Today, after 15 years as Russia's strongman, Putin finds himself facing his biggest storm yet. He is fighting a financial crisis and a showdown with the West, both of them problems of his making. Can he survive?
His annexation of Crimea and his meddling in eastern Ukraine, where pro-Russian rebels are accused of shooting down a Malaysian airliner, killing nearly 300 people, have caused relations with the West to slump almost to Cold War levels.
Russia's elite are banned from travelling to Europe and America, their assets there have been frozen and Russia's state banks have been denied access to Western money markets. More US sanctions are being lined up under a law newly passed by Congress and, despite internal pressures to retreat, the EU is also holding firm. An EU summit this week banned all investment in Crimea, halted exports for the region's transport, energy and telecoms sectors and barred cruise ships from stopping at Crimean ports. Coinciding with these woes is a slump in the world's oil price, ravaging government revenues and the ruble.
Cronyistic and lacking rule of law, Putin's Russia never set in place the structures for diversifying to an entrepreneurial economy. As a result, it remains almost as dependent on raw energy exports as it was in the Soviet era. The ruble has lost around half its value against foreign currencies since the start of the year, prompting the central bank to raise interest rates to 17 per cent and to throw almost US$2 billion into the fight to prop it up this week. Even before the interest-rate increase, the central bank estimated that the Russian economy could shrink by 5 per cent in 2015. Now the spectre has revived the era of the 1990s - of a country that defaulted on its foreign loans, and where lifetime savings were destroyed by inflation.
The crisis marks the biggest test yet for Putin, whose popularity is based on an image of stability, prosperity and national pride after the chaos and humiliation under Boris Yeltsin, Russia's first post-Communist leader. So far, though, the 62-year-old supremo looks secure. For one thing, the central bank has vast reserves - US$416 billion ($534 billion), built up thanks to Russia's conservative fiscal policy - that it can use as ammunition to defend the national currency. Russian companies and banks are scheduled to repay US$120 billion in debts, but if this balloons into a credit crunch, it is unlikely to hit until next year. In addition, it will take several months for the ruble's declining value to be transformed fully into rising prices in the shops, hitting people in the pocket. These factors give Putin some important breathing space.
Fyodor Lukyanov, editor of the foreign policy journal Russia in Global Affairs in Moscow says there are rumblings of concern rather than talk of a failure of the economic model. "Doubts are growing about whether the Russian leadership has any plan for how to tackle the economic situation in the short and especially long term, but I don't see any potential yet that this will turn into open discontent," Lukyanov told the Weekend Herald.
"It is not affecting the average Russian just yet," says Sarah Lain of Britain's Royal United Services Institute think-tank. "It will, but not yet. Obviously, savings are dwindling and people are moaning about that, but only when it has a fuller impact will the Government find people saying they are very much responsible."
If pressure on Putin rises, he can be counted to play the nationalist card, find a scapegoat or quash dissent.
Russian analyst Arkady Moshes of the Finnish Institute of International Affairs said Putin had already primed the Russian public to rally behind the flag through the state media. His approval rating was 80 per cent when he annexed Crimea and has risen slightly since then.
"The people have been bombarded for more than a year by massive propaganda, according to which Russia is a victim of Western aggression, that the most powerful coalition of the world, led by the United States and including Europe is doing everything to destroy Russia," said Moshes.
Even if the public were sick of their government, there was little likelihood of an uprising given the absence of a competent alternative to Putin. Meanwhile allegiance from people Putin has appointed means a revolt within Kremlin is unlikely.
At his traditional year-end news conference, where he faced hundreds of journalists, Putin laughed off any suggestion of "palace coups". "Calm down," he told the questioner. "We don't have palaces, therefore we cannot have a palace coup."
What counted, Putin said, was the backing of ordinary Russians, and "on the main thrusts of foreign and domestic policies, such support exists." The economy would rebound within two years even "under the most unfavourable world conditions", he said.
"I think he is going to survive and in 2018 he will still be the President of Russia and [also] in 2024, depending on this health," predicted Moshes. "All the challenges are manageable because he has the loyalty of the repressive machine that he has built and the propaganda machine - and in many respects, he is still genuinely popular."
