A tale of two choices

Oil prices tumble, the Russian economy is in recession, the Russian elite is nervous, but Vladimir Putin is smart enough to avoid the traps that the Soviet Union fell into – in a nutshell, this is the argument of Richard Sakwa’s opinion piece, published in The Guardian three weeks ago. There’s no way out of this crisis and Putin will soon have to handpick a successor, argues Alexander Morozov on openDemocracy. Between these two, somewhat extreme opinions that supposedly contain some wishful thinking, we have seen a myriad of scenarios emerging in the past month about the end game of the crisis in Ukraine. All of them sound somewhat plausible, yet it is difficult to argue that one of them has significantly higher chances of happening than the rest. This ambiguity paints a perfect picture of Russia at the beginning of 2015.

To borrow a metaphor from Erwin Schrödinger, Russia is a closed box that presently contains both the possibility of Putin’s fall and that of Putin’s “outwitting” the West by transforming Russia. Both cannot exist at the same time, yet, with the box is closed at this point, it is impossible to tell in which state Russia exists at the moment. Nevertheless, the mere fact that these possibilities are mentioned shows the gravity of the situation the Russian political elite is in today. They show that the internal balance of a previously solid Russian political system was tilted. And the last time this happened, things did not work out well for Mikhail Gorbachev.

The castling and its aftermath

One of the biggest errors that this blog has committed was having failed to anticipate the “castling” of Vladimir Putin and Dmitry Medvedev in 2011. In 2009-10, while far from being the real leader of Russia, Medvedev’s circles seemed to have taken root in the highest echelons of the Russian state. The global economic crisis forced what then seemed to be the first phase of a large-scale restructuring. Privatisation was launched. Some of the direct links between the political and business elite were severed. The political system opened up a little. In short, Russia seemed to be at the threshold of a reform era. Reforms were going to be cautious, slow and uncertain, but reforms nonetheless. And then came 2011. Oil prices recovered to their pre-crisis levels, while the crisis continued in Europe, providing a pretext to Russia’s fiscal conservatives to cancel privatisation and for hardliners to re-establish themselves as the dominant political force. Medvedev had to go, Putin returned. Thus goes a somewhat simplified version of the story.

To this day, I am convinced that for a long time, Plan A was for Medvedev to stay on as president and for Putin to keep his influence as the essential mediator of Russian politics, but to gradually phase himself out of politics. The Russia of 2010, to return to the previous metaphor – included both the possibility of a reformed state and a third presidential term for Putin. My mistake was therefore not that I failed to see the “obvious” return of a “power-hungry” Putin from the beginning. The error I committed was assuming that changes built into the system during the crisis were more difficult to reverse than they actually were. In fact, it was, and it still is, the system that had the inertia, and not the reform drive. I was not the only Russia-watcher to have forgotten about this back then. And I hope I am not the only one to have learned from my mistake.

A vicious circle

The castling made the Russian political system more Putin-centred than it had been, but it also marked its limits. The president, popular as he was, arguably lacked the overwhelming public trust and elite support that characterised his first two terms, partly because the social pact that it was based on withered, and partly because the priorities of the Russian political and business elite supposedly changed. As I have repeatedly underlined on this blog, a considerable part of Russian voters was annoyed by the castling (as evidenced by large-scale protests in 2011-12) and so was a part of the elite – nonetheless, as there was no alternative available, both groups made peace with Putin’s return to the presidency. But this was patience, not enthusiasm, and screws needed considerable tightening to remain in place: this did not only mean cracking down on the opposition, but also a crackdown on the elite.

The crisis in Ukraine and especially the annexation of Crimea opened a door for the president, allowing him to replace the lukewarm support he had with unfettered enthusiasm. Propaganda helped to pump his approval ratings to previously unseen heights. More importantly, the political system, while largely unchanged, received a new guiding principle, an inner logic, a core myth, if you like, that helped to interpret news, explain undesired events and rally nationalists, a considerable part of whom had been flirting with the opposition, around the government. More importantly, just like the Chechen War, it helped to strengthen the president’s standing. The castling gave people the feeling that politics was, in fact, all about Putin. Crimea and the legends around it gave many the feeling that he had the legitimacy he needed for this. However, by doing so, he also equated himself with this myth.

By upsetting the balance of the system, Putin may have put it on a crash course. As the former Kremlin pundit, Gleb Pavlovsky cleverly put it in an interview last December, Putin’s system was built on globalisation. First on its benefits and then on its criticism. Anchoring a system or putting the blame on an external force is convenient, but it will also trap the leaders of the system. Russia can now only move from one form of this system to another, said Pavlovsky. And it is far from certain that Putin will succeed. In fact, things do not look good. Even if global oil prices rebound, the prospects of the Eurasian Union look increasingly dire, with Belarus even threatening to leave the Union and Kazakhstan increasingly wary. Russia’s newfound friendship with China is by no means a partnership of equals. Meanwhile, both citizens and the elite are asked to “be patient” until the situation takes a turn for the better, while the prospects for this are dubious at best.

Whatever form the present economic and political system takes – call it Asian pivot or Eurasian Union – it will remain essentially extractive and kept on life support by globalisation and the hunger of emerging markets for energy. At the same time, it will remain relatively isolated for as long as its leader’s legitimacy is based on virulent anti-Westernism and an expansive foreign policy. If none of these elements change, Russia’s next couple of years will be critical and potentially implosive.

The choice of what to remove

The president is not able to take a decision on this alone. As I blogged at the end of last year, some parts of the Russian elite are interested in continuing the war, while others are not. Even if Putin did recognise the need to change certain elements of the system – which is not too likely in a system plagued by the lack of constructive feedback – changing the very basis of its legitimacy would still be extremely difficult. Without that, however, certain sanctions will remain in place as long as Putin occupies the Kremlin. Change would almost certainly mean changing the system or changing the man at the helm of it.

Putin is trying. The measures, announced in his speech before the Russian parliament were supposed to give the impression that liberalisation had started. However, so far this is nothing more than a Potemkin façade. The cornerstones remain in place: Bashneft was forcibly nationalised last year, and fiscal measures announced by the finance ministry in January touch everything but the sacred heading of the Russian budget: the modernisation of the military aimed to satisfy the Ministry of Defence and the arms industry that, according to one Kremlin pundit, have become Putin’s closest associates in the past months. “Delaying reforms too long and upping defence spending in response to the exaggerated western threat drove the Soviet Union into oblivion.” – says Sakwa in the article quoted above. This is exactly what is happening, despite the cautious reforms announced in December. Putin does not look like someone who is about to step aside, either. One of the many readings of the jailing (and subsequent freeing) of Vladimir Yevtushenkov, the owner of the Sistema holding last year – besides the nationalisation of Bashneft that I mentioned – is that it was a message sent to those in the elite opposed to Putin’s policies but, so far, silent.

It certainly looked like that: Yevtushenkov was jailed in September, shortly after the downing of Flight MH17 led to unexpectedly strict sanctions against Russia, Ukrainian military gains and an almost visible uproar in the Russian elite that had been told by Putin that he could read the West and thus manage risks. He could not. And while the situation in Europe is different, as today’s meeting of the EU Council showed, last week’s shelling of Mariupol’s residential areas may just be a similar turning point.

Today’s Russia includes both the possibility of Putin’s finding his way out of the crisis and that of his fall. The castling was a sobering enough lesson for me not to pass a judgement at this point. But the necessity of change does not mean that something will inevitably be changed, either. In that case, however, 2015 will certainly be a disastrous year.

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