The event of crucial importance for Russia’s wellbeing happened last week in Brussels where EU leaders managed to put together a half-deal on containing the Greek debt crisis and on preserving the integrity of the eurozone. Russia had no say in their desperate deliberations and was very far from their minds (while China was heavily factored in), but the Moscow stock exchange registered a rally and the ruble strengthened against the US dollar (RBC Daily, Vedomosti, October 28). This instant response makes a telling contrast with the complete indifference of Russian business actors to the economic statements that come daily from the supreme authorities. For that matter, the market showed only a mildly negative reaction to the “breaking news” on Prime Minister Vladimir Putin’s decision to take back the power of the presidency, and even that was probably caused by the demonstrative resignation of Finance Minister Aleksei Kudrin (Kommersant-Dengi, October 3).
Vulnerability of the Russian petro-economy to external shocks is well-known, but there is still a paradox in the fact that the high level of state ownership over major economic assets translates into very low ability to influence economic development. President Dmitry Medvedev was surprised to hear on October 29 that government expenditures exceeded 40 percent of GDP, but his timid words “we need to think about it” clearly confirm that the work of various expert groups on kick-starting Russia’s modernization was wasted (Kommersant, www.gazeta.ru, October 29). Putin confidently charts the course of stable growth (even if slow) with as little reforms as possible and sees no need to elaborate these “more-of-the-same” guidelines in any economic program (www.gazeta.ru, October 27).
Putin’s firm control over the political agenda makes the fast-approaching parliamentary election entirely nonsensical and the follow-up presidential elections into a preordained referendum on his peerless leadership (The New Times, October 24). Experts used to apply to the quasi-democracy that Putin installed in Russia such terms as “managed” or “imitation,” but now all pretenses at imitating competition are abandoned. The liberal PARNAS party was banned from the elections; the project for reinvigorating the Right Cause party with the energy of charismatic billionaire Mikhail Prokhorov was aborted; Dmitry Rogozin was ordered to stay in Brussels and had to instruct his motley crew of nationalists to vote for the preponderant United Russia. This crude electoral farce may suit Putin’s taste but many in the ruling elite see it as a sign of fin de siècle and make haste with evacuating their money, so the standard answer to the question about leaving for good now is: “With the first opportunity – no” (Vedomosti, October 28).
One distinguished voice among dozens of commentators and thousands of bloggers expressing disgust with this farcical democracy belongs to former Moscow Mayor Yury Luzhkov, who had remained suspiciously silent for a year since his sacking. Last week he asserted that the public support for servile United Russia (of which he was a founding father) was plummeting and that Medvedev would make a very weak prime minister (Nezavisimaya Gazeta, October 27). The Kremlin could not let that outrage go and clarified that Luzhkov was fired for the unprecedented spread of corruption in Moscow and that the state prosecution had called him for an interview in connection with a fraud investigation (www.lenta.ru, October 26). The conversation scheduled for November 15 could be concluded very quickly with Luzhkov’s arrest, and in order to avoid it citing “political persecution” he might decide to make public some evidence of corruption and abuse of office in high places (Moskovsky Novosti, October 27).
This juicy scandal unfolds in parallel with another court case occurring in London and involves two arch-typical “oligarchs” – Boris Berezovsky and Roman Abramovich. English judges are having a hard time deciding whether out-swindling a master-swindler constitutes a misdemeanor and what is the exact meaning of the accusation “he kinul me” (The New Times, October 17). These proceedings make a very special background for Medvedev’s conference on building an international financial center in Moscow, at which a key issue is winning trust of Western investors. Sweet promises are reinforced by data on $30 billion inflow of direct foreign investment in the three quarters of this year, but half this money is reinvested profits, and most of the rest is an element of a circular scheme of evacuating money from Russia to “safe havens” like Cyprus or the Virgin Islands and returning a part of it as “Western” capital (Vedomosti, October 27). International rating agencies are not fooled by this camouflage so the forecast for Russian banks has changed from “stable” to “negative” (Nezavisimaya Gazeta, October 25).
The rot in the ruling bureaucracy has grown so pervasive that even some die-hard Putinists are turning against the stagnant stability. Viktor Cherkesov, who gained fame in 2007 by revealing the feuds between siloviki clans, has joined the list of the Communist Party and admits that he placed too much hope on the “special mission of the chekist community” (Moskovsky Komsomolets, October 28). Putin remains royally unconcerned about such grumbling and shrugs off economic alarmism. He is confident that the road of slow growth answers the expectations of the vast majority of Russians, who would trust him to stick to it, and if things would turn to the worse, they will rally around him as the only hope for deliverance.
Putin portrays himself as a statesman on a par with Charles de Gaulle but his leadership style evolves more in accordance with the sentiment of Alexander II: “It is not difficult to govern Russia but utterly useless.” Counting on the elite and public preference for the sweetness of stagnation he would not want to reflect on the desire for change that overtook Budapest 55 years ago (Ogonyok, October 24). His role-model Yury Andropov, then Soviet ambassador to Hungary, panicked and cried for tanks, which made hopeful crowds angry, and it took 17 divisions to suppress the uprising. Putin does not have one division that would be ready to fight in the streets of Moscow, and his courtiers are preparing to fight in the courts of London for their spoils. By reducing politics to a farce he makes his own performance certain to end with a flop.