July 2000 Vol. 221 No. 7  International Politics

Jacques Sapir,  Contributing Editor

Russia’s Putin makes his first moves in new term

For weeks and even months, the most frequent question you were asked when coming back from visiting Moscow was, "Who’s Putin?" Again and again, you could answer, that who the man is was irrelevant and that the right question was "What will he do as Russia’s President, and what can he do?" – the same question that was thrown to you.

"Putinology" has replaced the old-fashioned "Kremlinology." Even psychiatrists, or people pretending to be psychiatrists, were enrolled in what seemed to be the most important quest in the West since the Holy Grail. If Vladimir Putin looked sad at a meeting, he was described as a strong man. If he had to put himself in airman, then sailor, then soldier clothes for campaigning, people began to describe him as dangerous, without noticing that the public relations business has nothing to do with individual taste.

When Putin’s first appointees were known, speculation went a stage higher. Still, nobody had noticed that the political culture surrounding Putin was completely different from the one encircling his predecessor, Boris Yeltsin. Before rising to power, Yeltsin had been nothing but a "second-zone" Soviet bureaucrat, someone who had to pretend to be powerful to be respected. Power struggles inside the Party apparat could have been nasty, but they were nothing compared to the former KGB culture to which Putin belonged, and in a way still belongs. Maskirovka – disinformation and counter-intelligence – is the real keyword. Cornering people in situations where they have no other option than doing the very opposite of what they would like to do – where they have to destroy their own friends or their own family – is unfortunately a typical hallmark of KGB culture. In terms of psychology, open appointments were not giving us any actual information. The only sensible thing to do was to wait and see, until Putin began to move, as he did in May.

Putin’s first move of real significance was to solemnly announce a far-reaching administrative reform that clearly leads to Russia’s re-centralization. With its new administrative "super-region" change in governor’s status and appointment of deputy federal attorneys to back presidential strongmen, this reform will change – in a radical way – the balance of power between regions and the federal center.

Russian President Vladimir Putin (A.P. photo)

Why Putin chose this reform as the first one is simple to understand. No country can sustain a situation where local authorities act in complete and total disregard for national laws and regulations. The corruption of the local elite is frequently much worse than in Moscow, and its penetration by oligarchs is even more important. There is no discussion that Putin needs to have, because he will have strong popular support to push through this reform. People are as tired of the petty tyranny of local authorities as they are tired of the Russian chaos in general. However, this reform does mean much more than just leveling the bureaucratic playing field for more effective state power. This is a direct attack against oligarchs’ interests, something clearly understood by Boris Berezovsky. Implications of such reform are far-ranging, and they reveal Putin’s choices much better than all economic programs currently discussed.

There is no possibility of achieving any kind of federal power-strengthening without significantly altering fiscal and taxation policy. The federal share of tax revenues, as well as budget expenditures, is expected to increase quickly, to somewhere between 55% and 66%, from the current 30%. This must occur, if federal officials want to have both means and legitimacy to implement reforms. No real re-centralization is possible without addressing massive, regional economic and social imbalances that developed in Russia during the last 10 years. This speaks clearly for a much more active state policy in the economic and social spheres, not withstanding all the noise made around "liberal" advisers.

This reform will also deeply modify the respective roles of parliament – the Duma – and of the senate near-equivalent, the Federation Council. The Federation Council will lose its relevance and the Duma increasingly will be at the forefront of legislative battles. In current Russian politics, this means, at the very least, that Putin will forge a temporary alliance with "reasonable" communists like Duma Speaker Guennadi Seleznev. The communist party, KPRF, could even experience a split, and a new "Social Democrat" party that strongly supports the President could emerge.

The third implication is more ominous. If administrative reform is actually implemented, the President will be on a collision course with oligarchs’ interests. Such a scenario could unfold this fall in open conflict that pits the presidential core team – supported by "power ministries" (Defense, Interior and Special Services) and a large part of the Russian population – against political leaders from the left and center, and the oligarchical system surrounding the current "presidential apparatus" (headed by Mr. Voloshin), plus some industrial and media groups.

The next three months will be decisive. If the reform program stays on track, the forthcoming conflict will change Russia’s face. It really will make Vladimir Putin the head of a strong, enduring state-rebuilding movement. If the President is defeated, or has to back down, he will probably not survive politically for very long, and Russia will head for new troubles.

The author

Jacques Sapir is Professor of economics at EHESS-Paris and at the Higher School of Economics in Moscow. He is a regular contributor to this column.