Putin's Russia: Slowing the Pendulum without Stopping the Clock

Author(s): Martin Nicholson

Source: International Affairs (Royal Institute of International Affairs 1944-), Vol. 77, No. 4
(Oct., 2001), pp. 867-884
Published by: Blackwell Publishing on behalf of the Royal Institute of International Affairs
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 Putin's Russia: slowing the pendulum

without stoppingthe clock

MARTIN NICHOLSON*

By the time this article appears, eighteen months will have elapsed since Vladi-
mir Putin was inaugurated president of Russia. On present evidence he will see
out his two presidential terms, until 2008, so he is still at the start of the road. He
has been on the road long enough, however, to provide some answer to the
question 'Who is Mr Putin?', and to allow us to assess how he may respond to
the challenges he faces in the remainder of his first term.

The making of a president

As long ago as 1993 the Russian Federation's first president, Boris Yeltsin, con-
fessed to agonizing over his choice of successor.I The question dominated
Yeltsin's second term from 1996, particularlyfollowing the crash of 1998, as he
became ever more incapacitated and the threat of criminal prosecution for
alleged corruption hung over his family and entourage. Finding someone who
would both guarantee continuity and at the same time appear as a complete
change from an increasingly unpopular Yeltsin was a challenge. At the begin-
ning of 1999, one of Yeltsin's influential public relations advisers,Gleb Pavlovsky,
concluded that even if the populace was disgruntled with the way Yeltsin ruled,
it was prepared to live with the resultsof that rule. In Pavlovsky's view, an
equally pro-market but more conservative leader, able to promote the 'state
potential of liberal values', could command a majority at the next presidential
elections.2 That leader was eventually found, not from among politicians either
of Yeltsin's own or of the next generation, but from among young officials from
the security services, loyal but politically untainted.3

* An earlierversion of this articlewas discussedin June 2001 at the Royal Instituteof InternationalAffairs
in the frameworkof the Prospectsfor the Russian FederationProjectof the Institute'sRussia and Eurasia
Programme.The authoris gratefulfor commentsand suggestionsmade at that meeting.
Interviewwith EldarRyazanov, broadcaston OstankinoChannel I TV, 16 Nov. I993, BBC Summary of
World Broadcasts,19 Nov. I993, SU/I85o B/8.
2 Gleb Pavlovsky, 'Termidor 9: zavtra pravy konservatism', Ekspert,no. ooI, i8 Jan. 1999.
3 Yu. M. Baturinet al., EpokhaYeltsina:ocherki istorii(Moscow: Vagrius,200I), p. 782.
politicheskoi

InternationalAffairs 77, 3 (200i) 867-884 867

Martin Nicholson

The original choice was Nikolai Bordyuzha, a 49-year-old KGB military

counter-intelligence specialist. Appointed head of the border guards service in
January 1998, Bordyuzha was promoted within a year to head the president's
administration and serve simultaneously as secretary of the president's Security
Council-an unprecedented combination of powerful posts. But Bordyuzha
could not cope with the intensifying Kremlin intrigue and was sacked in March
1999. Bordyuzha's rise was closely followed by that of Vladimir Putin, then
aged 47-another former KGB employee, but with broader experience, having
worked in the administration of Mayor Anatolii Sobchak of St Petersburg and
then in a variety of posts in Yeltsin's own administration. Putin was appointed
director of the FSB (the internal security arm of the former KGB) in July 1998.
In March 1999 Yeltsin chose him to replace Bordyuzha as Security Council
Secretary, and from there appointed him prime minister in August. In private,
Yeltsin merely offered Putin the prime ministerial job 'with prospects'; but he
went on to announce publicly that he had selected Putin as his successor, which
gave Putin no chance to refuse.4
Putin satisfied the requirement for continuity by guaranteeing Yeltsin and his
family immunity from prosecution at the first opportunity.5 As for the require-
ment for a radical change, the ongoing crisis in the Chechen Republic provided
the context in which to present Putin as a quite different leader from Yeltsin.
By 1999 the peace that had been negotiated in August 1996 was no longer
holding. Lawlessness in Chechnya had led not only to a spate of kidnapping, but
also to increasing insecurity on the republic's borders with the neighbouring
regions of the Russian Federation. Following an incursion by Chechen warlords
into Dagestan in August 1999 and the deaths of some 300 people in violent
explosions in Moscow a month later, Putin assumed the mantle of the leader
who would restore order to Chechnya and morale to the Russian people.6
Putin's electoral campaign was waged from two headquarters.The official one
was at the Centre for StrategicAssessments,which he had set up as prime minister
under his principal economic adviser from St Petersburg, German Gref.7 At the
same time an unofficial headquarters operated in the Kremlin under the com-
mand of Yeltsin's chief of staff, Aleksandr Voloshin, with a number of members
of Yeltsin's actual and political 'family'.8 The intellectual and political talents of
4 This is Putin's own account in a series of interviews
published during his presidential campaign. See
Natalya Gevorkian et al., Ot pervogolitsa: razgovorys VladimiromPutinym (Moscow: Vagrius, 2000), p. 131.
The interviews were also published in English as VladimirPutin, first person (London: Arrow, 2000). Page
references are to the Russian edition.
5 Decree of 31 Dec. I999, 'On
guarantees for the President of the Russian Federation, having laid down
his office, and members of his family', <http://press.maindir.gov.ru/press/messages.asp?yy= 999&mm
=12&dd=3 I&nn=7> (in Russian, as are further interet references in this article, unless otherwise
indicated). This was one of the first decrees Putin issued as acting president following Yeltsin's New
Year's Eve resignation.
6 The sequence of events was convenient enough from an electoral point of view to have aroused the
suspicion that the bombings and even the incursion into Dagestan had been provoked by Yeltsin's
regime to launch Putin into the presidency. But no hard evidence has been produced to support this
theory.
7 Putin's election website named the
complete team: <http://www.putin2000.ru/o5/>.
Yelena Tregubova, 'Vladimir na shee', Kommersantvlast, 22 Feb. 2000, pp. 5-7.

868
Putin's Russia

these two teams have continued to support Putin in the early stages of his presi-
dency. There was an urgent need to acquaint the general public with the man
they were being asked to elect as their president. Putin's deliberately short and
general manifesto was published in February2000.9 It had been preceded by a long
and diffuse document, his 'millennium' article, posted at the end of December
1999 on a newly created government website.'0 A book-length series of interviews
was designed to fill in the human side of a hitherto unknown official."I There
are many inconsistencies in these documents, but they contain three common
and overlapping themes, which form Putin's credo as a liberal conservative in
the mode outlined by Pavlovsky. These themes are: restoringorder under a strong
state; overcoming Russia's backwardness through a market economy; and
reviving (some would say creating) a sense of nationhood in post-Soviet Russia.
Putin was duly elected president on 26 March 2000, with an official 53 per
cent of the vote. With the war in Chechnya being prosecuted successfully,
those regional leaders who had initially backed Moscow Mayor Yurii Luzhkov
as an alternative quickly jumped on the acting president's bandwagon-and the
electorate, by and large, jumped with them.

What sort of a president?

The duties of the president are fairly precisely defined in the Russian constitu-
tion, but Putin had only the egregious Boris Yeltsin as an example of how in
practice to go about the job. With no leadership experience of his own (his
career, in stark contrast to Yeltsin, had been that of a perennial second-in-com-
mand), Putin has veered between a monarchical and a utilitarian view of his
role. On ceremonial occasions Putin has recalled Yeltsin's parting advice-
'Take care of Russia!'-and put on the mantle of the father of the nation,
responsible for everything. However, his later description of himself as no more
than a man hired by the electorate on a four-year contract (the presidential
term) to fulfil certain functional and professional duties is more characteristic.I2
In either mode, patriotism is probably the quality for which Putin would
most like to be remembered. Yeltsin's political career was built on the rejection
of his own Soviet past and that of his country. Apart from the impractical idea of
restoring tsaristRussia, he had nowhere to steer the Russian ship of state except
towards the values and goals of Western democracies. In doing so, in the eyes of
many Russians, Yeltsin squandered Russia's patrimony. Putin, in contrast, has
9 'Otkrytoe pis'mo Vladimira Putina k rossiyskim izbiratelyam', <http://www.putin200o.ru/07/>. Also
published in Izvestiya and other central newspapers on 25 Feb. 2000. A translation, 'Open letter by
Vladimir Putin to the Russian voters', was carried inJohnson's Russia List, no. 4133, 25 Feb. 2000,
<http://www.cdi.org/russia/johnson/4I 33.html>.
1O Russia at the turn of the century, <http://www.pravitelstvo.gov.ru/english/statVP_eng_I.html> (in
English).
" Gevorkian et al., Otpervogo litsa.
12 For the first, see his
inaugural speech on 7 May 2000, <http://www.press.maindir.gov.ru/press/
messages.asp?yy=200o&mm=5&dd=7&nn=I>, and for the second, his interview with some of the
central media on 25 Dec. 2000 (Nezavisimaya gazeta, 26 Dec. 2000).

869
Martin Nicholson

described himself, with no hint of embarrassment, as 'the successful product of

the patriotic education of a Soviet man'.'3 His vision of a strong, paternalist
Russian state includes the Soviet period, rejecting only the Soviet economic
system on the grounds that it did not lead to prosperity. There is little doubt
that Putin's brand of all-weather patriotism is better suited than Yeltsin's
aggressive partisanship to the 'silent majority' of Russians, still struggling to
overcome the humiliation brought about by the disintegration of the Soviet
Union. So is his personality. Putin has brought youth and novelty to the job. By
simply fulfilling his duties in a predictable and dignified way, which Yeltsin did
not, he has provided the figurehead that the state requires and the population
craves. In his first year in office Putin also cut a Gordian knot that had defeated
Yeltsin-he had national symbols for the new Russia written into law. Charac-
teristically, he found an eclectic mix: the music of the Soviet national anthem,
accompanied by new, all-purpose words; the tsarist tricolor as the flag of the
nation; and the Soviet red flag for the armed forces. Putin seized on the dismay
of Russian athletes, unable to sing their wordless and unfamiliar anthem at the
Sydney Olympic Games in September 2000, in order to push these measures
through parliament in time for the New Year celebrations on the eve of 2001.
Liberals were aghast, but the majority approved.
Putin has championed two historic Russian institutions that remain high in
popular esteem despite their manifold failings: the Russian Orthodox Church
and the armed forces. Secretly baptized by his mother,I4 Putin has gained respect
by observing Orthodox ritual to the manner born, which Yeltsin never managed.
To his credit, however, he has resisted the siren call of the more chauvinistic
end of the Orthodox spectrum and has paid attention to other faiths as well.'5
The initial stages of the Chechen campaign gave Putin the chance to restore the
armed forces to their traditional high place in popular esteem, although the
Kursksubmarine disaster in August 2000 made it difficult to sustain this effort.
Putin resisted the temptation to lay blame, but used the incident to insist that
the armed forces must be cut down to a size where they can be properly
maintained. Putin's initial gestures of respect towards the military may allow
him to do this without significantly affecting their status in society or his own
image as a patriotic leader.
It falls to Putin, as president, to define Russia's place in the world. He starts
from the premise that Russia is and always will be a great power, by virtue of its
geography, history and economic potential alone.I6 His election statements,
however, rejected the imperial connotations of this stance. He argued that
13 Gevorkian et al., Otpervogo litsa, p. 39.
I4 Interview with Komsomolskayapravda, I Feb. 2000, translation in Johnson's Russia List, no. 4106, 13
Feb. 2000, <http://www.cdi.org/russia/johnson/4Io6.html>.
I5 Putin's demonstrative support of a Chief Rabbi who is a rival to one supported by Vladimir Gusinsky
betrays ulterior motives, however.
I6 'Russia was and will remain a great country. This is determined by the inalienable characteristics of its
geopolitical, economic and cultural existence' (millennium article); 'Russia is not haggling for the status
of a great power. It is one. This is determined by its great potential, history and culture' (interview with
Welt am Sonntag, IOJune 2000, <http://www.president.kremlin.ru/events/38.html>).

870
Putin's Russia

Russia could take its rightful place in the world only by restoring its economic
strength. This meant giving internal policy primacy over external policy; pur-
suing national, particularly economic, interests in foreign policy; achieving
integration into the world economy, in particular the World Trade Organiza-
tion (WTO); and emphasizing Russia's European destiny. The last comes
naturally to Putin, a native of Peter the Great's 'window on Europe' who has
lived in Germany. With this policy goal in mind, Putin has resisted confronta-
tion with the West, even where it may initially have been the most popular
route to take, for example in reaction to US plans for missile defence or NATO
plans for further enlargement to the east. Nor has Putin indulged in nostalgic
dreams of reconstructing the Soviet Union.
Both Putin's understanding of the role of the state and his view of his own
role have led him to rely on top-down government. The 'executive vertical'-
a direct chain of command from the president down to local government-is
his goal. In fact, the economic, geographical and social realities of Russia
preclude such a simple schema. Putin himself has added to the complexities of
decision-making by cluttering the political landscape with committees, com-
missions, working groups and advisory councils, set up to solve-or possibly to
bury-difficult issues. Putin is more organized in his habits than Yeltsin and far
better able to sustain long periods of hard work, but his general approach to the
presidency shows little of the Germanic orderliness that was imputed to him on
account of his background. Putin's own route to his firstjob in the Kremlin in
1996 was through a haphazard combination of circumstances-friends, the
return of favours and chance encounters.'7 In the initial stages of his presidency
his statements and actions depended on who had his ear at a critical point. His
own voice came through, sometimes discordantly, on the few issues he had
made his own, Chechnya being the prime example.
As president, Putin is influenced, broadly speaking, by three groups of people.
The first comprises the key players from Yeltsin's team who ran Putin's un-
official campaign headquarters. Aleksandr Voloshin, as head of the president's
administration, and his deputy, Vladislav Surkov, have been particularly pro-
minent. Through these two, links have been maintained to some of the
informal influences on the Yeltsin administration, such as Gleb Pavlovsky, the
public opinion specialist Aleksandr Oslon, and the industrialist (and former
protege of the 'oligarch' Boris Berezovsky) Roman Abramovich. The capacity
of this team to manipulate the political climate has proved a valuable resource
for Putin, whose only personal excursion into public politics, his management
of Sobchak's unsuccessful campaign for re-election as governor of St Petersburg
in 1996, was a disaster. The acute political instincts of the team are beyond
question. But their obsession with tactics and ratings could become a liability if
Putin, as is suggested at the end of this article, is embarking on policies that will
involve some unpopular moves. A botched attempt in March 200I-in which

17 Gevorkian et
al., Ot pervogolitsa, pp. I I9-22.

871
Martin Nicholson

Putin seems to have played no part-to force the dissolution of the Duma and
hold early elections brought the team no credit.'8
The second group comprises liberal economists and lawyers, most of them
associated with Putin from his days in Sobchak's St Petersburg administration.
Two deputy heads of Putin's presidential administration, Dmitrii Medvedev
(who shadows Voloshin) and Dmitrii Kozak, are lawyers, the latter responsible
for Putin's ambitious legal reform programme and for reconciling federal and
regional legislation. Two key economic players in the government, Aleksei
Kudrin (finance minister) and German Gref (minister of the economy, trade and
development, and author of Putin's social and economic blueprint), are from St
Petersburg. The name of Andrei Illarionov, Putin's idiosyncratic personal
economic adviser (not a St Petersburger), should be added to the list of liberal
advisers. The list could be extended, but not very far. 'Cadre famine'-the
shortage of qualified and competent government officials-is a persistent com-
plaint of political analysts in Moscow.
By contrast, the third group-officials with a security background-boasts
both individuals close to Putin and a long tail as well. Sergei Ivanov (an ex-
colleague from the SVR, the foreign intelligence service, who succeeded Putin
as secretary of the Security Council) and Nikolai Patrushev (director of the
FSB) are particularly close.'9 Five of the seven new presidential representatives
in the regions come from a security, military or police background. Former
KGB officials dominate the lucrative arms export business. This trend should be
seen in perspective. Yeltsin chose a military officer (Aleksandr Rutskoi) as his
running mate in the presidential elections of 1991. Nor, although responsible
for breaking up the KGB as an institution, was Yeltsin averse to KGB officers
individually. One of the strongest influences over him for many years was his
KGB bodyguard Aleksandr Korzhakov. And of course, it was to the security
services that Yeltsin ultimately looked for his successor. It should also be borne
in mind that former officials of the KGB and other coercive organs have long
since dominated private protection companies that play a central role in
enforcing business contracts.20 The new element is a generally heightened
concern over national security, sometimes verging on paranoia, that is charac-
teristic of Putin's regime. It is fed by policy papers produced by the Security
Council, itself staffed largely by military and security personnel; and it is
reflected in the increasing attention being paid by the FSB to foreign scholars in
Russia. Putin's own security background and his trust in senior security officials
must have contributed to the freedom with which they feel able to operate.
Putin's relations with the formal institutions of power have been less

I8
Apart from a number of public remarks by Pavlovsky, it is clear from apparently genuine intercepts of
telephone conversations between him, Voloshin and Surkov that the three were behind this episode.
The Russian text of the intercepts was posted on the internet at <http://www.stringer-agency.ru>.
'9 Gevorkian et al., Ot pervogo litsa, pp. 18I-2.
20 Vadim Volkov, 'Organised violence, market building and state formation', in Alena V. Ledeneva
and Marina Kurkchiyan, eds, Economiccrimein Russia (The Hague: Kluwer Law International, 2000),
PP. 57I-9.

872
Putin's Russia

dramatic than Yeltsin's. The prime minister is constitutionally weak: he can be

dismissed by the president without notice. In his declining years, Yeltsin resorted
increasingly to this tactic. Putin, by contrast, has been demonstratively suppor-
tive of Prime Minister Mikhail Kasyanov, despite his being a holdover from the
Yeltsin regime. By the summer of 2001, however, Putin was beginning to
impart his own stamp, at least to the 'security bloc' of the government, which
traditionally reports direct to the president. On 28 March 2001 Putin imposed
outsiders, with a brief to carry out change, on two ministries that have tradi-
tionally been headed by uniformed officers, sending his trusted colleague Sergei
Ivanov to the defence ministry and another St Petersburger, Boris Gryzlov, to
the interior ministry. He also imposed an outsider on the tax police. He ordered
Kasyanov to restructure the 'economic bloc' of ministries with the aim-first
attempted in 1997-of cutting down on the numbers of deputy prime ministers
and increasing the responsibilities of ministers. Characteristically, Putin has put
up with, and indeed defended, delay in the implementation of his order, arguing
that it would all happen in good time, without 'revolutionary changes'.2'
The biggest contrast with the Yeltsin era lies in Putin's relationship with
parliament. Yeltsin was permanently at odds with the Duma, the lower house of
the bicameral parliament, both as the successor to the Supreme Soviet with
which he waged war in I993, and as the bastion of the Communist opposition.
Putin was fortunate to come to power with a working majority in the Duma. In
September I999 an electoral association, Unity, was created to support him.
Trading heavily on Putin's soaring popularity, it gained enough votes in the
December I999 elections to form the second largest faction in the Duma after
the Communists.22 Putin quickly turned a good hand into a winning one. With
the president's administration exerting its manipulative power, Unity made a
tactical alliance with the Communists over the distribution of the major
offices.23 This led to the marginalization of what might have become a centre-
left opposition led by former Prime Minister Yevgenii Primakov together with
Luzhkov. They have now had to throw in their lot with Unity.
Putin's control over parliament has been a major element of what has come
to be known as 'managed democracy' and led critics of Putin's regime to label it
an elective autocracy.24 Putin himself has recognized the dangers inherent in
the situation. In words, at least, he has encouraged the development of indepen-
dent political parties with a critical approach to government policies, though he
shies away from using the word 'opposition'.25 Nonetheless, developments

21
See Putin's I8 July 2001 press conference, <http://www.president.kremlin.ru/events/264.html>.
22 Putin, like Yeltsin, belongs to no politicalparty.
23 A
Communist,GennadiiSeleznev, retainedhis post as Speaker,and the Communistsgainedthe
chairmanshipof significantDuma committees.
24
LilyaShevtsova,'Vyboroe samoderzhaviepri Putine:perspektivyi problemyevolyutsiipoliticheskogo
rezhima', Moscow Carnegie Centre Briefings3: , Jan. 200I.
25
In his 8 July 2000 addressto parliamentPutin said, 'It is advantageousfor a weak power to have weak
parties. It is calmer and more comfortable for it to live according to the rules of political bargaining. But
a strongpower is interestedin strongrivals.Only in conditionsof politicalcompetitionis a serious
dialogueon the developmentof our statepossible.'<http://www.president.kremlin.ru/events/42.htm>

873
MartinNicholson

under Putin so far point to a weakening of the party system. The pro-presidential
Unity shows no sign of becoming more than another 'party of power'-that is,
one dependent on the ruling elite rather than acting as the ruler's political
base-as was the now defunct Our Home Is Russia, created in 1995 to support
Yeltsin's government. The established political parties in the Duma have
relatively little influence, as parties, over the drafting of laws, lacking both the
expertise of the Duma committees, each of which has professional support, and
the muscle of informal, sectoral interest groups. A law on political parties,
initiated by the Kremlin and adopted in June 2001, is intended to weed out
small and weak parties, leaving only two or three to fight the next elections. It is
still far from clear, however, that the law will have the desired effect of creating
a viable party system, any more than the original attempt to do this by splitting
the Duma into constituency deputies and those elected under a party list.

The issues
Putin's first year in office was dominated by the attempt to restore the authority
of the state, the principal issues being Chechnya; the reassertion of Moscow's
power over Russia's regions; curbing the 'oligarchs'; and the creation of a legal
framework to regulate Russia's social and economic life.

Chechnya
Chechnya was the only issue on which Putin as presidential candidate ventured
a personal commitment. To solve the problems of the North Caucasus was, he
said, his 'historic mission'.26 The distinguishing factor of his commitment was
its reliance on force alone, which in turn coloured his vision of the rule of law
in Russia as a whole: 'All we had to do was to grapple directly with the bandits,
destroy them, and a real step was taken towards the supremacy of justice,
towards the dictatorship of a law that is equal for all.'27
Putin appears to have favoured reimposing federal rule in Chechnya beyond
the naturalboundary of the River Terek that had been agreed in March I999.28
He gave full support to the military campaign,29 and reassuredthe generals that
it would not be interrupted to search for a political solution, as the campaign of
1994-6 had been-in the military view, the prime cause of its failure. Putin also
put his personal stamp on the federal authorities' policy of controlling press
coverage from the start, in contrast to the first Chechen war. He publicly
defended their seizure and incarceration of the Radio Free Europe/Radio

26 Gevorkian et al., Otpervogo litsa, p. 133.

27
'Otkrytoe pis'mo'.
28
Putin's predecessor as prime minister, Sergei Stepashin, made several statements to this effect. See e.g. his
address to a Strengthening Democracy Institute event on 13 March 2000, <http://ksgnotesi.harvard.edu/
BCSIA/SDI.nsf/web/Election2000?OpenDocument&ExpandSection=9,6>.
29
He paid two dramatic visits to the war zone, on 31 Dec. 1999, the day of Yeltsin's resignation, and on 20
March 2000, six days before the elections, in an SU-27 training jet.

874
Putin's Russia

Liberty correspondent Andrei Babitsky, arguing that he was helping the enemy
because he was reporting from the enemy side.30
Putin's handling of the peace and reconstruction process has, by contrast,
been hesitant and distant.3' He rejected the option of re-engaging with the
elected president Aslan Maskhadov, but has been unable to find a Chechen who
would carry some credibility in both Moscow and Chechnya. Russians have
been appointed to key posts to ensure that federal funds disbursed for the recon-
struction of Chechnya are not salted away into private pockets as they were
after the 1996 settlement. But the bureaucratic structure appearsto be hindering
rather than helping the reconstruction of Chechnya; even federal forces are not
getting paid, which encourages them to extort money from the population and
contributes to the deterioration of the security situation. A plan to reduce force
levels, from the current 80,000 to a permanent garrison of 15,000 defence
ministry and 6,000-7,000 interior ministry troops, was begun in March 2001
but abandoned in May, after only a few thousand had been withdrawn.
Putin's handling of Chechnya as an international issue has been more skilful.
He neutralized much Western criticism of the disproportionate use of force by
arguing that Chechnya was the front line of an attack by political Islam on
Russia and Europe as a whole, and that by its military action Russia was in fact
fighting for Europe's security as much as its own. While ruling out any repeat of
the mediating role that the Organization for Security and Co-operation in
Europe (OSCE) played in the first Chechen war, he kept the OSCE in play by
allowing its Assistance Group to resume humanitarian operations from a base in
the north-west of Chechnya. Putin has also worked to assuage the Council of
Europe's concern over human rights violations in Chechnya, despite the
humiliation of the Russian delegation to the Council's ParliamentaryAssembly
(PACE) being temporarily deprived of its vote. Putin acceded to pressure from
the Council in appointing a special representative for human rights in Chech-
nya, Vladimir Kalamanov, in February 2000, assisted by three Council of
Europe experts, to work on cases of complaints against the federal authorities in
Chechnya.
Domestically, the lack of progress towards a political solution or the
reconstruction of Chechnya, more than a year after the military operation was
said to have been successfully completed, is turning Putin's personal commit-
ment to solving the Chechen problem into a potential liability. There is no
major political force that would see advantage in trying to embarrasshim over
Chechnya, and Putin's personal rating remains high. But opinion polls are
beginning to register public disillusionment.32

30 Putin interview with KommersantDaily, Io March 2000.

3I He has paid only one visit to Chechnya since becoming president, on 14 April 200I.
32 VTsIOM
monthly review for June 2001, 3 July 200o, <http://www.polit.ru/documents/42865o.html>.

875
Martin Nicholson

Centre-regionrelations
While Chechnya was one sort of threat to the integrity of the Russian Federa-
tion, a more insidious challenge was presented by the increasing freedom of
manoeuvre under Yeltsin's rule exercised by Russia's other 88 regions, includ-
ing 21 that enjoy superior status as republics. Putin did not address the question
directly in his election campaign, in order to avoid alienating the regional
leaders on whom he depended for support. But this turned out to be a tactical
ploy. His first major political initiative-a week after his inauguration-was a
sweeping attempt to restore the Kremlin's control over the regions.
Putin's initiative involved three separate measures. The first-and potentially
most far-reaching-was no more than an adjustment to the system of
presidential representation in the regions. Yeltsin had had his own represen-
tatives in almost all the 89 components of the Federation. Over time they had
ceased to be the instruments of the president's will and had become increasingly
subservient to the regional administrations, depending on the regional leaders
for their housing and other basic amenities. Putin reduced their number to
seven, each representative overseeing a group of regions, to be called a federal
district. The federal districts, which virtually coincided with the existing
military districts, were to provide an effective federal presence in the regions.
The new representatives would make the president's writ run throughout the
country by ensuring that they, not the regional leaders, controlled federal
officials in the regions-local police chiefs and tax inspectors, for example. The
representatives would bring regional legislation into line with central,
counteracting the trend by which some of the regions, and especially republics,
had arrogated to themselves a degree of sovereignty that was manifestly
incompatible with the federal constitution and laws.
Putin's second measure was to deprive regional leaders of their ex officioseats
in the Federation Council, the upper house of the parliament. Putin had weighty
reasons to justify this reform. The fact that the heads of regional executives sat in
the central legislature violated the principle of the division of powers. Further-
more, Putin argued, regional leaders could not focus simultaneously on
legislating in Moscow and running their own regions. His draft law forced the
regional leaders to cede their seats to nominated representatives. But in the face
of resistance-the Federation Council still had the power to delay legislation
that would lead to its own demise-Putin conceded a 'stay of execution' to
January 2002. Further, to compensate the governors for the abolition of their
Moscow 'club', Putin decreed the creation of a consultative body, the State
Council. Its membership comprises the executive heads of each of the 89 com-
ponents of the Federation, with a presidium of seven (one from each federal
district), rotating every six months. Putin has commissioned reports from the
State Council on a number of major issues, though the suspicion remains that
he intends the Council to do little more than keep senior regional figures in
play by giving them an opportunity to ride their hobby horses.

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The third move gave the president the legal instruments to dismiss regional
leaders on defined grounds. Again, Putin made concessions to get amendments
to existing legislation through parliament. First, any dismissal would be subject
to a lengthy judicial process. Second, Putin acquiesced in a complex series of
amendments that will allow several influential regional leaders to run for
election for a third term-the original law had stipulated a maximum of two.
Putin further pandered to the regional authorities by introducing amendments
to the law on local government, reducing the powers of municipalities in
relation to the regions.
Putin's federal initiative was supported by politicians of all shades in Moscow,
who considered that Yeltsin, in his desire to enjoy easy relations with the
regions, had allowed the Federation to fragment dangerously. The move was
skilfully executed and enhanced the image of the new president as a strong and
decisive leader in his early days in office.33 By the middle of 200I, however,
Putin's concessions in the face of rearguardactions by regional leaders had led to
the opposite perception-that he was in fact a weak and indecisive leader. To
general surprise, Putin made a deal with the governor of the Primor'e region in
Russia's Far East, Yevgenii Nazdratenko, whose wilful mismanagement had
contributed to an appalling energy crisis in the region in early 2001. Rather than
using his new powers to dismiss Nazdratenko, Putin appointed him to the
potentially lucrative position of chairman of the Federal Fisheries Committee in
return for his voluntary resignation from the governorship. Nor have the
presidential representatives become the power in the land that many expected
on account of their background. Disagreements over their status and powers
have snagged them in bureaucratic thickets. They have attempted to organize
the economic activity of the federal districts around themselves, meeting resist-
ance not only from the regional governors, but also from the federal govern-
ment-the ministry of finance has only recently succeeded in setting up a
treasury system to channel financial flows to and from its offices in individual
regions.34 And, against Putin's stated intentions, they have become immersed in
regional politics-not always successfully. Finally, the Federation Council,
which enjoys far-reaching powers under the constitution, is in limbo, with a
number of its current members hanging on to their privileges and immunities to
the last possible moment, January 2002, and a number disposing of their seats to
their preferred representatives as part of a political deal, or simply for money.
Such sweeping reforms should, of course, have been preceded by extensive
consultation with those most affected: the regional leaders. But to labour this
point would be to ignore the realities of Russian politics. Putin needed to show
who was boss. At the same time, as we can now see on closer acquaintance with
his style of leadership, it would have been equally unrealistic to expect him to

33 Percipientobserversat the time

questionedwhether such a far-reachingattemptat recentralizationwould
not run into the sand,as have top-down reformsthroughoutRussia'shistory.See William Tompson,
'Putin's power plays', The World Today,July 2000, pp. I-3.
34 The lastof the federal
treasurybranchofficeswas opened in Tatarstanon 17 March2001.

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Martin Nicholson

follow up his initial surprise move to the point of confrontation with still
powerful regional interests. Some gains have, nonetheless, been made. The
harmonization of federal and regional laws is a necessary part of the broader task
of creating a coherent legal framework for Russia, even if much of it has been a
showcase exercise, as were many of the original incompatible regional laws.
The system of federal districts, while yet to prove its effectiveness, has re-ignited
a necessary debate over the eventual shape of the Federation.
In the longer term, geographical and economic realities, as much as any of
Putin's administrative measures, will shape relations between the centre and the
regions, and among the regions themselves. It would take another article to
explore them, but certain trends are worth picking out to illustrate the point.
Up to now, regional political and business elites have been able to dominate
their local economies. Since the middle of 2000, however, a new generation of
businessmen has embarked on a range of horizontal and vertical mergers. The
financial-industrial groups that have emerged have interests far beyond those of
individual regions. This development does not necessarily herald a more
rational pattern of economic activity, but it is loosening the regional leaders'
traditional control over, for example, the automotive industry in the Volga
region. The eventual restructuring of the railway and energy provision systems
will also profoundly affect the political economies of the regions.

The 'oligarchs'
The new generation of businessmenenjoys a respectableand stillprivileged position
in Putin's Russia. Putin had another group in mind when he undertook in his
election manifesto to put everyone, from 'oligarchs'to stallholders,under the same
set of rules. He was distancing himself from one of the most unpopular features
of Yeltsin's presidency. 'Oligarch' was the term coined to describe the small
group of bankers, industrialistsand media magnates who pooled their resources
in early 1996 to ensure Yeltsin's re-election, thereby staking a claim to the spoils
of victory and a continuing say in the running of policy. In practice, Putin has
pursued only those magnates who have offended by their political stance.
The prime target has been Vladimir Gusinsky, head of the banking and
media conglomerate Media-MOST. His flagship, the television channel NTV,
lays claim to being Russia's only independent national TV station. In fact it has
a history of alternating conflict and alliance with the Kremlin since 1994.
Angered by what he considered inadequate reward for supporting Yeltsin in his
1996 re-election bid, Gusinsky made the mistake of supporting Luzhkov's
unannounced campaign for the presidency in mid-g999. This brought him into
conflict with Yeltsin's, and then Putin's, political machines, who were able to
exploit Media-MOST's vulnerability through its debts to the gas monopoly,
Gazprom. Putin has been able to claim when convenient that this is just a com-
mercial matter. He has also developed a political argument to justify his pursuit
of Gusinsky and, to a lesser extent, his fellow media magnate Berezovsky. Putin

878
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claims that the weak financial basis of the Russian media has made them easy
prey for business clans, to use against each other and against the state. Putin
deployed this argument with uncharacteristic bitterness in an otherwise
balanced interview following the Kursk submarine disaster, betraying his
obsession with the issue.35
It would be a mistake to see Putin's hand behind every development in these
cases. The Procuracy, the FSB, the press minister and Gazprom Media's own
director all had scores to settle with Gusinsky. The timing of their actions against
Gusinsky has at times embarrassedPutin.36 Nor was the Media-MOST episode
part of a concerted attack on the freedom of the press. But there can be no
doubt that Putin's personal vendetta against Gusinsky has created an atmosphere
in which lower-grade officials have felt able to act with impunity. Its effect has
been to reduce the plurality of the press-a number of Gusinsky's other media
outlets with a better claim to independence than NTV have suffered-and to
induce a climate of fear stemming from the realization that the law will be used
selectively against media organizations that step too far out of line.

Legal reform
Despite Putin's primitive view of the power of the state where politics are
involved-he once referred to it as a 'cudgel'37-he has emerged as the
champion of a badly needed reform of the judicial system. As acting president,
Putin argued that Yeltsin's faltering 1991 programme for judicial reform needed
reviving: the judicial system did not conform to the 1993 constitution (into
which some of the embryonic Yeltsin reforms had already been written);
citizens' rights were insufficiently protected; and failure to reform would put
Russia in breach of its international obligations following its ratification of the
European Convention on Human Rights and Fundamental Freedoms.38
The pace of legal reform increased in 2001. By its summer break the Duma
had embarked on a package of laws that will raise the status, remuneration and
accountability of judges; increase the number and funding of courts and under-
pin them with a system of justices of the peace; extend trial by jury throughout
the country (at present it operates in only nine regions); and limit pre-trial
detention to one year (currently eighteen months). Sanctions will be introduced
to ensure Constitutional Court rulings are obeyed (currently they can be
ignored with impunity).39

35 Interview with the Russian TV station RTR, 23 Aug. 2000, <http://www.president.kremlin.ru/events/

6o.html>.
36 Putin was on a visit to
Spain when Gusinsky was arrested in June 2000 and was unable to respond
cogently to press questions. Gazprom Media's boardroom coup against NTV on 3 April 200I stole the
limelight from Putin's annual address to parliament on the same day.
37 Interview with Le Figaro, 23 Oct. 2000, <www.president.kremlin.ru/events/85.html>.
38 Speech to a conference of heads of regional courts, 24Jan. 2000, <http.president.kremlin.ru/events/
2.html>.
39 The classic case is Moscow Mayor Luzhkov's breach of a Constitutional Court ruling that his system of
registration for Moscow inhabitants is unconstitutional.

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Martin Nicholson

The most sensitive political aspect of the new laws is that they significantly
curtail the powers of the Procuracy, a deeply embedded Russian institution
founded nearly 280 years ago by Peter the Great as the 'eye of the state'. Its
monopoly of all stages of a case from investigation to search, arrest,prosecution
and supervision will be diluted. The Procurator General, Vladimir Ustinov, has
intervened forcefully against the reform. It is in any case to be introduced
gradually, beginning in 2003, since it requires finance, training and a cultural as
much as organizational shift in Russia's judicial practice. It would be naive,
therefore, to expect an immediate change in the present climate, in which the
law enforcement agencies are acting with as much licence as ever. The test for
Putin will be whether he can give consistent backing to measures that are
unpopular with vested interests and little understood by the public at large. His
defence of Russia's moratorium on the death penalty in July 200o-against the
trend of popular opinion-was a good start.40

Economicand socialpolicies

Legal reform is an essential component of Putin's economic policy. Putin's

recipe for overcoming Russia's economic backwardness is unequivocally linked
with the integration of Russia into the world economy. The lack of a working
legal framework for economic activity has been one of the main drivers of
economic crime and corruption and a disincentive to foreign investment in
Russia. Property rights are poorly protected and commercial courts ineffective,
mainly due to the corruptibility of judges. Gazprom's manipulation of the
courts in its case against Media-MOST would have been a poor advertisement
for the system even if this case had been merely the resolution of a debt issue.
Bankruptcy cases are still disguised forms of asset-stripping. The government is
still intertwined with business, and some government ministers have a close
commercial connection with the areas they supervise.4I
Putin's economic and social policies were knitted loosely together in an
extensive programme drafted in German Grefs Centre for Strategic Assess-
ments and approved by the government on 28 June 2000. The programme
aimed to complete the restructuring of the economy, particularlyin the tax and
banking spheres, and to divest the social support system of its Soviet-era inclu-
siveness in favour of targeted benefits. The programme was an overlong wish-
list, with no prioritization, but it has served as the menu from which the
government has chosen a la carte.Although there has been little progress in the
critical area of banking reform, a number of landmarks have already been

40 Putin was
speaking at a meeting in Moscow on 9 July 200I with the president of the World Bank, James
Wolfensohn, and to participants to an international conference on justice: <http://www.president.
kremlin.ru/events/254.html>. Seventy-two per cent of respondents to a VTsIOM survey in June 200I
favoured the death penalty for serious crimes.
4' Nikolai Aksenenko, the railways minister, has family interests in commercial enterprises linked to his
ministry; the press minister, Mikhail Lesin, has commercial interests in TV advertising.

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Putin's Russia

passed. By the summer of 2001, legislation was at various stages of approval in

the Duma in the following areas, in addition to the judicial reform mentioned
earlier.

Budgetand tax:
* a balanced budget (for only the second time in the ten-year history of post-
Soviet Russia) on track for 2002;
* the easing of the tax burden through a 13 per cent flat rate for income tax,
designed to kick start the tax-paying habit, a reduction of corporate profit
tax from 35 per cent to 24 per cent, and the lowering of some import tariffs.

Structuralreform:
* a Land Code that will regularize the buying and selling of land, including
agricultural land, and provide the basis of a mortgage market;
* a package of measures to de-bureaucratize the process of setting up and
running a business-Putin claims to have intervened personally to push
through the Duma a plan to reduce the number of activities for which a
government licence must be obtained from over 500 to 102;42
* a law to restrict opportunities for money laundering.43

Labourand pensions:
* a Labour Code to replace the existing Soviet-era Code of 1972;
* the adoption of four bills on pension reform, which will institute contri-
butory and graduated pensions in place of the current one-rate-for-all state
pension.

Equally important, although not requiring legislation, a starthas been made in the
restructuringof the naturalmonopolies. A compromise plan for the government-
controlled energy provider United Energy Systems (UES) will retain a state-
owned national grid fed by privately owned electricity companies. A plan for
the gradual privatization of the railways has been adopted. And the replacement
of the chief executive of Gazprom, Rem Vyakhirev, by one of Putin's former
subordinates from St Petersburg, Aleksei Miller, promises greater transparency
and accountability in a vast enterprise that had been run as a family business.
In the summer of 2001 Putin launched another major reform: in housing and
communal services. This has not been a high-profile political issue in post-
Soviet Russia, simply because people have been left to live in the style to which

42 Putin, press conference, i8 July 2001, <http://www.president.kremlin.ru/events/264.html>.

43
Legislation urged by the Financial Action Task Force against Money Laundering (FATF) in its annual
report in June 2001: <http://www.oecd.org/fatf/pdf/PR-200oo622_en.pdf> (in English).

88i
MartinNicholson

they had become accustomed-poor accommodation and services in return for

minimal payment. The issue has to be tackled now because the crumbling of
the infrastructurein some areas has become critical, and because the restructur-
ing of the natural monopolies will bring an end to cross-subsidization, whereby
cheap energy for domestic consumption is subsidized by higher industrial
prices. A competitive market in energy supply, envisaged under the plan to
restructure UES, cannot be achieved while this imbalance remains. The plan is
for residents to pay in full for privatized communal services, with benefits
available to those who cannot afford the cost. There are formidable obstacles to
be overcome before this plan is put into effect, including the setting of norms
for the payment of benefits and decisions on whether the money should come
from central, regional or municipal coffers.
Putin has not yet confronted his electorate with the cost of housing reform-
the only reform to arouse more negative than positive expectations among the
public, according to a mid-200I opinion poll.44 His popular message has been
that Russians have been deprived of their natural share in the wealth of their
land: 'Russia is a rich country of poor people.'45 The relative economic boom
of 2o00-brought about by high world prices for raw material exports, especially
oil, together with the devaluation of the rouble-has allowed Putin to raise
state pensions, as well as the wages of a range of state employees. These actions
are the principal source of his continuing popularity.46 This factor, as well as the
inherent complexity of housing reform, may mean that it moves ahead only
slowly. Its implementation should begin around 2004, and the government
plans to continue subsidizing housing and utilities for another Io-I5 years.

Looking ahead
At his first major press conference as president, on 18 July 200I, Putin was
asked: 'Who is Mr Putin?' by the same PhiladelphiaInquirercorrespondent who
had so embarrassedhis ministers when she confronted them with the question
in Davos inJanuary 2000. Putin's answer was, in effect: 'Look at the record.' He
went on to list a number of the measures that have been outlined in this article,
concentrating on centre-region relations, the law on political parties and the
laws to liberalize the economy. Significantly, in this context he made no
reference to Chechnya. He hoped that by the next elections ordinary citizens
would feel the effects in their pockets, in their security and in conditions where
they could feel proud of their country. What are the chances of this being
achieved?
Putin's reform programme re-introduces many of the initiatives of Yeltsin's
short-lived 'young reformers' government of I997, which were strangled by

44 VTsIOM
survey of the social-political situation in Russia in June 2001, 3 July 2001, <http://
www.polit.ru/printable/42865o.html>.
45
'Otkrytoe pis'mo'.
46 VTsIOM
survey of social and political opinion, Jan. 2001, polit.ru, 26 Jan. 200I.

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resistance from vested interests, by the deteriorating financial position and by

Yeltsin's own increasingly erratic attention to the issues. Putin stands a better
chance, but at the moment two cheers rather than three are in order.
Implementation of the reforms raises formidable obstacles.
The greatest danger is that they will simply slow down and run into the sand
as Putin's determination not to raise the political temperature inclines him more
and more to compromise with vested interests. It is symptomatic that much
of the restructuring of the natural monopolies has been left in the hands of
the monopolists themselves. More legislation will do little of itself to bring
about the cultural change that would lead to respect for the law. The danger is
that elements of the powerful if discordant coalition in the middle ground-
bureaucrats, businessmen, regional elites and law enforcement agencies-will
continue to play their own game, in which mastery of the unwritten rules is all-
important.47
It is obvious that one man can do little to free the country from its ingrained
habits, and Putin has shown that he is frequently prey to them himself. Putin
will need allies, and will need to find a way of sharing political responsibility
more broadly. The present trend is in the opposite direction: towards a concen-
tration of power in the presidency. This is where the drive for control-of the
regions, political parties, the media-will ultimately harm Putin himself and his
cause. That control is being achieved with suspicious ease because most of its
victims have voluntarily rushed to join the ranks of the powers-that-be. But for
the same reason it is deceptive, as outward shows of loyalty conceal resistance to
policies that impinge on vested interests. Putin risks being in the classic situation
of having all the levers at his command, but finding that nothing happens when
he pulls them.
In two years' time Russia will be entering a new election cycle. It is a
measure of Russia's progress towards the long-desired goal of being a 'normal
country' that free elections are a factor built into its political life. The danger is
that 'electoral techniques' will predominate over electoral politics. There are
certainly those in Putin's entourage-principally the group from the Yeltsin
administration mentioned earlier in this article-whose interests do not extend
much further. Although it is hard to envisage a scenario under which Putin will
not be re-elected in 2004, victory is not something his team will take for
granted: they know better than most how easily swayed the electorate is. Hence
their desire to exercise total control over the political process and the media.
There is also nervousness in Putin's camp that a range of problems-the
peaking of Russia's foreign debt repayments and the collapse of the ageing
energy infrastructure are usually cited-are going to come together in 2003,
uncomfortably close to the Duma and presidential election dates. To this could
be added the need to explain to the electorate the pain that real reform will

47 For a discussionof this vital subjectsee Alena Ledeneva,Unwritten

rules:howRussiareallyworks(London:
Centre for EuropeanReform, 2001), reviewed in this issue of International
Affairs.

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Martin Nicholson

bring-probably in economic circumstances less favourable than those of today.

And Chechnya will continue to be, if nothing worse, a drain on the state's
resources and Putin's authority. These are the factors that are causing his advisers
to play with the idea of bringing forward the Duma elections from their due
date of December 2003. One test of Putin's leadership and his commitment to
reform will be whether he shows himself master of his own house in managing
his political and electoral strategy.
The question of whether Putin will be a successful 'liberal conservative',
as suggested by Pavlovsky, remains open. On present evidence, his vision of the
state is too narrowly identified with the centralization of political power to be
able to sustain the variety of political and social forces that go to make up a civil
society, which in turn underpins a successful market economy. But time is on
his side.

884