In stark contrast to the hope of last spring, 2012 draws to a close with both the Russia’s political elite and the new Russian opposition finding themselves stuck in gear. A year that began with democratic reforms and promises of progress towards a democratic regime transformation is ending in a cacophony of incompetent governance, pervasive and massive corruption scandals, petty infighting, and a petite repression.
Government in Chaos
The Russian government is in chaos as it attempts to address economic modernization challenges and to shore up the country’s economy––all the more challenging since it feels darker economic times approaching. Despite (or perhaps because of) the reorganization of the Russia’s government (with the addition of a series of young minister appointees undertaken by Prime Minister Medvedev), the government has gotten off to a woefully slow start.
This prompted President Vladimir Putin in August to harshly criticize the government’s work for not moving more quickly on his 22 roadmaps for economic structural reforms. The latter were laid out in his first presidential decrees after inauguration. For example, the Labor Ministry failed to draw up a new personnel policy for state and civil service. The Science and Education Ministry failed to delay a salary raise for teachers. The Regional Development Ministry was slow in drafting a set of special conditions for mortgages for certain categories of citizens. Putin instructed Medvedev to call the three offending ministers on the carpet. Shortly thereafter one of the troika, Regional Development Minister Oleg Govorun, resigned. Only five roadmaps have begun implementation––and the key construction, customs procedures, and electricity grid roadmaps will not be implemented until next year.
Medvedev’s government was also slow in resolving issues related to establishing private account contributions under the pension system; a system that is long overdue for reform as a whole. And Putin was further dismayed when the government issued a draft budget that failed to take into account the planned pension reforms. In October, it was reported that only half of the leadership positions in the crucial Energy Ministry had been filled, and that the ministry was in chaos. This further complicated an energy sector that is being torn apart by competition between the presidential administration’s statist energy point man, Igor Sechin, and the government’s liberal point man, Arkadii Dvorkovich. Thus, a roadmap for the energy sector (as well as one for Russia's innovation strategy) was rejected by Medvedev and the respective ministries were ordered to thoroughly revise them. There are enough reports to indicate that it is not just the energy sector that is plagued by the bifurcation and competition between the presidential and governmental staffs (see, for example, www.ng.ru/politics/2012-10-11/1_minenergo.html and www.ng.ru/economics/2012-11-29/1_kazus.html)
All this governmental chaos and infighting comes at a bad time, as the government is running out of time and money for implementing a series of modernization plans and an ambitious privatization schedule. Economic growth has slowed this year from 4.9 percent in the first quarter, to 2.9 percent in the third quarter, and is projected to remain at that low level or lower through 2013. Regarding the massive privatization plans which are slow to be implemented, the government recently sold a stake in SberBank to get the ball finally rolling, which will not feed the budget enough to boost growth. Only fundamental restructuring will encourage sufficient growth, but Russian authorities (like authorities everywhere) are reluctant to undertake economic reforms that relinquish political power––especially when instability abounds both domestically and internationally. In an interview published on November 20th,, Medvedev warned that the economy is in a pre-crisis or “pre-storm” (predgrozovaya) situation.
Anti-Corruption Fight and Corruption Scandals
On top of these critical situations throughout autumn, the country has been rocked by a series of the high profile corruption cases reaching the loftiest corridors of power, as Putin seems to be getting serious about rooting out this most grave of Russia maladies. These include the R15 billion (approximately half a billion dollars) APEC Summit misappropriation case, the R 6.5 billion Glonass geospatial system embezzlement case, the R10 million Health and Social Development Ministry investigation, and the unprecedentedly high-level Oboronservis embezzlement case exposed in November. In the last case, six Oboronservis executives have been arrested so far, and Defense Minister Anatolii Serdyukov and Chief of the General Staff Nikolai Makarov, were fired. Those arrested illegally sold R95.5 million worth of state-owned real estate, land and shares at below-market rates to temporary shell companies, presumably funneling the holdings back to themselves, their friends and family members. Serdyukov who headed Oboronservis until last year, is married to Deputy Premier Viktor Zubkov’s daughter, and was found cavorting in the apartment of the one of the chief female figures in the case.
Later in the month the same state television channel that publicized the Oboronservis case also exposed a new corruption case involving Yelena Skrynnik, the former Minister of Agriculture and chairwoman of the state’s agricultural leasing company ‘RosAgroLizing’, (see http://www.vedomosti.ru/politics/news/1387370/biznesinteresy_eleny_skrynnik?full#cut and http://www.ng.ru/economics/2012-11-29/4_skrynnik.html%29. Skrynnik claims that she informed then Deputy Premier Zubkov about these issues and asked journalists to inquire with him. Thus, this case could be an attempt to ‘pay back’ Zubkov by some of those hurt by the Oboronservis scandal––or a signal from higher up that few will be spared in the new anti-corruption drive or both. Regardless, the corruption fight could be spiraling out of control now and threatens to destabilize the elite, who are already somewhat shaken by defections from the regime after the emergence of the street opposition a year ago. Universal infighting and mutual recriminations regarding corruption could consume the regime. And remember there is no shortage of corruption charges made against Putin himself by members of the opposition.
Things did not stop with bureaucratic disarray and corruption scandals. Moscow’s rumor mill filled with talk of Medvedev’s impending dismissal, and a media campaign emerged highlighting various groups’ disenchantment with Medvedev, in particular from elements within the military. On this background, Medvedev and Putin publicly aired their disagreement regarding a Russian court’s two-year prison sentence handed down against the now famous/infamous Pussy Riot demonstrators. Putin agreed with the verdict and sentence; Medvedev said he preferred their immediate release since they had already served sufficient time - five months in jail before and during the trial. This week Medvedev held open the possibility of running for president once again, without mentioning any coordination with Putin.
At the same time, the ‘white ribbon’ opposition movement is torn apart by ideological differences among democrats, nationalists, and communists. Moreover, each ideological camp is in turn ravaged by disagreement, competition and the personal ambitions of leaders. This renders the opposition as ineffective as the government. Last spring’s political reforms have enticed some opposition parties to focus on electoral politics, alienating more irreconcilable elements. As noted above, Putin smartly has surgically targeted a cautious retrenchment or freeze of Medvedev’s thaw, and he has left the spring’s election reforms intact. More recently, for a second time and more specifically, Putin broached the idea of returning to the direct election of the Federation Council’s senators and drafting the necessary constitutional amendments.
In sum, stagnation is the word, but the potential for change, including democratic, free market reform, remains. Much will depend on the opposition’s ability to mobilize enough strength to pressure Putin to reform––while simultaneously avoiding scaring him into a tougher crackdown. In that regard, the opposition’s December 15th ‘Freedom March’ may have something to say.
Gordon M. Hahn is Analyst/Consultant, Russia Other Points of View – Russia Media Watch; Senior Associate, Center for Strategic and International Studies in Washington DC; Senior Researcher and Adjunct Professor, Monterey Terrorism Research and Education Program; and Senior Researcher, Center for Terrorism and Intelligence Studies (CETIS), Akribis Group. Dr Hahn is author of two well-received books, Russia’s Revolution From Above (Transaction, 2002) and Russia’s Islamic Threat (Yale University Press, 2007), which was named an outstanding title of 2007 by Choice magazine. He has authored hundreds of articles in scholarly journals and other publications on Russian, Eurasian and international politics and founded and writes the CSIS Islam, Islamism, and Politics in Eurasia Report (IIPER) at https://csis.org/node/33013/publication.
Gordon M. Hahn, Ph.D.
Senior Associate, Center for Strategic and International Studies (CSIS), Washington, D.C.
Senior Researcher and Adjunct Professor, Monterey Terrorism Research and Education Program, Monterey, California
Analyst/Consultant, www.russiaotherpointsofview.com firstname.lastname@example.org
Dr. Hahn is author of the well-received books Russia’s Islamic Threat (Yale University Press, 2007) and Russia’s Revolution From Above, 1985-2000 (Transaction Publishers, 2002) and numerous articles in academic journals and other English and Russian language media. He has taught at Boston, American, Stanford, San Jose State, and San Francisco State Universities and as a Fulbright Scholar at Saint Petersburg State University, Russia. Dr. Hahn writes and edits the bimonthly 'Islam, Islamism, and Politics in Eurasia Report' at the Center for Strategic and International Studies in Washington, D.C. archived at http://csis.org/programs/russia-and-eurasia-program/islam-islamism-and-politics-eurasia-report and http://www.miis.edu/academics/faculty/ghahn/report.