Tsar Putin

In this summary of the latest developments in Russia's political scene, less than a year from national elections (and just more than a year for the election of Putin's successor) Jean-Marie Chauvier details the spectrum of political forces and the domestic, regional, and international issues that swirl through Putin's Russia.

[This advisory includes a sidebar Kremlin "who's who." (217 words)]

Tsar Putin’s Russia

Jean-Marie Chauvier

Le Monde diplomatique
February 18, 2007

[Republished at GRBlog with Agence Global permission]

The headline news is that Russia’s gross domestic product is now back to its 1990 level. After the depression of the 1990s, there have been six years of sustained growth at an annual average of 6%. After Russia’s oil bonanza came successes in metallurgy, aluminium, armaments and agribusiness; there has also been a sharp rise in domestic consumption, the repayment of Russia’s foreign debt, and huge increases in education and health-care spending in the past five years. To everyone’s surprise, some Russian firms are now transnational players in the global market.


The upturn is not yet assured: There is more poverty and less equality than in Soviet days. Russia needs investment to overcome its weaknesses: loss of capital and of expertise, obsolete infrastructures, a widening technology gap with other industrialised countries, declining life expectancy and a decreasing birth-rate. Even so, economist Jacques Sapir saw 2006 as a year of strategic reorientation, with a new industrial policy based on a realisation that the economy cannot continue to depend entirely on gas and oil revenues. This means more state intervention, against the advice of international organisations and of Russian neoliberals, who are arguing over the use of a $80bn stabilisation fund.


The United States secretary of defence, Robert Gates, thinks that President Vladimir Putin’s aim is to restore Russia to its former great power status and to revive national pride. According to opinion polls, Putin has 70%-80% of the people behind him, especially the prosperous middle classes and the highest-paid workers. Lilia Ovtcharova of the Independent Institute for Social Policy reports that wages are now 80% of their 1989 level in real terms and that consumption is up by an average 167%. These figures do not reflect social differences. Poverty may be diminishing but it is still endemic and inequalities are greater than ever, especially as market forces have swept away the Soviet safety net. So the net result of 15 years of transition is due for a rigorous review, particularly in the light of the vast, hidden, informal economy and society.


President Putin is not Hugo Chávez or Evo Morales. Despite the declared wishes of the majority, he has not questioned the privatisations of the 1990s, and he has not re-nationalised key sectors with the intention of establishing a social market economy. Only those robber oligarchs with political ambitions have been prosecuted.


Faced with the choice of ultra-liberalism or state control, Putin opted for a compromise that would reassure the new owners and the West: Restore the sovereign powers of the state, bring the oligarchs to heel and let the market economy take its course.

How to power this growth?

What development will power this growth? Leonid Grigoriev, president of the Institute of Energy and Finance, said: “To double GDP without modernising the economy is not much of an achievement. Many people, especially the young and members of the business community, are aware that we now have a half-developed country, with raw materials and huge social inequalities. The past 15 years have been wasted in the field of scientific advances. The well-educated and trained post-war generation is approaching retirement. Investment began again five years ago but it accounts for less than 20% of GDP and represents only 33% of the capital invested in 1990.”


There was a major turning-point at the beginning of Putin’s second term in 2003, when he handed control of the crucial hydrocarbons sector to selected state undertakings. The sector had partly recovered from the oligarchs, who had acquired their holdings at knockdown prices during the privatisations of the Yeltsin era. Putin’s move to protect strategic assets does not preclude opening them to foreign capital; but, given the offensive mounted by the public energy monopolies Gazprom and Transneft, it is intended to block a U.S. policy, instituted in 1991, aimed at diminishing Russian power. This policy was the purpose of NATO enlargement and the establishment of alternative energy supply routes to replace the Russian networks.


Another of Putin’s aims is to recreate a common Euro-Asian economic area, possibly including a European-Russian partnership. This Kremlin strategy, stalled in South Caucasus, has had some success in Ukraine, where 60% of the population are against joining NATO; and, in Kazakhstan, and Belarus, which will have to abandon its outdated regime and open up to Russian capital. Moscow is also developing cooperation with China, India and the Muslim world. Putin has expressed serious concern (in a speech on 8 November at the inauguration of a Russian military intelligence centre) over the international situation, the unilateral actions of the United States, new strategic weapons systems that require “an appropriate response” and foreign support for “acts of terrorism” in Russia.


Much of the media soon came up with an easy explanation for a series of assassinations in autumn 2006: The Kremlin was getting rid of its enemies. When the story turned out to be more complicated, it ceased to be front page news. The Russian press, however, is still unravelling the tangled tale. Observers have noted several strange coincidences. The journalist Anna Politkovskaya was assassinated on 7 October, Putin’s birthday, when he was in Germany on a visit of importance for Euro-Russian relations. Alexander Litvinenko, the former Federal Security Service agent and boon companion of oligarch Boris Berezovsky, was poisoned on 23 November, during the Russo-European summit at Helsinki.


Other murders struck at the centre of power: Andrei Kozlov, killed on 13 September, was vice-president of the Central Bank, and Alexander Plokhin, assassinated in October, was a director of the Foreign Trade Bank. Both were involved in activities at the heart of Putin’s strategy: Kozlov in the fight against organised crime, Plokhin in European aviation. Yegor Gaidar, founding father of the Russian reforms, was taken seriously ill in Dublin on 23 November, an illness which he considers to be part of the same campaign.

Who would gain from a coup?

Anatoly Chubais thinks there is a real possibility of a coup directed against the Kremlin (and its relations with the West) and blames Berezovsky: A suggestion echoed elsewhere. Who stands to gain? Certainly not Putin. Italian expert Giulietto Chiesa thinks the attacks represent a clear attempt to discredit and incriminate Russia. He believes this is in the interests of certain circles in Russia and the European Union, and of some members of the Bush administration.


There has been evidence of diminishing democracy since 1993 (including the use of tanks against parliament) but it has only recently received any critical attention. The West, silent during the wars in Chechnya, suddenly found its voice when the private oil consortium Yukos was taken over in 2003. According to a report that received little press coverage, Yukos had planned a merger with Sibneft and was arranging, in collaboration with Exxon Mobil and Chevron Texaco, for a massive investment of U.S. capital in the Siberian oilfields on the eve of the Iraq war.


The Yukos takeover was the first step towards renationalisation of energy, to the detriment of certain closely connected Russian and foreign interests. Putin rejected the Chilean-style course recommended by his economic adviser, Andrei Illarionov, who resigned in 2005, protesting that Russia had changed and was no longer a free country.


At the anti-Russian Vilnius summit in May 2006, U.S. vice-president Dick Cheney, denounced what has been called an “authoritarian drift” in Russia. The country is now 102 out of 130 in the economic freedom rankings, top of the list in the Transparency International global corruption reports, and 147 out of 168, lower than Sudan or Zimbabwe, in the Reporters Without Borders press freedom rankings. It is true that radio, television and the popular papers have been taken over by the state; but the quality papers remain neoliberal, since until recently they were partly controlled by Berezovsky, who has just left the famous Kommersant group, spearhead of the 1990s market ideology. In the same spirit, the government is keeping both Russian and foreign NGOs under tighter control.


This is “soft authoritarianism,” according to Gaidar, for whom the Putin era falls into two distinct phases: 2000-2002 was a period of reforms, with relatively independent parliament and media, under the influence of powerful and influential business organisations; 2003-2004 saw the introduction of a “decorative and directed” democracy, in which governors and presidents of republics were appointed, not elected.


Garry Kasparov is more outspoken. He considers that Putin has effectively restored the Soviet system and achieved Gorbachev’s dream of an authoritarian state with limited reforms. He sees Putin as Mussolini in Moscow. Lev Ponomarev, leader of the Movement for Human Rights, thinks there may even be a far-right coup.


The anniversary of the 1917 revolution is still celebrated on 7 November, but unofficially. The traditional communist parade was banned in 2006, and demonstrators from Gennady Zhuganov’s Communist Party of the Russian Federation (CPRF) had to make their way along the pavement to their authorised meeting-place under heavy police surveillance. There were about 10,000, mostly elderly, who were joined by groups of young radicals from the Young Communists, the Red Youth Vanguard and Eduard Limonov’s National Bolshevik party. According to the polls, the Bolshevik revolution is becoming more popular with the young.

A new ‘day of national unity’

Putin introduced a new holiday, the day of national unity, on 4 November, in place of the traditional celebrations on 7 November. Representatives of the Church and the Russian diaspora, including Prince Dmitry Romanov, a descendant of the dynasty expelled in 1917, gathered in the Kremlin on 4 November. Putin claimed that this was the first celebration of an event from the pre-Soviet era, the liberation of the Kremlin from Polish occupation on 4 November 1612, the end of the “time of troubles” (1598-1612) and the prelude to the accession of Mikhail I, first of the Romanovs, in 1613. It is an odd choice of symbol, suggesting that Russia needs to be liberated again from an occupier and another time of troubles -- perhaps even given another tsar.


The far-right have a different idea of liberation. On 4 November 2005, they shouted “Russia for the Russians” and “Sieg Heil” and gave the Nazi salute. The mayor of Moscow, Yuri Luzhkov, was outraged, said never again, and banned the “Russian march” planned for the 2006 holiday; 8,000 police were sent to clear the few marchers who had gathered outside railway and metro stations.


The far-right includes Alexander Belov’s Movement against Illegal Immigration, Alexander Sevastianov’s National Power Party of Russia, the Slav Union (which proudly sports its Russian acronym, SS), and Russian National Unity, which was ordered not to carry swastikas. Some Orthodox religious groups, not recognised by the church, plus some Cossack groups, support the far right. It has another supporter in Dmitry Rogozin, leader of the nationalist party Rodina (Motherland), a pluralist coalition formed in 2003, but subsequently deserted by those leftwing members who found it too xenophobic. There is also Alexander Prokhanov, editor of the weekly Zavtra, and an influential writer associated with the European new right. Prokhanov has called for the Azerbaijani “mafia” (at most 3,000 people) to be expelled.


There are thought to be about 50,000 far right sympathisers and “skinheads” among Russia’s 143 million people. The often-murderous activities and violence of this minority and their rabble-rousing, anti-immigrant propaganda is disturbing. According to a source close to the Kremlin, though, half the 4 November demonstrators were in fact agents of the security services. Some senior police officers are inclined, like their czarist predecessors, to use or encourage popular movements to quell “revolutionary terrorists”.


The November celebrations signalled a revival of patriotism. The CPRF and its National Patriotic Union profess nostalgia for the USSR but they are being overtaken by a new generation. This has experienced the sudden advent of capitalism in previously blighted regions, developed its own survival strategies and is looking for scapegoats.

Bridge between Europe and Asia

The anti-Caucasian riots in Kondopoga in Karelia in September 2006 were a shock, awakening fears of a racist pogrom. An investigation by the political commentator Maxim Grigoriev suggested that the causes were actually social rather than ethnic. Local people were concerned about poverty (24%), crime (19%), unemployment (16%), terrorism (13%), education, health-care and housing (13%), and administrative corruption (9%). Only 2% expressed concern about conflicts between different nationalities.


These conflicts still attracted the most media attention because, according to Izvestia, it is easy to view all the other problems as a national question. The authorities also want to make room in business for the local population. Under cover of modernisation, they are imposing a new sharing of the wholesale and retail markets that were formerly dominated by Caucasians. However the security services habitually associate the presence of ethnic, non-Russian groups in markets with crime.


How are fresh outbreaks of xenophobia to be avoided, given the recent expulsion of hundreds of Georgians? Putin still officially claims that Russia is a multinational, multi-denominational federation. Yet the demands of territorial integrity and Moscow’s geopolitical interests are an excuse for increasingly brutal anti-terrorist operations: Chechnya is the first and worst example.


The president of Tatarstan, Mintimer Chaimiev, warned that there was a danger of nationalist extremism in a country where a fifth of the population is Muslim. He said the risk in such a multinational country was serious and it was essential to react to the least sign of chauvinism. The former Russian prime minister, Yevgeny Primakov, confirmed that Russian Muslims are not immigrants, as they are in most western countries, but natives.


Primakov said the co-existence in Russia of a native Christian majority and a native Muslim minority, combining their separate cultures to form an original community, is unique. Therefore Russia was the bridge between Europe and Asia. Will Russia’s new identity be rossiskaya (Russian in the civil and multinational sense) or russkaya (in the ethnic and exclusive sense)? The question remains open. The prospect of mass immigration makes it more important.


Last November United Russia, the centre-right party which hopes to win an absolute majority, held its congress in Yekaterinburg. Its leader, Boris Gryzlov, called it the “ruling party” and predicted that it would remain in power for 20 years. He said he would adopt an ideology based on a “neoliberal-conservative consensus” and the “rule of democracy”; in fact, a disparate union in favour of the presidential majority.

‘Geopolitical disaster’

In a speech to the Federal Assembly in April 2005, Putin presented an analysis of the post-Soviet transition that had caused uproar in the West. He said: “The collapse of the Soviet Union was the greatest geopolitical disaster of the century. Tens of millions of our citizens and countrymen found themselves outside Russian territory. The epidemic of disintegration spread to Russia: Savings were devalued, the old ideas destroyed, institutions broken up or hastily reformed. The country’s integrity was violated by terrorist action and the subsequent capitulation at Khasavyurt [the 1996 ceasefire confirming the victory of the Chechen rebels]. Groups of oligarchs, which controlled the flow of information, served only their own corporate interests. Widespread poverty was accepted as normal. All this against a background of economic collapse, financial instability, and social paralysis."


This analysis is thought to reveal a spirit of power (derjavnost). The ideologue behind it, Vladislav Surkov, has no time for the people who would like to make Russia into an ethnographic nature reserve. For him, the rule of democracy means justice for everyone and justice for Russia in the world. He rejects the idea of a Soviet- or North Korean-style closed society and is also opposed to the idea that Russia should become a source of raw materials for multinationals.


He violently disagrees with the offshore aristocracy, whom he blames for draining the economy dry; $800bn-$1,000bn of capital has been siphoned off and quietly transferred to 60,000 offshore Russian companies. The Russian tycoons, unlike their U.S. counterparts, are not attached to their country. Surkov claims that they live abroad and educate their children there; they manage their estates in Russia like old-style plantations.


At the Union of Right Forces (SPS) annual conference in December, the new party leaders, Leonid Guzman and Nikita Belykh, were optimistic and said they were on course to establish capitalism in Russia and continue the 1990s reforms in the interests of all its citizens (15). But the SPS and the other liberal party, Yabloko, have not held any seats in the Duma since the 2003 elections. The key government posts are held by moderate liberals, German Gref in the department of economic development and trade and Alexei Kudrin at the ministry of finance.


The SPS foundation, Liberal Russia, met last November, in a bank. The flower of the democratic and human rights intelligentsia were there: Ludmilla Alexeyeva, head of the Moscow Helsinki Group; Alexei Simonov of the Glasnost Foundation; historian Yuri Afanasiev, former leader of the pro-Yeltsin organisation, Democratic Russia; sociologists Tatiana Zaslavskaya, moving spirit of perestroika, Lev Gudkov and Mark Urnov; political commentators Igor Kliamkin and Tatiana Kutkovetz; physicist Georgy Satarov, president of the Indem Foundation, which has links with U.S. foundations, and champions the battle against corruption; and economists Yevgeny Yasin and Andrei Illarionov. The bookshop displayed copies of works by local authors and by two foreign authors: the U.S. economist Milton Friedman and the philosopher and economist Friedrich Hayek.

Sorcerer’s apprentice

Satarov explained that the 5% of people at the top had a decisive influence on the rest of the population, but the neoliberals were unfortunately no longer part of that upper echelon. He said there was a revival of traditional Russian authoritarianism; the aggression and the tendency to look for outside enemies was a reflex reaction of the authoritarian mindset to a situation beyond its control, a reaction that the leaders exploited to unleash a powerful wave of anti-neoliberalism. Satarov said that Putin, in taking this course, was playing the sorcerer’s apprentice, gambling on the inert force of Soviet internationalism and risking being swept away.


The neoliberals are also critical of the general drift of Russia foreign policy: the detachment over the “democratic” war in Iraq, the tolerance of Iran and Syria, the betrayal of Israel (inviting Hamas to Moscow), the complicity with socialist Hugo Chávez and other anti-U.S. leaders.


Garry Kasparov’s Orangists -- more radical democrats -- are determined to take action. A strange group has formed round his United Civil Front, including young liberals from Grigori Yavlinsky’s Yabloko party; national bolsheviks (natsboly) and Stalinists from Viktor Anpilov’s Working Russia party; and humanitarian NGOs associated with the All-Russia Civil Congress. Members of the neoliberal right and assorted leftwing movements are banding together to oppose the Putin government. Some 2,000 of them took part in demonstrations last December.


At a forum, Another Russia, held in the margins of the G8 summit in August 2006, and generously funded by the U.S. National Endowment for Democracy, this alliance of right and leftwingers went so far as to suggest that Russia should not be in the big powers’ club at all. Kasparov claimed that it was politically impossible for Russia to belong to the G8 because, unlike the other members, it was not a democracy. Nor did it meet the economic criteria for membership, because it was far from having the neoliberal, transparent system adopted by the other countries. The Russian state constantly extended its role in all areas. The forum was honoured by a visit from the U.S. secretary of state, Condoleezza Rice, and the British ambassador, Tony Brenton, an active supporter of the dissidents.

Cold war on the West

According to Illarionov, Putin had declared cold war on the West, although he ought to have accepted vice-president Cheney’s offer of friendship and strategic partnership at Vilnius, and acknowledged the benevolent role of the U.S. foundations in the former Soviet Union.


The Russian neoliberals believe that those now in power could not see that the western system of government was essentially democratic and the Russian system autocratic. The western countries had never concealed the fact that their purpose in promoting democracy was to secure their national interests; it amounted to the same thing. Democracy was not only the best means of development; it guaranteed peace and security for the democratic alliance of states.


Regional elections will take place this March, followed by parliamentary elections in December and presidential elections in March 2008. The forces favourable to Putin are likely to win. Their opponents in Russia and the West are likely to contest the results. Berezovsky has said that the present regime will never allow fair elections and there is only one solution -- seize power by force. This advocate of “democratic revolution” now lives in London, where he has been granted political asylum.


There is an unknown factor. Two-thirds of Russians would like Putin to seek a third term, but this is barred under the constitution. However it is difficult to imagine the Moscow scene without him, especially as his possible successors are unfamiliar. There is speculation about what post the “founding father of stabilisation” might take next: the chairmanship of United Russia or Gazprom have been proposed.


What policy would he pursue, faced with the challenges of the demographic crisis, membership of the World Trade Organisation, and life after oil runs out? The union supporting the presidential majority still lacks direction and a real social project. What will become of the crew when the captain no longer holds the tiller? There is no assurance of a peaceful handover. Various factors could change the picture: tensions with the West, US adventures to bring democracy to the greater Middle East, possible conflict in South Caucasus, post-George Bush Washington. The features of the regime and its place in the world will slowly take shape: A second new Russia is in the making. -- Translated by Barbara Wilson




Jean-Marie Chauvier is a journalist and the author of URSS, une société en mouvement (Editions de l’Aube, La Tour d’Aigues, 1988).


© 2007 Jean-Marie Chauvier - Le Monde diplomatique


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Released: 18 February 2007
Word Count: 3,606
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The Cast of Characters in the Kremlin


Vladimir Putin, president of the Russian Federation


Mikhail Fradkov, prime minister


German Gref *, minister of economic development and trade


Boris Gryzlov*, chairman of the state Duma and the ruling party, United Russia;


Sergei Ivanov*, minister of defence


Alexei Kudrin*, minister of finance


Sergei Lavrov, minister of foreign affairs


Dmitry Medvedev*, first deputy chairman, chairman of the board of the 51% state-owned gas monopoly, Gazprom


Igor Sechin*, chairman of the state oil company, Rosneft


Vladislav Surkov, ideologist of sovereign democracy


Neoliberals in power and in opposition


Yegor Gaidar**, moving spirit behind the reforms and founding father of the 1992 shock therapy


Anatoly Chubais**, moving spirit behind the privatisations under Boris Yeltsin and chief executive of the state-owned electricity monopoly


The pro-western radical liberal opposition


Boris Berezovsky, deposed oligarch, based in London, active in Russia and Ukraine


Andrei Illarionov, former adviser to Putin, and the US Cato Institute


Garry Kasparov, United Civil Front, Another Russia


Mikhail Kassianov, former prime minister under Putin


Georgy Satarov, All-Russia Civil Congress, Indem foundation (associated with the Soros, Ford and MacArthur foundations)


* Often cited as possible presidential candidates. Medvedev, Gref and Kudrin are reputed to be neoliberals; Gryzlov, Ivanov and Sechin are nationalists.

** Members of the neoliberal opposition party, the Union of Right Forces.




© 2007 Le Monde diplomatique


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Released: 18 February 2007
Word Count: 217
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Advisory Release: 18 February 2007
Word Count: 3,606
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