March 19th 2012,
In the wake of the presidential elections, commentators across Russia and the world have been asking how Vladimir Putin will govern Russia in his third term. How will he respond to the rise of an increasingly critical urban middle class? Is he about to recast himself as a reformer (“Putin 2.0″), or will he crack down on the unrest as a populist autocrat? Finally, will he imitate reform but actually maintain the status quo?
A mixture of the last two options looks most plausible. The rhetoric of reform will be pushed once again to the fore but the system will remain unchanged. Just as was the case with the Medvedev “liberalization,” ”Putin 2.0″ looks likely to prove a non-starter; a convenient lie designed to provide the illusion that change may on the way in a society that is (mostly) aware that this is not true, but also one where many people are keen to keep up the pretence of reform.
In this regard, it is not much of an exaggeration to say that political and economic reform in contemporary Russia are “being implemented” in the same way that the communist utopia was “just a few years away” during the late Soviet period. In both cases this narrative serves the same purpose: A legitimizing tool that can be trotted out by those with an interest in keeping the existing system in place in the face of popular scepticism. In both cases the message is essentially the same; you are part of a “greater project”; stay the course; things will improve gradually; there is no need to rock the boat.
But the fact that issues of property rights, the promotion of small and medium-sized business culture, and especially corruption persist after 12 years of Putin strongly suggests that serious change is unlikely. Indeed, for an indication of the source of much of Russia’s corruption, we need look no further than Angus Roxburgh’s analysis of the extraordinary good fortunes of Vladimir Putin’s friends from his Saint Petersburg youth, and the Ozero dacha collective. (Strongman, I.B. Tauris 2012). Arkady and Boris Rotenburg, Putin’s erstwhile judo partners, each now have assets worth $1.75 billion. Yuri Kovalchuk, from the Ozero collective is worth just under a billion dollars. There are many other similar examples.
More broadly, Roxburgh notes, “…by far the biggest obstacle to foreign investment (or the creation of an international financial center in Russia) can be summed up in one word – corruption – a word so complex that one leading Russian businessman told me I would never, as a Westerner understand it. “Theft,” he said, “is not theft as you know it. It is the entire system – the political system, the business establishment, the police, the judiciary, the government, from top to bottom, all intertwined and inseparable.”"
In this regard, Professor Alena Ledeneva (of University Collage London) has argued that the Putin corruption systema is fundamentally unreformable, and will remain in place until a change in the political or economic situation provokes a collapse. Given the evidence presented above, the continued popularity of the government, and the involvement of large sections of Russian society in various corruption networks, the re-election of Vladimir Putin is unlikely to herald a period of reform. Rather, a better case can be made that Putin has become captive to a system he helped to create, and will be unable to introduce the reforms Russia needs without alienating these constituencies.
Nonetheless, change is certainly coming, because the middle class is growing, and Russian society is changing. But the tipping point is years away. The oil price is again on the rise, and so social spending can remain high. This will be enough to placate large parts of the population. Many people are living materially better lives, and indeed have more freedom than Russians have enjoyed throughout almost all of their history.
Additionally the current system has the backing of the FSB, an organization which acts in a manner closer to an arab mukhabarat than western Security Services, and which sees the protection of the regime as a key priority. Therefore, in addition to the (already evident) shift towards renewed state media restrictions and manipulation, the FSB will not hesitate to use all of the many tools at its disposal (surveillance, subversion, kompromat) to ensure the opposition remains weak, divided and marginalized.