Can Putin Survive Sustained Economic Pain?

When Vladimir Putin came to power in 1999, oil cost around $10 a barrel.

During his first two terms the global oil price rocketed - it gave the impression of an economy that was booming, and a real increase in the standard of living for some.

A small elite got very, very rich, and a new middle class got used to owning the latest iPhone and taking the family on holidays abroad.

After the chaos of the 1990s under Boris Yeltsin, culminating in the default of 1998, Putin's rule seemed to be delivering stability and order.

Pensions and salaries were being paid on time, and the new strongman president was reasserting Russia's place in the world.

The oil wealth helped pay off the national debt, and build up vast reserves - what it didn't do was develop Russia's economy.

Russia was, and remains, heavily dependent on sales of oil and gas - they make up two thirds of the country's exports, around half the national budget.

The president says the current situation (he refuses to call it a crisis) will help diversify the economy, but that is the opposite of what has happened under his leadership thus far.

Under Mr Putin, much of the nation's wealth and natural resources have been concentrated in the hands of large, state-controlled companies, and a select group of billionaires.

But personal fortunes and wealth here can disappear.

The billionaire owner of telecoms company Sistema was recently held under house arrest for several months, and his company's holdings in Bashneft (one of Russia's largest oil companies) were seized by the Russian state.

Vladimir Yevtushenkov was released shortly before Mr Putin's annual press conference this week, but his treatment is unlikely to reassure would-be investors in Russia that their money is safe.

The case evoked memories of Yukos - once one of the world's largest oil companies, it was broken up and its assets acquired by state oil giant Rosneft in 2003. Its owner Mikhail Khodorkovsky spent a decade in a Russian prison camp.

Capital flight over the last 12 months is expected to top $125bn - hardly a vote of confidence in the Russian economy.

And then there are the international sanctions imposed over the crisis in Ukraine.

Mr Putin estimates they are responsible for 25-30% of the current economic damage.

By themselves they might not have been earth-shattering, but combined with the falling oil price they are having an effect - cutting off some of Russia's biggest companies from access to credit on foreign markets, forcing them to appeal to the state to finance their foreign debt.

Russia has large foreign exchange reserves, but they are not endless - it has already spent at least $80bn of an estimated $360bn fund defending the currency so far this year.

These policies - both foreign and domestic - all lead back to Mr Putin's Kremlin. But with almost complete control of the country's main media outlets, that is not the story that is being told here.

The president blames "external factors" and the nefarious forces that, to use his analogy, are trying to chain and de-fang the Russian bear.

The question is whether his popularity can withstand a sustained period of economic pain.

And whether a weaker Russia, in the manner Mr Putin's cornered bear, might not be a much more dangerous animal.