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Special Report: The threat from Russia | The Economist

October 26, 2016



How to contain Vladimir Putin’s deadly, dysfunctional empire

FOUR years ago Mitt Romney, then a Republican candidate, said that Russia was America’s “number-one geopolitical foe”. Barack Obama, among others, mocked this hilarious gaffe: “The 1980s are now calling to ask for their foreign policy back, because the cold war’s been over for 20 years,” scoffed the president. How times change. With Russia hacking the American election, presiding over mass slaughter in Syria, annexing Crimea and talking casually about using nuclear weapons, Mr Romney’s view has become conventional wisdom. Almost the only American to dissent from it is today’s Republican nominee, Donald Trump.

Every week Vladimir Putin, Russia’s president, finds new ways to scare the world. Recently he moved nuclear-capable missiles close to Poland and Lithuania. This week he sent an aircraft-carrier group down the North Sea and the English Channel. He has threatened to shoot down any American plane that attacks the forces of Syria’s despot, Bashar al-Assad. Russia’s UN envoy has said that relations with America are at their tensest in 40 years. Russian television news is full of ballistic missiles and bomb shelters. “Impudent behaviour” might have “nuclear consequences”, warns Dmitry Kiselev, Mr Putin’s propagandist-in-chief—who goes on to cite Mr Putin’s words that “If a fight is inevitable, you have to strike first.”

Vlad the invader

As our special report this week sets out, Russia confronts grave problems in its economy, politics and society. Its population is ageing and is expected to shrink by 10% by 2050. An attempt to use the windfall from the commodity boom to modernise the state and its economy fell flat. Instead Mr Putin has presided over a huge increase in government: between 2005 and 2015, the share of Russian GDP that comes from public spending and state-controlled firms rose from 35% to 70%. Having grown by 7% a year at the start of Mr Putin’s reign, the economy is now shrinking. Sanctions are partly to blame, but corruption and a fall in the price of oil matter more. The Kremlin decides who gets rich and stays that way. Vladimir Yevtushenkov, a Russian tycoon, was detained for three months in 2014. When he emerged, he had surrendered his oil company.

Mr Putin has sought to offset vulnerability at home with aggression abroad. With their mass protests after election-rigging in 2011-12, Russia’s sophisticated urban middle classes showed that they yearn for a modern state. When the oil price was high, Mr Putin could resist them by buying support. Now he shores up his power by waging foreign wars and using his propaganda tools to whip up nationalism. He is wary of giving any ground to Western ideas because Russia’s political system, though adept at repression, is brittle. Institutions that would underpin a prosperous Russia, such as the rule of law, free media, democracy and open competition, pose an existential threat to Mr Putin’s rotten state.

For much of his time in office Mr Obama has assumed that, because Russia is a declining power, he need not pay it much heed. Yet a weak, insecure, unpredictable country with nuclear weapons is dangerous—more so, in some ways, even than the Soviet Union was. Unlike Soviet leaders after Stalin, Mr Putin rules alone, unchecked by a Politburo or by having witnessed the second world war’s devastation. He could remain in charge for years to come. Age is unlikely to mellow him.

Mr Obama increasingly says the right things about Putinism—he sounded reasonably tough during a press conference this week—but Mr Putin has learned that he can defy America and come out on top. Mild Western sanctions make ordinary Russians worse off, but they also give the people an enemy to unite against, and Mr Putin something to blame for the economic damage caused by his own policies.

Ivan the bearable

What should the West do? Time is on its side. A declining power needs containing until it is eventually overrun by its own contradictions—even as the urge to lash out remains.

Because the danger is of miscalculation and unchecked escalation, America must continue to engage in direct talks with Mr Putin even, as today, when the experience is dispiriting. Success is not measured by breakthroughs and ceasefires—welcome as those would be in a country as benighted as Syria—but by lowering the chances of a Russian blunder.

Nuclear miscalculation would be the worst kind of all. Hence the talks need to include nuclear-arms control as well as improved military-to-military relations, in the hope that nuclear weapons can be kept separate from other issues, as they were in Soviet times. That will be hard because, as Russia declines, it will see its nuclear arsenal as an enduring advantage.

Another area of dispute will be Russia’s near abroad. Ukraine shows how Mr Putin seeks to destabilise countries as a way to stop them drifting out of Russia’s orbit (see article). America’s next president must declare that, contrary to what Mr Trump has said, if Russia uses such tactics against a NATO member, such as Latvia or Estonia, the alliance will treat it as an attack on them all. Separately the West needs to make it clear that, if Russia engages in large-scale aggression against non-NATO allies, such as Georgia and Ukraine, it reserves the right to arm them.

Above all the West needs to keep its head. Russian interference in America’s presidential election merits measured retaliation. But the West can withstand such “active measures”. Russia does not pretend to offer the world an attractive ideology or vision. Instead its propaganda aims to discredit and erode universal liberal values by nurturing the idea that the West is just as corrupt as Russia, and that its political system is just as rigged. It wants to create a divided West that has lost faith in its ability to shape the world. In response, the West should be united and firm.

Source: The threat from Russia | The Economist



Inside the bear

When the Soviet Union collapsed 25 years ago, Russia looked set to become a free-market democracy. Arkady Ostrovsky explains why that did not happen, and how much of it is Mr Putin’s fault

ON AUGUST 20th Guzel Semenova, a 25-year-old Muscovite, was strolling through the grounds of Muzeon, one of the city’s parks, and stopped by a burnt-out, rusty trolleybus. Inside its shattered interior a small video screen was playing black-and-white footage of events that unfolded in the year she was born. A volunteer explained that the trolleybus had been part of an anti-tank barricade during a coup 25 years ago and symbolised the people’s victory. Ms Semenova looked confused. The 22-year-old volunteer, herself unsure what exactly had happened during those three days in August 1991, said it was when “Russia became free.” Ms Semenova listened politely, then walked on.

A patchy knowledge of those events is nothing unusual in Russia. A survey by the Levada Centre, the country’s leading independent pollster, shows that half the overall population and as many as 90% of young Russians know nothing about the drama that began in the small hours of August 19th 1991.

But on the day of the coup not a soul came out to support the Soviet regime. Instead, tens of thousands of Muscovites took to the streets to build barricades and defend their new freedoms. Boris Yeltsin, the first democratically elected president of Russia, then a subordinate part of the Soviet Union, called for resistance. The KGB’s special forces were told to attack the Russian parliament, the epicentre of the opposition, but nobody was prepared to give a written order. Two days later three young men died under a tank. A few hours after that the troops were withdrawn and Gorbachev returned to Moscow. Jubilant crowds marched to the KGB’s headquarters and toppled the statue of its founder, Felix Dzerzhinsky.

Those three days marked the end of the Soviet Union, but they did not become a foundation myth for a new Russia. The country was tired of myths. Modern school textbooks barely mention them. Russian officials used to lay flowers at a small monument to the three young men killed by the tanks, but even this modest gesture stopped in 2004. This year liberals were banned from marching to the place of their victory 25 years ago. The small festival at the Muzeon attracted a few hundred people who watched a stylised performance of “Swan Lake” and a documentary from those days. Shot in St Petersburg, the cradle of the Bolshevik revolution, it showed a vast, peaceful crowd in the main square watching the death throes of the Soviet empire. The camera also captured a young Vladimir Putin by the side of his boss, Anatoly Sobchak, then the mayor of St Petersburg, who had defied the coup. A demonstrator was heard to shout: “When we get rid of the communist plague, we will again become free and we won’t have to fight [a war] again.”

The revolution of 1991 overturned the Soviet Union’s political, economic and social order and put 15 countries on the map where there had previously been only one. But like many revolutions in history, it was followed by a restoration.

The tsar the Kremlin most admires is Alexander III, who on taking office in 1881 reversed the liberalisation overseen by his father, who was assassinated, to impose an official ideology of Orthodoxy, nationalism and autocracy. His portrait and his famous saying, “Russia has only two allies: its army and its navy,” greet visitors to a revamped museum of Russian history at VDNKH, a prime example of Stalinist architecture in Moscow. Stalin himself has had a makeover too. Gigantic portraits of him line the roads in Crimea, proclaiming: “It is our victory!”

The two main pillars of the Soviet state, propaganda and the threat of repression, have been restored. The KGB, which was humiliated and broken up in the aftermath of the coup, has been rebuilt as the main vehicle for political and economic power. The secret police is once again jailing protesters and harassing civil activists. In September the Kremlin designated the Levada Centre a “foreign agent”, which could be the end of it. Television has been made into a venomous propaganda machine that encourages people to fight “national traitors” and “fifth-columnists”. Boris Nemtsov, a liberal politician who once represented Russia’s hopes of becoming a “normal” country, was murdered outside the Kremlin last year.

After nearly a decade of economic growth spurred by the market reforms of the 1990s and by rising oil prices, the Russian economy has descended into Soviet-era stagnation. Competition has been stifled and the state’s share in the economy has doubled. The military-industrial complex—the core of the Soviet economy—is once again seen as the engine of growth. Alternative power centres have been eliminated. Post-Soviet federalism has been emasculated, turning Russia into a unitary state.

Reactionary restoration at home has led to aggression abroad. Russia has invaded Georgia and Ukraine, two of the most democratic former Soviet republics. It has intervened in the conflict in Syria, propping up the regime of President Bashar al-Assad. It has attempted to undermine Euro-Atlantic institutions, backed right-wing parties in Europe and tried to meddle in America’s presidential election. And it is once again using the threat of nuclear arms to blackmail the West.

After the defeat of the 1991 coup, Russia was widely expected to become a Westernised, democratic, free-market country. This special report will explain why that did not happen, and ask whether the West has a Putin problem or a much deeper and more enduring Russia problem.

Mr Putin was originally chosen for the top job by Yeltsin, Russia’s first president, not least for being on the “democratic” side in 1991. When he came to power in 2000, he was expected to consolidate the country. Instead, he has reinstated an archaic model of the state.

It was naive to expect that after 74 years of Soviet rule, and several centuries of paternalism before that, Russia would rapidly emerge as a functioning Western-style democracy. But this report will show that Russia’s relapse into an authoritarian corporate state was not inevitable. It was the result of the choices made by the country’s elite at each new fork in the road. And although those choices cannot be unmade, they do not predetermine the future.

Not the Soviet Union

The collapse of the Soviet Union brought a massive change to Russia. The creation of private ownership launched industries that did not exist before, such as private banks, restaurants and mobile-phone networks. People are free to make money, consume and travel on a scale never seen before in Russia’s history. They consume not just more goods and services but more culture and information. The state no longer dominates people’s lives. Although it controls television, the internet remains largely unconstrained everywhere, and radio and print still have some freedom. Even Alexei Navalny, an opposition politician, admits that “despite the curtailing of political and civil freedoms, the past 25 years have been the freest in Russian history.”

People are becoming increasingly alienated from politics, as demonstrated by the low turnout in the parliamentary elections in September, but they are finding other ways of expressing their views. Although few Russians remember quite how the Soviet regime ended, many enjoy the results. Russia has a vibrant urban middle class which, until recently, was richer than its equivalents in eastern Europe. Russia’s cities, with their cafés, cycle lanes and shopping streets, don’t look very different from their European counterparts.

A new generation of Westernised Russians born since the end of the Soviet Union has come of age. The children of the Soviet intelligentsia—a vast educated professional class that supported Gorbachev—dress, eat and behave differently from their parents’ generation. They have a spring in their step.

Many of these young, educated Russians owe their comfortable lives to a decade of economic growth that began in 1998 and ended with the economic crisis in 2008-09. The impact of that crisis exposed the limits of Mr Putin’s model of governance. And although economic growth recovered fairly quickly, trust in Mr Putin’s model of governance declined sharply, from 35% at the end of 2008 to 20% in early 2012, whereas support for Western-style democracy shot up from 15% to 30%.

Those who felt that Russia needed both economic and political modernisation pinned their hopes on Dmitry Medvedev, who served as president from 2008 to 2012. The Russian elite wanted him to stay for a second term, but in September 2011 he announced that Mr Putin, who was then prime minister, would resume the presidency, while Mr Medvedev would become prime minister. He indicated that this job swap had been planned right from the start of his presidency. Many people felt they had been duped. When three months later the Kremlin blatantly rigged the parliamentary elections, they took to the streets, demanding the same sort of respect from the state as citizens as they were enjoying as private customers at home and abroad. They wanted Russia to become a European-style nation state, an idea formulated by Alexey Navalny, an anti-corruption blogger who had galvanised the protests through social media. His definition of the governing United Russia as a party of “crooks and thieves”, and the mood of protest, spread across the country.

Mr Putin was rattled and angry, but having witnessed the failure of the 1991 coup he knew that tanks were not the answer. Instead he trumped civic nationalism with the centuries-old idea of imperial or state nationalism, offering the idea of Russia as a besieged fortress. In 2014 he annexed Crimea. The tactic worked. The protests stopped and Mr Putin’s personal approval ratings shot up from 60% to 80%. By attacking Ukraine after its own revolution in 2014, Mr Putin persuaded his country and its neighbours that any revolt against the regime would be followed by bloodshed and chaos.

Smoke and mirrors

Mr Putin’s Russia is a slippery construct in which simulation and bluff play a big part

The Soviet Union had many faults, but postmodernism was not one of them. Mr Putin’s Russia is a more slippery construct in which simulation and bluff play a big part. Nothing is what it seems. Elections are held not to change power but to retain it; licensed “opposition” parties are manufactured by the Kremlin; Mr Medvedev’s modernisation was an illusion; doctorates awarded to scores of Russian officials, governors and even to Mr Putin himself were based on plagiarism or cheating, according to Dissernet, a grassroots organisation.

In 2014 Russia put on a remarkable show with the costliest winter Olympics ever staged, in Sochi on the Black Sea. The host country’s athletes got the largest number of gold medals, not least thanks to a massive doping operation in which the Federal Security Service (FSB), the KGB’s successor and Russia’s main security organisation, swapped urine samples through a hole in the wall between an official laboratory and a secret one next door. (That caused many Russian athletes to be banned from this year’s Rio Olympics.) In the same way that Russia has been doping its athletes, its state media have been doping the population with military triumphs and anti-American propaganda, conveying an artificial sense of strength. But unlike those sport victories, Russian violence in Ukraine and Syria is real enough.

Mr Putin’s restoration project is working because the disintegration of the Soviet Union was not complete. The remains of the Soviet and even pre-Soviet system, its institutions, economic structure and social practices, which lay dormant during the first post-Soviet decade, have been revived and strengthened by the current regime.

But just as the Soviet and pre-Soviet legacies cannot be erased, nor can the quarter-century since the USSR ceased to exist. The fundamental conflict between a modern lifestyle and the political restoration under Mr Putin, exposed by the protests of 2011-12, has been suppressed, not resolved. No restoration has ever ended in a return to the past, and none has been permanent.

Russia, perhaps more than other countries, advances through generational shifts. The current reactionary phase may turn out to be no more than a detour on the path towards a modern, federalist nation state. Or it could lead to further decline, interspersed with outbursts of aggression. Which is it to be?

Source: Inside the bear | The Economist


The economy

Milk without the cow

Political reform is an essential prerequisite to a flourishing economy

No oil, no spoils

JUST ACROSS THE mighty Volga river from Sviyazhsk, an island fortress built by Ivan the Terrible in 1552 to help him conquer the Khanate of Kazan, stands a brand new city. It is the first to appear on Russia’s map since the fall of the Soviet Union. Innopolis, 820km (510 miles) due east of Moscow, was founded in 2012 as an IT park and a model for the sort of modernisation that Dmitry Medvedev, Russia’s prime minister and before that its president, had proclaimed a main priority. Now two years old, it is the smallest town in Russia, with the large ambition to launch the country into a high-tech era. Designed by Liu Thai Ker, the chief architect of Singapore, it has a university where 350 students are taught in English. Just half an hour’s drive away is Kazan, the capital of Tatarstan, an oil-rich republic that has recently adopted a new 15-year strategy to turn itself into a hub of creativity and growth. “We are competing not with Russian regions but with the world. Our new oil is human capital,” says Vladimir Gritskikh, a former physicist who co-ordinates the programme.

Innopolis has comfortable town houses, playgrounds with Wi-Fi and a large swimming pool. Igor Nosov, its manager, holds an American MBA. The city’s free economic zone is dominated by a circular office building for high-tech firms. There is just one thing in short supply: the firms themselves. So far the building has only about a dozen occupants. “Well, we’ve built a collective farm. Now we need the farmers,” quips one of the Tatar officials. Whether those farmers will come depends on a range of factors mostly outside Tatarstan’s control.

There was a difference between invention and innovation, he said. Russian scientists and engineers invented the laser, electric light and hydraulic fracking, yet time and again the country failed to reap any economic benefit from its scientific brilliance. The reason, Mr Graham explained, was not a lack of business talent but the adverse social, political and economic environment. Russia’s authorities build expensive innovation cities, “but at the same time they prohibit demonstrations, suppress political opponents and independent businessmen, twist the legal system and create a regressive, authoritarian regime…They want the milk without the cow.”

None of this was particularly new to Mr Gref. In 2000 the liberal economist, then aged 36, was picked by Mr Putin to draft a ten-year economic programme and lead reforms. “The centrepiece of the new social contract is the primacy of the citizen over the state,” Mr Gref wrote at the time. “The country has a unique chance provided by political stability, appetite for reform and rising oil prices to renew itself. Unless that chance is used, economic regression is inevitable, threatening not only social stability but the existence of Russia as a state.” Mr Putin signed off on Mr Gref’s plan and hired Andrei Illarionov, a determinedly libertarian economist, as his adviser.

During the first eight years of Mr Putin’s reign the economy grew by an impressive average of 7%, kickstarted by a 70% rouble devaluation in 1998. As state finances and economic rules became more stable, the market reforms of the 1990s began to have an impact. From the mid-2000s soaring oil prices stimulated further growth, mainly in the services and construction sectors, but also fuelled imports, and the economy started to overheat. When the financial crisis hit in 2008, the Russian economy crashed, contracting by 10% from the peak of 2008 to the trough of 2009.

The subsequent recovery was driven by higher government spending that propped up consumption. Between 2010 and 2014 the economy grew by only 3% a year, even though revenues from oil exports were 70% higher than during the oil boom of 2004-08. Russia used its abundance of natural resources to create a corporatist state that suppressed competition. Between 2005 and 2015 the share of the state in the economy doubled, from 35% to 70%.

Now the economy is in recession. Last year GDP shrank by 3.7% and real disposable income fell by 10%. Investment in fixed assets declined by 37% over the past four years, with the steepest fall coming after Russia’s attack on Ukraine in 2014.

The people running the economy are competent, well-educated technocrats (such as the head of the central bank, Elvira Nabiulina). But there are limits to what they can achieve. A depreciation of the rouble against the dollar of almost 50% since the start of 2014 has failed to rekindle economic growth, partly because Russian producers in the past preferred to import parts and materials rather than invest in domestic capacity. Those intermediate imports have now become unaffordable.

The slump in the oil price and Western sanctions have exacerbated the problems, but they did not cause them. Growth started to slow down in 2012 and 2013 when the oil price was still high and before the invasion of Ukraine. The root causes are that Russia’s market is not free, and the rules are opaque and enforced inconsistently. As an upper-middle-income country, it can develop only if its economy is integrated with the rest of the world. Its confrontations with the West and the activities of its security services make it an unenticing target for investment. “The investment climate matters in an open market economy. A state economy does not need an investment climate; it needs security services,” jokes Sergei Belyakov, a former deputy economics minister. Russian businessmen have stopped investing in their own country mainly because they see no future.

Property and power

When the Soviet Union collapsed, many people hoped that once liberated from communist ideology and enjoying a free market, Russia would be able to make good use of its immense natural and intellectual resources. Yegor Gaidar, the architect of the Russian reforms, was among the few who realised that the market alone could not solve Russia’s fundamental problem: the close nexus between political power and property. In an article published two years before he took charge of the economy, he wrote: “A market [by itself] does not answer the key question of who is supposed to benefit from the results of economic production; it can serve different social structures. Everything depends on the distribution of property and political power.” Yet although the 1991 revolution overturned the political and economic system and led to the sale of state assets, it did not sufficiently separate political power and property.

Part of the problem was the type of economy modern Russia had inherited from the Soviet days. Stalin’s crash industrialisation and urbanisation was designed to create a militarised autarky with a total disregard for cost, financial or human. Factories were built in cold and inaccessible places, using forced labour. The output of those factories was often worth less than the input in energy and materials. After Stalin’s death they were kept going by oil and gas money. The factory managers, known as “red directors”, travelled to Moscow to haggle with the relevant ministries for resources. They employed millions of people and had enormous lobbying power. When the Soviet Union collapsed, the only way to keep them quiet was to sell them their factories, which meant that much of industry remained in the hands of the old elite. Mr Gaidar reckoned that this was a price worth paying to prevent civil conflict.

Yet many of these companies could survive only if their energy and transport costs were subsidised. For example, Yukos, once Russia’s largest oil firm, was forced to sell 70% of its oil in the domestic market, yet since its buyers could not afford to pay an open-market price, they accumulated huge debts that in the end had to be written off, says Mikhail Khodorkovsky, the company’s former owner.

But whereas Gaidar’s government in 1992 had to act urgently to stop the country from falling apart, Mr Putin had no such excuse. When he first took over, oil prices were rising and there was broad political support for reforms. However, according to Clifford Gaddy and Barry Ickes, two American economists, Mr Putin did not merely fail to dismantle the Soviet structure; he used Russia’s windfalls to reinforce it in order to preserve social stability and votes.

It was always unrealistic to think that after the fall of the Soviet Union Russia would be able to build institutions overnight. Russia had been subjected to totalitarian rule for so long that it had no memory of life before it. Douglass North, a Nobel prizewinning economist, and co-authors have written that in Russia, as in many other countries, access to valuable rights, economic activities and resources is determined by privilege enforced by the political and military elites. This system, which he calls a “limited-access order”, relies on the ability of the elites to control rents, be it from land, raw materials or jobs for cronies. Its main objective is to preserve stability and prevent uncontrolled violence by giving those elites access to streams of rent. But that state monopoly on rent and violence collapsed with the Soviet Union.

Oligarchs and beyond

In the mid-1990s control over natural-resource firms passed to the oligarchs, a powerful group of business tycoons who emerged from the rubble of the Soviet Union. Their power rested not so much on violence but on entrepreneurship, which allowed them to accumulate capital. But they also cultivated personal connections with the liberals in the government to gain privileged access to the most valuable assets.

In 1995 they struck an audacious deal, offering to lend money to the cash-strapped government and put their resources, including the media they controlled, behind an ailing Yeltsin. In return, they asked to manage the government’s shares in natural-resource firms. When Yeltsin was re-elected in 1996, they were allowed to auction off those shares to themselves. This “loans for shares” privatisation undermined the legitimacy of Russian capitalism and compromised the idea of property rights.

To protect their assets, the oligarchs had to ensure the continuity of the regime. In 1999, as Yeltsin prepared to step down, Boris Berezovsky, the ultimate oligarch, who had worked himself into the president’s family, proposed Mr Putin as Yeltsin’s successor. According to Berezovsky, Mr Putin had originally wanted to be chairman of Gazprom, Russia’s natural-gas behemoth, but instead he was offered the job of running Russia Inc.

Mr Putin was shaped mainly by two experiences. One was his service in the KGB, which made him a statist. The other was his time in St Petersburg, where he served as deputy mayor in the early 1990s, dabbling in business. That turned him into a capitalist, but of a particular kind. Capitalism to him meant not free competition but connections, special access and, above all, deals. As Fiona Hill and Clifford Gaddy wrote in their book, “Mr Putin: Operative in the Kremlin”, “Capitalism, in Putin’s understanding, is not production, management and marketing. It is wheeling and dealing. It is not about workers and customers. It is about personal connections with regulators. It is finding and using loopholes in the law, or creating loopholes.” Mr Putin did not destroy the oligarchy but merely changed the oligarchs, creating much closer links between property and political power. He wanted to control the market, transferring its benefits to the people he trusted—friends from St Petersburg and former KGB colleagues.

But whereas the oligarchs in the 1990s were ruthless self-made businessmen driven by profit, the men Mr Putin brought to power were specialists in suppression, violence and control, driven by revenge. The siloviki, people with roots in the KGB and other powerful ministries, had no special business skills, but quickly took over the commanding heights of the economy, capitalising on popular discontent with the oligarchs and using their licence to exert violence to amass property. In 2003 they jailed Mr Khodorkovsky, the most independent and politically ambitious of the oligarchs. A year later Yukos, his oil company, was dismembered and its assets taken over by Rosneft, a state oil firm chaired by Igor Sechin, one of Mr Putin’s most trusted lieutenants and an informal leader of the siloviki.

During the years when the oil-price boom fuelled domestic consumption, the new elite not only came to control the distribution of rent, it also limited access to the market in order to reduce competition, developing a system which Kirill Rogov, a Russian political economist, describes as “soft legal constraints”. It involves writing the rules in such a way that to observe them is either prohibitively expensive or downright impossible, then handing out informal licences to break those rules.

Licence to offend

Just as in the Soviet era red directors haggled for resources, market participants now haggle for the right to break the rules, so the system gives the security services ultimate economic and political control. The licence can be withdrawn at any time if its holder steps out of line or gets too greedy, or if his assets start to look too attractive.

The story of Igor Pushkarev, a former mayor of Vladivostok, illustrates the point. In the early 2000s Mr Pushkarev, the owner of a large cement firm in Russia’s far east that got a lot of orders from the government, joined Mr Putin’s United Russia party, and in 2008 he was elected mayor of the city. Earlier this year he challenged Vladimir Miklushevsky, the regional governor, in the party primaries. Mr Miklushevsky went to see Mr Putin, and the next day Mr Pushkarev was arrested for “abuse of office”. The FSB started to expropriate his assets straight away.

Such lack of clear property rights creates distrust at all levels of Russian society, heightens the role of the security services and raises transaction costs. Every other Russian shop or restaurant employs security guards. While the economy was growing, there were plenty of profits to spread around and keep everyone happy, but now that it is shrinking, the rules have become even less clear and the fight for resources has turned more brutal. Property can be taken away regardless of political loyalty, turning owners into temporary holders.

Take Vladimir Yevtushenkov, the owner of Sistema, a holding company, who is perfectly loyal to the Kremlin. In 2009 Sistema bought a controlling stake in Bashneft, a medium-sized oil firm, from a local authority for $2.5 billion. It had been given explicit approval by Dmitry Medvedev, who was president at the time. But in September 2014 Mr Yevtushenkov was arrested and charged with buying stolen goods. His real crime was reportedly to refuse to sell Bashneft, which had become one of the world’s fastest-growing oil firms, to Rosneft, at a price below its market value. After three months under house arrest, Mr Yevtushenkov was released and cleared of all charges—but not before giving up Bashneft, a contolling stake in which has now been sold to Rosneft for $5.2 billion. The day after he was released, Mr Yevtushenkov (who still owns MTS, Russia’s largest mobile-phone company) went to a drinks party at the Kremlin and spoke to Mr Putin. “I thanked him for his wise decision…to release me,” Mr Yevtushenkov recently told Dozhd, an independent internet television channel. He continued: “If [you] like any of my other companies—[you are] welcome.”

Faced with prolonged economic stagnation, the Kremlin is now trying to stimulate growth by pouring money into the military-industrial sector and into infrastructure projects. Given the level of corruption, though (see chart), the cost of these projects could outweigh their benefits. And in the absence of a thriving private sector, those new roads and bridges may not do much good.

The main problem with Russian modernisation, says Mr Rogov, is that the new, competitive urban middle class that has emerged as the economy has developed has no place in the current authoritarian model, which is designed for those who depend on the state but cannot compete.

The prospects for change are not encouraging. As North observed, limited-access orders have been in operation for thousands of years: “No forces inherent in the logic, social structure or historical dynamics of limited-access orders inevitably lead them to become open-access orders. Because natural states have internal forces built on exclusion and rent-creation, they are stable orders…extremely difficult to transform.” Technology does not help because the elites can adopt it selectively, without having to face competition.

Natalia Zubarevich, a Russian economist and geographer, argues that one of the biggest risks for Russia is not an implosion but a slow economic and intellectual degradation. As long a Russia’s elite sees modernisation as a matter of technology rather than of open access based on the rule of law, Innopolis is likely to remain the smallest town in Russia.

Source: Milk without the cow | The Economist


Power structures

Wheels within wheels

How Mr Putin keeps the country under control

The FSB is emerging as the main mechanism for exercising power in Russia

MYSTERY, MIRACLE AND authority are three powers alone able to hold the conscience of people captive, explains Fyodor Dostoyevsky’s Grand Inquisitor in “The Brothers Karamazov”. Mr Putin has mastered all three. Yet none of these is as important as secrecy, the main tool of a good spy. Nobody really knows what goes on behind the Kremlin’s thick walls, or inside Mr Putin’s head. But several things are becoming clearer. Mr Putin’s rule is turning increasingly personal; a generational shift is taking place within his entourage; and the FSB, the successor organisation to the KGB, is emerging as the main mechanism for exercising power, often at the expense of all other security services, including the police.

Mr Putin had always relied heavily on his former KGB colleagues, but after the annexation of Crimea the expansion of the FSB gained new momentum and greater public legitimacy. It now openly wields political and economic power. Mr Putin has recently appointed three members of his security detail and one former KGB officer as regional governors.

Today the FSB is personally overseen by Mr Putin. “There is no political control over the FSB. It is a self-contained and closed system,” says Andrei Soldatov, an expert on Russia’s security services. Behind the scenes, the FSB controls the Investigative Committee, the Russian equivalent of America’s FBI. The prosecutor’s office, in effect, has no independent oversight of the FSB and the courts take their cue from it.

On September 18th, the day of the parliamentary elections, Kommersant, an authoritative daily newspaper, reported the Kremlin’s plan to fold other parts of the former KGB, including the foreign intelligence services (SVR) and the Federal Protection Service, which is responsible for guarding top Russian officials, into a new megastructure: the Ministry for State Security, or MGB, which is what the KGB was called under Stalin. The date of the report is telling. The parliament has become an appendix of the FSB. As Tatyana Stanovaya of the Carnegie Moscow Centre notes, the FSB drafts most of the repressive laws that are rubber-stamped by the parliament.

The FSB is a notoriously opaque organisation, but one of its most powerful figures appears to be Sergei Korolev, who used to head the internal-security department that can investigate the staff of all security services, including its own. He has recently been promoted to the job of overseeing all financial and business activity in Russia. His team was behind most of the high-profile arrests of governors, mayors and policemen in recent years. These started with two young generals from the interior ministry, Denis Sugrobov, the head of the ministry’s economic-crime and anti-corruption department, and his deputy, Boris Kolesnikov. Both in their mid-30s, they had been installed in their jobs by Dmitry Medvedev, Russia’s current prime minister and former president, and given carte blanche to go after corrupt senior officials.

Yet soon afterwards they became victims of a sting operation set up by the FSB. In his prison cell Mr Kolesnikov suffered a head injury and six weeks later, during a formal interrogation, he apparently killed himself by jumping out of a sixth-floor window. Mr Sugrobov remains in jail.

The public is regularly treated to footage of governors, policemen and officials being led away in handcuffs, their homes being searched and enormous piles of cash being confiscated. The most spectacular arrest so far has been that of Dmitry Zakharchenko, a police colonel who had hidden $120m in cash in his sister’s flat. A few weeks earlier the FSB had raided a vast mansion belonging to Andrei Belyaninov, the head of the customs service and a former KGB officer, and found $670,000 in cash, a one-kilo gold ingot and assorted old-master paintings. Mr Belyaninov was fired from his job but not charged.

Hardly anyone believes that such raids help the fight against corruption, which remains an organising principle of Russia’s political system, but they go down well with the public. It is said that Mr Putin is using men like Mr Korolev to purge the ranks of the FSB itself and keep its members on their toes and the elites in check. The practice harks back to Stalin, who wielded his power almost exclusively through the NKVD, the KGB’s predecessor, regularly purging the party.

Mr Putin’s rotation of cadres so far has been much softer. None of the senior people in his entourage has yet lost his freedom or his fortune. Mr Belyaninov has said he is hoping to find another government post. Mr Korolev’s rival has been “exiled” to Rosneft, the mammoth oil company. Every important Russian firm and institution has an FSB officer seconded to it, a practice preserved from Soviet days.

But as Mr Putin’s personality cult grows, he is severing his connections with the old comrades who remember him as a lowly young KGB officer and bringing in new people who have known him only as president. Many of those who had started with him have already stepped down, including Sergei Ivanov, a long-serving chief of staff and former KGB general, Viktor Ivanov, the former head of an anti-drugs agency, and Evgeny Murov, the trusted (but ageing) head of the Federal Protection Service. Mr Putin has also got rid of some of the old KGB guard who had headed Russia’s largest state-owned corporations.

Pass it on

They have been replaced by youngish men who owe their careers entirely to Mr Putin. Mr Putin’s new chief of staff, Anton Vaino, aged 44, is the grandson of a Soviet-era Estonian Communist Party leader and a third-generation bureaucrat. But while civilians have been installed to run the Kremlin apparatus, the children of the old siloviki are moving into key positions in state banks and natural-resource companies. The son of Mr Murov is chairman of the management board of the state-owned Federal Grid Company, Russia’s main electricity supplier. Dmitry Patrushev, the son of the Security Council chief, Nikolai Patrushev, heads the Russian Agricultural Bank, a large state-owned bank.

One of the communist regime’s key weaknesses was the impossibility of passing on wealth. When old party bosses died, their families were mostly left with nothing. It was also one of the main reasons why many members of the Soviet nomenklatura supported the revolution in 1991. These days Russia’s elite can pass on its possessions to its children, but its wealth and its physical safety depend on Mr Putin.

Perhaps in an effort at diversification, Mr Putin recently announced the creation of a new security structure, the National Guard. Headed by Viktor Zolotov, who used to be one of Mr Putin’s bodyguards, it has 25,000-40,000 special commandos at its disposal, along with 400,000 troops. These are not part of the regular army of about 930,000 and report directly to Mr Putin.

The creation of the National Guard is meant to head off the threat of another colour revolution (as the series of peaceful uprisings in former Soviet republics became known), explains Alexander Golts, a Russian military analyst. The scenarios used in its training are based on the protests in Ukraine and involve the use of tear gas and water cannon as well as conventional weapons. One of the lessons the Kremlin learned from the failed coup of August 1991 was that in a political crisis a regular army may be reluctant to use force against protesters.

As a former bodyguard, Mr Zolotov is responsible for Mr Putin’s personal safety, but also for providing some balance to the powers of the FSB. In a closed political system, trust is low.

Source: Wheels within wheels | The Economist


Foreign policy

The fog of wars

Adventures abroad boost public support at home

RUSSIA HAS NO intention of going to war with America or its allies. Instead it will act through non-military means “to undermine the general political and strategic potential of major Western powers, to disrupt national self-confidence, to increase social and industrial unrest, to stimulate all forms of disunity…Anti-British talk will be plugged among Americans, anti-American talk among British. Germans will be taught to abhor both Anglo-Saxon powers. Where suspicions exist, they will be fanned; where not, ignited.” So wrote George Kennan, the “wise man” of American diplomacy, in a famous telegram from Moscow in 1946. Seventy years later the telegram seems as relevant as ever, because the system that Kennan described is being rebuilt.

Russia has launched cyber-attacks, spread disinformation and interfered in the domestic affairs of both neighbouring and faraway countries. Its military jets are buzzing NATO’s ships and flying close to American reconnaissance aircraft in Europe. The American government has formally accused Russia of meddling in the presidential election by means of extensive hacking. In Syria it has subverted America’s efforts to defeat Bashar al-Assad and threatened to shoot down American warplanes if they attack his army.

Russia has provided funds for the French right-wing party of Marine Le Pen. RT, the Kremlin’s foreign-language propaganda TV channel, has offered a regular spot to Nigel Farage, the former leader of Britain’s far-right UKIP party. Russia’s support for Donald Trump, the Republican presidential candidate, who has also appeared on RT, has become a talking-point in America’s forthcoming election.

None of this is particularly new. Subversion, disinformation and forgery, combined with the use of special forces, were at the heart of the Soviet Union’s intelligence services. The KGB had a special department responsible for “active measures”, designed to weaken and undermine the West. It stirred racial tension by posting bogus letters from the Ku Klux Klan, planted stories about AIDS having been invented in America as a biological weapon and put it about that John F. Kennedy’s murder was plotted by the CIA.

Yuri Andropov, the head of the KGB in the 1970s and one of Mr Putin’s heroes, set up special courses to train operatives in the use of active measures. At the height of the cold war 15,000 officers were working on psychological and disinformation warfare. When the Soviet Union collapsed, the department was renamed but never dismantled.

Modern technology has helped it widen its scope; the Kremlin now uses large numbers of “trolls” that spread disinformation and propaganda through online communities and social media. It also helps Russia to sow confusion by putting out multiple versions of events. According to Alexander Vershbow, NATO’s deputy secretary-general and a former American ambassador to Moscow, it is “an endlessly changing storyline designed to obfuscate and confuse to create the impression that there are no reliable facts, and therefore no truth.”

This echoes Kennan’s observation in 1946 that “the very disrespect of Russians for objective truth—indeed, their disbelief in its existence—leads them to view all stated facts as instruments for furtherance of one ulterior purpose or another.” Unlike Soviet propaganda, which aimed to promote communist ideology, modern Russian propaganda aims to show that Western policies are as rigged and hypocritical as Russian ones.

Assessing the effectiveness of these Russian attempts to influence opinion abroad is hard because they often tap into existing sentiments, from disenchantment with elites to resentment of immigrants. But research by Finland’s Institute of International Affairs has found that Russian propaganda has had very little impact on mainstream Western media and has never resulted in any change in policy. A strong and confident West should find it easy to brush off Russian media assaults. But sober political thinkers have noted some signs of a “Putin panic” in the West, and Mr Putin himself has said that America’s attempts to present Russia as an “evil empire” indicates “Russia’s growing influence and significance”.

In the eyes of his own people, Mr Putin has restored his country’s status to that of the Soviet Union. According to a recent report by the Aleksanteri Institute in Finland, a think-tank, “the West’s response to the Crimea annexation partially did exactly what Putin had demanded: putting forward the notion of Western weakness in the face of Russia’s superior ‘hybrid warfare’ capabilities implies respect and even fear of Russia as a powerful global actor.”

The country’s intervention in Syria in the autumn of last year was designed to reinforce the image of Russia as a global power. It did change the course of events, saving Bashar al-Assad from a seemingly inevitable fall, and made the humanitarian situation in Syria far worse. But Russia cares little about the future of Syria. It sees the war there as a way of forcing America to recognise a Russian sphere of influence in the former Soviet Union.

Weakness in strength

The wars in Ukraine, Georgia and Syria have demonstrated Russia’s willingness and ability to use its military power to achieve political goals. But they are not a sign of Russia’s strength; instead, they indicate deep insecurity. As Kennan wrote: “At [the] bottom of [the] Kremlin’s neurotic view of world affairs is [the] traditional and instinctive Russian sense of insecurity…This thesis provides justification for that increase of the military and police power of the Russian state…Basically this is only the steady advance of uneasy Russian nationalism, a centuries-old movement in which conceptions of offence and defence are inextricably confused.” This nationalism continues to shape Russia’s behaviour today.

Mr Putin sees Russia’s wars as a form of self-defence, driven by the need to deter the West. That is what he meant when he gathered the country’s elite in the Kremlin’s gilded hall to announce Russia’s “reunification” with Crimea on March 18th 2014. “Like a mirror, the situation in Ukraine reflects what has been happening in the world over the past several decades. Our Western partners, led by the United States of America, prefer not to be guided by international law but by the rule of the gun.” In Ukraine, he said, the West had crossed a red line. Western actions left Russia with no choice but to send its troops into Crimea.

Yet only a few days earlier Mr Putin had told the German chancellor, Angela Merkel, that there were no Russian troops in Crimea. “He lives in another world,” she was reported to have said to Barack Obama. In his world the West was trying to undermine Russia. The colour revolutions across the former Soviet Union and the protests in Russia in the winter of 2011-12 were Western plots.

Yet his view of the West as a threat was not, as many have argued, his starting position; it developed in response to changes inside Russia and the former Soviet republics. When Mr Putin became president in 2000, he showed no overt hostility towards America or the West, despite a recent NATO bombing raid on Belgrade without a UN resolution that had triggered a shrill anti-American response. In his first interview with Britain’s BBC, Mr Putin said: “I cannot imagine my own country in isolation from Europe, so it is hard for me to visualise NATO as an enemy.” Russia, he said, might become a member of NATO if it were treated as an equal partner. Even when the three Baltic states joined NATO in spring 2004, Mr Putin insisted that relations with the defence organisation were “developing positively” and he had “no concerns about the expansion of NATO”.

The breaking-point in Mr Putin’s relationship with the West came towards the end of that year when several seemingly unrelated events coincided. The first was a terrorist attack on a school in Beslan, in the north Causasus, in which 1,200 people, mostly children, were taken hostage. After Russia’s special forces stormed the school, leaving 333 people dead, Mr Putin accused the West of trying to undermine Russia. He cancelled regional elections and handed more powers to the security services.

The next key event was the dismemberment and expropriation of the Yukos oil firm, which further emboldened and enriched the siloviki with roots in the Soviet KGB. They thrived on the idea of a Western conspiracy and an exaggerated sense of the West as an enemy.

The call of liberty

Just such an enemy was provided by the Orange revolution in Ukraine in 2004-05, a popular uprising against rigged presidential elections in which Mr Putin had backed Viktor Yanukovych, a corrupt thug. His defeat at that time (he was elected later) was seen as a humiliation for the Kremlin and an ominous sign of American meddling, underlined by George W. Bush’s praise for democracy in Georgia and Ukraine and his comment that “eventually the call of liberty comes to every mind and every soul.” Mr Putin saw Georgia’s successful reforms and its determination to break out of the post-Soviet system and move towards the West as a threat, in the same way as the Soviet Union had felt threatened by liberal reforms in Czechoslovakia in 1968. And just as the Kremlin had responded by ordering tanks into Prague to stop the reforms spreading to the Soviet Union, so Russia sent its tanks and planes into Georgia in August 2008. Immediately after that war Mr Putin ordered a thorough modernisation of the Russian armed forces.

America chose to follow the war in Georgia with a “reset” initiated by the new Democratic president, Mr Obama, and his secretary of state, Hillary Clinton. But when protests broke out in 2011-12 Mr Putin accused Mrs Clinton of spurring protesters on: “She set the tone for some actors in our country and gave them a signal…They heard the signal and with the support of the US State Department began active work.” As Ms Hill and Mr Gaddy wrote, “America and Europe encourage political and economic change as a matter of course in their foreign policies. The essence of Western political systems extends to promoting democracy and liberal markets abroad.” But whereas Western governments see such efforts as benign, Mr Putin considers them a danger, they continue: “Western-style democracy and open markets are a clear threat to a Russian political system that thrives as a closed one-body network and an economic protection racket.” In Russia’s new military doctrine, signed by Mr Putin at the end of 2014, popular uprisings against an oppressive regime were classified as a military aggression which warrants a military response.

In January 2013 Valery Gerasimov, then newly appointed as chief of staff, had spoken about a new type of warfare that Russia had to face. “The emphasis in methods of struggle is shifting towards widespread use of political, economic, informational, humanitarian and other non-military measures…Overt use of force, often under the guise of peacekeeping and crisis management, occurs only at a certain stage, primarily to achieve definitive success in the conflict.” The revolution in Kiev in the winter of 2013-14 which overthrew Viktor Yanukovych was perceived by the Kremlin as an escalation of hostilities by “hybrid means”.

Russia’s heavy propaganda campaign which portrayed Ukraine’s post-revolutionary government as fascists paved the way for its own special forces in Crimea, allowing them to stage a coup, overthrow the legitimate government and appoint its placemen who quickly called an unconstitutional referendum on joining Russia. In Mr Putin’s mind, Russia’s actions in Crimea and eastern Ukraine merely mirrored Western “hybrid” tactics, including special forces, disinformation and mobilisation of the protest potential of the local people. The annexation of Crimea was bloodless.

In eastern Ukraine the task was different. It was not to annex territory but to spark a conflict that would undermine Ukraine’s territorial integrity and its chances of moving towards the West. Whereas in Crimea Russia relied on a disenchanted population nostalgic for the Soviet era, in Donbas it was supported by the core of Mr Yanukovych’s voters who considered the government in Kiev illegal. But Russia’s operations in both Crimea and eastern Ukraine were limited in scale and depended on a power vacuum in Kiev. As Alexander Nevzorov, a Russian journalist, wrote, “Crimea was taken not from a strong, rich and brave country but from a wounded, bleeding and motionless one.”

Samuel Charap of the International Institute for Strategic Studies notes that if Russia had attempted to deploy its “little green men” (soldiers in unmarked green uniforms) in Western Ukraine, for example, “they would have likely been hanging from the lamp-posts, not leading an armed insurgency.” Even in Donbas, Russia had to use its conventional military force to stop the Ukrainian army from defeating the Russian-armed rebels. Russia’s Ukraine operation, therefore, should not be seen as a template for a potential conflict with NATO, Mr Charap argues.

Belarus, another Slavic, Russian-speaking country that was one of the founding members of the Soviet Union, could also be a target. It is ruled by Alexander Lukashenko, often called the last dictator in Europe, and so far Russia has kept him going with its gas subsidies. But should the Kremlin sense that Mr Lukashenko’s grip is weakening or that he is turning towards the West, it could easily stage a coup and take the place over.

The perception of Russia’s military advantage rests on two main elements, argues Alexander Golts, a Russian military analyst. One is unpredictability and surprise, because Mr Putin is not constrained by any formal institutions or by his own team. The other is Russia’s ability quickly to deploy well-trained, disciplined and equipped troops, thanks to the modernisation of its forces enabled by a 30% increase in spending in real terms since 2008. Russia has about 80,000 elite troops that can be sent into battle within hours.

Russia’s conventional military expansion is limited by its demography. According to its own estimates, this year it will be able to increase its forces by only 10,000 men, barely enough for one division. It also needs to be careful to minimise casualties, which go down badly with a population that sees war as a television show. The number of people who supported Russia’s military invasion in Ukraine declined from 47% in June 2014 to 25% a year later, according to the Levada Centre.

The nuclear option

Russia’s military-industrial complex is unable to produce anything close to Soviet volumes of hardware. But the country’s relative economic and military weakness compared with NATO does not make the country any safer; on the contrary, it poses a big risk. The only way Russia can compensate for the gaps in its conventional forces is to invoke the threat of a nuclear strike. After the annexation of Crimea Mr Putin said he had been ready to use nuclear arms to defend his country’s “historic territory”. And after Russia showed off its long-range cruise missiles in Syria, Mr Putin said that it was prepared to use its powerful weapons if its national interests were infringed upon, implying that those missiles might one day carry nuclear warheads. America’s “impudent behaviour” would have “nuclear consequences”, said one of Mr Putin’s chief propagandists.

After Stalin’s death the Soviet Union was ruled by a generation of leaders who, having emerged as victors from the second world war, were naturally averse to another big war and genuinely fearful of the use of nuclear arms. They were also restrained by the collective power of the Politburo, which had ousted Nikita Khrushchev soon after he dragged the Soviet Union into the Cuban missile crisis.

Mr Putin, on the other hand, is bound by few constraints and has no particular aversion to war. His initial popularity as president rested on the war he had waged against Chechnya in 1999, and his sagging ratings were restored by the war in Ukraine.

Yet Mr Putin would not unleash a war for ideological reasons. He will continue to present his actions as defensive. What he is ultimately after is a new pact along the lines of the Yalta agreement after the second world war which would create a buffer zone between Russia and the West. In the absence of such a deal, Mr Putin will continue to confront his perceived enemies by both non-military and military means. Western sanctions only reinforce his determination.

Mr Putin has no plans to conquer the world. He may be impervious to logic or reason, but he is highly sensitive to force. He knows he cannot afford a conventional war with the West, but he could quickly raise the stakes to the verge of a nuclear war, believing that the other side would always blink first. Over the past 16 years the West has done little to persuade him otherwise.

Source: The fog of wars | The Economist


Modern life

Tell me about Joan of Arc

Young people are finding new ways of signalling dissent

A thirst for knowledge

“THE TEN BEST Patisseries in St Petersburg”, “12 Crazy Photographs of Famous Sites”, “A South Korean Erotic Thriller”. These are just some of the main headlines colourfully displayed on the Russian news site Bumaga (Paper). “We modelled it on Vox and the Boston Globe,” says Anna Kosinskaya, its co-founder and editor. Bumaga is totally independent. When it started four years ago, it had no funding. Now it makes money from advertising.

Ms Kosinskaya, red-haired and open-faced, is 26, just one year older than post-Soviet Russia. She spends her time in a part of St Petersburg well supplied with cool lofts, funky bars and gastropubs. Though not rich, she has travelled the world. Her generation of educated, urban young Russians has very little in common with the cowed Homo sovieticuswho still abounds. In 2011 they took to the streets to protest against rigged parliamentary elections. For Ms Kosinskaya this was the first election in which she was able to vote. She would not accept the standard practice of rigging, not because she had a particular preference for any party, but because she thought it was disrespectful and wrong.

Watch the graffiti

Five years on, last month’s parliamentary elections passed without incident. Alexei Navalny, one of the leaders of the 2011 protests, says people have lost interest in politics. Many of his former supporters switched sides following Russia’s annexation of Crimea. Street artists who were drawing anti-Kremlin graffiti five years ago have switched to anti-American themes. One drawing shows a fish with blue stripes and red stars inside a blender in the colours of the Russian flag.

But many young, liberal Russians feel frustrated. “We live with the feeling that something really important did not happen in our lives,” says Phillip Dziadko, a former editor of Bolshoi Gorod, a Moscow magazine which five years ago was the flag-carrier of the protest movement. Its owners have since closed it down. “Many of my friends feel as though we have gone into internal exile,” says Ms Kosinskaya.

Until recently young Russians did not see themselves as part of the intelligentsia. “This was something rather archaic for us; people who talked a lot and did very little,” says Ms Kosinskaya. But now the survival strategies developed by their parents’ generation, particularly their ability to carve out niches where they could apply their skills and knowledge, have become relevant to younger people too.

One of the most popular authors among the new generation is Sergei Dovlatov, a Soviet writer from the 1970s. He emigrated to America where he died in 1990. In his prose he cultivated self-irony and sought privacy and autonomy from the Soviet state. In the words of a friend, Joseph Brodsky, Dovlatov “belonged to that generation which took the idea of individualism and the principle of autonomy of human existence more seriously than anyone, anywhere.” On September 3rd this year thousands of people in St Petersburg celebrated what would have been Dovlatov’s 75th birthday and unveiled a privately financed statue of him.

Say it with culture

Although the state today suppresses independent civil and political activity, it allows a lot more personal freedom than it did in 1979 when Dovlatov left. Since the mainstream media are mostly pumping out government propaganda, Russia’s modern intellectuals have got involved in cultural projects. Public lectures by notable scholars, both Russian and foreign, on subjects from urbanism to artificial intelligence gather mass audiences. Tickets to such talks sell out within hours. Every night dozens of events take place in Moscow and other cities. Book fairs attract queues to rival those for pop concerts. A new shopping centre in Yekaterinburg, in the Urals, has organised a book round-table as one of its opening events.

Public lectures, intellectual discussions and excursions have evolved into a business. “Ten years ago, to raise money from investors, you needed to say only one word: ‘media’. Today all you have to say is ‘education’,” says Yuri Saprykin, a former editor of Afisha, a listings magazine that helped shape the tastes of the urban middle class. The trend started a few years ago when a site called “Theory and practice” began to provide a wide variety of courses and lectures. The young are wild about classical music and art museums. “If you are not learning something outside your work, you are a loser,” says Ms Kosinskaya.

Mr Dziadko, the grandson of Soviet dissidents and human-rights activists, and a group of friends have launched a popular multimedia education and entertainment project called Arzamas, a name borrowed from a 19th-century literary society of which Pushkin was a member. The subjects range from Elizabethan theatre and medieval French history to the anthropology of communism and the mythology of South Africa. A few months ago Arzamas organised an evening lecture about Joan of Arc, including a recital of medieval music, at Moscow’s main library. “We thought it would be attended by a few intellectuals. But when we turned up 15 minutes before the lecture, we saw a long queue of young people and hipsters trying to get in,” says Mr Dziadko.

The boom in “enlightenment” projects is not so much a reversal of the rise of consumerism in the previous decade but a complement to it. Just as Russian people were suddenly presented with a vast choice of consumer goods, they now have a large array of intellectual pursuits to choose from. And whereas Russia’s government can impose a ban on imports of Western food, barring the spread of knowledge is much harder.

The main producers and consumers of these enlightenment projects are young Westernised Russians who are part of a global culture. Their pursuit of a wide range of knowledge is a way of fighting the isolationism and aggressive obscurantism imposed by both state and church. This takes many forms, from banning modern-art shows to organising anti-gay campaigns, promoting anti-Darwinism and attempting to stop abortions.

Popular books about biology and physics currently sell better than detective stories. Yulia Shakhnovskaya, the director of the Moscow Polytechnic Museum, where Evgeny Yevtushenko read his poetry in the 1960s, says that education and science have become a form of resistance to politics. “We can’t win but that does not mean we should stop resisting, so we try to grow a garden in the middle of hell.” She says her main target audience is teenage schoolchildren, who are desperate for knowledge: “Good marks are no longer the main prerequisite for getting a good job in Russia…but the demand for knowledge is still there, so we try to satisfy it by other means.”

Ms Shakhnovskaya’s patrons include Igor Shuvalov, the first deputy prime minister in charge of the economy, and Anatoly Chubais, the father of Russia’s privatisation programme. They are helping to promote an educated and emancipated elite that could gradually begin to change the system, which is what happened in the 1980s.

For now at least, the educated urban class does not pose a serious political threat to Mr Putin. But it represents a different and more fundamental challenge that has to do with values and ideas. Some of the most striking independent public-lecture projects recently launched had titles such as “The return of ethics” and “Public lies”, involving both Western and Russian philosophers, economists, sociologists and writers.

This new generation of educated young urbanites has criticised Russian politicians and opinion-formers of the 1990s and 2000s for viewing human-rights abuses and the lack of independent courts as unfortunate impediments to business and foreign investment, rather than bad things in themselves. Yet “despite the total amorality of politicians and bureaucrats, or maybe because of it, the demand for ethics in the public sphere is growing, not falling,” says Andrei Babitsky, a former editor of the Inliberty website that organised the lectures on ethics and lies. The power of ideas should never be underestimated, especially in Russia.

Source: Tell me about Joan of Arc | The Economist


Past and future

Take care of Russia

But Mr Putin is not setting about it in the best way

WHEN BORIS YELTSIN walked out of his office for the last time, at the end of 1999, he famously told Mr Putin: “Beregite Rossiyu!”, which translates as “take care of Russia” or “preserve Russia”. But what did he mean by “Russia”? Was it a new country born from the 1991 revolution, or was it an old Russia restored after the Soviet regime? Unlike other Soviet republics, it could not celebrate its independence from the Soviet Union because it had been its core. Nor could it hitch its wagon to the European Union and NATO—it was simply too big.

Russia’s freedom in the 1990s had been sustained not by the institutions of an enlightened state but by a plurality of economic and political actors, the weakness of the security services and Yeltsin’s determination to defend it. His legitimacy and support rested largely on the Russian people’s rejection of the communist system that produced plenty of missiles and tanks but little that anyone wanted to consume.

The 1991 revolution had been largely bloodless because the old nomenklatura retained its economic and often its political power. (Yeltsin himself was a former Communist Party boss.) It did not and could not bring in a new elite because after 74 years of Soviet rule there was none. And although the oligarchs who in the 1990s took over the commanding heights of the Russian economy and the media had all the appearance of an elite, they lacked any sense of responsibility for their country.

It was partly the failures and in-fighting of that Westernised ruling class that prompted Yeltsin to pick Mr Putin as his successor in 2000. By that time the Russian economy was starting to benefit from the transition to a market economy, complete with coffee shops and the first IKEA superstore.

An opinion poll in 2000 found that 55% of the population expected Mr Putin to return Russia to the status of a great and respected country

Mr Putin was neither a liberal nor a Stalinist. His manifesto, published on the eve of the new millennium, was all about the value to the Russian people of a strong, centralised state. An opinion poll in January 2000 found that 55% of the population expected Mr Putin to return Russia to the status of a great and respected derzhava, which most Russians equate with “fear of their country”. Only 8% thought he would bring Russia closer to the West. Today half the population reckons that Mr Putin has indeed restored Russia’s position as a great power.

Mr Putin took the next logical step: he incorporated the Soviet period into the historical continuum of Russian statehood. Soon after coming to power he ordered the restoration of the Soviet anthem, which had been abolished when the Soviet Union collapsed. New lyrics were set to the music originally composed in 1938, at the height of Stalin’s terror. While Russian liberals cringed, most people saw it as a fairly harmless symbolic gesture to placate ageing Communist Party voters. After a decade of freedom under Yeltsin it seemed impossible that Russia would lapse back into Stalinism.

In a press conference in 2004 Mr Putin said: “Despite all the difficulties, we managed to preserve the nucleus of that giant, the Soviet Union. And we called this new country the Russian Federation.” He was not interested in its communist ideology or its hopeless central planning system. What mattered to him was the state, which had served the Russian empire and the Soviet Union equally well.

Alexander Yakovlev, the author of Gorbachev’s reforms, understood the challenge better than anyone else. In 1985 he had written to Gorbachev: “For a thousand years we have been ruled by people and not by laws…What we are talking about is not the dismantling of Stalinism but a replacement of a 1,000-year old model of statehood.” That model was never properly dismantled, and Mr Putin set about restoring it. According to Andrei Illarionov, his adviser until 2005, Mr Putin was haunted by fears of disintegration and saw the 1990s as a period not of freedom and stabilisation but of chaos.

In trying to preserve the nucleus of an old empire, Mr Putin eliminated all alternative power centres. He stopped direct regional elections, standardised legislation across the whole of Russia and appointed his own representatives to the regions. He thus destroyed the principle of federalism, which had kept Russia together and politically stable throughout the economic upheavals of the 1990s. Like many of his predecessors, including Stalin, Mr Putin believed, and still believes, that a country of Russia’s size and ethnic complexity can be kept together only by centralising economic resources and political power, and that the security services are the best tool for achieving that.

Yet Moscow, St Petersburg and even Kazan are modern European cities. They have little in common with Chechnya, a tyrannical state where elements of sharia law have been reintroduced. They also have little in common with Russia’s grim, small towns in the hinterland which form the core of Mr Putin’s electorate. The only way in which these differences can be peacefully reconciled is through decentralisation and political competition. Rather than being run as a centralised state, Russia would work much better as a federation in which each region can develop in its own way. This idea of Russia as a “united states” was first voiced by the Decembrists, a group of aristocratic revolutionaries who led an unsuccessful uprising in 1825.

To head off such notions, Mr Putin needed a unifying narrative about the past. The only one available was the Soviet victory in the second world war, which he presented as an exemplar of state power rather than a triumph of human values achieved by all allies. The sanctification of that victory, and Stalin’s role in it, has become the main ideological foundation of Mr Putin’s velvet Stalinism, disguised as patriotism—an old mix of Russian Orthodoxy, state nationalism and autocracy.

Stalin regilded

As a victor in the second world war, Russia was never forced to reject Stalinism in the way that Germany was forced to reject Nazism, even though the two regimes had much in common. In an insult to the millions of Stalin’s victims, the Kremlin has recently called Memorial, a long-established human-rights organisation set up to draw attention to the crimes of Stalin’s regime, a “foreign agent”—a synonym for “traitor”.

“Putinism”, writes Mr Gudkov of the Levada Centre, “is a modified version of a repressive and centralised state system which imitates the Soviet style of a totalitarian regime.” But for all his faults, Mr Putin is not a bloodthirsty tyrant. Although he has resorted to coercion and selective violence, both at home and abroad, he is neither willing nor able to reproduce the economic foundation of Stalin’s regime or impose a reign of terror. His system uses more subtle methods of control and manipulation such as rigging elections, demoralising or co-opting the liberal opposition and, most important, deploying television as a propaganda tool.

Old injuries

The reason Russia’s current nationalistic, anti-American propaganda is so much more effective than the Soviet version is that people choose to believe it. It plays to their feelings of jealousy, resentment and victimisation. As Mr Gudkov notes, television propaganda exploits the syndrome of “learned helplessness”—a psychological condition where people who have been repeatedly abused give up control and start believing that “nothing depends on us”. Having a mighty enemy, such as America, helps alleviate their feelings of failure and weakness. Russia’s anti-Americanism is based not on any real interaction between the two countries but on Russia’s domestic failures. America’s perceived aggression allows Mr Putin to present himself as the leader of a country at war.

The extraordinary support for Mr Putin (82%) as a head of state who stands up to this American aggression contrasts starkly with the deep contempt people feel for the power elite generally, whom they see as corrupt, amoral and callous. They applaud the annexation of Crimea but do not want to accept any responsibility for it. Like most other people, Russians on the whole have little interest in the outside world. They care far more about their families and their jobs than they do about foreign adventures. They have no wish to go to war.

Russia’s perceived resurgence is not a sign of strength but of deep weakness and insecurity. Its anachronistic state cannot deal with modern challenges, resolve contradictions and injustices or offer any vision of a common future. Russia’s regional diversity, its growing inequality and the contrast between the urban middle classes and the paternalistic periphery will remain causes of tension.

As Dominic Lieven, a British historian of the Russian empire, has observed: “For most of Russian history…aggression was the same thing as survival. In the 20th century Tsarist and Soviet Russia smashed itself to pieces by competition first with the Germanic bloc in central Europe and then with Anglo-Americans. The limited recovery of Russian power under Mr Putin cannot hide the fact that Russia is weaker than it has been in the last 300 years.”

Mr Putin knows he has a problem and is looking for ways to change the system while retaining personal power and dealing with the problems of elections and legitimacy. He may promote himself as a new national leader, a Russian late-period Deng Xiaoping. That would allow him to combine confrontation with the West with some degree of economic liberalisation (he has recently appointed Sergei Kiriyenko, a liberal of the late 1990s, as his deputy chief of staff). But Russia is not China. And Mr Putin will be aware that, as de Tocqueville said, the most dangerous moment for a bad government is when it begins to reform.

The Russian empire had been overdue for transformation back in 1914, but Tsar Nicholas II’s insistence on ruling like a 17th-century absolute monarch made it impossible. In the 1930s Stalin managed to hold the empire together by extreme violence. After the Soviet Union finally expired in 1991, the new regime gave federalism a chance for a decade. But since Mr Putin has been in charge, he has been trying to hold Russia together with the same anachronistic methods that had pushed his country into decline and political upheaval at earlier points in its history. Unless Russia can complete the transformation into a modern nation state that began in 1991, what Mr Putin tries to present as his country’s resurgence may in fact be one of the last phases of its decline.

Source: Take care of Russia | The Economist


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