The rise of the regions

The main story of the year 2018 in Russia was the rise, in indignation, of Russia’s regions. While there has been growing tension between Russia’s federal subjects and the federal government for years, 2018 changed the calculation for the Kremlin as local voters organized protests and delivered shocking electoral upsets. This has marked the failure of previous models of dealing with public discontent. The Kremlin is and will be experimenting with new forms of managing the regions, but anything short of stronger self-governance is unlikely to do the trick. Below is a discussion of why the crisis of political responsibility plaguing Russia led to protests and protest votes in the regions and what to expect in 2019.

It was a memorable spectacle: a stern and angry Vladimir Putin wearing a grey jacket and a blue shirt sitting behind a table, scolding a room full of officials. “You made thousands of people hostage to your ambition, unprofessionalism and perhaps greed; this is unacceptable,” we hear from Putin who then tosses sheets of paper and a pen on the table. One of the men sitting around the table, aluminum magnate Oleg Deripaska, the main culprit, stands up and walks behind the chairs over to Putin’s end of the table while others look on in silence – we only hear the sound of shutters, each one a strike on the oligarch running the gauntlet. Deripaska then proceeds to sign the paper – requiring him to reopen a factory that he had just closed for its unprofitability – and is about to walk back, humiliated, to his chair when, to add insult to injury, Putin tells him: “don’t take the pen!”.

We are in June 2009, in the small industrial town of Pikalyovo where residents, angry with the closure of the alumina factory, upon which the livelihood of the whole town depended, decided to block a federal highway. Putin, then prime minister of Russia, flew in almost immediately and created a precedent out of Deripaska’s public humiliation. While it was obvious that in the middle of the global economic crisis some factories would have to be closed down and as a result, many of Russia’s four hundred “monotowns” – towns relying on one specific industry or employer – would suffer, the message was clear, both to oligarchs and workers: in times of trouble, entrepreneurs who owed their fortune to their political connections will be expected to chip in to prevent a sudden surge in unemployment and thus large-scale unrest. Putin needed to do a couple of similar appearances that year, but it was the televised scene in Pikalyovo that ultimately did the trick.

Fast forward to March 2018. Putin is president again, having just won a fourth term by a significant margin. Moreover, in the previous four years, his foreign policy successes seem to have put him on track to become more than just a president, something like a “father of the nation”. He is, it would seem, at the zenith of his power.

And then disaster strikes. In the Siberian industrial city of Kemerovo, a fire in the Winter Cherry shopping mall causes the death of more than 60 people, mostly children. The tragedy was most likely caused by corruption in the local administration which allowed the builders of the mall to cut corners in fire safety regulations. Vladimir Putin, again, promptly flies to the scene to chastise local officials, including Aman Tuleyev, the governor of Kemerovo Oblast and local strongman. A scene not very different from the “boardroom” meeting in Pikalyovo unfolds.

Only this time, something is off. When Putin arrives at the scene to lay a wreath in memory of the victims, he is alone and looks awkward: hops out of the car, walks to the makeshift memorial, looks around and hops back in. There is no crowd, angry or jubilant, to welcome him. People are elsewhere: protesting, in a rage, against Tuleyev who hinted that they might be opposition activists and his deputy who talked down to relatives of the victims. Putin does not want to be there. Later when the president does talk to a group of locals, he seems diminished, almost on the defensive as he listens to them demanding the governor’s dismissal – a step that Putin clearly did not consider taking. Five days later, Tuleyev is out of office.

Half a year later, Putin travels to Vladivostok. The second round of the gubernatorial election in the Primorsky Krai, the Pacific region of which the city is the seat, is around the corner. The first round did not go the Kremlin’s way. Even though no serious opposition contender had been allowed on the ballot, one of the “dummy candidates”, the Communist Party’s Andrei Ishchenko nonetheless won enough support in the first round to force the Kremlin’s appointee, governor Andrei Tarasenko, to contest a second round. Three other gubernatorial elections – in neighboring Khabarovsk, in the Republic of Khakassia, a south Siberian territory noted for its bucolic beauty and in the Vladimir Oblast, a part of “old” Russia less than 200 km from Moscow – also result in unexpected second rounds. However, the one in Primorye will come first, on 16 September and thus Putin uses a conveniently timed business forum to throw his weight behind Tarasenko. “Everything, I think, will be all right,” so Putin tells the governor at a public meeting. He has every reason to think so: the first and the last time a gubernatorial election did not go the Kremlin’s way was in 2005. And Putin represents a winning brand.

But things do not turn out “all right”. Five days after Putin’s visit, as the second round votes are counted, Tarasenko is losing. It takes highly conspicuous rigging to turn the election around, so obvious that even the Central Electoral Committee calls the official result into question and annuls the second round. The worst – an opposition victory – is avoided, but Tarasenko is, politically speaking, dead meat. And non-Kremlin candidates who were only supposed to lend legitimacy to the election do end up winning in Khabarovsk, Khakassia and Vladimir. In Vladimir, Vladimir Sipyagin, a political non-entity defeats Svetlana Orlova, a governor who used to be genuinely popular. In Khakassia the Kremlin is trying to bully Valentin Konovalov, the communist candidate, into giving up his bid, to no avail. In Khabarovsk, governor Vyacheslav Shport suffers a crushing defeat; the winner is Sergey Furgal, the Liberal Democratic Party’s candidate. In Primorye, in a repeat election in December, the Kremlin’s new candidate, Far-Eastern crisis manager Oleg Kozhemyako does succeed, but his victory is pyrrhic: it takes the disqualification of Ishchenko, the likely winner in September, promises on fixing health care, roads and flood control, as well as more rigging to secure a majority. A very ungraceful end to an electoral season that seemed routine.

A year that went downhill

Domestically, despite his re-election in March and the FIFA World Cup in June and July that was supposed to be a victory lap, 2018 was a dreadful year for the Russian president. Foreign policy successes were few and unspectacular while domestic problems abounded. Much of the second half of the year, the political agenda was defined by a highly unpopular pension reform that destroyed a Soviet-era social guarantee and triggered protests all over the country. Putin unsuccessfully tried to isolate himself from the reform and ended up owning it.

The pension reform was certainly an important driver of social unrest in 2018, but it was not the main story of the year. The main story was the rise, in indignation, of Russia’s regions.

In March 2017 I wrote about a growing conflict between Russia’s regions and the federal government, noting that the financial burden on the regions had been rapidly growing for years, especially since Vladimir Putin’s “May Decrees” issued following his re-election in 2012, which prescribed a heavy social spending plan, which regions had to implement all while they were losing power over an increasing portion of their budget: in 2017, almost two-thirds of regional income went to Moscow while only about one-fifth came back in the form of subsidies. In October 2017 I quoted Natalia Zubarevich, an eminent expert on Russia’s regions who pointed out that while the political independence of Russia’s governors had rapidly decreased, their chance of being prosecuted had increased, tying the hands of governors who had traditionally been trusted with tasks such as acting as arbiters between local business groups. I added:

“Revenue management may become increasingly centralized and business decisions removed from the regions, but it is very questionable whether the delivery of political legitimacy can be centralized. The position of individual governors might be weakening, but this does not mean that their office becomes less important.”

2018 showed just how big this problem has grown. Incident after incident forced Moscow and Vladimir Putin personally to think about domestic politics just when it seemed that ruling the political agenda through foreign policy adventurism was enough.

The Kemerovo tragedy directly exposed the president to the anger brewing in the regions with incompetent and hapless officials. In the same month, in Volokolamsk, a town in the Moscow region protests against a toxic waste dump presented the government with a problem that it was ill-suited to resolve: simply putting waste elsewhere is going to cause problems elsewhere, as protests in the Arkhangelsk region made obvious in December. Russia was simply not big enough to solve this issue without competent management. Protests in Ingushetia against a border treaty that had the Kremlin’s blessing raised the spectre of violent conflict in the Caucasus and while developments did not quite get there, the federal level, represented this time by the Constitutional Court was visibly uncomfortable as it scrambled to find arguments in support of the deal.

The pension reform triggered country-wide protests because it galvanized previously fragmented, but existing flare-ups of social discontent. The efforts of Alexei Navalny and his colleagues who, in the run-up to the March 2018 expanded their reach in Russia’s regions – in early December they had 40 coordination centers – certainly made a difference. Navalny’s suggestion to establish a “smart vote” platform to gauge protest votes to a single candidate in regional elections was promptly shut down by the authorities, but there is no guarantee that as long as the Kremlin is keen on upholding the semblance of competitive elections, the September fiascos will not repeat themselves organically. And as an increasing number of Russians are tired of the foreign policy agenda and worry about further sanctions and an economic downturn, there will be more emotions to build on.

A crisis of responsibility

The common thread running through the above is a serious crisis of political responsibility in Russia. In recent years, the government’s role in decision-making has decreased to merely implementing decisions. Decisions are increasingly prepared by experts trusted by the president. They hold various positions from the Central Bank to the Audit Chamber. Decisions on their suggestions are often taken by the Security Council, which officially only has an advisory role, and receive a final, political nod from the Presidential Administration, an unelected body. Governors, most of whom are, even if they are officially elected, appointed from Moscow (often together with their supposed “opposition”) have little political authority, save for a few who hold real (and in the case of Chechen president Ramzan Kadyrov, outsized) sway. When governors and local officials are left to their own devices – like election officials in the Primorsky Krai – they will often take clumsy decisions. It matters little whether the governors are “young technocrats” (as many of the latest appointees are referred to) or local heavyweights.

In December, the independent Levada Center made headlines when it published the results of a survey, in which 55 percent of Russians said that Putin was responsible for the country’s economic successes – not a surprise; the number has been steadily high for almost two decades – and the same number held him responsible for Russia’s economic problems. In fact, the two figures had been converging for years: a natural phenomenon in a political system, in which the president is the only visible political authority.

In such a system the path to change, even in local matters, also runs through the president. It is not inconceivable that the voters in the four regions that delivered electoral upsets in September wanted to send a loud and clear message to the president: we are fed up and you should fix things; in any case, this explanation is more plausible than thinking that voters actually took a liking to the candidates of the “systemic opposition”, some of whom seemed to be shocked by the result almost as much as the Kremlin. And once the genie is out of the bottle, it is difficult to put it back in. The Levada survey also found that while the pension reform may have triggered a significantly higher readiness to protest, this readiness stayed high even after the reform was adopted and the government declared the issue over and done with.

The Kremlin dealt with the four regions in different ways, applying carrots and sticks and will, presumably, draw the conclusions. In Khakassia, Mikhail Razvozzhaev, a caretaker governor appointed following the September election tried to bully the eventual winner Valentin Konovalov into withdrawing his candidacy. He also tried to create a new political movement disguised as independent, presumably to support his own candidacy. This did not work and it is unclear what the Kremlin’s plans are with the new governor who is energetically replacing personnel in the regional administration. In Vladimir, the Kremlin is trying to work together with Vladimir Sipyagin, the new governor whose inauguration the president’s special representative attended. The goal here is most probably to co-opt the politician who used to be a mere regional deputy and thus counts as inexperienced. In Khabarovsk, this almost worked before the second round when Sergei Furgal, the opposition candidate initially accepted the offer of governor Vyacheslav Shport to serve as his deputy. Instead, Furgal later went on to defeat Shport and soon afterwards, the capital of Russia’s Far Eastern Federal District was moved from Khabarovsk to Vladivostok, which, at the second try, elected the Kremlin’s candidate.

This, of course, was not the only incentive that the Primorsky Krai received. Oleg Kozhemyako, a native of Primorye who had served as governor of three other Far Eastern regions and built a reputation of crisis manager was another incentive. Furthermore, Kozhemyako promised a hefty sum totaling 14 billion rubles – one-seventh of the region’s 2018 budget – mainly on road repairs, a better health care system and flood control – to sweeten the offer. By all appearances, he still needed the disqualification of his main opponent and some rigging to deliver a convincing victory, but it seems to be understood that the Kremlin heard the cry of the voters of Primorye and responded to it.

Maxim Trudolyubov, a Russian analyst who is doing an excellent job chronicling the rise of the regions, warned in December that this could very soon result in a pattern: governors will use the threat of embarrassing election results – why not a parliamentary election, next time? – and public unrest to blackmail Moscow for more resources. In fact, this is how, Trudolyubov argues in another great piece, the Kremlin muffled unrest in Moscow following the protests of 2011-12. The facelift given to the city by mayor Sergei Sobyanin is indeed staggering. Urban renovation projects started in 2015 are expected to cost more than 200 billion rubles. Moscow’s budget has grown almost twofold in the past eight years and now accounts for 25 percent of all the budgets of Russia’s 82 other regions together. To see the gap, consider that the average Moscow resident now benefits from 170,000 rubles per year in local government spending while the average Russian only benefits from 60,000.

A choice between bad and inconvenient

Pouring money and favors on an indignant region and appointing a crisis manager to oversee the spending may work in a handful of regions. It cannot work everywhere. The Moscow facelift was possible because the Kremlin redirected funding from other regions. Problems with waste disposal in and around the capital were alleviated only as waste was shipped to other regions. As long as protests were confined to the capital, the model worked. Now that protests are popping up at the countryside, its limits will soon be painfully obvious.

Hardly can the president force big business to chip in the same way as he did in 2009, either. Western sanctions have not only irked Putin’s entourage and reduced the size of the pie that rent-seekers divide among themselves; they have also made the protection racket that the president has offered to loyal businessmen less credible. Several attempts to make business pay more – e.g. by increasing their tax burden to finance capital investments or to make observing sanctions on Russia a crime – received a loud rebuke.

There is also a third problem. Throwing money on problematic regions is but a symptomatic treatment, which will not resolve the underlying issue. As Oleg Kashin explained on in a piece on “the inside of Putin’s head”, messages and orders are inevitably simplified as they travel up and down the power vertical. Even if certain governors are able to demand more money from Moscow, this will hardly help the federal government understand the regions’ problems more or satisfy the people’s will to take part in decisions on their own future.

There is, at the same time, reason to doubt that real, actual self-governance will be strengthened as long as Vladimir Putin is in office. For a few months in 1998, at the start of Putin’s career in Moscow, he was the deputy head in Boris Yeltsin’s presidential administration, responsible for regions. The prime minister in this period was Sergei Kiriyenko who today is Putin’s deputy chief of staff. After Russia’s financial meltdown that year, as the banking crisis accelerated insolvency, regions started adopting unconstitutional laws in order to prevent what they feared would be upcoming uprisings. Nizhny Novgorod announced that it would pay salaries before taxes and even raised the possibility of the separation of its banking system. Kaliningrad and the Sverdlovsk region contemplated declaring a state of emergency and initiating price controls. Khakassia also threatened Moscow with withholding tax revenues. Some regions even made independent foreign policy initiatives. Putin’s task in 1998 was collecting data on how governors spent subsidies and preparing agreements spelling out the powers of regional governments. Once in power, however, he moved to cancel these agreements and centralized power over the regions. It would not be surprising if the president’s fear of unconstitutional initiatives or even separatism were strong enough to make devolving power a taboo.

Nonetheless, the president may still be forced to make a move in 2019. Almost twenty years ago, on the morrow of Russia’s messy financial crisis and in the wake of apartment bombings in Buyknaks and Volgodonsk, Putin came to power promising, essentially, three things: a stable improvement in Russians’ standards of living; the restoration of Russia’s soviet-era prestige in the world; and protection both from the law of the jungle that seemed to rule the country in the 1990s and terrorism. In recent years, he has had trouble fulfilling the first promise while it turned out that Russians are less and less interested in the second. What remains is the promise of protection. This Putin can still credibly promise to Russian citizens. But as it was shown by a recent blast in Magnitogorsk that cost 39 lives and immediately fueled talks of terrorism, in a country where the president is responsible for almost everything, this might also change, sooner than most would expect.

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