RUSSIAN-STYLE STABILIZATION: HOW LONG CAN IT LAST?

By Aleksandr Tsipko

Political life in Russia has become dull and drab again over the last few weeks. News programs are dominated by floods, air crashes and, as always, high-profile murders. As many analysts predicted, Putin’s rise to power has brought an end to the era of fierce political struggle in Russia. It is becoming increasingly obvious that Putin, assuming he is alive and well, will remain president for a second term. The bottom line is that no political force in Russia today has any interest in a change of leader.

Typical of this is the assertion by SPS ideologue and Duma deputy Boris Nadezhdin that talk of “genuine democracy and genuine democratic succession can only take place after Putin’s second term, when the question arises not of his successor, but of the election of a politician who belongs to the most popular party and who is supported by a majority of the public.”

Many analysts, however, think Nadezhdin is too optimistic. If Putin decides to relinquish power after his second term as president, he will probably not be interested in the democratization of the country. The fact is that increased democratic freedoms in Russia always lead to a settling of accounts with the past, and to reprisals–at least moral reprisals–against the old leaders. Gorbachev is now blamed for the collapse of the Soviet Union. Yeltsin is blamed for the collapse of the Soviet Union, for plundering state property and for the criminalization of the country. Putin’s current and increasingly obvious alliance with the privatizers of the fuel and energy complex and the natural monopolies may similarly be the target of his denunciation as a politician in the future. This is why Putin will probably relinquish power in exactly the same way as Yeltsin did–not by democracy but by contract, or by “concepts.”

Under these circumstances the communists are not in the running at the moment, because they have very weak leaders and, despite holding on to their traditional core voters, who make up one-third of the population, they do not have anyone they can put up against Putin. They have not even found a replacement for Zyuganov, whose personal popularity rating has fallen recently even among protest voters.

Significantly, today’s main oppositionist, Boris Berezovsky, has toned down his fiery criticisms of Putin and no longer claims in interviews that Putin will not even survive as president until the 2004 elections. The oligarchs and their new leader Mikhail Khodorkovsky have backed down from their recent plan to nominate the tough General Shamanov, hero of the second Chechen war, to stand against Putin at the next presidential election. True, the president’s administration has done everything it can to scupper the chances of any potential rivals to Putin and the siloviki. It has emerged that the administration will not support General Lebed in his plan to seek reelection as governor of Krasnoyarsk Krai for a second term. Lebed will thus be deprived of his regional platform to launch a possible offensive on the Kremlin. Similarly, the administration prevented General Shamanov, who is governor of Ulyanovsk Oblast, from taking control of the fuel and energy complex in his region.

It can be seen that, despite his enduring popularity (official figures show his approval rating to be running at 70 percent), Putin does not want to take any risks, and has already put in place all the conditions necessary to ensure victory at the next presidential election. Incidentally, this circumstance indicates that Putin is placing his bets on his “administrative resources” rather than the “love of the people.”

Interest in the backstage battles within Putin’s team is also waning. It turns out that there is no serious rift between the siloviki, the St. Petersburg KGB alumni and the St. Petersburg liberals, and that Putin uses each group for the right purpose at the right time. It turns out that the media exaggerated the intensity of the conflict between Putin’s people and the old “family” staff, for example between Putin’s man Kozak, who drafted the legal reforms, and “family” man Ustinov, the prosecutor general. It turns out that there is no danger of the siloviki seizing power in Russia, and that Putin is not interested in replacing all the old Yeltsin elite with graduates from the power structures.

Putin continues to be perceived in Russia as a stabilizing president and has been seen to be making a great deal of effort recently to keep Russia’s political elite happy. In this respect, in concentrating on the elite minority, Putin is following the Yeltsin line after all. Talk of a change of course and a change of regime is clearly exaggerated.

It is clear that Putin is putting most of his money on big business and protecting its interests, at least for now. On Putin’s initiative, and with his support, a liberal law was passed reducing profit tax from 35 to 23 percent. On the president’s initiative, and with his active support, the long-awaited law on the free sale of land in Russia was passed in the Duma at the first reading–with the exception, for now, of agricultural land. Putin has decided to carry out the liberal reforms which Yeltsin and Gaidar were unable to push through in the early 1990s. Through Prime Minister Kasyanov, Putin has satisfied the appetites of the oil barons by lowering tariffs on exports of “black gold” from Russia. This gesture cost the budget US$2 billion. Moreover, Putin supports liberalizing the export of capital–a measure that is unpopular in Russia. The president also wants to achieve a reduction in the amount of hard currency receipts that must be converted into rubles from 75 percent to 50 percent.

A new consensus between Putin and the “family” has also contributed to stabilization. In recent months, two key figures from the old “family”–Aleksandr Voloshin and Mikhail Kasyanov–have considerably consolidated their positions. Interestingly, with this new state of affairs, when the liberals have almost no reason to fight Putin, the need for Gusinsky’s media empire fades of its own accord. Recently the former director of NTV Yevgeny Kiselev told friends that he was trying to persuade Gusinsky to give up his plan to relaunch the Itogi news analysis program on TV-6. In Kiselev’s view there are essentially neither serious subjects nor any serious motives for an ideological opposition to Putin’s course. Exposure of the crimes committed in the second Chechen war, Kiselev thinks, does not strike a chord with most viewers. Moreover, this task is being ably handled by the new NTV under Kokh. Incidentally, many analysts are saying that the change of management at NTV has not affected the traditional liberal pro-western orientation of the channel. As it turns out, the change of management at NTV presented no threat to freedom of speech in Russia.

The liberal media, which objectively reflect the West’s interests in Russia too, simply cannot undermine Putin’s current course, which is designed to reintegrate our country into the international community. Attempts by some liberal media in the recent past to adopt the slogans of the communists and criticize Putin from a popular standpoint will damage the SPS, which is trying to establish itself in the right-wing political niche. Putin’s current liberal course mainly meets the interests of improving relations between Russia and the West. In Russia, incidentally, ordinary people were also delighted particularly with the personal and human achievements of the meeting between Putin and Bush Junior in Ljubljana. Bush, who irritates the European intellectual elite, does not provoke any such feelings in Russia, strange as it may seem. Many were won over by the phrase that he trusts Putin as a man mainly because he is loyal to his country and to his family.

Under these new circumstances, when the battle within the Kremlin is waning and the internal and external threats to Putin as president are also fading, all attention has shifted to the line of possible confrontation between the Kremlin and the majority of the population who are still suffering. Clearly, as everyone is saying, Putin is no longer maneuvering between the majority and the elite minority; he would prefer to achieve an alliance with Russia’s business elite.

The main problem therefore lies in assessing the attitude of the public towards Putin’s new liberal path. There is a real threat to him here. How long will he be able to pursue his current, liberal course, one so unpopular with the public? This is the central question currently exercising the minds of the experts. In all seriousness, this is once again the old Russian question: When will the discontent and the hungry begin to revolt?

In Russia there is growing realization that the South Korean model we have adopted of creating vertically integrated companies, where all enterprises work for the export sector–in Russia’s case in the fuel and energy complex–will not result in an improvement in the material wealth of the general public.

Objectively speaking, our vertically integrated companies restrain the growth of small and medium business, which could really provide Russia with cheap jobs and reasonable incomes. Experts also think that our vertically integrated companies, formed around fuel and energy sector enterprises, do not operate according to the market, but according to “concepts,” that is, in accordance with confidential agreements between the oligarchs and Putin. Only the high-tech industry strives for transparency and openness in its business dealings, but its leaders do not set the agenda in Russia.

Thus we have chosen a path for the development of capital that hampers the growth of solvent consumer demand, and this impedes the formation of a civilized market. However, in answer to the question “Will there be a revolt?” there is considerable divergence in the views of the intellectual elite. Some intellectuals think that everything will be fine, that the current gulf between the wealth of the elite and the poverty of the majority is the normal state of affairs for Russia: Russians have always lived badly, and they are used to it. They sometimes even cite the example of India, where hundreds of millions of people have lived in abject poverty for centuries, but have never rioted. These optimists also place their trust in the regional authorities, which will be a buffer between Moscow and the discontented masses, and which will have to find a way of pacifying the people.

Others, including myself, think that Russia is no India, and that the idea of protest is a major component of the Russian mentality. In our climate there is a physical limit to the decline in wealth. In our climate, a hungry man with no access to warmth or a roof over his head is doomed to die. The advocates of fast-track liberal reforms have forgotten about this. In my view, Russia today compares its wealth not with the poverty of India but with the prosperity of Europe. This cannot be dismissed. Russians will not put up with their current poverty and the striking inequality between the elite and the majority for long.

For now, everything suggests that the optimists are right. We really are witnessing a strange phenomenon: Putin maintains a relatively high approval and popularity rating, while doing practically nothing to improve the welfare of the population. Moreover, he maintains this rating despite moving politically closer to the unpopular reformers and openly pursuing a policy of dismantling the old Soviet social sphere. Through Putin we have rejected the free Soviet healthcare system and the idea of free higher education and, to a significant degree, secondary education.

Nevertheless, I believe that Putin’s current favorable position cannot last long, unless, of course, he radically alters his chosen course. His popularity rests mainly on the idiosyncrasies of the Russian psyche, on the hopes placed in a new leader, on the desire for stability, and on the fear of the potential upheaval involved in a change of president. But as a basis for the implementation of long-term policies the Russian psyche is too fragile. This popularity can collapse overnight, just like the oil and gas prices we have to thank for helping us avoid starvation.

It is also essential to take into account the fact that for many people Putin’s actual rating is a problem. In a number of Russian regions–Irkutsk and Tomsk Oblasts, for example–it stands at no more than 30 percent. It is noticeable that for all his popularity, Putin is unable to influence the results of gubernatorial elections in the regions. All his attempts to lobby for this or that candidate have ended in failure.

It is striking that after Putin announced his program to reform the housing and utilities complex and to abolish of the Soviet social program, confidence in the liberal market reforms immediately fell by ten points–from 22 percent to 12 percent. And as discontent with the liberal reforms inevitably rises while this policy is being pursued, this discontent will transfer itself to the leader and initiator of these reforms–that is, Putin himself.

Putin’s recent declaration that it was necessary to abolish the death penalty as soon as possible also met with public disapproval. The thing is that 80 percent of Russians believe that only the death penalty and tougher sentencing–above all in relation to drug trafficking–will help curb the increase in crime. The number of murders with aggravating circumstances has risen threefold in Russia in the last ten years. As yet the criminal world in Russia is stronger than the state. Under these circumstances ordinary people see liberalization of the penal system as an anti-popular measure taken in the selfish interests of the elite, which is scared of falling out with the OSCE. And more and more people are clearly unhappy that Putin’s team, above all the siloviki, is incapable of bringing the second Chechen war to a victorious end.

This all suggests that if the current policy of bringing the interests of Putin’s team into line with the interests of oligarchic capital, for which the public are paying with what little is left of their wealth, open conflict between the ruling regime and destitute Russians is inevitable, sooner or later. It is possible that there will be a repeat of the situation Yeltsin found himself in towards the end of his second presidential term. But then Yeltsin had an emergency exit–patriotic rhetoric and a patriotic successor, declaring war on Chechnya in the name of the integrity of Russia. Putin’s tragedy is that he is wasting Russia’s last mobilizing resource, rapidly and to no purpose, and his policies are compromising the idea of serving Russia and the people.

Aleksandr Tsipko is a senior associate at the Russian Academy of Sciences’ Institute for International Economic and Political Research and a columnist for Literaturnaya Gazeta.