Monthly Archives: Апрель 2017

Opposition From Within: Russia’s New Counter-Elite

In political systems that block change through elections, the main guarantee of a regime’s stability is its capacity to absorb a potential counter-elite. At the moment, the regime is preventing any such renewal from occurring. Yet a counter-elite is in the process of formation nonetheless—one that can eventually take Russia in a new direction.

Observers of the Russian political scene are constantly looking for clues as to where political change will come from. At a time when Russia’s “systemic” opposition, which is represented in parliament, is widely perceived as compromised, there is a common belief that the only viable alternative to the current ruling class will come from the “non-systemic” opposition, which does not play by the rules set by the Kremlin and does its politics on the street.

However, there is good reason to believe that the observers are looking in the wrong place, and that real political change in Russia will eventually come from a counter-elite that forms within the current regime.
In the post-Soviet world, existing elites have rarely been replaced by outside forces. Instead, the pattern is for disgruntled members of the ruling elites to break away and counterpose themselves to the existing regime. A classic example of this phenomenon is Ukraine’s 2004 Orange Revolution, in which Viktor Yushchenko, who had been a prime minister under President Leonid Kuchma, called for the overthrow of the ruling elite. This type of transition is only possible, however, with the backing of major business interests, regional officials, or prominent political groups.

By this logic, it is likely that those who will come to power in an elite rotation in Russia are people who already hold high-ranking positions in the current regime and are well integrated into the ruling class. It needs to be emphasized that we are not talking about the collapse or overthrow of the Putin regime. For a counter-elite to crystallize, it is only necessary for the regime to weaken considerably.

A key role in any future transition will be played by those in government whom we can call technocrats. These are individuals, ranging from middle-ranking bureaucrats to ministers and to the heads of parliamentary committees, who are competent professionals and display no conspicuous political ambitions of their own. This description fits most members of the current government—in contrast to those who served in the governments up until 2012.

The neutrality of these bureaucrats could allow them to swiftly and seamlessly transition into the counter-elite when the time comes.

Internal conflicts and disputes within the government are getting more frequent. That brings back memories of the Yeltsin era and the 1990s, when Russia’s ruling elite was in an almost permanent state of crisis and riven by disputes between different powerful groups. Based on that experience, we should not be surprised if in the future those whom we hear today expressing their loyalty to Putin transition into being the Kremlin’s opponents tomorrow.

Another way of describing this phenomenon is to say that a large number of those who serve in the current Russian establishment are “decorators” who help keep up the appearance of Russia’s “decorative democracy.” Increasingly, many of these individuals feel slighted by the Kremlin and feel that it shows no appreciation for their efforts. For example, when the Kremlin decided that it needed to revamp the Duma, more than half of the members of parliament from the ruling party ended up with no party support or financing for the election.

Those who were denied electoral victory in order to clear a path for new Kremlin favorites have not lost their political ambitions and are still looking for alternative paths of advancement. One of the main problems United Russia faced last year was that its own members had jumped ship to join the systemic opposition.

A new section of the elite is forming, which believes that “traditional values” may be more important than loyalty to the president and might in the future advocate “Putinism without Putin.”

The loyalty of business elites to the Kremlin is also provisional. We have gotten used to the notion that Russian business is fully loyal ever since 2003–2004, when it took Putin just one year to convert the country’s politically powerful oligarchs into mere businessmen who put their money only where the authorities allow them to.

Yet large sections of Russia’s top businessmen made their fortunes in the 1990s and feel no obligation to Putin. Businessmen are pragmatic and unsentimental. Corporate decisionmakers adjust to national trends and prepare for all scenarios, including a change of elite. We need only recall the intense interest that Alexei Navalny registered in business circles in 2011–2012. We can expect that if the rules set by the current regime begin to cost business billions in lost profits and hundreds of unrealized projects, then those who are currently pragmatic will begin to dream about regime change.

Another headache for the Kremlin is presented by the diverse leaders of Russia’s far-flung regions. While the current regime has full control of federal politics, it is not just difficult but even dangerous to find a strong leader for each region. After all, a strong politician with high levels of electoral support will be harder to control. What Moscow needs is hard to deliver: effective regional managers who can be painlessly removed if things go wrong.

Recently, the Kremlin has been appointing as governors not strong managers but men associated with the security services and conspicuous only by their loyalty. This attempt to simplify and strengthen governors’ subordination to Moscow will only result in more mistaken and dangerous decisions at the regional level.

If federal power gets weaker, the overwhelming majority of the regional political establishment will end up in opposition to Moscow. Literally the whole of the regional elite, with the exception of those with personal ties to the president, can potentially turn into a counter-elite.

Where do these trends leave Russia’s long-suffering non-systemic opposition, which still harbors ambitions of dislodging President Putin? Paradoxically, despite their capacity to effect political change, it is they who are least likely to form a new counter-elite. The kind of leaders who can generate street protests are too dangerous and unpredictable, and those who possess money and power will do everything to leave them on the margins of political life.

And yet despite all its problems and its miserable showing in the last parliamentary elections, the non-systemic opposition can also help form the future ruling class in Russia. That will occur not through electoral victory but through the growing personal prominence of certain individuals—something that exiled oligarch and opposition leader Mikhail Khodorkovsky has acknowledged. A new era will begin when the non-systemic opposition becomes systemic and the Kremlin is no longer able to bar it from elections because it fears a political explosion.

This is not a matter of ideology. As a change of regime gets closer, ideological labels will take second place to pragmatic considerations and connections to the man who constructed the system, the president. Many observers fall into the trap of identifying liberal members of the elite such as Alexei Kudrin or Anatoly Chubais as a potential counter-elite and alternatives to Putin. Yet even the opponent of Putin who has the strongest ideological objections to the current president may at the critical moment end up being more pro-Putin than Putin’s inner circle.

Ultimately, in political systems that block change through elections, the main guarantee of a regime’s stability is its capacity for renewal from within. That capacity depends on how well the system can absorb a potential counter-elite. At the moment, the regime itself is cracking down and preventing any such renewal from occurring. Yet a counter-elite is in the process of formation nonetheless—one that can eventually take Russia in a new direction, whether that be toward liberalization or a tougher form of authoritarian rule.

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The Race to Be Putin’s Next Prime Minister Is Heating Up

How can Vladimir Putin avoid the political fallout that will inevitably come from firing Prime Minister Dmitry Medvedev? Facing corruption allegations and losing support within the government, Medvedev is quickly becoming a “suitcase without a handle” for Putin.

Presidential elections will be held in Russia in one year, and already there’s little question about the outcome: Vladimir Putin will enjoy a resounding victory. Prime Minister Dmitry Medvedev’s job, however, is far less secure, and in the lead-up to the election, Putin will have to make a decision about whether or not to bring Medvedev with him into his fourth term.

The competition for the prime ministership—and for the control over the country’s economic future that comes with the job—is already kicking into high gear, all the more so after the anti-corruption protests that took place across Russia on March 26. The opposition is fast making corruption the central theme of the 2018 election, and many activists are pointing the finger directly at Dmitry Medvedev. This is creating a surprising anti-Medvedev coalition made up of the opposition and large swaths of the political elite.

Both the regime and the opposition know that a political showdown is coming. In Putin’s last term, the ruling elite will either enter a period of decline or be forced to transform into something completely new. Combined with the decline in support for the regime, which had peaked after the annexation of Crimea, and the deterioration of the country’s socioeconomic conditions, the recent protests are already prompting various groups to fight for future political influence.

Everyone senses a new perestroika coming, making it crucial to seize the initiative now.

The recent protests were sparked by an investigation into corruption among high-ranking members of the Putin regime—chiefly, Medvedev—published by opposition leader Alexei Navalny’s Anti-Corruption Foundation. Paradoxically, because of the investigation’s revelations and subsequent protests, Putin has no choice but to stick with Medvedev for now—he cannot be seen as making a personnel decision based on pressure from below.

Still, the protests are turning up the heat on the regime. And indeed, the question of whether Medvedev will be dismissed is turning into a question of when he will be dismissed. Will it be a few months ahead of the election; right before voting day, as was the case with Putin’s dissolution of the Mikhail Kasyanov cabinet in 2004; or shortly after the election?

In some ways, this fall would be the optimal time to form a new cabinet because it would give Putin enough time to rebrand the government before the election. This is why the anti-Medvedev coalition is strengthening inside the government: to compel the president to throw Medvedev under the proverbial bus in the hope of maximizing short-term political dividends.

Thus, Putin faces a dilemma: how does he avoid the political fallout that will inevitably come from firing Medvedev, who is both one of the chief ideologists of the president’s 2018 campaign and the formal leader of Putin’s United Russia party? Medvedev is quickly becoming a “suitcase without a handle” for Putin.

If Medvedev is able to prove himself worthy by playing a significant role in shaping Putin’s campaign platform, it would be difficult to dismiss him—particularly before the election. But the scenario in which Medvedev keeps his post appears to be as improbable as it is desirable—particularly for businessmen and for liberals.

Much ink has been spilled over why Putin’s Russia cannot liberalize: the Kremlin lacks the political will for reforms; Putin does not trust liberals, who are seen as the ideological allies of the West; Putin is not willing to give the government autonomy; and he fears liberal (i.e., socially unpopular) reforms. All of this is true, but there is one important caveat: Vladimir Putin remains convinced that he is Russia’s main liberal reformer, making the question of why he needs help from other reformers a rhetorical one.

System liberals like Alexey Kudrin and German Gref are respected advisers to Putin whom the president calls on whenever he needs an alternative expert assessment. They are, in fact, the only group with anything close to an ideological monopoly on the formulation of the financial and economic components of Vladimir Putin’s government.

Maintaining a high key interest rate, trying to reduce the budget deficit, reforming healthcare and education, targeting inflation, and rejecting regulated interest rates in the real sector—all of these liberal initiatives are “red lines” drawn by the so-called “party of stability,” or those who favor macroeconomic stability over economic growth.

Whereas the system liberals have something of a coherent political philosophy, the dirigiste faction is focused entirely on political administration. The former group is looking for ways to liberalize Russia’s political and economic system, while the latter group hopes to pursue stricter regulation.

One representative of the dirigiste faction is state business ombudsman and Party of Growth leader Boris Titov, who on March 1 presented the final draft of the Stolypin Club’s “Growth Strategy” program. The main agenda of the Growth Strategy includes considerable relaxation of monetary and credit policy, harsher currency regulation, and the use of sovereign reserve funds to prop up the real sector.

Titov’s program is a major project that has been in the works for several years and focuses above all on the interests of the “real sector,” which seeks expanded access to state resources despite Western sanctions and economic stagnation. This lobby likely has its own favored candidate for the prime minister’s seat: Andrey Belousov, who has become particularly active recently in discussions about economic strategy and is the man behind Titov’s proposals.

The easiest solution to the “2018 quandary” would be to appoint a “technical” prime minister. It would be psychologically much easier to dump Medvedev, who would be less offended if he were replaced by a minor, obscure bureaucrat rather than by a longtime rival or ideological opponent.

Appointing a technical prime minister would also be in line with the recent state personnel trend: replacing political heavyweights with young technocrats. Putin likes working with individuals who see themselves not as “friends” or “comrades in arms,” but as loyal foot soldiers who do what they are told without asking unnecessary questions or taking advantage of their proximity to power.

Finally, a technical prime minister would free Putin from having to choose among ideologists of various strategies (liberal or dirigiste, populist or reformist). A technical prime minister would eliminate the need to debate development strategy, allowing the president to govern tactically, based on circumstances—the style of governance that Putin prefers.

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Power brokers in the Kremlin jostle to succeed Putin

https://www.ft.com/content/3656bdf6-1b7e-11e7-bcac-6d03d067f81f

President’s authoritarianism has barred the rise of any challenger

APRIL 11, 2017

The prime minister has denied the accusations but the focus on him “makes it much more likely that Medvedev will have to go”, says Tatyana Stanovaya, a political analyst at the Center for Political Technologies, a Moscow think-tank.

Ms Stanovaya believes significant political changes remain a long way off. “They will only happen when you start seeing an open split in the elites,” she says.

Today, the willingness to protest may be too nascent, and Mr Navalny too weak, to convince members of the political elite to join. Ms Stanovaya says: “Until that happens again, a lot more time is needed for dissatisfaction to gradually accumulate.”

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