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Forever Putin?

Bez Putina: Politicheskie Dialogi s Yevgeniem Kiselevym (Without Putin: Political Dialogues with Yevgeny Kiselev)

by Mikhail Kasyanov
Moscow: Novaya Gazeta, 318 pp., 290 rubles
Vladimir Putin; drawing by John Springs

How long will Vladimir Putin last? It is hard to imagine Russia without its steely-eyed, iron-fisted, and hugely popular prime minister, especially since he has hinted so broadly that he might run again for the Russian presidency when the term of his protégé, Dmitry Medvedev, expires in 2012. Starting in that year, the Russian presidential term will extend from four to six years (a change introduced by Medvedev) and Putin would legally be allowed to serve two more terms. This means he could conceivably be Russia’s leader until May 2024, when he would be seventy-one years old.

If this sequence seems eerily reminiscent of the Brezhnev “era of stagnation” (Brezhnev was the Soviet leader for eighteen years, until his death in 1982 at age seventy-five), it is not surprising. Despite the physical vigor of Putin and the modern, youthful demeanor of Medvedev (who even blogs), today’s Kremlin leadership is acting more and more like it did in the Soviet era—when aged, ailing bureaucrats presided over a one-party system, fraudulent elections, a state-controlled press and television, rampant official corruption, and an all-powerful security service that kept political dissent to a minimum. As was the case then, little is known today about the inner workings of Russia’s political regime, so analysts, both in Moscow and in the West, have resorted to Kremlinology, drawing on the Moscow rumor mill (which flows freely on the yet to be censored Russian Internet) to understand what is happening.

The signals from the Kremlin are mixed. Putin said confidently in a September 2009 speech that he and Medvedev “are people of the same blood, with the same political views.” But Medvedev responded: “Maybe I will have to go and take a blood test to find out whether we have the same blood type.” During a December trip to Italy, he told reporters that he did “not rule out” the possibility that he too would seek another presidential term. Medvedev has also been indicating in recent speeches and public pronouncements that he is not in complete agreement with his prime minister on some policy issues. His harsh criticisms of the status quo and urgent calls for modernization could be carefully scripted by Kremlin strategists to distract attention from the fact that the Putin–Medvedev partnership is solid and has little commitment to real change. But there is also a possibility that Medvedev may be coming out from behind Putin’s shadow.

In Without Putin, Mikhail Kasyanov, who after serving under Boris Yeltsin in the 1990s was Putin’s prime minister from 2000 to 2004 and is now a member of the democratic opposition to the Kremlin, avoids speculating about the Putin–Medvedev relationship, concentrating instead on his own relationship with Putin, as well as with Yeltsin. As the first political memoir from a former top Kremlin official since Boris Yeltsin’s Midnight Diaries, published in 2000, the book has received considerable attention from Russians since it was released in October.1 Presented as a dialogue between Kasyanov and Yevgeny Kiselev, a well-known Russia journalist and political commentator, the book chronicles Kasyanov’s life and career as he rose from a young economist for Gosplan—the state economic planning agency in the Soviet era—to become Yeltsin’s minister of finance and subsequently to hold the same post under Putin, along with the premiership.

Born in 1957, Kasyanov is typical of the generation of enlightened, well-educated technocrats who emerged in the Kremlin under Yeltsin. As a product of the Soviet system, Kasyanov had little understanding of democracy or civil society when he entered Yel-tsin’s government in 1991 at the age of thirty-four to work in the Foreign Economic Relations Department. He tells us in his book that he was caught completely off guard by the August 1991 attempted coup of hard-line Communists that Yeltsin and his followers defied and by the subsequent collapse of the Soviet Union:

Like the majority of citizens in the country, I assumed that the Soviet Union was indestructible…. As a model bureaucrat already in a high position, I thought that Gosplan, this Leninist agency, would live on forever. And then everything collapsed in three days.

Kasyanov quickly converted to market economics, and continued to be a “model bureaucrat” under Yeltsin. Talented, hardworking, and fluent in English, he soon made himself indispensable to the Kremlin leadership as a negotiator with Western financial institutions on matters relating to Russian debts and credits. By 1995, Kasyanov was a deputy minister of finance, and in the spring of 1999 Yeltsin appointed him Russia’s finance minister.

Kasyanov was not directly involved with the controversial privatizations of the state’s assets that, during the 1990s, enabled a select group of tycoons to profit enormously at the expense of ordinary Russians. But he earned the derisive nickname “Misha Two Percent” because of accusations in 1999 by a Russian newspaper that he took money from banks in exchange for inside information about the debt market. And he made some dubious financial moves that were designed to support Yeltsin politically on more than one occasion. In 1996, for example, on the eve of his reelection bid, Yeltsin’s popularity was at an all-time low and he faced possible defeat by the Communist candidate, Gennady Zyuganov. A central problem for Yeltsin was the huge budget deficit, which left his government unable to pay members of the military, teachers, pensioners, and other groups. According to Kasyanov, Yeltsin wanted to meet these obligations before the election, so he appealed to French President Jacques Chirac and German Chancellor Helmut Kohl, warning them that the Communists were about to win. He then sent Kasyanov on a secret mission to negotiate several billion dollars in loans from France and Germany. As Kasyanov explains, rather awkwardly: “we wanted to adjust slightly the results of the upcoming elections” because “the return of the Communists would have been a disaster.”

Kasyanov claims that Putin kept him on as finance minister and appointed him prime minister in May 2000 because he was a political outsider with no financial connections to the Yel-tsin “family”—the clan of Yeltsin’s relatives and tycoons who supported him—thus implying that Putin intended to make a complete break from this group. In fact, despite his early promises to “eliminate the oligarchs as a class,” Putin went after only those he suspected of political disloyalty, and he allowed tycoons like Roman Abramovich, Oleg Deripaska, Mikhail Fridman, and others to continue to thrive. A more likely explanation for Putin’s choice of Kasyanov is that his reputation as a liberal and a modernizer was useful to the Kremlin’s image. (A lot of people worried about Putin’s KGB background.) Putin also had a shaky grasp of economics and he badly needed Kasyanov’s expertise.

Kasyanov pushed for much-needed reforms of the budget, taxation, and pensions, along with further privatizing of state enterprises, including those in the energy sector, where he wanted to eliminate monopolies and introduce competition in the export market. Although he succeeded in bringing down inflation, the only significant reform made under his tenure as prime minister reduced the tax burden on businesses and imposed a 13 percent flat income tax. Putin was simply not inclined to take on the challenge of real economic modernization that Kasyanov proposed. Kasyanov wanted to mobilize investment for large-scale replacement of outdated infrastructure such as roads and rail transport and to reduce Russia’s dependence on oil exports. This would have meant challenging the powerful oligarchs—who were largely involved in oil deals—and the so-called siloviki, Putin’s allies from the security and law enforcement agencies who came to dominate much of the bureaucracy and the principal state-owned companies.

The Kremlin analyst Lilia Shevtsova observed that under Putin “Kasyanov showed himself to be a good administrator who knew how to survive in the shark-infested Kremlin pond.” But survival meant supporting Putin at every turn, even when it involved rescuing Putin’s corrupt friends. In 2001, Yeltsin’s former Kremlin property administrator Pavel Borodin was being held in a Geneva prison awaiting trial on well-established charges of laundering $25 million in kickbacks from a Swiss construction company, Matebex, which was hired in 1995 to renovate the Kremlin. Borodin was a close associate of Putin, who had served for a time as Borodin’s deputy in the property office, so Putin decided to come to his aid with $2.9 million to pay his bail, which Kasyanov organized. Knowing that the Russian government would not cooperate in their further investigation of Borodin, the Swiss released him and the case was dropped.

This episode conflicts with Kasyanov’s attempts in the book to portray himself as an honest bureaucrat with democratic ideals. Amazingly, he writes:

For three and a half years of my career as prime minister I believed that we, Vladimir Putin and I, shared the very same democratic values and the same view for the future of Russia. And we did everything right. Even today I think that everything was right, except for three or four things that I regret.

One regret, Kasyanov acknowledges, was the takeover in 2001 by the Kremlin-controlled Gazprom of the sole independent Russian television station, NTV (where Yevgeniy Kiselyov was director-general). Kasyanov also says that he was disturbed by the deplorable way that Russian authorities handled the Moscow theater hostage crisis in October 2002, when they caused needless casualties by pumping poisonous gas into the auditorium. But he does not discuss the brutal second war in Chechnya or the murders of independent journalists that began under his tenure as prime minister. Whatever doubts he may have had, he continued to be a loyal member of the government.

Kasyanov did not openly oppose Putin until July 2003, when the Kremlin began a campaign against the private oil giant Yukos, culminating in the October arrest (on tax evasion charges) of its CEO, Mikhail Khodorkovsky. Kasyanov talked to the press on more than one occasion, expressing his view that the tax charges had no merit and that the prosecution of Yukos executives would discourage foreign investment. He also, according to his book, talked privately with Putin, trying, in vain, to persuade him to put a stop to the case. Putin admitted, Kasyanov writes, that the Kremlin was moving against Khodorkovsky for political reasons—because Khodorkovsky was financing the Communists for the upcoming parliamentary elections, along with other parties.

The Yukos affair was a turning point for Kasyanov. He decided that he would resign from the government after the March 2004 presidential elections. Much to his surprise, he says, Putin fired him in February. In addition to the dispute over Yukos, Putin apparently got wind of a meeting Kasyanov had with Boris Nemtsov, leader of a relatively liberal opposition party, the Union of Right Forces (SPS), in early 2004. While skiing together in Austria, Nemtsov and Kasyanov discussed the upcoming elections and the possibility that Kasyanov would take over the leadership of Nemtsov’s party. Putin suspected that they were plotting to stop him from getting reelected.

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    The book, which has not yet been translated into English, is reportedly selling well in Moscow and is now in its second printing of 10,000 copies.

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