President Putin celebrated his 62nd birthday on Tuesday 7 October. Kirill, the Patriarch of Moscow and all Russia, head of the Russian Orthodox Church, congratulated him and gave him special thanks for his “care for the spiritual condition of the people”. Kirill continued: “Now we are living through a complex time, when attempts are being made to put pressure on Russia. I am convinced that in these conditions it is especially important to preserve belief in those traditional spiritual and cultural ideals which have formed our Fatherland and its great history and culture.”
Kirill was praising Putin’s “conservative turn”, more and more evident since he was re-elected for a third term in 2012. This includes not only a reversal of the limited progressive reforms introduced by President Medvedev, but a new crack-down on independent media in Russia with journalists threatened, harassed, physically attacked and even murdered with impunity; an attack on non-governmental organizations, which are now systematically smeared, fined and forced to close down for independent and critical work spuriously presented as “political activities” in the interests of foreign sponsors, under the 2012 Foreign Agents law; a denial of freedom of assembly, in which protesters no longer have the right to express their views in public spaces, and are arrested and tried in unfair proceedings; and a renewed social conservatism including harassment of the LGBTI community by means of a homophobic law and attacks on their freedom of expression.
And Putin’s birthday is also the 8th anniversary of the murder of the fearless Russian investigative journalist Anna Politkovskaya. The police investigation into her killing has been marred by many shortcomings and has, to this date, failed to establish who ordered it.
But it is important not to lose sight of two continuing underlying features of the present Russian regime.
First, there is what has been aptly described as the system of personalised state-sponsored capitalism that now exercises a strangle-hold on Russian government and economy. The current regime has been described as a “kleptocracy”: the title of Karen Dawisha’s new book is “Putin’s Kleptocracy: Who Owns Russia”. This system has been thrown into sharp focus as a result of the recent US and EU sanctions imposed on Russia. In April 2014, shortly after the illegal annexation of Crimea, a regulatory body in Moscow, the Market Council, voted to transfer the account for Russia’s wholesale electricity market, worth at least $100 million a year, to Bank Rossiya. This one of a series of decisions in recent years designed to bolster the assets of this bank.
A recent article in the New York Times International describes how Bank Rossiya, built and run by some of Putin’s closest friends and colleagues from his early days, in St. Petersburg, is at the centre of the way his brand of crony capitalism has turned loyalists into billionaires whose influence over strategic sectors of the economy has in turn helped him maintain the regime’s grip on power.
Despite privatisation policies and programmes since 1991, the Russian state still owns two-thirds of market capitalization in the Russian stock market. The state’s ownership is concentrated in four strategic sectors: energy (oil, gas, and electricity), banks, defence industries, and transport. There is little state ownership in most other sectors in the Russian economy, including consumer goods, non-defence manufacturing, agriculture, insurance, and services. But it is precisely in the two thirds of the economy that remains in state hands or has been seized by the state (as in the expropriation of Yukos and arrest and imprisonment of its owner Mikhail Khodorkovsky) that Mr Putin and his cronies are in control and have become incredibly rich. Their policy with regard to these strategic sectors, which are also a fountain of ready cash, is to maintain their control and to protect their wealth. This is why Mr Khodorkovsky, who is a free market neo-liberal and Russian nationalist, is seen by the regime as such a threat, especially since his release and return to politics.
Bank Rossiya was created in 1990 at the initiative of the Leningrad branch of the Communist Party, with party funds as capital. It was also believed to handle the banking needs of the KGB. After the collapse of the USSR in 1991, it was almost bankrupt. With Putin’s help, it became the recipient of a number of lucrative St Petersburg accounts and recovered.
In 1996, Putin joined seven businessmen, most of them Bank Rossiya shareholders, in forming a cooperative of summer homes, or dachas, called Ozero, “lake,” in the northeast of St. Petersburg. The cooperative included the homes of Mr. Putin, Mr. Yakunin, Mr. Kovalchuk, Mr. Fursenko and his brother Sergei.
Yuri Kovalchuk, one of Putin’s earliest collaborators, is now the Chairman of the Board and largest shareholder in the Bank, and worth, according to Forbes, $1.4 billion. Gennadiy Timchenko, also very close to Putin, and founder of the oil-trading giant Gunvor, is said by Forbes to be work $14.5 billion including his holding in the Bank. The US placed him on the sanctions list, alleging that Putin “has investments in Gunvor and may have access to Gunvor funds.” Andrei Fursenko, now an adviser to Putin, worked with him in the St. Petersburg mayor’s office in the 1990s. He and his brother Sergei were among the early investors in Bank Rossiya. Vladimir Yakunin is the Chairman of Russian Railways, the country’s largest employer. He was also an early investor in Bank Rossiya, as well as a member of the Ozero dacha cooperative.
The person said to be the real power behind Putin, Igor Sechin, who is now President of the state oil company Rosneft (now in bed with BP), has Rosneft shares worth roughly $169 million. He was close to Putin since their days in the St. Petersburg mayor’s office, and was Putin’s deputy prime minister from 2008 to 2012. Finally there is Matthias Warnig, who serves on boards of corporations that dominate Russia’s energy, aluminium and banking sectors, including Bank Rossiya. He was a member of the Stasi in the former GDR, when Putin was served there in the KGB for five years to 1989. They both insist that they both met for the first time in St Petersburg.
Second, and closely linked to the first, Russia is a state in which the secret service has taken power. Even in the USSR the KGB was kept under close control by the Communist Party. The FSB, the KGB’s successor, is today much larger, at least 200,000 strong, much better funded, and in a significant move some years ago Putin changed the colour of their uniform from green to black. This is what Andrei Soldatov has described as the “new nobility”.
Putin was a career KGB officer for 16 years from 1975 until 1991, although he only achieved the rank of podpolkovnik (Major); and from 25 July 1998 until August 1999, President Yeltsin appointed him to the post of Director of the FSB (one of the successor agencies to the KGB). Putin’s closest associates, the siloviki, share his KGB background.
First, there is Igor Sechin, probably the most formidable member of the Kremlin team, referred to above. Second, Viktor Ivanov has been Putin’s deputy head of the presidential staff since January 2000, and since 2008 also heads the state anti-drug agency, the Federal Service for the Control of Narcotics. Ivanov was elected to the Board of Directors of Aeroflot in October 2004, and was running Almaz-Antei, an air defence consortium, at the time. Ivanov became an advisor to the president in March 2004. Third, Nikolai Patrushev, also from St Petersburg, joined the KGB in 1975, the same year as Putin. When Putin directed the Main Control Department in 1997, Patrushev became his assistant. Once Putin became prime minister in 1999, he appointed Patrushev as director of the FSB. In 2008, Patrushev lost his position as FSB director but became a member of the Security Council. Fourth, there is Vladimir Yakunin, mentioned above.
Rashid Nurgaliev, an FSB general and a friend of Patrushev’s, was appointed Minister of Internal Affairs in 2003. Viktor Cherkesov, a close friend of Putin and a former KGB operative, was appointed to lead a new anti-narcotics agency when Putin became President. At the same time Putin appointed Sergei Ivanov, who served the foreign intelligence branch of the KGB, to the post of deputy prime minister. Vladimir Shulits, a former deputy director of the FSB, became part of the leadership of the Russian Academy of Science. The telecommunications company Alfa Group was headed by Anatoly Protsenko, former deputy director of the Federal Protective Service, part of the FSB. The former head of the FSB’s Economic Security Department, Yuri Zaostrovtsev, was appointed vice-president of Vneshekonombank, which is used by the government to manage Russian state debts and pension funds.
Thus, Russia might give the appearance of a decisive and authoritarian regime directed by an impregnably cohesive team of secret service veterans and crony capitalists. It should be no surprise that the ideology of this group, all of them devoted to the restoration of Russia as a Great Power, entitled to respect from the rest of the world, especially the West, is strongly influenced by the writings of the “Nazi crown jurist”, Carl Schmitt. The key chapter of a book published in 2006, entitled “Sovereignty” (a mantra of the regime) with contributions from Putin, Medvedev, and the regime’s ideologist Vladislav Surkov, is entitled “Sovereignty as a Political Choice”, with many references to Schmitt, written by the scholar who has translated more of Schmitt into Russian than exists in English. This is the ideology of decisionism, of the “state of exception”, vehemently rejecting liberalism, and insisting on authoritarian rule, even dictatorship.
The weak link in this apparently strong chain is Putin himself. Unlike his predecessor he is never drunk in public, and feels the need to promote a hyper-masculine image, often appearing half-naked. But it is likely that he would never have risen beyond the rank of Major in the KGB had he not been chosen by the late Boris Berezovsky, then the treasurer and “grey cardinal” of the Yeltsin regime, as the best operative for the job of protecting the Yeltsin family, and providing a reliable succession, including, as a first action as Acting President in 2000, signing decrees grating immunity to Yeltsin and his family.
In fact, Putin is not a strong or decisive leader in times of crisis, as demonstrated by his paralysis and inability to act decisively following the sinking of the Kursk submarine on 12 August 2000, the “Nord-Ost” theatre siege in Moscow in October 2002, and the Beslan school hostage disaster of September 2004. The case of the Beslan Mothers, complaining of the deaths of their children as the result of government incompetence followed by a total failure to investigate what happened, is being heard on 14 October 2014 by the European Court of Human Rights. It is widely rumoured that the annexation of Crimea earlier this year was not the result of a planned strategy, but a knee-jerk reaction: pure opportunism. Putin was nowhere to be seen in the first few days of the crisis, only emerging to give a thoroughly incoherent press conference.
Putin and his circle have in fact been suffering from “Orange Paranoia” ever since the events in Kiev from November 2004 to January 2005. They are terrified that suddenly they will lose power, and at the same time face prosecution and the loss of all the assets they have accumulated.
There are two threats in particular which they fear every day.
First, there is the Pandora’s Box which the annexation of Crimea has opened. The real victims of Russia’s incorporation of Crimea and Sevastopol into the Russian Federation on 21 March 2014 are the Crimean Tatars, whose homeland this is. The Crimean Tatars, conquered by the Russian Empire in the 18th century, suffered genocide and deportation to Central Asia in 1944 at the hands of Stalin. They now number several hundred thousand, some 15% of the population, are well organised, and boycotted the fake “referendum” of 30 March 2014. A member of the Russian President’s Human Rights Council has estimated that only 15-30% of Crimea’s population voted. The Crimean Tatars are now subject to persecution, and their leaders have been forbidden entry to Crimea. The annexation is already proving extremely expensive, and the Crimean Tatars are not going to leave.
The regime is very conscious of the fact that there were already 5 ½ million Tatars in the Russian Federation, the most numerous minority, with their own ethnic republic. Tatarstan, on the River Volga, in which Tatar is the second official state language, is one of the richest and most autonomous of the 83 subjects of the Russian Federation. Tatars ruled Russia for 300 years, and Moscow has a Muslim population of 2 million; Russia has more than 16 million Muslims, more than 14% of the population.
By claiming that the “population of Crimea” had a “right to self-determination”, the regime has encouraged not only the Tatars but many of Russia’s more than 150 ethnic and linguistic minorities to claim their own rights much more forcefully. There are renewed separatist claims in Siberia and the Russian Far East, and repression of local leaders has begun. The USSR broke up in 1991. The dreadful fear of the regime is that the Russian Federation too could disintegrate.
Second, Putin and his cronies fear the Russian working class. The regime was already terrified by the mass protests in Moscow and other cities in 2011-12, and the left-wing activists arrested after the protests of 6 May 2012 against Putin’s inauguration were subjected to show trials. On 14 February 2014 eight accused were convicted. On 24 February seven Bolotnaya case accused received prison sentences: Sergey Krivov – four years; Andrey Barabanov – three years and seven months; Stepan Zimin, Denis Lutskevich and Alexey Polikhovich – three years and six months; Artem Savelov – two years and seven months; Yaroslav Belousov – two years and six months; and Alexandra Dukhanina received a suspended sentence. Mobile phone videos taken by other demonstrators showed that there was no case against the accused.
But the participants in these impressive mass protests were overwhelming educated middle class Muscovites, in well-paid employment, who were expressing their disgust at the rokirovka, the cynical stage-managed swapping of roles by Medvedev and Putin.
After the tremendous strike by Russian miners in 1991 it appeared that the Russian working class was entirely dormant. The successor to the Soviet trade unions, the Federation of Independent Trade Unions (FNPR) survived the collapse of the USSR with most of its enormous property – offices, sanatoria, facilities – intact, and has continued its predecessor’s role of supervision of housing and welfare in close cooperation with management. Its leader, Mikhail Shmakov, after flirtation in the 1990s with the idea of creation of a social democratic party on the basis of the unions, has been a loyal supporter of the regime. FNPR has about 22 million members, mostly in former Soviet enterprises, about one third of the working population. Occasionally FNPR finds itself obliged to lead workers’ struggles.
The new factor in working class struggle in Russia has been the construction of new factories by foreign investors, notably in the car industry: Ford, Renault, Peugeot-Citroen, Volkswagen, General Motors. New, fast growing, “fighting” trade unions have appeared in these enterprises as well as in transport, teaching and public services, and now organise some three million workers, in a variety of new organisations, notably the KTR, Confederation of Workers of Russia. On 2 October 2014 an article in the leading business daily newspaper Kommersant, “How labour fights capital in Russia” , described the effective fighting units which are now organising campaigns against employers with the same thoroughness as Proctor & Gamble plans its actions for selling washing powder.
Moreover, research by the Centre for Social and Labour Rights, based in Moscow, shows that in 2013 there were 277 protest actions, in iron and steel, automobiles, food, and public service. 40% of these took the most radical forms: strikes, hunger strikes, blockading of roads and railway lines. Official Russian statistics only record “legal” strikes, which Russian labour legislation make practically impossible. In the first six months of 2014 alone, there were 130 worker protests, and for 2014 as a whole it is expected that there will be up to 275 protests.
And there are more and more “spontaneous” worker actions, many concerning non-payment of wages. The English word “spontaneous” usually translates the Russian word stikhiiniy, which, as Lars Lih points out in his splendid 2006 “Lenin Rediscovered: What Is to Be Done in Context”, has the connotation in Russia of volcanic eruptions or the violent underground movement of tectonic plates. The first three synonyms in the Russian thesaurus for the noun stikhiinost include anarkhichnost (anarchicalness), anarkhiya (anarchy) and bezotchyotnost (unaccountability). In a country which has experienced massive unexpected eruptions of popular fury – the Pugachov uprising in the 18th century, and the 1905 and 1917 revolutions – this new phenomenon is deeply disturbing to the regime.
Putin and his colleagues surely sense the ground trembling beneath them in Russia, quite apart from the continuing bloodshed in Ukraine. The new workers’ movement can only add to their paranoia and panic.