#5
From: "Peter Lavelle" <plavelle@metropol.ru>
Subject: Untimely Thoughts
Date: Thu, 6 Dec 2001
Peter Lavelle: Untimely Thoughts - The Putin Enrollment
(re What moves Kremlin politics)
As the year comes to an end, Putin has good reason to be pleased. Across the board Russia's macroeconomic indicators engender envy. Russia is indeed out of step with the world, though in the most positive sense for a change. Putin has also been given an opening to radically change Russia's international presence, returning it to a modicum of greatness. At home, Russia continues on its reform and restructuring projects unabated. Russia has even shown the world it can be a team player with OPEC (for now) with its promise to cut crude oil exports. In many ways, the year 2001 has been almost idyllic - well least looking from the outside in.
Russia also ends this year with a sense of uncertainty. Political rumors in Russia are best to be ignored. However, the level of rumor-mongering is worth paying attention to. Either there is something up or someone (or some group of individuals) is paying a small fortune to disseminate uncertainty in both the print and electronic media. One does not need rumor though to ponder the public bickering of Kasianov and Stepashin. At the same time Chubais steps up to bat for Aksyonenko. When the Communists attack the government it is for Communist constituents. Political parties attack and debate to demonstrate they are active and interested in public life - which they rarely are. But the government attacking the government takes on a somewhat different tenor. Add to this Putin's sphinx like silence.
The media is also transforming in to something different. Most pundits see Russian television becoming more and more politicized, taking political sides favoring one Kremlin faction against another. Actually, I think the opposite is true. Politics simply does not sell like cheap American serials. What politics there is on the tube seems more and more homogenous. Subtleties certainly might be there somewhere, but does Russian television broadcast for the "vast minority" of Russians who are politically engaged? If this is the case, the political elite merely bores the heck out of the rest of us. The electronic media has a very limited impact on how Russians think about politics. Politics remain the purview of the elite and it does not need TV to fight its battles.
But there does appear to be something afoot. It is not the media that bothers me - what does is some changes in the law impacting Russia's restructuring of the economy, especially future privatizations. Add to this Putin's growing coterie. Clearly there are fractions jockeying for position and Putin's ear. How clear-cut each fraction seems to be more imagined that real. What is real is the privatization bill passed by the Duma on November 29.
The new legislation gives the Duma control over the assets of natural monopolies; small business will be able to compete in tenders even with relatively little money; and the state will get rid of unnecessary assets. Henceforth, privatization will be carried out in accordance with a three-level system, with the president, the Cabinet and parliament involved. According to the bill, the head of state draws ups a list of enterprises with strategic significance for national security and determines the possibility of privatizing them. The Duma receives the right to monitor restructuring among the assets of natural monopolies The Cabinet is in charge of the general management of the privatization process.
Now political infighting and intrigue take on flesh. Conflict in the Kremlin is less about ideas and more about future cash flows. This new round of privatization could well be called the "Putin enrollment". With the Duma even more under control with the merger of Unity and Fatherland-All Russia, Putin has a trough to reward his circle. This kind of privatization will not come again. Those looking to have their loyalty rewarded are no doubt fighting to get as much attention from Putin as possible. The old guard surrounding the President has already had their shot at the trough; they surely want to hang on to their wealth. Thus political infighting is just as much about attaining wealth (at the expense of the state) as it is about protecting wealth (with the state's help).
Within a year's time, I doubt there will be much talk of the Family - rapidly losing its connection or role within the world of material corporeality. 2002 will mostly likely be very different from this year. Instead taming the Family, we will be spectators to the development of a new class of rent-seekers - a process that will of course be "transparent" and "within the rule of law". And all Kremlin fractions will be sending their subtle political messages by demanding that a Russian TV station show "Rich Man, Poor Man" still one more time.
Peter Lavelle
Head of Research
IFC Metropol
Moscow, Russia
plavelle@metropol.ru
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