Who is sleeping in the Lenin Bedroom in the Kremlin? Money, Power and Politics in the Putin Era

Meeting report, Vol. 2, No. 9, Nov. 2, 2000

On November 2, 2000, Andrei Ryabov, scholar-in -residence at the Carnegie Moscow Center discussed the principle influences behind the contemporary Russian political process. Ryabov's discussion was moderated by Carnegie Endowment Senior Associate Michael McFaul; it was the second session of the "state of the State" monthly series, which seeks to increase understanding of the recent developments and prospects of the key institutions of the Russian state.

Andrei Ryabov opened his discussion by setting a more modest goal than the one suggested by the title - his aim is to identify several determining factors behind contemporary Russian political development and political conflicts.

Ryabov offered an alternative to the approach most commonly used to evaluate the Putin administration. Instead of a direct analysis of the political decisions and laws put forth by the executive branch, his method assesses the balance of forces inside and outside Putin's coalition, and defines the resulting political boundaries and possibilities.

Adopting this approach, Ryabov introduced a political fact of great consequence for limits on political possibilities - the availability of political rescources. Ryabov argues that Putin has not been able to strengthen or expand his own political resources, and is therefore forced to resort to the services of the old Yeltsin's "family." Putin's only personal resource is his high public approval rate, which substitutes resources that Yeltsin possessed, such as charisma and capacity for political manipulation. Putin is forced therefore, to use public opinion as his main political instrument; his efforts to expand the bases of his power have thus far failed.

There are three main consequences of this political fact. First, the persisting heterogeneous character of Putin's coalition prevents him from any significant political initiatives in every sphere -- he finds himself unable to even propose, much less implement, his own goals. Every initiative of change in the social, economic or political spheres has been effectively blocked by one or more the competing groups within Putin's coalition. For instance, the confirmation of certain reform laws - the second part of the Tax code, the labor code, pension reform -- is being delayed, because the forces within, as well as outside the state apparatus are interested in blocking these reforms. This is especially true of Yeltsin's "family," who see their interests threatened by changes to the status quo. This heterogeneity of Putin's coalition pushes him to adopt the old logic of the "family," that dictates fluctuation between competing centers of power and influence.

The second consequence consists in the great difficulty of changing Yeltsin's system of power leadership. In July 2000, Putin tried to change the constitution of the leadership, and applied strong pressure on various power groups, such as financial oil and gas oligarchs. Since then however, the situation is changed, and Putin is only pressuring those members of the former Yeltsin leadership elite that are now weak and not truly dangerous. Ryabov pointed to the removal of Rutskoi from the Kursk gubernatorial election as an example of attacking weak figures; no one among the federal political elites supported him, nor did he control any significant financial resources. Replacing Rutskoi without much resistance was therefore quite easy for Putin.

This inability to decisively change the distribution of power among the elites is also apparent in Putin's actions vis-à-vis the regional governors. In July 2000, Putin took a bold step in an attempt to exclude the governors from federal decision making with his Federation Council reform; just one month later however, he created a new consultative political institution, the State Council. The State Council is just another mechanism for cooperation and coordination of national policies with local leaders. Again, when the regional electoral campaigns have started, Putin resumed pressure on the regions, resulting in the current strained relationship between them and the center. In these fluctuations we cannot discern any logic or strategy, Ryabov insisted, but merely ad hoc responses to changing external political factors.

The third consequence is the strong political activity of Yeltsin "family" over the last month. This activity begun with the presentation of Yeltsin's latest memoirs, which unfolded as a major political and public relations campaign. Ryabov asserted that the purpose of this campaign was to demonstrate that Yeltsin and his advisors continue to play an important role in the Russian political process, and Russia still has a "second president." This activity intensified the fragmentation of Putin's coalition. On the one hand, the old Yeltsin elite perceived this campaign as a call towards greater activity to preserve the power relationships of the Yeltsin era: we can observe this in the bold declarations of Bashkortostan president Murtaza Rakhimov and Sverdlovsk governor Eduard Rossel. On the other hand, the new aspiring elites perceived such developments as an indication of continuity of Yeltsin's order. Ryabov brought up the example of Novgorod governor Prusak, who criticized Putin precisely for his inability to accomplish real changes in federal politics.

Ryabov drew a parallel between this current position of President Putin, and the position of Gorbachev in 1990-1991, suggesting that Putin may be facing a similar threat of disintegration of his coalition. As in 1990-1991, competing political forces within the coalition are dissatisfied with the moderate position of central decision-making. A possibility exists that both the liberal/moderate and the conservative forces will seek a new center of political influence outside of the Kremlin - similar to the developments that brought about the collapse of the Gorbachev regime and the Soviet Union.

Ryabov conceded that this is not an immediate threat to President Putin; however, if he does not block the disintegrating forces within his coalition, the menacing prospect may become more real. For the present moment, the three features of the current political process - the heterogeneirty of Putin's coalition, durability of the Yeltsin system, and the political activity of the "family" -- restrict the potential for any real economic, social or political changes.

Ryabov proceeded to analyze several recent political conflicts within his proposed framework. First, the war of the Kremlin against the two media oligarchs - Boris Berezovskii and Valdimir Gusinskii - is a parallel case to Rutskoi's removal from the Kursk electoral race. Berezovskii and Gusinskii do not have access to the real, money-generating sector of the Russian economy (especially in comparison with the other oligarchs), and are not dangerous to Putin. Putin's only real political resource however - the support of public opinion - allows and encourages him to attack the oligarchy. While public opinion supports fighting against oligarchs in general, Putin only has enough political power to do so against these two relatively unimportant figures.

The last month of Putin's presidency also lends support to the theory that it is not Putin, but "financial administrative groups" that wield the most power over the political process. Ryabov used the example of the Chukotka gubernatorial race to illustrate this point. The current Chukotka governor Nazarov, who has been loyal to the Kremlin powers for the last 13 years, is now faced with a Tax Police investigation that aims to remove him from the electoral contest. The person behind this political play is Roman Abramovich, who desired to have no real competition in his bid for the Chukotka governor's seat, and drew upon his connection with Tax Police head Soltaganov to trigger the investigation. Kremlin is not at the center of decision making in this and other conflicts; instead, Putin is adopting the strategy of non-participation and equal distancing from all conflicts - including the budget debates, the regional elections, and actions of most oligarchs. This non-participation policy really signals that Putin simply does not possess the political resources necessary to be a decisive player in such conflicts. Ryabov asserted that in the fragmented political environment that exists today, it is impossible for Putin to create the authoritarianism that many observers predict.

Ryabov also noted the contradiction between public demand and the necessity of social, economic, and political reforms. Ryabov claimed that Putin's electoral base rejects the continuation of liberal economic and social reforms, and thus places Putin in a position that is not conducive to liberalizing change.

This tension may push Putin to consolidate the one political resource he has - his public popularity - by acquiring control over the media. If he does consider this (and not reform) the key goal, then it is logical for him to take over the media sphere occupied by Berezovskii and Gusinskii. Maintaining public support and abstaining from real policy initiative would coincide with public demand for calm order after nearly a decade of Yeltsin. So it is only in the informational sphere that the prospect of authoritarian control exists; but control over the media is not connected to tangible administrative or political power.

Ryabov concluded that Putin is faced with two very simple alternatives: he can replicate Yeltsin's logic, and do whatever is necessary for the survival of the political system and the maintenance of his one political resource; or he can attempt to break the current immobilizing balance of political forces in his coalition, and create a possibility for his administration to go ahead with policy initiatives of economic and social change. Ryabov offered evidence that Putin is at least thinking about this latter option - he cited talk of creating for the President his own financial resources controlled by one of the departments of his administration, which would lessen his financial dependence on the oligarchs. Perhaps the inevitable drop in oil prices will prompt Putin to be more independent and resolute in his choices, and set him on the second path. But political will from Putin himself is indispensable; without it, he will be doomed to repeat the experiences of Gorbachev and Yeltsin.

Questions and Answer Period

Michael McFaul posed the first question on the continuity and change between the Yeltsin and the Putin regime: Does Putin's governance differ at all from his predecessor's, or is Putin bound by the same constraints and limitations?

Ryabov's response clearly emphasized continuity between the two regimes. One cannot speak of the Putin era, Ryabov stated, but only of the post-Yeltsin era, or even the "Yeltsin era without Yeltsin." Although Putin appears to be answering the public demand for change from the Yeltsin years, this change is only occurring in the virtual sphere of media.

Another question asked for a clarification on who the members of Putin's fragmented coalition are. Ryabov identified three main groups of the coalition. The first is the Yeltsin "family," which includes Voloshin, Kasyanov, Rushailo, Ustinov, Lesin, as well as two oligarchs, Abramovich and Mamut. Their main resources consist of control over the media, intellectual potential and most importantly, great financial assets.

The second group is the St. Petersburg liberals within the Russian government, such as Gref and Kudrin, led by Chubais. The influence of this group is presently weakening: Chubais is losing influence, and Putin is not willing to lend active support to Gref's plan for economic reform.

The third group is the Russian military and secret services, represented by Sergei Ivanov, Cherkesov, Patrushev and others. This group's most important resource is their own fortified political institution, the Security Council, which is becoming more and more important, and transforming into a real decision making body.

Subsequent questions sought clarification on the two alternatives that Ryabov claimed Putin is faced with. If Putin has a choice between perpetuating the system-sustaining logic of the Yeltsin administration and attempting to break out of the constraints posed by his fragmented coalition, what would be the ramifications of his taking the latter route? That is, if he were to successfully break the deadlock caused by his heterogeneous coalition, and somehow expand the political resources available to him, towards what ends would he use the resulting opportunity of initiative politics? One participant remarked that judging from Putin's actions thus far, it is not at all clear that his capacity to carry out policy initiatives is a better choice for Russia than the current fragmented arrangement.

Ryabov confirmed the prevalent opinion that Putin does not in fact have his own program; he suggested that an economic or political crisis would force the president to define his priorities. One of the reasons why Putin has not moved closer to one group within his coalition over the other two, is exactly the absence of his own priorities and his own plan for Russia's future. This is why Ryabov insisted that Putin's political will is key in determining which path he takes. Ryabov also expressed the belief that the authoritarian flavor of Putin's personal preferences is not inevitable as many suppose.

Summary by Elina Treyger, Junior Fellow with the Russian and Eurasian Program