| December 19, 2007 |
Summary
The Kremlin is buzzing with rumors of further reshuffles, restructurings and dismissals by Russian President Vladimir Putin after the latest ejection of the prime minister and Cabinet on Sept. 12. During almost eight years in office, Putin often has used confusion and chaos to consolidate power over the once-unwieldy Russia. The only thing that is certain in all the disarray is that Putin is in the driver's seat, and he is determined to lead Russia back to its status as a "Great Power."
Analysis
Since Russian President Vladimir Putin unexpectedly ousted Prime Minister Mikhail Fradkov and his Cabinet on Sept. 12, leaks of reshuffles, restructurings and dismissals within the government, businesses and state institutions have abounded, leaving most politicians and power brokers wondering what Putin will change next. The Fradkov dismissal is just the latest in a long line of similar moves Putin has made since he came to power in 2000. The only certainty in the years of disarray and confusion is that Putin has a plan that runs through the calculated chaos and is using it to continue shaping Russia politically, economically and socially in order to restore the country's "Great Power" status.
In the 17 years since the Cold War ended, Russia's story has been one of precipitous and disastrous economic, political, military and demographic decline. This led to the widespread perception that Russia was no longer an influential global power and could be ignored. Putin's goal since taking power has been-as the first step in a grand plan to prepare Russia for future challenges-to reverse these crises and perceptions in order to inspire the respect Putin feels Russia still deserves. No one thought the former "Great Power's" devastating decline could be reversed, particularly not under a president who took the reins unexpectedly.
Moments of great and greater chaos have occurred regularly throughout Putin's presidency. Though each one left people baffled at the time, from a distance his moves make much more sense, especially in the context of Putin's strategy to maintain control and implement his view of Russia. Putin's unpredictability allowed him the freedom to make some painful and drastic changes inside and outside Russia in order to begin repairing the deep problems that forced Russia into obscurity.
Calculated Chaos
Early in his presidency, Putin shocked everyone by passing reforms at a breakneck speed. Days after his inauguration, he began removing the oligarchs from national political power. He completely scrapped the system that gave Russia 89 regional territories, each of which had its own power broker or oligarch and its own set of laws. (It was estimated that under former Russian President Boris Yeltsin, more than 20,000 regional laws were passed without the Kremlin's knowledge.) Putin created seven federal districts that each had its own federal representative appointed by the president. Within his first year in power, Putin had assumed direct control of the overall administration of the country. Of course, this created disarray and fear among Russia's governors, whose resistance prompted Putin to scrap gubernatorial elections and handpick each instead.
Putin then began removing Yeltsin supporters from their influential positions in the government and big business, even though the "Old Guard" had helped Putin ascend to the presidency. In a radical shake-up in 2001, Putin ditched a slew of ministers who had been loyal to Yeltsin-including the defense, interior, atomic energy and security ministers-and began building his own team. Since the Cabinet had only been in place under Putin for a year, this move was unexpected and left people wondering how much further Putin would purge the government. Moreover, the shake-up revealed a theme: Putin's team would consist mostly of former security officials (customarily KGB, like Putin) and people who served with Putin in St. Petersburg's regional government (nicknamed the Petersburgers). The new president was placing people he had known and trusted in the past, as well as those who thought like him, in important posts.
But just as the government got comfortable under Putin, he began a new series of moves meant to solidify his hold on power and keep everyone guessing. Putin shook up the government again in 2004, naming the relatively unknown Fradkov as prime minister. Fradkov is neither a Petersburger nor a former spook; he is a banker allied to an oligarchic clan previously barred from the Kremlin. Putin had broken the mold again by creating a new group of technocrats faithful to him and completely unbalancing the recently rebalanced oligarchic power structure. Of course, the technocrats could not get too comfortable either, as illustrated by Putin's recent decision to replace Fradkov with new Prime Minister Viktor Zubkov.
Big Business
The most infamous group Putin has targeted is the oligarchs who rose to power by rallying behind Yeltsin and his politicians. In return, Yeltsin allowed the oligarchs to usurp many state assets in the early 1990s. Putin saw the oligarchs' rise and influence as a threat to Russia's national security, and early in his presidency, the oligarchs realized they were the next logical target for Putin's purges.
Not long before Putin's re-election, there was doubt about who wielded more power in Russia: the president or the most powerful of the oligarchs-Mikhail Khodorkovsky. A string of investigations and criminal charges diminished Khodorkovsky, his lieutenants and his giant oil firm Yukos. By mid-2005, Khodorkovsky was sitting in jail with a decade-long sentence and Yukos was being swallowed piece by piece by Putin's state-controlled energy champions Gazprom and Rosneft.
Other oligarchs fled after their initial clashes with Putin, such as billionaire Boris Berezovsky, a dominant economic force who controlled auto manufacturer Avtovaz, oil firm Sibneft and the airline Aeroflot. Some became very friendly with the Kremlin and Putin, willingly selling their valuable assets to state-controlled groups. For example, Roman Abramovich sold his oil firm Sibneft-after acquiring Berezovsky's stake-to state natural gas behemoth Gazprom in 2005.
The Military
During his first year in power, Putin also began eyeing the military for complete restructuring-something that horrified military leaders, who historically had enjoyed much political power. But the sinking of the Kursk submarine in 2000 and the military's inability to get the Chechen insurgency in hand were national embarrassments for Russia, and Putin took them as clues that the military had a huge overhaul coming its way. The problem was that the military had largely decayed, not just in its capabilities but also in its foresight, since quite a bit of research and development had been abandoned. Also, the chaos surrounding the fall of the Soviet Union in the early 1990s left Russia with a military that was not only unaffordable but also in pieces and scattered around other former Soviet states. Russia's military was highly convoluted, backward and utterly unorganized-leaving it scrambling to gain any control, much less to have a strategic mindset.
The first sign of restructuring came in 2001, when Putin appointed the first civilian Russian defense minister: Sergei Ivanov. Though this outraged and confused the military leaders, there was no uprising against Ivanov because he and Putin were backed by the Russian Federal Security Service. The military establishment feared Ivanov and allowed Putin to begin restructuring the military and defense establishment.
Ivanov began reorganizing and purging the military's top posts and defense-related companies, reining in much corruption and unprofessionalism. The glut of high-ranking officers was scaled back, allowing Putin and Ivanov more control. Ivanov also began scaling back the countless defense manufacturers, vertically integrating them into large national champions-such as Rosoboronexport and United Aircraft Corp.-with a clear focus on specific projects and on functioning efficiently, maximizing productivity and quality, and minimizing waste and corruption. Also, Russia began actually pouring funds back into these defense companies, thus reviving manufacturing and production. This allowed for more military equipment, along with some new gadgets, such as the ballistic missile submarine Yuri Dolgoruky.
This has been one of the slowest changes Putin has had to make, though the military is one of Russia's most difficult, largest and most important sectors. Furthermore, Putin must illustrate that Russia is not trying to return to the Soviet military model but is planning and forming a modern military. This is not to say that the military is back to its former glory, but its terrible erosion and decline has been blocked and the turnaround is under way.
The Backlash?
Many ask where the backlash against Putin is. Those who have been hung out to dry are upset, but either Putin has masterfully intimidated them into silence or they have been forcefully silenced. This was seen recently in the takeover of energy company Russneft, whose owner, Mikhail Gutseriev, silently fled to Turkey and then the United Kingdom after charges were brought against him in August.
Moreover, the Russian people and many within government institutions have seen some very good things come out of Putin's consolidation of power. For example, the masses have seen Russia's abundant petrodollars pouring into social programs and construction projects, while the military has been kept content with new equipment. Many of these perks seem like quick fixes, but they have held off countermovements and revolutions thus far, and Putin's popularity within Russia exceeds 80 percent.
What Comes Next?
With each sweeping move, Putin has shown that Russia's decline is no more. This does not mean he is done, though. As Putin showed by appointing Zubkov as prime minister, he still has plenty of tricks up his sleeve, and there are still certain geopolitical imperatives for Russia's resurgence. Putin's possible moves include:- Further purges of the Kremlin's positions and people
- Balancing or wiping out the increasingly dangerous competition among the Russian energy companies
- Purging the highly tangled banking sector and pulling it directly under Kremlin control
- Consolidating the vast remaining companies in the defense industry
- Creating "national champions" outside of energy and defense, such as auto manufacturing, minerals, metals, diamonds and gold
- Clearing out the rest of the Caucasus militancy
- Breaking down ethnically autonomous regions, such as Bashkortostan and Tatarstan
Overall, Putin's moves have done what he wanted most: made Russia impossible to ignore. Though Russia has made quite a bit of noise since Putin came to power, much more is yet to come. But no matter what unexpected moves occur, Putin's path for Russia is clear, and he is determined to blow through all the commotion to keep the country's focus forward. Putin is definitely in control, and he will remain in charge whether or not he runs for re-election in 2008. Regardless of how much real progress his shake-ups are creating for Russia, the perception that Putin is creating a strong and intimidating Russia has made the country matter once again.
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| Posted by Stratfor.com at 1:23 PM |
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