(Maria Lipman, Nikolay Petrov (Eds.) ) The State of (B-Ok - Xyz)

‘This brilliant – and concise – book by leading experts answers the two
most important questions about Russia. Why did it take a dramatic and
aggressive new course early in 2014? And what are the implications for
the rest of the world? Vital reading for anyone seeking to understand
Russia since the annexation of Crimea – and what might come next.’ –
Neil Buckley, Eastern Europe Editor, Financial Times
‘At a time when understanding Russia’s politics is more crucial than ever,
this volume by some of the country’s top analysts provides an invaluable
guide to the complex changes afoot since the annexation of Crimea. A
brilliant interpretation of a rapidly moving target.’ – Daniel Treisman,
Professor of Political Science, University of California, Los Angeles
DOI: 10.1057/9781137548115.0001
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DOI: 10.1057/9781137548115.0001
The State of Russia:
What Comes Next?
Edited by
Maria Lipman
Independent Analyst, Moscow, Russia
and
Nikolay Petrov
Professor, Higher School of Economics, Moscow, Russia
DOI: 10.1057/9781137548115.0001
Selection and editorial matter © Maria Lipman and Nikolay Petrov 2015
All remaining chapters © their respective authors 2015
Softcover reprint of the hardcover 1st edition 2015 978-1-137-54810-8
All rights reserved. No reproduction, copy or transmission of this
publication may be made without written permission.
No portion of this publication may be reproduced, copied or transmitted
save with written permission or in accordance with the provisions of the
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permitting limited copying issued by the Copyright Licensing Agency,
Saffron House, 6–10 Kirby Street, London EC1N 8TS.
Any person who does any unauthorized act in relation to this publication
may be liable to criminal prosecution and civil claims for damages.
The authors have asserted their rights to be identified as the authors of this work
in accordance with the Copyright, Designs and Patents Act 1988.
First published 2015 by
PALGRAVE MACMILLAN
Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited,
registered in England, company number 785998, of Houndmills, Basingstoke,
Hampshire RG21 6XS.
Palgrave Macmillan in the US is a division of St Martin’s Press LLC,
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Palgrave Macmillan is the global academic imprint of the above companies
and has companies and representatives throughout the world.
Palgrave® and Macmillan® are registered trademarks in the United States,
the United Kingdom, Europe and other countries.
ISBN 978-1-349-57820-7 ISBN 978-1-137-54811-5 (eBook)
A catalogue record for this book is available from the British Library.
A catalog record for this book is available from the Library of Congress.
www.palgrave.com/pivot
doi: 10.1057/9781137548115
Contents
List of Illustrations vi
List of Contributors vii
Introduction. The Post-Crimea Russia:
Development Scenarios 1
Maria Lipman and Nikolay Petrov
1 Post-Crimean Political Order 6
Boris Makarenko
2 The Russian Economy at the Start of
the Post-Putin Era 28
Sergey Aleksashenko
3 The Relations between the Center
and the Regions 50
Natalia Zubarevich
4 Russia Reinvents Itself as a Rogue State in
the Ungovernable Multi-Polar World 69
Pavel Baev
5 Putin’s Relapse into Totalitarianism 86
Lev Gudkov
6 Putin’s ‘Besieged Fortress’ and Its Ideological
Arms 110
Maria Lipman
7 Conclusions 137
Index 154
DOI: 10.1057/9781137548115.0001 v
List of Illustrations
Charts
1.1 Evolution of bureaucratic authoritarianism

in Russia 22
5.1 Endorsement of Putin and Medvedev 88
Tables
5.1 What are your feelings about the decision to

annex Crimea to the Russian Federation? 89
5.2 How would you characterize the current regime? 94
5.3 What traits do you think are most characteristic
of the majority of modern Russian politicians? 95
5.4 Do you believe Vladimir Putin is responsible
for the abuses of power that he is accused of
by his opponents? 96
vi DOI: 10.1057/9781137548115.0002
List of Contributors
Sergey Aleksashenko – Visiting Scholar at Georgetown
University (USA).
Pavel Baev – Research Director and Research Professor at
the Peace Research Institute in Oslo (PRIO), Norway.
Lev Gudkov – Director of the Levada Center, an inde-
pendent, non-governmental polling and sociological
organization in Moscow, Russia.
Maria Lipman – Independent Analyst. She was until
recently the Editor-in-Chief of the Pro et Contra Journal,
published by the Carnegie Moscow Center.
Boris Makarenko – Chairman of the Board of the Center
for Political Technologies (Russia), Professor at the Higher
School of Economics (Russia).
Nikolay Petrov – Professor, and Head of Laboratory for
Regional Development Assessment Methods, Higher
School of Economics (Russia).
Natalia Zubarevich – Professor at Moscow State University
and Director of the Regional Program at the Independent
Institute for Social Policy (Russia).
DOI: 10.1057/9781137548115.0003 vii

Introduction. The Post-Crimea
Russia: Development Scenarios
This book is a new volume produced by the international

team of experts that has been working on Russia develop-
ment scenarios since 2007. In their previous work, Russia
2025: Scenarios for the Russian Future published in 2013, this
group of researchers analyzed alternative paths for Russia’s
development after Vladimir Putin’s return to the Kremlin.
However, the unexpected and rapid developments of
February–March 2014 went far beyond the scenarios and
analysis offered by our experts; the current trajectory
appears to be worse than the worst-case scenario of the
three that we considered. The Kremlin’s steps have radic-
ally changed our views of the present and future and called
for revision of not only our scenarios, but also the under-
lying assumptions on their variance. Our experts had to
approach their analysis from a different perspective and
include completely different issues in it. In addition, the
constantly accelerating pace of change necessitated limit-
ing the analysis to a shorter timeframe.
The book was written quickly, on the go, and some
chapters had to be revised to take into account the unfold-
ing developments. While the authors’ positions may differ
on certain themes and related prospects, everyone is in
agreement that Russia has become a different country
after the annexation of Crimea. Apart from the territorial
DOI: 10.1057/9781137548115.0004 1
2 Maria Lipman and Nikolay Petrov
transformation, the event has changed Russia’s geopolitics, its economy,

and its people’s worldview.
The Kremlin faced new challenges as far back as in 2011–12. Economic
growth drastically declined against the backdrop of still high oil prices,
and mass protests demonstrated the weakened legitimacy of Putin’s
regime. In response, the Kremlin opted for a reversal of the social and
economic modernization of the 2000s, a primitivization of the political
system, and direct government management.
Russia’s reaction to the Ukraine crisis and subsequent decisions made
by the Russian government have dashed hopes for Russia’s moderniza-
tional development once and for all. Harsh confrontation with the West,
isolationism inside the country, militarization and increased government
control of the economy, public and private space, as well as intolerance to
even the slightest expressions of disloyalty and a crackdown on any inde-
pendently minded civic forces are all factors that have been rapidly and
consistently obliterating all the gains made in the quarter of a century
after the collapse of the communist regime.
This unexpected and radical new turn has prompted Western politi-
cians and Russia watchers to look to organic changes in the Russian
system of government. They started saying that the Russian presi-
dent lives in a ‘different world’ and even suffers from a mental illness.
Meanwhile, the Kremlin’s new course, which took shape with the annex-
ation of Crimea, is quite rational, at least from the short-term perspec-
tive. The steps that the Kremlin took in February–March 2014 were
presented as aimed at protecting the country’s sovereignty from Western
threats, but they were also motivated by efforts to preserve the political
and economic monopoly on power for a close circle of individuals. For
the sake of this goal, the Kremlin sacrificed the interests of a significant
segment of political elites and the majority of the population – but still
deemed these costs acceptable. In the mid-term perspective, however,
the costs could skyrocket and impact Putin himself.
The annexation of Crimea and Russia’s ensuing role in the armed
conflict in the east of Ukraine have not only exposed the colossal
dangers inherent in the construction of the personalized-power regime
but also exacerbated its personalized nature and risks even further. The
system’s increased dependence on the actions of a single individual may
be expected to lead to greater variance in development scenarios, which
may now include psychological analysis and other similar elements.
But in reality, in making his authority virtually absolute, Putin virtually
DOI: 10.1057/9781137548115.0004
Introduction 3
absolutely lost freedom to maneuver. After the annexation of Crimea –

the most radical step Putin has taken in all of the fifteen years of his
rule – the course of developments took on a logic of its own, and Putin
is incapable of changing or stemming this course even if he wanted to;
he can only accelerate it or slow it down. This phenomenon makes the
situation incredibly uncertain and practically inevitably leads to political
crisis, which may either result in the collapse of the regime or its radical
transformation accompanied by leadership change.
Putin’s calculations arguably go beyond internal Russian develop-
ments. Assuming the global rules of the game can substantively change,
whoever breaks them first – like Putin (did) – can derive maximum
profit. One may assume that Putin is hoping for tumultuous (and nega-
tive) political and economic dynamics in Ukraine, the European Union,
and the world at large. Despite extremely high risks and enormous costs
for Russia’s development, under certain circumstances Putin’s first strike
can help him avoid the fatal outcome and may lead to favorable results.
Putin has been deliberately destabilizing Ukraine, creating serious, if
not insurmountable, obstacles to its drift from Russia’s sphere of influ-
ence toward the West. At the same time, he is counting on the West’s
weakening; therefore, he is constantly trying to split Western powers,
and exploit anti-American sentiments as well as the discontent of some
European countries with European Union policies.
In the course of the past year, Putin had managed to outplay the West,
which proved incapable of defending Ukraine. The question is whether
Putin will have time to convert local, tactical gains into ‘victory’ over the
West. Will Russia be able to push the West farther away from its borders?
Will it be able to sideline the United States in favor of relatively weaker
Europe, which could be weakened even more if Russia were to improve
its position in certain European regions? What will happen earlier?
1 The collapse of the Ukrainian economy and/or massive political
crisis in Kiev?
2 Greater problems in Europe – for example Greece, or right-wing
opposition to the European Union – which will distract the EU
from Ukraine?
3 Oil price increase which will alleviate the strain on the Russian
economy?
4 Russia’s strengthening resulting from its closer cooperation with
China?
DOI: 10.1057/9781137548115.0004
Or before Putin manages to secure his gains, is Russia in for political

turmoil in addition to the current economic crisis?
Finally, what will Russia look like after Putin?
Dramatic changes in both Russia and the world, referred to as the ‘new
world disorder’ by Ivan Krastev and Mark Leonard,1 make the answer to
these questions impossible, but these shifts do call for a re-evaluation
and better understanding of the major trends that emerged after the
annexation of Crimea. This is exactly what this volume’s contributors are
trying to accomplish. The volume is subdivided thematically, with each
of the authors analyzing a particular aspect of changes that occurred in
Russia. The themes include foreign policy, the nature of the political and
administrative system, the economy, relations between the center and
the regions, the state of Russian society, and the ideological facets of
Putin’s regime.
We would like to thank the project’s participants – those who
contributed to this volume and our numerous colleagues from vari-
ous countries who participated in discussions and publications of our
Russia: the Scenarios of Development expert club over the course of many
years. The Pro et Contra journal, which was published by the Carnegie
Moscow Center up until the middle of 2014, played a particularly
important role in our project. The journal, edited by Maria Lipman, up
to 2014 had served as a meeting place and discussion platform for a wide
variety of experts. Starting in 2007, the materials written by our project’s
participants appeared in the respective thematic issues of the journal.
The articles published in the last issue of Pro et Contra became the basis
for this book. We are deeply grateful to the MacArthur Foundation and
the Open Society Institute for supporting the journal. We also greatly
appreciate the Open Society Institute’s help that made it possible to turn
the journal articles into this edited volume, as well as to organize our
international experts’ discussions for a number of years from the first
conference in Bellagio to later discussions in Vienna. We are thankful to
Ivan Krastev of the Vienna Institute of Human Sciences for his contin-
ued interest and attention to our project and his generous intellectual
support. We are very grateful to the Bruno Kreisky Forum, its head
Gertraud Boreа d’Olmo, and her staff members for their warm hospi-
tality and flawless organization of our gatherings. We were honored to
have Palgrave MacMillan as our previous book’s publisher and are happy
that our cooperation continues with the production of this volume. We
would like to express our gratitude to the Palgrave MacMillan team that
DOI: 10.1057/9781137548115.0004
Introduction 5
contributed to the production of our volume, and especially, to Jemima

Warren and Sara Crawley Vigneau. We thank Leon Geyer for translating
our book into English, and Tatiana Barabanova for preparing the manu-
script for publication.
We are dedicating our collective effort to the memory of Boris Dubin,
an outstanding Russian sociologist and humanist, one of the most astute
and insightful experts in Russian society and world culture. Boris Dubin
participated in our work at different stages, except, sadly, the last one;
he was the life of our discussions, always complementing them with his
unique depth and charisma.
Note
1 Ivan Krastev, Mark Leonard (2014) The New European Disorder http://www.
ecfr.eu/page/-/ECFR117_TheNewEuropeanDisorder_ESSAY.pdf
DOI: 10.1057/9781137548115.0004
1
Post-Crimean Political Order
Boris Makarenko
Abstract: The anti-modernization trend will become

the main feature of the country’s political regime for
the immediate future – this trend dooms the regime to
stagnation, making any attempts at technocratic renewal
futile. In order to keep the situation under control,
the regime will inevitably resort to greater, most likely
pre-emptive, and therefore disproportionate, repressions,
which will further exacerbate political conflict. The main
question that will determine the predictions of the political
regime’s future is how stable it will be under the new
conditions and what hypothetical solutions for overcoming
stagnation it will have at its disposal.
Lipman, Maria and Nikolay Petrov. The State of Russia:

What Comes Next?. Basingstoke: Palgrave Macmillan, 2015.
doi: 10.1057/9781137548115.0005.
6 DOI: 10.1057/9781137548115.0005
Post-Crimean Political Order 7
Farewell to modernization hopes?
By 2014, Russia had completely exhausted all the possibilities for an iner-
tia scenario. As was described in our Russia 2025 project,1 after his return
to the presidency, Vladimir Putin attempted to combine two different
scenarios: on the one hand, he sought to retain his regime’s framework
with its elites’ coalition pyramid which monopolized control over the
relations between power and property; on the other hand, he intended
to partially reform the political system.
Under a different set of circumstances, the ruling elite could prob-
ably avoid the ultimate choice of a development model for a few more
years. However, the Ukrainian events, especially the annexation of
Crimea, signaled that the choice had been made. The external, internal,
and socio-economic implications of the Crimean decision make the
modernization scenario impossible for Russia.The scenario that allowed
for both inertia and reforms that could take on a life of their own seemed
likely, albeit not the only possible scenario two years ago. At this time,
however, it transformed into a ‘forced inertia’ scenario, which leaves no
room for progressive development. Here is the rationale behind such a
conclusion.
First, lack of economic growth threatens to morph into a full-fledged
recession; strained relations with the West and lack of certainty lead to
capital flight, dashed hopes for investment growth and higher interest
rates. The recession forces further centralization of regions, which strips
the regional governments of initiative and stimuli to look for growth
strategies (see Chapter 3). The West stops cooperating with Russia and
starts containing it in all areas where cooperation is not necessary, and
modernization is hardly possible without dynamic cooperation with the
most advanced economies.2
Second, confrontation with the West sharply increases protective
and reactionary trends. The regime no longer cares about development,
reforms, and transformation. Instead, it preaches protection from ‘going
backward and downward’, citing the authority of Nikolai Berdyaev.3
Third, as the socio-economic situation deteriorates, the regime will
try to offset the growing discontent by stimulating the rise of patriot-
ism and imposing resistance to ‘foreign values’. True, this position is
more characteristic of neocorporate regimes; some of them were quite
capable of authoritarian modernization – under condition, however,
DOI: 10.1057/9781137548115.0005
8 Boris Makarenko
that authoritarianism was being used to mobilize resources and suppress

resistance to unpopular reforms.
Just as with all other facets of the Russian situation, the ‘Crimea factor’
has not changed the direction of the old trends but rather accelerated
them. While the regime’s tactics previously included both inertial elem-
ents and striving for controlled change, which could gradually acquire
its own dynamics, the ruling elite is now concerned exclusively with the
preservation of the current regime. But in reality, standing on the down
escalator means going down.
In keeping with a long-standing Russian tradition, the ruling regime is
trying to retain the role of the only subject in the country’s politics and
thus will not hesitate to resort to harsher means to achieve the desired
results. Therefore, the regime will continue relying on the paternalistic
majority, and pursue the course of isolation and marginalization of the
minority that attempts to claim its right to influence politics. To retain
the support of this majority as the public benefits continue to dimin-
ish, the regime has to resort to cruder and more ideology-driven social
mobilization mechanisms that allow it to maintain the status quo. More
importantly, institutional reforms are impossible under such a scenario
– they would undermine the regime’s support base, while the regime’s
flexibility is approaching its limits.
The comparisons of the current situation and the reign of Nicolas I
(1825–55) are becoming increasingly more common. Here is how Vasily
Klyuchevsky characterizes the emperor, ‘Nicolas made it his aim not to
change anything, not to add anything to the foundations but only sustain
the existing order, replenish the gaps ... and do it with no public input, in
fact, by suppressing public initiative.’4
The end of Nicolas’s rule coincided with the Russian defeat in Crimea,
while the current acquisition of Crimea seems like a new lease of life for
the regime. However, it is still too early to tell what its long-term impact
on Russia’s development will be.
Our subsequent discussion is based on the premise of the relative
status quo in Russia–West post-Crimea relations. The West has elected
for the strategy of containing Russia, which, while having its long-term
effects, will not trigger further escalation. In this case, to preserve itself,
the regime should minimize the damages that result from this confronta-
tion; it should gradually assume a less confrontational posture in its rela-
tions with the outside world and avoid drastic moves vis-à-vis the elites it
controls and the uncontrolled political forces. Another scenario – which
DOI: 10.1057/9781137548115.0005
would become practically inevitable in case of a fully fledged confronta-

tion with the West – would turn Russia into a purely authoritarian state.
Regime legitimacy as a key variable
Age-related ailments that afflict the Russian regime and others like it are
well-known; they make up a constellation of interconnected disorders:
decreased efficiency, eroded legitimacy, and the issue of succession. The
problem of legitimacy appears to be the most important. Essentially, it
can be reduced to two basic components: how we are ruled (how effi-
ciently the regime serves the needs of the people) and how much the rulers
deserve our trust. Even in the past, starting in 2011, these components
have developed along diverging tracks.
Performance legitimacy (the regime’s ability to satisfy socio-economic
needs) was also declining in the past. The model of sustaining social
well-being reflected in Putin’s third term socio-economic program (the
so-called May decrees of 2011) relies on completely different growth
rates. In other words, it simply cannot be implemented without infrin-
ging on other state expenditures. However, this situation is not expected
to cause legitimacy collapse: society still has quite a high tolerance level,
and the regime is still strong enough for ad hoc responses to sporadic
flare-ups (for instance, assisting regions or towns that face extreme hard-
ship financing their social spending). The regime will increasingly use
the ‘carrot’ approach to resolve these problems: protests are now out of
vogue, and the ‘Crimean consensus’ is still strong, which obviates the
need for a ‘stick’ that would disperse protest rallies. However, it would be
wrong to make it a long-term prediction. At any event, social optimism
disappears in this context, and the public cannot be easily mobilized to
support the regime (during elections and beyond).
One of the reasons why the Russian regime cannot be efficient is that
politics and policy are assigned separate realms in Russia. The ‘presi-
dential vertical’ dealt with politics, managing governors and the ruling
party, elections, relations with the opposition and public politics. On
the other hand, the government and local executives dealt with policy.
Naturally, one cannot draw a clear distinction between the two: any ‘big
politics’ decision has a direct impact on policy – for instance, prohibiting
imports from countries that imposed sanctions on Russia. Policy-making
structures were never particularly good at predicting social reaction to
DOI: 10.1057/9781137548115.0005
10 Boris Makarenko
their moves, and with the disappearance of political competition, they

lost their predictive abilities altogether. Hence, numerous scandals and
upheavals related to school reform, ‘optimization’ of medical facilities,
sharp price increases in the housing and utility sector, and cuts in social
subsidies. Losses from the rift between politics and policy continued to
grow as the state struggled to ‘optimize’ social expenditures (in reality, it
means cutting spending and making the regions shoulder the burden).
Institutional reforms played an extremely limited role in the regime’s
agenda. The regime preferred ad hoc management that preserves its
power monopoly to formulating binding and universal rules of the game.
When it did try to embrace universal rules, its success was rather limited.
For instance, implementing the road maps that would move Russia up in
the World Bank The Ease of Doing Business ratings (the project directly
monitored by the president) was successful in one of the three critical
areas (getting electricity). Efforts to improve the two others (dealing
with construction permits and trading across borders) failed miserably.
At the same time, state regulation is becoming more and more excessive.
The Ministry of Internal Affairs regained its right to initiate criminal
prosecution on tax violations. The rules of the game are unpredictable,
which every Russian business association is complaining about – for
instance, the unexpected tax hike on commercial property will exacer-
bate the already complicated situation for small businesses as consumer
demand declines and bureaucratic pressures and corruption increase.
Attempts to stimulate the economy through mobilizational measures
and substituting international economic and production structures for
their domestic equivalents, or increasing the tax burden on small busi-
nesses and the middle class, can hardly be economically efficient. Rather,
they will bring the most dynamic part of society over to the opposition
camp.
Another important component of the regime’s inefficiency is the
recognition of its unjust nature by the overwhelming majority of society
(including those who vote for it). The Levada Center’s December 2013
poll conducted at this author’s request highlighted the entire hierarchy
of institutions and practices that respondents believe to be most lacking
in the Russian society. The four most common answers were: citizens’
equality before the law (54 per cent), independent judiciary (44 per cent),
fair and honest elections (41 per cent), regime’s accountability to the public
(35 Per cent). The recognition that these elements are lacking actually
reflects the popular concern with the ‘injustice of the state’.5
DOI: 10.1057/9781137548115.0005
This component of the regime’s legitimacy has already been under-

mined, and there are no indications that this condition might be
reversed. However, it is not going to bring about drastic delegitim-
ization in the foreseeable future unless a large-scale economic crisis
develops.
The second component of legitimacy is the recognition of regime’s
symbolic leadership, which is essentially reduced to personalized power
in the case of Russia. Until recently it seemed that this component has
also been significantly eroded. Putin’s return to the presidency came at
a substantial cost: part of society interpreted it as a sign of the regime’s
permanency and lack of prospects for both personal development and
the development of the country as a whole.
The growing demand for greater openness and competition in polit-
ical life also indicates that personalized legitimacy is being eroded. This
is not a demand for a regime change, but rather for its greater account-
ability and the right to criticize and challenge its activities. The support
for a regime change (albeit merely theoretical) is another indicator that
the issue of succession is gaining more recognition. According to the
fall 2013 Levada Center poll, 41 per cent of Russians did not want to see
Putin as president after 2018, while only 25 per cent of the respondents
did. Incidentally, after the annexation of Crimea, the ratio changed to 22
per cent vs 49 per cent).6
It seemed that the Russian regime’s luck was running out. Sociologists
reported a decline in emotionally charged, active support for Putin,
which was still based on the fear of change and lack of alternatives.7 The
Putin regime’s luck ran out when it came to oil prices, high growth rates,
greater resources for paternalistic redistribution, and good relations
with the West. The regime also made an ‘unlucky’ choice by support-
ing Yanukovych in Ukraine. Only the resounding success at the Sochi
Olympics gave the nation some of its optimism back, although this feel-
ing was not likely to last long.
One should not overstate the erosion of this component of legitimacy.
The president’s rating has remained stable, although it has not reached
its record numbers in recent years. As Alexei Levinson convincingly
demonstrates,8 his main resource is that he acts as a unifying symbol for
the country and society that suffered shock from the breakup of an enor-
mous country and the disintegration of a powerful industrial complex
that has been replaced by atomized market subjects. Society was losing
confidence in the president’s ability to affect qualitative changes for the
DOI: 10.1057/9781137548115.0005
12 Boris Makarenko
better; nevertheless, it still valued stability and guarantees against future

shocks.
The annexation of Crimea and the ‘post-Crimean condition’ have
reversed the negative trend, increased the regime’s legitimacy as a
protector against external threats, and rallied people around the flag. For
a period of time (it is more likely to last years rather than months), this
increased ‘symbolic legitimacy’ will prevail over pessimism that accu-
mulated as a result of the regime’s routine work. However, the conflict
between these two trends remains unresolved; patriotic mobilization
does not solve any of the pressing socio-economic problems; in fact, it
only exacerbates the anti-modernization trends in the economy, public
discourse, and the regime’s agenda. The further development of the
conflict between these two components of the regime’s legitimacy will
to a large extent determine the framework for the development of the
entire political system.
Trends of political system development
The political reform started in 2012 exacerbated the conflict: the regime’s
dominance of public space was not in sync with the popular demand for
change described above; however, moving closer to this demand – creat-
ing a more pluralistic political field – could make liberalization processes
more dynamic. It would put the preservation of the power–property
pyramid into question and – in combination with unfavorable socio-
economic trends – also complicate the regime’s hold on power after the
2018 presidential elections.
The regime had started formulating its approach to resolving this
conflict even before the Crimean crisis, but the crisis allowed the
approach to take its final shape. Its first component is ultimate govern-
ment centralization, relying on big business (either state-run or fused
with state bureaucracy), and bringing everything possible – from social
networks and search engines to the moral sphere and cultural values
– under government control. Its second component is eviscerating the
rationale for reforming the political system.
The regime’s post-Crimean legitimacy seems like the solution to old
problems. However, in reality, this policy deepens the existing conflicts
and makes the balance of interests on the political field even more
inadequate.
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Besides, the facts on the ground do not warrant greater authoritarian-

ism, since the power vertical is dominant on every level, and all opposition
is weak and demoralized. The protest movement of 2011–12 evaporated,
failing to produce new organized political forces. Nevertheless, the
temptation of a pre-emptive crackdown might be too strong – it stems
from irrational fears of ‘Orange Revolutions’ amplified by the Ukrainian
events, as well as from the unpredictable socio-economic situation in the
next two to five years. Excessive fears, erroneous decisions, overzealous-
ness, and eagerness to display super-loyalty all lead to spontaneous and
a priori superfluous harshness in the regime’s actions.9 Russia’s hardline
tilt will encounter one less hurdle on its path: confrontation with the
West makes the Russian leadership less responsive to Western reaction
to its moves.
The question of whether the Russian political regime is eventually
becoming more authoritarian appears somewhat academic. Clearly,
the regime is acquiring more authoritarian traits and practices, and its
hardline posture is likely to increase.10 However, bestowing authoritar-
ian status upon Russia will contribute little to analyzing the prospects
for its political development. It is far more important to note the back-
ward slide in Russia’s modernization development: as stagnation sets in,
the increase in authoritarian traits becomes a dependent variable, but
it is hard to predict the scale of the slide and the future trajectory of
development.
The party system

Reform of the party system has brought its first tangible results. The
September 2013 election demonstrated the genuine growth of pluralism:
the effective number of parties has grown and exceeded the 3-point
mark (3.15) for the first time since 2007. The number of parties that
have a right to field candidates to the Duma without collecting signa-
tures has increased to 14 after the 2014 elections. The importance of the
single-member electoral districts is on the rise, bringing personalities
into politics. This positive trend seems irreversible, but it will have a
limited and delayed effect under post-Crimea conditions. The regime is
trying to maintain complete dominance of party space, but this time it
does so indirectly through manipulation, resorting to a combination of
methods.
The first one is ensuring greater control over the Duma’s opposition
parties. As long as the regime party dominated in the Duma, there was
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14 Boris Makarenko
no need to restrict opposition ‘clamor’– it was not perceived as a threat.

Now the regime senses the danger that comes from outside parlia-
ment and therefore seeks to demonstrate almost absolute consensus
within the ‘parliamentary establishment’. The regime is trying to seize
control of almost every possible agenda (except for the liberal one).
Thus, it is actively promoting social, conservative, paternalistic and
national patriotic agendas. The Crimean factor makes this trend much
more pronounced: it is not accidental that almost no one criticized the
government annual report to the Duma in April 2014 despite the obvi-
ous economic failures of the past year. The opposition is afraid to cast
any doubt on the ‘patriotic consensus’. Voting becomes increasingly
unanimous. Essentially, we are witnessing the degeneration of the party
system: the absence of power succession and the parliament’s weakness
stifle substantive discussion, which is being replaced by populist and
demagogical PR tricks. The parliamentary parties become part of the
neocorporate system, where they serve the role of the regime’s ‘fellow
travellers’, playing into its hands: for instance, the leaders of ‘opposition’
parties are used for making more radical statements on the Ukrainian
crisis.
Other methods have emerged with the start of political reforms. The
second one is erecting new barriers to political competition. New parties
lost their right to nominate candidates for regional elections unless they
collect a large number of signatures. This restriction, which regional
elites lobbied for, runs counter to the spirit of the reform: if a party has
a harder time winning seats in regional legislatures, it will also face
more difficulties while registering for the federal elections. As an illus-
tration, in October 2012, an average of 13.2 party lists took part in the
regional elections. In September 2013, the number was 17.2, but only 8.5
lists per region remained at the end of registration for the 2014 election
campaign.11 The old restrictions are still in full force as well. For instance,
the municipal filter – a requirement that gubernatorial candidates need
to gather 6 per cent to 10 per cent of signatures from the members of
local legislatures – effectively removed the competitive component from
the 2014 gubernatorial election in thirty Russian regions, and the incum-
bents were re-elected, gaining in most cases between 70 and 85 per cent
of the popular vote.
The third method is expanding pluralism while disallowing the
emergence of genuine alternatives to the regime. United Russia lost
about 19 per cent at the 2013 elections, but its loss was no one’s gain: the
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other parties in the parliament received as many votes as they did in the
previous election. The difference went to two dozen small parties, very
few of which were able to overcome the election threshold. The Civic
Platform was the most successful of the parties, receiving 4.5 per cent
of the vote. It was subject to strong attacks and in some cases was not
allowed to participate in elections (the gubernatorial elections and the
Yaroslavl region legislative elections). In other words, the party space
did not acquire any new forces, and the regime has already learned to
work with the old ones. At the same time, both the old parties that show
some signs of activity and the new ones are facing pressure. For instance,
some high-profile Communist Party members had criminal charges
filed against them; the Civil Platform and Green Alliance members are
also targeted.
The regime does not need to expressly prohibit particular parties or
institute a single-party system: the post-Crimea situation confirmed
its total dominance, and it is quite happy with the other parties in the
parliament, thus their presence in the Duma will be supported. In 2014,
with the ‘post-Crimean loyalism’ United Russia scored more than 60 per
cent in regional legislative elections, while other parliamentary parties
lost votes (Just Russia more than others).
The regime party is also being redefined as part of the new course.
Until recently, the regime seemed to have spurned the reliance on the
‘dominant party’ and moved toward a purely corporate and personalized
format – relying on the All-Russia People’s Front and the leader’s direct
communication with the people.
In some regions (ethnic republics, regions with monocentric power
system), United Russia remains as strong as ever; in others, it retains a
relative majority, but in many regions competition is growing stronger.
The most important change is that United Russia stops acting as the main
source of public support for the president (the People’s Front assumes
this function now), and it is no longer the only possible affiliation for
pro-regime politicians.
This trend was at the very least stemmed as a consequence of the
annexation of Crimea. According to the Public Opinion Foundation
polls, the president’s job approval rating has increased from 45 per
cent in February to 70 per cent in August, while support for United
Russia has grown from 38 per cent to 54 per cent.12 United Russia scored
a convincing victory at all the September 2014 elections. However, it
is not going to make Russia’s political regime less personalized, and
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16 Boris Makarenko
United Russia will not regain its status as the one and only regime party.
Besides, broader application of the majoritarian voting system may lead
to significant changes in the makeup of the legislature. The new members
of the Duma will be more active public figures capable of communicating
with their electorate. It is not accidental that United Russia is switching
to the blanket primary model, which forces party members to compete
against one another for the sympathies of active voters.
In the period between the elections, the All-Russia People’s Front will
be engaged in advancing popular initiatives that were actually carefully
chosen and orchestrated from the top; the regional elections will become
practice runs for the model of mixed representation (United Russia plus
the loyal single-member candidates). This model is aimed at building
the corporate vertical in which the regional elites’ vertical, which is
formally institutionalized through United Russia, will take a backseat to
the nonpublic bureaucratic verticals – both civil and dominated by force
structure representatives. The ‘patriotic consensus’ will not make this
construction ideological but will give it a ‘distinct mentality’13 (see Maria
Lipman’s chapter, Chapter 6).
A full-strength appearance of the All-Russian People’s Front is most
likely to be postponed until the 2018 presidential elections, when it
will play a role in the new personalized Putin coalition. However, this
coalition may make some kind of appearance as early as the 2016 Duma
elections. It should be noted, however, that the ‘regime party’ construc-
tion was also personalized in the past: while United Russia was highly
institutionalized, it had an extremely limited role in formulating agenda
and proposing candidates for top government positions.14 As had previ-
ously been the case, the regime party is not there to support the regime;
instead, it acts as a ‘quasi-party’ component of the power vertical.
The presence of single-member deputies on the political field will
affect the behavior of other parties. Rigid power vertical within the
regime party will be replaced by bargaining and cajoling. It will thus
create some pre-conditions for development of inner-party democracy,
however limited. In the next post-2016 cycle, the regime party will no
longer look like a monolith. Instead, it will be a coalition of United
Russia and single-member deputies from the People’s Front, which
resembles the groups of independent deputies in the first three Dumas
(1994–2003). The return to the mixed system on the federal level and
the decline in share of proportional party representation on the regional
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level will lower the value of the ‘party franchise’. Thus, the stimuli for
building parties on the regional level weaken significantly.
The parties represented in the Duma will be forced to prove their
competence. The Communist electorate will dwindle through natural
attrition, but the losses will not be replenished. The Liberal Democrats
might grow stronger in the nationalist-leaning regions, as well as in the
regions with ‘near-the-border mentality’ like the Far East. However,
the party’s lifecycle is limited to its leader’s capabilities. He is still able
to combine nationalism and populism, thus leaving no room in Russian
politics for other nationalist projects. Although with the ‘Crimean
consensus’, even this politician will have a hard time playing the nation-
alist card, since the president gets all the laurels of national success now.
Just Russia will remain in parliaments as long as it gets a free rein to
recruit elite figures in the regions.’Franchise’ parties might enjoy some
sporadic success. Some parties will unite alternative groups of regional
elites (it is not clear whether it will be one or two parties across the coun-
try or perhaps different ones in different regions). Yabloko is not likely
to return to big politics. Rodina might possibly reappear, but then again
the old conflict will emerge: the party is allowed into politics as a loyal
affiliate of the regime party (in the framework of the new and not yet
clear concept of ‘People’s Front’), but in times of crisis, it might repeat
the fate of Rogozin’s Rodina or split.
The appearance of a viable new party on the liberal flank seems
extremely unlikely. Apart from the traditional difficulties that the
liberal camp faces, two more problems exist. First, the events of 2011–12
substantially widened the gulf between the liberal voter and the regime,
which has intensified the conflict between the ‘establishment’ approach
(associated with Mikhail Prokhorov with his attempts to find a place in
the political system on the regime’s terms) and the radical rejection of the
current regime (associated with Alexei Navalny). This schism also exists
among the liberal segment of the electorate, which makes the emergence
of a viable party that expresses the interest of ‘angry urbanites’ less likely
(the ‘urbanites’ themselves hover between these two hardly compatible
positions). The second factor is a sharp escalation of ideological tensions
in the post-Crimean society. The new ‘system’ party could emerge only
as the union of the ‘urbanites’ and the moderate and pragmatic segment
of the elite, which appears extremely problematic under the current
conditions.
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18 Boris Makarenko
Thus, changes in the party system will not produce a qualitatively

different political system in the foreseeable future. Despite all the signs
of degeneration, the regime will keep it in its current state: these parties’
obvious servility is more important to the regime than the clearly deteri-
orating representation of people’s interests. The system will increasingly
resemble neo-corporate ones: a personalized ‘regime party’ completely
accountable to the country’s leaders plus an imitation multiparty system
similar to ‘People’s Fronts’ in the German Democratic Republic or third
world countries.
Center–regions
The disconnect between the Center and the regions can become the main
axis of conflict in non-competitive political systems, which explains why
the Kremlin paid particular attention to strengthening of the ‘power
vertical’. ‘Verticality’ in relations between the higher and lower echelons
of government is reaching its maximum level, despite the ostensible
restoration of gubernatorial elections.
This trend exacerbates the previously existing conflict between the
objective need for decentralization and the growing attachment to
retaining the monopoly on power–property relations. Both economic
and political interests call for decentralization. In the economic realm,
regions have to be more accountable for improving the investment
climate. Besides, growth has to be stimulated and social policy optimized.
In the political realm, the optimal model for local government has to
be created. But the Center will demand full accountability for budget
spending and ‘optimization’ (in reality, cutting) of social expenditures,
as well as attaining the objectives outlined in ‘May decrees’. It will also
directly manage the deficits of regional budgets.
Regional elites receive numerous clear signals that point to the futil-
ity of opposition to the Center: they are increasingly dependent on the
Center’s financial support (see Natalia Zubarevich’s chapter, Chapter 3);
force structures play a much greater role in domestic politics; the Center
has a final say in what happens to governors. The barrage of governors’
early resignations in the spring of 2014 was totally predictable: in any
event, most of them would have liked to be done with the election cycle
as soon as possible before the socio-economic conditions in the regions
deteriorate; besides, the ‘Crimean consensus’ has created more favor-
able conditions for conducting elections. Once all the regional leaders
acquire the status of elected governors, the Center will have less power
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to resolve conflicts by removing governors before the end of their term.

Impeaching or recalling governors carries a hefty political price and can
be resorted to only in extreme cases. However, in the next few years,
the Center will have enough other instruments to exercise control over
the governors, thus retaining full control of the situation. Just as with
the party system, attempts to resolve crises precipitated by old policies
by tightening control will buy the regime some time (probably, a few
years); however, it may precipitate new crises in the future, and the
federal Center will have even fewer institutional resources to deal with
them.
In exchange for their obedience to the Center, governors are allowed
to tighten their grip over the municipal governments of large cities.
Municipal government reform effectively eliminates the city as a polit-
ical subject, since it grants governors a right to cancel direct mayoral
elections and gives them a focal role in appointing city managers. One
of the fathers of this reform, the Duma member Vyacheslav Timchenko,
offered an extremely forthright comment on the recent changes: ‘We
have simply given a legal status to an already existing situation.’15 In the
current context, the Center does not need to play the game of checks
and balances between governors and mayors, since it is confident that
it has the regions under its firm control. The reform comes at a price,
though – it denies cities the opportunity to become hubs of economic
growth and human capital development. Regions will deprive cities of
budgetary funds in favor of economically depressed peripheral areas.
It is not accidental that the Moscow region with its traditionally strong
multiple city elites and a non-existent regional center became the first
federation subject to take advantage of these opportunities.
The region vs city confrontation will grow more political as the
resource struggle intensifies, but the institutional channels for expressing
city interests (mayor and city legislature) will be weakened or eliminated.
This, in turn, will nourish the ‘angry urbanite movement’, which will be
driven by the municipal (or regional) rather than federal agenda. In the
places unaffected by the reform, regional governments will still apply
increased pressure to the hubs of growth and Russia-1 (to borrow Natalia
Zubarevich’s terminology).
Nevertheless, the crisis of the political system around the Center–region
dimension was not prevented but merely postponed. The amendments
to the law on municipal government allow regions to choose between
the harder and softer models. Some regions will not embrace pluralism
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20 Boris Makarenko
and political competition in the short and mid term. In contrast, other
more politically liberal and economically diverse regions (Moscow,
Northwest, Urals) demand more competition. However, the example of
Moscow region contradicts this assumption.
Civil society
The regime comfortably dominates the party system and regional power
vertical, thus any normative restrictions in these spheres will be gradual.
But when it comes to civil society and information space, one can expect
tighter restrictions. These network-organized spaces are impossible to
control directly; besides, they are the only sources of potential regime
delegitimization and protest mobilization, as well as self-organization.
The fate of the ‘foreign agents’ law still remains a litmus test for gaug-
ing the state’s treatment of civil society. In 2013, the cosmetic liberal-
ization of the law (for instance, a more adequate definition of the term
‘political activities’) still seemed possible; now after the Crimean events,
the Constitutional Court deemed the law legally valid. According to the
law, in 2014 the Justice Ministry was granted a right to forcibly include
NGOs in the ‘agents’ registry’ without court sanction. There are multiple
plans to extend the law to research institutions and individuals. Another
new legislation subjects NGOs to stricter audits than even commercial
organizations. Pressure on Internet media outlets is also increasing. The
liberal Dozhd TV channel was on the brink of closure after most broad-
casters were provoked to take its signal off the air. Subsequently, it was
prohibited to place advertising on such channels.
The intensifying crackdown on civil society activism is an inevitable
consequence of society’s ideological rift. The escalation in the confronta-
tion with the West induced by the ‘external factor’ is projected on Russia’s
internal affairs. The sociopolitical forces opposing the regime or merely
autonomous from it are seen as ‘the fifth column’ and ‘national traitors’
by the regime and its supporters. Just as at the times of the Soviet Union,
the political map no longer has neutral space for civic (not even neces-
sarily political) activism. Such activism has to be ‘patriotic’; otherwise, it
is declared destabilizing and harmful to Russia’s interests.16
The talk of democratic development (even the development of ‘sovereign
democracy’) has almost disappeared from the discourse initiated by the
regime or pro-regime groups in recent years; liberalism has all but become
a curse word; democratic values are being decried as alien and ‘imported’.
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The attempt to turn Russia into a stronghold of ‘conservative values’ does

not resolve a single issue on the country’s internal or external political
agenda, thus signifying the ultimate rejection of modernization strategies.
All these developments portend further stagnation of civil society and
even more persistent attempts to substitute it with government-organized
NGOs (GONGOs) – civic structures created by the regime for advan-
cing its agenda. Another set of organizations similar to civic chambers
and public councils affiliated with government bodies is about to appear.
These organizations will function as ‘public controllers’, imitating the
regime’s accountability to the public.
As long as the regime is firmly in command, the government-control-
led NGOs will function as an obedient link in the relation between the
state and part of society; however, the situation might change in the long
run. If the regime’s legitimacy is undermined, civil society gets detached,
and then not only dissident groups but ostensibly loyal and even recre-
ational civic associations can become politicized, as Adam Przeworski
demonstrated with the case of Central Europe over two decades ago.17
Post-Crimea regime prospects
The decision to annex Crimea was to a large extent situational: on the

one hand, it did not directly stem from preceding domestic or inter-
national developments; on the other hand, it did not contradict the
earlier trends – in fact, as we have already mentioned, it accelerated
some of them. The rejection of modernization development in favor of
maintaining the status quo and preserving the current political regime
may have the following consequences:
▸▸ Freezing at the stage of ‘bureaucratic authoritarianism’. In
Russia–2025, we offered the model for applying Guillermo
O’Donnell’s theory18 to Russian conditions. Two years ago, after
the 2011–12 protests, we thought that the key parameters of
this strain of authoritarianism must change, since the regime’s
costs of suppressing the protests had clearly gone up.19 This
ostensibly created a chance for transitioning to a more pluralistic
regime. However, the ‘Crimean consensus’ reverses the trend: it
significantly lowers the costs of suppressing dissent. As for the
costs of tolerating the opposition, we have to recognize that they
have been steadily growing in recent years: we are witnessing
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22 Boris Makarenko
the escalation of the crisis, and the regime’s course for escalating
confrontation with all the forces beyond its control (see Chart 1.1).
▸▸ Perpetuating the ‘king of the hill’ model20 in which the
power–property pyramid is supported at the expense of damaging
institutions and restricting political protest. The regime completely
loses the stimuli for institutional improvement.
▸▸ Continued deterioration of the quality of governance and an
exponential increase in the likelihood of erroneous decision-
making. The decision-making process will be unencumbered by the
public discussions inside the country or the views from outside its
borders, which makes even authoritarian modernization practically
impossible.21
Let us stress that the anti-modernization trend will become the main
feature of the country’s political regime for the immediate future – this
trend dooms the regime to stagnation, making any attempts of techno-
cratic renewal futile. In order to keep the situation under control, the
regime will inevitably resort to greater, most likely pre-emptive, and
therefore disproportionate repressions, which will further exacerbate the
political conflict.
The main question that will determine the predictions of the political
regime’s future is how stable it will be under the new conditions and
what hypothetical solutions for overcoming stagnation it will have at its
disposal.
Cost of toleration
Probability of bureaucratic
authoritarianism
Probability of
democratization
Cost of supression
Dec 1993 Dec 2003 Dec 2011 Feb 2014
chart 1.1 Evolution of bureaucratic authoritarianism in Russia
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As long as the ‘Crimean consensus’ remains in place, and the confron-

tation with the West is not yet felt too strongly, the regime will restrain
its authoritarian measures, opting for selective repressions. Assuming
that the crisis in relations with the outside world on the issue of Ukraine
will not escalate radically, the regime will strive for inertial development,
avoiding drastic steps.
The extremely hermetic nature of such a regime complicates rational
predictions of its future. Thus, it is difficult to predict the scenario and
timeframe for undermining the ‘Crimean consensus’ in the face of
the growing socio-economic challenges. At the hypothetical level, the
following predictions can be formulated.
The risk of the elites splitting will remain low for an extensive period
of time. Under the vertically constructed neo-corporate regime, the
elites will be ready to tolerate numerous inconveniences (and live in fear
of being purged) for the sake of keeping their place in the power hier-
archy. Conflicts within the regional elites and between the regional and
municipal elites are inevitable, but they will not reach a critical point.
The decrease in redistributed resources will generate a multitude of
backroom tensions, including the tension between the ‘force structure’
and ‘civilian’ elites. The number of conflicts between various business
interests will also increase. However, as of today, we cannot rationally
predict any splits. The splits will only come to the fore if the situation in
all other crisis areas significantly deteriorates.
Just as in the case of the Soviet collapse a quarter of a century ago,
socio-economic factors will not be the main drivers behind the regime’s
development or collapse. However, one should not underestimate their
significance. Treating the socio-economic situation and one’s own well-
being as value that are worth preserving (in other words, fear of losing
normalcy) is the foundation of stability for any society and a very power-
ful shock absorber for any revolutionary upheavals. This sense of well-
being was missing in the late Soviet period, and it may also disappear in
tomorrow’s Russia. This scenario is likely if a few factors converge:
▸▸ There will be a sharp and massive decrease in living standard, and
the regime will prove unable to thwart this crisis, so it will grip a
significant number of Russian localities.
▸▸ The ‘Crimean consensus’ will no longer work – in fact, it will end in
an abrupt and unexpected collapse (for instance, due to the regime’s
failure), causing powerful reverberations throughout the entire
social spectrum.
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24 Boris Makarenko
These possibilities are not predictions of the regime’s survival or collapse:

they depend on a number of additional factors, such as the scale of the
regime’s errors, the reaction of ‘the street’, the politicization of civil soci-
ety, first splits in the elites, worsening of the succession crisis by 2018
and others. However, the regime will definitely collapse if these condi-
tions are met. It is impossible to draw up a scenario of such a collapse,
let alone predict what regime will come next. Researchers note that in
the decades following the Cold War non-democratic regimes are either
replaced by democracies (57 per cent of the cases) or dominant party
regimes (26 per cent), while military dictatorships and chaos represent
rare exceptions.22 However, due to the weak institutions and personal-
ized character of Russia’s political regime, such exits are unlikely. There
appear to be no actors, social strata, or institutions to affect positive
change. However, many cases of liberalization started – and successfully
ended – from a much lower threshold while being implemented by
members of the old elite.
Notes
1 B.Makarenko, (2013) ‘Frameworks of Political System Development’ in M.
Lipman, N. Petrov (eds) Russia 2025: Scenarios for the Russian Future (London:
Palgrave Macmillan), 161–80.
2 Although the parallels between the Soviet Union and today’s Russia are
imperfect, it should be remembered that the West agreed to a large-scale
cooperation with the Soviet Union only when it was in dire economic straits,
for instance, during the Great Depression in the 1930s or after the sharp
increase in the oil prices in the 1970s (the gas pipeline project). Nothing of
that sort is happening at this time.
3 President of Russia (2013) ‘Presidential Address to the Federal Assembly’, 12
December 2013, http://www.kremlin.ru/transcripts/19825.
4 V. Klyuchevsky (1993) Russian History. Full Course of Lectures, Lecture
LXXXV: The Nicholas I Reign (Moscow). We appreciate Vladimir Gurvich’s
suggestion. See V. Gurvich (2014) ‘The Future Dictated by the Past’,
Nezavsimaya Gazeta, 21 May 2014.
5 Center for Political Technologies (2013) ‘Russian Politics–Chance for
Reformers’, Report for the Committee for Civil Initiatives, http://komitetgi.
ru/analytics/1292/
6 S. Goryashko (2014) ‘Vladimir Putin Is Recognized as Irreplaceble’,
Kommersant, 15 May 2014.
DOI: 10.1057/9781137548115.0005
7 S. Belanovskiy, M. Dmitriyev, et al. (2011) The Driving Forces and Prospects

for Russia’s Political Transformation, Analytical Report (Moscow. Center for
Strategic Research).
8 A. Levinson (2013) ‘Russian Society Before and After 2012’, Vestnik
Obshchestvennogo Mneniya: Dannye, Analyz, Diskussiya, 1 (114), January–March
2013, 30–34.
9 A case in point is the force structures’ reaction to the Foreign Ministry’s
recommendation to Russian citizens to ‘be cautious’ in regard to trips
abroad. See V. Barinov (2014) ‘ Judges Are Sent Notices Not to Leave the
Country’, Kommersant, 28 May 2014; D. Yevstifeev, K. Baranova (2014)
‘Force Structure Employees Now Vacation in Russia’, http://www.gazeta.ru/
social/2014/05/29/6053105.shtml
10 The Economist Intelligence Unit first downgraded Russia from a ‘hybrid’ to
‘authoritarian’ regime in 2011. The country moved down a few places in the
Economist’s Democracy Index in 2012, being ranked 122 out of 167 countries.
See The Economist Intelligence Unit (2012) Democracy Index 2012. Democracy
at a Standstill, http://www.eiu.com/public/topical_report.aspx?campaignid=
DemocracyIndex12
11 The Committee for Civil Initiatives (2014) Analytical Report No 3 on the
Long-term Monitoring of the September 2014 Elections, http://komitetgi.ru/
analytics/1744/#.U_dFqqLmBiw
12 Public Opinion Foundation (2014) Political Indicators: Electoral Rankings.
Public Opinion Poll on 9–10 August 2014, http://bd.fom.ru/pdf/d32ind14.pdf
13 The term was introduced by Juan Linz to describe ersatz ideology in
authoritarian regimes. See: J. Linz, A. Stepan (1996) Problems of Democratic
Transitions and Consolidation: Southern Europe, South America and Post-
Communist Europe (Baltimore: Johns Hopkins University Press).
14 B. Makarenko (2011) ‘The Post-Soviet Regime Party: The United Russia in
the Comparative Context’, Polis, 121(1), 42–65.
15 V. Khamraev, E. Yeremenko (2014) ‘Municipal Reform Runs Ahead of Law’,
Kommersant, 82 (5355).
16 A case in point: at the end of May, this author received a spam email from
the Kaluga region about the creation of a civic organization named ‘Against
the Fifth Column’. However, in reality, its ‘founder’ was advertising a lawsuit
he commenced against a woman identified as ‘spending six months a year in
Israel’ for allegedly building a house on a disputed land plot.
17 A. Przeworski (1991) Democracy and the Market (Cambridge: Cambridge
University Press), 58–70.
18 G. A. O’Donnell (1973) Modernization and Bureaucratic-Authoritarianism.
(Berkeley: Univiversity of California Press), 51–52.
19 B. Makarenko, (2013) ‘Frameworks of Poliitical System Development’, 161–80.
DOI: 10.1057/9781137548115.0005
26 Boris Makarenko
20 B. Makarenko, A. Melville (2015) ‘How Do Transitions to Democracy Get

Stuck, and Where?’ in A. Przeworski (ed.) Democracy in a Russian Mirror,
Cambridge 268–97.
21 I. Yurgens (ed.) (2011) Attaining the Future. Agenda 2012 (Moscow: Econ-
Inform).
22 B. Magaloni, R. Kricheli (2010) ‘Political Order and One-Party Rule’, Annual
Review of Political Science, 2010, 13 (1), 123–43, p. 134.
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V. Barinov (2014) ‘Judges Are Sent Notices Not to Leave the Country’,
Kommersant, 28 May 2014
S. Belanovskiy, M. Dmitriyev, et al. (2011) The Driving Forces and
Prospects for Russia’s Political Transformation, Analytical Report
(Moscow. Center for Strategic Research).
Center for Political Technologies (2013) ‘Russian Politics–Chance for
Reformers’, Report for the Committee for Civil Initiatives, http://
komitetgi.ru/analytics/1292/
S. Goryashko (2014) ‘Vladimir Putin Is Recognized as Irreplaceable’,
Kommersant, 15 May 2014.
V. Gurvich (2014) ‘The Future Dictated by the Past’, Nezavsimaya Gazeta,
21 May 2014.
V. Khamraev, E. Yeremenko (2014) ‘Municipal Reform Runs Ahead of
Law’, Kommersant, 82 (5355).
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LXXXV: The Nicholas I Reign (Moscow).
A. Levinson (2013) ‘Russian Society Before and After 2012’, Vestnik
Obshchestvennogo Mneniya: Dannye, Analyz, Diskussiya, 1 (114),
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J. Linz, A. Stepan (1996) Problems of Democratic Transitions and
Consolidation: Southern Europe, South America and Post-Communist
Europe (Baltimore: Johns Hopkins University Press).
B. Magaloni, R. Kricheli (2010) ‘Political Order and One-Party Rule’,
Annual Review of Political Science, 2010, 13 (1), 123–43.
B. Makarenko (2013) ‘Frameworks of Political System Development’
in M. Lipman, N. Petrov (eds) Russia 2025: Scenarios for the Russian
Future (London: Palgrave Macmillan), 161–80.
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B. Makarenko, A. Melville (2015) ‘How Do Transitions to Democracy

Get Stuck, and Where?’ in A. Przeworski (ed.) Democracy in a
Russian Mirror, Cambridge 268–97.
B. Makarenko (2011) ‘The Post-Soviet Regime Party: The United Russia
in the Comparative Context’, Polis, 121(1), 42–65.
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Assembly’, 12 December 2013, http://www.kremlin.ru/
transcripts/19825.
A. Przeworski (1991) Democracy and the Market (Cambridge: Cambridge
University Press).
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d32ind14.pdf
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Long-term Monitoring of the September 2014 Elections, http://komitetgi.
ru/analytics/1744/#.U_dFqqLmBiw
The Economist Intelligence Unit (2012) Democracy Index 2012. Democracy
at a Standstill, http://www.eiu.com/public/topical_report.aspx?campai
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DOI: 10.1057/9781137548115.0005
2
The Russian Economy at the
Start of the Post-Putin Era
Sergey Aleksashenko
Abstract: The fall of 2014 demonstrated that the economic

sanctions on Russia accelerated inflation, which was
triggered by the devaluation of the ruble. The ban Russian
authorities imposed on Western food imports only
exacerbated consumer price hikes. The elevated inflation
rates (close to 10 per cent a year) may seriously distort
the budget in the coming years. The law requires that the
salaries of public-sector employees be adjusted for inflation
if its annual rate exceeds 6 per cent. However, the 2015–17
budgets anticipate inflation rates of 5.5 per cent or lower
and thus do not allocate funds for additional inflation-
related expenses. Since the Russian authorities are unlikely
to resort to salary freezes for public-sector employees,
they will have to compensate for inflation adjustments by
cutting other expenses or dipping into the Reserve Fund.

doi: 10.1057/9781137548115.0006.
28 DOI: 10.1057/9781137548115.0006
The Russian Economy at the Start of the Post-Putin Era 29
Economy is extremely inertial. Even the strongest shocks may manifest

themselves in a few months, while the consequences of government deci-
sions and legislative or regulatory changes may become visible only a few
years later. This makes one especially cautious when engaging in scenario
analysis: while political processes allow us to identify certain bifurcation
points that would lead to starkly different scenarios, economic processes,
even those developing according to radically different scenarios, would
be affected by the inertial forces of the past, accumulated trends, as well
as conditions that lie outside of the economic realm. No political regime
can alter them over the short or even medium term.
This scenario exercise – Russia on the way to 2025 – was based on
a premise that Putin will be re-elected president in 2018, and thus will
remain in the Kremlin until at least 2024. This baseline scenario envis-
ages the inertial development of the economic situation in Russia, with
no radical changes in economic policy. At the same time, new factors
that lie outside of the economic realm, which are clearly discernible
already but so far have made little impact on the economy, will become
more pronounced. A brief overview of Russian economic history start-
ing from 1999 will explain the mechanisms behind this scenario. This
overview will allow us to identify the driving forces of economic growth
before the 2008 crisis and the causes of the slowed growth in 2011–14, as
well as certain distinctive elements of Vladimir Putin’s economic policy.
In addition, two deviations from the baseline scenario will be
analyzed:
1) The ‘New Cold War’ as a consequence of the Russian policy

toward Ukraine. This war will be mainly characterized by Western
economic sanctions and the Russian leadership’s attempts to
promote the country’s self-isolation (from the West) development
path.
2) ‘Vector change’, when approximately in the middle of the forecast
period the Russian leadership (regardless of who will be at the
helm and why this decision is made) will realize the depth of the
economic problems and start solving them comprehensively.
The Russian economic miracle: has there

ever been one?
The 10-year period spanning from the fall of 1998 to mid-2008 may
well be considered the ‘Russian economic miracle’ – average economic
DOI: 10.1057/9781137548115.0006
30 Sergey Aleksashenko
growth had reached approximately 7 per cent a year, which is a very

large number by global standards. We can only identify 13 instances
when countries’ post-World War II economies had grown at such rate in
the span of an entire generation – 25 years. But to maintain this growth
rate, the economic dynamics must have a powerful engine of growth
stemming from a confluence of natural and geographic, political, and
economic factors. However, it had become evident as early as 2010–11
that the Russian economy would not be able to maintain the 7 per cent
growth rate, which lends itself to a conclusion that the country’s polit-
ical leadership was unable to find any recipes for fast growth in the first
decade of the 21st century. Moreover, the sectoral analysis of the dynam-
ics of the Russian economy in that decade reveals that the period of rapid
economic growth was not homogenous: at different time periods it was
determined by a number of different factors that succeeded one another
and occasionally overlapped.
▸▸ 1999–2001. The economic growth was attributed to the ruble
devaluation during the 1998 crisis. The devaluation made Russian
products (primarily consumer goods) more price-competitive. This
factor had been exhausted by the middle of 2001.
▸▸ 1999–2004. Property rights and basic economic rules of the
game became stable, which sharply increased investments and
efficiency of private enterprises in the export-oriented natural
resource sectors. The actual oil output increased 50 per cent, metal
production grew 30–35 per cent (to compare, gas output rose only
10 per cent for the same period of time). This factor had been
exhausted by the middle of 2004 due to the Yukos affair.
▸▸ 2002–05. The rapid price increases on the global oil market and
delayed tax increases in the oil sector, which came only at the end
of 2004, allowed private enterprises to accumulate substantial
financial reserves, which were partially invested in development.
▸▸ 2005–08. Rapid increases in external debt in corporate and banking
sectors overheated the economy. Practically all growth was limited
to the non-tradable sectors (finances, construction, real estate
transactions).
It thus has to be acknowledged that something else other than Putin’s
economic policies produced the decade of exuberant economic growth.
Rather, the positive dynamics were a legacy of the reforms of the 1990s,
which the Russian president so loves to hate, and a result of some
DOI: 10.1057/9781137548115.0006
external factors. In fact, it then becomes clear that it was Putin’s 2004–13
counter-reforms that mainly slowed the economic growth. Besides, the
positive impulse from the favorable external climate in the first decade
of the 21st century was eventually exhausted.
Crisis hangover
It is commonly believed that the 2008 crisis was imported to Russia

from abroad, and no internal factors could have caused it at that time.
This belief has no basis in fact, although there is no doubt that the most
serious economic crisis in the last eighty years had a powerful impact on
most countries, including Russia. Of course, the events of summer and
fall of 2008, when the financial storm swept away one American financial
mega-institution after another, eventually leading to the paralysis of the
global financial system, played an extremely negative role and provoked
a number of downward trends in the Russian economy. Nevertheless, we
have to recognize that the Russian economy had been ‘pregnant’ with the
crisis by the time the global economic meltdown started; by the summer
of 2008, it had already developed pressure points that would trigger
crisis in two to three years. They are:
1 Overheated economy with the symptoms of ‘Dutch disease’. The
economy grew exclusively by the expansion of non-tradable sectors
(mainly construction, real estate, and finance). While in 2006–07
most experts denied that the economy is overheated and afflicted
with the Dutch disease, they had changed their position by the
start of the crisis. Even government officials acknowledged that the
economy was showing some signs of overheating. Historically, very
few overheated economies have been able to avoid crisis.
2 Sharply weakened balance of payments. Its current account surplus
was maintained exclusively by the fast increases in oil prices.
According to our expert estimate, Russia’s balance of payments is
stable when the current account surplus remains at or above 0.5
per cent of GDP. In the past, the Russian currency was drastically
weakened when the current account balance dropped below that
mark. This is what happened in 1997–98 and 2008.1
3 The rapid growth of the external debt of the corporate and banking
sectors,2 which had been increasing at the rate of 100–120 billion
dollars annually since 2005. The total debt accumulated by the
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start of the crisis was not the biggest threat to the economy (it
was actually relatively low – 508 billion, less than 32 per cent
of GDP). However, about a third of this debt had to be repaid
within 18 months – from the third quarter of 2008 to the fourth
quarter of 2009. Thus, the 1998 crisis was in a sense repeated in
2008, but this time with corporate rather than sovereign debt. The
external borrowing strategies employed by the Russian banks and
companies did not involve exact accounting of their efficiency,
which would help to generate positive cash flow to service the
debt; instead, they relied on refinancing with its ‘short-term debt –
long-term debt – equity sale’ algorithm. As a result, the banks
and companies made themselves hostage to the financial markets’
conditions. As has been the case with many developing countries
(Mexico in 1994, Korea, Thailand, and Indonesia in 1997, Turkey in
2001), sooner or later financing reaches its saturation point, when
investors are no longer willing to lend but demand the repayment
of the old loans.
4 The Central Bank of Russia (CBR) has been unable to create
functional banking supervision and regulation system. Not only did
the CBR fail to adequately estimate the risks for the entire banking
system or individual banks,3 but it could not even detect simple
cases of asset embezzlement, for instance in Svyaz Bank, Electronica
Bank, or Mezhprombank. Russian banks neglected every reasonable
limitation on their operations and ran disproportionate currency
risks, believing in the constant rise of the ruble. According to the
CBR estimates, the unhedged long currency position of the Russian
banks (the difference between their assets and liabilities) had
reached approximately 130 billion dollars by the fall of 2008,4 which
corresponded to the overall capital of the entire banking system.
This means that a 10 per cent ruble devaluation would instantly
result in 13-billion-dollar losses for the banking system, while
its total revenues for the three quarters of 2008 amounted to 354
billion rubles (14 billion dollars at October 2008 exchange rate).
The 2008–09 crisis proved to be extremely devastating for the Russian
economy. It fell 10 per cent from its highest point in the middle of 2008
to the lowest point at the end of the first quarter of 2009. The pre-crisis
growth mechanisms were destroyed; the recovery was very slow and was
based exclusively on government subsidies, while the private sector and
banks focused on debt restructuring and could not invest significant
DOI: 10.1057/9781137548115.0006
resources in development. Only at the end of 2011 did the Russian econ-
omy returned to its pre-crisis level, which means it required 11 quarters
to overcome the effects of the crisis.
Putin’s economic doctrine
It had become evident by the end of the crisis that the Russian economy
can no longer rely on exceptionally favorable external conditions (further
growth of natural resource prices and increasing external corporate
debt), and the trajectory of its further development will mainly depend
on Russian government policies. Given the country’s political regime,
the state economic policy became completely dependent on Vladimir
Putin’s personal views and his ‘economic doctrine’. We believe that this
is not a comprehensive doctrine; rather, it resembles a partly assembled
jigsaw puzzle, whose pieces sometimes do not quite fit together. Let us
take a brief look at the key elements of this doctrine:
1 Putin does not support (or at least has not thus far supported)
a return to the Soviet-style command economy. So far, the
Russian president has not questioned the key identifier of the
market economy – free-market pricing. Moreover, the Russian
authorities are slowly but steadily liberalizing electricity and gas
prices. We have not seen price freezes on fuel and lubricants for
the agricultural sector – whether initiated by the government or
‘volunteered’ by the Russian oil companies – which had been the
norm up until 2012.
2 Putin did not previously support and still does not support
reforms – be it economic, political or any others. The president
believes than any reforms upset the status quo and balance of
interests, thus destabilizing the situation.5 The 2001 flat personal
income tax reform6 is usually cited as an example of his reform-
mindedness, but there have been no similar examples since that
time.7
3 Putin trusts people rather than principles when it comes to
economic policy (and, perhaps, other issues as well). That is
exactly why he managed and strongly supported such controversial
reforms as the benefits monetization proposed by Mikhail
Zurabov in 2004–05. The reform contained some arithmetic errors
discovered in the course of the legislative process, which later
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triggered mass street protests and emergency spending from the

federal budget. On some questions, Putin trusted Alexei Kudrin, on
some – German Gref, on others – Tatiana Golikova or Igor Levitin,
whose views on economic policy did not always agree with one
another. As a rule, their disagreements stalled the implementation
of many decisions at their discussion stage.
4 Putin remembers the 1998 crisis well. He was and apparently
still is quite frightened by it. Having analyzed the causes of that
crisis, Putin recognized budget deficit as the main culprit. That is
exactly why he believes that the budget deficit ceiling set at 1 per
cent of GDP is not subject to change. He is prepared to cut any
expenditures over the short or medium term but is not ready to
agree to an even temporary and insignificant increase of budget
deficit (for instance, up to 1.5–2 per cent of GDP), which will have
no bearing on the macroeconomic situation in the country.
5 Putin is ready to rule by law but he does not accept the rule of law.
On the one hand, he believes that all individuals and enterprises
have to observe the laws of the country. On the other hand, he does
not believe the state is obligated to observe laws; in fact, the state
may change laws at will at any moment.
6 Putin supports dirigisme in economic policy. He believes the
state to be infallible, thus any government decision, restriction or
regulation is always beneficial. That is why he actively promotes
the creation of various state corporations that are supported by
periodic budget infusions. For the very same reason, Putin tolerates
lack of progress on privatization (the budget has enough funds,
and true privatization – when the government steps out of the
economy – does not seem right to him). He also accepts it when
state corporations periodically acquire private enterprises from
competitive sectors even if they are outside of their dedicated
sphere of interests.
7 Putin does not believe in competition and private sector initiative.
He does not view either of them as the economic engine – that
is why he easily raises social security taxes and taxes on small
business. For the same reason, he was reluctant to conduct an
economic amnesty and then substantially curtailed it.
8 Putin puts up with the existence of private property in Russia and
does not consider it to be at the core of the economic system. He
believes that all large private holdings in modern Russia emerged
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from Soviet assets, and their current owners were just lucky. In his
view, this justifies the concept of ‘utilizing the assets’, according to
which the top oligarchs do not own the assets; they may manage
them and be their beneficiaries, but they are not entitled to make
independent decisions on their sale, restructuring (closing), etc.
Since the state grants the rights to manage and derive profit, it may
take them away at any time and pass them on to someone else or
simply keep them. The assets can be seized in a civilized manner
through a market-price acquisition (Sibneft, Uralkaliy, Tele2), a
forced sale at a discount (VSMPO-AVISMA) or a hostile takeover
(Yukos, Bank of Moscow, Bashneft). Russia’s large businesses accept
this concept without challenging it.8
9 Putin is not looking to attract large-scale non-controlled direct
foreign investment. He understands that international business
cannot be treated as Russian business is. Therefore, he supports
formal and informal filters for the inflows of foreign capital to
Russia (the Law on Foreign Investments in Strategic Sectors of the
Economy and the Foreign Investment Commission play the role of
the main filters).
10 Since the state contributed to the creation of all large Russian
fortunes in the 1990s, Putin thinks it is appropriate that he (the
state) facilitates amassing such fortunes in the 2000s as well.
It is, therefore, normal to employ the administrative resource
so that Putin’s cronies gain control over the large flow of funds
(Timchenko and Gunvor), win practically every second big public-
sector construction bid, or simply get a right to charge a broker’s fee
on the purchases made by state corporations (Rothenberg brothers’
trading company on the pipe sales to Gazprom).
The Russian economy: baseline scenario
Are there reasons to expect that today’s negative economic trends will
gradually intensify and eventually result in economic catastrophe, which
will create preconditions for the drastic weakening of the political regime
in Russia and possible regime change? The brief answer to this question
is as follows: no, the Russian economy has a rather stable framework. As
per the baseline scenario, by the end of the ‘Russia on the way to 2025’
forecast period, economic problems may seriously weaken the regime
DOI: 10.1057/9781137548115.0006
but will not predetermine its collapse. Here is the reasoning behind this
conclusion:
1 Any economy is internally stable, and it is hard to undermine
this stability. The Russian economy is even more stable due to its
primitive structure. 85 per cent of Russia’s exports are raw materials
and their primary processing products (hydrocarbons comprise
67 per cent). Understandably, the growing global economy will
continue to require raw materials. China’s slowing economic
growth and diminished resource consumption during the forecast
period will be offset by the increased demand for primary energy
resources in India and Africa. Consequently, the Russian raw
material producers will continue to extract and to an extent process
natural resources (by developing new production fields in Eastern
Siberia, which will require large-scale investment); transportation
specialists will transport them by railroad or pipelines; bankers
will take care of financial issues; communication specialists will
deal with communications, etc. Due to the Russian economy’s
high reliance on imports, import-export trade and its logistical
support will remain vital. The military–industrial complex, which
has benefited from enormous financial infusions, will continue
to operate; the same applies to the public sector, construction,
agriculture and food industries. All of them make up the
framework of the Russian economy, which is extremely stable. Of
course, its state will also depend on external conditions, but it is
unlikely that there will be more than one global crisis in the 10-year
span, and this crisis is going to be weaker and shorter than the
2007–09 crisis.
2 The Russian economy and to an even greater extent the federal
budget are heavily dependent on oil prices. At this point, a
precipitous and long-term decline in oil prices is unlikely.9 There is
a number of convincing arguments in support of this position.
▸▸ The OPEC countries (Saudi Arabia) have already adjusted
their budget spending to current price levels and may be more
inclined to lower production than raise it and reduce the price
at the same time.
▸▸ Russia cannot increase oil production but is not likely to lower
it either. A drop in production is only possible if Western
countries boycott Russian oil and global companies are
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prohibited from technological cooperation with the Russian oil

industry (however, this is outside the baseline scenario).
▸▸ Shale gas will not play a major role within the next ten years.
Europe will not be producing it in significant amounts (perhaps
with the exception of Great Britain, which will compensate for
the decline in North Sea gas production). Gas exports from the
United States will be limited, since they will immediately lead
to higher gas prices in the US, thereby compromising a number
of investment projects.
▸▸ So far the world lacks economically feasible technologies
that can replace the classical internal combustion engine.
Automotive transportation accounts for the 50 per cent of
the world’s total oil consumption. Although improvements in
automotive technology will result in lower oil consumption,10
the increased standards of living in developing countries will
popularize the use of automobiles as a means of transportation,
thus negating the decrease in consumption.
3 The large and well-developed oil and natural gas fields of Western
Siberia will be gradually depleted, and production will move
to Eastern Siberia and the Siberian Shelf. According to Russian
Ministry of Energy forecasts, approximately 25 per cent of Russian
oil will be extracted from the new regions (as opposed to less than 5
per cent today). Since the development and exploitation of the new
oil fields is substantially more expensive, Russian authorities agreed
to reduce (and occasionally waive) the tariffs on oil exports from
these fields. If we are to assume that the reduction of export tariffs
will average 50 per cent, the federal budget will lose 5 to 7 per cent
of its revenues (all other things being equal).11
4 Budgetary problems will gradually increase. Due to the sharp
decline in economic growth, real budget revenues will grow
extremely slowly or remain stagnant. Even now, to comply with
the budgetary restrictions, the Russian authorities are forced to cut
investment expenses and actively exploit non-system sources by
confiscating the 2014 and 2015 pension savings or tapping into the
National Wealth Fund. In addition, the CBR has accepted the use
of monetary financing (deposits with Vneshekonombank, loans to
banks collateralized by their long-term credit agreements). While
working on the 2013–15 budgets, the Ministry of Finance postponed
financing the expenses that related to many promises made by
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Vladimir Putin in his ‘May edicts’, unless they were strictly linked
to the period of 2016–18. The future financing of these expenses is
bound to strain budget expenditures. As per the baseline scenario,
slow increases of federal budget deficit (0.3 per cent annually) are
expected starting in 2017–18. Thus, the deficit may reach 3–4 per
cent by 2025. This is not likely to rapidly increase the national debt,
since the deficit will be mainly financed through internal sources
and thus lose value with current inflation.
5 The financial situation in the regions will deteriorate faster, since
their revenues are more dependent on internal factors (profit taxes
and income taxes), but the regions are unable to affect the tax rates
or change the tax base.12 On the other hand, the regions will have
to increase expenses or change their structure, since most of the
responsibility for carrying out the ‘May edicts’ rests on them. The
regions will probably reduce their investments to a minimum and
continue to accumulate debt. In compliance with the established
power vertical, the Ministry of Finance will have to play an
increasingly more active role in controlling regional budgets and
eventually bear responsibility for their expenses.13 The budgetary
construct will then gradually transform from federal to unitary.
But this process has actually begun as early as 2003 under the
leadership of then Finance Minister Alexei Kudrin.
6 The devaluation–inflation spiral presents the most serious threat
to economic stability during our timespan. Since the summer of
2011, the safety cushion that was propping up the Russian economy
has been gradually disappearing – the ruble exchange rate started
its slow decline. By the summer of 2013, the safety cushion had
disappeared completely, accelerating the fall of the ruble. As soon
as they realized what was going on, people started converting
their savings (mostly cash, and to a lesser extent bank deposits)
into foreign currency. Since January 2014, the weakening ruble
has started affecting inflation. It appears that in the next few years
the ruble decline on average will amount to 12–15 per cent a year,14
which will ensure the stability of the balance of payments given the
moderate – up to 50 billion dollars a year – currency sales by the
Central Bank. This devaluation will gradually stoke up inflation,
which may exceed 10 per cent by 2018 and reach 20 per cent by 2025.
7 There is no reason to believe that households will actively protest
against the spiraling inflation– this has not happened in the
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last twenty years, although price hikes often appeared on the

list of the most serious problems in public opinion polls. True,
living standards will stop improving for a significant part of the
population, which will affect political leaders’ approval rating
but is not likely to change the results of elections. The latest
amendments to electoral law clearly demonstrate that the Russian
regime decided not to allow any serious political competition on
either federal or regional level. In other words, there will be no real
elections in Russia.
8 The devaluation–inflation spiral will affect the economy through
weakening the stability of the banking system which will have to
take on greater risks. The continuous devaluation will either (A)
make ruble deposits unpopular with households, forcing the banks
to acquire currency but finance the economy in rubles or (B) it
will make ruble loans very expensive, thus undermining financial
mechanisms for supporting economic growth.15
9 Demography presents the most serious problem for the Russian
economy during the forecast and post-forecast period regardless
of the political regime and its policies. All forecasts predict a
sharp decline in the size of the labor force, which cannot be offset
by the influx of Central Asian migrants.16 Theoretically, Russia
could overcome the negative effect (decline in the labor force
accompanied by a relative increase in the out of work population)
by increasing productivity, but this scenario requires large-scale
investments. Meanwhile, the current investment climate, as well
as the quality of property protection and contract laws, makes
investments boost highly unlikely. Consequently, the absence of
significant investments creates an inverse relationship: maintaining
the current size of the economy requires that the size of the
labor force remain stable.17 If, for whatever reason, Russia fails to
maintain stability in the size of its labor force, it will slow economic
growth.
10 The growing shortage of skilled workers will force businesses to
raise wages to retain their employees. (Besides, businesses will
have to react to the occasional public-sector salary increases.) This
will increase labor costs, thereby decreasing investments in the
economy. Thus, a vicious cycle is being created. Any government
would have a difficult time breaking out of it, especially Putin’s
government with its populist agenda.
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11 Demographic restrictions themselves will not pose economic

threats to the regime. They will impede growth, stoke up inflation,
and thwart the emergence of high-technology sectors, but will do
little harm otherwise.
12 As a whole, the baseline economic scenario envisions economic
stagnation with possible alternation between periods of slow
growth and insignificant decline, as well as growing budget
problems, higher inflation and a constantly weakening ruble.
Vladimir Putin’s unwillingness to undertake serious political
reforms that would restore the rule of law and create an
independent judiciary will be the main obstacle to improving the
investment climate in the country. Without these reforms, there
will be no stable investment in the Russian economy – hence, it will
increasingly lag behind both developed countries and its immediate
competitors in terms of economic development and quality of
life. Although the regime will find all these economic processes
extremely cumbersome, the economic situation will not reach its
critical point under the baseline scenario. However, certain events
may trigger crisis. Among them are administrative decisions that
regulate the economy, such as price controls or restrictions on
early withdrawal of bank deposits, as well political changes in the
country (leadership change) or external factors.
Scenario B: Self-isolation
This scenario posits growing tensions with the West, which will, on the
one hand, gradually intensify and expand the Western sanctions against
Russia and, on the other hand, prompt the Russian leaders to take steps
toward the country’s self-isolation from the global economy. Russia’s
share on the global raw material market is too high, so it is impos-
sible to cut it off from the consumer even over the medium term – the
global demand for raw materials cannot drastically decline. If Russian
companies cannot access the European market, they will shift to Asian
(China and India) and African consumers. Such a change requires time,
which will force the Russian economy to temporarily lower production
volumes, increase transaction costs and reduce export prices (this is
what Iran has been doing for several years now; the sanctions forced it to
sell oil to China at 20–25 per cent discount rates).
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Financial sanctions may hurt Russia the most, though. They block
Russian banks’ access to Western capital markets and include the ban
on insuring and reinsuring Russian risks. Two global currencies – the
euro and dollar – dominate international trade at this time. Financial
sanctions will preclude Russian banks from using ‘second-tier’ curren-
cies – those of Great Britain, Switzerland, Canada, Australia, and other
countries. This will force the banks to resort to complex financial and
logistic schemes involving the Chinese yuan, Indian rupee, and Brazilian
real, which will substantially increase the cost of Russian imports and
lead to even higher inflation. The serious level of sanctions analyzed
under this scenario may include a ban on foreign imports of parts and
accessories to previously sold merchandise (industrial equipment and
consumer goods). This step will result in a gradual deterioration of
industrial machinery, household equipment, and the automotive fleet. It
will probably take these negative effects at least five years to fully mani-
fest themselves. In the meantime, capital flight from Russia will increase
dramatically.
Consequently, financial sanctions may turn the ruble into a non-
convertible currency, leading to the disappearance of the legal domes-
tic foreign exchange market. The Russian authorities will be forced to
convert currency deposits and loans into rubles and impose restrictions
on exchanging rubles for foreign currency. In addition, new currency
resources will have to be rationed. These developments will prompt
Russian businesses to transfer their assets overseas at an even faster
pace (at this point, it will have to be done in a semi-legal fashion). The
most active part of the population will be forced to seek employment
in Eastern Europe. As a reaction to this behavior, the government may
attempt to nationalize raw materials enterprises – either by legal means
or de facto on the ground. Russian banks and enterprises that actively
borrowed funds on foreign markets will default on their obligations,
which will completely isolate the Russian financial system from its global
counterpart.
As a result of these developments, negative trends described in the
baseline scenario (inflation, devaluation, skilled labor shortages) will
accelerate significantly; the economy will continue to contract, and living
standards will decline. Under such a scenario, Russia will stop being a
developing country by 2025. The closest historical analogies are Zaire/
Zimbabwe or 20th-century Argentina, which means that the economy
will stagnate and grow at a much slower pace than competitor states. In
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the worst case scenario, the economy risks losing 20 to 30 per cent in 15
to 20 years. However, the negative processes discussed in this scenario
will not generate political change either, unless some powerful triggers
emerge.
Scenario C: Vector change
This scenario assumes serious changes in Russian politics in the middle

of the forecast period (2018–19). We will not discuss the reasons behind
them, their mechanisms or the possible shape they can take, but the
changes will force the regime to react to the stockpile of economic prob-
lems and radically change its economic policy. These changes can be
directed at either strengthening administrative control over the economy
or the gradual remediation of the root causes of the current situation.
The first option will propel Russia toward self-isolation, while the second
one may create the framework for another vector of development. Let us
imagine where it might lead.
As part of the new political and economic paradigm:18
▸▸ The Russian authorities reform the judiciary system, making it
independent. The most high-profile cases are revisited, and those
found guilty of manipulating the law and pressuring the court are
punished. The system is purged of unscrupulous judges. A supreme
appellate tribunal staffed with some foreign justices is created. This
judicial body is granted authority to review the decisions of Russian
courts and can make determinations on property restitution. New
court personnel are hired.
▸▸ The authorities reform the law-enforcement system, creating a
system that guarantees everyone’s equal treatment by law. All law
enforcement units that functioned as political police are eliminated.
A comprehensive probe into corruption allegations (even
anonymous ones) is launched on the federal, regional, and local
levels. Those implicated in political prosecution or raider attacks
and racketeering are fired from the force.
▸▸ The assets accumulated by the ‘new oligarchs’ are seized and their
origin investigated. If instances of corruption emerge, the assets are
confiscated and handed over to the Pension Fund.
▸▸ State administrative control of business is drastically reduced and
mass privatization of state property is conducted.
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▸▸ The post of independent prosecutor charged with investigating

corruption cases is created.
▸▸ Early Duma elections take place. The parliament members
that voted for the most nefarious legislation are banned
from participating in the elections. The restrictions on party
participation in the elections are significantly loosened.
▸▸ A constitutional framework is re-established. Electoral law is
changed; the president loses the right to appoint and remove
governors; the system of municipal filters is scrapped. In addition,
the system of redistributing the tax burden and expenditures
between different levels of government is revised, and the system of
budget federalism based on legislation on inter-budget transfers is
restored.
▸▸ The restrictions on foreign capital investments in the Russian
economy are significantly loosened.
Of course, this list of measures cannot be implemented within a month,
and it will not dramatically improve the economic situation in the coun-
try. However, political intentions and consistent progress in a particular
direction are important for creating a favorable investment climate. As
a result, the Russian economy will start showing signs of new vitality in
the period of two to three years and can gradually reverse the past nega-
tive trends.
* * *
As with any attempt at scenario analysis, the above discussion is merely

an attempt to distill the current economic trends. Obviously, no one has
a time machine or magic mirror that would allow him to take a peek into
the future. Instead, those scenarios try to point out the bounds within
which the Russian regime will operate and emphasize the key exter-
nal factors that will have a serious impact on economic development;
this analysis creates the foundation that enables us to extrapolate the
distilled trends over the forecast period. There is no space here for any
apocalyptic predictions in which catastrophes are succeeded by remedy-
ing their effects over a short time span. Such a scenario would require
overcoming inertial forces in the economy that do not allow the current
decisions to manifest themselves in less than two to three years. Besides,
to affect change, it is important to find recipes for political and institu-
tional reforms (in the spheres of rule of law, property rights protection,
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division of power, and checks and balances) and also to understand who
can become the driving force for change, when and why. In short, the
reader should treat the above analysis as merely food for thought.
Postscript
The fall 2014 developments have clearly deviated from the baseline scen-
ario in the direction of Scenario B. It is impossible to predict today how
long the Western sanctions on Russia will endure. They might be lifted
in a year or two (if so, then their impact on the entire forecast period will
not be that significant). Alternatively, they may become an indispensable
fixture of the West’s relations with Russia (similarly to the Jackson–Vanik
amendment, for instance) and will be impacting the Russian economy for
the next decades. Nevertheless, the analysis of the current state of affairs
allows us to highlight certain points that should be taken into account
when making corrections to both the baseline scenario and Scenario B.
1 Western countries, primarily those in Europe, are not ready to
completely sever their economic ties to Russia and do not believe
it to be possible. In this light, the sanctions’ scale is unlikely to
expand barring substantial political conflict escalation in Ukraine
or somewhere else. New sanctions (if they are to be imposed at all)
will be targeted and selective; they will not deal devastating blows
to the Russian economy. At the same time, the longer the economic
and financial sanctions remain in effect, the more they will affect
the Russian economy.
2 European countries have made a strategic decision to reduce
their economies’ dependence on Russian hydrocarbons. It does
not mean that Europe intends to boycott Russia’s oil and gas,
but their share of the European energy market will be gradually
declining. In part, this change will result from a shift to other
suppliers for the new hydrocarbon imports. In part, it will be
driven by increased competition on the traditional Russian energy
resources markets (for instance, due to the construction of new
gas pipelines or liquefied natural gas terminals). Even assuming a
10 per cent decline in Russian imports for the 10-year period, the
Russian companies will have to look for new markets to sell their
products. It will require significant resources, since the direction of
the current gas and oil pipelines cannot be changed. Consequently,
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Russia will have to build new east- or southbound pipelines, while

the unit costs of maintaining the existing ones will increase because
they will not be exploited to full capacity. Both developments will
lower the effectiveness of the oil-and-gas industry and the economy
as a whole.
3 The sanctions that impose restrictions on technological
cooperation between the Russian and Western oil-and-gas and
service companies are limited to the deepwater shelf and heavy
crude oil. The full-scale sanctions would have practically halted
all cooperation on new projects for obvious reasons – only
government officials can safely say what the sanctions apply or
do not apply to; the sanctions’ wording is ambiguous in many
places. The enormous fines recently imposed on the French BNP
Paribas bank for violating the Iran sanctions regime had a powerful
psychological effect on Western companies, which have decided to
play it safe and limit themselves to working with absolutely solid
contracts.
Western technologies and expertise are critically important for the
Russian oil-and-gas sector in its Arctic Shelf exploration and developing
heavy crude oil fields. It is hoped that in the long term these sources
will allow the country to maintain current output levels. Since all these
projects are now in their initial stages, no statistically significant effects
of the sanctions should be felt in the nearest year and a half to two years.
However, Russia may start feeling the effects from the decrease in oil
production as early as 2016, and it may reach 5 to 7 per cent of the coun-
try’s total oil outputs (28–32 million tons) in 2018.
Western technologies currently comprise less than a quarter of the
equipment used to develop oil production fields. Theoretically, almost
all of them can be replaced with Russian or Chinese technologies. But
with the exhaustion of the old production fields, the demand for new
technologies (horizontal drilling, hydraulic fracturing) will increase. In
this sphere, Russia is almost entirely dependent on Western technolo-
gies. As of now, there are no detailed estimates of the sanctions’ effect on
the old oilfield production outputs, but it can be predicted that the losses
may reach 4 to 8 per cent of the current output levels by 2025.
4 At first glance, the restrictions on access to capital markets imposed
on Russia’s state-owned banks and companies have already had
quite a serious impact on Russia’s financial and banking sector.
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From the start of the summer until the end of November 2014
(when this article is being written), the ruble has lost over 30
per cent of its value against the dual-currency basket. It appears,
however, that so far the situation on Russia’s currency market has
been more influenced by the decline in oil prices and psychological
factors (general uncertainty, distrust of the government’s economic
policy) and the Central banks’ poor choices (issuing unlimited
low-interest loans to banks and ‘guaranteeing’ their enormous
profits on the permanent ruble devaluation) rather than the actual
strain on the balance of payments.
Just like the technological sanctions, the financial sanctions have been
applied to a limited number of companies and banks; nevertheless, they
closed the capital markets to all Russian borrowers. According to Bank
of Russia, foreign corporate debt (banks and companies) amounted to
$680 billion on 1 October 2014, with $200 billion to be repaid in the
next two years. However, many experts believe that a substantial part of
this debt comes from the loans Russian companies take from their own
stockholders, which is a common strategy used to reduce the tax burden.
Therefore, to repay or refinance this debt, the companies do not need
to access the capital markets, nor, in many cases, buy currency on the
domestic market. For instance, in the third quarter of 2014, the external
corporate debt decreased by $40 billion, even though the current trans-
actions balance was just $11 billion and the Central Bank was not selling
any currency.
5 Declining oil prices in conjunction with financial sanctions may
put a substantial strain on the balance of payments. For example, a
$40-a-barrel drop in the oil prices (from $105 in summer of 2014 to
$70 at the end of November) will reduce Russia’s export revenues by
approximately $120 billion. Assuming that buying currency on the
domestic market will be required to repay half of the 2015 corporate
debt, Russian imports will have to decrease by $150–60 billion a
year (30 per cent of 2013 volumes) in 2015 (the hardest year for the
balance of payments) in order to balance the supply and demand
for currency. Nevertheless, it seems quite plausible – in 2009
Russian imports declined by $120 million (33 per cent). Naturally,
this is only possible given the sharp ruble devaluation that has
already taken place in autumn 2014 due to the transition to a
free-floating ruble. However such a decline in imports will certainly
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lower even further investments and hit the living standards of

Russian households.
6 There are not a lot of reasons to be concerned about the decline
in budget revenues due to the fall in oil prices. The oil-and-gas
revenues that make up half of all federal budget revenues are
actually pegged to the dollar, and the devaluation of the ruble
allows them to be maintained at the nominal level. The Ministry
of Finance reports that a $1-a-barrel change in the oil price
amounts to a 70-billion-ruble change in budget revenues, while
a 1-ruble change in the dollar exchange rate equals to 200,000
billion rubles in budget revenues. It means that as long as a $3
drop in the oil price (from the $96-a-barrel benchmark built into
the 2015 budget) is accompanied by a 1-ruble increase of the dollar
exchange rate (from the 37.5 rubles per dollar level built into the
2015 budget), the nominal federal budget revenues will remain
stable.
7 The fall of 2014 demonstrated that the economic sanctions on
Russia accelerated inflation, which was triggered by the devaluation
of the ruble. The ban Russian authorities imposed on Western
food imports only exacerbated consumer price hikes. The elevated
inflation rates (close to 10 per cent a year) may seriously distort
the budget in the coming years. The law requires that the salaries
of public-sector employees be adjusted for inflation if its annual
rate exceeds 6 per cent. However, the 2015–17 budgets anticipate
inflation rates of 5.5 per cent or lower and thus do not allocate
funds for additional inflation-related expenses. Since the Russian
authorities are unlikely to resort to salary freezes for public-sector
employees, they will have to compensate for inflation adjustments
by cutting other expenses or dipping into the Reserve Fund.
Generally the economic and financial sanctions imposed on the Russian
banks and companies will certainly aggravate the economic situation in
the country, leading to slowed growth, higher inflation, and continued
ruble devaluation. Though at the moment the sanctions could not be
qualitatively measured their overall effect is clear – the baseline scenario
is definitely going to drift towards Scenario B creating stronger pressure
on the Russian authorities. In this situation the probability of them
making mistakes should become far greater, leading to lower stability of
the political system.
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Notes
1 It also happened in 2013–14.
2 Central Bank of Russia (2012) Russia’s Foreign Debt Maturity and Financial
Instruments, http://www.cbr.ru/statistics/print.aspx?file=credit_statistics/
debt_maturity.htm&pid=svs&sid=vdRF_fisp
3 For instance, the Globex Bank financed its proprietor’s developer’s projects
with short-term deposits from individuals. The KIT Finance Investment
Bank massively purchased the stocks of telecommunication companies with
borrowed funds.
4 See the CBR First Deputy Chairman Alexei Ulyukayev’s speech at the XVII
Russian Bank Forum organized by the London-based Adam Smith Institute
in December 2010.
5 Apparently, Vladimir Putin’s main priority is maintaining power. Therefore,
any proposed solution to a problem is subjected to the question whether
it will strengthen or weaken his chances to maintain power. If the answer
is ‘weaken’, the solution has no chance to be adopted. This construct helps
to explain why Putin flatly refuses to even discuss court reform and other
principles of democratic governance, let alone to implement them.
6 I personally feel ambiguous about the reform. On the one hand, the low
flat tax rate reconciled the government and the taxpayer, making Russia
proper attractive to individual taxpayers. On the other hand, such a low tax
rate makes many people indifferent to taxes, which makes them much less
interested in controlling state budget spending.
7 The detailed description of reform proposals contained in the so-called Gref
Program and the history of their obstruction or erosion can be found in the
annual reviews of the Russian economy published by the Gaidar Institute for
Economic Policy (formerly Institute for the Economy of Transition).
8 In 2003–04, the Prosecutor General’s Office started another investigation
into the Norilsk Nickel privatization, threatening Potanin and Prokhorov
with legal actions similar to the one against Yukos. The episode was over
right after Potanin had clearly expressed his position in a letter to Putin.
‘Want to take it away? That is all you need to say. I will give it up with no
delay or resistance. Because I understand the rules of the game.’ Deripaska
made the same statement during the 2008 crisis, agreeing to hand RUSAL
over to the state in exchange for its bailout by Vneshekonombank.
9 Short-term declines in the oil prices are offset by the Reserve Fund and ruble
devaluation.
10 It should be remembered, however, that the average age of US light vehicles
stands at 11.4 years, which means that the full effect of the new technologies
will be felt in no less than six to seven years.
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11 In all likelihood, Russia will have to drastically reduce export tariffs or

eliminate them altogether in light of the creation of the Customs Union.
But in this case, the Russian authorities will create an alternative taxation
mechanism for the oil industry, which will at least ensure that the budget
revenues remain steady.
12 The introduction of the property tax, which may contribute to regional
revenues, is being delayed because the tax rules and global property registry
have not yet been fully prepared.
13 Vedomosti Editors (2014) ‘Devaluation of the Decrees’, Vedomosti, 15 May
2014, http://www.vedomosti.ru/opinion/news/26510851/devalvaciya-ukazov
14 The ruble devaluation has a positive side effect for the budget. In 2013, 50
per cent of federal budget revenues came from the dollar oil prices, while an
additional 13 per cent was attributed to VAT and import excise taxes, which
are also currency-based. This means that a 10 per cent ruble devaluation
(all other conditions being equal) increases federal budget revenues by 5–6
per cent.
15 The intensity of capital flight is an important factor that affects the balance
of payments and ruble exchange rate. We assume its ‘normal’ level for
the baseline scenario and an increased level for the pessimistic scenario
(Scenario B).
16 First of all, as opposed to China, labor resources from this region are limited.
Second, the labor migrants send a significant portion of their income home,
thereby reducing consumption inside Russia and negatively affecting the
balance of payments. Besides, since these individuals do not pay taxes, they
will contribute to the relative decrease of budget revenues while increasing
demand for public-sector services (education and health care).
17 Or the labor force should grow (due to the lower-skilled foreign workers).
18 This is an incomplete list of key steps presented in no particular order.
Anyone is welcome to expand on it.
Bibliography
Central Bank of Russia (2012) Russia’s Foreign Debt Maturity and Financial
Instruments, http://www.cbr.ru/statistics/print.aspx?file=credit_
statistics/debt_maturity.htm&pid=svs&sid=vdRF_fisp
Vedomosti Editors (2014) ‘Devaluation of the Decrees’, Vedomosti,
15 May 2014, http://www.vedomosti.ru/opinion/news/26510851/
devalvaciya-ukazov
DOI: 10.1057/9781137548115.0006
3
The Relations between the
Center and the Regions
Natalia Zubarevich
Abstract: Regional economies are growing more stagnant.

Although in 2012 the Russian economy recovered after
the 2009 crisis slump, not all of the regions have returned
to pre-crisis industrial production and investment levels.
Industrial production stopped growing in 2013 and actually
declined in 30 per cent of the regions. Investment declined
0.2 per cent, with half of the Russian regions experiencing
negative growth, including most of the developed regions
(the Far East suffered the sharpest 27 per cent decline).
The repercussions of the 2014 political events are bound to
exacerbate investment decline in the regions. Stagnation is
likely to transform into a slow economic crisis.

doi: 10.1057/9781137548115.0007.
50 DOI: 10.1057/9781137548115.0007
The Relations between the Center and the Regions 51
This chapter seeks to answer four questions:

▸▸ How and why are the regions’ economic development and budgets
deteriorating?
▸▸ What impact will the annexation of Crimea and, in a broader sense,
federal policies have on the development of Russian regions?
▸▸ What are the prospects and risks for the development of Russian
regions in the next few years?
▸▸ What are the scenarios for the development of the country from
the ‘Four Russias’ vantage point – that is, according to the center–
periphery model that analyzes a wide array of Russia’s territories,
from its largest cities to the less developed rural territories or ethnic
republics?
Russia’s political and economic situation has been rapidly deteriorating
during 2014, making previous scenario research irrelevant. Negative
trends run ahead of the most pessimistic predictions. Economic and
budgetary problems that became more pronounced in 2013 are now
exacerbated by new political and economic factors, which also call for
the reassessment of regional scenarios.
Regional economies are growing more stagnant. Although in 2012
the Russian economy recovered after the 2009 crisis slump, not all of
the regions have returned to the pre-crisis industrial production and
investment levels. Industrial production stopped growing in 2013 and
actually declined in 30 per cent of the regions. Investment declined
0.2 per cent, with half of the Russian regions experiencing negative
growth, including most of the developed regions (the Far East suffered
the sharpest 27 per cent decline). The repercussions of the 2014 polit-
ical events are bound to exacerbate investment decline in the regions.
Stagnation is likely to transform into a slow economic crisis. The job
market is generally doing well – the unemployment rate is at a historic
5 per cent minimum. Nevertheless, unemployment has started growing
in industrial cities due to production cuts or as a result of unfavorable
global market conditions (in metallurgy, the coal industry, and the pulp
and paper industry) and decline in domestic demand (in the automotive
industry and machine building).
The social contract between the regime and society that took shape
in the 2000s (it promised growing prosperity in exchange for political
support ) is about to expire. In 2009 and 2011, people’s real income prac-
tically stopped growing; in 2013, the growth did not exceed 3 per cent,
DOI: 10.1057/9781137548115.0007
52 Natalia Zubarevich
and in the first half of 2014, real income actually fell by 1 per cent. To
extend the social contract, federal authorities substantially increased
pension payments in 2009. Salaries for public sector employees were
significantly increased in 2012, after Putin’s earlier decrees on these
measures went into effect. Thus, the contract now applies to a narrower
base of the electoral groups most important to the regime.
Previously, the economy was sustained by consumption growth fueled
by greater financing opportunities. However, the growth of consumer
financing slowed in 2013 followed by the decline in consumer demand.
The population is overfinanced, so the risk of default is on the rise. Banks
mostly issue new loans to repay the old ones.
The regional budgets are in an even worse shape. Budget revenues grew
1 per cent unadjusted for inflation, which translates into a real 5 per cent
decline. A 13 per cent decrease in capital gains tax revenues and a 6 per
cent decrease in federal budget transfers are two major reasons for the
overall decline. The losses were offset by individual income tax revenues,
which grew as a result of salary increases for public sector employees
and higher property tax rates. Business costs grew, since commercial
enterprises shoulder most of the property tax burden.
Regional budget expenditures grew 6 per cent in 2013. Implementing
presidential decrees puts a real strain on regional budgets: wage payments
averaged 34 per cent of total budget in 2013, up 10 per cent from 2012;
the number exceeded 50 per cent in ten Russian regions.1
Budgets for social expenditures – education, health care, and culture
spending – grew the fastest (8–14 per cent), which was also driven by
salary increases. Since compliance with the presidential decrees was
declared to be the main criteria for evaluating governors’ job perform-
ance, many regions complied with the decrees ahead of schedule, despite
budget shortfalls. The federal budget co-financed only up to a third of
the expenditures, leaving the regions with most of the spending burden.
The increase in spending destabilized regional budgets. In a span of
one year, deficits grew from 278 to 642 billion rubles, which corresponds
to 3.3 to 7.9 per cent of total regional budget revenues. While 67 regions
had budget deficits in 2012, the number increased to 77 in 2013, reaching
15–55 per cent in 13 regions.
The shortfalls had to be covered through borrowing. As of 1 April 2014,
the total regional and municipal debt has reached 2.2 trillion rubles,
which amounts to a third of regional revenues (excluding transfers from
the federal budget). For 40 per cent of regions the debt exceeded half
DOI: 10.1057/9781137548115.0007
of their budget revenues. The destabilization of regional budgets has

reached a critical mark.
The problem of enormous regional budget deficits and debt is being
solved through manual management. The finance ministry wants regions
to optimize other spending, which will result in lower numbers of social
benefit recipients, accelerated increases in housing and utility charges
and decreases in regions’ investment spending. Regional debts will
become public-funded loans, which will allow the reduction of interest
rates and extension of the debt repayment period. This measure will, in
turn, lead to increases in federal spending.
Thus, resorting to accelerated salary increases to extend the social
contract with electorally important groups has created an enormous
problem. Economic efficiency is declining. The destabilization of the
budgetary system had begun in 2013 even before the annexation of
Crimea, which required additional budget spending.
In the political sphere, the federal government is in better control of
the situation and is able to soften potential threats. The return of guber-
natorial elections in 2012 was expected to enhance political competition:
many appointed governors are unpopular in their regions, since they
promote the interests of the groups that lobbied for their appointment,
and their competence plays a secondary role. The institution of gover-
nors has degraded; regional authorities are incapable of making adequate
management decisions, nor can they optimize budget spending without
alienating their constituents under the deteriorating economic condi-
tions. However, contrary to expectations, the return of elections has not
changed the situation. Rigid legal filters that require candidates to gather
the signatures of 5 per cent of municipal deputies become an almost
insurmountable barrier for alternative candidates. In the next few years,
gubernatorial elections are unlikely to become an instrument for elite
change and will fail to bring competent politicians and businesspeople
to power. The renewal of regional elites as a result of gubernatorial elec-
tions is only possible if the federal center grows weaker and loosens its
grip over the situation in the regions.
The impending elimination of direct mayoral elections in Russia’s 67
largest cities also helps to strengthen the regime. This step was taken
in response to opposition candidates’ victories at the mayoral elections
in Yaroslavl, Yekaterinburg, Petrozavodsk, and Novosibirsk in 2013–14.
While such a decision provides some short-term benefits, the federal
authorities are ignoring its long-term costs. Eliminating direct elections
DOI: 10.1057/9781137548115.0007
will undermine the representation of city interests in the regions, destroy

the system of checks and balances, and strengthen governors’ domin-
ance. The authoritarian regime model that is now being created in the
regions will increase the risks of disintegration if the federal government
loses some of its strength.
The implications of the Crimean annexation

for the regions
The annexation of Crimea and sanctions against Russia will have a strong
impact on the regions. Almost all Russian regions will be adversely
affected by the reductions of federal budget transfers, particularly cuts in
investment and social subsidies.
The regions that actively tried to improve the investment climate to
attract investors will suffer the most. The negative changes will impact
the Republic of Tatarstan, as well as Kaluga, Kaliningrad, Leningrad, and
other regions. These regions borrowed funds for infrastructure develop-
ment and accumulated a lot of debt, which will be hard to repay under
the worsened economic conditions, when many projects will either be
discontinued or generate less revenue. Up until 2014, the high-investment
regions served as a showcase of Russian modernization. This showcase is
no longer needed.
Federal cities are also suffering some losses. These losses are not
as significant, though, since the stiffening of the political regime will
strengthen the centralization of government and concentration of
financial resources. Just as was the case in the past, Saint Petersburg
will be helped by large enterprises transferring their headquarters there
from Moscow. After all, large enterprises are Russia’s main taxpayer.
Moscow’s budget stands to lose more: its main sources of revenues
– capital gains taxes paid by large companies headquartered in the
capital – will diminish as the recession and sanctions kick in. Most of
such companies are still located in Moscow, but both their numbers
and the amounts of their tax payments keep going down. The drop in
infrastructure investments will accelerate transportation collapse and
reduce the number of service-sector jobs, where the educated, higher-
earning segment of the population is employed. However, the agglom-
eration advantages will allow the capital to maintain a higher standard
of living than other regions.
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The regions with medium and lower levels of development are facing
cuts in federal budget transfers due to the need to finance Crimea and
generally deteriorating economic conditions across the country. If oil
prices remain stable (oil and gas tax revenues and export duties account
for two thirds of federal budget revenues), federal subsidies will not
decrease significantly.
Russia’s counter-sanctions – a ban on food exports from the EU and
US – have already led to price hikes. However, Russia’s major agrarian
regions stand to benefit from the growth of their domestic markets,
especially in large cities. Expanding markets and rising prices will
stimulate the development of the Russian agriculture and food industry.
But significant hurdles remain. It is unclear how long the sanctions will
remain in force (businesses are not likely to invest in the agricultural
sector if the sanctions prove to be short-lived). Besides, imports might
be quickly restored if the prohibited products are imported through the
Customs Union members and other states that were not subject to the
sanctions.
For the next decade, the federal center will primarily focus on the
development of the following territories:
▸▸ Eastern regions – the concentration of new oil and gas fields and other
export resources. In the 2000s, the center stimulated the economic
development of the Far East mostly from the federal budget.
Russia’s big business showed little interest in the region because of
the high costs. International investments were only directed at oil
production in Sakhalin, where a production-sharing agreement is
now in place. The Russian authorities do not like the agreement,
since it does not grant them full control over the oil production
business. After the sanctions take effect, China will become Russia’s
dominant partner for obtaining financing and investments, as well
as for joint projects on raw material extraction and infrastructure
development. The Chinese investors are especially interested in
the raw material projects in the border areas of Siberia and the
Far East, as well as oil and gas extraction in Western Siberia.
Chinese businesses may also participate in infrastructure projects,
which include building a bridge to Crimea. In exchange for this
cooperation, Russia is to sell China raw materials at a discount rate.
To stimulate the development of the eastern regions, federal budget
investments in their infrastructure will also increase.
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▸▸ Federal government and state-run companies’ large-scale investments

in Crimea. Russia’s financial support of Crimea, including pension
payments, is estimated to cost 200 billion rubles a year (7 billion
dollars), which is comparable to the amounts spent on the larger
Krasnodar region. According to the Federal Treasury, in the three
months after the annexation federal budget spending on Crimea
amounted to 33.7 billion rubles, excluding the pension payments.
Thanks to the weakened ruble, the federal budget is expected to
receive additional export revenues, thus financing day-to-day
Crimea expenditures will not be a problem. The costs of investment
in Crimea are much greater, though. The center will have to finance
such expensive infrastructure projects as the Kerch Strait bridge
or the systems for water and electricity supply. The total expenses
may reach 1 trillion rubles (30 billion dollars), which is on the scale
of the Sochi Olympics. The Ministry of Crimean Affairs has been
created to accelerate and coordinate this work. The infrastructural
problems require urgent and therefore expensive solutions while
the economic situation continues to deteriorate. Enormous budget
infusions into Crimea will mean less federal support for other
regions. Russia’s large companies will come under pressure to invest
in Crimea, which will increase their debts.
▸▸ Financial support of the North Caucasus republics in conjunction with
the use of force to ensure political stability. Heavily subsidized North
Caucasus republics receive 10 per cent of the total federal transfers
to the regions, and the federal budget is able to commit these
funds. The federal subsidies are used to finance current expenses;
investments are minimal (3 per cent of all Russian investments), so
few new jobs are created. Labor migration to other Russian regions,
as well as shadow employment, somewhat soften social problems,
but corruption, terrorism, and the use of force by the federal
government escalate tensions. These problems turn the North
Caucasus into a powder keg for the federal authorities.
Prospects and risks: the regional dimension
The following scenarios and risks are possible on the regional level:
▸▸ possible decentralization and transferring significant number of
resources and powers to the regions;
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▸▸ risks of confrontation between the regional elites and the federal

center;
▸▸ possible formation of regional alliances that will pressure the center
to cede some of its resources and powers;
▸▸ risks of disintegration of the country or secession of certain regions.
The above scenarios and risks are not likely to occur in Russia for the
time being. The center has a rigid power vertical, which is controlled
from the top. The regions are completely deprived of political independ-
ence; their powers and budgetary resources are regulated and strictly
controlled. Special privileges granted to certain regions are based on
prior agreements with the federal center.
The likelihood of decentralization of power and financial resources
further diminished after the Crimean events. Instead, the regions have
been saddled with accountability for unpopular decisions. They are now
allowed to manipulate financial resources in order to comply with presi-
dential decrees and search for funds to raise salaries in the social sector.
Thus, regional authorities will have to make painful choices: they will be
forced to cut the number of medical and educational institutions, social
sector jobs, and welfare benefit recipients. If social tensions escalate while
the unpopular measures are being implemented, the governors will be
punished by the federal center. In other words, we will witness the repeat
of a traditional Russian pattern, when the ‘kind tsar’ (the federal center)
takes care of the people, but the ‘evil boyars’ (governors and regional
authorities) stand in his way. This pattern helps to keep maintaining the
president’s high approval ratings. Under such conditions, the governors
do not need power decentralization, since in this case their additional
expenditures will not be sufficiently covered. A sales tax was suggested
to the regions as a way to raise additional revenues. However, this step
will only increase pressure on business and spur inflation.
Under the current political regime, the risk of confrontation between
the regional elites and the federal center is minimal. Confrontation is
possible within the region – between the federally appointed governor
and the ‘native’ political elite; however, such cases are quite rare. In the
1990s the horizontal interaction between the regions came from below:
a number of interregional associations came into existence at that time,
the Ural and Siberian one being the most powerful. In the early 2000s,
the center created federal districts, which were governed from above
by presidential plenipotentiary envoys. The associations were then
abolished, and the horizontal contacts initiated by the governors are no
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longer welcomed. Russia has always suffered from the lack of horizontal
interaction (bridging social capital), but in the last ten years it has been
almost completely wiped out and will probably not be restored any time
soon. This means that even in the worsened political climate and under a
weakened federal center, interregional cooperation is unlikely, and every
governor will act for himself.
The cooperation disappeared after the elimination of direct guberna-
torial elections. Figures loyal to the center and often unfamiliar with the
local elites were appointed to the governor’s office. As was mentioned
before, the restoration of direct elections is not going to change the
governors’ corps in the next few years, since it came with rigid electoral
filters for potential candidates. In 2012–14, the federal authorities came
up with the following approach to the elections: they now remove an
unpopular governor six months to a year before the upcoming elections;
the governor is then replaced by another center appointee with ties to
local or federal elites, who manage to raise his approval rating before the
elections by making numerous popular promises.
Regional authorities have mastered the art of individual bargain-
ing with the federal center. Tatarstan has long forged special relations
with the capital, which allowed it to receive large federal transfers and
reduce its federal tax burden.2 The heads of other developed republics
(Bashkortostan, Komi, Yakutia) are weaker and unable to fight for more
rights. The elites’ discontent is more pronounced in the developed Ural
and Siberia regions that boast strong regional identities and still retain
interregional coordination. They want decentralization and greater inde-
pendence. The resource-producing regions are unhappy with the colon-
ization policies of the companies that merely extract profits from the
regions; they would like to receive at least some of the licensing rights on
mineral resource extraction. However, after the annexation of Crimea
the unhappy regional elites will keep silent – everyone exercises more
caution now that the regime is toughening its stance.
There are potential secession risks for Russia’s peripheries – North
Caucasus, Far East, and Siberia. Sometimes Ural is also mentioned in
this regard in light of the attempts to create the Ural Republic in the
early 1990s. However, these attempts were driven by the idea of increas-
ing the budget revenues for Sverdlovsk region (at that time, republics
enjoyed budget privileges). The secession risks for the eastern regions
will increase only if the federal center suddenly loses a lot of its powers,
and the regional economies completely align themselves with China.
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Decentralization is actually the most attractive option for the eastern

regions.
The North Caucasus republics are in a league of their own. The situation
there will continue to deteriorate even if the level of federal aid remains
unchanged. The North Caucasus is at the peak of the modernization shift
from traditional to modern society. The former is characterized by the
dominance of clan structures, large share of rural population and higher
birth rates, while the latter is associated with urbanization and modern-
ized values. Rural migration influx slows the transformation of the urban
community, but urbanization also gradually changes the migrants’ behav-
ior. The modernization shift is taking place in the context of the corrupt
system of governance, which is being rejected by the local population,
especially its younger segment. In this case, non-traditional Islam and its
religious norms become an alternative. Some scholars view it as ‘Islamic
Protestantism’ that repudiates the pervasive corruption of the regime.3
The situation in the North Caucasus can be compared to that of early
20th century Russia, when it experienced excessive strain during the
modernization shift. The growth of religiousness in the North Caucasus
may trigger a social explosion, and the federal crackdown on the oppos-
ition exacerbates the threat. The growing xenophobia across the rest of
the country also intensifies the feelings of resentment toward the North
Caucasus natives, who are seen as alien. Nevertheless, the region’s seces-
sion is highly unlikely, since the elites and the population of the republics
are economically linked to the rest of the country through transfers, labor
migration and other channels.
The predictions of the situation in the regions can be divided into two
periods.
Predictions for 2016. Economic conditions will gradually deteriorate
as the resources accumulated in the National Wealth Fund are being
depleted. These resources are estimated to last for two to three years.
By 2016, economic situations in most regions will not get significantly
worse, with the possible exception of cities in a severe and protracted
industrial slump. Just as in the early 1990s, people will gradually adapt to
the worsened conditions.
Regional authorities will retain their loyalty to the center – otherwise,
any governor can be confronted with incriminating evidence. However,
the tensions inside the regional elites will continue to escalate, since
the strengthening of the power vertical will intensify fears and regions’
dependence on federal authorities. Gubernatorial elections will not
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trigger mass protests. The 2012 elections law ensures federal control
over the results; in five most problematic North Caucasus republics, the
elections were effectively replaced by appointments (regional legislatures
vote for the candidates that the president recommends). If need be, this
practice can be expanded under any pretext to most or even all regions,
since the law allows it. People actually prefer the direct elections of
regional leaders (according to the opinion polls conducted in the 2000s,
65–70 per cent made this choice), but their opinion will not matter to
the Kremlin’s strong-armed regime. Gubernatorial, let alone mayoral,
elections in large cities will still be managed by the center, while the rest
of the municipalities pose no danger to the regime.
The preparations for the State Duma elections will gradually weaken
the regional system of governance. Half of the new deputies will be
elected from single-member districts. Their election campaigns will
reenergize economically and politically powerful interest groups, espe-
cially in the more developed regions. Mud-slinging will complement the
barrage of populist promises as political life in the regions becomes more
active. Governors will not be able to totally influence the Duma elec-
tions, since they cannot control all of the interest groups. However, given
the low morale and apathy among the voters, as well as their distrust of
the Duma, the elections in single-member districts will help to revitalize
political life in only a limited number of regions.
Predictions for 2018. A long period of stagnation or a recession will
deplete the financial reserves by the 2018 presidential elections. Unless
the authorities start another ‘victorious little war’ to boost the president’s
job approval rating, the regime will have to rely on the hardline polit-
ical system that actually lacks sufficient means for economic pressure
or stimulation. There will be more bargaining with the regional elites,
even though the federal authorities have extremely limited financial
resources to keep their end of the bargain. The depraved regional elites
are most likely to bargain for privileges for narrow interest groups, not
the resources needed for the development of their region. Thus, the
federal center will continue to control the region using its ‘carrot and
stick’ approach while the situation in the country keeps deteriorating.
Scenarios: center–periphery dimension
This scenario views the situation in the country through the prism of
a center–periphery model. Russia is thus seen as an aggregate of four
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types of territories. ‘First Russia’ is made up of large, highly urbanized

cities (federal cities and the largest regional centers) with a population
of over 500,000 people and the highest educational and income levels.
31 per cent of the country’s population lives there. ‘Second Russia’ is
represented by smaller large and midsize cities with industrial economy
and remaining Soviet values. About 30 per cent of the population lives in
these cities. ‘Third Russia’ is the periphery inhabited by the aged small
town and rural population. Its inhabitants have low income and human
capital levels and lead more traditional lives. More than a third of the
country’s population belong to this category. ‘Fourth Russia’ is another
type of periphery (6 per cent of the population), which includes the
underdeveloped and least modernized republics of the North Caucasus
and South Siberia. These localities are characterized by clan social
structure, incomplete demographic transition and higher birth rates,
as well as strong religious and ethnic tensions and a shadow economy.
Modernization shift in these regions is accompanied by many negative
effects for the local population, therefore social and political tensions
run high.
A spectrum of possible scenarios was analyzed in the framework of the
Russia after 2014 project.4 The choice of scenarios was based on Russia’s
general trends and prospects, which ranged from the continuation of the
2014 negative trends as a baseline scenario to the most extreme possibil-
ities that lead to the country’s disintegration and forced regime change.
Here is the territorial projection of these scenarios.
The baseline scenario

Large cities with their higher-earning, more modernized populations
will bear the biggest brunt of the economic crisis. The non-bureaucratic
segment of the urban middle class will experience a higher decline
in their living standards as a result of the lower ruble exchange rate,
which makes it harder to buy high-quality foreign products, travel
abroad, and have access to medical care and education. In addition,
property and motor vehicle taxes will increase, and the flat tax rate
may be eliminated. Also, social services will cost more, although this
process has been going on for quite a while in large cities, and people
are gradually adapting.
The state will support those employed in its bureaucratic and force
structures with accelerated pay raises and various perks. These people
now represent a significantly higher percentage of the middle class than
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they did in the 2000s. Other public sector employees will also receive
some support, but their number will dwindle. Thus, the rift between
‘First Russia’s’ public-sector employees and less state-dependent profes-
sionals and entrepreneurs will widen.
Another important group is seniors, who are particularly active in
large cities. Their dissatisfaction may increase as a result of a switch to
the new pension payment system, which will lead to slower pension
increases. They will also be displeased with higher housing and utility
charges, which are inevitable during tough economic times.
Civil society first starts to take shape in large cities; therefore, the hard-
est crackdown on independent civic self-organization will occur there.
The persecution of civic and political activists will intensify, prompting
the most active ones to emigrate. The elimination of mayoral elections
in large cities will deprive the opposition of an important instrument of
protest mobilization.
Economic problems and increased political pressure will prompt the
residents of large cities – especially the more competitive younger gener-
ation – to leave the country. This is one of the main exit strategies for
the educated and high-earning ‘First Russia’ inhabitants who also share
European values.
The industrial ‘Second Russia’ will also split. Greater infusions of
budgetary funds into the military–industrial complex will provide jobs to
those living in the cities that serve this industrial sector. Meanwhile, the
situation in the cities with a large share of export industries (metallurgy,
coal, paper) and machine building will remain problematic and may
even deteriorate. This will lead to wage freezes and greater unemploy-
ment. The prospects for gas and oil-producing regions are not as clear,
but they will also suffer job losses even if the oil and gas prices remain
stable, since businesses will try to lower costs and reduce investments
under unfavorable economic conditions. Only the cities in the country’s
eastern regions that will benefit from Chinese investments may still have
positive economic growth.
Demographic factors make a surge in unemployment unlikely. The
large 1950s generation enters retirement age, while the smaller 1990s
generation comes in its place. The demographic factor will also soften
any protest drive. Besides, the regime and big business have learned to
coordinate their efforts on the restructuring of unprofitable businesses.
The restructuring is done through phased layoffs; the laid-off employees
are offered other jobs; the state subsidizes community service projects
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or appropriates limited funds for starting small businesses. Supporting

employment in the most problematic industrial cities requires rela-
tively small federal budget funds, which will be provided in the future.
They are not going to help end the crisis but will partly alleviate social
tensions.
‘Second Russia’ will be more affected by the social spending cuts. The
number of social service institutions and social sector jobs will decrease.
Many midsize cities have already lost most of their industrial func-
tions; their residents are now primarily employed in the public sector,
thus the cuts will decrease people’s income and job opportunities. Free
educational, health care and social services will be cut, and their quality
will decrease. The ‘inhabitants of Second Russia’, with the exception of
oil-producing regions, have lower incomes and will have a harder time
adjusting to higher service and housing and utilities costs. That said,
‘Second Russia’ is ready to tolerate lower quality and lack of accessibility
of services but not their higher costs.
The combination of social sector problems and higher unemployment
may trigger protests, but low social capital in ‘Second Russia’ has to be
taken into account. Most likely, the protests will be local and concentrate
in cities where the already complex economic situation is exacerbated
by lack of cooperation between the authorities and business. These
‘fires’ can be quickly extinguished with additional federal subsidies and
public punishment of mayors and business executives. Seniors living in
‘Second Russia’s’ midsize cities feel more secure, provided with timely
pension payments – thus, they may only join protests in the most prob-
lematic cities or in response to a sharp increase in housing and utility
costs.
The peripheral ‘Third Russia’ will experience even faster social service
and public sector job cuts; accessibility to education and health care
will also decrease significantly. These problems will be compounded
by minimal pension adjustments, which, given high inflation rates,
will substantially lower the real income of aged rural and small town
residents. ‘Third Russia’s’ protest potential is minimal. Its inhabit-
ants are used to surviving off their personal land plots and saving on
everything.
Thus, social tensions will primarily increase in ‘First Russia’s’ large
cities, as well as ‘Second Russia’s’ industrial cities with no connection
to the military–industrial complex. However, the two tension zones
are unlikely to merge – their populations and values differ greatly. The
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situation in ‘Fourth Russia’ will continue to escalate, but it is impossible

to predict the timeframe for its explosion.
The softening scenario

In the next few years, the deficit of social capital will keep protest poten-
tial low. However, the regime may alter its policies because of external
shocks. One such shock is a sharp decline of the Russian economy and
budget revenues brought on by a significant and continued decrease
in world export prices. The Russian budget is kept balanced when oil
prices exceed 110 dollars a barrel. At the same time, federal defense
spending and regional social expenditures are rising rapidly. Under
this policy, financial reserves in non-budget funds will be exhausted
in a couple of years. Lack of financial resources will force the Russian
regime to seek loans on external markets, which will in turn make the
regime soften its policies in order to have the EU and US roll back their
sanctions and allow Russia to obtain loans from banks and international
organizations. Apart from sanctions, Russia’s borrowing opportunities
are also linked to oil prices, which are a critical source of revenues for
the Russian budget.
Only Moscow, as the main center for redistributing financial flows,
and to a lesser extent Saint Petersburg, stand to gain from this scen-
ario. Other cities with a population over one million people are not
going to get additional resources and perceptible impulse for their
development. They will continue to lag behind Moscow, and the gap
will increase. This state of affairs will again generate negative senti-
ments toward the capital and make its isolation from the rest of the
country even greater. Essentially, the situation that existed in the
second half of the 1990s is about to be repeated. At that time, Moscow
started to grow economically, while the depression continued for the
rest of the country.
The softening of the regime will not bring about fast changes in
‘Second Russia’s’ industrial cities. Overcoming the crisis and generat-
ing economic growth will require more investments, but an uncertain
future will keep investments from growing significantly. The question of
whether the current softening of the regime will endure or whether it
is just a temporary tactical move will remain unresolved. Nevertheless,
a more stable job market after several years of layoffs will somewhat
decrease tensions in industrial cities. Nothing will change for the ‘Third
Russia’ periphery.
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‘Anti-Perestroika’ and the disintegration of the country

(shift toward nationalism/fascism)
Such a scenario is possible during the most acute stage of the economic
crisis and the subsequent split in the elites. A need to search for a new
enemy will emerge, since the images of external enemies and the ‘fifth
column’ inside the country will no longer ensure popular mobilization
in support of the regime. The authorities might start to encourage
ethnic (Great-Russia, Orthodox Christian) mobilization and foster
xenophobia toward migrants. While the great-power idea brought to
the fore by the annexation of Crimea managed to unite the majority
of Russians, at least for the time being, the nationalist one will sharply
divide them.
Nationalism of the majority always provokes nationalist sentiments
among ethnic minorities, which is certain to increase tensions in the
Fourth Russia – in the North Caucasus. Besides, interethnic tensions
will also escalate in more developed ethnic republics (Tatarstan,
Bashkortostan, Yakutia). With the support of the dominant ethnic
group, their leaders will try to distance the republics from the federal
center.
There will be more conflicts in ‘First Russia’s’ cities with a large
concentration of labor migrants from the CIS countries. The escalation
of violence will reduce the number of labor migrants in large cities,
which will have an adverse effect on the service, retail and construction
industries that employ most of the labor migrants. Ethnic conflicts and
violence will also spread to the towns and rural areas of the ‘Russian’
south, where the North Caucasus residents have long been migrating.
The escalation of violence will further intensify emigration from ‘First
Russia’s’ large cities.
Xenophobic policies will greatly increase the influence of the extrem-
ist groups from the North Caucasus. The number of terrorist attacks in
large Russian cities will grow; the same will be true of the southern areas,
where many North Caucasus natives live. Some restrictions on labor
migration from the North Caucasus might go into effect, which might
trigger a powerful social explosion exacerbated by the growth of ethnic
and religious conflicts.
The consequences of Russian and ethnic nationalisms are quite
predictable, and in the worst-case scenario, encouraging xenophobia
may lead to the disintegration of the country.
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Violent breakdown of the current regime (revolution)

This is the least likely scenario, which resists prognostication. ‘First
Russia’, or rather the capital, will clearly play a leading role in it, but its
contours cannot yet be seen. Its consequences are unfathomable.
* * *
The scenario analysis lends itself to the following, mostly pessimistic,

conclusions:
▸▸ The Russian regions will not become the drivers of positive change.
They lack economic resources and strong elite groups that are ready
to fight for more decentralized governance and distribution of
economic resources. Moreover, as had been the case in the 1990s,
the degraded regional elites will not be able to seize power if the
center grows weaker. They are unlikely to become a stabilizing
actor in most regions and have no potential to become the driver of
their development. The regional development scenario proposed by
Alexei Kudrin at the 2014 Davos Forum5 is becoming less and less
relevant.
▸▸ Increasing, but selective, political crackdown will be aimed at
federal and other large cities with more modernized populations.
It will most probably allow the regime to hold on to power until
the 2018 presidential elections, since the resistance will diminish.
Educated and financially secure Russians will choose external or
internal emigration.
▸▸ In the case of relative softening by the regime, the recovery will
resemble the processes of the mid-1990s. Moscow will benefit from
most of the investments; Saint Petersburg will receive significantly
less; the rest of the regions will lag farther behind. Regional
contrasts are going to intensify.
▸▸ In the most extreme scenario, the North Caucasus will act as the
main driver of change in Russia. The escalation of terrorism across
the country and the federal crackdown may lead to the secession of
the North Caucasus or its part.
▸▸ China’s economic influence will be growing in the eastern regions
of the country despite the federal efforts to retain political control
by barring regional executives from making investment decisions.
If the federal center weakens, the eastern regions will become
heavily dependent on China. Their secession is unlikely if Siberian
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regions manage to redistribute financial resources and powers in

their favor, including the control over mineral resources. Such
a scenario seems unlikely at this time. Putin’s new proposals to
transfer some federal ministries to the Siberian city of Krasnoyarsk6
mean that the federal center is simultaneously trying to
demonstrate quasi-federalization (or rather its own understanding
of federalization) and strengthen its control over the country’s
eastern regions.
▸▸ The policy of over-centralization is obviously ineffective. The
center’s authoritarian management decisions that do not consider
regional specifics are certain to exacerbate economic and social
problems in the regions. Only the change of political regime offers
a chance to establish feedback and create a system for coordinating
the interests of the center and regions.
Notes
1 The data of ‘Standard & Poors’ cited in Vedomosti, 12 December 2013: O.
Kuvshinova (2013) ‘Regionally Budget Crisis’, Vedomosti, 12 December 2013.
2 The Tatneft oil company pays a low tax on mineral resource extraction in
accordance with the federal law on supporting oil extraction from old oil
fields.
3 I. Starodubrovskaya (2014) ‘The Transformation of the North Caucasus:
From Tradition to Modernity’, Pro et Contra, No 1–2, 96–105.
4 Pro et Contra (2014) No. 3–4 (63), http://carnegie.ru/proetcontra/?fa=56399.
5 World Economic Forum’s Global Agenda Council on Russia Building on
the Scenarios for the Russian Federation (2014) Russia’s Regions Drivers of
Growth: 4x4, http://www3.weforum.org/docs/GAC/2014/WEF_GAC_Russia_
DriversGrowth_Report_2014.pdf.
6 President of Russia (2014) Excerpts from Transcript of Meeting with Seliger 2014
Forum Participants, http://eng.kremlin.ru/transcripts/22864.
Bibliography
O. Kuvshinova (2013) ‘Regionally Budget Crisis’, Vedomosti, 12 December

2013.
President of Russia (2014) Excerpts from Transcript of Meeting with Seliger
2014 Forum Participants, http://eng.kremlin.ru/transcripts/22864
DOI: 10.1057/9781137548115.0007
I. Starodubrovskaya (2014) ‘The Transformation of the North Caucasus:

From Tradition to Modernity’, Pro et Contra, No 1–2(62), 96–105.
World Economic Forum’s Global Agenda Council on Russia Building
on the Scenarios for the Russian Federation (2014) Russia’s Regions
Drivers of Growth: 4x4, http://www3.weforum.org/docs/GAC/2014/
WEF_GAC_Russia_DriversGrowth_Report_2014.pdf
DOI: 10.1057/9781137548115.0007
4
Russia Reinvents Itself
as a Rogue State in the
Ungovernable
Multi-Polar World
Pavel Baev
Abstract: Putin’s decisive move against Ukraine was

motivated by his vision of the Hobbesian multi-polar
world, in which the fast decline of US hegemony is
accentuated by rebalancing in favor of ‘emerging powers’.
In that fluid picture, the first mover who dares to capture
the initiative has a decisive advantage, but the reality
check has proven otherwise. The forceful move that was
supposed to push the disunited opponents into disarray
has resulted in a mobilization of efforts of the stakeholders
in the European security system determined to restore its
integrity.

doi: 10.1057/9781137548115.0008.
DOI: 10.1057/9781137548115.0008 69
70 Pavel Baev
Introduction
The shift in Russian foreign policy towards determined and purpose-

ful confrontation with the West was so abrupt, in March 2014, that it
appeared to many professional Russia-watchers to be irrational and
driven primarily by the personal idiosyncrasies of President Vladimir
Putin. The departure from the well-established pattern of combin-
ing pragmatic cooperation (primarily economic) and competition
(increasingly securitized) was indeed as resolute as it was unexpected;
in hindsight, however, it can be seen as a logical consequence of the
authoritarian evolution of Putin’s regime. This dramatic breakthrough
is also a result of a particular and still ongoing crisis centered on the
complex state failure in Ukraine, which constitutes a unique geopolitical
disaster – but is also a continuation of a chain of crises that goes from
the wave of ‘color revolutions’ in 2003–05 to the Russian–Georgian war
in 2008 and to the sequence of collapses of ruling regimes in the wider
Middle East in 2011–12.
Each of these crises made an impact on the direction of Russia’s
foreign policy and affected the dynamics of transformation of its ‘hybrid’
regime, which had to secure its own survival against perceived exter-
nal threats. This perspective makes it possible to draw a set of possible
trajectories of further shifts in Russia’s behavior on the international
arena, despite the extra-high uncertainty generated by the Ukrainian
calamity. The key issue for any near-future oriented analysis is whether
this failure of a major European state, in which Moscow is massively
implicated, has pushed the natural evolution of Putin’s regime too far
and delivered it into a confrontation, which it cannot sustain. Simple
‘Yes’ emerges as the most probable answer to this convoluted question,
but this chapter attempts to investigate other options, even if this author
is gravely concerned about the prospect of a sudden implosion of deeply
corrupt Russian state structures – a concern informed by the experi-
ence of living inside the collapse of the allegedly ‘indestructible’ Soviet
Union. After a brief background on the road to Crimea, the chapter
evaluates the choices made in Moscow during the Ukrainian crisis and
gives an abbreviated assessment of new risks and opportunities, before
outlining the possible short-term maneuvers and proceeding to mid-
term scenarios.
DOI: 10.1057/9781137548115.0008
Russia Reinvents Itself as a Rogue State 71
The road to Crimea
It would have been simplistic to see hostility to the West as an inher-

ent feature of Putin’s worldview and plain wrong to portray Russia’s
foreign policy as driven by inherent desire for imperialistic expansion.
Nevertheless, the trend toward disengagement from the EU-organized
Europe was present perhaps already since the Second Chechen war,
which was the original crisis of Putin’s regime. It was hidden by the
firmly set priority for engaging European companies and capital in revi-
talizing Russia’s economy, but this pragmatism was tested by the arrival
of the first wave of ‘color revolutions’, in which the ‘orange revolution’
in Ukraine (2004) produced the maximum shock effect, convincing
the Kremlin that it was under direct threat from ‘street power’.1 Broad
support in the West for these revolutions was – and still is – interpreted
as evidence of a deep conspiracy aimed at orchestrating a regime change
in Russia.
The determination to make Russia into a bastion breaking the revolu-
tionary tide fuelled the escalation of conflict with Georgia, which since
the ‘Rose revolution’ (2003) had become a champion of liberal reforms.
Another factor in this conflict was the desire to block President George
W. Bush’s plan for NATO enlargement, which was indeed ill-conceived
and allowed Moscow to exploit deep divisions among the allies. A small
but vociferous group of Western experts argued that the August war
(2008) set a watershed in Russia’s policy and that containment was the
only strategy for checking the ambitions of Putin’s regime.2 The annex-
ation of Crimea might seem to confirm their risk assessments, but in
fact, the Russian leadership was at that moment profoundly shaken by
the sudden arrival of economic crisis – and so committed to minimizing
the damage and prioritizing cooperation with Western partners.
That commitment was duly answered by US President Barack Obama,
who opted for ‘resetting’ relations, a decision which is now criticized
as an exercise in wishful thinking but was a sincere effort aimed at
exploiting the slim cooperative chance to the maximum effect. While the
US–Russian ‘reset’ was primarily focused on strategic arms control, the
parallel EU effort at launching a ‘partnership for modernization’ consti-
tuted a broader strategy for reconnecting Russia with Europe.3 President
Dmitri Medvedev’s inability to deliver on his promise of ‘modernization’
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72 Pavel Baev
may in hindsight look too obvious but his predictable personal fiasco
signified Russia’s missed chance for a true revival, which for many
European stakeholders in cooperation was bitterly disappointing.4
Putin’s decision to claim back the position of power was rightly seen as
a triumph of corrupt counter-modernization – but the dismay among
Western leaders was bitterly irritating for the vain autocrat.
What reinforced the anti-Western momentum in Russia’s foreign
policy was the fact that Putin’s return to the Kremlin coincided with
the increase of political turmoil across the wider Middle East, optimis-
tically called the ‘Arab Spring’. There were few doubts among Putin’s
courtiers that the US orchestrated that chain reaction of breakdowns
seeking to reformat its control over that region by applying technolo-
gies of ‘controlled chaos’.5 Russian leadership recognized the need to
take a firm stance against that new wave of revolutions, particularly
after Russian consent for setting a UN-authorized ‘no-fly zone’ over
Libya was abused by US and its NATO allies for launching an inter-
vention against the Qaddafi regime. The main counter-revolutionary
focus was placed squarely on preventing a Western intervention
in war-torn Syria, and the tactical success with the September 2013
initiative on eliminating the chemical arsenal and sheltering al-Assad’s
regime from US airstrikes was interpreted as a strategic achievement
in asserting Russia’s role as an ‘indispensable’ power. Significantly, in
only a month since scoring the Syrian ‘victory’, Putin made the first
fateful mistake in triggering the Ukrainian crisis by forcing President
Victor Yanukovich to abandon the long-prepared association agree-
ment with the EU.
The logic of Ukrainian choices
The still fast-moving existential crisis of the Ukrainian state has been
proactively instigated by Moscow and at the same time has determined
the narrowing of options in Russia’s foreign policy in the corridor of
new irreversible confrontation. The decision-making concentrated in a
hermetic circle of Putin’s lieutenants has been so unconventional that his
Western peers have had difficulties grasping the rationale and suspect
that Putin has departed to ‘a different reality’.6 Yet his risky choices have
been informed by the logic of regime self-preservation and based on the
lessons learned in managing earlier crises.
DOI: 10.1057/9781137548115.0008
Perhaps the most fundamental of these lessons is the conclusion on

the essential ungovernability of the emerging multi-polar and multi-
vector world system, in which the UN Security Council is the only
supreme arbiter – and an entirely ineffectual one due to the unbridge-
able divergence between the five permanent members and the proven
impossibility to reform this outdated mechanism.7 In this competitive
and conflict-infested world system references to international law serve
only the purpose of justifying the actions of major powers that are strong
enough to advance their parochial interests. The big question about a
possible clash between them remains, for the time being, open – and
Moscow counts on Western shyness in supplying an answer.
Russia’s positions in this multi-polar system are precarious since it
cannot any more rely on the fast economic growth (as in Putin’s first and
second presidential terms) which is a key measure of strength among
the ambitious and hesitantly revisionist ‘emerging powers’. Russia has
therefore to maximize its other sources of strength, including building a
sphere of political dominance structured through the institutions of the
Eurasian Union. Economic ties are insufficient for holding this disagree-
able Union together, so Russia must rely more on its unique advantage
in possessing a vast nuclear arsenal and deployable expeditionary forces.
Limitations on using military force for projecting power are weakening
as the global system turns prone to rebalancing through conflict.
Yet another conclusion is that the West is in irreversible decline as the
guarantor of norms and order in the global system, first of all because
the USA has lost the hegemonic position and is on the track of retrench-
ment and retreat. A corollary is that the USA seeks to weaken the new
centers of power by fostering internal discontent and undermining their
newly formed alliances by orchestrating regime changes. Another corol-
lary is that the EU is disempowered by centrifugal forces unleashed by
the economic crisis, which opens for Russia plentiful opportunities to
play on discord and to incapacitate a NATO compromised by the defeat
in Afghanistan.
These assumptions shaped the course of action in the Ukrainian crisis,
which has developed in a sequence of spasms surprising for Moscow. The
choice of torpedoing the association agreement between Ukraine and the
EU was dictated by the desire to demonstrate the weakness of the latter
and the strength of the Russian project for building the Eurasian Union.
The explosion of protests in Kiev necessitated the effort at exorcising the
specter of revolution by disbursing greater financial resources than was
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74 Pavel Baev
initially budgeted for.8 Yanukovich’s panicky escape from Kiev was taken
by Putin for a treacherous Western coup covered by the paper agreement
signed in order to keep Moscow out. The urgent need to defeat the riot
turning into revolution came together with the desire to prevail over the
deceitful West forming an imperative for launching a forceful counter-
offensive on the Ukrainian front.
In this hastily revised strategic plan, the main emphasis was placed
on Russia’s ability to put into play the military instruments which none
of the other parties to the conflict had at its disposal. The execution of
a radical military reform, controversial as it was, indeed secured for
the Russian leadership the option for deploying combat-capable units
of special forces equipped and trained for operations in various low-
intensity conflicts.9 The key political premise for launching the military
intervention into Crimea was that the more shocking was the strike the
greater would be the dismay in the disunited Western camp, so that the
strength of response would be in inverse proportion to the decisiveness
of proactive moves.
Evaluating the Crimea breakthrough
In Putin’s counter-revolutionary strategy in the Ukrainian crisis,

Crimea had not figured as a major goal; yet, the sudden collapse of the
Yanukovich government created an opportunity, which the Kremlin was
quick to grasp, acquiring both a valuable ‘prize’ and a lever for putting
pressure on the Eastern Ukraine. This perfectly executed intervention
did, nevertheless, become a game-changer, not least by securing Putin a
massive popularity boost. It is definitely too early to apply the proverbial
wisdom of hindsight to this case, but the scope of post-Crimea changes
in foreign policy could be evaluated by the old-fashioned method of
SWOT analysis.
The strength in Russia’s new position came primarily from proving
its ability to act decisively in advancing its interests disregarding the
expressed warnings from the West. The trend of its declining relevance
in the international system was thus instantly reversed by establishing
the readiness to violate the rules of behavior and challenge the domin-
ance of established authority in this system. The newly gained profile of
an arch-revisionist power is based primarily on the capacity for using
military instruments in combination with economic/financial/energy
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levers, and this source of strength is absent among the key actors popu-
lating the European arena.
The weakness was determined by Russia’s fast-deepening international
isolation, the most serious dimension of which was the confrontation
with the West. Against expectations in the Kremlin, the EU has demon-
strated useful capacity for collective action and willingness to accept US
leadership in delivering a meaningful response to Russia’s aggressive
unilateralism. A less obvious weakness was the lack of effective support
from China, which was rather disconcerted by Russia’s reckless behavior,
and from such key allies/satellites as Belarus and Kazakhstan, deeply
worried about the discourse on protecting ethnic kin advanced by
Moscow.
Opportunities arose primarily from the increased ability to stir
troubles in South-Eastern Ukraine, which were indeed exploited for
undermining governance and preventing the rebuilding of functional
state structures in Ukraine. Additional opportunities were to be found
in splitting the fragile Western unity by playing on business interests
centered not only on energy imports but also on servicing financial
flows originating in Russia. Yet more opportunities were to be opened by
reorienting Russian economic ties towards the Asia-Pacific and strength-
ening the strategic partnership with China.
Threats were shaped first of all by the combination of economic sanc-
tions and political ostracism in the course of confrontation with the
West. Sanctions were initially limited but even the instant impact was
disproportionally strong, pushing the Russian economy over the tipping
point of recession because the investment climate turned from unfavor-
able to prohibitive. Another threat appeared when NATO, instead of
expected dismay, was re-energized by Russia’s rediscovery of war as a
continuation of politics. Inventing the ‘encirclement’ by NATO bases
used to be a convenient political trick for Moscow but dealing with a
reinvigorated Atlantic Alliance is a different matter altogether, includ-
ing in the Baltic theater. One particular manifestation of this threat was
the shift in military balance in the Black Sea area, where the key role
in NATO plans belongs to Turkey; Moscow cultivated a strategic part-
nership with Ankara, but the annexation of Crimea has damaged these
bilateral relations. Closer ties with China bring another danger: Russia
has avoided any entanglement in the maritime disputes in the East and
South China seas, but it may become necessary to commit to supporting
Beijing.
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76 Pavel Baev
This balance sheet didn’t look promising for Moscow, but it opted
for exploiting the opportunities before the threats materialize, seeking
to gain the advantages of initiative. It was elementary to manipulate the
Donbass separatists but the proven readiness to escalate this conflict has
aggravated the weaknesses of Russia’s precarious position as an inter-
national ‘rogue’. Moscow has found itself in an unfamiliar predicament
where its freedom of maneuver is rigidly limited – and not by the hesi-
tant counter-measures executed by the tough-talking US and the flabber-
gasted EU, but by the need to score more ‘victories’ and the recognition
of looming defeat in the de-escalation of the Ukrainian crisis. Indeed, the
formula ‘winning Crimea – losing Ukraine’ summed up a geopolitical
fiasco, so Moscow sought to refuse the proposition for letting Ukraine
try to reconstitute its statehood after ingloriously losing Crimea. It was
probably possible to strike a profitable bargain if only Russia could have
stopped after annexing Crimea (as it did stop its tanks outside Tbilisi in
August 2008); the problem was that it could not.
The post-Crimea corridor of choices
Finding itself in the predicament of a real rather than virtual confron-

tation with the West, the Russian leadership didn’t want to commit
to a particular course of action and sought to expand the space for
maneuvering by combining three different approaches: damage mini-
mization; isolation prevention; and conflict escalation. The first one was
aimed at establishing that Crimea was sui generis, so the swift annexation
constituted a special case that did not diminish Russia’s general adher-
ence to international law and its readiness to be a part of solution for the
Ukrainian state failure. The second approach required targeted efforts
aimed at splitting Western unity through a maximum exploitation of
anti-Americanism and a careful wielding of the ‘gas weapon’ towards
impressible European customers.10 The third one required brutal pres-
sure on Ukraine and deployment of a range of subversive and special-
ops capabilities in the Donetsk and Luhansk regions in order to bring
the conflict to such level of risks where the West would recognize its
inability to deal with it.
Each approach had its merits, but the combination has proven to
be unworkable. The Crimean mix of political, historic and geographic
characteristics was indeed unique, but repetitive military exercises along
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the borders of Eastern Ukraine and the arrival of ‘green men’, who had
taken effectively control over Simferopol, to Kramatorsk and Slavyansk,
showed already in April that Moscow was preparing to replay the easy
‘victory’ on a larger scale. Troops of Valdai experts were sent to Europe
to connect with Russia-sympathizers and reinforce Putin’s warning about
possible interruptions of the flow of gas, but their efforts were wasted
as European politicians acknowledged that the security of gas supply
was already compromised – and also saw an urgent need in curtailing
Russia’s export of corruption.11 The too obvious Russian hand in belliger-
ency in Eastern Ukraine convinced the reluctant Europeans (particularly
after the destruction of flight MH17 on 17 July with the loss of 298 lives)
that the state failure in Ukraine was too dangerous to ignore – and that
Moscow could not be a part of the state-reconstruction project.12
It was the pursuit of escalation that undermined Russia’s prospects for
advancing alternative approaches, deepened its international isolation
and jeopardized its major achievement – fast incorporation of Crimea
into the Russian state. The initial assumption that the resolutely sustained
offensive would push the West into disarray was disproven already
during the first month after the de facto annexation, so the assumption
about the strengthening US leadership, consolidating EU and reinvigor-
ating NATO dawned on the Russian leadership.13 It was still possible to
break these negative trends, but that would have required establishing
a verifiable fact of non-interference in the fluid transformation of the
Ukrainian crisis. On several occasions, including in the final weeks of
the Ukrainian presidential elections in May and after the dubious cease-
fire deal in Minsk in September, Putin sought to explore chances on the
de-escalation track, but each time undoing the damage from the previ-
ous heavy-handed interventions and washing his hands over Ukraine
proved to be impossible.14
There were many components to the self-made trap that condemned
Russia to start losing in the ‘game’ of Ukrainian crisis manipulation
the moment it stopped moving along the track of conflict escalation.
There was hard pressure from the ‘patriotic’ domestic expectations
inflated by the hysterical propaganda.15 What is relevant here, however,
is the inescapable logic of confrontation according to which every
de-escalatory move amounts to giving up to Western pressure. Sanctions
were fiercely condemned by the official discourse, so acknowledging the
plain fact of their impact on the Russian economy (or, even worse, ruling
elite) would have amounted to admitting a mistake. Giving Ukraine a
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78 Pavel Baev
chance to rebuild structures of governance with Western help would

mean allowing a state severely traumatized by Russian aggression to
strengthen capacity for resisting further interference. Fuelling separatist
guerillas was in this logic a better choice, and the foreboding of a civil
war in Ukraine was indeed fast growing in Russian public opinion, while
at the same time the support for incorporating Donbass into the Russian
Federation was shrinking.16
Only bad options are available
A massive Russian intervention into a civil war in Ukraine emerges as

one of the most probable short-term scenarios, with extremely high
uncertainty. Civil wars come in various durations and intensities but
they never go according to the plan of their instigators and are extremely
hard to control. A violent uprising in the Donetsk region could have
seemed for the Kremlin policy-planners the shortest way to derailing the
presidential elections in Ukraine, but Petro Poroshenko gained never-
theless a very strong mandate as Ukraine’s president. He then effect-
ively mobilized military forces of different kinds for a successful (even
if misnamed) ‘counter-terrorist operation’, so Moscow had to deploy a
dozen combat battalion groups in order to prevent a defeat of the separ-
atist cause. At the moment of this writing, a fragile ceasefire has termi-
nated combat operations in Donbass, but it appears highly probable that
a new escalation of hostilities will occur before the volume is published.17
Examination of possible aims of a new Russian offensive goes beyond
the scope of this chapter, but it argues about the inescapable Western
response to such intervention in the form of tightening sanctions (which
were in fact tightened even as the ceasefire was established) and increas-
ing isolation turning into ostracism.
Russia’s ability to withstand such punishment is far more limited than
the circle of Putin’s courtiers imagines, and the exploitable vulnerabil-
ities in the financial system could in a matter of a few months become
an epicenter of a painful economic contraction.18 The badly mismanaged
and extremely open economy is no more capable to perform an indus-
trial mobilization than the deeply corrupt elite is ready to sacrifice its
consumerist life-style for a ‘patriotic’ austerity. This scenario runs, there-
fore, for only a shorter-than-short term – and then collapses into a chaotic
turmoil where Ukrainian civil war not only spills over into Southern
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Russia but also resonates in the ever-turbulent Northern Caucasus and

even triggers a messy regime transmogrification in Moscow through a
series of palace coups and street riots.
A more coherent scenario could be developed from the point of
departure of a stagnant low-intensity civil war around the small quasi-
state in Eastern Ukraine manipulated by Russia with limited military
interventions. The dual task for Russian foreign policy will then be to
keep Ukraine down and NATO out, while minimizing the impact of
sanctions. One key condition for this scenario is that the EU and the
international financial institutions are unable to deliver to Ukraine an
aid package sufficient for alleviating immediate pains and support-
ing long-delayed reforms, so the economy would suffer an implosion
comparable with the massive contraction that followed the collapse of
the USSR.19 Another condition is that Russia is able to avoid a similar
economic disaster by reorienting the trade and investment flows to Asia-
Pacific and first of all to China.20 This condition is more complicated
than most Russian politico-economists tend to believe and involves
both cuts in budget ‘generosity’ to the North Caucasus (and Crimea as
well, not to mention the rump ‘Novorossiya’) and ‘most favored regime’
status for Chinese investors. The shift of export flows of natural gas to
the Chinese market is hard to execute and the decline of export revenues
in this forced maneuver is inevitable.21
The least probable but still plausible scenario describes a U-turn in
Russia’s policy towards disengagement from the Ukrainian crisis and
readiness to contribute to its resolution. The main goal of such turn-
around is to secure the annexation of Crimea as a special case and to
convince the EU to reduce the sanctions regime to a symbolic minimum,
which many European states would be eager to subscribe to. There are
serious domestic risks involved in the taming of aggressive ‘patriotic’
forces, so Putin will opt for such retreat only if he is certain that an
essential normalization of relations with the West would yield tangible
economic benefits. He will also seek to ensure that Ukraine is not on track
to join NATO, and while the Alliance cannot give any formal obligation,
the Kiev government might find it opportune to commit to neutrality.22
Russia would still be perceived as a dangerous maverick that needs to be
contained (rather than re-admitted into the G8, for instance), but some
curtailing of the impracticable and financially unaffordable rearmament
program might help in alleviating newly revived fears, particularly in the
Baltic states.
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80 Pavel Baev
The chains of crises in the short- to mid-term
The trajectories of the second and the third scenarios, as outlined above,
are not separated by any political watershed and represent only variations
in the strategy of survival pursued by personalistic/populist Putin’s regime,
which continues to mutate under the impact of the Ukrainian crisis. For
that matter, Moscow’s manipulation of the stagnant civil war in the second
scenario involves a high possibility of mistakes that can be covered only
by a large-scale military intervention, which makes a shortcut to the first
scenario – and brings the confrontation with the West to such an intensity
that Russia’s implosion becomes the most probable short-term outcome.
The scenario involving a mid-intensity confrontation with the West
against the background of a violently unstable Ukraine can be divided
into two main channels different in the key parameter of Russia’s depend-
ency upon the strategic alliance with China. The first one goes towards
a mature but asymmetric alliance, in which Moscow has to accept a
subordinate position in exchange for massive investments that help in
preventing a deep economic contraction. Becoming a ‘raw materials
appendage’ to the powerful but politically arrogant and culturally alien
neighbor means a humiliating downsizing of Russia’s own ambitions
but Putin’s power-holders could find it acceptable if facing the risk of
regime failure.23 A ‘common neighborhood’ crisis that might propel this
alliance-building is a series of violent conflicts in Central Asia related
to a new civil war in Afghanistan that can only be countered by joint
Russian–Chinese interventions.
Another channel of possible developments goes towards execution of
a reformatted and reduced Eurasian project, which cannot include the
devastated Ukraine but still can gather several states, first of all Belarus
and Kazakhstan, around Russian leadership. A necessary precondition
for such ability to gain new confidence and withstand the impact of sanc-
tions is a significant increase in export revenues that could only happen
if a major conflict would disrupt the flow of oil from the Persian Gulf.
Another condition that could allow Russia to avoid China’s embrace is
an escalation of several conflicts around the contested islands in adjacent
seas, which would divert Beijing’s attention away from exploiting the
vulnerabilities of the Far East. The prominence of the Ukrainian debacle
in this deeply perturbed international system will then inevitably decline.
The scenario involving Russia’s contribution to a gradual rebuilding of
the Ukrainian state can also be divided into two streams depending upon
DOI: 10.1057/9781137548115.0008
the cohesion of key Western institutions. If the EU is able to overcome

the centrifugal forces driven by economic stagnation and NATO is able to
unite around a new purpose, Putin’s Russia will remain an outcast while a
recuperating Ukraine will prioritize increasing ties with the West. Bowing
to China may be Russia’s only option, as described above, but Moscow
may also explore opportunities for upgrading the strategic partnership
with Turkey.24 The Crimea remains an issue and, in order to bracket it out,
the Kremlin will keep suggesting to channel major volumes of gas through
the newly-designed Turkish Stream pipeline or through the expanded Blue
Stream pipeline, thus fulfilling Turkish ambitions to become a ‘gas hub’.
Protracted economic stagnation in the EU and the erosion of its
common foreign and security policy grant Russia a more advantageous
position, with many opportunities for exploiting splits in the Euro-
Atlantic discordance. Moscow would then be able to minimize the
impact of sanctions but the weakness of European economies inevitably
translates into feeble economic growth in Russia, which continues to
suffer from capital flight. A divided West would also fail to maintain an
effective sanctions regime against Iran, and the return on the global oil
and gas market of this potentially major producer could bring the oil
price down by 25–30 per cent from the current plateau, which delivers a
massive blow to Russia’s finances. Enfeebled Russia might be redefined
by revisionist China from a useful ally into an easy prey, and the swift
annexation of the Far East could become a geopolitical punishment for
the ‘triumph’ in Crimea.
Conclusion
Russia’s engagement in, and exploitation of, the crisis of Ukrainian

statehood has marked such a striking departure from its previous inter-
national behavior characterized by pragmatism and upholding of status
quo that the direction of the new course appeared nonsensical and
self-defeating. The main drivers of the aggressively revisionist policy
are clearly domestic and shaped by the mutation of Putin’s profoundly
corrupt regime; yet, there were also international parameters that were
crucial at the outset of the crisis – and may yet determine its outcome.
Putin’s decisive move against Ukraine was motivated by his vision of the
Hobbesian multi-polar world, in which the fast decline of US hegemony
is accentuated by rebalancing in favor of ‘emerging powers’. In that fluid
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82 Pavel Baev
picture, the first mover who dares to capture initiative has a decisive
advantage, but the reality check has proven otherwise.25 The forceful
move that was supposed to push the disunited opponents into disarray
has resulted in a mobilization of efforts of the stakeholders in the
European security system determined to restore its integrity. This trend
in the development of the extra-heavy-impact crisis, which differs from
the Cold War first of all in the high uncertainty of its trajectory, could
yet be broken in the second half of 2015, but every attempt by Moscow to
gain an upper hand is reinforcing it.
Putin has badly miscalculated the US capacity for producing effective
leadership and NATO’s ability to re-energize its reduced structures –
and has found himself in a trap where every pause is a net loss as the
opponents get their act together, and every move is also a net loss as
the urgency of the strategic task to contain Russia becomes greater. A
stagnant economy, which is propelled by sanctions into a deep recession,
is a major handicap in Russia’s further maneuvering in the international
arena, where new crises are certain to overlap with the Ukrainian
debacle. Moscow’s only chance to withstand a confrontation, which it
cannot hope to win or even to sustain, is that it will precipitate a melt-
down of the world order – an unthinkable but not impossible prospect.
Notes
1 My small contribution to the vast literature on that wave is P. K. Baev (2011)
‘A Matrix for Post-Soviet “Color Revolutions”: Exorcising the Devil from the
Details’, International Area Studies Review, vol. 14, no 2, Spring 2011, 3–22.
2 See, for instance, R. D. Asmus (2010) A Little War That Shook the World (New
York: Palgrave Macmillan).
3 One attempt at conceptualizing that opportunity was S. Karaganov (2010)
‘Union of Europe: The Last Chance?’, Russia in Global Affairs, 9 July 2010.
4 See on that A. Moshes (2013) ‘Europe’s Disillusionment with Russia’,
PONARS Eurasia Memo 284, http://www.ponarseurasia.org/memo/europes-
disillusionment-russia.
5 My early analysis of Russia’s position is in P. K. Baev (2011) ‘Moscow Does
Not Believe in Changes’ in B. Jones and K. M. Pollack (eds) (2011) The Arab
Awakening (Washington: Brookings).
6 One sharp insight into the nature of this decision-making is G. Pavlovsky
(2014) Putin in the Days of Great Russian-Ukrainian Revolution, http://gefter.ru/
archive/11640
DOI: 10.1057/9781137548115.0008
7 This conclusion is spelled out in F. Lukyanov (2014) On the Threshold of

Turbulence, http://www.gazeta.ru/comments/column/lukyanov/6202721.
shtml
8 My take on that miscalculation is in P. K. Baev (2014) ‘Maidan Stands against
Putin’s Plan to Buy Ukraine on the Cheap’, Eurasia Daily Monitor, 9 December
2014.
9 One competent opinion is A. Golts (2014) Two States, Two Armies, One
Anschluss, http://ej.ru/?a=note&id=24793
10 On the peculiar mix of anti-Americanism and business interests in Germany,
see C. Wergin (2014) ‘Why Germans Love Russia’, International New York
Times, 6 May 2014.
11 Every attempt to sell the ‘business-as-usual’ proposition only added to that
understanding; see Y. Safronov (2014) ‘Crimea Is No Honey’, Novaya Gazeta,
24 March 2014.
12 On the impact of this catastrophe, see Spiegel Staff (2014) ‘The Tragedy
of MH17: Attack Could Mark Turning Point in Ukraine Conflict’, Spiegel
International, 21 July 2014.
13 Thus, Russian Defense Minister Sergei Shoigu complained in a telephone
conversation with US Defense Secretary Chuck Hagel about the
‘unprecedented activity’ of NATO troops in Eastern Europe; see Y. Gavrilov
(2014) ‘Nobody Saw a Saboteur’, Rossiiskaya Gazeta, 30 April 2014.
14 My abbreviated evaluation of the Minsk ceasefire is in P. Baev (2014) ‘The
Pause in the Ukraine War Is No Putin’s Victory’, Eurasia Daily Monitor, 15
September 2014.
15 One warning about the punishment for losing initiative is E. Holmogorov
(2014) ‘Not to Be a Victim’, Izvestia, 4 May 2014. On the provocative power of
such arguments, see I. Milshtein (2014) Move in and Look Out, http://grani.ru/
opinion/milshtein/m.228678.html.
16 According to a Levada Center poll, 47 per cent of respondents saw civil war
as the most probable outcome of the Ukrainian crisis in mid-April, while
in early March the figure was only 22 per cent; see Levada Center (2014)
Russians on the Events in Ukraine, Public Opinion Poll, http://www.levada.
ru/06-05-2014/rossiyane-ob-ukrainskikh-sobytiyakh. In April, 35 per cent
of respondents were for incorporating Eastern Ukraine into Russia, but
by August this figure went down to 21 per cent; see Levada Center (2014)
Ukraine crisis: Attention, Role of Russia, Prospects, Public Opinion Poll, 29
August 2014, http://www.levada.ru/29-08-2014/ukrainskii-krizis-vnimanie-
uchastie-rossii-budushchee
17 See V. Tregubov (2014) Exhausted Peace: Ukraine’s Response to the Ceasefire
Deal, http://slon.ru/world/peremirie_ukrainskiy_vzglyad-1156156.xhtml
18 A concise evaluation of such induced crisis is in A. Åslund (2014) ‘Russia Is
in No Economic Shape to Fight a War’, Moscow Times, 22 April 2014.
DOI: 10.1057/9781137548115.0008
84 Pavel Baev
19 On the chances to avoid this implosion, see D. Boyarchuk (2014) ‘Ukrainian

Economy: Not As Bad As It Seems’, http://www.forbes.ru/mneniya-column/
mir/267967-ukrainskaya-ekonomika-ne-tak-plokho-kak-kazhetsya
20 This difference is captured in D. Trenin (2014) Russia: Pivoting to Asia or Just
to China?, http://carnegie.ru/eurasiaoutlook/?fa=55062
21 One sound evaluation is G. Gritsenko (2014) Gas Maneuver, http://polit.ru/
article/2014/05/06/gas/
22 A noteworthy opinion on this compromise (expressed before the Crimean
annexation) is H. A. Kissinger (2014) ‘How the Ukrainian Crisis Ends’,
Washington Post, 5 March 2014.
23 One competent examination of this option is V. Inozemtsev (2014) ‘Course to
the East?’, The New Times, 21 April 2014.
24 An interesting view on that is I. Busygina (2014) Does Turkey Need Greater
Europe?, http://russiancouncil.ru/en/inner/?id_4=3426#top
25 One fresh interpretation of this driver is B. Pastukhov (2014) The Cult of the
Offensive, http://polit.ru/article/2014/09/13/cult_of_the_offensive/
Bibliography
A. Åslund (2014) ‘Russia Is in No Economic Shape to Fight a War’, The

Moscow Times, 22 April 2014.
R. D. Asmus (2010) A Little War That Shook the World (New York:
Palgrave Macmillan).
P. K. Baev (2011) ‘A Matrix for Post-Soviet “Color Revolutions”:
Exorcising the Devil from the Details’, International Area Studies
Review, vol. 14, no 2, Spring 2011, 3–22.
P. K. Baev (2014) ‘Maidan Stands Against Putin’s Plan to Buy Ukraine
on the Cheap’, Eurasia Daily Monitor, 9 December 2014.
P. K. Baev (2011) ‘Moscow Does Not Believe in Changes’ in B. Jones
and K. M. Pollack (eds) (2011) The Arab Awakening (Washington:
Brookings).
P. Baev (2014) ‘The Pause in the Ukraine War Is No Putin’s Victory’,
Eurasia Daily Monitor, 15 September 2014.
D. Boyarchuk (2014) ‘Ukrainian Economy: Not as Bad as It Seems’,
http://www.forbes.ru/mneniya-column/mir/267967-ukrainskaya-
ekonomika-ne-tak-plokho-kak-kazhetsya
I. Busygina (2014) Does Turkey Need Greater Europe?, http://
russiancouncil.ru/en/inner/?id_4=3426#top
Y. Gavrilov (2014) ‘Nobody Saw a Saboteur’, Rossiiskaya Gazeta, 30 April
2014.
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A. Golts (2014) Two States, Two Armies, One Anschluss, http://

ej.ru/?a=note&id=24793
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gas/
E. Holmogorov (2014) ‘Not to Be a Victim’, Izvestia, 4 May 2014.
V. Inozemtsev (2014) ‘Course to the East?’, The New Times, 21 April 2014.
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Global Affairs, 9 July 2010.
H. A. Kissinger (2014) ‘How the Ukrainian Crisis Ends’, Washington Post,
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Poll, http://www.levada.ru/06-05-2014/rossiyane-ob-ukrainskikh-
sobytiyakh
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Public Opinion Poll, 29 August 2014, http://www.levada.ru/29-08-
2014/ukrainskii-krizis-vnimanie-uchastie-rossii-budushchee
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comments/column/lukyanov/6202721.shtml
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milshtein/m.228678.html
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disillusionment-russia
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article/2014/09/13/cult_of_the_offensive/
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Revolution, http://gefter.ru/archive/11640
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Point in Ukraine Conflict’, Spiegel International, 21 July 2014.
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ru/eurasiaoutlook/?fa=55062
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Deal, http://slon.ru/world/peremirie_ukrainskiy_vzglyad-1156156.
xhtml
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Times, 6 May 2014.
DOI: 10.1057/9781137548115.0008
5
Putin’s Relapse into
Totalitarianism
Lev Gudkov
Abstract: The central scenario should be based on the

premise that Putin is here to stay – not only until 2018
but until 2024 as well. Although the current patriotic
surge will eventually diminish (because of the sanctions,
psychological fatigue and fear of economic implications of
the Ukrainian crisis and Putin’s policies), the mass support
it provided to Putin will allow the regime to preserve the
situation in its current state for quite a while. To achieve
this goal, the regime will use the entire repressive machine
of the state security system, courts and prosecutors, as well
as the institutions that affect mass socialization and public
opinion – the media, educational system, culture and the
Church.

doi: 10.1057/9781137548115.0009.
86 DOI: 10.1057/9781137548115.0009
Putin’s Relapse into Totalitarianism 87
According to Yuri Levada, certain events that agitate society expose

deep-seated archaic layers and internal structures in mass conscious-
ness, which would remain blurred or invisible in an otherwise tranquil
state.1 It is these layers and structures that the regime is appealing to in
its quest to ensure the conservation of the political system and control
over the people. The change in the regime’s slogans and tactics may
resemble rapid social transformation, but, in essence, it is yet another
simplification of the institutional system, a sharp change of course and a
return to a more primitive social state – that of ‘aborted modernizational
development.’ On the one hand, slime does rise to the surface; on the
other, society is rapidly transforming.
These are the processes that are now underway in Russian society; they
determine the basic paradigms of dealing with the regime and conse-
quently the popular survival strategies, including the ways of adapting
to a repressive state. Any evolution scenarios for Russian society should
take into account material change in the Russian socio-political situation
in the wake of the Euromaidan and the annexation of Crimea. Russia’s
attempts to prevent Ukraine’s European integration and trying to keep it
within the Russian sphere of influence inevitably triggered negative reac-
tion on the part of the international community. However, in the eyes of
the Russian leadership, sanctions and the country’s partial isolation are
a small price to pay when facing the possible loss of the largest of the
remaining post-Soviet republics as well as the expansion of democratic
normative space and hence the shrinking of the post-totalitarian space.2
The driving forces behind Russia’s policy

toward Ukraine
The geopolitical motives for Russia’s intervention into the Ukrainian

crisis were precipitated by internal reasons. The rationale behind this
policy becomes clear if we consider the growing weakness of the Putin
regime and the decline in public trust and support for it, which came to
light soon after the 2008–09 economic crisis. These sentiments were best
expressed in the anti-Putin rallies of 2011–12. The grand-scale and incred-
ibly expensive ‘patriotic mobilization’ campaign – the Sochi Olympics –
was able to halt Putin’s plummeting ratings but still did not produce the
desired result.3 In this context, the Kremlin treated the people’s revolt
against the corrupt Viktor Yanukovych regime and the prospects of
DOI: 10.1057/9781137548115.0009
88 Lev Gudkov
radical change in Ukraine’s political system as extremely dangerous

developments that pose a lethal threat to the Russian regime.4
The two months of an intense, unprecedentedly aggressive anti-
Ukrainian propaganda campaign revived the ostensibly dormant great-
power stereotypes and myths.5 The artificially induced patriotic surge
gave rise to a new phenomenon – that of conservative reconsolidation
around the regime6 (Chart 5.1). The Russian regime’s actions in Crimea
were almost unanimously approved (see Table 5.1) by the Russian people
(80 to 88 per cent support it in 2014; 7 to 13 per cent oppose it). The
extent of support reflects virtually complete unanimity, which is very
rarely present in public opinion polls. Similar numbers can be seen
only if something essential to the entire collective unit is being compro-
mised – when its very existence is threatened or something of that
nature occurs. The protest community that took to the streets of large
cities in 2011–12 chanting anti-Putin slogans, demanding political system
reforms and an end to censorship has now gotten completely dissolved
in the midst of a nationalistically excited majority that supports Putin’s
anti-Ukrainian policies. Liberals, who comprised a relatively small
segment in the protest movement, are totally demoralized and crushed.
It appears that the popular consensus has been restored, but it was
80
70
60
50
40
30
20
10
–10
Aug.99
Apr.00
Aug.00
Apr.01
Aug.01
Apr.02
Aug.02
Apr.03
Aug.03
Apr.04
Aug.04
Apr.05
Aug.05
Apr.06
Aug.06
Apr.07
Aug.07
Apr.08
Aug.08
Apr.09
Aug.09
Apr.10
Aug.10
Apr.11
Aug.11
Apr.12
Aug.12
Apr.13
Aug.13
Feb.14
Jun.14
Dec.02
Dec.03
Dec.04
Dec.05
Dec.06
Dec.07
Dec.08
Dec.09
Dec.10
Dec.11
Dec.12
Oct.14
dec.99
dec.00
dec.01
Putin Medvedev
chart 5.1 Endorsement of Putin and Medvedev

Source: The indices represent the difference between the respondents’ approval and
disapproval of Vladimir Putin’s and Dmitri Medvedev’s performance.
DOI: 10.1057/9781137548115.0009
table 5.1 What are your feelings about the decision to annex Crimea
to the Russian Federation?
March April August
Justice has prevailed 31 30 30

Pride for my country 34 38 37
Happiness 19 23 16
Approval 47 46 39
Disapproval 3 3 3
Protest, indignation 0.5 0.3 2
Shame, despair 0.2 0.3 0.5
Anxiety, fear 3 3 3
No particular feelings 7 11 9
No answer 1 2 2
Note: 2014, N=1,600, % of the respondents.
accomplished by conducting purely reactionary policies and appealing

to symbols and values from the Soviet and even pre-Soviet imperial past.
Social problems that concerned people just several months ago – unfair
distribution of social benefits, abuse of power by the authorities, corrup-
tion, crime, unemployment – were all relegated to the backburner. At the
same time, the estimates of household well-being and expectations for
the near future have not changed significantly and in fact deteriorated
after the annexation of Crimea. In other words, the issues of personal
living standards and the symbolism of Russia being the global power are
not linked to each other in mass consciousness.
The Kremlin propaganda called the mass protests against the corrupt
Yanukovych regime a product of Western intrigue and an anti-Russian
conspiracy that seeks to undermine Russia’s influence over the post-
Soviet space. Then came the assertion that as a result of a coup, power
in Ukraine was seized by radical and asocial elements – Nazis, fascists,
‘Banderites’, anti-Semites, thugs, criminal factions; there was a power
vacuum, social and political chaos that posed a threat to the life and
well-being of ethnic Russians (Russian speakers). According to the
official propaganda, these extraordinary circumstances forced the
Russian authorities to resort to extraordinary measures to protect the
Russian-speaking population of Ukraine and send Russian troops to
the Ukrainian territory (Crimea). Finally, as per the last propagandist
assertion, Russia did not just want to protect its own but also return
‘the historic Russian territories.’ This has been interpreted as a ‘historic
DOI: 10.1057/9781137548115.0009
90 Lev Gudkov
change’ in Russia’s policy – from the disintegration of the empire to its

restoration and ‘gathering of the territories.’
These consistent propaganda tactics allowed for a shift in the inter-
pretation of the events from the protestors’ motives and their desire to
live in a democratic rule-of-law state (‘to live like other “normal coun-
tries” ’, ‘like the Europeans’) to the symbolic geopolitical plane, the issues
of russophobia and the traditional mythology of confrontation between
Russia and the West. Thus, the possibility of all too transparent compari-
sons with the Putin plutocracy and abuse of power was removed.
Propaganda offered no ideas and visions of the future.7 It was aimed
at imposing immoral interpretations of the events and absolving itself
of collective responsibility toward the citizens of the neighboring coun-
tries. It also sought to ignore the motives and values of other people,
thus instilling the ‘might makes right’ principle in its relations with
others. From the legal standpoint, Russia’s actions represented utter
disregard for the national sovereignty of other countries and rejecting
the importance of legal principles and norms – specifically, present-day
international law and international treaties.
The current outpouring of public enthusiasm resembles the swift and
radical change in the public mood and the surge of hopes, optimism
and illusions in the fall of 1999. At that time, the emergence of the new
and decisive head of state that came across as a tough and authoritarian
national leader in the midst of deep social, economic, and moral crisis
had an enormous effect on people and dramatically elevated public
spirits, although the economic situation still remained dire.
To understand the change that occurred in Russian society, one needs
to put the events in historical context. The disintegration of the Soviet
Union was an incomplete process; therefore, the institutional system of
modern Russia has retained some structures of the totalitarian system,
which contributes to the reproduction of Soviet perceptions on the
nature of the Russian state and relations between the regime and society.
Understandably, these perceptions no longer exist in their pure form;
that is, the late Soviet mass perceptions have been contaminated by
post-Soviet views and relations. It is important, however, that in this case
they are brought to life by means of propaganda or some extraordinary,
possibly crisis developments.
It is not immediately clear what the consequences of Russia’s Ukrainian
policy will be. But based on the Kremlin’s current legislative work, we
can already see periodic attempts to revert to the late Soviet ideology and
DOI: 10.1057/9781137548115.0009
practices. The reasons for these reversions lie in the heterogeneity of the
post-Soviet institutional system, which incorporates practically unaltered
power structures (which are not accountable to the public) and the insti-
tutions that the Putin regime is relying on.8 These institutions include
special services, investigative and law-enforcement bodies, the judiciary
which is subservient to the presidential administration, regional govern-
ment, as well as the public sector of the economy, science, education, and
culture. However, other institutions have little in common with the Soviet
forms of institutional organization. They include small and mid-size
businesses, mass culture, and communications – primarily the Internet
and social networks, consumer behavior, etc. These spheres, which are
trying to free themselves from the regime’s embrace, are increasingly
becoming subject to stricter and more coercive bureaucratic control
(there is a struggle for public morality, for the correct and patriotic inter-
pretations of history and so on). Retaining control over the ever more
complicated public life is becoming increasingly difficult for the ruling
regime, since social diversification and growing social complexity, as
well as structural–functional differentiation processes, erode the current
system of domination, causing increasingly uniform reaction by the
regime – it steps up repressions and tightens censorship and ideological
control. To preserve itself, the personalized-power regime is forced to
apply greater force to suppress autonomous groups – the intellectual,
scientific and cultural elites, the business community, the Internet, and
civil society. But by doing so, the regime is not only radically reducing
its ideological base – symbolic resources that legitimate its authoritarian
domination – but is also undermining its social base in the long run.
The declined human potential will in turn lead to a stagnant economy
and increased social tensions. These factors are obviously interrelated:
the growing primitivization of the regime (hence, clear administrative
ineffectiveness) calls for greater repressive practices.
In this respect, Ukraine is necessary to prevent the Putin regime
from disintegrating. The whole point of the current Ukraine destabil-
ization policy is to discredit democratic national consolidation and do
whatever it takes to shift the public dissatisfaction with Russia’s corrupt
bureaucracy to the supporters of law, democratization and europeiza-
tion. Creating the protective wall (the Eurasian Union) against the
expansion of democracy and European values is not the regime’s only
goal. It also wants to intimidate the people with the frightening example
of toppling the regime. The latter possibility is particularly frightening
DOI: 10.1057/9781137548115.0009
92 Lev Gudkov
to the Russians frustrated with the disintegration of institutions in the

1990s. In other words, the emphasis on protecting the ‘national interests’
(making the post-Soviet space a priority zone for Russian influence and
domination), as well as protecting ‘Russians’ and discrediting the West
and Ukraine, led to the national consolidation around a wartime leader
and restored the Putin regime’s legitimacy.
It is important to take this institutional context into account since a
society that is itself subjected to bureaucratic castration and coercion
and is genetically linked to the Soviet system is not and cannot be an
actor in relations with the regime that it does not control. The Putin
administration’s consistent policy of strengthening the repressive system
of domination and rule by decree, which has been conducted since 2002,
has sterilized the political sphere in the course of 10–12 years, leaving
most Russians without any means of rationalizing their problems and
articulating group interests.9 By severing ties between innovational and
specialized interest groups, the authorities eliminated the society’s poten-
tial for self-development, reducing the discussion of social problems to
amateurish conversations on the Internet.
Russian political scientists (unlike political journalists) ignore the
cumulative effect of various changes that the Putin regime has been
making all these years. Their origin can be traced to monopolizing
control over the mass media, primarily television10 (see Conclusions)
and turning the media into the principal instrument of propaganda,
manufacturing and manipulating public opinion.
Turn to the Soviet paradigms
After the first Khodorkovsky trial and establishing strict control over
large financial industrial factions, which fused with the top echelon of
the regime (particularly with the former KGB officers that are close to
the president), we have witnessed the rollback of privatization – the
state direct (through state-owned corporations) or indirect share in the
country’s economy has grown substantially11 (see Chapter 2). The special
services, which now pervade every part of the executive branch, have
significantly increased their (especially regional) presence in all spheres
of government, from law enforcement or key sectors of the economy
to culture and education. The fear of the spread of democratic revolu-
tions has caused Russia’s increasingly greater turn to confrontation
DOI: 10.1057/9781137548115.0009
with the West (especially following Putin’s 2007 Munich speech) and
also prompted the creation of a ‘sanitary barrier’ around Russia in the
form of a union of its satellite states, the former Soviet republics. Such a
policy necessitated discrediting all former ideological paradigms, such
as rapprochement with the West, ‘Europe is our common home,’ accept-
ing universal values – rule of law, human rights, humaneness, refraining
from the use of force and others. The gradual and escalating impeach-
ment of liberal values has been accompanied by the ever more force-
ful blending of statist ideology and the medieval tenets of the Russian
Orthodox Church that sought to exert its pull over society.
It is not really necessary to resort to total ideologization of the Soviet
Union variety (see Chapter 6). The current rulers – former KGB officers,
the political police functionaries inherently imbued with the perception
of being exceptional and above the law – simply cannot have any other
notions but the Brezhnev-era ideological relics. The regime does not
need to control the minds of its subjects – it can merely force the people
to be passive and loyal.
The regime’s demagogy not only produces mass negative views of the
US, the Baltic countries, the West as a whole, and now Ukraine, but also
casts a shadow on the regime itself. The public view of the major state
institutions has been consistently negative for the past decade. With the
exception of the president, the Church, the FSB and the Army, all state
institutions (Duma, the police, the prosecutors’ office, local government)
receive predominantly unsatisfactory job approval ratings,12 although the
standard of living had clearly been increasing throughout the 2000s. People
consider the very organization of the state institutional system unfair, that
is lacking an essential characteristic – paternalism, which is understood as
egalitarian distribution of wealth, free health care, education, social welfare
services, social infrastructure, housing and utility services, etc. The fact that
the state freed itself from a large number of social obligations is resented
by the public which still reminisces about the Soviet distribution system
as a lost and no longer attainable ideal. People cannot understand why the
state that derives such profits from oil exports seeks to burden them with
an increasing share of social expenditures. Hence, the general conclusion
drawn by the collective consciousness is that the regime works to secure
its own interests. The nationalist euphoria brought on by the annex-
ation of Crimea did not eliminate this public discontent but managed to
diminish its intensity. Seventy-two per cent of the Russians polled in 2006
and 52 per cent polled in 2014 are convinced that the current rulers are
DOI: 10.1057/9781137548115.0009
94 Lev Gudkov
mainly concerned with the preservation of their own power and personal
enrichment rather than the prosperity of the country (the Crimean effect
merely increased the share of ‘Russia’s prosperity’ answers from 26 per
cent in January 2013 to 35 per cent in April 2014). Most respondents still
believe that the regime mainly relies on the force structures (political and
criminal police, army, and the president-controlled judiciary, all of which
have changed little since the Soviet era), as well as on the oligarchs close
to Putin and the higher echelons of bureaucracy. In fact, the regime not
only relies on them but also expresses their interests in its policies while
neglecting the needs of the ordinary people.
Lack of public accountability engenders corruption that pervades state
institutions on every level. Against the backdrop of perennial discontent
with the government, the ever more frequent corruption scandals on top
of the regime’s pyramid have been causing particularly strong reverbera-
tions. They did not just lower the approval ratings of the high-ranking
officials – the entire political system associated with President Putin was
being delegitimized. The entire Russian political class is viewed nega-
tively today. By suppressing free political competition and competitive
elections, the Putin regime has created a situation in which the public
looks at the political and legal institutions as the mechanisms for nega-
tive selection that award positions to cynics, political hacks, and amoral
individuals devoted to the regime (see Tables 5.2, 5.3).
The perceptions of corruption and complete state decay are shared
across the cross section of the population. The top segment of the ruling
table 5.2 How would you characterize the current regime?

Looking out for its own interests 35
Thievish and mafia-like 27
Weak and insecure 16
Democratic, supporting the rule of law 14
Authoritarian and repressive 13
Brash and shameless 11
Competent and professional 11
Strong and secure 10
Reasonable and forward-thinking 8
Just and close to the people 2
No answer 11
Ratio of the positive (democratic, competent, strong, forward-thinking, just) 0.4
to the negative (selfish, mafia-like, authoritarian, repressive, brash, weak)
characteristics
Note: April 2013, N=1600, % of the respondents.
DOI: 10.1057/9781137548115.0009
table 5.3 What traits do you think are most characteristic of the majority of
modern Russian politicians?
Unscrupulous lust for power 44
Greed 41
Disrespect of ordinary citizens 37
Disregard of law 36
Dishonesty, lack of decency 30
Immorality 27
Unprofessionalism 23
Dislike of Russia 12
Dim-wittedness 11
High intellect 9
High professionalism 9
Strong willpower 8
Lack of willpower 7
Love for Russia 6
Honesty, decency 4
Wish to acquire power exclusively by honest democratic means 3
Respect for ordinary citizens 3
Altruism 2
Obeying the law 2
High morals 1
Atheism 1
Belief in God 1
No answer 12
Note: January 2014, N=1600, % of the respondents, answers ranked.
elite and the president himself had been above suspicion of corruption
and other abuses for quite a while, but following the 2011–12 mass protests
and the investigative reports prepared by the opposition politicians,
which had been widely discussed on social networks and the Internet,
the perceptions of the regime’s amorality have started to apply to Putin
as well. Since August 2008, when Vladimir Putin was at the height of his
popularity, enjoying an 87 per cent approval rating, the public trust for
the president and the government had been declining up until December
2013 (see Chart 5.1 and Table 5.4).
‘We are the subjects of the great power’
While the liberal segment of society is oriented toward the West, the
majority of the population identifies with the past. The Soviet people
DOI: 10.1057/9781137548115.0009
96 Lev Gudkov
table 5.4 Do you believe Vladimir Putin is responsible for the abuses of power
that he is accused of by his opponents?
2012 2012 2013 2014
April December August May
Definitely responsible, which 16 11 10 10
is substantiated by a number of
facts cited on the Internet and in
independent media
Probably yes, like all high-ranking 32 37 42 30
officials, but I don’t know much about
it; I don’t follow it
Even if it is true, it is more important 25 14 18 28
that the country is better off under his
leadership
Whatever may be said, I don’t believe 11 15 13 19
Putin ever abused power
No answer 16 23 17 13
Note: N=1600, % of the respondents.
considered themselves subjects of the most militarily powerful and terri-

torially vast empire (‘we used to be feared and respected by everyone’),
which was a way to compensate for their poverty and pitiful everyday
life pervaded by the realization of being dependent on their superiors
and the chronic state of helpless, humiliation, and inability to stand up
for their rights and interests. The widespread nostalgia for the Soviet
past serves to articulate the critical view of the present.13 Considering
oneself a subject of the great power is actually far more important to
maintaining national identity than it may seem at first glance. This idea
plays a fundamental role in mass self-perception, even if it is articulated
as a loss (‘we once had a great country’). The greatness of the empire that
expanded its borders through colonial conquest is a definite value in the
consciousness of the Russian public regardless of how this ‘greatness’ had
been achieved – whether it is through market reforms or the restoration
of the elements of the Soviet totalitarianism, return to traditions and the
entire spectrum of ‘patriotic politics’.
Discontent with the regime’s politics does not change the structures of
mass consciousness, nor does it strengthen liberal views, since it proceeds
from the fact that people’s paternalistic illusions, rooted in Soviet ideol-
ogy with its ‘the party and the government take care of the people’
DOI: 10.1057/9781137548115.0009
maxim, did not come to fruition. This discontent cannot be expressed

directly – through political activism or elections – therefore, it takes an
indirect form of criticizing the regime for the lost national grandeur.
The public sphere, where public discourse on the approaches to solving
social problems and independent media could be taking place, as well as
the political sphere (in its broadest sense) are fully sterilized as a result of
consistently repressive and protective regime policies. Diffused discon-
tent and tension that lack channels for expression lead to the erosion of
collective beliefs, breeding amorality and cynicism. Perceived enmity of
the outside world becomes the flip side of this outlook. Eighty-four per
cent of the respondents gave a positive answer to the question ‘Does our
country have enemies?’ in 2014, as opposed to only 13 per cent in 1989.
There has been a significant increase in aggressive xenophobia and anti-
regime nationalism that blames the authorities for ignoring and even
betraying the national interests of the Russian majority.14
When the question ‘Do you think our country and our people have
enemies?’ was first asked in winter 1989, the majority of those polled (48
per cent) answered, ‘why look for enemies when our own mistakes are to
blame?’ Fourteen per cent could not answer the question, while the rest
believed that the country has enemies, and the internal and hidden ones
pose the most danger, since the country that undergoes a revival always
has some enemies. However, only 4 per cent believed that the country
is completely surrounded by its enemies. In March 2014, 25 years later,
only 17 per cent still thought that our mistakes and imperfection are the
root cause of our problems, while the number of those believing that the
country is surrounded by enemies has increased to 26 per cent. Thirty per
cent said that the country that is rising from its knees will always have
enemies, while the most dangerous ones are of course those that come
from within, the ‘national traitors’ and their ilk. In other words, the total
share of traitors has increased from 40–44 per cent to 76 per cent.
Mass paternalism – justification of one’s own social passivity, help-
lessness, lack of political involvement, dependency and chronic civic
humiliation – is part and parcel of the great-state ideology with its
central symbol (World War II victory) and militarism (presented as the
country’s heroic past) as well as the justification of violence and force.
These are essentially different facets of the same set of ideas that form
the basis of the mass national identity. This identity lies in the belief
that collective unity can only be expressed and experienced as a form
of violence (toward the country’s own citizens or someone else). This is
DOI: 10.1057/9781137548115.0009
98 Lev Gudkov
a sort of collective hazing experience. Therefore, the erosion of specific

paternalism institutions seriously disturbs the collective conscious-
ness, engendering the feelings of national humiliation, injustice, and
defeat. The annexation of Crimea has created a surge of patriotic and
great-state propaganda, thus making all the liberal criticism and social
discontent less relevant and switching to the ‘Banderites’ as the object of
aggression.15
The deep frustration with the collapse of the Soviet Union also
proceeds from the fact that no other collective values and other symbols
have been created. Most Russians believe that they have lost something
very important, something that made them feel secure about their future
while also providing the foundation for respecting their nation and being
proud of it. Although fewer people believed in 2011–13 that they (their
families) were worse off as a result of the changes that had been happen-
ing in the country after the 1990s (50–51 per cent as opposed to 74 per
cent in 1999), their number is still very substantial. The standard of living
does not explain this phenomenon – it has definitely increased relative
to the end of the Soviet era, but the consumer society that emerged
cannot compensate for the erosion and loss of the old collective values
and beliefs. The feeling of belonging to a great power that was feared
and respected by everyone is no longer there. This symbolic superpower
status previously compensated for the poverty and despair in one’s
everyday life as well as for the state of humiliation and dependency on
the regime’s abuses. The most central values of the collective identity lie
in the past – hence, the distorted sense of defeat (it certainly came from
real losses and the drop in living standards in the 1990s, which, however,
had long been reversed by the mid-2000s).
In the context of institutional disintegration and decay (the superfi-
cial level of integration), this fictional solidarity points to the reduction
to the systems of leveling-down adaptation. This type of adaptation is
a tactic of coexisting with the repressive state, its administrative abuse,
mass conformism and opportunism of intelligentsia. Frustration trig-
gered by these mechanisms is generally concealed, disallowed or poorly
recognized. After all, it is a process of suppressing personal freedom,
dignity, and morals. Therefore, the problems surface as mere symptoms
of mass complexes in the guise of distorted and persistent great-power
and imperial aspirations and militarism (seen in St. George ribbons and
inscriptions like ‘Toward Berlin!’ or ‘Thanks for the victory, Grandpa!’
on predominantly foreign cars). They can also appear in the form of
DOI: 10.1057/9781137548115.0009
soccer fans’ Nazi masculinity (‘Proud to be Russian’). In other words,

these symbols of collective identity (great country, enormous territory,
heroic past, victory in the war, nuclear superiority and might) are all
inseparable from violence and force (whether toward the country’s own
citizens or toward its former colonies from the former Soviet Union or
Eastern Europe). Hence, sensing national grandeur and pride for the
country is accompanied by ethical insensitivity, dullness, and suppress-
ing empathy toward others. The ‘others’ can be one’s fellow citizens
that bear the brunt of the state’s repressive machine or military might
(be it the victims of Stalin’s repressions or the Chechens terrorized by
the federal authorities and Kadyrov’s gang, Pussy Riot or the Bolotnaya
Square activists). They can also be from other countries that Russia once
attacked – Czechoslovakia, the Baltics, Finland, Hungary, Poland, and
now Ukraine.
Russia and the West
The propaganda-driven patriotic surge among Russian citizens goes

hand in hand with the open and envious hostility toward the West.
The collective consciousness always paints an ambivalent picture of the
West: on the one hand, it is a utopian and idealistic representation of
what Russians would like to have back home; on the other hand, it is
a negative projection of themselves that leads them to the conclusion
that ‘the grapes are sour anyway’. Nowadays the anti-Western aggression
and discomfort quickly gave way to irrationality and hysteria that grows
stronger with the surge of mass patriotism. The negative views of the
US and the European Union have reached historic highs (73 and 68 per
cent of those polled stated in September 2014 that they have ‘negative’ or
‘very negative’ views of the US). The semantic transition from a calm to
an agitated state has to do with the fact that relatively concrete reasons
and motives behind social and political conflicts are being gradually
replaced by mythological ones, taking on the form of a struggle between
the ‘humans’ and the chthonic forces of evil or asocial monsters.
On the psychological level, this self-inflicted state of agitation allows
the masses to feel enormous relief upon discarding the burdensome
normative obligations associated with the West. The overwhelming
majority of the people believes that ‘normal’ Western countries do not
just boast higher standards of living, but the life and social order there
DOI: 10.1057/9781137548115.0009
100 Lev Gudkov
are also organized more humanely and justly than in Russia; the social
safety net and mutual solidarity in the West are more developed, and the
regime is accountable to the society. Thus, the feeling of freeing oneself
from morals, from the ideal demands to live up to the higher standards
of humanity and social organization which set in after the collective
expressions of patriotism and national unity is akin to hysterics in which
all the traumatic mass complexes of inferiority, discrimination, under-
development, and malice are unleashed. Only through the cathartic
experience of releasing one’s aggression against the ‘West’, ‘those damn
Americans,’ ‘Banderites,’ ‘fascists’, the ‘Kiev junta’ and others, can the
mass consciousness experience the elevated feelings of brotherly unity
and closeness to one’s own people.
The slow necrosis of the Soviet collective identity continued despite
the attempts to develop new normative, political and moral concepts.
However, such concepts have not emerged; since starting from the late
1990s (after Putin’s authoritarianism was put in place), the regime has
been putting constant pressure on the potential elite groups responsible
for developing new non-Soviet ideas, patterns and symbols. Therefore,
we have to conclude that coercive and repressive institutions rather than
representative, legal, market or cultural ones are the core and symbolic
structures of the Putin regime. On a larger scale, governance through
arbitrary coercion uncontrolled by society turns into an increasingly
more intensive and restrictive flurry of bureaucratic activities which
paralyzes the processes and mechanisms of social self-organization,
suppresses diversity, limits the number of opportunities, curtails indi-
vidual initiative and thus simplifies and impoverishes social structure.
Such retro-oriented policy allowed for the exploitation of mass
fears and national inferiority complexes exacerbated by the collapse
of the former Soviet Union, thereby ensuring sufficient legitimation of
Putinism. This symbolic resource was quite adequate until the financial
crisis of 2008–09, which undermined people’s faith in the regime’s ability
to improve their living standards. This faith was restored after the annex-
ation of Crimea and protecting ‘our own’ in Ukraine, which returned
Russia to its traditional superpower role.
Discrediting the Kremlin’s opponents does not just foil the opposition’s
new symbolic plans to incorporate Russia into the world community
with its values and norms. It is even more important to the Kremlin’s
ideologists and political spin masters to discredit their opponents so that
the public perceptions of immorality that pervade political life remain
DOI: 10.1057/9781137548115.0009
intact. The regime convinces the people that there is no alternative to

the ruling elite, and this becomes its main ideological resource today.16
Public alienation from politics allows for the preservation of paternalis-
tic illusions (both comprise a single set of mass perceptions), while the
inability to imagine any future that will not be a repeat of the past serves
as an additional justification of the current order (‘the normativization
of the de facto’).
In this respect, the internal and ostensibly private conflict between
the ruling elite and the NGOs (including a number of new repressive
laws: the Dima Yakovlev law, the laws on international agents, state trea-
son, the prohibition of calls for separatism, Nazism rehabilitation, and
others) becomes important and symptomatic, putting Russia’s status as
a civilized country into question and threatening to turn it into a pariah
state. These laws (let alone their enforcement practices) violate the funda-
mental principles of the post-war world order, which takes past behavior
and the crimes against humanity committed by totalitarian regimes into
account and recognizes restrictions imposed on national sovereignty by
international law.
Such restrictions on sovereignty are intrinsically unacceptable to the
Putin regime. Even a year and a half prior to the Ukrainian events, the
Russian authorities stated that they are prepared to violate legal norms
and principles that unite the developed countries into a community of
civilized states that voluntarily undertake certain legal obligations. The
Duma members made such statements on many occasions, but the
Constitutional Court chairman Valeri Zorkin has articulated the idea
most powerfully. He stressed the sovereignty of Russian legislation over
international law and the European conventions signed by Russia. In this
case, asserting the supremacy of national laws over international ones is
tantamount to dictatorship.
The growth of public discontent in 2011–13 did not result in revolution
and regime change but rather returned the society to past ideological
stages and simpler structures in relations between the regime and soci-
ety. The current scenario prediction is predicated upon this conclusion.
In authoritarian socio-political systems, the escalation of social
tension does not translate into gains in development potential (greater
structural–functional differentiation), human capital, and the people’s
striving for political system change (which should include greater
personal involvement and participation in opposition parties and civil
society organizations). Instead, social tension has entirely different
DOI: 10.1057/9781137548115.0009
102 Lev Gudkov
implications: it simplifies ideological perceptions of reality and neutral-

izes or shifts social discontent into other spheres (for instance, toward
aggression against ‘liberal perverts’, the West, and everything alien or
made out to look as such). The discontent is thus channeled into other
forms of legitimating the regime.
After the Crimea
The anti-Maidan propaganda – extraordinary in its character and inten-

sity – has agitated society to the extreme. All the dormant or latent
national complexes and myths that form the structure of collective
identity or Russian mass consciousness have risen to the surface. The
combination of perceived and real threats and ‘accomplishments’ (the
restoration of Russia’s ‘great power’ status and its return to a traditional
imperial role) has jolted Russian society out of its state of equilibrium,
disrupted its routine existence and shifted the understanding of the
events into a purely symbolic plane. It is extremely important to under-
stand that we are not just dealing with traditionalist rhetoric and the
elements of conservative ideology here. The understanding of the events
has been shifted to the symbolic plane with such concepts as collective
whole, national unity, and the confrontation of ‘us’ and ‘them’. Only
this shift (the activation of other institutions) provides stimuli for mass
mobilization and thrusts the society into a state of consolidation and
being ready to go to war.
In March 2014, 74 per cent of Russians were ready to approve and
support Russia’s direct military intervention into Ukraine (however,
by September – after another round of sanctions went into effect – the
number had fallen to 38 per cent). The mechanisms of mass negative
mobilization, which almost exclusively rely on television propaganda,
actualize old conspiracy perceptions of the intrigues by internal and
external enemies (in this case, the Western plot to wrestle Ukraine
away from Russia). The plans to integrate Ukraine into the EU decimate
Putin’s project to reconstruct Russia as a great power by creating a bloc
of post-Soviet states under Russian leadership.
The main goal of opposing the West implies the rejection of Western
cultural and moral superiority (which in fact gives rise to a developed
economy). It also implies the rejection of modernization (Westernization)
and support for ‘multipolarity’ (isolationism), as well as the insistence
DOI: 10.1057/9781137548115.0009
on the precedence of national law and the limited importance of inter-

national conventions (consequently, the conditionality of international
law). People do not naively believe in the honesty and decency of the
ruling elite and the entire Russian political class. Nevertheless, they do
not give a thought to a possible regime change. The general feeling is
that the Putin regime is quite entrenched and one has to learn to live
with it.
We are essentially dealing with aborted national development
(another stage of abortive modernization).17 This is a return to conser-
vative, protective dictatorship whose success is determined by the extent
it is able to sterilize growing social, cultural and economic diversity and
thus contain or lower human potential. Such a turn is not accidental and
proceeds from the logic of the evolution of the authoritarian regime,
which is facing the consequences of its rule and the problems it created
(diminished support, greater social tensions and discontent triggered
by social spending cuts, mass protests in large metropolitan areas).
Weakened legitimacy, as the track record of other authoritarian regimes
suggests, often leads to dictatorship, or at least attempts to establish it,
rather than to democratization. This is exactly the Putin regime trajectory
which we have been witnessing after the Medvedev–Putin power swap in
the fall of 2011. Provoking instability and subsequently directly support-
ing separatist militants (providing them with heavy military equipment,
ammunition, and the direct involvement of the Russian troops in the
armed conflict in the east of Ukraine) as well as consistent efforts to split
the country, which are the staples of the Kremlin policy in Ukraine, are
reaffirming these trends but this time in the guise of pointless national
narcissism. This concentration of negative evolutionary trends – appeal-
ing to xenophobia, obscurantism of the Russian Orthodox church,
anti-Western and anti-liberal ideology – leads to Russia’s alienation from
global processes and guarantees to engender feelings of resentment and
self-isolation for the next generation of Russians.
The central scenario should be based on the premise that Putin is here
to stay – not only until 2018 but until 2024 as well. Although the current
patriotic surge will eventually diminish (because of the sanctions,
psychological fatigue, fear of economic implications of the Ukrainian
crisis and Putin’s policies), the mass support it provided to Putin will
allow the regime to preserve the situation in its current state for quite
a while. To achieve this goal, the regime will use the entire repressive
machine of the state security system, courts and prosecutors, as well as
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104 Lev Gudkov
the institutions that affect mass socialization and public opinion – the
media, educational system, culture and the Church. Such a policy will
most likely result in curtailed vertical mobility and negative selection of
administrative personnel, as well as in the archaization of mass conscious-
ness. The precedence of politics over economy and the concentration of
control over the economy in the hands of Putin’s inner circle will sooner
or later trigger deep crisis or at the very least economic autarky which is
characteristic of mobilizational regimes. These factors will weaken the
Russian market and can potentially paralyze it; in a more distant future,
they may cause the complete collapse of the national economy. Liberal-
leaning groups will be forced to choose external or internal emigration.
They will not be able to have any effect on the society’s moral state and
will be reduced to intellectual prostration or replicating Western ideas
and cultural paradigms (but with a substantial delay and lack of their
own contribution). The eventual end result – ten years down the line – is
national catastrophe and degradation. There is no doubt that the cyni-
cism and incompetence in the key political and administrative spheres
will generate radical protest a generation later – among the children of
the current young generation. This protest may lead to some changes in
the system, but only if the conclusions from the present-day situation
will be drawn now.
The changes in mass consciousness that occurred over the past year
are irreversible. The surge of nationalist agitation will subside, but the
damage it has done to the intellectual, legal, and moral spheres of public
life is irreparable in the foreseeable future. The pro-Western, pro-democ-
racy and liberal residents of the large cities, who could be considered
Russia’s proto-middle class until very recently, are now for the most part
on Putin’s side. The immunity to state centralization and violence has
been lost. The ideas of peaceful transformation of the Russian regime,
the rule-of-law state, democracy, fair elections and freedom of the press
are no longer part of the public discourse and interest. They have been
replaced by various strains of Russian nationalism and confrontation
with the West. The reactionary and repressive laws adopted by the Duma
are laying the foundation for the authoritarian regime’s conservative and
populist politics for the next several years, and perhaps even decades to
come. The liberal hopes that the strengthening of the middle class will
bring about the development of a rule-of-law state were not realized. The
Russian middle class actually serves the corrupt and distributive state
and its police bureaucracy. It is hard to assess the extent of the social
DOI: 10.1057/9781137548115.0009
degradation that resulted from the surge of nationalist populism and

newfound ‘traditionalism’. In its course, the society has lost any moral
distinctions and concepts of the future, ideal or desirable, state organ-
ization. From the standpoint of civilizational choice, Russia is worse off
today than it was 25 years ago.
Notes
1 Y. Levada (2006) ‘The Two States of the Common Man’ in Y. Levada (2006)
In Search of Man (Moscow: Novoye Izdatelstvo), 364–79.
2 It is characteristic of authoritarian and totalitarian dictatorships to cynically
believe that the Western countries will stop at indignant condemnations,
and that brashness and decisiveness in geopolitical games is tantamount to
strength. Every concession that the international community makes merely
confirms these beliefs. Expelling the Soviet Union from the League of
Nations in December 1939 after its attack on Finland did not stop Stalin from
realizing his political strategy; nor did Russia’s drastically worsened image
after the Georgian war have any effect on Putin.
3 When discussing ‘mobilization’, it is important to consider the new
propaganda technologies that emerged in the post-Soviet era. The society
is now mobilized with the help of mass media and the Internet; it becomes
‘the society of television audience,’ to use Yuri Levada’s description of this
phenomenon. Symbolic consolidation that is ensured through television
propaganda is accompanied by suppressing any real public participation
in political and public life, as well as by intensifying repressions against
civic organizations, opposition and independent media. Year after year,
80–85 per cent of those polled claim that they have no opportunity to
participate in political life and affect the authorities at any level (from the
national government to the local administration). This includes affecting
political decisions that have bearing on people’s daily living. What is even
more important is that even if the respondents had such opportunities,
most of them would still choose to dodge them under different pretexts.
Authoritarian regimes hinge on massive political passivity supplemented by
numerous demonstrations of acclamation and solidarity with the regime.
Such practices fragment and even atomize the society and sever the ties
between different social groups, creating an amorphous ‘plasma’, which
is subjected to the manipulations by the Kremlin’s political technologists.
This simulacrum of public opinion plays an extremely important role in
legitimating the power of the authoritarian regime: it presents the job
approval ratings of non-competitively elected ‘national leaders’ as evidence
of the public support for their political course. See Y. Levada (2000)
DOI: 10.1057/9781137548115.0009
106 Lev Gudkov
From Opinions to Understanding (Moscow; Novoye Izdatelstvo), 96–110; B.

Dubin (2014) ‘Macht, Masse, Manipulation. Putin’s Rating und Russlands
Gesellschaft’, Osteuropa, 64. Jg., H.7 Juli, 3–12.
4 Obstructing democratization in the neighboring post-Soviet countries and
preventing them from shedding their Soviet legacy is part of a strategic
program that Putin has been implementing since the time of the ‘color
revolutions’ in Georgia and Ukraine and the Baltic countries’ ascension to
the EU and NATO. See Levada Center (2013) Public Opinion 2013. Levada
Center Annual Yearbook (Moscow: Levada Center), Table 21.8, Graph 20.2,
Graph 20.3.
5 The overwhelming majority of Russians voluntarily chose to be almost
completely isolated from the alternative sources of information and
interpretation of the Ukrainian events, which helps to explain the
effectiveness of the propaganda. Ninety-four per cent of the respondents
obtain most of their information about the events from the Russian
television channels; 16 per cent named the Internet as a significant but not
an alternative source; 9 per cent selected social networks. Levada Center
(2014) Russians about Lighting Ukrainian Events and Sanctions, Levada Center
Press Issue, 12 May 2014, http://www.levada.ru/12-05-2014/rossiyane-ob-
osveshchenii-ukrainskikh-sobytii-i-sanktsiyakh
6 Public opinion polls reveal that the protest sentiments and people’s interest
in participating in political rallies were at an all-time low in 2014.
7 It means that mechanisms of setting political development goals are
non-existent; no one even works on developing such goals, unless they are
consistent with rearmament or protecting the country’s geopolitical interests
and returning to the world stage in the role of a superpower.
8 L. Gudkov, V. Zaslavsky (2011) Russland. Kein Weg aus dem
postkommunistischen Űbergang? (Berlin: Wagenbach); L. Gudkov (2011) The
Metamorphosis of the Communist Nomenclature in Russia at the Turn of the
Century (Moscow: ROSPEN), 116–33.
9 The audiences of non-state newspapers and radio stations (independent TV
had practically disappeared by the start of 2014) and the number of federal
TV channel viewers are incomparable. Channel 1, Channel 2, and NTV
cover 70–90 per cent of the population (90–110 million viewers), while the
aggregate weekly audience of the Novaya Gazeta, Vedomosti, and the Echo
of Moscow is at most 6 to 7 million people (including website visitors). This
audience is predominantly from Moscow and other large cities.
10 The management changes at the leading media holdings, including the
Internet publications, should also be considered. Besides, during Putin’s rule,
oligarchs close to the president have acquired colossal media resources; there
is constant pressure on independent media, including relatively influential
television channels and websites.
DOI: 10.1057/9781137548115.0009
11 According to the Bloomberg L.P. estimates, state-owned enterprises account

for over 50 per cent of the GDP, up from 30 per cent in 1999 (I. Reznik, S.
Bierman, H. Meyer (2014), Putin Promoting Sochi Tightens Grip as Investors
Fret, http://www.bloomberg.com/news/2014-01-29/putin-uses-oil-giant-
rosneft-to-tighten-grip-on-economy.html); the GDP public expenditures to
public sector employment ratio has increased from 0.69 in 1999 to 1.29 in
2012 – calculated according to: Rosstat (2013) The Russian Statistic Yearbook,
Collected Volume (Moscow: Rosstat), Tables 1.1 and 1.2.
12 Levada Center (2013) Public Opinion 2013, graphs 8.1.1 and 8.1.2, table 8.1.1.
13 Paternalistic beliefs (statist ideology), albeit in their soft incarnation,
are characteristic even among the urban class in the large metropolitan
areas which came to existence as a result of the market reforms and
past institutional changes. The opposition’s moral protest, rejection of
authoritarianism, dissatisfaction with the clampdown on the independent
media, and other views conceal the concoction of social democratic beliefs,
liberal ideas, and imperial legacy amplified by the traditionalist Soviet
perceptions of Russia as a great power with a heroic past. The pride in the
great Russia goes hand in hand with feeling ashamed for its current pitiful
state.
14 According to the Levada Center polls, xenophobia and ethnic nationalism
had reached their all-time high by October 2013. Sixty-two per cent of those
polled in October 2013 believed in the possibility of violent interethnic
clashes (as opposed to only 23 per cent in November 2009). Moreover, this
xenophobia resulted from people’s internal state rather than some external
causes, such as a sharp increase in conflicts with migrants. Sixty-three
per cent of Russians support the ‘Russia for Russians’ slogan; 71 per cent
think that ‘It’s time to stop feeding the Caucasus.’ It is also of note that the
previously less aggressive groups, such as educated respondents, Moscovites
and the residents of other metropolitan areas, government officials,
specialists and the like, are now much more xenophobic than ever before. In
fact, these groups have been the staunchest supporters of Putin’s policy on
Ukraine.
15 The Crimean annexation was supported 18:1 in March, 20:1 in April and 14:1
in August 2014. The Russian public is so eager to justify the annexation of
Crimea and recognize its legitimacy that all other analysis of the events is a
priori rejected. The overwhelming majority accepts the information provided
by the national media as ‘objective’ and ‘truthful’, although, by their own
admission, less than half of the respondents ‘understand what is going on
there’ (that is what 43 per cent of them said in March and 35 per cent said
in April; in contrast, 55 per cent and 62 per cent of Russians said that they
‘do not quite understand the events’). Sixty-six per cent of Russians think
that the foreign media is biased, but practically no one is familiar with the
DOI: 10.1057/9781137548115.0009
108 Lev Gudkov
information that the media provides. Interestingly enough, industrial Russia

(or Russia-2 as per Natalia Zubarevich’s classification) was the fastest and
most enthusiastic respondent to Putin’s propaganda and policies in Ukraine.
Putin’s policies also garnered more support among the extremely rich, who
are affiliated with and corrupted by the regime, and the extremely poor and
disenfranchised, who strongly resent well-to-do and successful members of
the middle class. These two segments feel particular need to legitimate the
regime and assert their national status. Although their reasoning is different,
both groups strongly rely on compensatory patriotism.
16 Levada Center (2013) Putin in public opinion before and after the political
reshuffle, Levada Center Press Issue, 15 October 2013, Table 4, ‘Motives
behind Voting for Putin’. The principal reasons why people vote for the
current president are reduced to paternalistic illusions and artificial lack of
alternatives (‘people hope that Putin will be able to tackle the problem facing
the country’ – the percentage of such answers has not changed for a decade,
averaging 38 per cent in the period of 2001–2013; ‘people do not see who else
they can vote for’ garnered 36 per cent of responses for the same period).
The choice ‘people are convinced that Putin is successful in solving the
country’s problems’ received 14–15 per cent, except for 2007, when it reached
33 per cent.
17 L. Gudkov (2012) Abortive Modernization (Moscow: ROSSPEN).
Bibliography
B. Dubin (2014) ‘Macht, Masse, Manipulation. Putin’s Rating und

Russlands Gesellschaft’, Osteuropa, 64. Jg., H.7 Juli, 3–12.
L. Gudkov (2012) Abortive Modernization (Moscow: ROSSPEN).
L. Gudkov, V. Zaslavsky (2011) Russland. Kein Weg aus dem
postkommunistischen Űbergang? (Berlin: Wagenbach).
L. Gudkov (2011) The Metamorphosis of the Communist Nomenclature in
Russia at the Turn of the Century (Moscow: ROSPEN).
Levada Center (2013) Public Opinion 2013. Levada Center Annual
Yearbook (Moscow: Levada Center).
Levada Center (2013) Putin in Public Opinion Before and After the Political
Reshuffle, Levada Center Press Issue, 15 October 2013.
Levada Center (2014) Russians about Lighting Ukrainian Events and
Sanctions, Levada Center Press Issue, 12 May 2014, http://www.levada.
ru/12-05-2014/rossiyane-ob-osveshchenii-ukrainskikh-sobytii-i-
sanktsiyakh
DOI: 10.1057/9781137548115.0009
Y. Levada (2000) From Opinions to Understanding (Moscow: Novoye

Izdatelstvo).
Y. Levada (2006) ‘The Two States of the Common Man’ in Y. Levada
(2006) In Search of Man (Moscow: Novoye Izdatelstvo).
I. Reznik, S. Bierman, H. Meyer (2014), Putin Promoting Sochi Tightens
Grip as Investors Fret, http://www.bloomberg.com/news/2014-01-29/
putin-uses-oil-giant-rosneft-to-tighten-grip-on-economy.html
Rosstat (2013) The Russian Statistic Yearbook, Collected Volume
(Moscow: Rosstat).
DOI: 10.1057/9781137548115.0009
6
Putin’s ‘Besieged Fortress’
and Its Ideological Arms
Maria Lipman
Abstract: The main ideological ‘tenets’ of Putin’s third term

are state nationalism based on Russia’s greatness and its
‘special path’; an aggressive anti-Western and anti-liberal
stance; quasi-traditionalism; the infallibility of the state
and Putin as a leader of no alternative; and intolerance
toward autonomous activism, civic or political. The
annexation of Crimea as historically and culturally ‘our’
land and Putin’s determination to support ‘ours’ in eastern
and southeastern Ukraine inevitably boosts the existing
ethnic nationalism. Meanwhile, the Kremlin remains
evasive and controversial as regards some of the basic
ideological issues, such as national identity, the perception
of the past or national heroes. The current consensus may
be deceptive, Putin’s over 80 per cent approval rating and
broad approval of his policies notwithstanding.

doi: 10.1057/9781137548115.0010.
110 DOI: 10.1057/9781137548115.0010

Putin’s ‘Besieged Fortress’ and Its Ideological Arms 111
The term ‘ideology’ used in this chapter refers to the ‘sphere for ideas
and symbols’1 rather than a cohesive doctrine. It is a blurred sphere that
encompasses values, symbols, rhetorical formulas, elements of national
identity, ideological, ethical, and esthetical concepts that determine one’s
perception of events and of the reality as a whole. For its part, the term
‘state ideology’ will be used when discussing the state’s actions in this
sphere directed at the consolidation of public support and legitimation
of state authority.
Although the current ‘ideologemes’ bear some resemblance to their
Soviet counterparts, the present-day ‘ideology’ substantially differs
from the one that formed the foundation of the Soviet state. It does not
claim to be a consistent creed or a methodological cognitive instrument;
besides, Russia lacks the center for disseminating absolute truths, whose
role was played by the Department of Ideology of the Communist Party
Central Committee during the Soviet era. Essentially, the only institu-
tion that claims the mantle of ideological authority is President Putin,
whose words are interpreted as the state-supported ideological tenets.
Even though in the past two years Putin’s statements have increasingly
encroached on the sphere of ideas and symbols – the questions of
morality, national identity and history – they nevertheless do not at all
represent a consistent doctrine.
In this respect, and to the extent of the substantive difference between
authoritarianism and totalitarianism, the Russian regime is becoming
increasingly authoritarian and may possibly transform into a dictator-
ship but will not become a replica of Soviet totalitarianism.
Juan Linz characterizes an authoritarian system as lacking ‘free [polit-
ical ] competition ... with limited, not responsible, political pluralism; without
elaborate and guiding ideology, but with distinctive mentalities; without
extensive nor intensive political mobilization, except at some points in their
development.’2
Putin’s Russia in the 2000s represented such a ‘distinctive mentality’,
which is not a narrative3 but a sphere of symbols and symbolic practices
that are intuitively understood and accepted by the majority rather than
rationally learned. This worldview included the beliefs that:
▸▸ Russia is a great power, and the West is hostile to it;
▸▸ the supreme leader is the only source of authority and the pillar of
the right state order;
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112 Maria Lipman
▸▸ the state is omnipotent, and its citizens depend on it; ‘might

makes right’ is a legitimate concept, and injustice is an inevitable
part of life which is taken for granted; the relations with the state
incorporate elements of heroism and victimhood at the same
time – people see themselves as part of the state’s power and
greatness but also conceive of themselves as victims of this state;
▸▸ Russia has a special path, which in and of itself ostensibly provides
the justification for national pride, but in reality masks deep
ressentiment (see Chapter 5 for a more detailed description of
perceptions and sentiments of the Russian public).
These beliefs are not necessarily articulated but are implicitly present
in the worldview of most Russians, which is skillfully exploited by the
state to achieve its pragmatic goals. The Kremlin’s ideological work drew
on existing perceptions and reinforced them, then it responded to the
reinforced demand. This process of mutual reinforcement is more artful,
subtle and effective than the ideological work of the late Soviet times.
The Kremlin’s ideological instrument is primarily used to strengthen the
paternalistic model which ensures citizens’ dependence and loyalty, as
well as their passive support of state policies. As will be demonstrated,
evasiveness and fuzziness are the key characteristics of state ideology
that provide the regime with the requisite ideological elasticity.
Putin’s return to the Kremlin, and especially the escalation of the
Ukrainian crisis, has sharply changed the character of the Russian
regime (this transformation is also discussed in other chapters of this
volume). The regime has acquired the elements of emergency; it has less
room for political maneuvering; the ideological unobtrusiveness, which
was characteristic of the early stages of the regime, is being replaced
by propagandistic fierceness, expansionism and aggression directed
primarily at the West and its ‘agents’. The ‘distinctive mentality’ is being
transformed into the ‘consensus of emergency’4 based on the broadest
possible support for the leader and his ‘besieged fortress’ regime.
However, the ‘besieged fortress’ regime does not rely on a specific
doctrine, instead drawing on a hodgepodge of ad hoc arguments which
are used to protect the regime from any figures and values that might cast
doubt on the exceptional value of the state and the legitimacy of its current
rulers. At the same time, the current hardening of the regime encourages
public radicalization and obliterates old taboos. The regime has already lost
its chance to backtrack and return to moderation and will likely be forced
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to adopt more radical slogans, thus expanding the circle of its enemies and
drifting toward greater intolerance and aggression. It is getting increasingly
harder for the Kremlin to maintain the freedom of ideological maneuver
and maintain its ideological elasticity under such conditions.
‘The state that does not intrude’: unobtrusive

ideology of the 2000s
The Boris Yeltsin presidency was built around anti-communism; the

anti-communist ‘victors’ had been actively confronted by the defeated,
but not completely vanquished, opponents of the new post-Soviet
regime. The constant sharp confrontation of the Kremlin regime and the
communist opposition did not just limit itself to the political sphere but
pervaded society as a whole.
However, after coming to power in 2000, Putin quickly made peace
with the communists. The very fact of such reconciliation, accompanied
by a number of symbolic gestures – for instance, the return of the Soviet
anthem – sparked outrage in the liberal community. Nevertheless, the
intensity of political confrontation had soon diminished, and the irrecon-
cilable political opponents of the regime gradually transformed into the
‘systemic opposition’, which posed no threat to the Kremlin. Subsequently,
ideological work became the domain of political technologists headed by
Vladislav Surkov. This work was mainly assigned to the pro-Kremlin United
Russia party, which, in Surkov’s view, was to become the dominant force
for at least 10 to 15 years.5 For instance, in the middle of the 2000s, Surkov
proposed the concept of ‘sovereign democracy’ as the United Russia ideol-
ogy. But even Surkov’s team’s ideological work with loyal political elites
was rather sluggish. Their efforts ‘did not just fail to overcome the original
ambivalence of the concept of “sovereign democracy”, but constantly
generated eclectic structures that allowed for different interpretations.’6
Thus, the attempts to make ‘sovereign democracy’ into a symbol of faith
for the United Russia have gradually come to naught. On the whole, Surkov’s
activities sought to secure dominance of loyal political forces in the public
space. These forces were given discussion forums; they benefited from
the publishing programs generously sponsored by the state. For instance,
Nashi, the pro-Kremlin youth movement – one of the most ambitious and
expensive of such projects – was nevertheless mostly aimed at discrediting
potential opponents rather than ideological training of the Russian youth.
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114 Maria Lipman
If the goal of molding the worldview of the general public indeed

existed, the Kremlin was not very persistent in implementing it (as
opposed to electoral behavior, which was deliberately and success-
fully shaped by the Kremlin). Public consolidation was being achieved
through nation-wide demobilization rather than by rallying the people
around commonly shared values. National television channels became an
essential tool for such demobilization. The editorial line of national tele-
vision was shaped in conformity with the Kremlin’s political objectives.
However, political indoctrination per se did not figure as the principal
goal; rather, the main idea was to remove the public from participating in
politics – to turn Russians into ‘the society of television viewers,’7 to use
the Russian sociologist Yuri Levada’s description of this phenomenon.
Such an approach allowed for significant tolerance towards ideo-
logical opponents, who had to be relegated to peripheral positions rather
than suppressed. The proponents of alternative ideas – whether liberal,
communist or nationalist ones – retained an opportunity to develop
them, but in a way that will not stir the majority of the population.
At early stages of Putin’s leadership the Western-minded liberals
maintained their influence and derived support from a large segment of
the state elite; therefore, it was they, not the communists or nationalists,
who have gradually become the object of public disparagement. People
started accepting the image of a liberal who wants to plunge the country
back in the ‘chaos of the 90s’ (see below) and is most likely to act at the
behest of outside forces, thus harming one’s own country. At the same
time, the Kremlin did not completely sever the ties with liberal Western
beliefs – economic policy, for instance, was still conducted according to
roughly the same principles that were utilized by the Yeltsin administra-
tion. The current regime also did not completely reject the revisionist
take on the Soviet past that had emerged under Gorbachev and Yeltsin.
However, with the ideological ambivalence characteristic of Putin’s rule,
the Kremlin did not disown this past either, remaining ambiguous and
evasive in its treatment of Stalin8 and preserving the link between the
present-day security service and its Soviet predecessors, etc.
Ideological work under the demobilizational model
The Kremlin-controlled national channels were not seeking to impose

the only true interpretation of reality on their audience; the regime did
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not invade citizens’ private life. Boris Dubin characterized this situation
as ‘the non-intrusive state.’ Nevertheless, researchers did detect the ideas
of the state’s infallibility and greatness, as well as Russia’s ‘special path’,
in both political and non-political television formats in the 2000s. The
past – whether imperial or Soviet – was often depicted as a single indi-
visible great-power unit.9
The late 1980s–early 1990s, the Gorbachev tenure that ended with the
collapse of the Soviet Union and the Yeltsin presidency, was the only period
torn out of this continuum and subjected to scathing criticism. Yeltsin’s
rule was firmly condemned as ‘the chaos of the 90s’ or ‘the wild 90s’.
There were waves of anti-Western and especially anti-American
campaigns, but the public opinion of the West still remained generally
positive. One of the most prominent surges of anti-Western rhetoric
came in 2004–05 in the aftermath of the Beslan terrorist attack and the
Orange Revolution in Ukraine.10
Television coverage persistently and extremely effectively developed
the idea of President Putin as a leader of no alternative, infallible and way
above all other political figures. This idea was most vividly encapsulated
in the following television images: the lonely Putin on his way to a village
church on Christmas 2004 and the lonely Putin at his inauguration – in
an empty space devoid of people.
Ideological work with the past

Starting with the early stages of Putin’s rule, the Kremlin made an effort
to marginalize public denunciations of the Soviet regime. The attempts
to unify the historic narrative have been made from the very start of the
2000s, although they were not particularly persistent. The initiative to
create a single unified history textbook first surfaced in 2002.11 In the
early 2000s, Igor Dolutsky’s textbook was removed from the list of
recommended texts for political/ideological reasons.12 In the following
years, Putin himself has repeatedly come back to the issue of the unified
textbook. However, the number of history textbooks had actually
increased from 61 to 65 in the period 2002–13.
The glorification of the Great Patriotic War

(World War II) victory
Aware of the deep divides that had been tearing society apart in the 1990s,
the Kremlin ideologists see the victory as ‘the one and only indisputable
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116 Maria Lipman
foundation for the Russian national myth’13 ; the Victory Day celebrations
on May 9 become more grandiose every year; the official narrative about
the war is practically reduced to the glorification of victory.14 In 2006, the
RIA Novosti state-run information agency introduced St. George black-
and-orange ribbons as a symbol of the 1945 victory; subsequently, these
ribbons became the symbols of loyalty to the regime and the opposition
to the regime’s adversaries.
The struggle against ‘falsifying history’

The official campaign under this name was launched in 2009 when the
world community was widely discussing the role that the Soviet Union
and Stalin played in the partition of Poland and other circumstances
surrounding the start of World War II, which by then had been essen-
tially removed from the official Russian discourse. At the same time,
the State Commission on Counteracting the Falsification of History
that Harms Russia’s Interests was created. This commission was actually
quietly disbanded in 2012. However, the efforts directed against ‘falsify-
ing history’ soon shifted toward internal ‘falsifiers’ (see below).
Enhanced role of the Russian Orthodox Church

The role of the Russian Orthodox Church was being enhanced throughout
the entire post-communist period, but relations between the Church and
state have become considerably closer under Putin. The Russian Orthodox
faith is all but synonymous with the Russian national identity in the public
consciousness, while the Russian Orthodox Church as an institution enjoys
significant support among Russians: in public opinion polls it is consist-
ently ranked as second most trusted institution after the president.15 This
allows the Kremlin to rely on the Russian Orthodox Church, which is eager
to lend its helping hand to the regime and consistently demonstrates its
loyalty. In return, the state supports the high social status of the Church and
fulfills its needs – both material and ministerial ones – allowing it easier
access to schools and the military. At the same time, the moral authority of
the Russian Orthodox Church is very limited when it comes to the private
sphere – most Russians remain secular in their daily routine and lifestyle.
Patriotic character building

The first state program on this issue was enacted back in 2001, and its
financing has been steadily growing: while 200 million rubles were
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allocated for the first program, the third program received as much as
800 million. However, it is not particularly clear what the program does,
even to the president himself. At the inauguration of the third program
in September 2012, Putin said that ‘the issue was completely ignored for
twenty years.’16
Ideological evasiveness as a tactical means
All throughout the 2000s, the regime failed to offer Russian society
a coherent narrative on the foundations of the post-Soviet iden-
tity – national holidays, national heroes, the origins of the post-Soviet
statehood, etc.17 Not only has the country been lacking a new pantheon
of national heroes throughout the entire span of its post-Soviet devel-
opment, but not a single new name has actually emerged. People name
Lenin and Stalin among the two or three most prominent figures of the
old communist past, but Putin and the Kremlin administration rarely
mention these names.18 Putin appears to hold in high esteem Pyotr
Stolypin, imperial Russia’s prime minister in the early 20th century; he
repeatedly quoted him and had a Stolypin statue erected in Moscow. But
the appropriate narrative did not appear, and Stolypin failed to become
a national hero.
The sphere of ideas and symbols of the modern Russian state, the
Russian Federation, lacks its creation narrative; the concept of what it
means to be a Russian today is also non-existent. It is not clear how the
national identity of contemporary Russian citizens differs from that of
their Soviet predecessors or the subjects of the Russian Empire. Instead,
Russian history is presented as a mystical continuum, and its revolu-
tionary transitions and dark pages are played down. Here is how Putin
expressed it in his 2012 Address to the Federal Assembly, ‘Russia did not
begin in 1917, or even in 1991, [...]we have a common, continuous history
spanning over one thousand years.’19
References to conservative Russian philosophers in Putin’s speeches,
most frequently to Ivan Ilyin, are nothing more than a collection of fitting
quotations. In reality, Putin can hardly consider himself the follower of
Ilyin’s philosophy. Ilyin referred to Soviet patriotism as ‘perverted and
ridiculous’; he had absolutely no respect for the Russian victory in World
War II, and harshly criticized the Western countries for their ‘political
naïveté’ in ‘giving Stalin the small countries of Eastern Europe.’20 This
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118 Maria Lipman
example illustrates the regime’s essential need for eclectic ideas and
evasiveness: quoting Ilyin may come in handy for Putin, but he does not
need Ilyin’s entire worldview with his staunch opposition to everything
Soviet and his nationalism intermingled with Fascist sympathies.
The character of state identity in the 2000s had been the subject of
discussion in official and semi-official circles, but the nation-building
project remained unfinished. The concept of the civic nation (‘the citi-
zens of Russia’) had its proponents among more liberal advisers, but if it
ever had a chance for success, this chance has gradually evaporated as a
result of the deliberate assault on civil liberties and erosion of the demo-
cratic institutions that should serve as the foundation for a civic nation.
The members of the Russian elites who adhere to Russian (ethnic or
imperial) nationalism are actively – and successfully – pitching certain
ideas to the Kremlin. This segment of the elite gradually gained signifi-
cant influence; however, Putin did not align himself with any of these
groups completely, seeking to maintain his freedom of maneuver on the
ideological field.
The views on the market economy and private enterprise also
remained ambivalent. The Kremlin did not stand in the way of a common
belief that large fortunes were acquired by plundering the people’s wealth
and at times actively exploited the popular resentment of the ‘oligarchs’,
while allowing the latter to continue enriching themselves and disallow-
ing public discussion on reversing privatization.
The attitude towards the West remained ambivalent as well. While
speaking in front of United Russia activists in 2006, Surkov described
‘isolationists’ as the Kremlin’s adversaries, calling them ‘the two-steps-
backwards party’. In 2007, when Putin delivered his blistering denunci-
ation of the West in Munich, Surkov added an emotional passage about
Russia’s backwardness to his general praise of Russian distinctiveness in
a speech before the members of the Russian Academy. In this ‘catch-up
modernization manifesto’, Surkov compared the global economy to a
large plant, where Russians – ‘the grubby lads from city outskirts’21 – are
relegated to the very bottom of the industrial hierarchy.
The lack of ideological certainty is not a miscalculation or an oversight.
Both Putin and Surkov22 acknowledged the absence of public consensus
on important issues; however, as was stated above, building the national
consensus was not one of the Kremlin’s goals. The regime had neither
symbolic capital nor resources to formulate a cohesive worldview that
would explain to the country what had transpired, what its current state
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is, let alone where it is heading. We have already mentioned that the
regime’s goal was to neutralize its ideological adversaries and play down
the differences, which required maintaining flexibility and freedom of
maneuver and the absence of restrictive doctrines and dogmas. For
example, an attempt to create the narrative of post-Soviet statehood and
its origins would require articulating a clearer position on the attributes
of the Soviet past, which would be inevitably equivocal. Embracing the
Soviet past calls the legitimacy of the current regime and Putin himself
into question, since Putin came to power as Yeltsin’s protégé, and Yeltsin
took charge of the Russian Federation as a result of the collapse of the
Soviet regime and the breakup of the USSR. Rejecting the Soviet past
runs counter to the concept of the infallibility of the state that lies at the
core of the current regime. Either concept of state-building would exacer-
bate the discord within society and the political elite and strengthen
one of the factions. The Putin regime was generally reluctant to restrict
itself legally, institutionally, or morally, and the lack of certainty in the
ideological sphere was merely one of the manifestations of this general
approach.
New ideologization as part of the overall

transformation of the regime
The change of course was basically triggered by the fact that the resource-
based economic model has been exhausted; Putin acknowledged it
during his 2012 presidential address – the first such address since his
return to the Kremlin. Thus, Putin was confronted with the choice
between intensive modernization and an anti-modernizational course
that leads to greater autarky and isolationism. Besides, the mistrust of the
West deepened after the Western operation in Libya in 2011.23 There are
some reasons to believe that Western intervention in Libya and Qaddafi’s
violent death prompted Putin to drift closer to conservative elites in his
inner circle, which had long been trying to convince him to formulate
his policies with the assumption that the West is the enemy. Therefore, it
appears that Putin had already opted for the anti-modernizational course
prior to his return to the Kremlin. This choice naturally precipitated
the reliance on the (conservative) ideological resource to consolidate
the majority and strengthen legitimacy, since it became evident that the
material resource would continue its steady decline.
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120 Maria Lipman
Mass anti-Putin rallies that sprang up in large cities (predominantly in

Moscow) in late 2011 disrupted the routine atmosphere of stability and
passive loyalty. The Kremlin responded by consolidating the paternalistic
majority – the exponents of ‘distinctive mentality’ as per Linz – against
the overly modernized ‘unpatriotic’ minority that challenged the regime
and Putin personally. The tactics of demobilization and playing down
the differences that had been utilized throughout the 2000s gave way
to discrediting and intimidating those infringing on the paternalistic
order. A few dozen of the ordinary participants in the 6 May 2012 protest
rally that took place on the eve of Putin’s inauguration were arrested
and many of them were sentenced to prison terms after spending up to
one and a half years in pre-trial detention. Hence, Putin has turned to
the policy of dividing Russians into the ‘loyal ones’ (the Putin majority)
and the ‘disloyal ones’ – the exponents of the new, non-Soviet symbolic
capital based on Western, liberal values. Such a division required greater
ideological certainty – the right normative standards to guide the ‘loyal’
Russians had to be formulated.
The escalation of the Ukrainian crisis in the fall of 2013 greatly
strengthened the Kremlin’s ideological shift. The Kremlin launched
an unprecedentedly lengthy and aggressive propaganda campaign in
response to the Kiev Maidan protests. The national television chan-
nels exploited crucially important Great Patriotic War (World War II)
symbols to portray the Kiev events. The events were described as a
‘fascist’, ‘neo-Nazi’, ‘Banderite’ assault that again – as back seven decades
ago – threatens ‘our people.’ Against this backdrop, the spring 2014
annexation of Crimea resonated as an echo of the great World War II
victory. Now, the Russian citizens had Putin’s victory, the victory of
the present-day Russia. At the same time, the Crimean ‘victory’ was a
triumph of paternalism: it looked like a gift bestowed on the people by
their ruler. Detaching Crimea from Ukraine and annexing it to Russia
came (back in the spring of 2014) at no material or human cost. The
public reacted with a powerful surge of patriotism, a euphoric spell
under the slogan ‘Crimea is Ours!’
From late 2011 to late 2013, Putin governed a society in which his
(potential) opponents – those supporting the slogan ‘Russia without
Putin’ – comprised up to a fifth of the population. In 2014, however, a new
patriotic consolidation took place. Putin has now been re-legitimated as
a victorious national leader that revived Russia’s greatness and protects
the country from the hostile West.24 Many of the current ideological
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methods were also present in the 2000s, but they are being used far
more intensively and consistently now; some new elements adopted after
Putin’s return to the Kremlin appeared as well.
The change of discourse: turn to

mobilizational rhetoric
The revamped discourse prominently features the anti-Western motif.

First, the Kremlin reacts to the mass protests by discrediting the
protesters; Putin accused them of acting on a cue from the US State
Department. As an important part of this campaign, secret ties with
the West are routinely ‘revealed’ through television documentaries that
expose particular individuals or groups, political and civic activists,
NGOs and journalists.
The ideological campaign is accompanied by a whole host of polit-
ical decisions that seek to protect Russians from Western influence: a
ban on foreign adoption of Russian orphans; a stricter NGO-‘foreign
agent’ law; restrictions on foreign travel for a growing number of public-
sector employees; strict limits on foreign stakes in Russian mass media
companies; business ‘deoffshorization’; ending the US student exchange
program; and a number of steps to control the use of the Internet. The
Ukrainian crisis and military conflict is blamed on Western stratagems,
creating a link between the West and the ‘fascists’/’Bandera sympathiz-
ers.’ In 2014 against the backdrop of Western sanctions the course for
Russia’s self-isolation becomes clearly evident.
While in Putin’s earlier statements the West was often referred to as an
unfriendly competitor and in some cases as a hostile force bent on inflict-
ing harm on Russia, now a new motif emerges: the West is depicted as a
source of alien and unacceptable values and a hotbed of immorality. In
the past, Russia was not infrequently described as part of Europe,25 but at
the Valdai Forum26 and his Address to the Federal Assembly27 in the fall
of 2013, Putin explicitly accused the West of immorality and deviation
from Christian morals.
Essentially, this declaration constitutes the ultimate rejection of
Western standards and practices. This is a rejection of the West as a
model of national modernization development and a conduit of modern
liberal values. In particular, openness and tolerance of diversity, which
have been internalized, at least in part, by the younger residents of large
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122 Maria Lipman
cities during the post-Soviet era, are now decried as hostile, while their
exponents are accused of being the ‘fifth column.’
In this context, the annexation of Crimea is perceived as a sort of
indulgence for Russians: while Russia is no longer bound by international
norms and agreements on the global stage, Russian citizens, with the
regime’s blessing, no longer feel obligated to measure themselves against
Western standards, emulate Western values or try to catch up with the
West – especially in light of the fact that with its rejection of moderniza-
tion, Russia’s lag will only be increasing.
The issues of social conservatism and ‘traditional values’ are now
inextricably linked to the threat that the West poses to Russian values.28
‘The state that does not intrude’ is being replaced by the state that, for
the first time in a quarter of a century of freedom from the communist
dictates, interferes in the private and public sphere – in questions of
family life, sexual mores, faith, education, art and culture. The rhetoric
is followed by political decisions that impose new legal restrictions, such
as the ban on the propaganda of homosexuality or use of profanities in
the media.
The Pussy Riot case that resulted in the punk band singers’ conviction
has substantially strengthened social conservatism and the position of
the Russian Orthodox Church. After the passage of the law that crimi-
nalizes offending religious believers’ feelings, the Church has finally
received the legal protection against those who dared to disrespect it.
The Church’s traditional conservatism and xenophobia, its anti-Western
and anti-liberal tenets have been generally adopted as elements of the
state ideology.
The desire to legislate true historical interpretations is also no longer
limited to mere declarations. The possibility of introducing a single
history textbook has become a reality: the unified concept of teaching
history was ordered, developed at lightning speed, and approved under
Putin’s watch. In fact, Putin frequently expounds his personal views on
various historical events that span the period from the 9th to the 20th
century.29 A law introducing a de facto ban on critical assessment of the
policies and acts of the Soviet Union during World War II has also been
passed (attempts to pass such laws had been made in the past, but until
2014 they never came to fruition).30
The current regime still has not offered the people a cohesive histor-
ical narrative; nevertheless, it strictly demands that the ‘correct’ attitude
toward the past be expressed. Such an attitude must be completely
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devoid of critical interpretations, while the critics themselves should

be strongly condemned. This sociopolitical atmosphere encourages all
kinds of ‘historical’ versions and interpretations driven by servility with
no regard whatsoever for established facts or academic authority.31 The
policy of unifying the historical discourse has also encouraged proposals
to introduce unified Russian language and literature; unlike the Soviet
environment that was guided by Marxist–Leninist ideology, however, in
today’s Russia there are barely any guidelines, except the desire to pledge
allegiance to the Kremlin, that would help tell ‘correct’ literature from
‘incorrect’ one.
The increasingly hardline rhetoric and drift toward repression has
elevated a number of aggressive loyalists, particularly from the ranks
of the Duma members. Trying to outdo one another, they constantly
propose new nationalistic, xenophobic and ever more obscurantist
restrictions in the moral, cultural and economic sphere. Not all of these
initiatives become laws, but merely discussing them makes the previously
peripheral subjects and rhetoric part of the mainstream – for example,
the discourse on nationalization and price control.
The same applies to the sphere of ideas, where previously inhumane
and marginal concepts have now become mainstream and accessible to
the national television audience. The ideological supply of this sort was
given a huge boost by the annexation of Crimea and Russia’s subsequent
support of the anti-Kiev forces in Ukraine’s east. This includes conser-
vative and aggressive ‘doctrines’ disseminated by a host of state agencies
– from the Security Council and the Ministry of Defense to the Ministry
of Culture – and the statements made by a wide range of government
officials, from the president and members of his administration to an
assortment of analytical centers, with the ultra-conservative Izborsky
Club32 occupying a prominent place among them. A great number of
cultural figures, educators and scientists are eager to pledge their loyalty
to the new course and its ideological underpinnings.
The suppliers of this ideological ware subscribe to a wide variety of
views – imperial, Stalinist, xenophobic and nationalist, clerical, and
even fascist, but they are all united in their anti-liberal and anti-Western
stance.
Liberal views are radically marginalized and effectively declared
hostile. Those trying to support liberal viewpoints, even within their
professional sphere – whether it is culture, science or education – find
themselves in the position of dissidents; liberal-leaning media outlets are
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124 Maria Lipman
constantly pressured by the authorities, with their number rapidly dwin-

dling along with the rest of the space for autonomous self-expression.
The Kremlin has been extremely successful in fusing a disparate
collection of groups and individuals into one indivisible image of the
Evil of the West. This collective evil includes the recipients of foreign
grants, liberals, homosexuals (commonly perceived as pedophiles), those
refusing to accord absolute deference to the Russian Orthodox Church,
those failing to interpret national history as a mystical representation of
Russian greatness and rectitude, as well as the adherents of modern art
and science. The ‘fascist junta’ in Kiev is also on this list. This propaganda
stunt enabled the Kremlin to strengthen national consolidation and raise
anti-Western sentiments to an unprecedented level.
In 2014, the regime has been consistently trying to create the neo-
Soviet project33 that aims at eradicating (liberal) dissent by appealing to
great-power aspirations, isolationism, and quasi-traditionalism while
also steadily expanding its control over the media and the Internet and
making the educational system more uniform. However, the absence of
official discourse on a number of fundamental questions obstructs the
consistent implementation of this project. Instituting uniform thinking
in such a context inevitably requires more repressive authoritarian and
police practices.
Heightened attention to the questions of

national identity
Throughout the 2000s, the regime had been trying to maintain the
fragile balance between the rather ethnically intolerant Russian majority
and the ethnic minorities. The popularity of ‘Russia for Russians’ and
‘Stop feeding the Caucasus’ slogans, the annual ‘Russian March’ on 4
November, the problems in the North Caucasus and resentment of labor
migrants, ethnic strife and flare-ups of ethnic violence were all factors
that steered the regime toward a cautious approach.
Since his return to the Kremlin in 2012 Putin’s speeches and official
discourse in general became considerably more ideological, and ethnic
issues and problems of Russian national identity have started to gain
more prominence.
Putin often praises Soviet practices that ensured the ‘friendship of
the peoples’; he emphasizes that Russia’s ‘beauty and strength’34 lies in
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its ethno-cultural diversity and that the country must never become a
nation state. At the same time, he calls ethnic Russians a ‘state-forming’
nation and is happy to publicly join the company of bikers, who are
known for their radical nationalism. Actually, the term ‘state-forming
nation’ has not been formally codified, despite persistent appeals from
the nationalists.
The new state identity, particularly its relation to its Soviet and pre-
revolutionary imperial incarnations, remains uncertain.35 Various,
sometimes conflicting, definitions that correspond to different concepts
of nation building continue to co-exist in the statements made by Putin
and other state officials and loyalists. They include the concepts of:
Russia as a unique civilization

This is a declaration of Russia’s self-sufficiency, its uniqueness and certain
‘higher’ supranational character (this role was played by the ‘Soviet’
identity during the Soviet era). At the same time, it is not at all specified
whether there are any differences between the concepts of ‘civilization’
and ‘multi-ethnic nation’ (or ‘poly-cultural entity’, as Putin described it
in his 2013 Address to the Federal Assembly).
‘Russia is not Europe’

This is a negative and undefined cultural identity. This declaration was
included in the 2014 draft of the Cultural Policy Concept developed by
the respective ministry. Putin avoids making such drastic statements,
but his rejection of European values supports this declaration.
Russia as an heir of the Byzantine Empire

As per this concept, Byzantium is perceived as the ‘true’ Europe, as
opposed to Western Europe and Rome. Therefore, Russia is an ‘heir’
of true European and Christian values; it is better and more pure than
today’s Europe that betrayed its values. Thus, it is yet another undefined
and negative cultural identity.36
Russia as Eurasia
This was a declaration of soft power and a foundation for creating the
Eurasian Union – the key vector of Russian policy, according to the
article written by Putin in 2011.37 However, Russia’s aggressive policy
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126 Maria Lipman
towards Ukraine, its backing of the anti-Kiev insurgents in Donbas and

the ensuing radical alienation of Ukraine has undermined Putin’s project
of the Eurasian Union to the extent that it is most probably no longer
realizable.
Russia as a civic nation

As was mentioned above, even as an idea this concept of the Russian
identity has been losing its relevance after 2012. But the essence of ‘civic’
identity was quite tenuous in the previous periods as well, and it is
unclear what it could be based on given the radical erosion of political
and civic institutions.
* * *
Although these ideologemes may seem ideologically incompatible,

they all (perhaps with the exception of the civic nation) serve the same
purpose: to affirm Russia’s great-power status and its unconditional
righteousness at all times. (‘We are stronger than everybody because
truth is on our side,’38 Putin said in November 2014.) Any symbol may be
exploited to achieve this purpose. While the World War II victory is the
main one, other symbols may do as well: the Brezhnev-era superpower,
the Russian Orthodox Church with its intolerance to Western values,
Moscow The Third Rome, the Russian Empire, and the Romanovs,
whose 400-year anniversary was celebrated in 2013–14, about 100
years after their murder at the hands of heroic chekists, as well as the
heroic chekists themselves. It is no big deal that these symbols apply to
completely different nation-building projects. They are being used situ-
ationally upon the sanction from today’s supreme leader, who serves as
the main guarantor of the country’s greatness. He does not bind himself
with a particular concept of the national identity – his unlimited power
allows him to act at will and interpret symbols, history, Russian and
international law arbitrarily.
In 2014, the diverse body of national identity constructs was enriched
by one more concept – that of ‘Russians as a divided nation,’ articulated
by Putin during his ‘Crimean speech.’39 Although he has frequently
returned to the traditional multi-ethnic world rhetoric in the following
months, his room for ideological maneuver invariably dwindles.
The annexation of Crimea has triggered national euphoria – an
outpouring of militaristic and chauvinistic sentiments under the slogan
DOI: 10.1057/9781137548115.0010
‘Crimea is Ours!’ The regime immediately gained the support of the

Russian nationalists that protested alongside liberals in 2011–12 under
the slogan ‘Russia without Putin’. At that time, their dissatisfaction
with Putin stemmed from his inadequate protection of ethnic Russians.
Despite the fact that the anti-Ukrainian propaganda employs mainly
political rather than ethnic terms, the juxtaposition of ‘us’ against ‘them’
is bound to be interpreted along ethnic lines; along with the language
of ‘Russians as a divided nation’ and the decline of the Eurasian Union
project this encourages aggressive nationalism – both statist and ethnic –
and facilitates a shift toward an ethnic Russian identity.
Conclusions: The 2014 ideological shift –

prospects and risks
1. Neither society nor the regime have been able to formulate new
development goals or produce new authoritative leaders (with
the exception of Putin himself) over the two post-Soviet decades
when government control over the society was not too tight and
there was no ideological dictate. For the most part, the state has
tried to discredit and suppress any ‘ideological competitors’ and
succeeded in doing so. The belief in the Western political order as
the main alternative to the existing one, which was prevalent in the
public perception of the late 1980s and to some extent the 1990s
(the dream of turning Russia into a ‘normal’ country, where people
live ‘like they do in the West’), has been replaced with the virtually
all-out belief that liberal democracy, the law-governed state, and
value of human rights are merely skillfully designed window
dressing. The negative attitude towards the West has started its
gradual upward climb, occasionally translating into a belief that
Western politicians have intentionally ensnared Russia in the
‘Western values’ trap in order to weaken and undermine it.
2. The legitimation of the 2000s rooted in stability and growth of
prosperity has exhausted itself. Replacing the material resource
with the ideological one worked, particularly because there has
been gradual increase in public demand for nationalism triggered
by the loss of the Soviet state identity. The new ideological
supply – Russia as a militarized power bristling at being besieged
by its enemies – currently meets the demand for the substantial
DOI: 10.1057/9781137548115.0010
128 Maria Lipman
majority of the people. This ‘consensus of emergency’ is based on

rallying behind the leader and aligning oneself with the state that
everyone around fears and therefore respects; ‘We are stronger than
everybody because we are right.’
3. Being unable to conform to the increased complexity and
diversity of post-Soviet society, the Kremlin forcibly simplifies it,
depriving it of the slightest traits of autonomy, self-sufficiency and
independence. Moreover, Russia-1 (as per Natalia Zubarevich’s
terminology) and the symbolic capital it accumulated in the
years of post-communist development are being rejected and
declared hostile. Liberal ideas are not just unpopular; they are
practically outlawed, and their exponents marginalized, weakened
and reduced to irrelevance. The very distinction between the
modernized Russia-1 and the members of the more conservative
constituencies has mostly faded away.40 The terms ‘national
traitors’ and ‘fifth column’ have entered everyday use. The state
ideological work is becoming increasingly archaic, intolerant and
xenophobic, translating into social regress on the national scale.
4. For the first time in a quarter of a century, the state interferes in
citizens’ private and public life. The ‘quasi-traditional’ rhetoric and
vilification of all things ‘alien’, from behavioral norms to artistic
tastes, are popular with the public, but hardly change social habits
and patterns. Since Russians do not treat the state elite as their
moral authority, such government proscriptions merely corrupt
morals, exacerbate aggressive xenophobia towards various kinds
of ‘strangers,’ ‘others’ and minorities and encourage violent
vigilantism.
5. A powerful propaganda campaign launched in connection with
the Ukrainian crisis has unleashed various strains of aggressive
nationalism, be it the statist nationalism of the Soviet variety,
imperial nationalism, ethnic or ethno-cultural nationalism.
Along with the growing economic crisis, nationalist discourse
drastically reduces the regime’s abilities – not only to develop
but also prevent social conflicts. Nationalist energy can be vented
through violent clashes, similar to the 2010 Manezhnaya Square
events. The Kremlin may then be confronted with the choice to
either quell the energy with police action, and thus risk turning the
nationalist forces against itself, or shift to even greater nationalist
mobilization. The second choice appears more plausible, but such
DOI: 10.1057/9781137548115.0010
a shift may lead to the sharp deterioration of ethnic conflicts

between the Russian majority and ethnic minorities, escalation of
the situation in the North Caucasus, etc. This is probably the most
serious threat that resulted from the transformation of the regime
in the course of the past two years, especially in 2014.
6. The annexation of Crimea and support for the separatists in the
eastern Ukraine sounds the final death knell for the prospects of
creating the Eurasian Union as the projection of soft power, which
is the potential that Russia has mostly wasted in all the years of
its post-Soviet development. In light of the threats repeatedly
voiced at official levels against the post-Soviet states , including the
Baltic countries, the concept of the Russky mir (‘Russian realm’)
creates the atmosphere of instability in the post-Soviet space
and pushes the Russian regime toward the ethnic Russky self-
definition of a nation, which becomes the source of superiority
and righteousness. At the time of the Soviet Union, ‘we’ were right
because of our progressive communist ideology that confronted the
ideology of the rotting capitalist West. Now our righteousness is
rooted in ethics: ‘When a Russian feels he is right, he is invincible.’41
7. The logic of regime development suggests the escalation of
authoritarianism and government crackdown against the slightest
signs of disloyalty. If the anti-Western and anti-liberal campaign
proves insufficient to maintain legitimacy and control, the circle
of ‘enemies’ will be expanded. The decline in living standards and
deteriorating socio-economic problems will aggravate the feelings
of social injustice. Given the general drift toward a Soviet-style
command economy and creeping nationalization, the turn to
expropriation in order to forestall the upsurge of socio-economic
protest no longer looks improbable. Those who are seen as having
enriched themselves at the people’s expense may then become
scapegoats.
8. The broad public consolidation and apparent consensus conceals
serious disagreements. In the 2000s, when the situation was stable
and society demobilized, the regime’s evasiveness and ambivalence
in the sphere of ideas and symbols provided it with greater
elasticity and freedom of maneuver. But now when the regime has
changed its behavior and is facing more limited choice in both
foreign and domestic politics, the evasiveness and uncertainty of
state ideology may become more of a liability. The radicalization
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130 Maria Lipman
of rhetoric and removal of taboos leaves the Kremlin with no

avenue for retreat, thus making it impossible to revert to the
demobilization trend.
9. Today the regime is still trying to retain ideological elasticity
and avoids making a decisive choice that will signal its ultimate
turn to mobilization – whether it is mobilization based on ethnic
nationalism, imperial expansionism or a command economy.
The remaining uncertainty creates a risk of losing initiative and
runs counter to Putin’s main priority – preserving the absolute
monopoly on power. Escalating repressions – in other words, a
slide toward dictatorship – can be picked as an alternative to a
clear ideological choice. Naturally, these options are not mutually
exclusive. Either one of them, or both at the same time, put Russia
on a disaster course.
Notes
1 This term was suggested for describing the sphere of political ideas, public
perception of politics, etc. in O.Y. Malinova (ed.) (2011) Russia’s Ideas and
Political Space: Dynamics, Institutional Environment, Actors (Moscow: Rosspen).
2 J.J. Linz (1970) ‘An authoritarian regime: Spain’ in E. Allardt, S. Rokkan (eds)
Mass Politics: Studies in Political Sociology (New York: Free Press), 251–83.
3 The ideology adopted by Putin’s Russia contains certain ‘meta-narrative’ (see
M. Laruelle (2014) ‘Russian Nationalism as a Subject of Scientific Research’,
Pro et Contra, No 1–2 (62) 2014). This meta-narrative is characterized by
its implicitness, numerous omissions, contradictions and incomplete
statements. Laruelle notes that an attempt to verbalize the implicit ideas
strips the meta-narrative of its force.
4 A. Levinson (2014) ‘A State of Emergency in People’s Minds’, Vedomosti, 11
November 2014.
5 Newsru.com (2006), Surkov Asked ‘United Russia’ to Not Gape, http://www.
newsru.com/arch/russia/03mar2006/surkov.html
6 O.Y. Malinova (ed.) (2011) Russia’s Ideas and Political Space: Dynamics,
Institutional Environment, Actors, 95.
7 Y. Levada (2000) ‘A Man Political...’ in: Y. Levada (2000) From Opinions
to Understanding (Moscow: Novoe Izdatelstvo), 96–108. See also B. Dubin
(2005) Today Russian society is being conserved as the society of television viewers
rather than being developed as a participatory democracy, http://www.strana-oz.
ru/2005/6/postoronnie-vlast-massa-i-massmedia-v-segodnyashney-rossii
DOI: 10.1057/9781137548115.0010
8 See, for instance, Th. de Waal (ed.) (2013) The Stalin Puzzle. Deciphering
Post-Soviet Public Opinion (Washington, DC: Сarnegie Endowment for
International Peace).
9 The image of the past as presented by national television is discussed in the
special issue of the Pro et Contra journal ‘Television in Search of Ideology’,
Pro et Contra, 4(33), 2006.
10 This period was also marked by a campaign to discredit non-government
organizations financed by the West as working against their own country,
as well as by the passage of the law that tightened control over such
organizations (2005–06).
11 S. Kirillova (2013) Unified History Textbook: Another False Start?, http://
ps.1september.ru/view_article.php?ID=201301904%D1%8E
12 Izvestia.ru (2003) Minister of Education Banned Dolutsky Textbook on the
History of Russia, http://historydoc.edu.ru/news.asp?ob_no=12440
13 A. Chadaev (2006) Putin. His Ideology (Moscow: Evropa Publishers), 44.
14 B. Dubin (2004) The ‘Bloody’ War and the ‘Great’ Victory, http://www.
strana-oz.ru/2004/5/krovavaya-voyna-i-velikaya-pobeda
15 Levada Center (2012) Confidence in Government Institutions, http://www.
levada.ru/02-11-2012/doverie-institutam-vlasti
16 President of Russia (2012) Meeting with Public Representatives on Patriotic
Education for Young People, http://eng.kremlin.ru/transcripts/4405
17 For more details on evasiveness in fundamental questions related to the past,
national history, national identity, etc., see M. Lipman, N. Petrov (eds) (2013)
Russia 2025: Scenarios for the Russian Future (London; Palgrave Macmillan),
220–39.
18 In recent years, Putin has been critical of Bolsheviks quite a few times. On
the occasion of the hundredth anniversary of World War I, he even called
the peace Bolsheviks made with Germany ‘treasonous.’ At the same, Russians
were outraged at the destruction of Lenin monuments in Ukrainian cities in
2014.
19 President of Russia (2012) Address to the Federal Assembly, http://www.
kremlin.ru/news/17118
20 I. Ilyin (1947) Soviet Union Is Not Russia, http://imwerden.de/pdf/
ilijn_sov_sojuz_ne_rossiya_1947.pdf
21 V. Surkov (2007) Russian Political Culture. A View from the Utopia, http://www.
intelros.ru/2007/06/11/vladislav_surkov_russkaja_politicheskaja_kultura_
vzgljad_iz_utopii.html
22 In the above-cited address to the United Russia functionaries (see endnote 5)
Surkov pointed out that ‘in our society we failed to produce a consensual
assessment of the recent events.’ Putin spoke about a ‘deep ideological ...
split in [the Russian] society’ back in his article published in late 1999;
twelve years later in another article he wrote ‘a civil war is still going on in
DOI: 10.1057/9781137548115.0010
132 Maria Lipman
many people’s minds’; ‘the [perception of the] past is highly politicized and
“torn” into ideological quotations’ (See V. Putin (2012) ‘Russia: The National
Question’, Nezavisimaya Gazeta, 23 January 2012).
23 Igor Yurgens claims that the Libyan events became the ‘last drop’ in
convincing Putin that the West is a threat. I. Yurgens (2014) Interview, http://
www.novayagazeta.ru/politics/66099.html
24 Putin’s approval rating has sharply increased following the annexation of
Crimea: it reached 80 percent in March 2014 (Levada Center (2014) Approval
and Trust December Ratings, http://www.levada.ru/24-12-2014/dekabrskie-
reitingi-odobreniya-i-doveriya) and hovered around 82–88 percent for the
rest of the year.
25 In 2002 Putin said that ‘Russia is, no doubt, a European country, because
it is a country of European culture’. President of Russia (2002) Interview to
the Polish newspaper ‘Gazeta Wyborcza’ and the Polish television channel ‘TVP’,
http://2002.kremlin.ru/events/433.html
26 At the Valdai Forum Putin said ‘The excesses of political correctness have
reached the point where people are seriously talking about registering
political parties whose aim is to promote pedophilia. People in many
European countries are embarrassed or afraid to talk about their religious
affiliations. Holidays are abolished or even called something different;
their essence is hidden away, as is their moral foundation. And people are
aggressively trying to export this model all over the world. I am convinced
that this opens a direct path to degradation and primitivism, resulting in a
profound demographic and moral crisis’. President of Russia (2013) Meeting of
the Valdai International Discussion Club, http://eng.kremlin.ru/news/6007
27 The following excerpt from Putin’s 2013 Address to the parliament gives
an idea of his moral condemnation of the West: ‘Today, many nations are
revising their moral values and ethical norms, eroding ethnic traditions and
differences between peoples and cultures. Society is now required not only
to recognize everyone’s right to the freedom of consciousness, political views
and privacy, but also to accept without question the equality of good and
evil ...’ President of Russia (2013) Presidential Address to the Federal Assembly,
http://eng.kremlin.ru/transcripts/6402
28 In 2014, the West has come to be associated with a three-prong threat:
to our ‘traditional values’ (‘there had been and still are attempts to break
our cultural code’, for instance, see V. Putin (2012) ‘Russia: The National
Question’); to Russia’s sovereignty (‘America is trying to subjugate Russia’
as Putin remarked at the All-Russia People’s Front meeting), and to Putin’s
power (despite the almost 90-per cent-high approval rating, Putin talked of
the threat of ‘color revolutions’ at the Security Council meeting in November
2014).
DOI: 10.1057/9781137548115.0010
29 In 2014 Putin repeatedly offered his interpretations of the history of Crimea

that were apparently intended to justify its annexation by Russia. His
remarks made in October 2014 on the history of parts of Ukraine that he
referred to as ‘Novorossiya’ sounded at the time quite a bit like a justification
of Russia’s territorial claims (President of Russia (2014) Meeting of the Valdai
International Discussion Club, http://eng.kremlin.ru/transcripts/23137) . In
November 2014 at a meeting with young historians Putin shared his views on
national history (President of Russia (2014) Meeting with Young Academics and
History Teachers, http://eng.kremlin.ru/transcripts/23185).
30 The law that prohibits ‘rehabilitation of Nazism’ has a provision criminalizing
‘the dissemination of false information about the activity of the USSR during
the years of World War II’ which, in today’s political environment, means
any critical analysis (academic or otherwise) or assessment of the actions of
the Soviet Union or its army during WWII.
31 An ever growing number of obscurantist and absurd historical theories have
appeared in the Russian media, many of them focused on exposing Russia’s
Western enemies. To cite just one out of scores of such curiousities, an article
in Krasnaya Zvezda, the newpaper published by the Ministry of Defense,
suggested that Yemel’yan Pugachev, the leader of an 18th century popular
revolt, was in fact a French spy.
32 M. Laruelle (2014) Novorossiya: A Launching Pad for Russian Nationalists,
http://www.ponarseurasia.org/memo/novorossiya-launching-pad-russian-
nationalists
33 In the second half of 2014 the rapid economic decline has pushed the
Kremlin toward Soviet-style economic management. As was mentioned
above, public adherence to a market economy has never been firm or deep,
so the government’s mobilization of economic practices to the detriment
of business interests has been readily accepted by the vast majority of the
Russian people.
34 President of Russia (2012) Address to the Federal Assembly, http://www.
35 ‘We have left the Soviet ideology behind ... ,’ Putin told the participants of the
Valdai Forum in 2013. He pointed out that ‘idealizing pre-1917 Russia’ is also
wrong ... ‘We have also got over the post-Soviet stage’ ‘Russia is coming back
to itself, to its own history’. See President of Russia (2013) Meeting of the Valdai
International Discussion Club.
36 V. Fadeev (2014) On Solid Ground, http://expert.ru/expert/2014/03/
na-tverdoj-pochve/
37 Izvestia.ru (2011) The New Integration Project for Eurasia – A Future That Is Born
Today, http://izvestia.ru/news/502761
38 President of Russia (2014) Interview to TASS News Agency, http://kremlin.ru/
transcripts/47054
DOI: 10.1057/9781137548115.0010
134 Maria Lipman
39 President of Russia (2014) Address by President of the Russian Federation,

http://kremlin.ru/news/20603
40 To use the expression of Natalia Zubarevich, who had earlier authored the
broadly cited concept of ‘four Russias’ based on the socio-economic diversity
of the Russian population, ‘the four Russias are called off ’. See N. Zubarevich
(2014) Four Russias are Cancelled, http://www.novayagazeta.ru/politics/66622.
html
41 President of Russia (2014) Interview to TASS News Agency.
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strana-oz.ru/2004/5/krovavaya-voyna-i-velikaya-pobeda
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of television viewers rather than being developed as a participatory
democracy, http://www.strana-oz.ru/2005/6/postoronnie-vlast-massa-
i-massmedia-v-segodnyashney-rossii
V. Fadeev (2014) On Solid Ground, http://expert.ru/expert/2014/03/
na-tverdoj-pochve/
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ilijn_sov_sojuz_ne_rossiya_1947.pdf
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That Is Born Today, http://izvestia.ru/news/502761
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ps.1september.ru/view_article.php?ID=201301904%D1%8E
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(eds) (1970) Mass Politics: Studies in Political Sociology (New York: Free
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DOI: 10.1057/9781137548115.0010
7
Conclusions
As a result of the Ukraine events of late 2013–early 2014,

the regime, consciously or not quite so, has made a sweep-
ing political choice which will determine the country’s
developments for many years to come. Russia after 2014 is
essentially another country: with qualitatively a different
leader, different elites, and different citizens.
The regime has become even more personalized and
authoritarian. Just a year ago, we could describe Putin as
a ‘chairman of a board of directors’ who takes the complex
and diverse interests of elite factions and clans into
account in his decision-making. Today he bears far greater
resemblance to a monarch; political elites have grown
more dependent on him and less capable of affecting his
decisions. In turn, people’s abilities to affect political elites
have also diminished. While the term ‘Putin regime’ might
have sounded like a hyperbole in the past, it characterizes
the situation quite accurately now.
The transformation of the political system reached
its apex in 2014, although certain symptoms manifested
themselves as early as 2012, when Putin returned to
the Kremlin. The major vectors of this transformation
consisted in further weakening of already weak institu-
tions; constructing a police state; ‘elite nationalization’
DOI: 10.1057/9781137548115.0011 137

and personnel purges – effectively a return to the ‘nomenclature’ system;

substantial erosion of the separation of powers –both horizontally (with
an especially weakened judicial branch) and vertically (with the effective
elimination of local self-government). The state has extended its reach
into various spheres of public life and citizens’ private life; the ‘foolproof
system’ has been completely dismantled; control over information space
has drastically tightened and the remaining zones of relative autonomy
have been increasingly infringed by the government; the entire public
and political space has been progressively ‘Sovietized.’
The decision-making process looks entirely different now. The peace-
ful model has been replaced by the military or semi-military one – it
is centered around the commander-in-chief with his power vertical that
comes down to a single point. The critical decisions – the annexation of
Crimea, countersanctions against Western food products, and the like –
are being made by a narrow group of individuals with little if any prior
deliberation or consideration of possible consequences.
In contrast with the 2000s, the Putin regime is far more ideological.
Its past ideological unobtrusiveness is being replaced by propagandist
harshness and aggression, primarily directed at the West and its ‘agents.’
The new ideological supply – the neo-Soviet project to eradicate (liberal)
dissent by resorting to great-power aspirations, isolationism, and quasi-
traditionalism –meets the demand of the vast majority of people today
and forms the nationwide consensus based on the broadest possible
support for the leader and his ‘besieged fortress’ regime. The regime’s
‘ideology’ requires no doctrine, and the regime itself does not seek to
deeply indoctrinate its subjects. Rather, it finds it important to discredit
any ideas and values that may cast doubt on the supreme value of the state
and the legitimacy of its top leadership. Unlike the Soviet mobilization,
mobilization under Putin is negative and offers people no overarching
future objective which would justify their current or future privation.
The 2014 strategic choice was never discussed on the national level;
its implications, even if analyzed, turned out to be deeper and more
serious – especially over the long term – than the leadership imagined
them to be in the spring of 2014. As a result, choices at several import-
ant bifurcation points have been made. Although some blurriness with
respect to each of these points still remains, and some backward or
forward shifts are possible, the changes listed below seem irreversible.
The regime has ventured beyond the point of no return, and so has the
country it controls.
DOI: 10.1057/9781137548115.0011
Conclusions 139
1. Liberal economic and political reforms vs ‘besieged fortress’

mobilizational model
2. Hybrid regime vs authoritarian regime (elite vs nomenklatura)
3. Empire (inside and outside) vs Russian nation state
4. Soft power vs hard power
5. West vs a pivot to Asia
Liberal economic and political reforms vs ‘besieged

fortress’ mobilizational model
Bureaucratic inertia is at work where technological liberal reforms were

not yet suspended by an administrative decree: government agencies
continue to carry out their past assignments even if they are at odds with
the current political agenda. For instance, efforts to improve national
‘doing business’ rankings as per previously developed roadmaps endure,
although attracting foreign business and investments was arbitrarily
removed from the agenda.
Top-ranking officials still periodically refer to their commitment to
economic liberalism;1 in his address to the Federal Assembly Putin spoke
of supporting business, promising to soften the audit regime and refrain
from raising taxes in the next few years.2 But these plans contradict
economic realities and government economic policy (prohibitively high
Central Bank interest rates, creeping renationalization, greater central-
ization and micromanagement).
While the economic bloc is still headed by liberal technocrats, the
balance of political forces has significantly shifted in favor of siloviki
(security and law-enforcement). Liberals no longer formulate policies;
their current role is to minimize negative economic consequences of
decisions made in other spheres.
Mobilization
The political course is determined by the increasingly powerful siloviki-

the Investigative Committee, Federal Security Service, Prosecutor
General’s Office, Interior Ministry and the Armed Forces – as well as
former siloviki that make up Putin’s inner circle. This course is reflected
DOI: 10.1057/9781137548115.0011
in the federal budget through defense and security spending increases at

the expense of investment and social spending.
Counter-sanctions – bans on food imports from the countries that
support sanctions against Russia – went into effect in the summer of
2014. Bashneft – one of the last remaining private oil companies – was
taken over by the state in the fall. In December, the government first
collapsed the ruble to accommodate big business, effectively assigning
corporate debt to the public, and then directed state-run companies to
share with the state their currency revenues.3 Mobilizational policy also
manifests itself through an increased tax burden that primarily affects the
interests of relatively affluent middle-income groups, which are increas-
ingly saddled with paying the costs of government social programs and
taking care of the paternalistic majority.
A number of steps to stem foreign influence were taken.
Non-commercial organizations receiving foreign grants are being
declared ‘foreign agents’ and subjected to discriminatory treatment that
restricts their operations.
Putin introduced the term ‘national traitor,’ which is now widely used
to discredit disloyal citizens, particularly those guided by Western liberal
values.
Various categories of state employees – up to 4 million people, accord-
ing to some estimates4 – are effectively prohibited from traveling abroad.
Federal and municipal employees, as well as the employees of state-run
enterprises, are regularly mobilized to participate in mass political activ-
ities – ranging from government-sponsored rallies, dubbed ‘Putings’, to
vacationing in Crimea.
In contrast to the previous decade, the control over information space
has been drastically tightened. The media has become a significantly
more important political resource for the regime. While in the 2000s
this resource was being used sporadically and situationally, particu-
larly during election campaigns to create the perception of a lack of
alternatives to Putin’s rule, today all national television channels are
at the complete disposal of the state propaganda machine. People are
being bombarded with a barrage of information aimed at securing their
maximal loyalty to the regime and shutting out all alternative sources of
influence. The remnants of autonomous media coverage are constantly
pressured and effectively forced out of public space. Pressuring the
remaining independent public venues, which may ultimately result in
their closing, along with consistent attempts to restrict Internet freedom
DOI: 10.1057/9781137548115.0011
Conclusions 141
and create a uniform educational system, are seeking to ensure public

mobilization and tighter control over society with a likely escalation of
repressive measures.
State expansion into various spheres of public life and citizens’ private
life can come directly from the state in its attempts to regulate culture,
arts, morals and education, especially teaching history. It can also result
from the deliberate incitement of the majority against the ‘renegades’
– homosexuals, Westerners, liberals, those ‘disrespecting’ the Russian
Orthodox Church and ‘traditional values.’ At the same time, the state
and its servants/political elite lack moral authority, therefore imposing
the ‘right,’ quasi-traditionalist norms is bound to encroach on civil rights
and the rights of minorities.
Hybrid regime vs authoritarian regime (elite vs

nomenklatura)
The regime partly retains its hybrid characteristics. Vladimir Putin still
meets human rights activists and the Council on Human Rights and
speaks of his interest in human rights advocacy. He even expresses will-
ingness to revise certain paragraphs in the ‘foreign agents’ law, which
hinders human rights activists in their work. Some NGOs that were
previously receiving foreign grants are now getting government funding.
There are still some media outlets (although their number dwindled in
2014) that can be relatively independent in their editorial policy. Despite
mounting restrictions, relative freedom of expression still exists on the
Internet. As of the end of 2014, the Echo of Moscow – a liberal radio station
with a relatively large and loyal listening audience – managed to retain
its editor-in-chief in the face of pressure on the part of Gazprom, its
main owner. However, the situation highlighted the vulnerable position
Echo and other outlets find themselves in when faced with government
actions.
These lingering traits of hybrid regime do not change the overall
trend for the steady increase in authoritarianism. In 2013, opposition
candidates were still allowed to participate in the election campaign in
certain localities (for instance, during the mayoral race in Moscow).
Subsequently, such freedoms were no longer permitted.
The system has grown more personalized – Putin’s power is
unchecked; he, his inner circle, and the structures accountable directly
DOI: 10.1057/9781137548115.0011
to him (the Security Council, Presidential Administration, etc.) have

gained additional powers. The role of formal institutions has drastically
diminished after Putin’s departure from the post of prime minister. The
key control mechanisms are either outside of government scope (for
instance, they are with Igor Sechin and the President’s Commission
for the Strategic Development of the Fuel and Energy Complex and
Environmental Safety), or the government is formally in charge, but the
power is concentrated in the hands of ‘Putin oligarch’ appointees. The
quasi-institution of presidential envoys in different spheres has continued
to gain strength: the Kovalchuk brothers are in charge of business, the
Russian Academy of Sciences, and media; Yevgeny Shkolov monitors the
force structures; Igor Sechin is responsible for the oil sector. In addition
to the presidential envoys in the various sectors of the economy, there are
nine more envoys responsible for the different parts of the country. More
police and special service generals were appointed presidential envoys to
federal districts in 2014.5
Siloviki structures gain more and more power but are not accountable
to any external organs. In this context, ‘managed’ conflicts between indi-
vidual force structures play the role of quasi-checks and balances that
allow control of the force structure bloc.6
Political parties, including United Russia, local government, and elec-
tions are also playing a less important role now. At the same time, the
role of presidential administration has been growing and now partly
resembles that of the Central Committee of the Communist Party at the
time of the Soviet Union. It has been given unbridled powers comple-
mented by the lack of accountability and personal responsibility. After
Putin became president in 2012, key ministers from his former cabinet
followed him, joining the Kremlin administration. The presidential
administration now has an anti-corruption task force, controlling all
bureaucracy in the country, and the center that coordinates siloviki
structures and formulates all the key strategic decisions. The United
People’s Front, which has received an official ‘public movement’ status
only at the end of 2014, is also playing a more prominent role now as a
kind of substitute of United Russia.
Elections are subject to tight administrative controls; the Kremlin’s
favored candidates are legitimated ‘from above’ – by Vladimir Putin
rather than through elections. Fewer elections are conducted; mayoral
elections in most large cities have been eliminated, and the remaining
ones are being defunded.
DOI: 10.1057/9781137548115.0011
Conclusions 143
The Federal Security Service (FSB), the Ministry of Internal Affairs

(MVD), and the Federal Migration Service (FMS) continue to receive
additional police privileges in dealing with both the public and business.
The control over Internet use is being tightened. Russian citizens now
have to declare their dual citizenships or foreign residency permits and
foreign asset activity under criminal penalty. Civil rights activists are
being pressured, intimidated and publicly discredited. Siloviki structures
play an increasingly important role, while the role of the courts dimin-
ishes, and the law itself is being discredited.
A host of new norms that restrict Internet and press freedom were
passed into law. For instance, foreign ownership of media outlets, which
previously secured at least a degree of editorial independence, has now
been limited to a maximum stake of 20 percent.
Starting from the second half of 2013, the state and businessmen close
to Putin have significantly increased their control of the media. Yuri
Kovalchuk has concentrated much greater media assets in his hands than
the oligarchs of the 1990s ever did. Concentrating assets in the hands
of regime supporters makes editorial policy changes possible, sparing
journalists from direct political pressure. The owners that are still trying
to maintain their independence are vulnerable to economic, admin-
istrative and other forms of pressure from the authorities. Among the
grave changes that started in December 2013 is the replacement of the
RIAN news agency with the Russia Today propaganda machine headed by
Dmitry Kiselev, one of the Kremlin’s most aggressive propagandists. As
a result of pressure from the regime, the Dozhd TV channel is struggling
for survival. A number of political websites were blocked, while some
other had their editors-in-chief replaced. Lenta.ru employees resigned in
protest over the firing of their editor-in-chief; some of them and their
former boss established a new web site medusa.io in Riga, Latvia (it is
the first publication established by political emigres since the Soviet
era). This massive offensive against the media inevitably results in self-
censorship by journalists and editors.
The pressure on NGOs intensified in 2012 after the law on foreign
agents was passed. New restrictions were introduced in 2014: govern-
ment bodies can now unilaterally decide which NGOs should be labeled
as ‘foreign agents’, and the pressure started to translate into driving the
unwanted NGOs out of the public space. In effect, any type of inde-
pendent financing – both from foreign sources and businesses – is being
prohibited unless it is sanctioned by the regime. Another vector of the
DOI: 10.1057/9781137548115.0011
regime offensive is directed at public accountability structures, such

as the Presidential Council on Civil Society Development and Human
Rights and the Public Council at the Federal Penitentiary Service,
which are packed by the Kremlin to ensure a loyal majority. Such steps
strengthen corporatism, removing the few remaining mechanisms of the
regime’s accountability to the public.
The judicial branch has also become significantly weaker as the role
of the courts declines, and the law itself is discredited. The 2013–14
judicial reform effectively made the courts completely dependent on
the Kremlin. The Higher Arbitration Court, which until recently was
considered a relatively independent institution of high professional
standards, has been subsumed by the Supreme Court, which is much
more dependent on the executive branch. The Constitutional Court was
‘exiled’ to St. Petersburg, and the seriously reformed Supreme Court
followed suit. Siloviki structures were granted more extrajudicial rights;
the practice of summary trials was expanded, while the number of jury
trials was reduced. Blatant political interference in court proceedings
consistently devalues the legal authority of the judicial branch. Courts
are also constantly being used as a means of intimidation and suppres-
sion of regime critics and opponents.
Empire (inside and outside) vs Russian nation state
The official rhetoric, primarily President Putin’s pronouncements,

retains a Soviet-style emphasis on Russia’s multinational identity, respect
for ethnic equality and tolerance of all traditional religious confessions.
While the ‘state-forming’ (gosudarstvoobrazuyushchy) role of the ethnic
Russians is emphasized, it has not yet been reflected in legislation. The
state declares its commitment to establishing and expanding the Eurasian
Union, which is to incorporate Kyrgyzstan in addition to Armenia (the
inclusion of Uzbekistan is also mentioned). The Izborsk Club, which
bands together influential conservative members of the Putin elite in
Moscow and regions, as well as such public ideologists as Alexander
Prokhanov and Alexander Dugin, consistently promotes Russia’s imper-
ial identity.
The regime escalated its nationalistic rhetoric following the 2014 annex-
ation of Crimea. The ideological stamp ‘divided nation’, which was used
in Putin’s speech on Crimea, is a clear illustration of this development.
DOI: 10.1057/9781137548115.0011
Conclusions 145
Although protecting ‘our people’ from the ‘fascists’ in Ukraine – the key
theme in the media coverage of the Ukraine events – ostensibly remains
an element of political rather than ethnic confrontation, it is commonly
interpreted as protecting ethnic Russians. Government documents and
official speeches increasingly feature the word ‘Russian’ (Russky) that it
applies to the Russian ethnic identity.
Russian involvement in the Ukraine crisis has weakened the stand-
ing of the Russian Orthodox Church among the Orthodox believers
in Ukraine, effectively downgrading its status to that of the Russian
Orthodox Church (of Russia). Such emphasis on ethnicity further
complements the traditionally anti-Western and xenophobic position
of the Church. The World Russian People’s Council asserts ‘Russian’
(Russky) identity and even attempts to define it.7
While the state ideology, which now resembles the system of situational
defense from any ideological challenge, remains fuzzy and eclectic, the
strengthening of its nationalist component is obvious. Conservative state
nationalism is gradually becoming an important ideological resource.
But while ‘mainstream’ nationalism is statist, the racist strain of nation-
alism is also present among the Russian public. This type of national-
ism, linked to the fear of labor migrants from Central Asia and North
Caucasus natives, has caused numerous incidents of ethnic violence.
Although the regime perceives ‘racial’ violence as a threat, reliance on
statist nationalism risks provoking ethnic hostilities.
Political developments also steer Putin and his regime toward the
ethnic/ethnocultural basis for nation-building even as Putin still supports
the ‘friendship of peoples’ and ethnic equality, at least in his pronounce-
ments. Ethnonationalism manifests itself in some of the policies, such
as developing simplified procedures for granting citizenship to ethnic
Russians, tightening the rules for labor migration from Ukraine, etc.
The prospects for creating a Eurasian Union which would fit into the
imperial nation-building model are rather slim following the annexation
of Crimea and in light of customs and other disputes with Belarus and
Kazakhstan.
Soft power vs hard power
The examples of soft power include: the annual summits and activ-
ity of the Valdai Club; the Russia Today TV channel and news agency
DOI: 10.1057/9781137548115.0011
and Sputnik radio broadcasts for foreign audiences that includes

viewers and listeners in the former Soviet countries;8 work done by
Rossotrudnichestvo9 and the Russkiy Mir (Russian Realm) Foundation;
support of, and contacts with, right-wing political parties in Europe;
financing the construction of the Russian Spiritual and Cultural Center
in Paris; and other projects.
The 2014 Sochi Olympics was a showcase of peaceful Russia, open
to constructive cooperation. The regime still sends some positive
signals to the West and world public opinion. For instance, it does not
withdraw from cooperation with OSCE, the Council of Europe, the
Parliamentary Assembly of the Council of Europe and other inter-
national organizations.
The drift toward ‘hard power’ is primarily related to the annexation
of Crimea, Russian support for the insurgents in the east of Ukraine
and military exercises at the borders. Besides, the state is far more eager
to demonstrate its military might, for instance, with flights over other
countries’ territory.
The new military doctrine, adopted at the very end of 2014,10 formally
validates the idea of the value-driven conflict between the West and
Russia. It erases the border between external and internal military
threats, thus ‘the work that seeks to influence people by way of infor-
mation ... directed at subverting spiritual and patriotic traditions in the
sphere of protecting the Fatherland’ is considered an internal threat.
This doctrine effectively legalizes the hybrid war that the Putin regime is
waging in Ukraine.
The shift from soft to hard power occurred inside the country as
well. As the economic situation rapidly deteriorates, the state effectively
expropriates large asset holdings that have so far remained privately
owned. In 2014, Bashneft was renationalized. Its former owner Vladimir
Yevtushenkov spent a few months under house arrest; a few of his
employees were also detained. It is quite likely that the Bashneft renation-
alization will not be the last in the series of similar events.
Dozens of mayors across the country (in Yaroslavl, Yekaterinburg,
Smolensk, Bratsk and other cities) and their team members fell victim
to trumped-up charges. In most cases, their only fault is being elected
against the Kremlin’s and its party’s will.
Criminal prosecution and arrests are used as a means of internal
struggle within the force structure elites. In 2014, around thirty senior
officers and two Ministry of Interior generals were arrested (one of them
DOI: 10.1057/9781137548115.0011
Conclusions 147
committed suicide). Three regional Ministry of Interior chiefs were

arrested (one of them also shot himself).11
Instances of using hard power include the above-mentioned ban on
foreign travel for state employees, as well as harsh pressure (fines and
ultimately closings) against the NGOs that are not yet controlled by the
state (Golos (election monitoring), Memorial (commemoration of the
victims of Soviet repression; human rights), Moscow School of Civic
Education, Soldiers’ Mothers (soldiers rights)).
The Bolotnaya Square case, in which 6 May 2012 protest participants
were charged, resulted in prison terms of up to four and half years
for ordinary protest participants, not the leading figures in the liberal
community that played the key role in organizing the rallies. Sergei
Udaltsov, until recently the leader of left-wing opposition, and his asso-
ciate Leonid Razvozzhayev were sentenced to four and a half years in
prison.
Alexei Navalny, the Kremlin’s and Putin’s most active political oppon-
ent, has been facing trumped-up criminal charges, trials, months-long
house arrest and, starting in December 2014, moral pressure as well.
A prison sentence imposed on his brother effectively turns him into a
hostage, whose fate will rest on Alexei’s actions. A similar ‘hostage taking’
practice had been used by authorities in the past, but a family member
finds himself in the role of a hostage for the first time.
Large teams of investigators are being assembled to prosecute polit-
ical undesirables; a priori absurd charges are brought, and verdicts are
rubber-stamped. It is premature to claim that the regime has turned to
mass repressions, but it is gradually accumulating relevant experience
and forming mechanisms that are making this turn more likely.
West vs a pivot to Asia
Until December 2014, the Kremlin continued to press for the construc-
tion of the South Stream, and even now, having announced its withdrawal
from the project, apparently did not abandon the issue altogether. At the
end of the year, it was officially announced that the asset swap between
Gazprom and the German Wintershall holding would not be completed.
The swap was to become Gazprom’s largest European deal, giving it
control over gas trading and storage in Germany and a share in the gas
and oil exploration of the North Sea fields. ExxonMobil and Statoil left
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the Russian oil sector because of sanctions, and service companies are
trying to compensate for their absence by attracting Chinese and Indian
businesses. While the decision to turn to Asia has been made, it cannot
be implemented in an instant, especially in the sphere of commerce.
However, as was mentioned above, even outside of economic relations
and energy supply, Russia continues to demonstrate its respect for OSCE
and the Council of Europe and even its occasional commitment to
European values.
Nevertheless, on the whole, Russia’s relations with the West turned
confrontational in 2014, prompting the reorientation of Russian
foreign policy toward Asia, primarily China. Throughout 2014, Russia
accelerated its 10-year-long negotiations with China. As a result, the
contract to deliver gas via the Power of Siberia and Altai pipelines was
signed. Starting in 2019, Russia is also planning to divert its Western
Siberia energy resources from Europe and redirect them eastward. In
December, Putin announced that Russia would abandon the South
Stream project. Russia withdrew from a whole host of joint projects,
from space exploration and nuclear cooperation to simplifying the
visa regime. The powerful barrage of anti-Western propaganda is
accompanied by assurances that Russia is not isolated. The propaganda
machine emphasizes Russia’s relations with China (one of the friendli-
est countries to Russia, in the public perception), as well as India and
other BRICS countries. Putin’s foreign visits have shifted to the east,
and Russia is strengthening its ties with Turkey. Russia’s policy in the
post-Soviet space, which had until recently been informed by the
prospects of creating the Eurasian Union as a counterbalance to the
EU, has run into considerable obstacles: the annexation of Crimea and
the use of hard power vis-à-vis Ukraine have made its membership in
the Eurasian Union impossible and complicated relations with Russia’s
closest allies in the post-Soviet space. Besides, deepening economic
crisis weakens Russia’s standings vis-a-vis those allies and exacerbates
its dependence on China in the long run. The loss of Western invest-
ments forces Russia to be more accommodating of its Chinese partners
and investors. Foregoing the benefits of cooperation with the West and
turning to the east was to a large extent determined by the dramatic
developments in Ukraine in the first half of 2014 and Russia’s no less
dramatic reaction to them – primarily, the annexation of Crimea.
However, internal reasons – both economic and political – are as
important. The logic of the country’s development was prompting the
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Conclusions 149
Russian leadership to make this turn. Russia had been drifting from a
relatively open hybrid regime to an authoritarian one; the mistrust for
the West, primarily the United States, had been on the rise, and so had
the perception that the West and its influence in the world was declin-
ing. The impending change in the global power alignment ostensibly
gave Russia a chance to strengthen its positions by refusing to play by
the old rules of the game, which were based on American hegemony.
However, as of the end of 2014, Russia had apparently overestimated
both the extent of Western decline and its own potential to become the
new alternative power hub – it simply lacks the economic resources
and new ideas for modern development to accomplish this goal.
* * *
Evidently, 2014 did not just drastically narrow the range of possible
developmental trajectories for Russia, but also set the country on a dead-
end course which will have to be reversed sooner or later. The return will
be long and arduous. After all, the 2014 de-modernization is not merely
a rejection of the modernization scenario and the elimination of such an
option, at least for a time. It is actually the dismantling of past achieve-
ments that affected four key areas in 2014:
1. The judicial system. The weakening of the higher courts and
expansion of extra-judicial persecution have undone years of efforts
to strengthen judicial independence, humanize the justice system
and raise public legal awareness.
2. Elections. By 2014, the elections were completely eviscerated. The
dismantling of mayoral elections in large cities, which still had
some remnants of political competition, virtually completes the
process of eliminating elections as an engine for political reforms,
ensuring its idle run.
3. Local self-government. Eliminating mayoral elections in large cities
and prosecuting mayors on various grounds effectively leads to the
liquidation of local self-government on its upper level and extends
the ‘power vertical’ down to the lower rungs of power. The virtual
demolition of local governance deprives grassroots democracy of
its base and shuts the public out of civic life.
4. Society. The adverse effects on society are particularly strong. In
this instance, not only the mechanisms, but the benefit of past
experience and a resolve to proceed toward modernization have
DOI: 10.1057/9781137548115.0011
been lost. Repairing the damage and returning to the state of 2013
will now require many years.
SWOT analysis for the 2014 transformation of

the regime
STRENGTHS:
Public and elite consolidation around the annexation of Crimea and
the victorious Putin; the resulting new legitimacy allows the post-
ponement of the political crisis if not its resolution.
Positioning Russia as an alternative global center of power.
Successful marginalization of internal opponents and discrediting
the West in public perception.
WEAKNESSES:
Hard confrontation with the West that led to sanctions and serious
economic losses and substantially limited Russia’s opportunities
(strict limits and lack of freedom to maneuver); end of the modern-
ization scenario and start of the de-modernization course.
Dismantling of the old rules of the game under the conditions of
Russia’s relative and increasing weakness.
Sharp and protracted deterioration in Russia’s relations with
Ukraine, Europe and the West as a whole.
Deteriorating internal problems as a result of straining resources
outside the country and the acceleration of political time.
Social degradation: legal nihilism and preference for ‘might makes
right’ approach; over 20 years of ‘wandering in the desert’ wasted.
Elite degradation in connection with the annexation of Crimea;
greater elite dependence on the leader as opposed to the people;
their negative selection.
OPPORTUNITIES:
The retention of the regime of Putin’s oligarchy and the monopoly
on economic and political power.
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Conclusions 151
Positive exit (the acquisition of Crimea) from the ‘declining’

Western coalition and minimization of losses from the changes in
the world order.
Strengthened positions as a result of building a coalition with the
next-door neighbors and China/India under the conditions of an
emerging multi-polar world.
THREATS:
Sharp escalation of the economic crisis as a result of confrontation
with the West and the closure of access to financial markets against
the backdrop of declining resource revenues.
Rapid depletion of resources that leads to the weakening of
centralized state; growing public discontent and a threat of public
protest; weakened control over the regions and the prospect of the
disintegration of Russia as centrifugal forces develop.
Getting involved in a string of exhausting confrontations with the
significantly stronger West and growing dependence on China.
Risk of crisis escalation as a result of a combination of three trad-
itional threats: a) critical decline in administrative effectiveness; b)
large-scale technological disaster and c) explosion in the Caucasus.
Growth of nationalist sentiments – both Russian and anti-Rus-
sian – with the prospects of sharp confrontation; Ramzan Kadyrov
as a threat.
Chaos and ‘political desert’ effect in the event Vladimir Putin’s
system-bearing supreme-leader approval rating falls.
Destabilization resulting from escalating conflicts within the elites.
Notes
1 The Russian Government (2014) In Conversation with Dmitry Medvedev:
Interview with Five Television Channels, http://government.ru/en/news/16036/
2 President of Russia (2014) Presidential Address to the Federal Assembly, http://
eng.kremlin.ru/transcripts/23341
3 D. Skorobogatko, K. Melnikov. E. Kovalyova, S. Dementieva, Y. Barsukov,
A. Dzhumaylo (2014) ‘The Foreign Exchange Market Will Be Cured of
Arrhythmias’, Kommersant, 23 December 2014.
4 Russia Today (2014) Media: Employees of State-Owned Companies Encouraged to
Abandon Overseas Travel, http://russian.rt.com/article/56420
DOI: 10.1057/9781137548115.0011
5 Vice Admiral Oleg Belavintsev, known for his KGB background, was
appointed the envoy to the Crimean Federal District (FD) in March 2014;
Lieutenant General Sergey Melnikov of Internal Troops became the head of
the North Caucasus FD in May; the Former Commander of MVD Internal
Troops General Nikolay Rogozhkin was put in charge of the Siberian
FD in May. In addition to the previously appointed envoys, FSB Colonel
General Vladimir Bulavin (North-Western FD, March 2013) and the former
Prosecutor General Vladimir Ustinov (Southern FD, 2008); generals
make up the majority of presidential envoys, just as 14 years ago when this
institution was introduced.
6 As an illustration, in the course of 2014, the FSB and the Investigative
Committee actively promoted the case against the Economic Security
Department of the Ministry of Interior (the so-called Sugrobov case): S.
Reiter, I. Golunov (2014) Kazus Sugrobova, http://daily.rbc.ru/special/politi
cs/01/09/2014/542535ffcbb20fea6008978c#xtor=AL-[internal_traffic]--[rbc.
ru]-[main_body]-[item_13]. The ever-expanding case featured dozens of
arrested officers and generals, incredulous accusations, and the mysterious
suicide of one of the main defendants, all of which conjured up associations
with Stalin’s purges of the 1930s. Public conflicts between the FSB and the
Ministry of Interior are also happening in the regions. The Interior chief
in the Sakhalin Region Vladislav Belotserkovsky was arrested on charges
of unauthorized surveillance of FSB officers in March 2014. The Ivanovo
region Interior chief General Aleksandr Nikitin, who was a ‘guarantor’ in
the Sugrobov case, was arrested in December. At the same time, the siloviki
structures are becoming ever stronger and more powerful: the Federal
Migration Service has essentially become a small-size copy of the Ministry
of Interior, the ‘Interior-2’ of sorts; after the long-time Federal Protective
Service chief Victor Zolotov assumed control over the Interior Troops, there
have been persistent rumors that they are going to become the National
Guard tasked with maintaining order in the country.
7 Moscow Patriarchate (2014) Declaration of the Russian Identity, http://www.
patriarchia.ru/db/text/508347.html
8 A. Luhn (2015) ‘Ex-Soviet Countries on Front Line of Russia’s Media War
with the West’, The Guardian, 6 January 2015, http://www.theguardian.
com/world/2015/jan/06/-sp-ex-soviet-countries-front-line-russia-media-
propaganda-war-west
9 The subsection of the state Foreign Policy program entitled ‘Conducting
work in the spheres of humanitarian cooperation and facilitation of
international development’ is slated to receive 2–2.5 billion rubles in annual
funding until 2020. State Program of the Russian Federation ‘Foreign-Policy
Activities’ (2014), http://www.mid.ru/bdomp/activity.nsf/0/70C680302CAF0
CC744257B4000450BF3
DOI: 10.1057/9781137548115.0011
Conclusions 153
10 Military Doctrine of the Russian Federation (2014), Rossiyskaya Gazeta, 30

December 2014, http://www.rg.ru/2014/12/30/doktrina-dok.html
11 There are different explanations for repressions against the Interior staff.
Among them are a struggle for ‘protection’ business among the special
services, the FSB payback for a number of sensitive losses, and the offensive
against Dmitry Medvedev appointees. In any event, such a lengthy and
publicly scandalous brawl between the special services has never been seen
before under Putin’s watch.
Bibliography
A. Luhn (2015) ‘Ex-Soviet Countries on Front Line of Russia’s Media

War with the West’, The Guardian, 6 January 2015, http://www.
theguardian.com/world/2015/jan/06/-sp-ex-soviet-countries-front-
line-russia-media-propaganda-war-west
Military Doctrine of the Russian Federation (2014), Rossiyskaya Gazeta,
30 December 2014, http://www.rg.ru/2014/12/30/doktrina-dok.html
Moscow Patriarchate (2014) Declaration of the Russian Identity, http://
www.patriarchia.ru/db/text/508347.html
President of Russia (2014) Presidential Address to the Federal Assembly,
S. Reiter, I. Golunov (2014) Kazus Sugrobova, http://daily.rbc.ru/
special/politics/01/09/2014/542535ffcbb20fea6008978c#xtor=A
L-[internal_traffic]--[rbc.ru]-[main_body]-[item_13]
Russia Today (2014) Media: Employees of State-Owned Companies
Encouraged to Abandon Overseas Travel, http://russian.rt.com/
article/56420
D. Skorobogatko, K. Melnikov. E. Kovalyova, S. Dementieva, Y.
Barsukov, A. Dzhumaylo (2014) ‘The Foreign Exchange Market Will
Be Cured of Arrhythmias’, Kommersant, 23 December 2014.
State Program of the Russian Federation ‘Foreign-Policy Activities’
(2014), http://www.mid.ru/bdomp/activity.nsf/0/70C680302CAF0C
C744257B4000450BF3
The Russian Government (2014) In Conversation with Dmitry
Medvedev: Interview with Five Television Channels, http://
government.ru/en/news/16036/
DOI: 10.1057/9781137548115.0011
Index
All–Russia People’s Front/ ‘Crimean consensus’, 9, 15,
United People’s Front, 17–18, 21, 23
15–17, 142 ‘color revolutions’, perception
‘angry urbanites’, 17, 19 of, 13, 71
annexation of Crimea, SWOT conservative (re)consolidation,
analysis of, 74–75 92
anti-modernization, 6, 12–13, ‘controlled chaos’, 72
21–22, 102 courts’ dependence on the
anti-western foreign policy, 72 Kremlin, 144
see also West, confrontation Crimea, financing of, 56
with
anti-western perceptions/ decentralization, need for, 18,
rhetoric/campaign, 99, 115, 57, 59
118–19, 121–22, 124 decision-making, 21–22, 138
Arab spring, 72 devaluation of the ruble, 28,
Arctic shelf, 37, 45 30, 46
Asian markets, shift to, 40 devaluation-inflation spiral, 39
athoritarianism, 8–9, 13, 21, 54, dirigisme in economic policy,
105, 137 34
autonomous groups, disengagement from Europe, 71
suppression of, 91 disintegration, risk of, 54,
57–58, 65
banking system, 32, 39, 41 ‘dominant party’, ‘regime party’,
Bashneft, 35, 140, 146 15–16, 18
Donbass, prospects of military
capital flight from Russia, 41 conflict in, 78–79
center – regions, 18, 50–67 Dozhd TV, 20, 143
center – periphery model Dubin, Boris, 5, 106
(‘Four Russias’), 60–66 ‘Dutch disease’, 31
Central Bank of Russia (CBR),
32, 37, 46 Eastern regions, 55, 66
China, asymmetric alliance Echo of Moscow, 141
with, 55, 66, 80, 148 economic crisis (2008–09),
civil society, 20, 24 31–32
154 DOI: 10.1057/9781137548115.0012

Index 155
elections labor force, 39

administrative control of, 60, 142, law-enforcement system, 42
149 legitimacy of Russian regime, 9, 11–12,
Duma (2016), 16,60 21, 102
federal, 14–16, 43 Levada Center’s polls, 10–11, 88–89,
gubernatorial, 14, 18, 53, 58, 60 94–96
mayoral and municipal, 19, 53–54 Levada, Yuri, 87
presidential (2018), 12, 16, 60 Levitin, Igor, 34
regional legislative, 14–15 Lybia crisis, 72
elites, 23–24, 57, 137, 141–44, 146–47
regional, degradation of, 58, 66 May decrees of 2011 (Putin’s third term
external debt, 31–32 socio-economic program), 9, 18,
38, 52
‘falsifying history’, campaign against, 116 media, control over/restrictions of
Far East, 17, 50, 55 press freedom, 140, 142–43;
‘fifth column’, 20, 25, 65, 122, 128 see also TV national channels
Foreign Investments Commission, 35 Medvedev, Dmitri, 71, 88
‘foreign-agents’ legislation, 20, 101, 141, military doctrine, 146
143 Moscow, 54, 64, 66
Moscow region, 19–20
Gazprom, 35, 147 municipal government, 19, 149
Golikova, Tatiana, 34
gross domestic product (GDP), 32, 34 Nashi, pro-Kremlin youth movement,
government expansion into public, 113
private life, 141 nationalism, 17, 65, 144–45
governors, 18–19, 53 national identity, 96, 99, 102, 124–26,
Great Patriotic war, victory day 144–45
celebration, 116, 120 National Wealth Fund, 37, 59
Gref, German, 34 Navalny, Alexei, 17, 116, 122, 147
neo-corporate system, 14, 18, 22
history textbook/unified historical ‘New Cold War’, 29
discourse, 115, 122, 123 ‘new oligarchs’, 42, 142
Nicholas I, 8
inflation, 28, 38–41, 47 nongovernment organizations
Internet, control over, 143 (NGOs), 20–21, 143, 147
investments, 35, 39, 43, 50, 54 ‘nomenclature’ system, 138, 144
‘non-intrusive state’, 115
judiciary system, 42, 144, 149 North Caucasus, 56, 58–61, 65–66
‘the king of the hill’ model, 22 nostalgia for Soviet past, 96
Kovalchuk brothers, 142 O’Donnell, Guillermo, 21

Kremlin
new course of, 2, 9 ‘partnership for modernization’, 71
perception by, of the decline of the party system, the degeneration of,
West, 3, 73, 81, 140, 143 13–14, 18
Kudrin, Alexei, 34, 38, 66 personalized regime, 2, 24, 137, 141–42
DOI: 10.1057/9781137548115.0012
156 Index
political regime monetization of benefits (2004–05),

agenda of, 14, 39 33–34
inefficiency of, 10 municipal, 19
political parties, 13–17, 142 political, 12–14, 16, 40
Civic Platform, 15 regime change, support for, 11, 18
Communist Party, 15, 17 regional budgets’ destabilization, 52–53
Green Alliance, 15 repressions, 22–23
Just Russia, 15 Rotenberg brothers, 35
Liberal Democrats, 17 rule by law, 34
opposition parties, 13–14 Russia Today, 143, 145
Rodina, 17 Russia–Turkey partnership, 81
United Russia, 14–16, 113, 142 ‘Russian economic miracle’, 29–31
Yabloko, 17 Russian Orthodox Church, 93, 144
political system, development/ Russia’s position in multi-polar system,
transformation of, 12, 137–50 73
power institutions, post-Soviet, 91,
139–44 Saint Petersburg, 54, 64, 66
see also siloviki, special services Sakhalin, 55
power vertical, 9, 16, 18, 38, 149 sanctions
privatization, 34, 42 Russia’s counter-sanctions, 47, 54, 138
Pro & Contra journal, 4 Western against Russia, 40–41,
Prokhorov, Mikhail, 17 44–47, 54, 75
propaganda, post-Crimea, 90, 102 Sechin, Igor, 142
property rights protection, 34–35, 43, self-isolation, 28, 40–42
48 Shkolov, Yevgeny, 142
protests (2011–12), 13, 17, 21, 87–88, 101, Siberia, 36–37, 55, 58, 66–67
120, 147 siloviki, 139, 142–44, 152
Przeworski, Adam, 21 see also power institutions, special
Public Opinion Foundation polls, 15 services
public perceptions Sochi Olympics, 11, 56, 87, 146
national humiliation, feeling of, 98 social conservatism, 122
of Russia as a ‘besieged fortress’, 97, social contract between regime and
112, 138–39 society, 51–52
of Russia’s great-power status, 96 social mobilization, 8, 12, 65, 105, 138
view of political class, 94–95 society, post-Crimea, 17
Putin, Vladimir ‘soft power’, 125, 129, 145
approval rating of, 11, 15, 57, 88 South Stream, 147–48
economic doctrine of, 33–35 ‘sovereign democracy’, 20, 113
irreversible choices of, 138–50 special services, domination of in
miscalculation of, 3, 82 government, 92–93
perception of international law, 3, 73 see also power institutions, siloviki
strategy in Ukrainian crisis, 3, 74 stagnation, 40–41, 51
Stalin, perception of, 114, 117
reforms State Duma, 13–15
institutional, 10, 40 Syrian crisis, Russia’s success in, 72
DOI: 10.1057/9781137548115.0012
Index 157
Tatarstan, 54, 58, 65 West, confrontation with 7–9, 13, 20,

Timchenko, Gennadi, 35 23, 40, 149
Timchenko, Vyacheslav, 19 see also anti-western foreign policy
TV national channels, control over, 92,
114, 120, 121, 140 Yaroslavl region, 15, 53
Yevtushenkov, Vladimir, 146
Ukraine, Russia’s policy in, 76, 77 Yukos affair, 30, 35, 92
Ural, 58
U.S.–Russia ‘reset’, 71 Zorkin, Valeri, 101
DOI: 10.1057/9781137548115.0012

(Maria Lipman, Nikolay Petrov (Eds.) ) The State of (B-Ok - Xyz)

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‘This brilliant – and concise – book by leading experts answers the two

Thomas Kaiserfeld: Beyond Innovation: Technology, Institution and Change as Categories

ISBN 978-1-349-57820-7 ISBN 978-1-137-54811-5 (eBook)

1.1 Evolution of bureaucratic authoritarianism

5.1 What are your feelings about the decision to

DOI: 10.1057/9781137548115.0003 vii

This book is a new volume produced by the international

transformation, the event has changed Russia’s geopolitics, its economy,

absolutely lost freedom to maneuver. After the annexation of Crimea –

Or before Putin manages to secure his gains, is Russia in for political

contributed to the production of our volume, and especially, to Jemima

Abstract: The anti-modernization trend will become

Lipman, Maria and Nikolay Petrov. The State of Russia:

Farewell to modernization hopes?

that authoritarianism was being used to mobilize resources and suppress

would become practically inevitable in case of a fully fledged confronta-

Regime legitimacy as a key variable

their moves, and with the disappearance of political competition, they

This component of the regime’s legitimacy has already been under-

better; nevertheless, it still valued stability and guarantees against future

Trends of political system development

Besides, the facts on the ground do not warrant greater authoritarian-

The party system

no need to restrict opposition ‘clamor’– it was not perceived as a threat.

Thus, changes in the party system will not produce a qualitatively

to resolve conflicts by removing governors before the end of their term.

The attempt to turn Russia into a stronghold of ‘conservative values’ does

Post-Crimea regime prospects

The decision to annex Crimea was to a large extent situational: on the

Dec 1993 Dec 2003 Dec 2011 Feb 2014

chart 1.1 Evolution of bureaucratic authoritarianism in Russia

As long as the ‘Crimean consensus’ remains in place, and the confron-

These possibilities are not predictions of the regime’s survival or collapse:

7 S. Belanovskiy, M. Dmitriyev, et al. (2011) The Driving Forces and Prospects

20 B. Makarenko, A. Melville (2015) ‘How Do Transitions to Democracy Get

B. Makarenko, A. Melville (2015) ‘How Do Transitions to Democracy

Abstract: The fall of 2014 demonstrated that the economic

Lipman, Maria and Nikolay Petrov. The State of Russia:

Economy is extremely inertial. Even the strongest shocks may manifest

1) The ‘New Cold War’ as a consequence of the Russian policy

The Russian economic miracle: has there

growth had reached approximately 7 per cent a year, which is a very

It is commonly believed that the 2008 crisis was imported to Russia

Putin’s economic doctrine

triggered mass street protests and emergency spending from the

The Russian economy: baseline scenario

prohibited from technological cooperation with the Russian oil

last twenty years, although price hikes often appeared on the

11 Demographic restrictions themselves will not pose economic

Scenario C: Vector change

This scenario assumes serious changes in Russian politics in the middle

▸▸ The post of independent prosecutor charged with investigating

As with any attempt at scenario analysis, the above discussion is merely

Russia will have to build new east- or southbound pipelines, while

lower even further investments and hit the living standards of

11 In all likelihood, Russia will have to drastically reduce export tariffs or

Abstract: Regional economies are growing more stagnant.

Lipman, Maria and Nikolay Petrov. The State of Russia:

This chapter seeks to answer four questions:

of their budget revenues. The destabilization of regional budgets has

will undermine the representation of city interests in the regions, destroy

The implications of the Crimean annexation

▸▸ Federal government and state-run companies’ large-scale investments