This is a reprint, with permission, of my Stolypin column from Intellinews Business New Europe: the original was published on 16 November 2015. I have made one change as in hindsight I wished I had used ‘Normal Russia’ instead of ‘Real Russia’ for the essentially working substructure. On what I call ‘fantasy fatigue,’ Andrew Wilson has drawn an entertaining football analogy with his ‘Mourinho Effect.’
There have been many attempts to understand Russia by subdividing it. Is it a feudal Russia of rulers and ruled, or the four Russias posited by scholar Natalya Zubarevich, divided geographically and socio-economically? My own sense is that alongside such formulations, we also need to see the country and society divided into three, and the competition between them – one as much philosophical as practical – is likely to become all the sharper in 2016, defining Russia’s future trajectory, and the eventual post-Putin order.
The Three Russias
However little attention it may get in foreign coverage, Russia has a working, rational state. This is not some neo-fascist imperialism, nor an out-of-control kleptocracy where everything is plundered and funnelled into foreign bank accounts. There are inefficiencies, there is petty corruption – apparently on the rise again, as a result of officials’ shrinking real incomes – but in the main, the country works. Roads are paved, refuse is collected, teachers teach and police officers police. Most people essentially want to do their jobs, live – that perennial Russian dream and mantra – a “normal” life.
However, above Normal Russia squats the smaller, but vastly richer Kleptocratic Russia. This ugly parasite is much of the time happy to let its host do its thing, but has ultimate authority over the structures of state, routines of life and workings of justice, when it chooses to exert it. This is the realm of the embezzling senior officials, the pampered sons and daughters of the mighty, the businesspeople who depend as much on sweetheart deals and covert cartels as any real acumen.
Yet this country cannot simply be dismissed as a kleptocracy, because at the very top of the stepped ziggurat of national power lies the smallest and, perhaps, most dangerous and pernicious incarnation: Ideological Russia. It is hard to doubt that, whatever his motivations during his earlier presidencies, Vladimir Putin is driven now not by personal economic interest but an ideological programme, a vision of a nation restored to its due place in history and the world (and, by extension, a vision of his appropriate legacy). He has surrounded himself with a small coterie of like-minded cohorts – or at least figures willing and able to play that role – and they are ultimately in charge.
The Kleptocrats get to reach in to Normal Russia when they choose, to divert a procurement contract here, dictate a court decision there, but the Ideologists in turn have the final say. Ever since Crimea, the primary thrust of national policy has been towards confrontational geopolitics which have hit at the heart of the kleptocrats’ interests, grinding an already-suffering economy downwards and limiting their scope to move themselves and their assets at will. Beyond that, whereas in the past these two blocs collaborated smoothly, there are now indications that the Ideologues see some of the Kleptocrats and their parasitic habits as a growing problem in an age when dwindling resources need to be focused more directly on the ideological project. Witness, presumably, Russian Railways chief Vladimir Yakunin’s dismissal and the increasing evidence of a not-as-bogus-as-usual anti-corruption campaign on the way.
Of course, no such simple pattern can be exact and accurate. There are individuals high up in the system, from example, from cabinet ministers to Central Bank chair Elvira Nabiullina, whose technocratic instincts seem closest to those of Normal Russia. Likewise, even Ideologists still seem happy to help their children find comfortable and highly lucrative positions, from whence to steal with savage abandon. However, as a broad model for trying to understand the disparate and often contradictory forces working to shape Russia’s future, this seems to have some value.
Widening gaps in 2016
Although it is probably wishful thinking to expect dramatic and positive outcomes over the course of the coming year, for a variety of reasons 2016 is likely to see the relationships between the three Russias become increasingly tense, laying the groundwork for change to come.
On 18 September, elections will be held for the Duma, the lower house, which will in many ways also be a referendum on the regime. There is no question of United Russia (and its affiliated pseudo-parties) losing their control over the chamber, both because of the propaganda campaign likely to precede the vote and also, where necessary, judicial rigging of the process and the count. We can, for example, expect to see the more vocal and effective Kremlin critics systematically excluded, vilified and pressurised. How the vote will count, though, is that it forces the state to mobilise the masses – and the extent to which it has to struggle to produce the results decreed by the Kremlin will provide insiders with an index of true popular discontent.
After all, Putin’s sky-high personal ratings tell us little about the public mood. Arguably, the growing rash of local labour and social protests, from truckers blocking roads to demonstrations against rising utilities prices, are a better measure, as inflation, wage pressures and the effects of social spending cuts all come to bite.
The Ideologists may be tempted to crank up their propaganda about a Russia isolated and embattled, but there is a real risk of ‘fantasy fatigue’ if this is just a matter of intemperate words and invented threats. On the other hand, manufacturing or introducing Russia into crises abroad to give substance to the hype, from a renewed Ukraine campaign to picking fights over the Arctic sea lanes, would not only deplete dwindling resources but likely only deepen its economic and diplomatic isolation.
This is unlikely to please the Kleptocrats, squeezed between economic stagnation, popular dissatisfaction and Kremlin adventurism. However, at present political power trumps all in Russia: the rich are not so much wealthy in their own right so much as the temporary stewards of those assets until the day comes when the Kremlin seeks to reassign them. To this end, they have a perverse incentive to want to see genuine rule of law and secure property rights come to Russia, and an end to its geopolitical struggle with the West.
An archetypal bankrobber wants the police force to be inefficient and corrupt – until he is rich enough to own banks, at which point he wants the state to protect his ill-gotten gains. So too, a kleptocratic generation of Russian oligarchs, minigarchs and boyar-bureaucrats who have done well thanks to Putin may well come to feel that their interests have come to diverge from his.
And what about the poor Russian people, the perennially disenfranchised? There seems little prospect of their rising against the regime, literally or metaphorically (rising, after all, for what?). Instead, theirs are the weapons of the weak: refusing to conform, turning to the underground economy, passively resisting to behave as their masters would want. This does not go unnoticed, and will be visible – at least to those who see the real, uncooked books – in indices from labour unrest and productivity to suicide rates and support for local civic initiatives.
In itself, this will not force change on the elite. However, it may scare the Kleptocrats and technocrats. If the economy worsens, if the elections prove tougher to massage, and if the Kremlin looks increasingly willing to sacrifice their interests in the name of an ideological project, at some point they will begin to look for ways to protect them.
And here’s the inevitable prediction buried in all these “year ahead” articles. It may well not come in 2016, but whenever Putin is replaced or succeeded, it will not be with another Ideologist, but with a Kleptocrat. The interests of the elite will take precedence over the masses’ but also over Russian geopolitical grandeur, and this new regime will eagerly seek to mend bridges with the West.
As a generation of ruthless exploiters gives way to their more pampered and less sharp-toothed children, the pressure to create reliable protections for property rights (however that property may have been acquired in the first place) will only grow. Meanwhile, ordinary Russians and their technocrat fellow-travellers in the elite will be looking for change, and thus the possibility – no more – is that a Kleptocratic presidency may in turn give way, some day, sometime, to a generation finally eager to make real the promises of 1991, of building genuine, working political and economic democracy. Perhaps.