NEW YORK (TheStreet) -- Russia's currency, the ruble, is at a record low against the U.S. dollar, while the Market Vectors Russia ETF (RSX) is down 26% in 2014.

So who's to blame for the collapse?

Karen Dawisha, author of Putin's Kleptocracy, says it's Russian President Vladimir Putin. He's not a supporter of the the private market and is bad for the Russian economy, Dawisha told TheStreet's Gregg Greenberg.

RSX Chart

 Market Vectors Russia ETF RSX data by YCharts

And while Russian oligarchs have been hurt financially by the sagging market -- as stocks like Rosneft Oil (RNFTF) , Gazprom (OGZPY) and Lukoil Oil (LUKOY) move lower -- the leaders of these companies aren't going anywhere. 

These companies and leaders rose up to power alongside President Putin and sit atop their respective industries because of him, Dawisha said. For that reason alone, these corporate leaders will not flee Russia for other countries, she reasoned. 

The Russian energy sector's pain is apparently China's gain. Because of Russia's faltering economics, China has been able to secure favorable energy terms for importing oil. The Russians will be responsible for constructing pipelines up to the Chinese border to export oil to energy-hungry China.

And while U.S. President Barack Obama is doing the "correct thing" by imposing sanctions against Russia, Dawisha says, German Chancellor Angela Merkel "has a real problem" in dealing with Putin and Russian business leaders. 

Many of the European countries, including Germany, depend on Russia's natural gas. If that connection is shut down, it could leave millions without heat.

Merkel is trying to keep Europe united, even as it depends on Russia for energy, Dawisha concluded.  

-- Written by Bret Kenwell

Follow @BretKenwell


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