Forever Putin?

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.

However he felt about Kasyanov, Putin was careful not to go too far. After he dismissed him, Putin tried to persuade Kasyanov to stay in the government in a lesser capacity and at some point they talked about him becoming mayor of Moscow (an elected post, but the Kremlin could arrange the outcome). But Kasyanov decided that he could not cooperate with the Putin regime after the horrific hostage-taking at a school in Beslan in September 2004, which Putin used as an excuse to impose laws that significantly restricted electoral rights. In February 2005, a year after his dismissal, Kasyanov announced at a press conference that he was considering a bid for the presidency in 2008. The Kremlin’s response was to have Russian prosecutors declare that they were investigating Kasyanov for allegations that he used his office as prime minister to purchase a luxurious dacha outside Moscow for well under market value.

The Kremlin’s campaign against him provoked Kasyanov to take more radical positions; he began to harshly criticize Putin for destroying Russia’s fragile democratic institutions and replacing them with an authoritarian system of “vertical power.” In 2006 Kasyanov formed his own movement—the Russian People’s Democratic Union—and teamed up with former chess champion Garry Kasparov to create the political coalition Other Russia, which organized a series of street protests against the Kremlin’s repressive policies in cities all over the country. Since then Kasyanov’s party, which has over fifty regional branches, has withdrawn from the coalition, but acts in close concert with all the democratic opposition movements, including Solidarity, founded in late 2008 by Nemtsov and Vladimir Milov, who supported Kasyanov’s candidacy for president in the 2008 elections.²

Kasyanov was prevented from registering as a presidential candidate when election officials claimed that many of the two million signatures he gathered to support his bid were fake. He would probably have made a poor showing even if he had been allowed to run. Respected by his fellow democrats, Kasyanov has little appeal for ordinary Russians. His reputation as “Misha Two Percent” continues to dog him, and, as one political observer put it: “Kasyanov conveys an impression of plumpness, satisfaction and good fortune. While that might go down well in a country like Denmark, it doesn’t work so well in Russia, where 84 percent of the population lives in poverty.”

Critical of Putin, Kasyanov expresses great admiration for his first Kremlin boss, Yeltsin, claiming that after Yeltsin retired, the two became close. Kasyanov tells us that Yeltsin approved strongly of his decision to join the opposition movement and gave him secret advice on strategies to use against Putin: “He understood that everything he had done to construct a democratic society was destroyed by the very man who he had placed in power. To be deceived by this man was very hard for him.”

In fact, it is unlikely that Yeltsin considered Putin, a former career KGB officer, to be a democrat when he designated him as his heir apparent. As Stephen Cohen points out in his provocative and insightful book Soviet Fates and Lost Alternatives, Yeltsin’s main goal was to ensure that he and his family would not face criminal investigations for corruption after leaving office, and Putin promised him immunity from prosecution. Cohen has little use for the idea that Yeltsin brought democracy to Russia. In his view, Gorbachev deserves the main credit, particularly for the policies of glasnost and perestroika he introduced in the late 1980s. When Gorbachev was forced out of power in 1991, he writes, Russia lost a golden opportunity to modernize, and “Gorbachev’s model of evolutionary democratization was deleted from history and thus from politics.”

As Cohen stresses, the emergence of Putin was the result of Yeltsin’s “de-democratization.” The US contributed to this trend by insistent demands that Russia implement economic “shock therapy”—a policy of large-scale privatization and removal of state subsidies and price and currency controls—while it gave uncritical support to Yeltsin. Once Putin came to power, US policy continued to be misguided and counterproductive. By “praising the despised Yeltsin and his shock-therapy ‘democrats’ while condemning the popular Putin,” Cohen writes, the US “further associated democracy with Russia’s social pain and humiliations of the 1990s.”

Cohen observes correctly that many Russians are deeply suspicious of the West and its notions of democracy, even those in the younger generation. A recent poll of eighteen-to-twenty-four-year-olds by Moscow’s Levada Center showed that 40 percent view the US in a negative light because they think it is trying to undermine Russia’s stability. But Cohen goes too far in putting the blame for such views primarily on American “crusaders” for democracy. Xenophobic tendencies in Russia, which have increased dramatically since Putin became president, are also the result of the Kremlin’s extensive anti-Western propaganda efforts through the state-controlled press, radio, and television.

In Cohen’s opinion, Washington should refrain from promoting democracy in Russia because this will lead only to more distrust on the part of the Russians. But the US can hardly ignore the murders of journalists and human rights workers that are committed at such an alarming rate there. Indeed, Tanya Lokshina, deputy director of Human Rights Watch in Moscow and a former close colleague of the two murdered journalists Anna Politkovskaya and Natalya Estemirova, feels strongly that the US government should be pressing the Kremlin harder on human rights: “Making isolated statements when another person is killed is not enough,” she told me on a recent visit to New York. In her opinion the US should collaborate with the European Union and deliver a strong message to the Kremlin: “The killings are intolerable. They have to stop.”

Asked about how Kasyanov and other leading oppositionists might address Putin’s dominance, Lokshina observed: “The opposition parties are not making a difference. They have adopted an underground mentality, criticizing the government nonstop and not offering anything positive.” Lokshina is not alone in her views. Marina Litvinovich, a senior member of Garry Kasparov’s opposition group United Civil Front and a prominent human rights activist, wrote an impassioned piece in October, urging Russian democrats to adopt a different strategy. Rather than criticizing Medvedev, why not, she wrote, assume that he means what he says and publicly offer him support?

Litvinovich’s question was inspired by Medvedev’s much-discussed September article “Go Russia,”³ in which he pointed out that widespread corruption and an economy based on exports of raw materials were hindering Russia’s progress. He proposed that Russian citizens support him in modernizing the economy and renewing the political system by means of free competition among political parties.

The democratic opposition, not surprisingly, was highly skeptical of Medvedev’s motives in his “Go Russia” piece, especially after the October 11 regional elections, which were widely reputed to have been rigged in favor of the Kremlin-controlled party, United Russia. Litvinovich suggested putting aside the skepticism:

The “change from above” that Medvedev proposed can only succeed with support from below. In this situation the [democratic] opposition must try to fill the role of society’s avant-garde in modernizing the country.

Litvinovich urged her fellow democrats to “pressure Medvedev so he moves into our corner, and not into Putin’s. We need to break up their tandem.”

Litvinovich’s article created a furor in Kasparov’s party. For proposing alliances with Medvedev, she was denounced as a traitor and removed from her post as executive director. But Medvedev’s second annual state of the nation address, delivered on November 12,⁴ added weight to her arguments. Predictably, members of the democratic opposition dismissed as empty rhetoric Medvedev’s speech in which he again discussed plans for modernizing the Russian economy, fighting corruption, and reforming the judicial and law enforcement systems. But he did mention concrete reforms—such as abolishing the requirement of collecting signatures to be on the ballot in regional elections and lowering from seven to five the percentage of votes required for a party to be represented in all regional parliaments.

More importantly, Medvedev made unprecedented criticisms of Putin’s record. He observed, for example, that Russia’s industrial infrastructure and oil and gas production facilities, which provide most of the country’s revenue, were built in the Soviet era:

It was not we who built it. It is still keeping our country afloat today, but it is rapidly depreciating…. We need to recognize that we have not done enough over these last years to resolve the problems we inherited from the past. We have not freed ourselves from a primitive economic structure and humiliating dependence on raw materials.

The message was clear: after almost a decade of Putin at the helm, nothing has been done to improve on what Soviet leaders had created. Although Medvedev used the term “we” when talking about the government’s failings, the blame falls squarely on Putin rather than on Medvedev, who has been president only since May 2008 and has not had the power to implement significant changes on his own.

Medvedev was also harshly critical of Russian policy in Chechnya and the North Caucasus, which Putin has orchestrated: “The level of corruption, violence, and cronyism in the North Caucasus republics is unprecedented.” He announced that he would appoint a special boss for the North Caucasus, who would be directly responsible to the Kremlin (and thus in a position to overrule Chechnya’s brutal president, Ramzan Kadyrov, whom Putin installed and has heartily endorsed).

Just days after his speech Medvedev spoke at the congress of the United Russia Party, which Putin chairs, in St. Petersburg. In a clear reference to the fraudulent October elections, Medvedev—who is not a member of United Russia, or any party—said that the party had not won the contest fairly in some regional branches and argued that “democracy exists not for parties, those in government or in opposition, but for citizens.”

The crucial question, if we accept Medvedev’s calls for reforms as genuine, is whether or not he has the power to carry them out. Although he has the constitutional authority to dismiss his prime minister, as Putin did with Kasyanov, the pro-Putin United Russia Party dominates the Duma, which would vote on his replacement. Medvedev is known to have the support of the so-called civilniki—a group of economists, technocrats, and lawyers allied to Vladislav Surkov, his deputy chief of staff. But Putin’s rival siloviki clan, led by his deputy prime minister Igor Sechin, is believed to be more powerful, because of its links to the security and law enforcement agencies. And then, of course, there is Putin’s popularity with the Russian electorate (a December poll gave Putin an approval rating of 68 percent, compared with Medvedev’s 58 percent).

But that is not the whole picture. Gennady Zyuganov’s Communist Party, the second most powerful in the Duma, with fifty-seven seats, has recently shown a clear preference for Medvedev over Putin, mainly because of Putin’s failure to modernize the economy. More significantly, the law enforcement organs do not represent a united front. The FSB (successor to the KGB), the MVD (Ministry of Internal Affairs), and the Prosecutor’s Office are feuding among themselves and all have been the focus of corruption scandals that have resulted in dismissals of high-level officials.

Medvedev’s promise in his November 12 address to “take some very strong measures to cleanse the ranks of police and special services and rid them of the unworthy” suggested that there would be further shake-ups, which could weaken Putin’s power base. Indeed, the tragic death, just four days after Medvedev’s speech, of Sergei Magnitsky, a young Russian lawyer for a British investment fund who had been languishing in prison for a year on bogus tax fraud charges, gave Medvedev the impetus to follow through on his promise. After it was revealed that Magnitsky died because he was denied crucial medical treatment and that he had produced evidence against corrupt MVD officers, Medvedev fired twenty senior officials in the Federal Prison Service and ordered a criminal investigation into the case.

In mid-December he dismissed Anatoly Mikhalkin, head of the tax crimes unit in the Moscow police department, who had been a key figure in the investigation of the investment fund for which Magnitsky worked. And on December 29, the day after a shocking report on the Magnitsky case was issued by the Moscow-based nongovernmental Public Oversight Commission, Medvedev dismissed the deputy chief of the prison service and signed a law making it illegal to hold persons accused of tax and other financial crimes in pre-trial detention.⁵

Not suprisingly, Medvedev has not taken on the most powerful agency, the FSB, which is filled with Putin’s cronies, despite press reports that the FSB was deeply involved in the Magnitsky case. But he has at least made some positive first steps toward reform of the law enforcement system.

Maxim Trudolyubov, an editor of the Russian business daily Vedomosti, has pointed out that Putin and Medvedev appeal to different audiences: Putin to the less-well-off Russians who depend on the government for their income and get their news from state-controlled television, and Medvedev to the narrower constituency of better-educated, more prosperous Russians who travel abroad and use the Internet. Although Putin’s audience is much larger, it is politically passive and probably will remain so unless oil prices plummet and the Russian economy then falls into an acute crisis. Medvedev’s constituency is where the pressure for change would come from.

As Stephen Cohen reminds us, there are several precedents in Russia’s past of significant reform initiated from within the ruling elite. Who, for example, would have expected Nikita Khrushchev’s secret speech denouncing Stalin in 1956 and his subsequent program of de-Stalinization, or the emergence of Mikhail Gorbachev’s perestroika in the late 1980s? Although Medvedev, who has been a Putin loyalist for many years, may seem an unlikely person to undertake such reforms, the possibility that he has become a vehicle for expressing discontent with the current course of Kremlin politics gives some grounds for hope that Putin will not be around forever.

—January 13, 2010