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

Putin really has been living like a tsar. By 2011 the value of his eleven sighted wristwatches had risen to $687,000 and the presidential estate had swollen to more than twenty residences, fifteen helicopters and four yachts. 15His forty-three Kremlin aircraft alone are worth over $1 billion. 16Nor is he the only one living like this. There is great comfort and gold off the Rublevka. Moscow has more billionaires than any other city in the world, its seventy-eight billionaires leaving New York’s mere fifty-seven far behind. 17The ‘average’ member of the power elite isn’t doing too badly either. In 2010 the average board member of Gazprom earned $2.9 million, whilst those at Sberbank received $2.4 million. 18These wages are respectively 400 and 325 times the national average. 19Putin has always been open: he is no egalitarian. Even when he was running for president he made his thoughts clear:

Our society must understand that a minority – a certain category of people – must be paid very well by the state, so they can secure the standards of living for the majority. When will we finally understand this? Our people aren’t stupid. It just hasn’t been explained the right way. 20

But under all this is a huge free-floating, cavernous anxiety. Unlike the ‘new nobility’ they purport to be, none were born to wealth but scrabbled, sometimes shot their way into it. Everything they have, no matter how much of it, remains unsecured. For some, without Putin it could disappear; others to anger Putin, could make it disappear. All are frightened of a better-connected criminal asset-stripping scheme backed up by the bureaucracy. The wealthier you are in Russia, the more vulnerable you actually are. ‘It occurred to him after some particularly great hash, that in post-Soviet economies the primitive accumulation of capital was also final’, is how the writer Victor Pelevin once put it, but it is how elites behave.

For a while, I got to know a petrol-princess who was driven about by a thuggish driver back and forth to Rublevka. Money had made her financially weightless. Free from most things, apart from that huge doubt. I had three long conversations with this girl on a bench in Paris. And then a few more in Moscow in some bar with a stupid piano modelled on ‘an intelligentsia apartment in the 1930s’, which never exactly made me feel at ease. She always drank and smoked so much more than me, but I very rarely saw her eat. So she told me her whole short story. We became friends, of a sort.

A quarter of her life had been spent like this. Several kids and no money in Siberian Surgut during the collapse. She told me about Chinese traders swapping passports of men who had died in the Chechen war, a lack of food, how cramped their apartment had been, with lots of children. Once she said she had a Chinese grandparent, then changed her mind and told me she was lying. I think she just didn’t know why she had a slightly Asian face. What she was more certain of is that she had moved to Moscow when her father had made it out of Surgut into the stratosphere of post-Soviet wealth. The company is rumoured to be one of Putin’s alleged ‘personal oil companies’.

She was not coy about showing that off. Ambitious provincials would hang off her like a micro-court of greedy middle-class twentysomethings with Moleskines and schemes to seduce her for money. To them she liked to show off how much she knew about ‘culture’, about almost everything really. But, she didn’t like talking about her parent’s politics. Or inviting people back to her family home. Maybe she also felt a bit embarrassed that her mother had built it to look like a wooden gingerbread house for her children. ‘She’s so stupid. She thinks that Putin is great and all this is because of Putin. But my father… when I ask him, he tells me that it’s all a disaster and because of Putin none of this is safe.

‘The worst thing about growing up in Rublevka was after the Khodorkovsky arrest my classmates started to disappear. I’d come in to school and there would be the empty seats… the teachers would say, “Don’t worry, he went to Israel… he went to London… he went to New York… he went somewhere else… but don’t worry, he’s safe.”’

Coming together in Rublevka is a social world that pulls in even opposition leaders. We should understand Kremlin factions as many faces of the same court – where some are used to seduce, others to intimidate, some that are masks and others that can only be seen in the mirror. Those in the loose ‘liberal’ faction like to season their speeches with sprinkles of fiscally neoliberal terms, noises about improving human rights and puff about technological innovation. A taste of this talk was on offer at Davos in 2012. Arkady Dvorkovich, a chess-playing and tweeting minister, lamented the ‘oversized and constant pressure from the state’, whilst the influential first deputy prime minister Igor Shuvalov noted that the government must ‘heed clear and tough warnings that the situation must be changed’. 21Yet this liberalism is thin. Their ideal has been the authoritarian modernization practised in Singapore, not the democratic transition in Poland. They want a slow and gradual liberalization on the regime’s own terms, as practised in Taiwan, not a sudden and threatening break.

Yet a closer look at Mr Shuvalov shows him to be more of a courtier than a reformer. Within the entourage Shuvalov has become the court ‘chamberlain’, who has excelled in paperwork and is responsible for managing disputes. One US Embassy cable even reported that Putin had delegated so much everyday administration to him that he was ‘the actual prime minister’. 22Like any member of Putin’s government he walks tall and can fail even to acknowledge those he thinks are his inferiors. At the FIFA award ceremony, handing the right to host the World Cup 2018 to Russia, a balding young man from the England team walked up to congratulate him. Shuvalov shook hands with him so dismissively, failing even to make eye contact, that he had to issue an apology. This man was Prince William.

A quick glance at his 2010 official income statement shows an official living in as much luxury as a prince. His family in the two preceding years earned in excess of $48 million. 23They own two plots of land of 40 acres, an apartment of 175 square metres, a rented apartment of 643 square metres, a residential property of 1,479 square metres in Austria and an apartment of 424 square metres in London. 24They also possess a fine selection of cars, amongst them a Jaguar, three Mercedes, a ZIL limousine and other luxury vehicles. 25Funnily enough, the earner in the family is not the politician but his wife, who earns thanks to ‘securities’. 26And despite embassy gossip that he is a reformer, documents have revealed that he has amassed a fortune by co-investing over $200 million with the oligarchs Suleiman Kerimov and Roman Abramovich. 27The opposition suggest this is either cronyism or bribery. 28With fortunes like these it comes as no surprise that men like Shuvalov have not struggled harder for reform. In an ideological feud, beliefs tend to override faction’s material interests. This is not the case in Shuvalov’s Kremlin. The two most prominent ‘liberals’, the 2000 to 2011 finance minister Alexey Kudrin, and Dmitry Medvedev, who have both called for reform, are said to detest each other. Kudrin eventually resigned, partly because he refused to serve under Medvedev as prime minister after the 2012 elections.

Putin’s court is a provincial place. The most powerful ministers and magnates are old colleagues and friends of Putin from St Petersburg. Many of those characterized as liberals are rather St Petersburg ‘civilians’, whilst those seen as ‘hardliners’ are mostly St Petersburg ‘siloviks’. They are two sides of a local political mafia that grew up around Anatoly Sobchak whilst he was mayor. The two ‘civilians’ who had the biggest mark on economic policy as veritable ‘chancellors’ to Putin were German Gref, the moustachioed ethnic German, and Alexey Kudrin, the fiscally conservative economist who used to share an office with Putin when they worked for Sobchak. Always slightly outspoken, Gref served in the government until 2007 and Kudrin until 2011. Both can claim credit for the policies that brought macro-economic stability such as balancing the budget, bringing in the flat tax and liberalizing legislation.