The end of the Putin era?

lenin-statueDr Robert Horvath

While controversy rages in the West over the failings of neo-liberalism, in Russia the very basis of Vladimir Putin’s “managed democracy” is under question.

It is difficult to imagine a less likely firebrand than Dr Evgenii Gontmakher, the mild-mannered head of a social policy research centre in the Russian Academy of Sciences. Even one of the Putin regime’s most militant defenders has described him as “unimpeachably loyal.” But last November, Gontmakher ignited a political firestorm by publishing an article titled “Novocherkassk 2009” in Vedomosti, a leading Russian business newspaper affiliated with the Financial Times. His title alluded to a notorious Soviet-era massacre of workers protesting in 1962 against rises in food prices and work norms in the town of Novocherkassk. Gontmakher set out to explain, in fourteen steps, how a similar social explosion could erupt today in “N-sk,” one of 700 Russian “mono-towns” whose economic life revolves around a single industrial employer.

In Gontmakher’s narrative, the crisis in N-sk is triggered by the decision of the employer to begin mass layoffs in a bid to avert bankruptcy. The social impact of this step is magnified by the fact that the corrupt local bureaucracy has stifled small business, so there are few alternative sources of employment. The city administration, paralysed by its dependence on orders from Moscow, flees its offices when faced by mass protests. When the local police fail to intervene against their fellow townsfolk, the demonstrators occupy administrative buildings and begin to create their own alternative power structures. The collapse of local authority is completed by the resignation of the regional governor. By the time the Kremlin has finally taken action to restore order by offering credit to the bankrupt employer, a similar chain reaction has started in “town M-sk.”

The fact that Gontmakher’s scenario became a political sensation was partly a result of the kind of bureaucratic ineptitude that he portrayed. A senior official of the government department responsible for overseeing mass communications sent a warning letter to Vedomosti, claiming that the article could incite “extremism.” In Putin’s Russia, this nebulous term is one of the markers of the limits of the permissible, and in theory the very existence of the newspaper was under threat. Legislation passed in 2006 outlaws incitement to extremist activity and public statements that excuse such activity. Although ostensibly directed against Islamist terrorism and skinhead violence, the anti-extremism legislation has been repeatedly invoked by the security organs in their campaign against the mainstream political opposition. Its application to Gontmakher seemed to mark a new stage in the suffocation of public debate. As the journalist Yuliya Latynina remarked, “If Gontmakher, a highly scholarly man, can really be equated with Bin Laden, I certainly do not know who can consider himself safe in our country.”

What makes the vilification of Gontmakher particularly ironic is the fact that officials from Putin’s office contacted this “extremist” to thank him for a “timely warning” that would be incorporated into the government’s crisis-management strategy. The lessons they learned may have been reflected in a decision, several weeks later, to send units of Interior Ministry troops from Moscow across six time zones to suppress protests in Vladivostok, where, as in Gontmakher’s “N-sk,” local forces could not be trusted.

The controversy surrounding Gontmakher reflects the ambivalence of his analysis. If he offers useful tools to Putin’s crisis managers, he has also become emblematic of an increasingly vocal faction within the Russian elite which is questioning the basic tenets of the authoritarian, corporatist state that emerged under Putin. One of the bastions of this tendency is the Institute for Contemporary Development, a think tank linked both to the presidential administration and to powerful business circles. It was launched in March 2008 by President Medvedev, who heads its board of trustees. Its director, Igor Yurgens, is the vice-president of Russia’s pre-eminent business lobbying association, the Union of Industrialists and Entrepreneuers.

In February this year, Yurgens used the occasion of the launching of a report on anti-crisis measures to propound a subversive thesis about the necessity of democratisation. He argued that in the years after Putin’s accession to the presidency “the social contract consisted of limiting of civil rights in exchange for economic well-being. At the current moment, economic well-being is shrinking. Correspondingly, civil rights should expand. It’s just simple logic.”

Yurgens’ “simple logic” is vehemently rejected by the architects of Russia’s “managed democracy.” The most strident is Vladislav Surkov, the Kremlin’s deputy chief of staff, who is widely regarded as the regime’s unofficial ideologist. During Putin’s second term, Surkov supervised the creation of the pro-regime youth movement “Nashi” and popularised the term “sovereign democracy” to legitimise uncompetitive elections and controls over non-government organisations. On 3 March, Surkov lashed out at the advocates of democratic reform in a speech to a conference marking a milestone in the history of “sovereign democracy”: the first anniversary of Dmitrii Medvedev’s victory in tightly controlled presidential elections. “Of course,” he declared, “this model will survive the crisis.” To justify his confidence, he extolled the advantages of strong government over the chaotic pluralism of the 1990s, when economic troubles inevitably precipitated the fall of governments. Mocking the pretensions of Russian liberals as “free people,” he contended that, if realised, their dream of liberalisation would lead only to the extinction of the remnants of liberty in Russia and the establishment of a durable dictatorship. “With all due respect for free people,” he sneered, “those free people would have stirred up so much trouble here that, afterward, someone who does not love freedom would have come along and introduced order for another 100 years.”

Surkov’s defence of the Putin model came the day after a more sinister attack on the liberals by Gleb Pavlovskii, a former dissident who is the Kremlin’s leading spin-doctor. In an interview with the pro-government newspaper Komsomolskaya Pravda, Pavlovskii argued that the real threat to the regime came not from the streets but from the enemy within, a “pro-crisis party” in state institutions who want to trigger “a little new coup,” a “farcical remake” of the failed putsch of August 1991 or Ukraine’s Orange Revolution. According to Pavlovskii, this “party” was numerically small, but it included “people at the pinnacle of the federal authorities, big business, circles in the capital, [and] some of the [regional] governors.” If the regime faltered, these turncoats would come into the open and attempt to instigate mass protests and assume the mantle of revolutionaries.

What the Putin regime’s apologists can no longer deny is the fact that the Russian economy is reeling from the double impact of plummeting oil prices and the credit crunch. Russia’s much vaunted gold and foreign currency reserves, the third-largest in the world before the crisis, may be exhausted by the end of this year. During the second half of 2008, the Russian stock market lost over 70 per cent of its value. Even Oleg Deripaska, Russia’s richest man and Putin’s favourite oligarch, has fallen on hard times. According to some estimates, his wealth contracted by 85 per cent; only a state bailout saved him from defaulting on loans to Western banks. Meanwhile ordinary Russians face rising unemployment and soaring underemployment. As demand collapses, factories are idling and many enterprises have reduced their workforce to a two or three day week.

The contribution of the Russian government to this escalating internal crisis is now a focus of bitter debate. At every opportunity, Putin and his entourage lambast the incompetence of the US government and the recklessness of Wall Street. For them, Russia is an innocent victim of an American contagion.

Read the rest of this opinion piece, published on 'Inside Story'.