Russia After Putin: Inherent Leadership Struggles

JUNE 24, 2013 | 0530 Print Text Size

Stratfor

Editor's Note: This is the first part of a three-part series on Russia's leadership after President Vladimir Putin eventually leaves office. Part 1 revisits Putin's rise to power; Part 2 will examine Russia's demographics, energy sector and Putin's political changes; and Part 3 will explore whether the political systems Putin has built will survive him.

Russia has undergone a series of fundamental changes over the past year, with more changes on the horizon. Russia's economic model based on energy is being tested, the country's social and demographic make-up is shifting, and its political elites are aging. All this has led the Kremlin to begin asking how the country should be led once its unifying leader, Vladimir Putin, is gone. Already, a restructuring of the political elite is taking place, and hints of succession plans have emerged. Historically, Russia has been plagued by the dilemma of trying to create a succession plan following a strong and autocratic leader. The question now is whether Putin can set a system in place for his own passing out of the Russian leadership (whenever the time may be) without destabilizing the system as a whole.

A Difficult Land to Rule

Without a heavy-handed leader, Russia struggles to maintain stability. Instability is inherent to Russia given its massive, inhospitable territory, indefensible borders, hostile neighboring powers and diverse population. Only when it has had an autocratic leader who set up a system where competing factions are balanced against each other has Russia enjoyed prosperity and stability.

A system of balances under one resolute figure existed during the rule of some of the country's most prominent leaders, such as Ivan the Terrible, Peter the Great, Catherine the Great, Alexander II, Josef Stalin -- and now Vladimir Putin.

Each Russian leader must create and tinker with this system to ensure the governing apparatus does not atrophy, fracture or rise in mutiny. For this reason, Russian leaders have continually had to rearrange the power circles beneath them. Significant adjustments have been necessary as Russia grows and stabilizes or declines and comes under threat.

However, creating a power balance in the government with layers whose collective loyalty is ultimately to a single figure at the apex has created succession problems. When a clear succession plan is not in place, Russia tends to fall into chaos during leadership transitions -- sometimes even ripping itself apart. The so-called Time of Troubles, a brutal civil war in the 16th century, broke out after Ivan the Terrible killed his only competent son. During the Soviet period, a vicious succession struggle erupted upon Lenin's death in 1924, with Josef Stalin ultimately winning and his main challenger, Leon Trotsky, exiled and later assassinated. Following Stalin's death in 1953, Nikita Khrushchev, Vyacheslav Molotov and Lavrentiy Beria engaged in a similar power struggle.

In many of these cases, contenders for power represent a group or a clan of sorts vying for control. The individual represents a body that derives its power from its ties to security, military, industrial, financial or other circles. Stability is achieved only when there is one overarching leader in Russia capable of overseeing each of these groups' agendas and balancing them for the good of the country. Putin's transition into leadership and his subsequent 13 years in power serve as a prime example of such a balancing act.

The Rise of Putin

Putin came to power in 1999, when Russia had experienced almost a decade of chaos following the demise of the Soviet Union. Russia was in a state of near-collapse. It had lost its Eastern and Central European satellites and the other constituent republics of the former Soviet Union, which had created a buffer from foreign powers around Russia. Fierce conflicts wracked the Russian republics in the northern Caucasus, some of which sought to break loose from Moscow's grip. Under then-President Boris Yeltsin, various foreign groups and a new class of business elites known as the oligarchs stripped Russia's major strategic sectors, including oil, natural gas, mining, telecoms and agriculture, leaving most of them in disarray.

The most important of those sectors, energy, was devastated. Between 1988 and 1996, oil production fell from 11.4 million barrels per day to 6 million barrels per day. Oil historically has provided one of Moscow's key sources of revenue, funding half the state budget for more than 60 years. With this revenue halved, the Yeltsin government was forced to slash military and social spending, further deepening the country's disarray. At the end of the 1990s, Russia plunged into a deep financial crisis that resulted in a default on domestic and foreign debts, food shortages, a sharp devaluation of the ruble and inflation above 84 percent.

Fierce political infighting erupted, and many of Yeltsin's top men and supporters, including Moscow Mayor Yuri Luzhkov and Russian Prime Minister Yevgeny Primakov, distanced themselves from the weakening president. Moreover, Yeltsin lacked a succession plan.

At the time, Russia had two main political factions and a nominal third faction. The most powerful clan was the siloviki, which was loosely made up of national security hawks and former KGB agents. The siloviki were strong rivals to Yeltsin's own clan, known as the Family, which was made up of his relatives and a menagerie of other loyalists -- many of whom were beginning to display dissent due to Russia's political, social and economic chaos. The third group was a smaller, quieter clan known as the Petersburg Group given its origins in St. Petersburg under that city's powerful mayor, Anatoly Sobchak. The Petersburg clan was different in that it included a mixture of liberal (including some pro-Western) reformers, former KGB operatives and independents. Sobchak was able to bridge the differences within these groups in St. Petersburg.

In an attempt to undermine the siloviki to buy time to sort out his own clan's issues, Yeltsin allowed Vladimir Putin, a member of the Petersburg clan, to rise to power. Putin was at first brought in to oversee the Federal Security Service (known by its Russian acronym, FSB) in 1998, after which he quickly was named to succeed Yeltsin, whose followers continued to revolt. Yeltsin had not counted on the ability of Putin, who commanded loyalty from the Petersburg clan, the siloviki, and even some of Yeltsin's Family, to unify Russia.

Much like his mentor, Sobchak, Putin understood that the only way to stabilize Russia (let alone rebuild its previous strength) was to balance its competing forces against each other under his consolidated power, purging any who would not comply. Putin successfully garnered loyalty from Russia's two main competing ideological groups: Those who would put national security first, and those who would open up the country and reform it. Putin subscribed to both ideologies to some degree. As a former member of the KGB, he shared affinities with the siloviki. But he understood Russia's inherent weaknesses; during his time in the KGB, he was tasked with covertly securing technologies from the West, an experience that framed his appreciation for Russia's need to modernize to compete effectively with the West.

Putin placed the siloviki and the liberals, who eventually became known as civiliki, in positions that best suited his strategy for the country. Striking a political balance in the Kremlin allowed Putin to launch a series of massive consolidations across the country. As a result, he took direct control over Russia's strategic sectors, strengthened Russia's defenses, bolstered government revenues, stabilized the economic system, and clamped down on dissent, whether from the political opposition or from militants in the Muslim Caucasus.

By stabilizing Russia, Putin gained the support of most Russians, granting him political legitimacy during his first two terms as president. He eventually gained a cult-like status.

With this kind of popular support, Putin established one political party -- United Russia -- that dominated the government and both main clans. Military, economic, financial and energy assets were divided between the two groups. For example, the siloviki ran the military, FSB and oil sector, while the civiliki ran the country's economic and financial institutions and the natural gas sector. Each side's sectors guaranteed them financial resources and political tools. Such a balance kept the two competing clans relatively in check, though power struggles remained a constant. Eventually, Igor Sechin took over the siloviki while Vladislav Surkov and later Dmitri Medvedev took over the civiliki.

The balancing of the clan system has three major flaws. First, it is wholly dependent on Putin's subordinates to control their own subordinates, and so on, for the system to hold together. Putin therefore has been dependent upon Sechin, Surkov and Medvedev, who in turn have been dependent on their subordinates. One break in the chain can therefore have serious consequences. This absolute hierarchy begins to fray if one individual fails. There has been constant reshuffling at the lower levels while the hierarchy at the top has remained mostly the same until recently, even if their performance has been poor.

The second issue is that a vertically arranged system cannot handle change coming from outside the system. The vertical system finds it difficult to adapt to fundamental shifts in Russia or global events that affect Russia.

The third issue is that the hierarchal clan system heavily relies on the person at the apex. Putin, who has interests in both, is the ultimate arbiter among the clans. He once sought to step back from the presidency and allow the clans to try to continue under a new leadership. The year he left the presidency, 2008, saw Russia the strongest it had been in decades. It was enjoying the benefit of high oil prices, a strengthened military, a unified political system and a dominant energy position in Europe. Putin chose then-Gazprom Chairman Dmitri Medvedev to succeed him as president. Putin chose a civiliki because the siloviki are the stronger group and because Russia was flirting with the idea of opening up to foreign investment. Having a liberal reformer as president, the thinking went, could help rehabilitate Russia's reputation.

After Putin's departure, however, the cracks in the hierarchal system turned into gaping fissures in 2008-2009. Medvedev and the civiliki split over how to handle the global financial crisis, giving the siloviki a chance to grow in power. Putin ultimately had to step back in to restabilize the system, first behind the scenes in 2009 to make sweeping financial decisions and then publicly in 2012 as president. But by then, even more dangerous and larger fundamental shifts inside Russia started to emerge -- shifts that threatened not just the system Putin had built, but the country itself.

Tuesday, June 25, 2013