Vladimir Putin
Vladimir Putin; drawing by David Levine


Run your finger around the borders of Russia, and you begin to realize what a worrying place the world must seem when viewed from the Kremlin. Ukraine, supposedly the closest and best-loved of Russia’s immediate neighbors, has just biffed its big brother on the nose by electing a West-backed president, Viktor Yushchenko. Three other neighbors or near neighbors of Russia—Belarus, Turkmenistan, and North Korea—are run by dictators whose grasp of reality is open to question. Unstable autocrats run the rest of Central Asia. Georgia and Moldova are crippled by illegal Russian-sponsored secessionist regimes on their soil. Armenia and Azerbaijan teeter on the brink of renewed war. Dialogue with Japan has been hostage for decades to arguments about four disputed islands of negligible value. The Baltic states are the objects of a Russian government hate campaign. Relations with the rest of the European Union are at their chilliest since the cold war. The rise of China, and its imagined designs on the Russian far east, are the long-term worry that keeps the Kremlin awake at night. That leaves Mongolia for comfort.

It takes time and effort to build up a set of problems quite as impressive as that. Probably no year since 1945 has been a particularly good one for Russian foreign policy, but last year must have ranked among the worst since the collapse of the Soviet Union. It ended with the Ukrainian election, which has sent anger and anxiety reverberating through the Russian political establishment. The anger was directed mainly at the United States, blamed with some justification for engineering the defeat of the Russian-backed candidate, Viktor Yanukovych,1 although the real force for change was widespread outrage within Ukraine at early attempts to rig the voting in Yanukovych’s favor, coupled with determined public support for his poisoned challenger, Yushchenko. The anxiety was reserved for Russia’s own regime. If “people power” could change the course of politics in Ukraine, a similar country in so many ways, could it do the same in Russia too? Probably not, even according to Russian liberals, since in Russia the public was more passive and the regime more powerful.2 But it was a shocking precedent all the same.

Events in Ukraine have confirmed Russia’s fears about the recent expansion of NATO and the European Union into Central Europe.3 The Putin regime thinks that the former Communist countries in that region will work against it, using their newfound influence inside the European and Atlantic institutions to draw more countries—especially Belarus, Georgia, Moldova, and Ukraine—away from the Russian sphere of influence and into the European one. Janusz Bugajski, in his splendid new survey of Russian foreign policy in the region, Cold Peace, suggests that relations with Central and Eastern Europe are even worse than they might be because Russians have only “paltry information about their Western neighbors [which] fosters hostile stereotypes about the allegedly Russophobic East Europeans.” But if we take “Russophobic” at its literal meaning, which is to say, “frightened of Russia,” and not “hateful toward Russia,” then Russophobia is an emotion felt widely in post-Communist Europe, especially in the Baltics, and of course it shapes policy.

The Central Europeans fear Russia, because Russia has a long history of supporting bad governments as allies and clients, while undermining good ones. As near neighbors of Russia and as past victims of its foreign policies, the Central Europeans will always choose to limit Russian influence. Bringing Ukraine into the European Union is a long-term goal of Polish foreign policy. When the election crisis moved toward its resolution in Kiev, it was President Aleksander Kwasniewski of Poland and President Valdas Adamkus of Lithuania who rushed in as mediators—not the British, or the French, or the Germans, the usual top dogs of European diplomacy.

But while Russia complains about foreign interference in Ukraine and elsewhere in what it now calls “the post-Soviet space,” it has proved entirely capable of messing things up there by itself. It has tried to make an enemy of Georgia’s new president, Mikhail Saakashvili, by encouraging two separatist regions of Georgia under Russian control, Abkhazia and South Ossetia, to intensify their struggle against Saakashvili’s government. It has alienated the Communist government of Moldova, which was pro-Russian until recently, but which has turned to the West after losing patience with Russia’s continued support of secessionists in Transdniestr, the eastern part of Moldova. Russia’s plans for a political union with Belarus are also unraveling. A plan for Belarus to adopt the Russian ruble as its national currency this year has been postponed, and may well be abandoned.

So if, as one Russian official recently claimed, the main aim of Russian foreign policy has always been to ensure “a band of neighborliness all around [Russia’s] borders,” then something in the implementation of that policy has gone very badly wrong indeed.4 Nor can it be said that domestic policy has been going particularly well either. The great economic goal proclaimed by President Putin in his first term, to double the size of Russia’s gross national product by 2010, is now recognized to be more or less out of reach.5 The expropriation of the Yukos oil company, previously controlled by the “oligarch” Mikhail Khodorkovsky but hounded and seized by the Russian state in the name of tax arrears, has cast a long shadow over the business environment. The Yukos affair has depressed the stock market, encouraged more capital flight, and given rise to speculation that Putin has lost control over the clan of fellow KGB men whom he brought in to fill top Kremlin jobs.


Putin did clearly want to bring down Khodorkovsky, proving that even the richest man in Russia could be humbled by the state. Now that Khodorkovsky has been held in jail since October 2003, and is being tried on charges of fraud and tax evasion which carry a potential ten-to-fifteen-year sentence, this objective has been achieved in full. But Putin also said early on that he did not want to see the bankruptcy or collapse of Yukos. And yet it is hard to construe the outcome as anything other than that.6 The prospect of plundering a $40 billion oil company apparently proved too great for his subordinates to resist. The success of this heist invites the question of which other big Russian companies, all of which have sinned through tax avoidance in the past, and many of which were privatized, like Yukos, through the infamous “loans-for-shares” deals in the mid-1990s, will be the next to go.7

As for political reforms, nobody pretends any longer that Russia is on course to become a Western-style democracy—not even Putin’s own ministers.8 Andrew Jack, in the concluding pages of Inside Putin’s Russia, calls Russia’s hollowed-out democracy a “parody” of a political system. As in Soviet times, a single party holds power, but now it impersonates a democracy. One important difference is that Putin, unlike his Soviet predecessors, has been genuinely endorsed by the people. Still, says Jack, the result is

parties without ideas, debates without the most important participants, media without criticism …[and] no institutional framework, no broader political culture to help foster diversity of opinion for the future.

Many Russians call the system a “managed democracy.” Yegor Gaidar, Russia’s first post-Soviet prime minister, has suggested a better term: “closed democracy.” It describes, he says, a system in which opposition is legal in principle, there is no mass repression, elections take place, but “the results …are always a foregone conclusion.”9


Contemplating this catalog of political retrenchment and policy failure, it is impossible not to wonder whether President Putin can still be as secure and as powerful as the West has generally assumed him to be. If he has indeed “lost” Ukraine, which is a plausible reading of the recent presidential election result there, wouldn’t that be so big a reversal for Russian policy that even the president would have to pay some price? If Putin can be defied on Yukos, can he be defied on other things? And if, as could easily be argued, Russia has gained no specific lasting benefits from the pro-American policies and concessions proclaimed by Putin in the two years after September 11, can he emerge undamaged from that adventure too? We should heed the words of Andrei Illarionov, Putin’s long-serving but fiercely independent economic adviser, who was demoted on December 31 after making public criticisms of the Yukos affair, and after giving an outspoken interview to the Russian radio station Ekho Moskvy on December 30 in which he warned that anti-democratic forces were on the rise within the Kremlin. He said that

certain tendencies in our current political and public life cannot leave anyone indifferent, not even economists. These tendencies are linked with the ongoing destruction, I would say amputation of the whole series of civic institutions that are responsible for providing feedback…. These are the mass media, democratic institutions responsible for sending out messages, including messages of distress, crisis, and catastrophes to the public and to the authorities. The amputation of such institutions leads to catastrophic consequences for the country and for the entire public…. If there are no normal, traditional, legal methods of solving the crises then nothing else short of revolution is left.10

The last time I heard noises like this coming out of the Kremlin was in 1996 when the liberals working for then President Boris Yeltsin confronted a hard-line faction led by Alexander Korzhakov, chief of the Kremlin security service. Korzhakov’s team wanted the approaching presidential election postponed or canceled, putting an end to Russian democracy. Yeltsin sacked them and promoted the liberals, under Anatoly Chubais. I doubt very much that Putin would make a corresponding choice now. The men in uniforms are far stronger in his Kremlin, and he is one of them. The point has thus already passed, I fear, at which Illarionov and the few other liberals remaining inside the government can hope to exercise much influence on policy. Public opinion is a last and desperate resort in Russia. Insiders appeal to it only when they have lost the argument in private. Illarionov is, moreover, already identifying himself with the martyrs. The day after his radio interview he paid a visit to the show trial of Khodorkovsky, the former Yukos boss.



In Cold Peace, Bugajski analyzes Russian policy toward the former Soviet bloc and toward the former Communist countries of Central Europe and the Balkans with a single-mindedness that leaves little room for accident or ambiguity. Its appearance could scarcely be better timed, coming as it does in the wake of regime change in Ukraine, a country vital to any Russian “sphere of influence” if one is to exist at all. Ukraine is, as Bugajski says, “the most strategically important country (other than Russia) that emerged from the Soviet Union.” Russians trace the history of their nation back to the tenth- and eleventh-century princes of Kiev. Only after the Mongol invasion of between the thirteenth and fifteenth centuries was the state reconstituted with Moscow as its center.

The economies of Russia and Ukraine are still entwined almost as closely now as they were in the Communist era. Russia accounts for almost half Ukraine’s foreign trade, and perhaps two thirds of its industrial investment. Pipelines across Ukraine carry Russian oil and gas to foreign markets. Russian is commonly spoken, especially in eastern Ukraine, and Orthodox Christianity is the main religion in Ukraine, as in Russia. Few Russian politicians, Bugajski says,

have been willing to accept the permanent independence of Ukraine. … Ukraine’s statehood is viewed as a temporary aberration.

This Russian view of Ukraine does much to bear out Bugajski’s argument that Russia suffers from an “overwhelming historical burden.” It “gained an empire before it became a state and a coherent nation,” he says, and thus emerged as a country with no natural sense of its limits. In Bugajski’s view this does much to explain the “persistent Russian claims to the identity and territory of various neighbors” which have marked its foreign policy ever since. Better, says Bugajski, if Russia could see the damage that its Soviet-era policies and crimes have done to countries in the region, and concentrate on atoning for those sins.

Instead, Russia has gone on brandishing its regional ambitions like phantom limbs. As a quick guide to Russia’s early hopes for post-Communist Europe, Bugajski quotes from a speech given in 1992 by Igor Rodionov, then chief of the General Staff Academy in Moscow and later defense minister under Boris Yeltsin. Rodionov enumerated Russia’s “vital interests” as follows:

The neutrality of East European countries or their friendly relations with Russia; free Russian access to seaports in the Baltics; the exclusion of “third country” military forces from the Baltics and non-membership of the Baltic states in military blocs directed at Russia; the prevention of the countries that constitute the CIS [i.e., the Commonwealth of Independent States from the former Soviet Union] from becoming part of a buffer zone aimed at separating Russia from the West, South, or East; maintaining the CIS states under Russia’s exclusive influence.

In the event, Russia has proved too weak to defend any of these supposed “vital interests” whenever they were challenged by the West or by the countries directly concerned. Ukraine is only the most recent and the most painful example. What Rodionov calls the “East European” countries, including the Baltics, have joined NATO and the EU. The CIS states are under Russia’s influence to varying degrees, but none of them (save perhaps for Belarus) exclusively so, and in all of them Russia’s influence is weakening. As for using CIS countries as an East– West “buffer zone,” only Russia itself has tried to do this, beating back Western influence in Belarus and Moldova by encouraging the dictatorship of Alexander Lukashenka in the first of those countries and the rebellion of Transdniestr in the second.

Whether Russia can seriously hope to regain in the near future any of the ground it has lost in the past fifteen years is open to doubt. Bugajski’s point is that it is trying all the same, and creating a lot of damaging complications for other former Soviet countries in the process—for example, by refusing to withdraw military bases, by sponsoring secessionist regions, by interrupting energy supplies, by provoking political scandals, and by interfering with elections. Russia has also been adding new “vital interests” to its list. Under Putin, Russia has claimed the right to intervene militarily in CIS countries if it believes that ethnic Russians or Russian-speakers are in danger there; and it has claimed a right to protect Soviet-era pipelines carrying its oil and gas exports even where these lie outside Russian borders.

Oil and gas, though absent from Rodionov’s short list, would probably dominate any current consideration of Russia’s vital interests and strategic resources. They loom large in Bu-gajski’s account. Gazprom, the state-controlled Russian gas monopoly, accounts for perhaps one quarter of all the world’s gas resources and provides almost all of the gas used in the CIS and in Central Europe. Russian energy companies have bid for oil refineries, fuel pipelines, and oil and gas distribution companies in the countries of the CIS, the Balkans, and Central Europe, whenever these have been offered for privatization. Gazprom now has stakes in many of the region’s national gas companies. Lukoil, Russia’s biggest oil company (after the destruction of Yukos), is one of the biggest refiners of oil in southeastern Europe.

Such acquisitions can readily be explained on commercial grounds. If Western oil firms can expand into Russia, why should Russian oil and gas firms not expand into the West? But in Bugajski’s view, “Such explanations ignore the close ties between government and big business [in Russia].” The fact is, he says, that the Kremlin encourages Russian firms to acquire “strategic assets…in countries where Moscow seeks to wield political clout.” The result is a “politicization of economics,” or, to put it more simply, “political blackmail,” with Russia holding assets vital to the normal functioning of the host economies.

Until the start of the Yukos affair, it would have been easy to argue that Bugajski was out of touch with Russian business trends—that Russian energy companies were becoming much more Western in their management styles and worrying more about their obligations to the stock market than to the Kremlin. But the treatment of Yukos and of Khodorovsky has changed all that, and has made Russian investment a much touchier subject throughout Central Europe. Clearly, the Kremlin is intent on controlling Russia’s energy industry more closely and more extensively, and it will impose its political interests before commercial ones. If only there were some way of importing Russian oil and gas without importing Russian oil and gas companies too, then most of Russia’s neighbors, and most other European countries too, would be a lot happier.

There are times when Bugajski’s catalog of complaints against Russian policy can sound somewhat relentless. But they are always well documented, and they correct the more common view that Russia has been a fairly helpless victim of international events since 1991. As Ognyan Minchev, a Bulgarian political scientist, tells Bugajski:

Even if Russia is not in a position to decisively influence the key power factors of international life, this does not mean that Moscow is helpless to exert pressure on smaller and weaker partners.

Still, an analysis as unremitting as Bugajski’s invites the question of whether there is anything Russia can do to make itself a more welcome partner in world affairs. Bugajski allows for the possibility in principle, but he sets the bar very high. If Russia, he says,

had a thriving liberal democracy, a vibrant civil society, an effective multi-ethnic system, a productive capitalist economy, and a genuine peace policy in Chechnya, then its influences [might even be] welcomed in Eastern Europe, regardless of historical experiences.

But Russia is moving away from all those things, not toward them. And Bugajski, to his credit, pursues the implications of this drift to their logical conclusion. If we think Russia is perennially threatening, then should we wish it well at all? Are optimists misguided when they argue that a more prosperous Russia, even if it is not a more democratic country, will be a more contented one, and thus a less worrying neighbor? In Bugajski’s view, they may well be wrong:

A prosperous Russia does not signify a more cooperative government. If Russia rapidly bolsters its economy without undergoing profound democratization, it could become more aggressive and expansive. It may be preferable to have an economically weak or domestically entangled Russia as long as this does not precipitate violent disintegration or the destabilization of neighboring countries.

Far from angering Russian hard-liners, however, I suspect that the sight of this paragraph will strike them as curiously satisfying. This is exactly what they have always believed the West to be saying and thinking about them in private. And here, at last, they can point to somebody of importance saying it in public.


Western experts on Russia tend to fall into one of two groups. First, there are those who see Russia instinctively from within, and can usually trace their interest back to study or residence there. They tend to see the Russian people as the victims of successive bad governments, and to argue that Russia can evolve along roughly Western lines given time and favorable circumstances. Second, there are those who see Russia instinctively from without, and who often have family ties to Central and Eastern Europe. They tend to see Russia as intrinsically and permanently threatening by virtue of a disposition toward imperialism and authoritarianism permeating rulers and people alike.

I hope Janusz Bugajski will not mind it if I nominate him as a standard bearer for this second school of thought, and I hope Andrew Jack will not mind it if I place him closer to the first. Jack’s book, Inside Putin’s Russia: Can There Be Reform Without Democracy?, is, as the title suggests, an attempt to see Russia from within, to understand it on its own terms. Jack is not sympathetic to the regime, but he is fascinated by the country. As Financial Times bureau chief in Moscow until late last year (I was his predecessor in the job) he could count on relatively good access to the ruling classes in Moscow, and to this he has added a prodigious amount of provincial travel, an insatiable curiosity, and a fine instinct for detail. We do not, in the end, get a final answer to the question posed by Jack in his title, but we learn a huge amount about Putin’s Russia along the way.

As Jack points out, things in Russia are often neither as bad nor as good as they may seem at first glance. Low official figures for wages and savings are mocked by the purchasing power evident in Russian cities, and not only Moscow, where gimcrack extravagance is giving way gradually to a sophisticated consumerism. As Jack explains, incomes are often understated to avoid taxes, many Russians have second jobs or generous perks, and basic living costs—such as power and heating—are low. Russians were able to privatize their apartments for next to nothing after the Communist period, freeing them from rental and mortgage payments. And with real estate in central Moscow now worth between $2,000 and $10,000 a square yard, a lot of Muscovites are rich on paper by any standards. When Ikea, the big Swedish furniture retailer, opened its first store in Moscow five years ago, the queue of cars to get into the parking lot backed up so far that it jammed the highway leading into town from Sheremetevo airport.

Jack’s book is a portrait of Russia, not of Putin, but he does dig into Putin’s past just far enough to demonstrate that the early life, where it can be documented, is not especially edifying. He interviews Oleg Kalugin, a retired KGB general now living in the United States, who worked in the Leningrad KGB in the 1980s. Kalugin says that Putin offered himself as a KGB informant while he was still at Moscow University, and began his KGB work in the Fifth Directorate, which persecuted dissidents. Putin trades now on his supposedly glamorous past life as a foreign spy, but he was never formally transferred into the foreign intelligence service of the KGB, merely seconded to it, says Kalugin—and to a minor posting at that. Yuri Shvets, another former KGB agent, calls Dresden in East Germany, where Putin was based, a “black hole, a trip to nowhere” in career terms.

The restraint and the skepticism that run through Jack’s book do even more credit to the author now that Putin’s credentials as a democrat are going up in smoke. Jack acknowledges that Putin has done good things for Russia, mainly by reversing the drift toward chaos of the late Yeltsin years. But when it comes to praising the President directly, Jack prefers to let other people do the talking. He quotes a Russian television broadcaster, Leonid Parfyonov, for example, insisting that

anyone who is honest sees that Russia is freer in 2003 than it was in 2001. Young people are happier and more open to the world. They see democracy as a decoration. If the authorities try to remove their freedom, say by restricting the internet, then they will protest.

This interview, which I presume took place in 2003, is a peculiarly telling one for reasons that neither Jack nor Parfyonov could have foreseen. In the middle of 2004 Parfyonov was fired from his television show after complaining that the authorities had barred him from airing an interview with the widow of an assassinated former Chechen president, Zelimkhan Yandarbiev. If Parfyonov were to be interviewed again today about freedom in Russia, or at least about freedom of speech, he would doubtless give a different answer.

But still, Jack is right to acknowledge the achievements of Putin’s first term, from 2000 until his reelection in March 2004. Putin stabilized the Russian economy, he won a measure of respect for Russia in world affairs, and he restored elementary discipline in the public service such that wages and pensions were paid more reliably than they had been under Yeltsin. These things have ensured Putin a genuine popularity among ordinary Russians, who believe that he cares for the country.

The start of Putin’s second term, by contrast, has been a mess, dominated by the twin fiascoes of the Yukos affair and the elections in Ukraine. But even if Russia’s economic problems and diplomatic reversals multiply, it is hard to imagine that Putin might get overthrown prematurely in a Kremlin coup. He is too popular in the country, and the damage to Russia’s foreign relations would be too great. The danger to Putin is rather that failure diminishes his authority, and encourages conspiracies to defy or ignore him among the KGB and army veterans who now occupy more than half the top jobs in the federal government. They will run their own rackets, and their instincts will be to push Russia even closer to the condition of a police state, while deterring any further adventures in Westernization. Putin will go along with that because he half agrees with it himself. His stabs at liberalism have been motivated more by curiosity than by prior conviction.

If Putin does let his post-KGB entourage steer him now in the direction of a decorous fascism, he will have only himself to blame. He threw away the chance to take Russia in a quite different direction in his first term when he had huge popularity and goodwill at home, a booming economy, the confidence of Western Europe, and the opportunity after September 11 to make Russia the fore-most public ally of the United States. The fundamentals could never have been better for taking Russia decisively into the West. Instead, after toying with that option, Putin is letting Russia drift toward a Chinese model of one-party rule and clientelism, but seemingly without any of China’s redeeming economic vigor. Perversely, with Russia now heading in this direction, the attachment of Western nations to Putin may grow. Not because he is a good thing, but because, according to present trends, whoever comes after him will be worse.

—January 12, 2005

This Issue

February 10, 2005