Ben Judah - Fragile Empire - How Russia Fell in and Out of Love With Vladimir Putin

Putin was not a break from Yeltsin but the culmination of his choices and mistakes. But was there still an escape from entrenched authoritarianism? Had the man Russian democrats so feverishly supported doomed them to Putinism? One advisor in the current government’s closest circle, who asked to remain anonymous, only sighs:

‘Yes, I think there still was a chance to avoid a return to full authoritarianism. Putin inherited this half-built system. It was up to him, he would determine its shape – just imagine Putin had been a good man, not corrupt and not wanted to rule forever. There was still a way out. It all depended on who Putin really was.’

That was the question that nobody – not even Berezovsky – really knew the answer to. Not that they cared on the night of 31 December 1999 as he assumed his post as acting president. The inner circle were too busy creating a TV Putin. In the first telepopulist stunt, Putin was flown to a Russian front-line position in Chechnya to celebrate the millennium with the troops. All the way there, he drank champagne from the bottle. The spin doctors had been planning the shot carefully for weeks, working out how Putin would raise a plastic cup of vodka with the troops, to show that he was fearless, one of the people, but then suggest they not finish the vodka shot until the job was done – showing he was not Yeltsin, he was not a drunk and he would not tolerate failure. It went straight to the head of a vulnerable and scarred nation, desperate to be saved.

In the same way as the PR ‘political technologists’ attempt to cast Yeltsin’s chosen heir as a ‘break with the past’ was the opposite of the truth, so the national mood could not have been further away from Putin’s tele-populist posturing. Inside, Russians had far more in common with the characters of their pre-eminent, reclusive writer Victor Pelevin than with their new president. Pelevin is a writer in search of a metaphor. He is looking for the metaphor for Russia. In his early novels the USSR is a locked train speeding nowhere, or a rocket where cosmonauts must release each stage by hand, then burn up on re-entry with them, if it is to reach the moon at all and keep pace with the Americans, who have the luck of possessing automatic release buttons. In 1999, Pelevin’s metaphor for the unstable, shape-shifting and beliefless country was The Lives of Insects . At the edge of a Russian forest, these fragile, parasitical little creatures, whose wings are easily torn, are trying to do a business deal with an American insect. The proud Soviet Russia that frightened the West had woken up as a wounded and pathetic fly.

AS PUTIN’S rule was about to begin, on 29 December 1999 his team posted a manifesto outlining his goals for Russia. The dense essay announced to the people that Putinism was a project. ‘Russia was and will remain a great power,’ it asserted. 1‘This is preconditioned by the inseparable characteristics of its geopolitical, economic and cultural existence. They have determined the mentality of the Russian people and the policy of the government throughout the history of Russia and they cannot but do so at present.’ 2But in the closing paragraph it raised the spectre of this identity, this Russia, being extinguished for good. ‘Russia is in the middle of one of the most difficult periods in its history. For the first time in the past 200–300 years, it is facing a real threat of sliding to the second, possibly even the third, echelon of states. We are running out of time left to remove this threat.’ 3

Putin did not just inherit the Kremlin and the crisis. He inherited Yeltsin’s people, the Yeltsin agenda and Yeltsin’s war in Chechnya. Putin’s first term, between 2000 and 2004, was not fully Putin’s own – but was shaped by the Yeltsin legacy. Putin’s challenge looked Sisyphean – but Yeltsin had actually left behind one immense advantage. It was Putin’s luck to take over just as an economic boom took off. The year he began as prime minister growth hit 10 per cent thanks to a 75 per cent lower exchange rate following the default. Russian exports were competitive again and the state was no longer burdened by crippling debt. The country had rebounded from rock bottom. This legacy defined ‘early Putinism’. From his appointment as prime minister to the beginning of 2003, Putin’s politics were set on a road not entirely of his own choosing.

The man whom the Russian public associate with this period is Mikhail Kasyanov, a fallen political star. Dismissed from his post in 2004 and now pushed from the power elite, Putin’s first prime minister has not let go of the manners of a minister. Or – as the framed antique map of the empire above his desk hints – ambitions to return as one. Today, the entrance to Kasyanov’s office has an illuminated wall-size photo of him at an opposition march, standing behind a banner that heckles ‘Russia without Putin!’ His respectful, hushed staff give his office – or ‘party headquarters’, as they refer to it – the airs and graces of a government in exile. He likes to call himself an ‘opposition leader’ but I have not met one person who is ‘led’ by him.

Kasyanov had neither expected to rise so high – nor to be cast out so suddenly. Ten years before his appointment to high office he had been a Soviet central planner. Like so many others, he was convinced until the last moment that the USSR was as solid as the United States. Looking back, he says:

‘I, like most citizens, believed the Soviet Union to be inviolable, that no one would ever be able to destroy it. As an exemplary bureaucrat already in a high position, I thought that the State Planning Commission and the body of Lenin would live forever and for all time. And then everything that was made collapsed in three days!’ 4

Kasyanov then did two things common for his generation of top bureaucrats. First he swapped one orthodoxy for another – axiomatic thinking about central planning was replaced with a textbook neoliberal outlook. He then tried to turn his position in the Soviet nomenklatura into the most politically (they said financially) profitable position in Yeltsin’s new Russia. Unlike the vast majority – he succeeded. He was suave, with that certain charm needed in a courtier. The ailing leader took a shine to him. Yeltsin liked ‘bright young things’, people like Kasyanov in whom he saw the minimum of a ‘Soviet mentality’.

This helped Kasyanov rise quickly to be deputy finance minister by 1995, and made him responsible for Russia’s foreign debt and IMF loans. In the Yeltsin government – with debt to GDP ratio reaching 140 per cent in 1998 – there were few jobs that were more important. Kasyanov was the man holding the strings to Russia’s IMF life support, which was keeping the state alive. ‘The default was just killing news for me,’ he says, ‘I was shocked. I had been fighting it so hard. I was opposed to this decision to default.’ Like all other junior members of the government, he claims he was not informed until the decision had been taken – ‘by a tiny group of people, without any consultation’. But it was not bad news for his career. The same month that Yeltsin made Putin his prime minister, Kasyanov was promoted to be his last finance minister.

When Putin called Kasyanov a year later, asking if he would become his prime minister, he was the clear continuity candidate. In choosing Kasyanov, Putin’s government signalled that a Yeltsin ‘young reformer’ would run it on a day-to-day basis. With almost fluent English and close to a decade of experience closely cooperating with the IMF, Kasyanov was a soothing choice for foreign creditors. He was, however, seen rather differently inside Russia. Kasyanov had two reputations in the Kremlin – one for competence, another for corruption.