Kremlinology 2012

Disaster Politics

The real story behind Putin's return to the throne: Russia is headed for economic catastrophe, and nothing he does can stop it.

MOSCOW — On Saturday afternoon, Vladimir Putin announced that he would finally sync reality with formality and become Russia's actual president yet again. Once the initial sting wore off -- Putin seems on track to rule as long as Stalin -- cooler heads began to prevail. This will bring clarity and end the schizophrenia of the tandem contradicting itself, the thinking went. Putin was talking like he understood reform was necessary -- and even doubters had to admit that he was the only person with the political capital to accomplish it.

Just two days later, however, the ground shifted yet again. Dmitry Medvedev, coming off a couple of really bad days, very publicly fired the finance minister, Alexei Kudrin: perhaps the one person in the Russian government whom Western investors see as credible, the one who saved Russia when the bottom dropped out in 2008, the one holding the Russian government back by the scruff of the neck from total economic disaster. Kudrin's abrupt firing stunned everyone and completely destroyed the thesis that Putin's announcement would calm down Russia and its uneasy economy. Everyone knew there were power struggles going on behind the curtain, but rarely have there been so many elbows and knees jutting through, and, in recent weeks, actual people flying out.

What is going on? In short, no one really knows. But one thing is clear: Putin's return is not going to usher in a new reign of stability. If anything, the system is as unstable as it's ever been, and no one can tell when -- or into what form -- it will settle. And with the country's most competent economic official heading for the door while Russia stares down the barrel of another massive recession, it's probably not going to be anything good.

After Putin's surprise announcement on Saturday, everyone was asking: Why so soon? The substance of the announcement, of course, surprised almost no one. It's been clear for months that Putin was positioning himself, via motorcycle gangs and half-naked girls, for a comeback. But the timing was shocking. Going into the United Russia party congress, the conventional wisdom was that nothing about the presidency would be announced. It was too soon to hobble Medvedev, too soon to end the intrigue that only reinforces Putin's position as the country's arch arbiter. If you recall, last time around this announcement came in December; so why September, a full six months before the presidential elections? One explanation is the impatience of elites, evidenced by a growing unrest in the system that culminated with the implosion of the Right Cause project less than two weeks ago: Mikhail Prokhorov, the Kremlin-curated party's leader, bucked control and publicly slammed the very secretive curator of Russian politics, its eminence gris: Vladislav Surkov. It was a major, messy fail for the Kremlin, and it deepened the sense that the system has ossified to the point of inoperability.

The other, perhaps more urgent, explanation is the impatience of the market. At least $50 billion have leaked out of Russia this year. That's just one of many miserable economic indicators that point to big trouble ahead: the ruble at a two-year low, sliding domestic stock indexes, a budget that could barely be balanced even if oil were still at $116 a barrel (today, it's $107). Siberian oil fields are in decline, it'll be decades before Arctic drilling comes online, and the center of world oil production is shifting increasingly to the Americas. Then there's the looming economic crisis in Europe scraping at the door. None of it, frankly, looks very good.

So Putin's goal on Saturday may have been to step in and put a firm hand on the wheel, to assure everyone that the system was in fact functional at such a sensitive moment. The day before, behind the scenes of the first day of the convention, one of his strategists told a European news channel, "It's not the time to experiment with big political change in times of such economic uncertainty." Putin's return for, potentially, 12 years was supposed to signal an end to talk of such an experiment. The speeches he made at the conference -- including the one about government's duty to give "bitter medicine" -- were supposed to reassure foreign investors that he would implement urgent reforms. (Or, as the famous Kremlinologist Olga Kryshtanovskaya told me the other day, "Modernize or die.")

And for a day or so, this strategy seemed to be working. People spoke of clarity, of stability, of concrete reforms. "Putin is a person of balance; he is constantly balancing the conservative with the liberal," said Kryshtanovskaya. (Putin is, in fact, a Libra.)

"During [Putin's] first two terms, there was so much money that the feeling was, why do you need anything like political parties?" Nikolai Petrov, a political analyst at Moscow's Carnegie Center, told me after Putin's speech. "Now the situation is more complex and the system has to become more complex to accommodate it, and Putin can do it more effectively. And when the system lines up under him, you get rid of the complexity and decoration that was making it ineffective."

The Kudrin fracas completely turned this notion on its head. On Sunday morning, Moscow awoke to the news that Kudrin, in Washington at the time, had already started fulminating against the swap, which would make Medvedev his new boss instead of Putin. "I do not see myself in a new government," Kudrin said to reporters. "The point is not that nobody has offered me the job; I think that the disagreements I have [with Medvedev] will not allow me to join this government." On Monday, before a meeting of the Kremlin's Modernization Committee, Medvedev -- who had long clashed with Kudrin on budget issues, particularly increased military spending, which Kudrin has been staunchly against for years -- awkwardly, angrily read out a nasty pink slip from his iPad screen.

Kudrin's departure set off a new round of conspiracy-theory-spinning (was he just trying to swipe at Medvedev for taking a job many thought would be his? Was this a long-term strategy to become head of Russia's central bank?), until Tuesday night when he issued a new and more broadly explanatory statement to the press. He revealed that his kamikaze statement in Washington had been carefully considered. He also admitted that, due to his long-running fiscal conflict with the Kremlin, he had handed in his resignation to Putin back in February. Putin rejected it, telling Kudrin he was needed for the election season.

So, basically, Kudrin left when he felt the election season was over: the day Putin announced his return. "On September 24, the power structure in our country was determined for a long time to come," Kudrin wrote. "And I determined things for myself, too, after explaining my position." What was his position? "Over the course of several months, despite my numerous -- and public -- objections, there were decisions made vis-a-vis the budget that, without a doubt, increased the risk to the budget," Kudrin wrote. These, he added, would then spread to the rest of the domestic economy.

The whole situation, it turns out, was far simpler than anyone had thought: Kudrin was just fed up and, quite likely, did not want to be held responsible for a policy he couldn't control, especially on the eve of another economic meltdown. Kremlinology had become its own obfuscation. And now it looks like we're set to miss the biggest story in many, many years: The rigid system is teetering, and its key components are breaking down. Oil money is running out, the economy is sputtering, social discontent is growing, all of the massive problems that the Kremlin first threw money at and then ignored in favor of pointless political intrigue are coming home to roost. And the charades that the Kremlin used to be so skilled at pulling off in order to release political pressure are now falling flat because very senior-level participants are, essentially, defecting. There have been two such implosions in the last 10 days and, given the fact that they've only made the system more untenable for those who remain, there's no reason that they'll stop. 

Things are eerily simple this time around because things are eerily grim.

As for why Medvedev had to fire Kudrin even though Kudrin has publicly criticized him before, that's simple, too. Kudrin -- probably intentionally -- hit Medvedev at his weakest moment, which is why much of Medvedev's rant was about the fact that "No one has abolished discipline and subordination."

"Anyone who doubts the course of the president or the government can openly appeal to me with a proposal," Medvedev went on. "But I will put an end to any irresponsible chatter -- up until May 7," he said, referring to his last day in office.

In the meantime, everything's still more unstable than ever. Today came the news that the number of Russians living below the poverty line increased by over 10 percent in just the first half of this year. And Kudrin is still out of a job: evicted from his official dacha, a photo of his boxed-up office surfacing on Twitter.

While Kudrin packed his things, Medvedev was in Cheliabinsk, watching a military training exercise. Military spending, he said afterward, would always "be the government's highest priority.... Whoever doesn't agree with this can go work somewhere else. That's an order!" And so Kudrin did, perhaps because he discovered that there's only so much you can do to save a sinking ship, no matter how many guns it has.

YANA LAPIKOVA/AFP/Getty Images

Kremlinology 2012

The Return of the King

It's official: Vladimir Putin is Russia's once and future president. So how come we're surprised all over again?

MOSCOW – Back in December 2007, with his second presidential term running out, Vladimir Putin decided not to violate the letter of the Russian constitution. Instead, he chose to step down, become prime minister, and nominate one of his old St. Petersburg buddies, an aide named Dmitry Medvedev, for president. Back then, a good joke started to make the rounds: Russia, 2023. Putin and Medvedev are sitting in one of their kitchens, drinking and shooting the breeze. "Listen," slurs Putin. "I've lost track again. Which one of us is prime minister, and which is president?"

"You're the president now, I think," slurs Medvedev.

"Well," slurs Putin, "then it's your turn to go and get more beer."

It was a prophetic joke, and one that turned out to be all too accurate Saturday, when Medvedev announced the latest switch: Putin will return to the presidency in next year's election and Medvedev will take up the prime minister's post. And yet the joke was somehow lost on us over the last four years as we (rightly) let other debates get in the way, from the long silly distraction of wondering who was actually in charge (answer: Putin, of course) to the disputes over whether to believe Medvedev's talk of modernization. Even despite these last few months, when it became clear that Putin would come back, we managed to be surprised all over again when it actually happened.

"It was the most obvious and therefore the least probable move of the ones I could have predicted," said Andrei Kolesnikov, the Kommersant journalist who, in his intimate chronicles of Putin, has become the man's hagiographer. We were standing in the press section of the grandstands at the convention for the United Russia ruling party, looking down on the swarm of thousands of delegates filing their paper ballots in unanimous support of Putin's party platform.

"We all waited for this moment for a long time, and still this is a surprise precisely because it's so obvious," he said. "It'd be nice to have some actual surprises because the situation is just so stable" -- Putin's watchword -- "that when they made the announcement, I got really sleepy. Really. Because this is for keeps."

While Kolesnikov drifted off, the Twittering masses of Russia were either euphoric or in despair, depending on their political leanings. The despairing liberals, a dwindling crowd after two decades of dashed post-Soviet hopes, were utterly winded and deflated. Why does God hate Russia, one asked. And then everyone started doing the math: How old would we be when Putin finally leaves office in 2024 (a date that supposes he serves two more consecutive terms, which were extended to six years back in 2008)? Russia's digital airwaves quickly filled with a younger generation bemoaning their lost youth: Many of them will be pushing 40 by then, and they've already spent their last 12 years under his watch.

"When Putin finishes his second six-year term, I'll already be 58," one older blogger wrote. "Almost my entire life will have been spent with him." He punctuated this with a frown.

But Kolesnikov, at least, was still seeing a glimmer of opportunity in this latest Kremlin machination. "I hope we'll see a new Putin, this is my only hope," he told me, "because the earlier iterations have exhausted themselves."

In 2000, he and two other journalists (one of whom later became Medvedev's press secretary) authored a book called In the First Person, an as-told-to account from Putin of his life. At the time, Putin was a little-known former KGB agent newly installed in the presidency by an ailing Boris Yeltsin; though obscure, Putin from the start talked of his plans to restore Russian pride after a post-superpower decade of economic collapse and political intrigue. Periodically, Kolesnikov said, he goes back and reads certain sections and is amazed to see how prophetic it all was, how much of what Putin promised back then he's since delivered. "Even the idea of monarchy," Kolesnikov noted. "He said that, it may sound weird, but the idea of monarchy is appealing to me because a monarch doesn't have to worry about elections and can focus on the well-being of his subjects, so it's not such a bad idea." And even this idea, Kolesnikov noted, "is being realized."

No doubt the fact that Russia is staring down another looming economic crisis makes this return -- to the presidency or monarchy or whatever we call it -- rather problematic. The ruble dropped precipitously this week, and Putin and his finance minister have been squabbling in public in recent days over whether the state can deliver on its mounting social obligations without increasing taxes, or fomenting social unrest. Then again, given Putin's predilection for talking tough but not necessarily doing much, not to mention the fact that many of Russia's current problems -- corruption, cronyism, Byzantine politics -- were cemented into place during his reign, it seems the course he's choosing is to plow ahead and change as little as possible. Which, if you think about it, is a rather bold move, too.

"Putin is a very talented politician," said Aleksei Chesnakov, a United Russia official who was one of Putin's key strategists during his first two terms. "He never repeats himself and yet always remains himself. A politician's style is set early and forever, and his style, his manner of making decisions are well-known, and they will remain the same." Chesnakov assured me, however, that "Putin has always been a keenly responsive politician" who will continue to adapt to conditions as they develop. ("The child hasn't been conceived yet, and you're asking if it'll be a great mathematician," he told me, when I pressed him on what we can expect from the new Putin epoch.)

That remains to be seen. For now, though, Kolesnikov's monarchy thesis -- which, by the way, has more than a few supporters among the Russian elite -- seems to be coming to pass, but with more subtlety than the name would suggest. Russia has shed its still-new adornments of modernity and is once again coming out as a deeply conservative government based on personal ties.

"On one hand, it's a good thing because any ambiguity has now been removed," says political analyst Masha Lipman, referring to the "whither Putin, whither Medvedev" schizophrenia of the last four years. (This, by the way, will also make American foreign policy easier: just one man to deal with.) "On the other hand," she points out, "for everyone who has been thinking and writing about political modernization in Russia, the hope of this happening has been definitively negated." That is, even though few ever really believed Medvedev had the power to modernize without Putin, there was a hope that his installation in the Kremlin was the trial balloon for loosening the reins. Apparently, the balloon has burst.

But that leaves more questions than answers. Why has it failed? How has Medvedev failed, if he was acting the entire time with Putin's approval? Why will he be more effective as prime minister than as president? Neither the president nor the prime minister -- match the names to the titles as you see fit -- explained this in their speeches on Saturday, perhaps because the answer is obvious and yet cannot be uttered in polite company.

Gleb Pavlovsky, who helped Putin get elected in 2000 and who was an advisor to Medvedev until he was fired in May, had another question. "Medvedev never planned to say no to a candidacy for a second term," Pavlovsky told me. "What happened? Was he pressured? Did they make him an offer he couldn't refuse? He didn't explain his refusal in any way." The explanation, from where I sit, lies in that joke from late 2007, and in past columns I've written here: Medvedev, despite his haggard, emotional appearance at the United Russia convention Saturday, has always known that it was not his decision to make. And that once Putin made the decision, he could do nothing but accept it. That was the bargain he struck in 2007, a bargain that would be hard to call Faustian: The end was clear from the beginning.

So what will happen now that the end and beginning are one? Some are predicting a new wave of immigration -- or a class of dual-citizenship holders -- for those who had other things in mind for the next 12 years. Others see Medvedev, as prime minister, shouldering the blame for the next wave of economic crisis. ("Prime ministers are easy to replace," notes Lipman.) Still others see Putin steering the ship of state for a few more years and stepping down early. But Kolesnikov sees 12 more years for Putin, "because it's the first version" again. Pavlovsky, though, sees altogether different man: "The Putin of 2000 was a politician I loved, but that Putin is dead," he says. "And the Putin of 2007 is gone. Today's Putin is a zombie."

What's certain, however, is that the office of president -- buttressed as it was by the degradation of every other institution over the last decade -- has lost quite a bit of its legitimacy. And United Russia, created a decade ago to be the country's new ruling party, has apparently been dealt a body blow. It's being slowly swallowed up by the nebula that is a new entity set up by Putin known as the National People's Front, while United Russia will now be led through the parliamentary elections by Medvedev, a man who was just publicly stripped of his scepter. That may be good news for people who see United Russia as the Party of Crooks and Thieves, but where does that leave Russia? "I think we'll see a decline in the authority of the government, people will see it as silly, as odious," says Pavlovsky, "and power will have to lean increasingly on those who depend on it for wealth, for status. That's not a healthy scenario, but it will be with us for a long time."

Which is perhaps why so much alcohol was traded hands via Twitter in the aftermath of Saturday's big announcement. Someone lost a couple beers on their presidential bet, others won cases of cognac. I won a bottle of Hennessy. Others just wanted to get to drinking away their shock at suddenly facing what's been hidden in plain sight these four years. At the very least, it might pleasantly confuse them about where the rotating door might spin in the future.

NATALIA KOLESNIKOVA/AFP/Getty Images