Russian Puzzle: Change Inevitable, Evolution Impossible, Revolution Implausible

Publication: Eurasia Daily Monitor Volume: 9 Issue: 197

President Vladimir Putin at the October 2012 meeting of the Valdai Club

The Moscow rumor about President Vladimir Putin’s health problems appears well-informed and confirmed by several cancellations of long-scheduled visits and by the postponement of the Commonwealth of Independent States (CIS) summit in Ashgabat, Turkmenistan, but it is remarkable how little interest it stirs in Russia (, October 26). The State Duma has been agitated by the voting on the legislation on control over the personal finances of medium- to high-level bureaucrats, and the law enforcement elites are monitoring the aggressive move of the Investigation Committee against Defense Minister Anatoly Serdyukov (Kommersant, October 27;, October 26). The opposition, meanwhile, is infuriated by the deliberately flagrant kidnapping in Kiev of Leonid Razvozzhaev, a comrade of the Left Front leader Sergei Udaltsov, and his brutal interrogation in Moscow aimed at manufacturing evidence for the trial over instigators of the alleged riots on May 6 (Novaya Gazeta, October 26). Discontent of various kinds and persuasions is bursting through loose seams of the corrupt proto-authoritarian system, and Putin—whatever his state of health—is clearly not on top of events.

The uncertain dynamics of political turmoil in Russia are exemplified in a new report by the Center for Strategic Research, which was right on target predicting the explosion of mass protests last winter and now identifies further shifts in the public mood, underpinned by the fast declining confidence in the government and specifically in President Putin (Vedomosti, Kommersant, October 24). The analysis is based on a focus group methodology, and the findings are not altogether coherent: There is a firm conviction among respondents that the present-day “stability” is unsustainable; few to none hope that authorities could initiate reforms that would put the country on the right track, a clear understanding that the regime cannot be changed through elections; and a solid majority believes that a “white ribbons” revolution is not in the making (, October 27). The authors worked on a contract from the Committee for Civic Initiatives, created by the former Finance Minister Alexei Kudrin, and sought to avoid any radicalism but still arrived at the conclusion that the present course of procrastinations is leading to a “national catastrophe” (Moscow Echo, October 24). The report’s authors used to champion “enlightened reforms” favored by Kudrin, but now they have to focus on the idea of a non-violent and controlled chaotic revolution (, October 26).

The Kremlin found it necessary to comment on the report, downplaying its message as “unduly pessimistic.” And appearing self-confident, Putin instructed the members of Valdai Club to focus their deliberations this year on economic issues (RIA Novosti, October 24). The dinner menu was salivating, but the questions were dulled by Putin’s advice to be more “objective” in judgments about the opposition. Therefore, the general impression of this year’s Valdai Club discussions, while traditional an opportunity to gain insight into Russian politics, boiled down to the single honest word, “boring” (RBC Daily, October 26). At last year’s dinner, Putin came alive, describing the futility of the so-called “shale gas revolution” in the US energy market. But this year he felt obliged to spend time vigorously justifying the takeover of the TNK-BP oil company by Rosneft (Kommersant, October 26).

The TNK-BP deal has been in the making for many months, perhaps since the spectacular collapse of the shares and assets swap between Rosneft and BP in spring 2011, which was also blessed by Putin. The takeover will turn the Russian company into the largest “oil major” in the world (Kommersant, October 23). Expert opinions about this big leap in expanding state control over the oil industry are decidedly mixed. Whereas international rating agencies are inclined to downgrade Rosneft, which needs to borrow at least $45 billion to buy out BP (which agreed to accept up to 20 percent of Rosneft shares) and TNK-BP’s Russian owners (who demand $28 billion is cash). Yet, Rosneft is already heavily in debt (, October 23; RBC Daily, October 25). The new super-giant might become as loaded with political agendas and as disinclined to check the climb of operational costs and the decline of efficiency of management as Gazprom is. The ceremony of opening for business the long-delayed Bovanenkovskoe gas field (which Putin attended only virtually from his residence) cannot alter the assessment of deep troubles that the Russian gas “champion” is sinking into (Nezavisimaya Gazeta, October 24). The investigation launched by the EU Commission into Gazprom’s operations in Eastern European markets is inescapably moving toward large fines and major “unbundling.” Even Putin has come to recognize that Gazprom failed to adapt to the profound changes in the global gas market.

Economists engage in learned debates about how much of the shrinking oil dividend could be allocated to the rescue of the insolvent pension system. But for the majority of Putin’s elites, this is abstract theorizing—they are convinced it is not possible to either reduce their predatory appetites or to squeeze social spending. This foreboding turns squabbles for the still generous budget expenditures all the more fierce because the “bacchanalia of plenty” may not last another year. Former Kremlin insider Gleb Pavlovsky feels free to ridicule the frenzy of intrigues in Putin’s many “circles” populated by desperate courtiers who have long ago lost touch with reality and are now losing trust in their master (Novaya Gazeta, October 24). They may have liberated themselves from the concerns about possible sanctions from the mostly indifferent West where Russia-fatigue is the prevalent attitude. But, at the same time, the partially irrational fears of the regrouping opposition, as well as the rage of the “have-nots” and of one another, are becoming all the more intense.

It was nine years ago that Mikhail Khodorkovsky was thrown behind bars for the crime of charting a different course for Russia than the one leading to the dead end of Putinism. Last week, Putin intrigued the Valdai experts with the suggestion to stage a particularly exciting event next autumn in order to mark the tenth anniversary of their club. This event could break the progressively boring pattern and get lively were Khodorkovsky to come as the guest of honor—but it is certain to remain tedious if Mr. Putin is the only notable guest in attendance.