Russia without Putin

Money, Power and the Myths of the New Cold War

Tony Wood

• Publisher: Verso
• Year: 2018
• Print ISBN:
  9781788731256
• eBook ISBN:
  9781788731270
• Topic: Política y relaciones internacionales
• Subtopic: Historia rusa

It is impossible to think of Russia today without thinking of Vladimir Putin. More than any other major national leader, he personifies his country in the eyes of the outside world, and dominates Western media coverage. In Russia itself, he is likewise the centre of attention for detractors and supporters alike. But as Tony Wood argues, in order to understand Russia today, the West needs to shake off its obsession with Putin and look at what lies beyond the Kremlin, to see Russia without Putin.

In this timely and provocative analysis, Wood looks beyond Putin to explore the profound changes Russia has undergone since 1991. He shows that Russia is not strong but desperately trying to create a space for itself in an increasingly globalized and competitive world, Putin's reign is based on very thin ice; he is highly dependent on a small handful of powerful men who prop him up. Beyond the rich suburbs of Moscow, Russia is a country that is only surviving because of what remains of the soviet economy and culture rather than being held back by it.

Wood reconsiders what kind of country has emerged from Russia's post-Soviet transformations. The introduction of the market in the 1990s was a failure than descended into kleptocracy. He shows that the revival of a new cold war is a myth. Russia's incursions into Syria, Ukraine and questions of collusion into western states are a sign of desperation rather than agression. Russia without Putin culminates with reflections on the paths Russia might take in the 21st century following Putin's re-election in March 2018. How will he placate the oligarchs who control the economy and how will he manage his succession, and protect his legacy?

CHAPTER 1

The Man and the System

WHO IS VLADIMIR PUTIN? And what can his personal background and experiences tell us about the country he has governed for close to two decades? There is a strange disproportion in the ever-expanding literature on the man: although a great deal has been published about him, we still know relatively little about his inner life, especially compared with other major global leaders.¹ He is both ubiquitous and elusive, a permanent public presence whose private world remains largely closed off. Still, there are a fair number of clues. The basic facts of his biography are well known, and were laid out in First Person, a book of autobiographical interviews published shortly after he became president in 2000. Surprisingly, almost two decades on, this carefully crafted document remains the principal source on his early life and career.²

Born in 1952 in what was then Leningrad, Putin grew up in a communal apartment with his working-class parents – his father was a wounded war veteran, his mother a factory worker. He himself recalls the tough milieu of the dvor, the courtyard between apartment blocks where childhood arguments were often decided by shoves or fistfights. Putin’s readiness to see insults, a kind of constant, coiled defensiveness, has often been traced back to lessons learnt on Leningrad’s streets. As a boy, he dreamed of becoming a spy. Cult Soviet TV programmes such as Shchit i mech (Shield and Sword) painted a romanticized picture of intelligence agents, and Putin claims he grew up wanting to imitate the exploits of the programme’s undercover hero. After studying law at Leningrad State University from 1970–75, Putin joined the KGB and worked for the agency for several years in his native city, then spent a year at the Red Banner Institute, the KGB’s intelligence academy in Moscow, from 1984–85.

In 1985, he was posted to Dresden, where by his account he carried out ‘the usual intelligence activities: recruiting sources of information, obtaining information, analysing it, and sending it to Moscow.’ The four and a half years he spent in the GDR were ones of dizzying change in the USSR, as Gorbachev’s perestroika launched a far-reaching process of reform. In retrospect it seems significant that Putin missed this time of political and cultural ferment – the brief window when it still seemed possible that the old system could gradually be changed for the better. Eventually, though, the reforms – and in particular the economic situation – escaped the Communist Party’s control, culminating in the disintegration of the Soviet Union at the end of 1991.

In the meantime, the USSR had withdrawn its support for the Communist regimes of the Eastern Bloc, which toppled one after another in the closing months of 1989. Putin, who shared a building in Dresden with members of the Stasi, saw these events unfold with alarm. He recounts burning papers ‘night and day’ and confronting a hostile crowd outside the door of his workplace. In the view of many experts, this experience led him to associate mass politics with the threat of disorder – a connection that might explain his apparent fear that Russia would be contaminated by the ‘Colour Revolutions’ that overthrew a string of post-Soviet regimes in the mid-2000s. (The same repulsion was evident in the Kremlin’s virulent response to the Maidan protests in Ukraine in 2013–14.) There can be no doubt, in any event, that the fall of Communism was profoundly disorientating for Putin. Perhaps most bewildering of all was the lack of instructions or communications from Moscow. ‘I got the feeling then’, he later recalled, ‘that the country no longer existed. That it had disappeared.’³

Putin has famously spoken of the fall of the USSR as a ‘geopolitical catastrophe’. Along with many other Russians of his generation, he seems to have felt keenly the sense of national humiliation that the Soviet collapse brought; one of his former spin doctors has described Putin as part of ‘a very extensive, but politically opaque, unrepresented, unseen layer of people who after the end of the 1980s were looking for revanche’.⁴ The resentment only increased during the 1990s, when the former superpower found itself mired in endless economic crises and political turbulence, and the state apparatus turned into a chaotic jumble of factions. But this lingering bitterness was not the only thing that defined Putin’s experience of the 1990s: the time he spent in the murky, overlapping realms of post-Soviet government and business also shaped his perceptions of how the new capitalist system really worked.

Putin returned to Leningrad in March 1990, and soon began working for his former law professor Anatoly Sobchak, first at the university and then in the city government. Sobchak was elected mayor in June 1991, at the same moment that the city switched its name back to St Petersburg. Putin was effectively Sobchak’s deputy, and was placed in charge of the city’s Committee for External Relations, making him the point of contact for all the foreign businesses rushing to make deals on one of capitalism’s newest frontiers. The Soviet planned economy had been smashed, and almighty struggles – sometimes literal gunfights – were unfolding over the pieces. The state’s grip on its economic infrastructure, its resources, even its borders had become shaky, and huge profits were being made from a whole range of illicit activities, from smuggling to extortion, from fraud to the seizure of state assets.

As one of the functionaries responsible for St Petersburg’s economy, Putin issued licenses to thousands of new businesses, and saw for himself how the grey area of legality left behind by the state’s collapse was creating fortunes for a sharp-elbowed few. He later described his role, euphemistically, as having to ‘solve a fairly large number of problems and tasks of interest to various business structures’.⁵ The city itself joined in the market free-for-all, forming dozens of joint-venture enterprises – one of which, overseen by Putin, involved a 51 per cent stake in all St Petersburg’s casinos, and apparently resulted in millions of dollars in cash being funnelled into private pockets rather than the city’s coffers.⁶

St Petersburg was desperately short of money at the time, but it did have plenty of raw materials – timber, oil, metals – so Putin devised a scheme to exchange these for much-needed food imports. But the food never arrived. This gave rise to a scandal that sheds light both on Putin’s methods and on the priorities of the system in which he was operating.⁷ According to a 1992 investigation led by Marina Salye, a member of the city council, there were serious irregularities in Putin’s scheme, which involved $92 million worth of contracts. This included enormous commissions – kickbacks allegedly worth a total of $34 million. Salye’s report was forwarded to the Russian Account Chamber, with the recommendation that Putin be dismissed, but no further action was taken. This was largely thanks to Sobchak, who apparently insisted the case be dropped. Putin himself later claimed he had been duped by the companies involved. But even on this generous reading, his oversight resulted in millions of dollars’ worth of resources being drained from the city at a time when many of its inhabitants were virtually starving. At worst, he had potentially been involved in a far more deliberate and cynical plan for private enrichment at the public expense. Either way, Sobchak kept him in the job.

A further aspect of this episode is revealing in retrospect: several of the people in the St Petersburg city administration who rallied to Putin’s defence in 1992 went on to play key roles in his regime after 2000. They included future president and prime minister Dmitri Medvedev; Pyotr Aven, who would become a prominent banker; the future justice and interior minister Sergei Stepashin; and the future head of the Federal Security Service (FSB) Nikolai Patrushev. Other figures with whom Putin forged important ties in the early 1990s include Igor Sechin, his aide in the city administration and later head of the state oil company, Rosneft; Matthias Warnig, a former Stasi officer who ran Dresdner Bank’s new St Petersburg branch – the first foreign bank to operate in the city; and the businessmen Yuri Kovalchuk, Gennady Timchenko and Vladimir Yakunin, who all signed lucrative contracts with the city on Putin’s watch.⁸

Personal connections like these are crucial to understanding how Russia works.⁹ In the Soviet period, informal influence, or blat – translated as ‘pull’ – often dictated access to scarce goods, housing or coveted jobs. Its use was widespread because it was so essential to getting by. What was distinctive about the way blat came to function in the 1990s, however, was that personal connections were increasingly used as a means of making money. Previously a way for ordinary people to get around the inadequacies of the planned economy, they now served the powerful, blurring the lines between state office and private enrichment, and entangling the formal rules of government in a web of informal connections. In Russia, in any contest between legality and personal loyalties, the latter have generally won out. As we will see, Putin’s entire career, from the 1992 food scandal to the present, is in some ways an illustration of this basic rule of post-Soviet politics.

In the summer of 1996, Putin briefly found himself at a loose end after Sobchak failed in his mayoral re-election bid. But Aleksei Kudrin, a former St Petersburg colleague working in Moscow – he would go on to be Putin’s finance minister from 2000 to 2011 – soon recommended him for a post in Yeltsin’s presidential administration, as deputy head of the Presidential Property Management Department. This was a highly sensitive role, placing him not only in charge of a sizeable portfolio of assets but also in the midst of a knot of crooked dealings. For example, one scandal over contracts with the Swiss construction firm Mabetex ultimately led to the arrest of his direct superior, Pavel Borodin, for money laundering in New York in 2001.

A virtual unknown in Moscow before his arrival, Putin proved adept at navigating the byzantine paths of Kremlin politics and, perhaps more important, showed a marked personal loyalty to his bosses and patrons. This quality no doubt smoothed his progress through the ranks of the Yeltsin administration, earning him promotion by March 1997 to head of the presidency’s Main Control Directorate (GKU), which monitored the implementation of executive decisions. In May 1998, he was given another sensitive job in the presidential administration, in charge of the Kremlin’s relations with Russia’s regions. He had barely started when he was switched in July to a much more prominent role: director of the FSB, successor agency to the KGB.

What part had the KGB itself played in Putin’s phenomenal ascent? Putin himself has said that, though he left the agency in 1990 when he returned to Leningrad, he remained in its ‘active reserve’ until August 1991, when a group of hardliners led by the KGB’s chief made a coup attempt against Gorbachev. At this point, Putin claims, he formally resigned. This interval is, of course, when he began working for Sobchak. There is some debate about whether the job itself was arranged for him by the agency, as a kind of mission to supervise one of the country’s rising politicians. Sobchak supposedly knew of Putin’s KGB connections, but thought they might prove useful.

Does this mean that the agency’s shadowy hand was also behind the rest of his career? Putin himself has done little to discourage the idea. In December 1999, not long after he became prime minister, he made a tongue-in-cheek announcement at a dinner commemorating the founding of the Soviet secret police: ‘I would like to report that the group of FSB officers dispatched to work secretly in the federal government has been successful in the first set of assignments.’ Six years later, in December 2005, he told another audience of FSB officers that ‘there is no such thing as a former KGB man’.

Yet these statements are part of an image Putin has deliberately cultivated, and taking them at face value means buying into the mystique he was trying to create. He himself never went especially far within the KGB’s ranks, and was never given the kind of sensitive, high-risk assignments that he had aspired to as a boy; he remained something of an outsider in the Soviet spy world. The main achievement of his time as head of the FSB was a drastic downsizing that cut staff at the organization’s headquarters, the Lubyanka, by a third – scarcely the behaviour of a man bent on restoring the might of his alma mater.¹⁰ Putin’s KGB training and years of work within the institution would undoubtedly have given him certain skills and encouraged particular habits of mind. But perhaps equally important, in the context of his political career, are the similarities between secret-police methods and the routine practices of post-Soviet business: the use of blackmail and compromising information – kompromat – to apply pressure; manipulation of the legal system; consistent use of threatened or actual violence. In short, many of the features of Putin’s Russia that have been traced to some shadowy KGB conspiracy were widespread under Yeltsin; indeed, they created the environment in which Putin came to power.

If Putin’s ascent up to mid-1998 was remarkably rapid, the elevation that followed was almost shocking in its suddenness. In August 1999, a man of whom few Russians had even heard was appointed prime minister. At the time, the Yeltsin government was lurching from one crisis to the next, and Putin was its fifth premier in the space of a year. The fallout from the rouble collapse of 1998, when financial contagion from the Asian Crisis spread to Russia and eventually prompted a panicked currency devaluation, was one cause of the continued political instability. But just as important was Yeltsin’s search for a reliable successor who would guarantee him immunity from prosecution after leaving office. It had become clear that Evgeny Primakov, who served as prime minister from September 1998 to May 1999, was not going to oblige. Worse still, Primakov showed signs of wanting to investigate irregularities in the privatization process Yeltsin had forced through a few years earlier. Primakov’s successor, Sergei Stepashin – one of Putin’s colleagues from St Petersburg – lasted barely three months before being discarded because he lacked the charisma to be a plausible presidential figure.

When Yeltsin designated the apparently quiet, colourless Putin, many Russians initially thought he, too, would be a mere placeholder. But behind closed Kremlin doors, the coterie around Yeltsin, known as The Family, had already decided Putin would play a much more significant role. Here Putin’s loyalty to his patrons was decisive: he could be relied upon to shield Yeltsin and his clique from prosecution. Sure enough, one of the first measures he took as acting president, in the first hours of the year 2000 after Yeltsin unexpectedly stepped down, was to sign a decree guaranteeing the ex-president immunity. The founding act of Putin’s presidency was an elite pact designed to shield his predecessor from prosecution.

But fidelity to Yeltsin did not in itself make his rise to supreme office inevitable. A broad public consensus behind Putin’s candidacy still had to be forged. It was the Second Chechen War that, in a matter of weeks, transformed Putin from mere cypher to president-in-waiting. In late August 1999, an incursion into Dagestan by Chechen Islamist warlord Shamil Basaev and his troops, followed by a series of bombings of apartment buildings elsewhere in Russia, provided the pretext for Russia to launch another invasion of the separatist republic in the North Caucasus. The First Chechen War, unleashed by Yeltsin in December 1994, had ended in August 1996 in an ignominious stalemate, seen at the time as definitive proof of the decline of Russia’s power. Its army had been fought to a standstill by bands of separatist fighters while images of senseless destruction streamed into living rooms across the country. Russian bombers had turned the Chechen capital, Grozny, into a sea of rubble and caused tens of thousands of civilian deaths.

Three years on, a key part of Putin’s popular appeal was his commitment to reversing the humiliation inflicted in the North Caucasus – famously summed up in his vow to ‘wipe out’ Chechen separatists ‘in the outhouse’. Warmly endorsed by the major Western powers, the assault on Chechnya – labelled an anti-terrorist operation – provided the springboard for Putin’s rise to the Kremlin, sending his approval rating from a mere 31 per cent in August 1999 to 80 per cent three months later.

The Chechen campaign was the stage on which Putin tested and developed his presidential persona. This took time to emerge fully. It is striking now to watch footage of his first address to the nation as acting president, on New Year’s Eve of 1999. Putin speaks haltingly, as if unprepared or lacking in conviction; but beneath the stilted delivery, there is a determination that would not have escaped viewers’ attention. His sobriety, too, is in stark contrast to the rambling, drunken incoherence of Yeltsin’s speech that same evening. Putin’s low-key style was well received by much of the Russian public, who had grown tired of the high-sounding but empty rhetoric of the 1990s’ politicians.

Putin also spoke clearly, and for the most part in the idiom of a well-educated person. In this he was unlike both Yeltsin and Gorbachev, who like many Communist-era Party bosses had accents that bespoke their proletarian or peasant origins. Putin’s language was more that of a bureaucrat or manager, replete with technical-sounding euphemisms (‘business structures’) and references to ‘solving problems’. His occasional swerves into street language – these became cruder and more frequent when he was under pressure – may have alarmed some in the liberal intelligentsia. But they were often excused or even admired by others, seen as glints of steel amid the clouds of phrase-mongering offered by other politicians.

The story of Putin’s ascent tells us a certain amount about the man who would come to dominate Russia after 2000. But for understanding how he would then rule, perhaps more important than his personal trajectory is the context in which his rise took place. The consensus that carried him to the presidency in March 2000 was to a large extent a negative one. Putin’s initial success was founded less on a positive evaluation of what he was than on approval of what he was not: he emerged as an apparent alternative to ...

Table of contents

• Cover Page
• Halftitle Page
• Title Page
• Copyright Page
• Dedication
• Contents
• Introduction
• Chapter 1: The Man and the System
• Chapter 2: Faces of Power
• Chapter 3: Red Bequests
• Chapter 4: An Opposition Divided
• Chapter 5: After the Maidan
• Chapter 6: Russia in the World
• Epilogue
• Acknowledgements
• Notes
• Index