economic crisis and global condemnation following Russia's annexation of Crimea in 2014. There is no experience of stable, good times in Russia, and polls suggest most people are dubious that lasting improvements can even occur.

"There is nothing to be optimistic about. We are racing forward into the unknown, but our understanding lags far behind fast-moving events," says Yuly Nisnevich, a political scientist at the Higher School of Economics in Moscow. "I don't see any positive changes, only words."

Yet there are reasons to hope that Putin, who has consolidated his leadership through sweeping personnel changes and is presently at the height of his powers, might decide to expend his political capital by implementing long-needed structural reforms to diversify the economy, stimulate small business, and wean Russia from its dependence on oil-and-gas exports.

"Putin is in a position to move wherever he wants right now," says Nikolai Petrov, a political scientist. "He faces reelection in 2018, but he has this window of opportunity in which he can put in place real changes without fear of elite resistance. That would cement his legacy, and it's a program he's often said he wants to enact. The year to do that is 2017."

Even if Russia returns to economic growth next year, and oil prices – Russia's main source of foreign exchange – rebound a bit, there seems no hope of renewing the rapid growth of the past decade. That boom lifted millions of Russians out of poverty and established Putin's popularity. But a repeat would require the kind of sweeping reforms Putin has talked about but so far failed to initiate.

Economic reforms would be painful, at least in the short term, and would hit most Russians at a time when they are already suffering a fall in living standards, cutbacks in social services, and narrowing of employment opportunities. Despite a few outbursts of protest, Russian society has been surprisingly inert over the past three difficult years. But the big question is: how long will that continue?

"Russians aren't pleased with the situation, and don't admire their government – even if Putin himself is popular – but, the thing is, they see no alternative," says Alexei Makarkin, deputy director of the independent Center for Political Technologies in Moscow. "Hard to say when this will change."

Schadenfreude

On the international scene Russians have been stunned – like everyone else – but also encouraged by the earthshaking upsets suffered by Western establishments, such as last June's Brexit vote and, of course, the election of Mr. Trump in the US. With a wave of contentious elections coming up in key European countries such as France, Germany, and the Netherlands, there is a sense in Moscow that the tidal wave of radical change will continue in 2017.

There are certainly feelings of schadenfreude at the spectacle of disarray striking at the heart of Western elites who were so recently admonishing, sanctioning, and isolating Moscow. But there is also a hope that more pro-Russian governments will come to power in the West that might be inclined to negotiate new terms of coexistence with Russia.

"Russia's positions definitely look stronger in the world. The West tried to pressure us in various ways, and those attempts have failed," says Alexei Mukhin, director of the independent Center for Political Information in Moscow. "But we shouldn't let ourselves get carried away. There's no reason to think that, Trump or no Trump, the geopolitical tensions and information warfare will suddenly disappear. Our best hope is that the worst can be avoided, and we will make it through another year."