An Assessment Of Putin’s First Months In Power

The areas where Putin already acts independently are easy to spot: they all bear the unmistakable mark of Putin’s KGB world view. Putin came to power with the support of the hard-line military, but, once elected, he dismissed 60 generals…

By Dr. Françoise Thom (*) — July 23, 2000 —

When one considers Putin’s recent behavior, one is struck by a recurrent pattern. Putin starts a move and, encountering fierce resistance, is forced to retreat, sometimes quite ignominiously. A good example was the Yakovlev affair, when Putin wanted to replace the incumbent Petersburg major, launched the candidacy of V. Matvienko and had to back down a few days later. Then there was the Babitski scandal. More recently still, Putin wanted to name a man of his Petersburg clan, D. Kozak, as the State prosecutor, but under the pressure of Voloshin and Berezovski he had to accept their candidate Ustinov. Another example was the threat to bomb Afghanistan. The latest was the Gusinski arrest. What conclusions can be drawn from such a pattern? There are two logical possibilities. Either Putin, unlike his communist predecessors, unlike even the most mediocre of Bolshevik leaders, is unable to assess correctly the « correlation of forces. » In that case his behavior can be explained by a lack of intelligence (a possibility which, in my opinion, certainly cannot be excluded up to now). Another explanation is that Putin is but a puppet of outside forces, which would account for his hectic and sometimes incoherent behavior: many hands pulling many strings, Putin jumps and falls convulsively, thus giving the impression that he is not the arbiter but the tool of various and sometimes competing forces. Many observers recall the situation at the end of 1997, when the fighting between the clans lead to a war of « compromat », a war to take control of the most profitable sectors of the economy and of the cash flows .

What are the main clans fighting for influence over the president? First there is the Petersburg clan, divided into two group: the « economists » and the FSB. The Petersburg FSB group is the only reliable support for Putin. The second clan is the Moscow clan (Voloshin and Berezovski). What is the « correlation of forces » today between the clans? At first the Kremlin Moscow group seemed to get the upper hand. Their man, Kasyanov, heads the government and is directly responsible for the most profitable sectors – arms exports (Rosvooruzheniye and Promexport), customs, property and state reserves. Kasyanov has been one of the main engines behind creating a state bank for crediting agriculture, Rosselkhozbank, out of the ashes of SBS Agro’s branch network. He has persuaded Putin to call on the Central Bank to halt bankruptcy proceedings against Promstroibank in order to use the bankÂ’s structure as the basis for a state bank for crediting industry. Both banks would be managed by the Agency for Restructuring Credit Organizations, or ARKO. Kasyanov became chairman of the board of the agency in mid-February, just before the fortunes of both banks began to change. The Moscow group has also taken control of the key Siberian aluminum industry. Alexei Kudrin, a member of the Petersburg clan, is responsible for treasury income, but Kasyanov couldnÂ’t bring himself to hand over responsibility for the tax police to Kudrin and kept it for himself. The Petersburg clan has of course counterattacked. The last example of this struggle is the rivalry over the control of the Pension Funds which the Petersburg clan managed to snatch away from the Moscow clan of Kasianov, under the pretext of integrating the financing of the Pension Fund in the unique social tax.

But what is really important is what happens in the presidential administration. Here there are signs of a decline of the Moscow group: The duties have been redistributed amongst three of VoloshinÂ’s deputies; Medvedev, Sechin and Surkov. Medvedev and Surkov are obviously engaged in a strategic struggle for full control over the administration. Voloshin is helping Surkov as much as he can, but the members of PutinÂ’s team already sense they have control in the Kremlin. This decline explains why Berezovski becomes increasingly critical of Putin’s policy.

Putin’s Real Political Face

All the false starts that we have mentioned above, all the similarities with the late Yeltsin reign, should not hide the pattern which emerges when one takes a little distance from the immediate events. PutinÂ’s activity during his first weeks of presidency is impressive. He has simultaneously begun an administrative reform, a fiscal reform and launched an offensive against some oligarchs.

The Putin reform reveals to what extent, under all its democratic trappings, the Russian power structure has remained Soviet in essence: there are no real institutions, only competing centers of power dividing the ruling elite. As Stalin in the early 20ies transformed the Secretariat of the Central Committee into his personal power base, finally taking over the government at the end of 1930 when he replaced Rykov by Molotov, Putin has undertaken to create a new center of power, the so-called « vertical of power », leaving the government to the infighting of the oligarchic clans, while devoting his own efforts to the reform of the regional structure, much more important in his eyes. It is sufficient to compare all the fuss around the so called economic programs of the government, and the blitzkrieg manner in which Putin introduced his regional reform. The purpose of the creation of seven new federal districts announced on may 13th is to « ensure the exercise by the president of the Russian Federation of his constitutional powers, to make the work of federal bodies of state power more effective and to improve control over compliance with their decisions« , according to the presidential press service. There is a new provision: a presidential envoy « analyses the law-enforcement agencies » performance and… personnel placement in them. » The Soviet vocabulary reveals the Soviet mental outlook in this decision. « The new vertical of power » will remind the previous Soviet hierarchy: each functionary will be dependant on his superior, but he will be compensated by the possibility of oppressing those under him. The governors lose their independence, but in return they get the control of municipalities. The Putin reform puts an end to self-government in Russia. So far, Putin doesnÂ’t mind the government being weak, destabilized by permanent strife. The real center of power is the presidential administration and the Security Council where the heads of the new federal districts will sit (cf. secretariat of the CPSU and the Politburo). It is to be emphasized that the Security Council also covers economic issues.

The main trend is quite clear: Putin is intent upon neutralizing all the centers of independent power in the country: the Duma thanks to the creation of his own power-party and to the alliance with the communists, the Council of Federation thanks to the regional reform, the oligarchs and the media.

The areas where Putin already acts independently are easy to spot: they all bear the unmistakable mark of Putin’s KGB world view. Putin came to power with the support of the hard-line military, but one of his first moves when elected was to dismiss 60 generals to show who was the boss (may 15th).

Putin’s obsession with unity is also a symptom of his Bolshevik cast of mind. « I consider it my sacred duty to unite the people of Russia, to gather citizens around clearly defined tasks and aims and to remember, every minute of every day, that we are one nation and one people. We have one common future. » (Inauguration speech May 5th). Putin is feverishly looking for an « idea » to unite the Russians. In a talk with film director Mikhalkov, Putin mused: « Nikita Sergeyevich is right in what he said, I think. He said that without an idea there can be no great state and even went on to say that we are a great state. I want to continue this and say that if this is the case – and it undoubtedly is – then there is an idea. There canÂ’t not be if we are a great state. With your help, we must all simply become aware of what that idea is… » No wonder Putin emphasizes the role of the Orthodox Church: « The Russian Orthodox Church plays an enormous role in the spiritual unification of the Russian land after many years of life without faith, moral degradation and atheism, » he told Patriarch Alexei II. According to Putin, the arts had suffered financially after the fall of the Soviet Union because the government had considered its role to consist merely of lifting political controls and allowing culture to flourish « of its own accord. » « We quickly discovered that such a (laissez-faire) approach leads to degradation and decline in culture, which means a weakening of the state itself« Â’. For Putin, differentiation of society leads to the splitting of power; and the splitting of power leads to laxness. Very tellingly, in his Memoirs he ascribes the demise of the Soviet empire to laxness, « lack of will ». Putin is busy to build a one-party system, called Unity (the communists and Union of rightwing force are left for window-dressing). Unity has now 130 000 members; the Putin team wants to reach one million till the end of the year. Putin is busy infiltrating with snitches and agents all potential opposition. He is also consolidating the hold of the state on the Church, and in a typical KGB way, attempts to control all religious groups in Russia with the help of hand-picked leaders. There is now evidence of direct Kremlin interference in the internal affairs of RussiaÂ’s religious observant Jews. RussiaÂ’s chief rabbi Adolf Shayevich was forced to resign so that his post can be filled by a rabbi more loyal to Putin. The Russian culture ministry signed a protocol with the ultra-Orthodox Federation of Jewish Communities in Russia, pledging to promote Jewish culture. The Jewish congress, the oldest and largest Jewish body in Russia, says that the rival federation—which held its first convention last year and is fostered by Berezovski—represents no more than five percent of the Russian Jews. In the 17 May issue of the Moscow daily ‘Nezavisimaya gazetaÂ’, the widely respected religious journalist Maksim Shevchenko reported how the Moscow Patriarchate is lending its support to the creation of a new Christian political party that will function essentially as yet one more propaganda arm for PutinÂ’s Kremlin.Â

As for freedom of the press, let me quote minister of Information Lesin: « The defense of the state from the free mass media is a pressing problem at present.« 

What are the chances of Putin successfully dismantling the Yeltsin system and installing his own authoritarian order? There are four forces in Russia today: the oligarchs, the central bureaucracy, the regional elites, the force structures. The Kremlin has caused its enemies to close ranks. It has drastically weakened its base among the elite. But the central bureaucracy and the force structures strongly resent the influence of the oligarchs and of the regional elites, their monopoly on resources. So Putin has a real power base. He also enjoys strong popular support and can use the Russian nostalgia for a « strong hand. » With the oligarchs he can strike a deal: immunity in exchange for political docility. The main danger for Putin is his own proclivity for mistakes: « dizziness from success« , the Soviet-like sycophancy that surrounds him will still increase the loss of the sense of reality which affected each Kremlin leader. And when Putin will have to face real setbacks we can expect that he will be a bad loser.

The Economic Policy

There is much talk about the liberal leanings of the Putin team. There is also every reason to remain skeptic about the implementation of the new economic programs that Putin propagandists like to trumpet to Western investors.

First for Putin prosperity is not an end in itself, it is only a way to reinforce the state, which is not a very liberal view. Attending a meeting with the Ministry of Atomic Energy in March Putin said for example: « The atomic industry sector is one of our strategic interests, and its success will determine our status as a world power« .

Second it is very unlikely that the huge Russian bureaucracy can be stopped meddling in the economy. In fact one observes a tightening of Kremlin control on the profitable industries: in may the government set up a state watchdog to oversee the bulk of Russia’s alcohol production. Rosspirtprom will give the government huge influence over any of the partly state-owned alcohol businesses, which most of them are. Officials will be able to make key industry appointments and clamp down on manufacturers not making adequate profits. On June 30 Putin tightened his grip on Gazprom, getting Dmitry Medvedev elected as board chairman in place of Viktor Chernomyrdin. The Gazprom annual general meeting was something of a triumph for the Kremlin, which also succeeded in reducing management’s control of the board. Gazprom management, which has held full sway for much of the past decade, saw its representation on the 11-member board decline to four seats from five, while the government increased its representation to five seats.

What about Western investors? The Russian elites have already shown that they would rather have absolute control over a shrinking pie than a less-than-complete share of an expanding one.

So what will be left of the liberal program? What always happens in Russia: the rank-and-file Russian will be fleeced once more. Social programs will be cut, excise taxes – which in Russia are levied by the government independently, without parliament and are shouldered by the end consumer– will be increased. These include a twofold (!) increase in the tax on cigarettes, a sixfold (!!) increase in the tax on gasoline and unspecified fat new taxes on alcohol. In the economic field also PutinÂ’s policy seems highly risky : at the same time he is alienating many elites, and needing support from below, Putin is introducing measures which will necessarily lead to increased hardships for the population. When he realizes this the temptation will be strong to abandon all the liberal aspects of his economic policy and to revert to a « mobilization » style economy better assorted to his « patriotic » leanings: the « strong state » Putin is intent on creating will find its « raison dÂ’être » in ruling the economy.

Foreign Policy

The Russian elites have an increased consciousness of their countryÂ’s weakness. Therefore the main objective is now to avoid getting caught while organizing « active measures » against the West, especially the US. (this is by the way a « Tchekist » feature of Russian foreign policy which was already present under Primakov). This strategy was recently described by M. Deljagin, a former member of the Gaidar team, now head of the Globalization Institute: « Russia can not afford openly to confront the USA and NATO,..[Therefore] … Russia must seek an informal strategic alliance with Europe, South – East Asia, Japan and China, but leave to stronger countries the most dangerous and painful role of directly confronting the USA. . ..Russia must take to underground resistance, confront the aggressor in such a way that he wonÂ’t be able to see MoscowÂ’s hand behind his setbacks. « .

Among the Russian elites there is a growing feeling that Russia is structurally unable to integrate in the world economy. There is a strong leaning toward autarchy (which does not mean isolationism, because the Russian elites are well aware that they need inputs from abroad). Russian emphasis on European policy stems directly from this autarchic tendency: the development of Russia is possible only if Russia is coupled with Western Europe. Serguei IvanovÂ’s recent comment should be interpreted in this light: « Economic interests will dictate our actions. RussiaÂ’s economic interests lie mostly in the West European territory. » A remark Putin made to president Clinton last November is even more revealing: « You have North and South America, you have Africa and Asia. Why canÂ’t you at least leave us Europe?  » From the Soviet times the Russian elites perceive Europe as a small peninsula of the Eurasian heartland, a borderzone (« rimland » in geopolitical vocabulary) which needs only to be freed of the « Atlanticist » presence of the US to adhere spontaneously to the continental bloc dominated by Russia. Eastern and Western Europe are not perceived as subjects. They are perceived as a battlefield between Anglo-Saxon and « Eurasian » influence. In that antagonistic view, only Germany is taken seriously, because it can be lured as a partner into building the continental bloc.

Russia needs to make Western Europe dependant on Moscow, in order to erode Western European political autonomy. For this it is necessary to eliminate American presence from Europe, to foster agreements between Western Europe and Russia in the oil and gas sector (and we know from the examples of the Baltic states and Ukraine that when in position of force Moscow uses this as an instrument of political pressure) and third to gain a foot in the common European defense projects.

European Policy

In European policy, the tactic of the Putin team strikingly remind the tactics used by Soviet diplomacy, first in 66-9, then by Gorbatchev in 86-87. The idea is to create a competition among European states for MoscowÂ’s favors – what secretary of State Acheson called « the mad race to Moscow« . The final aim of this strategy is always the same: to build a Germano-Russian axis. Germany is the only country which exists in Europe in MoscowÂ’s eyes, whatever flattering things Russian diplomats may say to the British and the French. Always the key is Germany: « Germany is RussiaÂ’s leading partner in Europe and the world, » Putin declared in Berlin. « Politicians in Moscow and Berlin are obliged to take history into consideration and promote the positive traditions in the Russian-German relationship ». According to communist newspaper Zavtra, Putin proposed the Germans a political-ideological alliance, drawing a line under WWII, implying the historical rehabilitation of Germany, and implying that Germany, like Russia, would always be a target of the sionist lobbies and of the US. The arrest of Gusinski was thus allegedly a signal to the German nationalist circles on which the Putin administration stakes to build the new Rapallo relationship.

As in Soviet times, Moscow is pushing forward the Europeans to torpedo American defense initiatives using a mixture of flattery and threats: « The European position with regard to US plans for deploying a national ABM system acquires great importance for Russia at this stage. We perceive the German leadershipÂ’s opinion on this issue to be rather constructive and reasonable. ItÂ’s very important that European states support the preservation of the 1972 Russian-US ABM Treaty, thus opting for more substantial global strategic stability. As is known, Washington is unable to independently implement its plans without allied support, e.g. that of Great-Britain, Denmark and Norway, in the first place. By deploying specific elements of the projected US national ABM system on their respective territories, these countries run the risk of becoming embroiled in a process that would entail the unpredictable destruction of strategic stability. They might pay a very high price for this. You see, Russia would be forced to study the possibility of scrapping its START and INF-Treaty commitments, after being officially notified about US intentions to abrogate the ABM Â… » Putin told in an interview to Welt Am Sonntag at the eve of his visit to Germany.

In a state leaning toward autarchy, economic expansion always means subjugation of the neighbors. For Putin the priority is obviously to restore Russian control over CIS states. This is another reason why the German-Russian relation is crucial: only with German consent to Russian hegemony on the CIS and the Baltic states is the restoration of MoscowÂ’s influence on those areas possible. In August 1918, the Bolsheviks signed with Germany the Berlin treaty, which gave to Germany numerous economic advantages, one quarter of the production of the Baku oilfields, in exchange for the end of German support to Ukrainian and Caucasian independence (excepted Georgia). This precedent should be kept in mind today. On June 15, during his visit to Germany, Putin warned that the ambitions of the former Soviet Baltic states of Estonia, Latvia and Lithuania to join NATO, if realized, would bring the Atlantic alliance to the Russian border. « If a country like Russia feels threatened, that would destabilize the situation in Europe and the whole world, ». He called instead for the Organization for Security and Cooperation in Europe to be upgraded into a full-blown regional security forum.

At the same meeting with German businessmen, Putin pushed ahead with the promotion of his proposal to establish a joint European anti-missile defense system. Warning that U.S. plans to set up its own limited national defense system could lead to a new arms race, Putin commented « together, we can avoid that. Every European country must have the opportunity to take part in European security policy. » He added that Russia believes that a joint European system is possible « technically and technologically » and noted that Moscow has concrete technical proposals. « All we need is the political will, » he concluded.

Putin is counting on the Germans to introduce Russia in the future integrated European defense. A not unrealistic hope, judging from chancellor Schrà¶derÂ’s comments during PutinÂ’s visit: « We must integrate Russia in Europe on the economic, political level, and on the level of defense and security ». Michael Steiner, the chief diplomatic adviser to Mr. Schroeder, insisted that Germany was acting for Europe in seeking a « strategic partnership » with Russia. Participation of Russia in European defense would lead to a voice in the decision-making process, and that would mean that European forces could act only in MoscowÂ’s interests.

PutinÂ’s KGB past leaves a clear imprint on his diplomacy. Typical is the hypocritical way he dodged the question of a visit of the pope to Russia during his Italian trip. Personally he would have no objections, he told the Italians, but this has to be agreed with the Orthodox Church. This was preceded and followed by attacks on the Catholics in Russia by state and Orthodox Church authorities. On 11 May, gun-toting tax police wearing ski masks streamed into the Jesuit-run Inigo Center in Novosibirsk, seizing documents, videos and computer equipment. The Jesuits, who use the center’s television studio to make religious programs, were kept in a room for four hours while police searched the premises. Following PutinÂ’s visit to Rome the head of RussiaÂ’s Orthodox Church made a fresh attack on Roman Catholic conversions in Russia.

The emphasis on manipulation, the overestimation of manipulation in international relations will be the main weakness of Russian diplomacy, which fails to take into account the deepest trends of international relations because it has no hold on them. The second weakness of Russian foreign policy is still clan infighting in the domestic field: confrontation among the Russian elites has often led to the neutralization of otherwise promising foreign policy plans. As long as Putin has not achieved his operation of « Gleichschaltung » of Russia this factor will fortunately remain.

Conclusion: Implications of the Gusinski Affair

« Putin has strong grass-root support, but this support is not organized« , Kremlin political strategist G. Pavlovski claimed in a recent interview. Launching a war against the hated Yeltsin oligarchs is a way to operate a junction between the « silent majority » and the Kremlin leader. No wonder there was such unanimity among the oligarchs to defend Gusinski. ORT anchor Sergei Dorenko, who is known as « BerezovskyÂ’s bulldog, » has relentlessly targeted GusinskyÂ’s Media-MOST holding company. But he appeared in an NTV studio on the night of GusinskyÂ’s arrest. Dorenko went on to attack the « robots » of the former KGB, who he said had started to rise up upon hearing « magic music » from the Kremlin. During his own program Saturday on ORT, Dorenko continued to blame « mutant law enforcers » for GusinskyÂ’s arrest. Dorenko said he had been told by one « secret service employee » that « if these oligarch-Jews donÂ’t leave for warm islands themselves, we will send them to Novaya Zemlya. »

But there is more in this affair than the beginning of a war on the oligarchs. Gusinski has always been considered by the « patriots » as the « avant-garde of the new world order », an advocate of the « open society ». The Gusinski affair indicates the beginning of a process which must not be misunderstood in the West: not the elimination of the oligarchs in Russia, but the elimination of the Yeltsin oligarchs and their replacement by a new Putin oligarchy – an oligarchy forged by the KGB, nationalist, anti-Western and ambitious.

Françoise Thom

(*) Dr. Thom teaches History of International Relations and Cold War at the Sorbonne University in Paris. Famous Sovietologist, writer and lecturer, she first published « Communism: Newspeak » in French « La langue de bois » in 1987 (Julliard); « Le moment Gorbatchev » (Hachette) in 1991 and « Les fins du Communisme » in 1994 (Criterion) among other books.

  1. Moscow Times, May 23, 2000.
  2., June 9, 2000.
  3. June 20, 2000.
  4. In an interview in Komsomolskaya Pravda on June 8, 2000, Serguei IVANOV declared: « The recently adopted new National Security Concept for the first time openly stated that internal threats dominate over external threats in Russia. We are not embarrassed to say that threats to constitutional and economic security, including the threat that some governors may become too independent, worry us more than anything else at the current stage of national development.« 
  5. Mikhail Fradkov, the expert in trade, was appointed first deputy secretary of the Security Council.
  6. The new governmental initiatives regarding the military, such as the cancellation of benefits in payments for public transportation, payments for public utilities, and so on, are waiting for their turn. In his interview to Krasnaya Zvezda on June 7, Finance Minister Alexei Kudrin said that implementation of monetary compensations after implementation of the new tax and cancellation of such social benefits as the free use of public transportation, low payments for public utilities, and so on, « are necessary to balance the budgets of all levels, and to give money for education, health care and so on to the local budgets. » After having got the satisfaction of « rubbing off the Chechens in the loo« , the military will take their turn in the same loo.
  7. Source: NTV International, Moscow in Russian 1500 gmt, June 12, 2000.
  8. Keston Institute, Oxford, UK Letter from the director, June 2000.
  9. « I also have the information about the newly launched FSB recruitment of students in institutions of higher education. Students are being forced to sign agreements of cooperation with special services, their relatives are being threatened, some are being expelled from school for declining to cooperate or for not agreeing that fastÂ…Some people were told, that if you don’t provide us the information we need, then we might send you to fight in Chechnya. » June 15, 2000. Radio Ekho Moskvy Interview with Grigory Yavlinski.
  10. Moscow Times, May 17, 2000.
  11. See L. Shevtsova « Celovek krossword » Novaja Gazeta, June 29, 2000.
  12. Nezavisimaya Gazeta, June 15, 2000.
  13. He served under Putin back when he was a deputy mayor in St. Petersburg in the early to mid-1990s.
  14. Moscow Times, July 1st, 2000.
  15. But Gazprom will benefit a major tax break: a cut in natural gas export tax rates from 30 percent to 15 percent.
  16. Mikhail Deljagin, « Kto poseet veter, tot poznet buryu, » Moskva ,No.9, 1999. Quoted in Viktor Yasmann’s excellent article « Russia Between Geopolitics and Globalization« , RFE/RL March 14, 2000.
  17. Komsomolskaya Pravda, June 8, 2000.
  18. Quoted by: André Fontaine « Pourquoi l’Occident soutient Poutine« , in Le Monde, March 20, 2000.
  19. This is why Russia plans to triple nuclear power-generated electricity by 2030: Gazprom, the gas monopoly wants to concentrate more on the gas export market. Gazprom is a trump card in the German-Russian game.
  20. International Herald Tribune, June 17, 2000.
  21. June 20, 2000.
  22. The Independent (UK), June 11, 2000.
  23. Reuters, June 10, 2000.
  24. As it was in Soviet times.
  25., June 14, 2000.
  26. Zavtra, May 24, 2000.