He is back!
putin3
Joera Mulders
September 24, 2011
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Conservative thinking prevailed. Strongman Putin will run in the March elections and barred an alien invasion he will be Russia’s next president. I admit being taken by complete surprise, so it is time for some serious rethinking.

The main reason I thought Putin would not return to the presidency is that I didn’t expect him to risk his legacy. For many western observers Putin has always been a negative force. Most Russians however see him as a force for the good.

Since his ascent to power average pensions have increased from 750 rubles in the year 2000 to 8529 rubles by the end of 2011. The percentage of poor has decreased from 29% in 2000 to 12.8% in 2010, even while the income below which one is considered poor was raised from 1210 rubles in 2000 to 5902 rubles at the end of 2010. The rich in the meantime only got richer. All across the board a decade long 10% annual growth of average disposable incomes has given Russians the opportunities to buy themselves a better quality of life.  For a population that was kept from luxury products in Soviet times and plunged into poverty in the 80’s and 90’s, Putin’s first decade has been a welcome respite. In the West we tend to think that Putin’s power enforced popularity. In fact it has been his popularity that created his power.

By running for president again, Putin takes a big risk.  Material well being can satisfy only up to a certain point. In the coming decade that part of the population that has achieved a sufficient standard of financial well-being and now expects more of their leader will continue to grow. Six years is a long time. The balance will gradually shift and Putin risks loosing his popularity and thereby his power.

Putin could have chosen a different option, gradually retreating from the responsibility of day to day affairs, while living off his legacy and sustaining his popularity as father of the action and champion of the poor with his trademark publicity stunts.

So what made him decide to take the helm once again?

It is clear that Medvedev disappointed. The plan must have been for Medvedev to mend relations with the West and attract foreign investments by improving Russia’s image abroad. The latter didn’t happen. The financial crisis may suffice as a partial excuse only. Investors foremost value security and guarantees. Medvedev hasn’t been able to provide enough of it. The failed deal between BP and Rosneft is a telling story.

Medvedev’s warmer relations with the West didn’t yield tangible results. Russia has still not become a WTO member. Despite the reset, the United States continues to build its missile defense shield in Europe and now Turkey. What’s more, many Russians feel that Medvedev betrayed Russian interests and global peace by not trying to block NATO’s military intervention in Libya. Russia has reasons to think that only strength commands respect.

On a more general level, it should also be noted that the appeal of the West as a model of development has taken severe blows because of the financial crisis and Europe’s indecisiveness in dealing with debt crisis of some of its member states.

Domestically, Medvedev’s presidency was characterized by liberal and technocratic ideas that did not materialize. His strategy to fight corruption by admitting the problem did break the taboo on discussing corruption, but thereby also increased public perception of the scale of corruption and open anger with the state of affairs. Medvedev’s strategy counted on the empowerment of society. In a way the Russian people let him down.  From the point of view of the state his efforts have been halfhearted. Perhaps a strongman can do better.

The same can be said of his police reform. Again, Medvedev counted on the police apparatus to rid itself of unwanted elements in the re-attestation process. This process however may very well have increased corruption, giving the nepotist and powerful elements in the apparatus the chance to get rid of critical and unwanted elements.

The prime example of his technocratic approach was the decrease of the number of time zones, a very unpopular decision that deprived many Russians of hours of daylight, but would supposedly improve governance and business. The idea was partly abandoned and completely forgotten by the media. Its possible benefits were never articulated.

Medvedev’s reluctance to show off his achievements has always puzzled me. With hindsight, one could say he perhaps never intended to run for president again. That view however is too simple.  Any politician should count his achievements. The reforms of penitentiary system, for example, have been very successful, but these reforms got very little attention in the media. His domestic PR could be called a failure.

One striking example were Medvedev’s remarks during Cameron’s recent visit to Moscow. The Russian president said that his corruption drive was not a fig leaf to improve Russia’s image in the West, but a real process for the benefit of the Russian people. Why then did he choose a meeting with a foreign leader to say this. Why not do more to convince his own people?

Lack of tangible results from Medvedev’s part, dormant fears of the liberalization or perestroika 2.0 he symbolized and the lack of an alternative must have increased public and elite pressure on Putin to return. Himself, he must have considerable reasons to think that he can do better.

Furthermore,  it is no secret that we live in uncertain times. A global recession may be at hand. The Arab spring is descending into chaos and Russia fears the consequences of the withdrawal of US troops from Afghanistan. Unemployment fighters may very well move to hot spots in Central Asia and the Caucasus.

Putin’s strongman leadership may very well be in need in the years to come. The question however is whether he is able to reinvent himself as a president for the times to come. Will his trusted medicine work under the new conditions? 

One indicator is that the advice on strategy 2020 revision, which Putin commissioned  himself has been quietly buried. The ideas put forward spoke of the necessity for reforms favoring the development of the creative class and mid sized businesses over budget spending and social benefits. Putin’s recent campaign rhetoric however is a continuation of his previous politics; further promises of income growth.

Now that we know that he will take full responsibility again, this spending spree can longer be interpreted as mere election rhetoric. It will have a lasting effect on the policy choices in the years to come. In other words Putin is betting on being able to run a slight budget deficit sustained by oil and gas export, accompanied by modernization in the form of large scale state projects.

This is modernization not innovation. Russia may continue to buy foreign technology to upgrade their own production lines, a strategy that is working for the automotive industry. This means more Plastic Logic e-readers, a rather poor Russian copy of the Kindle, but no Russian iPad.  For the short and mid term this is a realistic vision. On the longer term  Putin may risk stagnation. In Russia 6 years is a long time.

This begs the question what Medvedev’s role will become in the new political makeup. There is no reason to suggest that he will not be able to continue parts of his innovative agenda. Medvedev may still be of much use to Putin, in particular when it comes to spearheading unpopular economic reforms. If needed he can be discarded later. The problem for Medvedev is that he lost the independent power he commanded as potential second term president. Much depends on the team he can assemble in his government. Will this new role help him to get tangible results? If not his demise can be rather swift.

Politically, Russia embarks on a conservative path. The opportunity to use the coming parliamentary elections to grow a constructive opposition as counterweight to the dominant United Russia party has been missed.  A more plural political system would have provided more room to channel discontent in society. By discarding the option of an evolutionary path in favor of a conservative solution, Russia in fact risks a revolutionary outcome. The conservative approach partly build on the fear that an evolutionary path would be politically too dangerous may very well backfire in the sense,  that being deprived of a moderate alternative, the disappointed middle class in the larger cities will turn to the more radical opposition for hope and solutions. Succesful opposition demonstrations in turn may lead to repressive countermeasures that could very well prove to be the oil on the fire.

Politics respite, change is still up to the Russian people themselves. And even though the news of Putin’s nomination of a third term, may lead you to think otherwise, Russia is changing very quickly.