Putin's Russia: slowing the pendulum without stopping the clock

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Putin’s Russia: slowing the pendulum

without stopping the clock

International Affairs 77, () ‒

MARTIN NICHOLSON*

º

By the time this article appears, eighteen months will have elapsed since Vladi-mir Putin was inaugurated president of Russia. On present evidence he will seeout his two presidential terms, until 2008, so he is still at the start of the road. Hehas been on the road long enough, however, to provide some answer to thequestion ‘Who is Mr Putin?’, and to allow us to assess how he may respond tothe challenges he faces in the remainder of his first term.

The making of a president

As long ago as 1993 the Russian Federation’s first president, Boris Yeltsin, con-fessed to agonizing over his choice of successor.1 The question dominatedYeltsin’s second term from 1996, particularly following the crash of 1998, as hebecame ever more incapacitated and the threat of criminal prosecution foralleged corruption hung over his family and entourage. Finding someone whowould both guarantee continuity and at the same time appear as a completechange from an increasingly unpopular Yeltsin was a challenge. At the begin-ning of 1999, one of Yeltsin’s influential public relations advisers, Gleb Pavlovsky,concluded that even if the populace was disgruntled with the way Yeltsin ruled,it was prepared to live with the results of that rule. In Pavlovsky’s view, anequally pro-market but more conservative leader, able to promote the ‘statepotential of liberal values’, could command a majority at the next presidentialelections.2 That leader was eventually found, not from among politicians eitherof Yeltsin’s own or of the next generation, but from among young officials fromthe security services, loyal but politically untainted.3

* An earlier version of this article was discussed in June 2001 at the Royal Institute of International Affairsin the framework of the Prospects for the Russian Federation Project of the Institute’s Russia and EurasiaProgramme. The author is grateful for comments and suggestions made at that meeting.

1 Interview with Eldar Ryazanov, broadcast on Ostankino Channel 1 TV, 16 Nov. 1993, BBC Summary ofWorld Broadcasts, 19 Nov. 1993, SU/1850 B/8.

2 Gleb Pavlovsky, ‘Termidor 9: zavtra pravy konservatism’, Ekspert, no. 001, 18 Jan. 1999.3 Yu. M. Baturin et al., Epokha Yeltsina: ocherki politicheskoi istorii (Moscow: Vagrius, 2001), p. 782.

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The original choice was Nikolai Bordyuzha, a 49-year-old KGB militarycounter-intelligence specialist. Appointed head of the border guards service inJanuary 1998, Bordyuzha was promoted within a year to head the president’sadministration and serve simultaneously as secretary of the president’s SecurityCouncil—an unprecedented combination of powerful posts. But Bordyuzhacould not cope with the intensifying Kremlin intrigue and was sacked in March1999. Bordyuzha’s rise was closely followed by that of Vladimir Putin, thenaged 47—another former KGB employee, but with broader experience, havingworked in the administration of Mayor Anatolii Sobchak of St Petersburg andthen in a variety of posts in Yeltsin’s own administration. Putin was appointeddirector of the FSB (the internal security arm of the former KGB) in July 1998.In March 1999 Yeltsin chose him to replace Bordyuzha as Security CouncilSecretary, and from there appointed him prime minister in August. In private,Yeltsin merely offered Putin the prime ministerial job ‘with prospects’; but hewent on to announce publicly that he had selected Putin as his successor, whichgave Putin no chance to refuse.4

Putin satisfied the requirement for continuity by guaranteeing Yeltsin and hisfamily immunity from prosecution at the first opportunity.5 As for the require-ment for a radical change, the ongoing crisis in the Chechen Republic providedthe context in which to present Putin as a quite different leader from Yeltsin.By 1999 the peace that had been negotiated in August 1996 was no longerholding. Lawlessness in Chechnya had led not only to a spate of kidnapping, butalso to increasing insecurity on the republic’s borders with the neighbouringregions of the Russian Federation. Following an incursion by Chechen warlordsinto Dagestan in August 1999 and the deaths of some 300 people in violentexplosions in Moscow a month later, Putin assumed the mantle of the leaderwho would restore order to Chechnya and morale to the Russian people.6

Putin’s electoral campaign was waged from two headquarters. The official onewas at the Centre for Strategic Assessments, which he had set up as prime ministerunder his principal economic adviser from St Petersburg, German Gref.7 At thesame time an unofficial headquarters operated in the Kremlin under the com-mand of Yeltsin’s chief of staff, Aleksandr Voloshin, with a number of membersof Yeltsin’s actual and political ‘family’.8 The intellectual and political talents of4 This is Putin’s own account in a series of interviews published during his presidential campaign. See

Natalya Gevorkian et al., Ot pervogo litsa: razgovory s Vladimirom Putinym (Moscow: Vagrius, 2000), p. 131.The interviews were also published in English as Vladimir Putin, first person (London: Arrow, 2000). Pagereferences are to the Russian edition.

5 Decree of 31 Dec. 1999, ‘On guarantees for the President of the Russian Federation, having laid downhis office, and members of his family’, <http://press.maindir.gov.ru/press/messages.asp?yy=1999&mm=12&dd=31&nn=7> (in Russian, as are further internet references in this article, unless otherwiseindicated). This was one of the first decrees Putin issued as acting president following Yeltsin’s NewYear’s Eve resignation.

6 The sequence of events was convenient enough from an electoral point of view to have aroused thesuspicion that the bombings and even the incursion into Dagestan had been provoked by Yeltsin’sregime to launch Putin into the presidency. But no hard evidence has been produced to support thistheory.

7 Putin’s election website named the complete team: <http://www.putin2000.ru/05/>.8 Yelena Tregubova, ‘Vladimir na shee’, Kommersant vlast, 22 Feb. 2000, pp. 5–7.


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these two teams have continued to support Putin in the early stages of his presi-dency. There was an urgent need to acquaint the general public with the manthey were being asked to elect as their president. Putin’s deliberately short andgeneral manifesto was published in February 2000.9 It had been preceded by a longand diffuse document, his ‘millennium’ article, posted at the end of December1999 on a newly created government website.10 A book-length series of interviewswas designed to fill in the human side of a hitherto unknown official.11 Thereare many inconsistencies in these documents, but they contain three commonand overlapping themes, which form Putin’s credo as a liberal conservative inthe mode outlined by Pavlovsky. These themes are: restoring order under a strongstate; overcoming Russia’s backwardness through a market economy; andreviving (some would say creating) a sense of nationhood in post-Soviet Russia.

Putin was duly elected president on 26 March 2000, with an official 53 percent of the vote. With the war in Chechnya being prosecuted successfully,those regional leaders who had initially backed Moscow Mayor Yurii Luzhkovas an alternative quickly jumped on the acting president’s bandwagon—and theelectorate, by and large, jumped with them.

What sort of a president?

The duties of the president are fairly precisely defined in the Russian constitu-tion, but Putin had only the egregious Boris Yeltsin as an example of how inpractice to go about the job. With no leadership experience of his own (hiscareer, in stark contrast to Yeltsin, had been that of a perennial second-in-com-mand), Putin has veered between a monarchical and a utilitarian view of hisrole. On ceremonial occasions Putin has recalled Yeltsin’s parting advice—‘Take care of Russia!’—and put on the mantle of the father of the nation,responsible for everything. However, his later description of himself as no morethan a man hired by the electorate on a four-year contract (the presidentialterm) to fulfil certain functional and professional duties is more characteristic.12

In either mode, patriotism is probably the quality for which Putin wouldmost like to be remembered. Yeltsin’s political career was built on the rejectionof his own Soviet past and that of his country. Apart from the impractical idea ofrestoring tsarist Russia, he had nowhere to steer the Russian ship of state excepttowards the values and goals of Western democracies. In doing so, in the eyes ofmany Russians, Yeltsin squandered Russia’s patrimony. Putin, in contrast, has

9 ‘Otkrytoe pis’mo Vladimira Putina k rossiyskim izbiratelyam’, <http://www.putin2000.ru/07/>. Alsopublished in Izvestiya and other central newspapers on 25 Feb. 2000. A translation, ‘Open letter byVladimir Putin to the Russian voters’, was carried in Johnson’s Russia List, no. 4133, 25 Feb. 2000,<http://www.cdi.org/russia/johnson/4133.html>.

10 Russia at the turn of the century, <http://www.pravitelstvo.gov.ru/english/statVP_eng_1.html> (inEnglish).

11 Gevorkian et al., Ot pervogo litsa.12 For the first, see his inaugural speech on 7 May 2000, <http://www.press.maindir.gov.ru/press/

messages.asp?yy=2000&mm=5&dd=7&nn=1>, and for the second, his interview with some of thecentral media on 25 Dec. 2000 (Nezavisimaya gazeta, 26 Dec. 2000).


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described himself, with no hint of embarrassment, as ‘the successful product ofthe patriotic education of a Soviet man’.13 His vision of a strong, paternalistRussian state includes the Soviet period, rejecting only the Soviet economicsystem on the grounds that it did not lead to prosperity. There is little doubtthat Putin’s brand of all-weather patriotism is better suited than Yeltsin’saggressive partisanship to the ‘silent majority’ of Russians, still struggling toovercome the humiliation brought about by the disintegration of the SovietUnion. So is his personality. Putin has brought youth and novelty to the job. Bysimply fulfilling his duties in a predictable and dignified way, which Yeltsin didnot, he has provided the figurehead that the state requires and the populationcraves. In his first year in office Putin also cut a Gordian knot that had defeatedYeltsin—he had national symbols for the new Russia written into law. Charac-teristically, he found an eclectic mix: the music of the Soviet national anthem,accompanied by new, all-purpose words; the tsarist tricolor as the flag of thenation; and the Soviet red flag for the armed forces. Putin seized on the dismayof Russian athletes, unable to sing their wordless and unfamiliar anthem at theSydney Olympic Games in September 2000, in order to push these measuresthrough parliament in time for the New Year celebrations on the eve of 2001.Liberals were aghast, but the majority approved.

Putin has championed two historic Russian institutions that remain high inpopular esteem despite their manifold failings: the Russian Orthodox Churchand the armed forces. Secretly baptized by his mother,14 Putin has gained respectby observing Orthodox ritual to the manner born, which Yeltsin never managed.To his credit, however, he has resisted the siren call of the more chauvinisticend of the Orthodox spectrum and has paid attention to other faiths as well.15

The initial stages of the Chechen campaign gave Putin the chance to restore thearmed forces to their traditional high place in popular esteem, although theKursk submarine disaster in August 2000 made it difficult to sustain this effort.Putin resisted the temptation to lay blame, but used the incident to insist thatthe armed forces must be cut down to a size where they can be properlymaintained. Putin’s initial gestures of respect towards the military may allowhim to do this without significantly affecting their status in society or his ownimage as a patriotic leader.

It falls to Putin, as president, to define Russia’s place in the world. He startsfrom the premise that Russia is and always will be a great power, by virtue of itsgeography, history and economic potential alone.16 His election statements,however, rejected the imperial connotations of this stance. He argued that

13 Gevorkian et al., Ot pervogo litsa, p. 39.14 Interview with Komsomolskaya pravda, 11 Feb. 2000, translation in Johnson’s Russia List, no. 4106, 13

Feb. 2000, <http://www.cdi.org/russia/johnson/4106.html>.15 Putin’s demonstrative support of a Chief Rabbi who is a rival to one supported by Vladimir Gusinsky

betrays ulterior motives, however.16 ‘Russia was and will remain a great country. This is determined by the inalienable characteristics of its

geopolitical, economic and cultural existence’ (millennium article); ‘Russia is not haggling for the statusof a great power. It is one. This is determined by its great potential, history and culture’ (interview withWelt am Sonntag, 10 June 2000, <http://www.president.kremlin.ru/events/38.html>).


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Russia could take its rightful place in the world only by restoring its economicstrength. This meant giving internal policy primacy over external policy; pur-suing national, particularly economic, interests in foreign policy; achievingintegration into the world economy, in particular the World Trade Organiza-tion (WTO); and emphasizing Russia’s European destiny. The last comesnaturally to Putin, a native of Peter the Great’s ‘window on Europe’ who haslived in Germany. With this policy goal in mind, Putin has resisted confronta-tion with the West, even where it may initially have been the most popularroute to take, for example in reaction to US plans for missile defence or NATOplans for further enlargement to the east. Nor has Putin indulged in nostalgicdreams of reconstructing the Soviet Union.

Both Putin’s understanding of the role of the state and his view of his ownrole have led him to rely on top-down government. The ‘executive vertical’—a direct chain of command from the president down to local government—ishis goal. In fact, the economic, geographical and social realities of Russiapreclude such a simple schema. Putin himself has added to the complexities ofdecision-making by cluttering the political landscape with committees, com-missions, working groups and advisory councils, set up to solve—or possibly tobury—difficult issues. Putin is more organized in his habits than Yeltsin and farbetter able to sustain long periods of hard work, but his general approach to thepresidency shows little of the Germanic orderliness that was imputed to him onaccount of his background. Putin’s own route to his first job in the Kremlin in1996 was through a haphazard combination of circumstances—friends, thereturn of favours and chance encounters.17 In the initial stages of his presidencyhis statements and actions depended on who had his ear at a critical point. Hisown voice came through, sometimes discordantly, on the few issues he hadmade his own, Chechnya being the prime example.

As president, Putin is influenced, broadly speaking, by three groups of people.The first comprises the key players from Yeltsin’s team who ran Putin’s un-official campaign headquarters. Aleksandr Voloshin, as head of the president’sadministration, and his deputy, Vladislav Surkov, have been particularly pro-minent. Through these two, links have been maintained to some of theinformal influences on the Yeltsin administration, such as Gleb Pavlovsky, thepublic opinion specialist Aleksandr Oslon, and the industrialist (and formerprotégé of the ‘oligarch’ Boris Berezovsky) Roman Abramovich. The capacityof this team to manipulate the political climate has proved a valuable resourcefor Putin, whose only personal excursion into public politics, his managementof Sobchak’s unsuccessful campaign for re-election as governor of St Petersburgin 1996, was a disaster. The acute political instincts of the team are beyondquestion. But their obsession with tactics and ratings could become a liability ifPutin, as is suggested at the end of this article, is embarking on policies that willinvolve some unpopular moves. A botched attempt in March 2001—in which

17 Gevorkian et al., Ot pervogo litsa, pp. 119–22.


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Putin seems to have played no part—to force the dissolution of the Duma andhold early elections brought the team no credit.18

The second group comprises liberal economists and lawyers, most of themassociated with Putin from his days in Sobchak’s St Petersburg administration.Two deputy heads of Putin’s presidential administration, Dmitrii Medvedev(who shadows Voloshin) and Dmitrii Kozak, are lawyers, the latter responsiblefor Putin’s ambitious legal reform programme and for reconciling federal andregional legislation. Two key economic players in the government, AlekseiKudrin (finance minister) and German Gref (minister of the economy, trade anddevelopment, and author of Putin’s social and economic blueprint), are from StPetersburg. The name of Andrei Illarionov, Putin’s idiosyncratic personaleconomic adviser (not a St Petersburger), should be added to the list of liberaladvisers. The list could be extended, but not very far. ‘Cadre famine’—theshortage of qualified and competent government officials—is a persistent com-plaint of political analysts in Moscow.

By contrast, the third group—officials with a security background—boastsboth individuals close to Putin and a long tail as well. Sergei Ivanov (an ex-colleague from the SVR, the foreign intelligence service, who succeeded Putinas secretary of the Security Council) and Nikolai Patrushev (director of theFSB) are particularly close.19 Five of the seven new presidential representativesin the regions come from a security, military or police background. FormerKGB officials dominate the lucrative arms export business. This trend should beseen in perspective. Yeltsin chose a military officer (Aleksandr Rutskoi) as hisrunning mate in the presidential elections of 1991. Nor, although responsiblefor breaking up the KGB as an institution, was Yeltsin averse to KGB officersindividually. One of the strongest influences over him for many years was hisKGB bodyguard Aleksandr Korzhakov. And of course, it was to the securityservices that Yeltsin ultimately looked for his successor. It should also be bornein mind that former officials of the KGB and other coercive organs have longsince dominated private protection companies that play a central role inenforcing business contracts.20 The new element is a generally heightenedconcern over national security, sometimes verging on paranoia, that is charac-teristic of Putin’s regime. It is fed by policy papers produced by the SecurityCouncil, itself staffed largely by military and security personnel; and it isreflected in the increasing attention being paid by the FSB to foreign scholars inRussia. Putin’s own security background and his trust in senior security officialsmust have contributed to the freedom with which they feel able to operate.

Putin’s relations with the formal institutions of power have been less

18 Apart from a number of public remarks by Pavlovsky, it is clear from apparently genuine intercepts oftelephone conversations between him, Voloshin and Surkov that the three were behind this episode.The Russian text of the intercepts was posted on the internet at <http://www.stringer-agency.ru>.

19 Gevorkian et al., Ot pervogo litsa, pp. 181–2.20 Vadim Volkov, ‘Organised violence, market building and state formation’, in Alena V. Ledeneva

and Marina Kurkchiyan, eds, Economic crime in Russia (The Hague: Kluwer Law International, 2000),pp. 571–9.


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dramatic than Yeltsin’s. The prime minister is constitutionally weak: he can bedismissed by the president without notice. In his declining years, Yeltsin resortedincreasingly to this tactic. Putin, by contrast, has been demonstratively suppor-tive of Prime Minister Mikhail Kasyanov, despite his being a holdover from theYeltsin regime. By the summer of 2001, however, Putin was beginning toimpart his own stamp, at least to the ‘security bloc’ of the government, whichtraditionally reports direct to the president. On 28 March 2001 Putin imposedoutsiders, with a brief to carry out change, on two ministries that have tradi-tionally been headed by uniformed officers, sending his trusted colleague SergeiIvanov to the defence ministry and another St Petersburger, Boris Gryzlov, tothe interior ministry. He also imposed an outsider on the tax police. He orderedKasyanov to restructure the ‘economic bloc’ of ministries with the aim—firstattempted in 1997—of cutting down on the numbers of deputy prime ministersand increasing the responsibilities of ministers. Characteristically, Putin has putup with, and indeed defended, delay in the implementation of his order, arguingthat it would all happen in good time, without ‘revolutionary changes’.21

The biggest contrast with the Yeltsin era lies in Putin’s relationship withparliament. Yeltsin was permanently at odds with the Duma, the lower house ofthe bicameral parliament, both as the successor to the Supreme Soviet withwhich he waged war in 1993, and as the bastion of the Communist opposition.Putin was fortunate to come to power with a working majority in the Duma. InSeptember 1999 an electoral association, Unity, was created to support him.Trading heavily on Putin’s soaring popularity, it gained enough votes in theDecember 1999 elections to form the second largest faction in the Duma afterthe Communists.22 Putin quickly turned a good hand into a winning one. Withthe president’s administration exerting its manipulative power, Unity made atactical alliance with the Communists over the distribution of the majoroffices.23 This led to the marginalization of what might have become a centre-left opposition led by former Prime Minister Yevgenii Primakov together withLuzhkov. They have now had to throw in their lot with Unity.

Putin’s control over parliament has been a major element of what has cometo be known as ‘managed democracy’ and led critics of Putin’s regime to label itan elective autocracy.24 Putin himself has recognized the dangers inherent inthe situation. In words, at least, he has encouraged the development of indepen-dent political parties with a critical approach to government policies, though heshies away from using the word ‘opposition’.25 Nonetheless, developments

21 See Putin’s 18 July 2001 press conference, <http://www.president.kremlin.ru/events/264.html>.22 Putin, like Yeltsin, belongs to no political party.23 A Communist, Gennadii Seleznev, retained his post as Speaker, and the Communists gained the

chairmanship of significant Duma committees.24 Lilya Shevtsova, ‘Vybornoe samoderzhavie pri Putine: perspektivy i problemy evolyutsii politicheskogo

rezhima’, Moscow Carnegie Centre Briefings 3: 1, Jan. 2001.25 In his 8 July 2000 address to parliament Putin said, ‘It is advantageous for a weak power to have weak

parties. It is calmer and more comfortable for it to live according to the rules of political bargaining. Buta strong power is interested in strong rivals. Only in conditions of political competition is a seriousdialogue on the development of our state possible.’ <http://www.president.kremlin.ru/events/42.htm>


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under Putin so far point to a weakening of the party system. The pro-presidentialUnity shows no sign of becoming more than another ‘party of power’—that is,one dependent on the ruling elite rather than acting as the ruler’s politicalbase—as was the now defunct Our Home Is Russia, created in 1995 to supportYeltsin’s government. The established political parties in the Duma haverelatively little influence, as parties, over the drafting of laws, lacking both theexpertise of the Duma committees, each of which has professional support, andthe muscle of informal, sectoral interest groups. A law on political parties,initiated by the Kremlin and adopted in June 2001, is intended to weed outsmall and weak parties, leaving only two or three to fight the next elections. It isstill far from clear, however, that the law will have the desired effect of creatinga viable party system, any more than the original attempt to do this by splittingthe Duma into constituency deputies and those elected under a party list.

The issues

Putin’s first year in office was dominated by the attempt to restore the authorityof the state, the principal issues being Chechnya; the reassertion of Moscow’spower over Russia’s regions; curbing the ‘oligarchs’; and the creation of a legalframework to regulate Russia’s social and economic life.

Chechnya

Chechnya was the only issue on which Putin as presidential candidate ventureda personal commitment. To solve the problems of the North Caucasus was, hesaid, his ‘historic mission’.26 The distinguishing factor of his commitment wasits reliance on force alone, which in turn coloured his vision of the rule of lawin Russia as a whole: ‘All we had to do was to grapple directly with the bandits,destroy them, and a real step was taken towards the supremacy of justice,towards the dictatorship of a law that is equal for all.’27

Putin appears to have favoured reimposing federal rule in Chechnya beyondthe natural boundary of the River Terek that had been agreed in March 1999.28

He gave full support to the military campaign,29 and reassured the generals thatit would not be interrupted to search for a political solution, as the campaign of1994–6 had been—in the military view, the prime cause of its failure. Putin alsoput his personal stamp on the federal authorities’ policy of controlling presscoverage from the start, in contrast to the first Chechen war. He publiclydefended their seizure and incarceration of the Radio Free Europe/Radio

26 Gevorkian et al., Ot pervogo litsa, p. 133.27 ‘Otkrytoe pis’mo’.28 Putin’s predecessor as prime minister, Sergei Stepashin, made several statements to this effect. See e.g. his

address to a Strengthening Democracy Institute event on 13 March 2000, <http://ksgnotes1.harvard.edu/BCSIA/SDI.nsf/web/Election2000?OpenDocument&ExpandSection=9,6>.

29 He paid two dramatic visits to the war zone, on 31 Dec. 1999, the day of Yeltsin’s resignation, and on 20March 2000, six days before the elections, in an SU-27 training jet.


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Liberty correspondent Andrei Babitsky, arguing that he was helping the enemybecause he was reporting from the enemy side.30

Putin’s handling of the peace and reconstruction process has, by contrast,been hesitant and distant.31 He rejected the option of re-engaging with theelected president Aslan Maskhadov, but has been unable to find a Chechen whowould carry some credibility in both Moscow and Chechnya. Russians havebeen appointed to key posts to ensure that federal funds disbursed for the recon-struction of Chechnya are not salted away into private pockets as they wereafter the 1996 settlement. But the bureaucratic structure appears to be hinderingrather than helping the reconstruction of Chechnya; even federal forces are notgetting paid, which encourages them to extort money from the population andcontributes to the deterioration of the security situation. A plan to reduce forcelevels, from the current 80,000 to a permanent garrison of 15,000 defenceministry and 6,000–7,000 interior ministry troops, was begun in March 2001but abandoned in May, after only a few thousand had been withdrawn.

Putin’s handling of Chechnya as an international issue has been more skilful.He neutralized much Western criticism of the disproportionate use of force byarguing that Chechnya was the front line of an attack by political Islam onRussia and Europe as a whole, and that by its military action Russia was in factfighting for Europe’s security as much as its own. While ruling out any repeat ofthe mediating role that the Organization for Security and Co-operation inEurope (OSCE) played in the first Chechen war, he kept the OSCE in play byallowing its Assistance Group to resume humanitarian operations from a base inthe north-west of Chechnya. Putin has also worked to assuage the Council ofEurope’s concern over human rights violations in Chechnya, despite thehumiliation of the Russian delegation to the Council’s Parliamentary Assembly(PACE) being temporarily deprived of its vote. Putin acceded to pressure fromthe Council in appointing a special representative for human rights in Chech-nya, Vladimir Kalamanov, in February 2000, assisted by three Council ofEurope experts, to work on cases of complaints against the federal authorities inChechnya.

Domestically, the lack of progress towards a political solution or thereconstruction of Chechnya, more than a year after the military operation wassaid to have been successfully completed, is turning Putin’s personal commit-ment to solving the Chechen problem into a potential liability. There is nomajor political force that would see advantage in trying to embarrass him overChechnya, and Putin’s personal rating remains high. But opinion polls arebeginning to register public disillusionment.32

30 Putin interview with Kommersant Daily, 10 March 2000.31 He has paid only one visit to Chechnya since becoming president, on 14 April 2001.32 VTsIOM monthly review for June 2001, 3 July 2001, <http://www.polit.ru/documents/428650.html>.


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Centre–region relations

While Chechnya was one sort of threat to the integrity of the Russian Federa-tion, a more insidious challenge was presented by the increasing freedom ofmanoeuvre under Yeltsin’s rule exercised by Russia’s other 88 regions, includ-ing 21 that enjoy superior status as republics. Putin did not address the questiondirectly in his election campaign, in order to avoid alienating the regionalleaders on whom he depended for support. But this turned out to be a tacticalploy. His first major political initiative—a week after his inauguration—was asweeping attempt to restore the Kremlin’s control over the regions.

Putin’s initiative involved three separate measures. The first—and potentiallymost far-reaching—was no more than an adjustment to the system ofpresidential representation in the regions. Yeltsin had had his own represen-tatives in almost all the 89 components of the Federation. Over time they hadceased to be the instruments of the president’s will and had become increasinglysubservient to the regional administrations, depending on the regional leadersfor their housing and other basic amenities. Putin reduced their number toseven, each representative overseeing a group of regions, to be called a federaldistrict. The federal districts, which virtually coincided with the existingmilitary districts, were to provide an effective federal presence in the regions.The new representatives would make the president’s writ run throughout thecountry by ensuring that they, not the regional leaders, controlled federalofficials in the regions—local police chiefs and tax inspectors, for example. Therepresentatives would bring regional legislation into line with central,counteracting the trend by which some of the regions, and especially republics,had arrogated to themselves a degree of sovereignty that was manifestlyincompatible with the federal constitution and laws.

Putin’s second measure was to deprive regional leaders of their ex officio seatsin the Federation Council, the upper house of the parliament. Putin had weightyreasons to justify this reform. The fact that the heads of regional executives sat inthe central legislature violated the principle of the division of powers. Further-more, Putin argued, regional leaders could not focus simultaneously onlegislating in Moscow and running their own regions. His draft law forced theregional leaders to cede their seats to nominated representatives. But in the faceof resistance—the Federation Council still had the power to delay legislationthat would lead to its own demise—Putin conceded a ‘stay of execution’ toJanuary 2002. Further, to compensate the governors for the abolition of theirMoscow ‘club’, Putin decreed the creation of a consultative body, the StateCouncil. Its membership comprises the executive heads of each of the 89 com-ponents of the Federation, with a presidium of seven (one from each federaldistrict), rotating every six months. Putin has commissioned reports from theState Council on a number of major issues, though the suspicion remains thathe intends the Council to do little more than keep senior regional figures inplay by giving them an opportunity to ride their hobby horses.


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The third move gave the president the legal instruments to dismiss regionalleaders on defined grounds. Again, Putin made concessions to get amendmentsto existing legislation through parliament. First, any dismissal would be subjectto a lengthy judicial process. Second, Putin acquiesced in a complex series ofamendments that will allow several influential regional leaders to run forelection for a third term—the original law had stipulated a maximum of two.Putin further pandered to the regional authorities by introducing amendmentsto the law on local government, reducing the powers of municipalities inrelation to the regions.

Putin’s federal initiative was supported by politicians of all shades in Moscow,who considered that Yeltsin, in his desire to enjoy easy relations with theregions, had allowed the Federation to fragment dangerously. The move wasskilfully executed and enhanced the image of the new president as a strong anddecisive leader in his early days in office.33 By the middle of 2001, however,Putin’s concessions in the face of rearguard actions by regional leaders had led tothe opposite perception—that he was in fact a weak and indecisive leader. Togeneral surprise, Putin made a deal with the governor of the Primor’e region inRussia’s Far East, Yevgenii Nazdratenko, whose wilful mismanagement hadcontributed to an appalling energy crisis in the region in early 2001. Rather thanusing his new powers to dismiss Nazdratenko, Putin appointed him to thepotentially lucrative position of chairman of the Federal Fisheries Committee inreturn for his voluntary resignation from the governorship. Nor have thepresidential representatives become the power in the land that many expectedon account of their background. Disagreements over their status and powershave snagged them in bureaucratic thickets. They have attempted to organizethe economic activity of the federal districts around themselves, meeting resist-ance not only from the regional governors, but also from the federal govern-ment—the ministry of finance has only recently succeeded in setting up atreasury system to channel financial flows to and from its offices in individualregions.34 And, against Putin’s stated intentions, they have become immersed inregional politics—not always successfully. Finally, the Federation Council,which enjoys far-reaching powers under the constitution, is in limbo, with anumber of its current members hanging on to their privileges and immunities tothe last possible moment, January 2002, and a number disposing of their seats totheir preferred representatives as part of a political deal, or simply for money.

Such sweeping reforms should, of course, have been preceded by extensiveconsultation with those most affected: the regional leaders. But to labour thispoint would be to ignore the realities of Russian politics. Putin needed to showwho was boss. At the same time, as we can now see on closer acquaintance withhis style of leadership, it would have been equally unrealistic to expect him to

33 Percipient observers at the time questioned whether such a far-reaching attempt at recentralization wouldnot run into the sand, as have top-down reforms throughout Russia’s history. See William Tompson,‘Putin’s power plays’, The World Today, July 2000, pp. 1–3.

34 The last of the federal treasury branch offices was opened in Tatarstan on 17 March 2001.


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follow up his initial surprise move to the point of confrontation with stillpowerful regional interests. Some gains have, nonetheless, been made. Theharmonization of federal and regional laws is a necessary part of the broader taskof creating a coherent legal framework for Russia, even if much of it has been ashowcase exercise, as were many of the original incompatible regional laws.The system of federal districts, while yet to prove its effectiveness, has re-igniteda necessary debate over the eventual shape of the Federation.

In the longer term, geographical and economic realities, as much as any ofPutin’s administrative measures, will shape relations between the centre and theregions, and among the regions themselves. It would take another article toexplore them, but certain trends are worth picking out to illustrate the point.Up to now, regional political and business elites have been able to dominatetheir local economies. Since the middle of 2000, however, a new generation ofbusinessmen has embarked on a range of horizontal and vertical mergers. Thefinancial–industrial groups that have emerged have interests far beyond those ofindividual regions. This development does not necessarily herald a morerational pattern of economic activity, but it is loosening the regional leaders’traditional control over, for example, the automotive industry in the Volgaregion. The eventual restructuring of the railway and energy provision systemswill also profoundly affect the political economies of the regions.

The ‘oligarchs’

The new generation of businessmen enjoys a respectable and still privileged positionin Putin’s Russia. Putin had another group in mind when he undertook in hiselection manifesto to put everyone, from ‘oligarchs’ to stallholders, under the sameset of rules. He was distancing himself from one of the most unpopular featuresof Yeltsin’s presidency. ‘Oligarch’ was the term coined to describe the smallgroup of bankers, industrialists and media magnates who pooled their resourcesin early 1996 to ensure Yeltsin’s re-election, thereby staking a claim to the spoilsof victory and a continuing say in the running of policy. In practice, Putin haspursued only those magnates who have offended by their political stance.

The prime target has been Vladimir Gusinsky, head of the banking andmedia conglomerate Media-MOST. His flagship, the television channel NTV,lays claim to being Russia’s only independent national TV station. In fact it hasa history of alternating conflict and alliance with the Kremlin since 1994.Angered by what he considered inadequate reward for supporting Yeltsin in his1996 re-election bid, Gusinsky made the mistake of supporting Luzhkov’sunannounced campaign for the presidency in mid-1999. This brought him intoconflict with Yeltsin’s, and then Putin’s, political machines, who were able toexploit Media-MOST’s vulnerability through its debts to the gas monopoly,Gazprom. Putin has been able to claim when convenient that this is just a com-mercial matter. He has also developed a political argument to justify his pursuitof Gusinsky and, to a lesser extent, his fellow media magnate Berezovsky. Putin


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claims that the weak financial basis of the Russian media has made them easyprey for business clans, to use against each other and against the state. Putindeployed this argument with uncharacteristic bitterness in an otherwisebalanced interview following the Kursk submarine disaster, betraying hisobsession with the issue.35

It would be a mistake to see Putin’s hand behind every development in thesecases. The Procuracy, the FSB, the press minister and Gazprom Media’s owndirector all had scores to settle with Gusinsky. The timing of their actions againstGusinsky has at times embarrassed Putin.36 Nor was the Media-MOST episodepart of a concerted attack on the freedom of the press. But there can be nodoubt that Putin’s personal vendetta against Gusinsky has created an atmospherein which lower-grade officials have felt able to act with impunity. Its effect hasbeen to reduce the plurality of the press—a number of Gusinsky’s other mediaoutlets with a better claim to independence than NTV have suffered—and toinduce a climate of fear stemming from the realization that the law will be usedselectively against media organizations that step too far out of line.

Legal reform

Despite Putin’s primitive view of the power of the state where politics areinvolved—he once referred to it as a ‘cudgel’37—he has emerged as thechampion of a badly needed reform of the judicial system. As acting president,Putin argued that Yeltsin’s faltering 1991 programme for judicial reform neededreviving: the judicial system did not conform to the 1993 constitution (intowhich some of the embryonic Yeltsin reforms had already been written);citizens’ rights were insufficiently protected; and failure to reform would putRussia in breach of its international obligations following its ratification of theEuropean Convention on Human Rights and Fundamental Freedoms.38

The pace of legal reform increased in 2001. By its summer break the Dumahad embarked on a package of laws that will raise the status, remuneration andaccountability of judges; increase the number and funding of courts and under-pin them with a system of justices of the peace; extend trial by jury throughoutthe country (at present it operates in only nine regions); and limit pre-trialdetention to one year (currently eighteen months). Sanctions will be introducedto ensure Constitutional Court rulings are obeyed (currently they can beignored with impunity).39

35 Interview with the Russian TV station RTR, 23 Aug. 2000, <http://www.president.kremlin.ru/events/60.html>.

36 Putin was on a visit to Spain when Gusinsky was arrested in June 2000 and was unable to respondcogently to press questions. Gazprom Media’s boardroom coup against NTV on 3 April 2001 stole thelimelight from Putin’s annual address to parliament on the same day.

37 Interview with Le Figaro, 23 Oct. 2000, <www.president.kremlin.ru/events/85.html>.38 Speech to a conference of heads of regional courts, 24 Jan. 2000, <http.president.kremlin.ru/events/

2.html>.39 The classic case is Moscow Mayor Luzhkov’s breach of a Constitutional Court ruling that his system of

registration for Moscow inhabitants is unconstitutional.


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The most sensitive political aspect of the new laws is that they significantlycurtail the powers of the Procuracy, a deeply embedded Russian institutionfounded nearly 280 years ago by Peter the Great as the ‘eye of the state’. Itsmonopoly of all stages of a case from investigation to search, arrest, prosecutionand supervision will be diluted. The Procurator General, Vladimir Ustinov, hasintervened forcefully against the reform. It is in any case to be introducedgradually, beginning in 2003, since it requires finance, training and a cultural asmuch as organizational shift in Russia’s judicial practice. It would be naive,therefore, to expect an immediate change in the present climate, in which thelaw enforcement agencies are acting with as much licence as ever. The test forPutin will be whether he can give consistent backing to measures that areunpopular with vested interests and little understood by the public at large. Hisdefence of Russia’s moratorium on the death penalty in July 2001—against thetrend of popular opinion—was a good start.40

Economic and social policies

Legal reform is an essential component of Putin’s economic policy. Putin’srecipe for overcoming Russia’s economic backwardness is unequivocally linkedwith the integration of Russia into the world economy. The lack of a workinglegal framework for economic activity has been one of the main drivers ofeconomic crime and corruption and a disincentive to foreign investment inRussia. Property rights are poorly protected and commercial courts ineffective,mainly due to the corruptibility of judges. Gazprom’s manipulation of thecourts in its case against Media-MOST would have been a poor advertisementfor the system even if this case had been merely the resolution of a debt issue.Bankruptcy cases are still disguised forms of asset-stripping. The government isstill intertwined with business, and some government ministers have a closecommercial connection with the areas they supervise.41

Putin’s economic and social policies were knitted loosely together in anextensive programme drafted in German Gref’s Centre for Strategic Assess-ments and approved by the government on 28 June 2000. The programmeaimed to complete the restructuring of the economy, particularly in the tax andbanking spheres, and to divest the social support system of its Soviet-era inclu-siveness in favour of targeted benefits. The programme was an overlong wish-list, with no prioritization, but it has served as the menu from which thegovernment has chosen à la carte. Although there has been little progress in thecritical area of banking reform, a number of landmarks have already been

40 Putin was speaking at a meeting in Moscow on 9 July 2001 with the president of the World Bank, JamesWolfensohn, and to participants to an international conference on justice: <http://www.president.kremlin.ru/events/254.html>. Seventy-two per cent of respondents to a VTsIOM survey in June 2001favoured the death penalty for serious crimes.

41 Nikolai Aksenenko, the railways minister, has family interests in commercial enterprises linked to hisministry; the press minister, Mikhail Lesin, has commercial interests in TV advertising.


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passed. By the summer of 2001, legislation was at various stages of approval inthe Duma in the following areas, in addition to the judicial reform mentionedearlier.

Budget and tax:

• a balanced budget (for only the second time in the ten-year history of post-Soviet Russia) on track for 2002;

• the easing of the tax burden through a 13 per cent flat rate for income tax,designed to kick start the tax-paying habit, a reduction of corporate profittax from 35 per cent to 24 per cent, and the lowering of some import tariffs.

Structural reform:

• a Land Code that will regularize the buying and selling of land, includingagricultural land, and provide the basis of a mortgage market;

• a package of measures to de-bureaucratize the process of setting up andrunning a business—Putin claims to have intervened personally to pushthrough the Duma a plan to reduce the number of activities for which agovernment licence must be obtained from over 500 to 102;42

• a law to restrict opportunities for money laundering.43

Labour and pensions:

• a Labour Code to replace the existing Soviet-era Code of 1972;

• the adoption of four bills on pension reform, which will institute contri-butory and graduated pensions in place of the current one-rate-for-all statepension.

Equally important, although not requiring legislation, a start has been made in therestructuring of the natural monopolies. A compromise plan for the government-controlled energy provider United Energy Systems (UES) will retain a state-owned national grid fed by privately owned electricity companies. A plan forthe gradual privatization of the railways has been adopted. And the replacementof the chief executive of Gazprom, Rem Vyakhirev, by one of Putin’s formersubordinates from St Petersburg, Aleksei Miller, promises greater transparencyand accountability in a vast enterprise that had been run as a family business.

In the summer of 2001 Putin launched another major reform: in housing andcommunal services. This has not been a high-profile political issue in post-Soviet Russia, simply because people have been left to live in the style to which

42 Putin, press conference, 18 July 2001, <http://www.president.kremlin.ru/events/264.html>.43 Legislation urged by the Financial Action Task Force against Money Laundering (FATF) in its annual

report in June 2001: <http://www.oecd.org/fatf/pdf/PR-20010622_en.pdf> (in English).


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they had become accustomed—poor accommodation and services in return forminimal payment. The issue has to be tackled now because the crumbling ofthe infrastructure in some areas has become critical, and because the restructur-ing of the natural monopolies will bring an end to cross-subsidization, wherebycheap energy for domestic consumption is subsidized by higher industrialprices. A competitive market in energy supply, envisaged under the plan torestructure UES, cannot be achieved while this imbalance remains. The plan isfor residents to pay in full for privatized communal services, with benefitsavailable to those who cannot afford the cost. There are formidable obstacles tobe overcome before this plan is put into effect, including the setting of normsfor the payment of benefits and decisions on whether the money should comefrom central, regional or municipal coffers.

Putin has not yet confronted his electorate with the cost of housing reform—the only reform to arouse more negative than positive expectations among thepublic, according to a mid-2001 opinion poll.44 His popular message has beenthat Russians have been deprived of their natural share in the wealth of theirland: ‘Russia is a rich country of poor people.’45 The relative economic boomof 2000—brought about by high world prices for raw material exports, especiallyoil, together with the devaluation of the rouble—has allowed Putin to raisestate pensions, as well as the wages of a range of state employees. These actionsare the principal source of his continuing popularity.46 This factor, as well as theinherent complexity of housing reform, may mean that it moves ahead onlyslowly. Its implementation should begin around 2004, and the governmentplans to continue subsidizing housing and utilities for another 10–15 years.

Looking ahead

At his first major press conference as president, on 18 July 2001, Putin wasasked: ‘Who is Mr Putin?’ by the same Philadelphia Inquirer correspondent whohad so embarrassed his ministers when she confronted them with the questionin Davos in January 2000. Putin’s answer was, in effect: ‘Look at the record.’ Hewent on to list a number of the measures that have been outlined in this article,concentrating on centre–region relations, the law on political parties and thelaws to liberalize the economy. Significantly, in this context he made noreference to Chechnya. He hoped that by the next elections ordinary citizenswould feel the effects in their pockets, in their security and in conditions wherethey could feel proud of their country. What are the chances of this beingachieved?

Putin’s reform programme re-introduces many of the initiatives of Yeltsin’sshort-lived ‘young reformers’ government of 1997, which were strangled by

44 VTsIOM survey of the social–political situation in Russia in June 2001, 3 July 2001, <http://www.polit.ru/printable/428650.html>.

45 ‘Otkrytoe pis’mo’.46 VTsIOM survey of social and political opinion, Jan. 2001, polit.ru, 26 Jan. 2001.


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resistance from vested interests, by the deteriorating financial position and byYeltsin’s own increasingly erratic attention to the issues. Putin stands a betterchance, but at the moment two cheers rather than three are in order.Implementation of the reforms raises formidable obstacles.

The greatest danger is that they will simply slow down and run into the sandas Putin’s determination not to raise the political temperature inclines him moreand more to compromise with vested interests. It is symptomatic that muchof the restructuring of the natural monopolies has been left in the hands ofthe monopolists themselves. More legislation will do little of itself to bringabout the cultural change that would lead to respect for the law. The danger isthat elements of the powerful if discordant coalition in the middle ground—bureaucrats, businessmen, regional elites and law enforcement agencies—willcontinue to play their own game, in which mastery of the unwritten rules is all-important.47

It is obvious that one man can do little to free the country from its ingrainedhabits, and Putin has shown that he is frequently prey to them himself. Putinwill need allies, and will need to find a way of sharing political responsibilitymore broadly. The present trend is in the opposite direction: towards a concen-tration of power in the presidency. This is where the drive for control—of theregions, political parties, the media—will ultimately harm Putin himself and hiscause. That control is being achieved with suspicious ease because most of itsvictims have voluntarily rushed to join the ranks of the powers-that-be. But forthe same reason it is deceptive, as outward shows of loyalty conceal resistance topolicies that impinge on vested interests. Putin risks being in the classic situationof having all the levers at his command, but finding that nothing happens whenhe pulls them.

In two years’ time Russia will be entering a new election cycle. It is ameasure of Russia’s progress towards the long-desired goal of being a ‘normalcountry’ that free elections are a factor built into its political life. The danger isthat ‘electoral techniques’ will predominate over electoral politics. There arecertainly those in Putin’s entourage—principally the group from the Yeltsinadministration mentioned earlier in this article—whose interests do not extendmuch further. Although it is hard to envisage a scenario under which Putin willnot be re-elected in 2004, victory is not something his team will take forgranted: they know better than most how easily swayed the electorate is. Hencetheir desire to exercise total control over the political process and the media.There is also nervousness in Putin’s camp that a range of problems—thepeaking of Russia’s foreign debt repayments and the collapse of the ageingenergy infrastructure are usually cited—are going to come together in 2003,uncomfortably close to the Duma and presidential election dates. To this couldbe added the need to explain to the electorate the pain that real reform will

47 For a discussion of this vital subject see Alena Ledeneva, Unwritten rules: how Russia really works (London:Centre for European Reform, 2001), reviewed in this issue of International Affairs.


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bring—probably in economic circumstances less favourable than those of today.And Chechnya will continue to be, if nothing worse, a drain on the state’sresources and Putin’s authority. These are the factors that are causing his advisersto play with the idea of bringing forward the Duma elections from their duedate of December 2003. One test of Putin’s leadership and his commitment toreform will be whether he shows himself master of his own house in managinghis political and electoral strategy.

The question of whether Putin will be a successful ‘liberal conservative’,as suggested by Pavlovsky, remains open. On present evidence, his vision of thestate is too narrowly identified with the centralization of political power to beable to sustain the variety of political and social forces that go to make up a civilsociety, which in turn underpins a successful market economy. But time is onhis side.


Documents

Putin's Russia: slowing the pendulum without stopping the clock