Editor’s Note: This is the third instillation in an ongoing series exploring the creation of “Putin’s Russia” and its place in the international community. Click here to read the preceding entries.
“I think Putin is not a democrat anymore. He’s a tsar. I think we’ve lost him.” – President George W. Bush to the Prime Minister of Slovenia
As Putin stood in his Kremlin office in the winter of 2000 he faced a Russia close to anarchy and teetering on the edge of collapse. The optimism of the past decade had collapsed along with the policies of the Yeltsin administration and the hope of a democratic Russia seemed further away than ever. Putin would respond to this crisis in a way that put his distrust, and quite frankly his disgust, for an open system fully on display. In just over a decade, Putin would replace the ‘wild west’ style of the Yeltsin years with a tightly controlled system of “vertical power.” By consolidating power and persecuting his enemies, Vladimir Putin would elevate himself into the position of a 21st Century Czar and truly turn his country into “Putin’s Russia.”
It’s the Economy, Тупой!
Upon taking office, Putin’s primary task was to rebuild the Russian economy. As described in the first installation of this series, the transition from the Soviet command economy to a free market economy did not go according to plan. Instead of a thriving capitalist society, Russia was left with a punishing depression, hyperinflation, and a new class of Oligarchs who controlled nearly all of the nation’s wealth. In addressing the issue, Putin did not really follow an over reaching economic plan so much as he just tried a bunch of different strategies to see which would work.His administration began by slashing corporate taxes in hope of stimulating business spending. When that didn’t quite work out, Putin ordered the break up and re-nationalization of the previously state owned industries that were sold off during the Yeltsin years. By 2004, due more to the increase in global demand for oil than any Putin-specific policy, the Russian Federation underwent an economic resurgence. The nation’s economy grew by about seven percent each year, the average income more than tripled, and for the first time a majority of Russians found themselves with real disposable income. A period of prosperity began and even today,in the midst of a continuing recession, most Russians think back to this time and contribute their well being directly to Putin.
A More Convenient Corruption
While Yeltsin’s government may have partaken in corruption, the Putin Administration has turned it into the National Pastime. Since taking office almost two decades ago, Putin has managed to create a system of institutionalized corruption that both enriches his cronies and neutralizes his enemies. In the latest 2012 election international observers noted that “while all candidates had access to the media,” Putin was given a significant advantage over the other candidates in term of presence. The international observers witnessed significant state resources being “mobilized at the regional level in support” of United Russia and their allied parties. Additionally, Putin and his government used their power to prevent the opposition parties from participating in the system. One such example occurred in 2005 with a law which set ridged requirements for political parties wishing to put a candidate on the ballot, among these requirements was approval to run by the executive branch. Another example came in 2007 when Putin’s United Russia controlled parliament passed law raising the percent threshold that a party has to surmount to qualify for seats in the Duma from 5 percent to 7 percent . This increase was aimed at make it harder for opposition parties to gain representation in the Duma and has resulted in the concentration of power within the “Big Four” parties.
The Putin government’s corruption does stop just at keeping the opposition party out of government. Putin and his lackeys began by using the so-called “Oligarchs” to their advantage. During the 2000’s economic reforms, the government targeted the industries controlled by those who opposed Putin and threatened to nationalize their assets. The most famous instance took place in 2004, when Yukos Oil CEO Mikhail Khodorkovsky was accused of fraud, tax evasion, and murdering the mayor of a Siberian city. Khodorkovsky’s company, one of the most profitable in Russia, would eventually be seized by the government and sold in a closed room auction. The company was purchased by a group called Baikalfinansgrup whose bid was financed by state-owned oil company Rosneft. Rosneft would go on to acquired Baikalfinansgrup within days of the auction, at which point the tax bill was “forgiven” by the Russian government. Similar exploits have been carried out and usually end with money traveling to an organization in which Putin owns a majority stake. In 2014, the Central Intelligence Agency estimated that these maneuvers had resulted in Putin coming into control of assets worth $40 billion. Not bad for an ex-KGB man on a government salary.
Half Naked on a Horse
In between imprisoning his political enemies and enriching himself, Putin has worked to cultivate an image of strength for both Russia and himself. On the international stage, Putin has stonewalled, nudged, and outright interfered with the affairs of other countries. The intention of which has been to project power and “thwart American interests” or act as a “spoiler in areas where the United States has vital interests” (Stent, 2014). Recently Russia has been playing the “spoiler” more and more frequently. Examples include the harboring of former NSA contractor Edward Snowden, invading Crimea, and most recently successfully sowing doubt into the legitimacy of the 2016 Presidential Election. To the Russian people, these moves help to create the sense that Russia is recapturing its former glory. It builds national unity and bolsters Putin’s position at home (Stent, 2014).
In addition to this international chess game, Putin has also engaged in extensive personal image building. Since taking office, Putin has attempted to cultivated an action hero public image. He has piloted firefighting planes, handled wild animals, participated in judo matches, and taken a sub almost 5,000 below the surface of Lake Baikal. Much like his [word] on the international stage, these exploits are meant to cultivate a macho man image and reassure the country that he is in charge.
Cracks in the Foundation
Despite the firm control that Putin has managed to put over Russia, it is not without its weak points. The first crack appeared in 2008 with the global recession. While the rising oil prices had lead to a boom, the failure of the government to diversify or modernise the overall economy meant that when prices dropped the nation was broadsided. Additionally, as a result of the invasion of the Crimea, the countries of the NATO alliance instituted a series of economic sanctions on Russia. These sanctions only further strained the economy and resulted in the 7% annual GDP growth shrinking to just .06% in 2014.
Perhaps more worrisome for the long term survival of Putin’s government, is the proliferation of anti-Putin protests around the country. As recently as March, demonstration took place in Moscow where up to 8000 people took to the streets. This round of protests were in response to the revelation the Prime Minister Dmitry Medvedev and other Putin government officials had used government funds to buy private vacation homes and similar luxuries around the world. Putin responded to the protests by arresting hundreds of protesters and deploying riot police to shut down the demonstrations. Protests such as this are uncommon in Russia, and could be a sign that Putin’s grasp on the country, or at least its younger generation, is slipping.
In the end Putin is not a democrat or a reformer. He is neither action hero nor christian crusader. Vladimir Putin is a despot whose fear of his own people prevents him from doing what is in their best interest. Until Russia can free itself from the grip of this small paranoid man, it is unlikely to realize the freedom it was promised.
Check back soon for the next installation of our “Bear in the Woods” Series as we explore Putin’s relationship with the West and analyze his ultimate intentions.
Stent, Angela E. The Limits of Partnership. Princeton: Princeton UP, 2014. Print.