bne -

The number of Moscovites who have registered on Facebook to attend the December 10 demonstration against last Sunday's parliamentary elections has swelled to 30,000 in the past few days. With the blogosphere alive with calls to friends to attend and the number of those registered rising by 5,000-10,000 a day, it looks like attendance could be even higher.

Analysts are looking at how great the political risk is becoming. The RTS Index has also sold off sharply and is currently trading at about 1,400. "We believe that the market is only now starting to price in the return of top-level political risk for the first time in 12 years, and that developments in Russia will lead to more short-term downside," Kingsmill Bond from Citigroup said in a note December 9.

Bond goes on to say that protests are likely to continue, as "Russia is unusually well-educated and wealthy to endure a system characterised by so much corruption. Now that the spark has caught the tinder of discontent, we expect more protests." And other analysts warn that if the protests this weekend get violent, then things could spiral.

The question is, therefore, has Russia reached a tipping point that will either end in violence and repression by the state or oust Prime Minister Vladimir Putin and his clan from the Kremlin?

Russian winter turns to spring?

Renaissance Capital's Charlie Robertson argued earlier this year that authoritarian societies with average per-capita incomes over $6,000 are increasingly prone to revolutions; Russia has a per-capita income of $15,000 so is well beyond this point. However, Robertson made the caveat that oil producers are the exception to the rule, as their governments have the cash to placate their people.

Nevertheless, dissatisfaction with Putin's regime has clearly been growing over the last year and is becoming increasingly more public. Recently, Putin was booed at a wrestling match - the first time he has been criticised in public since the Kursk submarine sank at the start of his first term in office as president.

The December 10 demonstration could prove key. The opposition is trying to reach critical mass, so how the Kremlin deals with the crowds in Bolotnaya square, across the river from the Kremlin, starting at 2pm will have far-reaching consequences. Until now, the average Russian has been unwilling to put themselves in harm's way. And Putin explicitly threatened protestors last year with a "crack on the head" during televised remarks that were designed to dissuade normal people from coming on to the streets. However, if there is violence, then the public outrage that would follow could radicalise the people enough that they overcome this barrier of fear. Once that happens, as was seen in Kyiv in 2006, there is no putting the genie back in the bottle.

Today's demonstrations have come too soon for the Kremlin, which was planning as part of the campaign to reinstall Putin as president in the March presidential election to ramp up spending to buy off dissent. Moreover, following United Russia's poor showing in the Duma elections, the spending programme will have to be even more aggressive. But this new campaign has not started and probably won't until after the holiday break. The Kremlin will need to act faster and even then can't be certain that it will work unless they can effectively diffuse people's anger frustration.

Will there be violence? It is pretty easy to organise - if the crowd tries to move beyond the patch of street that has been sanctioned for the protest, the police are almost certain to oppose them. This is what happened in the protests earlier this week. At the same time, United Russia and the Kremlin youth wing Nashi have also proven themselves capable of mobilising several thousand demonstrators when needed. But while the police can arrest several hundred protestors, they can't arrest several thousand. And if the numbers that turn out really are as big as the Facebook campaign suggests, then it could get ugly.

bne will report on the protests over the weekend and flash reports.