While President Vladimir Putin is distracted from the domestic agenda by the war in Ukraine, the Russian power vertical is undergoing a major crisis. Radical elements are proposing tough legislative changes, even as the government and some within the presidential administration struggle to maintain stability within the system. Neither group, however, has a mandate to make decisions: the president wishes to be the country’s only boss.
As a result, strategic decisionmaking centers are facing a crisis, and essentially no longer exist. Radicals and lobbyists have begun boldly answering back to those whose positions were previously accepted as orders for action. The diverse signals being sent out are exacerbating the administrative chaos and alarm within Russian society.
At the beginning of February, Valentina Matviyenko, speaker of the Federation Council, the upper chamber of the Russian parliament, proposed a revolutionary idea: for the duration of the war, state procurement should be allowed to be carried out without holding public tenders. The tender system was introduced back in 2013 and has been seen as a key achievement of the government technocrats, providing greater transparency in government spending and making that spending more cost-efficient.
Previously, figures of Matviyenko’s rank expressed the consolidated views of the authorities. Even a year ago, therefore, her comments would have been received unambiguously: if the chair of the Federation Council is proposing that a specific law be overturned, then that is what will be done.
It quickly became apparent, however—including from comments by presidential spokesman Dmitry Peskov, no less—that Matviyenko had not discussed the initiative with the president or the government. The cabinet sent Matviyenko a message via Vedomosti newspaper, in which an anonymous senior official dubbed the idea “unrealistic.”
Such unambiguous rejection by Peskov and the government should seemingly have meant an end to the discussion. Yet Matviyenko, a group of Federation Council senators, and a sizeable business faction profiting from state contracts apparently have no intention of abandoning their idea. Instead, they have jumped on the bandwagon of war, arguing that tenders slow down the state apparatus and are an impediment to victory. Focused on his “special military operation,” the president may sympathize with this take on the issue, and so disputes surrounding the issue of tenders continue.
This is far from the only example of contradictory and uncoordinated ideas within the power vertical. Several months ago, Deputy Prime Minister Andrei Belousov proposed that each federal ministry should get its own deputy minister for scientific and technological transformation. The idea was in keeping with the trend for import substitution and reliance on domestic strengths, as promoted by Putin himself.
The new posts never appeared, however. For Prime Minister Mikhail Mishustin’s government, Belousov is an outsider proposing extra work, and the apparatus successfully sabotaged his move.
Last fall, a similarly fashionable idea was floated by another influential figure: Sberbank CEO German Gref. He suggested that the government should lower the interest rates on loans for companies working on import substitution and infrastructure projects to 1–5 percent. No decisions on the matter have followed, however.
There is an even more striking split within the vertical over the fate of Russians who have moved abroad. Several radicals from the State Duma, led by its speaker Vyacheslav Volodin, proposed confiscating the property of those émigrés who “denigrate the motherland.”
The tactical goal of the move is clear: to make waves in the media and be noticed by the president. Yet such statements stand in direct conflict with the public position of other influential statesmen, like the United Russia ruling party head Andrei Turchak, Nizhny Novgorod region governor Gleb Nikitin, and Peskov, who have said that the authorities’ goal is to ensure that émigré specialists are tempted home as soon as possible.
The result is administrative chaos. Last summer, the Finance Ministry suggested raising income tax for those who have relocated but continue to work for Russian companies from 13 percent to 30 percent. This idea was rejected in the fall, apparently because of the objections of major companies such as Yandex and Sberbank, from which many valued employees have left the country.
Previously, rejection by the Finance Ministry would have ended all further discussion, yet in December, Volodin announced that the Duma would draw up a draft law on hiking taxes for Russians who have left the country. Senator Andrei Klishas, representing United Russia, even reported that the party was preparing amendments to the Labor Code forbidding remote working for certain professions, including IT. Matviyenko quickly objected, arguing that IT should be supported, rather than further encumbered.
Until recently, Volodin, Klishas, and Matviyenko were all heavyweights in the Russian power vertical and would never have made statements for no reason. Now they are saying entirely contradictory things, and there is no way of telling whose position will win out.
Public unity has always been a key tenet of the Russian power vertical. Disputes were to be resolved behind closed doors and moderated by the senior leadership. Those who disagreed with the consolidated view were removed from their posts, irrespective of previous services. That is what happened to former finance minister Alexei Kudrin in 2011, when he criticized then president Dmitry Medvedev. Similarly, deputies who voted against the so-called anti-Magnitsky law and sanctions list in 2012 found themselves removed from Russia’s political life.
Now disputes may go on for months without bringing results, despite the involvement of former decisionmaking centers: the presidential administration and the government. Previously, their word was enough to quash dispute, but now they too are mere participants in the discussions.
The reason for these changes is that with the start of his war, Putin took the running of the country entirely into his own hands. The functions of the former decisionmaking centers have been reduced: they can engage in tactical planning, but strategic issues are the preserve of the head of state. Distracted by the war, however, the president has too much on his plate to allow him to deal with “civilian” issues, and certain parts of the power vertical have sensed this.
Trusting that their radicalism will be to the president’s liking, some figures within the vertical are starting to actively participate in an aggressive exchange of opinions. For now, Putin refuses to be distracted from the war, so the discussions are continuing and increasing in number. Having decided to enter into a battle of opinions, the radicals and bolder lobbyists may yet be victorious, at least in certain fields.
