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The No 1 Gold Stock for 2019

Russia's Evolving Leadership, The Appearance of Democracy

Politics / Russia Jul 05, 2011 - 05:38 AM GMT

By: STRATFOR

Politics Best Financial Markets Analysis ArticleRussia has entered election season, with parliamentary elections in December and presidential elections in March 2012. Typically, this is not an issue of concern, as most Russian elections have been designed to usher a chosen candidate and political party into office since 2000. Interesting shifts are under way this election season, however. While on the surface they may resemble political squabbles and instability, they actually represent the next step in the Russian leadership’s consolidation of the state.


In the past decade, one person has consolidated and run Russia’s political system: former president and current Prime Minister Vladimir Putin. Putin’s ascension to the leadership of the Kremlin marked the start of the reconsolidation of the Russian state after the decade of chaos that followed the fall of the Soviet Union. Under Putin’s presidential predecessor, Boris Yeltsin, Russia’s strategic economic assets were pillaged, the core strength of the country — the KGB, now known as the Federal Security Service (FSB), and the military — fell into decay, and the political system was in disarray. Though Russia was considered a democracy and a new friend to the West, this was only because Russia had no other option — it was a broken country.

Perceptions of Putin

Putin’s goal was to fix the country, which meant restoring state control (politically, socially and economically), strengthening the FSB and military and re-establishing Russia’s influence and international reputation — especially in the former Soviet sphere of influence. To do so, Putin had to carry Russia through a complex evolution that involved shifting the country from accommodating to aggressive at specific moments. This led to a shift in global perceptions of Putin, with many beginning to see the former KGB agent as a hard-nosed autocrat set upon rekindling hostilities and renewing militarization.

This perception of Putin is not quite correct. While an autocrat and KGB agent (we use the present tense, as Putin has said that no one is a former KGB or FSB agent), he hails from St. Petersburg, Russia’s most pro-Western city, and during his Soviet-era KGB service he was tasked with stealing Western technology. Putin fully understands the strength of the West and what Western expertise is needed to keep Russia relatively modern and strong. At the same time, his time with the KGB convinced him that Russia can never truly be integrated into the West and that it can be strong only with a consolidated government, economy and security service and a single, autocratic leader.

Putin’s understanding of Russia’s two great weaknesses informs this worldview. The first weakness is that Russia was dealt a poor geographic hand. It is inherently vulnerable because it is surrounded by great powers from which it is not insulated by geographic barriers. The second is that its population is comprised of numerous ethnic groups, not all of which are happy with centralized Kremlin rule. A strong hand is the only means to consolidate the country internally while repelling outsiders.

Another major challenge is that Russia essentially lacks an economic base aside from energy. Its grossly underdeveloped transportation system hampers it from moving basic necessities between the country’s widely dispersed economic centers. This has led Moscow to rely on revenue from one source, energy, while the rest of the country’s economy has lagged decades behind in technology.

These geographic, demographic and economic challenges have led Russia to shift between being aggressive to keep the country secure and being accommodating toward foreign powers in a bid to modernize Russia.

Being from groups that understood these challenges, Putin knew a balance between these two strategies was necessary. However, Russia cannot go down the two paths of accommodating and connecting with the West and a consolidated authoritarian Russia at the same time unless Russia is first strong and secure as a country, something that has only happened recently. Until then, Russia must switch between each path to build the country up — which explains shifting public perceptions of Putin over the past decade from pro-Western president to an aggressive authoritarian. It also explains the recent view of Putin’s successor as president, Dmitri Medvedev, as democratic and agreeable when compared to Putin.

Neither leader is one or the other, however: Both have had their times of being aggressive and accommodating in their domestic and foreign policies. Which face they show does not depend upon personalities but rather upon the status of Russia’s strength.

Putin’s Shifts

Putin, who had no choice but to appeal to the West to help keep the country afloat when he took office in 2000, initially was hailed as a trusted partner by the West. But even while former U.S. President George W. Bush was praising Putin’s soul, behind the scenes, Putin already was reorganizing one of his greatest tools — the FSB — in order to start implementing a full state consolidation in the coming years.

After 9/11, Putin was the first foreign leader to phone Bush and offer any assistance from Russia. The date marked an opportunity for both Putin and Russia. The attacks on the United States shifted Washington’s focus, tying it down in the Islamic world for the next decade. This gave Russia a window of opportunity with which to accelerate its crackdown inside (and later outside) Russia without fear of a Western response. During this time, the Kremlin ejected foreign firms, nationalized strategic economic assets, shut down nongovernmental organizations, purged anti-Kremlin journalists, banned many anti-Kremlin political parties and launched a second intense war in Chechnya. Western perceptions of Putin’s friendship and standing as a democratic leader simultaneously evaporated.

Russia was already solidifying its strength by 2003, by which time the West had noticed its former enemy’s resurgence. The West subsequently initiated a series of moves not to weaken Russia internally (as this was too difficult by now) but to contain Russian power inside its own borders. This spawned a highly contentious period between both sides during which the West supported pro-Western color revolutions in several of the former Soviet states while Russia initiated social unrest and political chaos campaigns in, and energy cutoffs against, several of the same states. The two sides were once again seriously at odds, with the former Soviet sphere now the battlefield. As it is easier for Russia to maneuver within the former Soviet states and with the West pre-occupied in the Islamic world, Moscow began to gain the upper hand. By 2008, the Kremlin was ready to prove to these states that the West would not be able to counter Russian aggression.

By now, however, the Kremlin had a new president, Medvedev. Like Putin, Medvedev is also from the St. Petersburg clan. Unlike Putin, he was lawyer trained to Western standards, not member of the KGB. Medvedev’s entrance into the Kremlin seemed strange at the time, since Putin had groomed other potential successors who shared his KGB background. Putin, however, knew that in just a few years Russia would be shifting again from being solely aggressive to a new stance that would require a different sort of leader.

Medvedev’s New Pragmatism

When Medvedev entered office, his current reputation for compliance and pragmatism did not exist. Instead, he continued on Russia’s roll forward with one of the boldest moves to date — the Russia-Georgia war. Aside from the war, Medvedev also publicly ordered the deployment of short-range ballistic missiles to the Russian enclave of Kaliningrad, on the Polish border, and to Belarus to counter U.S. plans for ballistic missile defense. Medvedev also oversaw continued oil disputes with the Baltic states. Despite being starkly different in demeanor and temperament, Medvedev continued Putin’s policies. Much of this was because Putin is still very much in charge of the country, but it is also because Medvedev also understands the order in which Russia operates: security first, pragmatism to the West after.

By 2009, Russia had proven its power in its direct sphere and so began to ease into a new foreign and domestic policy of duality. Only when Russia is strong and consolidated can it drop being wholly aggressive and adopt such a stance of hostility and friendliness. To achieve this, the definition of a “tandem” between Putin and Medvedev became more defined, with Putin as the enforcer and strong hand and Medvedev as the pragmatic negotiator (by Western standards). On the surface, this led to what seemed like a bipolar foreign and domestic policy, with Russia still aggressively moving on countries like Kyrgyzstan while forming a mutually beneficial partnership with Germany .

With elections approaching, the ruling tandem seems even more at odds as Medvedev overturns many policies Putin put into place in the early 2000s, such as the ban on certain political parties, the ability of foreign firms to work in strategic sectors and the role of the FSB elite within the economy. Despite the apparent conflict, the changes are part of an overall strategy shared by Putin and Medvedev to finish consolidating Russian power.

These policy changes show that Putin and Medvedev feel confident enough that they have attained their first imperative that they can look to confront the second inherent problem for the country: Russia’s lack of modern technology and lack of an economic base. Even with Russian energy production at its height, its energy technologies need revamping, as do every other sector, especially transit and telecommunication. Such a massive modernization attempt cannot be made without foreign help. This was seen in past efforts throughout Russian history when other strong leaders from Peter the Great to Josef Stalin were forced to bring in foreign assistance, if not an outright presence, to modernize Russia.

Russia thus has launched a multiyear modernization and privatization plan to bring in tens if not hundreds of billions of dollars to leapfrog the country into current technology and diversify the economy. Moscow has also struck deals with select countries — Germany, France, Finland, Norway, South Korea and even the United States — for each sector to use the economic deals for political means.

However, this has created two large problems. First, foreign governments and firms are hesitant to do business in an authoritarian country with a record of kicking foreign firms out. At the same time, the Kremlin knows that it cannot lessen its hold inside of Russia without risking losing control over its first imperative of securing Russia. Therefore, the tandem is instead implementing a complex system to ensure it can keep control while looking as if it were becoming more democratic.

The Appearance of Democracy

The first move is to strengthen the ruling party — United Russia — while allowing more independent political parties. United Russia already has been shifted into having many sub-groups that represent the more conservative factions, liberal factions and youth organizations. Those youth organizations have also been working on training up the new pro-Kremlin generation to take over in the decades to come so that the goals of the current regime are not lost. In the past few months, new political parties have started to emerge in Russia — something rare in recent years. Previously, any political party other than United Russia not loyal to the Kremlin was silenced, for the most part. Beyond United Russia, only three other political parties in Russia have a presence in the government: the Communist Party, Just Russia and the Liberal Democratic Party of Russia. All are considered either pro-Kremlin or sisters to United Russia.

While these new political parties appear to operate outside the Kremlin’s clutches, this is just for show. The most important new party is Russia’s Right Cause launched by Russian oligarch Mikhail Prokhorov. Right Cause is intended to support foreign business and the modernization efforts. The party at first was designed to be led by Medvedev’s economic aide, Arkadi Dvorkovich, or Finance Minister Alexei Kudrin. However, the Kremlin thought that having a Kremlin member lead a new “independent” political party would defeat the purpose of showing a new democratic side to Russian’s political sphere. Prokhorov has rarely shown political aspirations, but he has a working relationship with the Kremlin. He clearly received orders to help the Kremlin in this new display of democracy, and any oligarch who survives in Russia knows to follow the Kremlin’s orders. The Kremlin now will lower the threshold to win representation in the government in an attempt to move these “independent” parties into the government.

The next part of the new system is an ambiguous organization Putin recently announced, the All Russia’s Popular Front, or “Popular Front” for short. The Popular Front is not exactly a political party but an umbrella organization meant to unite the country. Popular Front members include Russia’s labor unions, prominent social organizations, economic lobbying sectors, big business, individuals and political parties. In short, anything or anyone that wants to be seen as pro-Russian is a part of the Popular Front. On the surface, the Popular Front has attempted to remain vague to avoid revealing how such an organization supersedes political parties and factions. It creates a system in which power in the country does not lie in a political office — such as the presidency or premiership — but with the person overseeing the Popular Front: Putin.

So after a decade of aggression, authoritarianism and nationalism, Russia has become strong once again, both internally and regionally, such that it is confident enough to shift policies and plan for its future. The new system is designed to have a dual foreign policy, to attract non-Russian groups back into the country and to look more democratic overall while all the while being carefully managed behind the scenes. It is managed pluralism underneath not a president or premier, but under a person more like the leader of the nation, not just the leader of the state. In theory, the new system is meant to allow the Kremlin to maintain control of both its grand strategies of needing to reach out abroad to keep Russia modern and strong and trying to ensure that the country is also under firm control and secure for years to come. Whether the tandem or the leader of the nation can balance such a complex system and overcome the permanent struggle that rules Russia remains to be seen.

By Lauren Goodrich

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© Copyright 2011 Stratfor. All rights reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis.

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Comments

PiccolaBee
06 Jul 11, 04:42
Very Insightful Article

Wow! This is one of the most thorough and insightful articles I have ever read about Prime Minister Putin. Regretfully, most of the articles written about him are reactive.

Just today Bloomberg News published the following story:

Billionaire @realProkhorov Opposes #Putin’s Centralization of Power

As you know, the world is rapidly changing. Do you think Prime Minister Putin will join the digital era and communicate via social media such as Facebook and Twitter?

With Presidential elections in both the United States and the Russian Federation, 2012 will turn out to be an historic year. Hopefully, we can move forward and strengthen international cooperation and mutual respect.

Kind regards,

Piccola Bee


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