Title
Russia’s “Turn to the East”: a Study in Policy Making
Author
Stephen Fortescue
Affiliation
School of Social Sciences, University of New South Wales, Sydney, Australia, and
Centre for European Studies, Australian National University, Canberra, Australia
Address
27A Brook Road, Glenbrook, NSW 2773, Australia
Telephone/E-mail
+61 2 47390027 [email protected]
1 Abstract
Russia’s recent reorientation ‘to the East’ has gained increased urgency given events in Ukraine. In this article the policy-making process around the ‘turn to the East’ is examined, both pre- and post-Ukrainian events. The focus is on the economic dimension of the ‘turn’, as related to both the economic development of the Russian
Far East and economic engagement with the Asia Pacific, rather than geostrategic issues. The framework is personalist vs institutionalist views of the Russian policy process. A generally dominant personalist view has been strengthened by Ukrainian events. The author finds a far more institutionalised policy process than a personalist view would lead us to expect, with relevant bureaucratic and non-state actors well represented in an elaborate and relatively formal process. However he also finds a considerable weakening of sign-off (soglasovaniye) procedures, which has lead to policy inconsistency and unpredictability and indeed ‘policy irresponsibility’ among participants. Putin is reluctant to take firm control. The author puts the weakening of soglasovaniye down to Putin’s frustration with the gridlock tendencies of strict soglasovaniye regimes, rather than a desire to create a total personalist regime of hands-on management (ruchnoye upravleniye). This suggests that improvement of the Russian policy process requires structural and procedural change, rather than simply leadership change.
Key words
Russian Far East; Putin; policy-making; institutionalism; personalism.
2 Main text
At a time when there is great interest in the nature of the Russian policy process – how does it work? does it work? – a case study is undertaken of policy making related to Russia’s ‘turn to the East’. The ‘turn to the East’ includes the economic development of the Russian Far East (RFE), economic engagement with the Asia-
Pacific Region (APR), and geostrategic engagement with the region and individual countries within in. The focus of this study will be the first two of these concerns.1
While the ‘turn to the East’ might not have the dramatic topicality of Russia’s current
‘turn to the South’ – Crimea and other parts of eastern Ukraine – it is presented by the leadership as a key, if not the key, long-term strategic orientation for Russia, with events in Ukraine making it even more urgent. In his December 2013 state of the nation address Putin said: “The resources of the state and private business must be devoted to development and the achievement of strategic goals. For example, the renaissance of Siberia and the Far East. That is our national priority for the whole 21st century” (Poslaniye 2013). And as Prime Minister Medvedev delicately put it in talking of economic links with the APR in May 2014, ‘they are particularly useful in circumstances when we face some difficulties in other markets’ (Soveshchaniye
2014a).
1 For more detail on the economic issues, see Fortescue 2015; on the geostrategic engagement, see Lo 2014.
3 It is a policy commitment which requires significant public and private investment. It involves complex financial, commercial and engineering issues, suggesting the involvement of a range of bureaucratic and corporate actors. At the same time there are strong expectations of the direct personal involvement of President Putin. There is also evidence of a lot going on behind the scenes, with those who might be considered
Putin’s cronies often lurking in the background.
These features make it a good case study of the contemporary Russian policy process.
It is true that a lot of key policy decisions were taken before events in Ukraine posed major new questions. However there is enough still happening around RFE policy making for the case study to retain its relevance in new circumstances.
A personalist view
Those new circumstances have strongly reinforced existing personalist views of policy making under Putin. Gaaze (in Novaya vremya, September 1, 2014) and
Minchenko (2014) draw the picture well, but it is commonplace in any amount of commentary. In this view Putin takes decisions on everything himself, after discussion within a very small circle of his most trusted advisers. In the most extreme view the inner circle consists of no more than the head of the FSB, Aleksandr
Bortnikov and his deputies, and perhaps a few other siloviki.2 This small circle maintains its influence over Putin by presenting everything – including domestic policy – in a foreign policy context of external threat (Medvedev in Forbes.ru,
September 26, 2014). In this view, even the personal friends who have used their
2 The FSB is the successor organization of the KGB. Siloviki are those with backgrounds in the so-called ‘power agencies’, above all the KGB/FSB.
4 friendship with Putin to pursue highly lucrative careers in business and who are often considered part of the inner circle are no longer trusted (Shul’man in Vedomosti,
February 2, 2015). To the extent that the government (in the specific Russian sense of the word)3 and other institutionalised sources of policy-making capacity have any involvement, it is to rubber-stamp and implement decisions made by Putin within the inner circle (Samoylova in Politcom.ru, February 18, 2013).
The consequences of this approach to the policy process are seen as catastrophic.
Decisions that emerge from the inner circle are made on the basis of inadequate information, with the country having either to live with the consequences of the resulting bad decisions, or the policy-making system being further disrupted by the watering down of decisions during implementation (Shul’man in Vedomosti, August
29, 2014). Policy issues that do not make it into the inner circle – and inevitably many do not – languish in a policy-making limbo, the much vaunted ‘power vertical’ being replaced by a ‘power horizontal’ of no one answering to anyone (Pastukhov in
Polit.ru, March 7, 2012).
This description of the policy process in its strongest form derives from recent dramatic circumstances. But it is an extension of a common view of the Russian policy system going back far into the past. Russia has generally been seen as personalist or patrimonial, whether we are talking of despotic and capricious Tsars,
3 In the Russian context the ‘government’ refers to the office of the prime minister and subordinate ministries and other agencies. It does not include the presidency and its agencies.
5 their families and favourites, and a network of corrupt bureaucrats (LeDonne 1987;
Kollmann 1987); or of Soviet leaders with their patron-client relationships replicated down through state and party hierarchies (Gill 1990; Easter 2000; Rigby and
Harasymiw 1983); or of Yeltsin and Putin in the post-Soviet era, with their
‘superpresidentially’ autocratic styles of governing (Holmes 1993-94; Fish 2000), their clientelistic and crony allegiances, and clannish networks extending deep down into society (Ledeneva, 2013; Nikolyuk and Chernov, 2012). Even a recently popular approach such as neo-patrimonialism, while granting a place to institutionalist phenomena alongside the personalist, arguably gives priority to the latter, as suggested by its name (Whitmore, 2010, 1000).
An institutionalist view
While personalist characterisations have predominated, institutionalist approaches have not been entirely absent, it being recognised by some that even Tsarist Russia - as a complex, modernising state - was no less subject to the pressures of institutionalisation than any other (Pintner and Rowney 1980; Orlovsky 1981). There are excellent accounts of the struggles of Lenin and even Stalin to introduce coherent and effective administrative institutions in the early Soviet period (Rigby 1979;
Khlevnyuk 1996), while the late Soviet period saw the controversial but influential concept of ‘institutional pluralism’ (Hough 1972; Solomon 1983).
In the author’s view it is unlikely – and certainly would be catastrophic – if the personalist view of Russian policy making set out above were complete and accurate.
The policy-making process in a modern society needs to use specialised knowledge in an efficient way, such that decisions are arrived at on the basis of the consideration of
6 all relevant information and with due dispatch (Fortescue 2010a). Efficiency requires that policy participants approach the policy-making process with a sense of responsibility: they present with due persistence views based on their specialised knowledge, but respect outcomes even if they do not fully reflect those views. To put it another way, participants grant the process legitimacy. That requires that they feel that they have an appropriate role and that their knowledge is treated with respect.
Both efficiency and legitimacy are achieved – beyond the mutual reinforcement they offer each other – through the appropriate handling by those running the system of access, procedures, and leadership.
Access
Access has to be granted to the range of holders of the various specialised knowledges that are relevant to the particular policy issue. In a complex society that requires a far greater range of policy participants – both state agencies and non-state actors, in this case primarily business - than the personalist model allows.
Procedures
It is through procedures that those with specialised knowledge use the access they are granted, and decisions are ultimately made. There will inevitably be an informal element, but in a complex, modern system one would expect significant levels of formality and institutionalisation.
Constitutional arrangements set out procedures at the highest level. There is not the space here to describe even in outline Russian constitutional arrangements (Smith
7 2012). However it should be noted that the constitution is semi-presidential, in that a prime minister chairs cabinet (Zaznaev 2008; Protsyk 2006). Separation from operational control of the executive is something that has frustrated Putin as president
(Soveshchaniye 2013a), and in his third presidential term, in particular, he has tried to address the issue structurally and procedurally.
Complex policy processes are characterised by consultation processes that usually entail obligatory sign-off by policy participants. In Russian the process is known as soglasovaniye. Such a process is likely to slow down decision making; when it entails something like a veto for policy participants, the outcome can be lowest common denominator policy if not gridlock. What I call the soglasovaniye problem is made more serious by the technocratic nature of the leadership of Russian state agencies. Russian ministers are usually technical specialists in their ministry’s area of responsibility, and have probably risen through the ministry’s ranks. This increases the likelihood that they see policy narrowly in terms of their specialised knowledge.
Leadership
Whether as an arbiter (deciding who on balance has the better of a policy argument) or as an ‘activist’ leader (one who treats the policy process as a mechanism for achieving his or her own goals), a resolute leader is required to reduce the impact of the soglasovaniye problem.
Such resolute leadership is not always forthcoming. There might be an unwillingness to upset the balance of power within the system by taking sides, or the pursuit of narrow personalist rather than collective goals might be more attractive. Further, by
8 having a leader above functionally specialised agencies we have the basic circumstances for principal-agent problems. Given the specialised knowledge possessed by agencies and the complexity of the societies with which we are dealing, there are major information asymmetries and cognitive overload problems that make it difficult for a leader to impose order, much less vision.
A leader may respond to the problem in three ways. Firstly, measures can be taken to weaken the consultation process by changing sign-off rules, whether formally or informally. This means that some specialised knowledge might be excluded from the policy process, perhaps leading participants to see their role as being devalued, thereby delegitimizing the process in their eyes. It could also create circumstances in which there are greater opportunities for those with personalist links with the leader to insert themselves into the process.
The second leadership response follows from the last point. The leader places people he or she knows and trusts in key agency positions or creates new agencies and positions to be filled by trusted allies and clients. This, if handled judiciously, could have a net benefit for the policy process. But the danger is clear, that people come to be appointed more for loyalty than capacity to represent specialised knowledge.
The third thing the leader might do is to become more personally involved. This is a phenomenon regularly attributed to Putin, particularly in his third presidency, under the name of ruchnoye upravleniye (hands-on management). As already implied the author is not inherently opposed to activist leadership – rather the reverse. But there are clear dangers not just of the leader substituting his or her own knowledge for the
9 specialised knowledge of policy participants, but also of those participants abdicating their responsibilities in relieved or frustrated recognition that the leader will do it all for them, a component of the delegitimisation mentioned above.
Putin and policy making
The author has noted in earlier studies the continued existence of an institutionalised policy process and of the soglasovaniye problem in Putin’s first two presidential terms. Such major policy issues as tax regimes and resource management were dealt with through a bureaucratic process that was open to the holders of specialised knowledge, but was also tortuous and indeed often gridlocked, with Putin being a diffident rather than decisive leader (Fortescue, 2006; Fortescue, 2009).
Putin was frustrated by this. Some relief came when he was encouraged by circumstances to serve as prime minister from 2008 to 2012, a term which coincided with the global financial crisis. It was a period of crisis management which Putin still recalls with pride and nostalgia. While he was closely involved in operational policy making, something made easier by being prime minister, so were the established bureaucratic agencies. There was a sense of urgency and common purpose that made it easier to reach consensus, and a flexible approach to procedures which made for speedy decision making. But the essentials of an institutionalised system were not abandoned (Fortescue 2012). Putin refers to the approach of the time as an appropriate form of ruchnoye upravlenyie. At a meeting with the cabinet in
December 2014 both he and Medvedev suggested that a similar approach would be appropriate in newly difficult economic circumstances (Vstrecha 2014b).
10 Putin’s return to the presidency placed the issue of how to drive the policy process back onto the agenda. An institutional response was as evident as personalist arrangements. He tried to create a ‘second government’ in the presidential administration, by transferring to it as his assistants several of those who had served as ministers in his government (Stanovaya in Politcom.ru, July 2, 2012; Tovkaylo et al in Vedomosti, January 29, 2014). It has been claimed that they attend government meetings and coordinate inter-agency relationships (Butrin in Kommersant, May 24,
2012). Putin also sponsored alternative sources of policy-making capacity, such as the Duma, the United National Front, and the Agency for Strategic Initiatives. And he involved himself more directly, and quite formally, in the operations of the government, including chairing cabinet meetings and having one-on-one meetings with ministers. During and since his time as prime minister there have also been formal changes to the government’s standing orders (reglament) in order to weaken soglasovaniye arrangements (O vnesenii 2012; Izmenenii, 2012).
How significant are these institutional approaches to improving a policy process suffering from the soglasovaniye problem? Have they worked? Are they minor blips against a background of an ever increasing emphasis on a personalist approach? We will attempt to answer those questions by looking at the ‘turn to the East’ policy process.
The ‘turn to the East’
Various motivations can be suggested for the current (and by no means the first) ‘turn to the East’: Putin’s rejection of partnership with the West in Munich in 2007, the unexpectedly severe effect on Russia’s economy of the Western-originated GFC in
11 2008, indicators of political and social discontent in the RFE, the impending depletion of currently exploited natural resources with their orientation to Western markets and the opening of new areas of exploitation further east, and the general atmosphere that
Asia was now the rising powerhouse of the global economy. All these drivers have been given added force by recent events in Ukraine.
There are two strands to the policy issue, not mutually exclusive but nevertheless likely to generate tension. One is the economic development of the RFE, to improve living standards and reduce social and political tension as well as reverse population decline. The other is increasing national revenues through exports to the APR. Given the current structure of the Russian economy it is likely that such exports would be primarily of resources, not necessarily originating in the RFE itself and therefore limiting the benefits to the region. Ideally the two goals could be pursued simultaneously, but funding shortages and bureaucratic competition have constantly brought the tension to the surface.
The Ishayev program
After debate over the best administrative and funding structures to pursue the ‘turn’, a new Ministry of Far Eastern Development was created by government decree of June
30, 2012 (minvostokrazvitia.ru/about/ministry.php). It was headed by experienced local heavyweight, Viktor Ishayev, who was also appointed presidential representative in the RFE region. The name of the new ministry might suggest a focus on RFE economic development rather than resource exports. However Ishayev produced as a development program for the RFE a resource-oriented monster, proposing serious funding commitments from private and state sectors for a huge
12 catalogue of projects. Many of the projects had been bandied around and included in funding wish lists since Soviet times. Some are owned or run by those considered to be personally close to Putin. Thus, Igor Sechin, as head of state-owned Rosneft, is involved in a range of oil and gas projects, including a controversial, funding-hungry petrochemical plant in Vladivostok. Gennady Timchenko, who came to prominence after Putin’s rise to the presidency as head of the oil trader Gunvor, is the major shareholder in Novatek, the private gas company developing the Yamal LNG project, as well as the Kolmar coal company with its RFE and East Siberian coal projects. He also has interests in RFE ports and infrastructure construction firms in the region.
Sergey Chemezov, head of the state-owned engineering and defence conglomerate
Rostekh, is involved in the Udokan copper project, and has a JV with the Chinese coal company Shenhua for coal and port projects. The Nakhodka Mineral Fertiliser plant is propsed by a structure owned by a close Putin colleague, Arkady Rotenberg.
Other projects belong to the companies of more traditional oligarchs: Potanin’s
Norilsk Nickel the Bystrinskoye copper project; Abramovich and Abramov’s Evraz the Timir iron ore project; and Zyuzin’s troubled Mechel a range of coal and port projects. Other big projects, particularly in coal, are run by major business people and companies with much less of a public profile and no known links to Putin.
Ishayev’s program called for R3.8 trillion of state funding,4 a sum which did not include one of the biggest and most controversial items of expenditure, the expansion
4 Funding volumes are given here in rubles. For most of the period being discussed one dollar bought roughly 35 rubles.
13 of the BAM and TransSiberian railways. It represented 36 per cent of the total bill, and was spectacularly more than the only existing dedicated funding mechanism could handle. The creation of the Far Eastern Development Fund of the state-owned development bank VEB had been announced in December 2010 but formal arrangements were put in place only in November 2011. It was given R500 million, expanded to R15 billion in 2012, to seed appropriate projects. The Fund was hampered by its charter requirement to make a return on investment, something which the infrastructure projects submitted to it struggled to demonstrate (Lyutova and
Pis’mennaya in Vedomosti, March 22, 2013).
Despite clear scepticism regarding Ishayev’s program and unresolved funding issues
(Pis’mennaya in Vedomosti, March 4, 2013), it was presented to a cabinet meeting on
21 March 2013. Minister of Finance Siluanov stated that the state budget contribution was 14 times more than his ministry considered realistic and that therefore the ministry could not support the program (Zasedaniye 2013a). Despite that and the open concerns of other participants about the lack of funding clarity, the program was accepted in principle. It was also agreed that the BAM/TransSiberian project would be added, at a cost of up to one trillion rubles. Despite the fact that meeting participants had seemingly accepted it on the understanding that six months were available to resolve funding issues, Medvedev suddenly signed the program into law a few days later (Gosudarstvennaya programma 2013). It is probable that the urgency derived from a directive issued by Putin the previous November that the program be approved no later than the first quarter of 2013 (Zasedaniye 2012).
The Trutnev/Galushka program
14 The now official status of the program did not end dissatisfaction. In August 2013
Ishayev was dismissed and the head of the VEB Fund resigned (Lyutova in
Vedomosti, September 3, 2013). Ishayev was replaced as presidential representative by Yury Trutnev, who was also appointed a deputy prime minister. The latter appointment was seen as particularly important, since it gave Trutnev the power to issue directives in his area of responsibility to any minister (Tovkaylo and Biryukova in Vedomosti September 2, 2013). Trutnev has a business background in his home region of Perm, and has served as mayor of the city and governor of the region. He was appointed Minister of Natural Resources in 2004, a post he held until 2012, when he briefly worked as a presidential assistant. The new minister of MFED was
Aleksandr Galushka. He worked as an appraiser, before moving into business representation in the policy arena, in the medium-enterprise business association
Delovaya Rossiya (DelRos) (Gabuyev and Mel’nikov in Kommersant, February 17,
2014). In June 2013 he moved to the secretariat of Putin’s new political movement, the National Front (Tovkaylo, Glikin, and Lyutova in Vedomosti, September 5, 2013).
It is claimed that MFED is run by a team from DelRos and the Agency for Strategic
Initiatives (ASI) (Turovsky 2014). ASI was set up in 2011 with a focus on developing and supporting imaginative mid-sized business initiatives
(asi.ru/about_agency). It is said to enjoy Putin’s patronage, as an alternative source of policy initiative (Freinkman and Yakovlev 2014). In addition to Galushka, whose work for DelRos has already been noted, of the four original deputy ministers one, the first deputy, had previously worked for DelRos (Osipov) and one for ASI (Finsky).
Another (Stepanov) came from the Ministry for Economic Development, where he had responsibilities for entrepreneurial activities. The last (Shereykin) was a deputy
15 governor of Kaluga region, known for its success in attracting foreign car assemblers and components manufacturers. Finsky has departed; the new deputy minister,
Skufinsky, has worked with ASI in a consulting role. The DelRos and ASI presence is evident, as is the representation of officials with backgrounds in regionally based entrepreneurial activity oriented towards manufacturing.
Those backgrounds give us a clue as to the nature of the new approach that Galushka presented in outline a few weeks after his appointment, at the first meeting of the newly created government Commission on the Socio-Economic Development of the
Far East (Pravitel’stvennaya komissiya 2013).5 He made clear his dissatisfaction with the priority given in Ishayev’s program to railway infrastructure (that is, infrastructure to serve resource exports). Projects were driven by ‘the inertia of Soviet economic geography and the consequent stereotypical mindsets’. One assumes he meant by that a reliance on resource exploitation. He presented a radical alternative, based on the export into the APR of goods and services produced in RFE-based special economic
5 The commission was created by government decree no.810 of September 17, 2013
(www.rg.ru/2013/09/19/dv-komissia-site-dok.html), replacing the State Commission for the Socio-Economic Development of the Far East, Republic of Buryatia, the
Zabaikal region and Irkutsk region. The new commission is chaired by the prime minster, whereas its predecessor had been chaired by a first deputy. Its membership includes as business representatives Zyuzin (Mechel), Dod (Rusgidro), Gref
(Sberbank), Miller (Gazprom), Sechin (Rosneft) and Tokaryev (Transneft), the first being the only privately owned firm. The previous commission had had Miller of
Gazprom as its single commercial representative.
16 zones of a new type, with the investment funding coming largely from APR-based corporations. The special economic zones are known as ‘territories of accelerated socio-economic development’ (TOSER, to use the Russian acronym; as initially proposed they were called TORs). Discussions of possible locations focused on agriculture and food processing, consumer electronics and other light manufacturing, and shipbuilding and aircraft components. They are to attract the usual tax privileges of a special economic zone, as well as a ‘one-stop shop’ approach to dealing with potential investors. That involves the centralisation under MFED of regulatory functions previously carried out by a range of agencies and ministries (O vnesenii
2014). It has taken a major bureaucratic struggle to have those functions transferred.
Part of the bureaucratic struggle has been over where the TOSER regime can be applied. While devised for the RFE, the Ministries of Regional Development and of
Economic Development, with the support of Medvedev, pushed hard for it to be applicable throughout Russia, presumably because they, rather than MFED, would have administrative control of those outside the RFE (Netryeba in Kommersant, April
8, 2014; Soveshchaniye 2014). In July 2014 Trutnev claimed a compromise had been reached: if successful in the RFE, the TOSER regime would be more widely applied after three years (Brifing 2014). There was then considerable toing and froing, including Medvedev-sponsored statements that there would be country-wide application (Resheniya 2014, item 3.5) and the apparent rejection of that view by
Putin (Netryeba and Shtykina in RBK, October 7, 2014), as well as a vague compromise approved by cabinet on October 9, 2014 that was duly sent to parliament
(Zasedaniye 2014a). A directive then came out of Putin’s state of the union address on December 4, 2014 calling for the bill to be amended, to allow the TOSER regime
17 to be applied immediately to monogoroda (one-company cities) facing particularly difficult socio-economic circumstances (Perechen’ 2014). The legislation, signed into law by Putin on 29 December, included this provision, as well as broader application after three years (Podpisan 2014). The last minute inclusion of the potential immediate use of the TOSER regime in monogoroda represented a victory for the
Ministry of Economics and Medvedev over MFED and its supporters in the presidential administration.
There is clear scepticism regarding the TOSER strategy (Gabuyev in Kommersant,
February 24, 2014; Inozemtsev in Vedomosti, October 8, 2014), and certainly the leadership’s faith in it is not such as to abandon the resource-export strategy. Among the decisions of the October 2013 commission meeting at which Galushka presented the TOSER approach was one affirming a funding commitment to the
BAM/TransSiberian project (Resheniya 2013, item 18). A December 2013 Medvedev decree extending the program to 2018 was entirely unreflective of the TOSER strategy, with the stress on transport and energy infrastructure, including particular mention of the capacity of railways and marine ports (O federal’noi 2013).
The BAM/TransSiberian project
Within the continued pursuit of a resource-export policy, the debate focused on two related matters: whether the BAM/TransSiberian project should proceed, and whether the National Welfare Fund (NWF) should be a source of funding for that and other resource-oriented projects.
The NWF is one half of Russia’s sovereign wealth fund, into which a proportion of government revenues from hydrocarbon exports are paid (Fortescue 2010b;
Dabrowska and Zweynert 2014). The other half, the Reserve Fund, is to cover fiscal
18 deficits in crisis situations. The NWF was to be used to cover deficits in the state
Pension Fund, but there has always been great pressure to use it for infrastructure spending. That pressure peaked with the debate over the BAM/TransSiberian project.
The supporters of the resource strategy argue that it is viable only if there is a major expansion in railway capacity, to allow the transport of resources to Pacific seaboard ports for further delivery by sea to customers in the APR.6 Coal would make up the bulk of shipments, from established fields in the Kuzbas in south-western Siberia and new fields in East Siberia. (Expanded output in the RFE itself, particularly on
Sakhalin, would not be dependent on the railway expansion.) Copper and iron ore would make up much smaller shares. As the pipeline network expanded, shipments of oil would become less important.
As already described, it was agreed that the rail project should be included in the RFE development program at a cabinet meeting in March 2013, although without any resolution of the funding issue. On 15 April 2014, in a largely unnoticed decree,
Medvedev approved amendments to the RFE program that were specifically dedicated to the rail project. The level of state spending was defined, although no funding sources were indicated (Ob utverzhdenii 2014).
6 Further spending is required to connect deposits to the main line railways and for port facilities. It was always expected that this spending would be shared between the state and operators in the case of the former and largely borne by operators in the case of the latter. Demands for greater state contributions have steadily strengthened.
19 This pushed Galushka and Trutnev to up the ante in their opposition to the rail project.
As already cited, Galushka had made clear not just his dislike of the resource-export strategy, but specifically its rail infrastructure component when he presented his new strategy in October 2013. Trutnev was no less outspoken (Interv’yu 2013). They began demanding that funding be transferred from the rail project to the TOSER project. That demand came to a head at a meeting chaired by Putin in September
2014 (Soveshchaniye 2014b). Trutnev complained angrily about the allocation of money to an ‘empty rail line’. Although Putin characteristically appeared to support both sides and avoided taking a decision, it quickly became clear that Trutnev and
Galushka had lost the argument. Since then there has been a clear if unacknowledged downgrading of the TOSER program. What had been a confirmed list of 14 TOSERs became a short list from which five would ultimately be chosen, with three receiving preliminary approval in February 2015 (Yury Trutnev 2015; Soveshchaniye 2015).
There has been a sharp reduction in the number of jobs predicted to be created through the program (Sitnina in Kommersant-Vlast’, November 3, 2014).
While the TOSER program was being downgraded, the proposed capacity increase of
BAM and the TransSiberian expanded as time went on, from 55 to 66 million tonnes per year, despite the fact that both Putin and Medvedev took seriously the concerns of the BAM/TransSiberian sceptics, particularly over whether the proposed increase in capacity would be utilised (Soveshchaniye 2013b; Soveshchaniye 2013c). When the matter was brought to the September 2014 meeting referred to above, Putin made it clear yet again that, while he supported the proposal, the crux of the matter was the utilisation of the extra capacity. Soon after the meeting Dvorkovich noted that the key question remained: ‘Will the required volumes of freight eventuate?’ He
20 answered his own question by claiming that shippers had asked for an extra 137 million tonnes per year, meaning that there was plenty of room for error
(Soveshchaniye 2014c). Clearly not all are convinced.
By this stage funding arrangements had, at least in theory, been determined. The federal budget was to provide R110.2 billion, the FNW R150.0 billion, and Russian
Railways R302.2 billion. The firm allocation of FNW money was a major policy decision, which led to a huge range of other demands on the FNW, including from the promoters of individual RFE-related projects (Chelpanova in Vedomosti, June 24,
2014; Zhilion and Kindsfater in Vedomosti, December 15, 2014; Starinskaya and
Lyutova in Vedomosti, December 11, 2014).
Access to FNW money had first been suggested by Putin in his report to parliament in
April 2012 (Predsedatel’ 2012). That was followed by considerable discussion as to how FNW money could be invested in a way that would bring a return. In particular there was debate as to whether the money should be used to buy bonds or equity in
Russian Railways. The bond option was initially the preferred one, and at the St
Petersburg Economic Forum in June 2013 Putin gave his imprimatur to both the project and the idea that money for infrastructure projects, including TransSib, be provided from FNW for the purchase of corporate bonds (Plenarnoye 2013).
However Russian Railways was not happy with Putin’s proposal (Chelpanova and
Tovkaylo in Vedomosti, July 3, 2013). Since it could not guarantee a return on the bonds and was concerned about increasing its debt burden any further, its preference was for the equity option. (In November 2014 Russian Railways head Yakunin, in
21 insisting that direct state funding was required, went so far as to describe the project as incapable of earning a commercial return (kommercheski neokupaemyi)
[Zasedaniye 2014b].) In late July 2013 Minister of Transport, Maksim Sokolov, duly announced that Russian Railways would get the FNW money through the sale of privileged shares, with exactly how to be worked out by the end of the year. The base rate of return on the shares would be 2-3 per cent, with a mechanism to be found to raise it to the level of inflation. Sokolov also noted that eventually – after 30 to 50 years - FNW would be able to recover its capital by selling the shares (Chelpanova and Tovkaylo in Vedomosti, July 29, 2013.
Arrangements were formalised in preliminary form in a government decree of
November 5, 2013 (Rasporyazheniye 2013), with a more specific decree following nearly a year later (Ob investitsionnom 2013). Another, of December 31, 2014, approved the transfer to Russian Railway’s paid-up capital (Ob uvelichenii 2014).
Shares are to be issued with a guaranteed dividend of 0.01 per cent in 2015-19 and thereafter for 15 years at 2.98 per cent. The dividend is to be funded by selling the shares and/or including an ‘investment component’ in freight charges. The dividend appears not to be inflation protected, meaning that the FNW contribution is effectively a subsidy on which no return will be earned. Another Medvedev decree soon after added another R7.5 billion of FNW money to finance the Eastern BAM component of the project, as well as R60.2 billion to buy new locomotives. This money is to buy Russian Railways bonds, with a return of inflation + 1% (Ob investitsionnykh 2014).
The rail funding seems to have survived the crisis-induced review of FNW funding in early 2015 (Visloguzov in Kommersant, February 4, 2015). A problem regarding the
22 final funding category, Russian Railway’s own contribution, also seems to have been resolved. It was divided into two: R261.1 billion from its own operating capital and
R41.1 billion of new debt. The new credit was to be provided by VEB, through the purchase of long-term infrastructure bonds using contributory pension fund holdings.
But in 2013 and 2014 the government required all pension funds to transfer their holdings to the state’s Pension Fund, leaving VEB without the money to purchase the bonds.7 With liquidity problems threatening Russian banks it appears that the
November 2014 suggestion of Minister of Finance Siluanov, that they be supported by channelling infrastructure funds through them, has been adopted, with the state- owned VTB being the conduit in this case (Yakovleva in Kommersant, November 11,
2014).
Despite the ongoing funding difficulties the commitment to the project seems to be firm. Certainly Russian Railways has started work, a fact that it uses to pressure the government in funding negotiations (Yakunin in Soveshchaniye 2014b; 40-letiye
2014). (Project owners lobby for state support on the grounds that their projects must go ahead in order to utilise the expanded capacity [Lyutova in Vedomosti, January 27,
2014; Ogorodnikov in Ekspert, September 15, 2014].)
The other rail-related debate has been over whether priority should be given to BAM or the TransSiberian. The two lines split at Taishet, north-west of Lake Baikal. From
7 Russian pensions include a defined benefit component in theory funded through a central Pension Fund made up of employer contributions (but chronically underfunded), and a contributory component, under which wage earners choose a fund to hold their contributions. VEB is the default fund.
23 there the distance along BAM to the Pacific port of Vanino is 4,276 kilometres; to
Nakhodka along the TransSiberian is 4,544 kilometres. The upgrading of BAM, to save those few hundred kilometres, is an expensive undertaking and it bypasses mineral projects in the southern part of East Siberia. Further, funding focused on
BAM disadvantages that part of the TransSiberian which runs south down the
Primorye seaboard.
Putin seemingly changed sides on which line should get priority. In June 2013, much to the consternation of Yakunin, he spoke of providing FNW money for the
TransSiberian without mentioning BAM (Chelpanova and Tovkaylo in Vedomosti,
July 3, 2013). At a meeting soon after, which was officially announced as specifically devoted to the TransSiberian, Putin somewhat apologetically made it clear that BAM had to be included (Soveshchaniye 2013c). A year later he participated in a video- link to congratulate railway workers on the beginning of work on the BAM modernisation, with the TransSiberian very much in the background (40-letiye 2014).
This led Duma deputy from the Just Russia party, Valery Zubov, to ask why Putin was funding BAM at the expense of the TransSiberian when the latter had twice the traffic (Zubov in Vedomosti, July 16, 2014). The head of Russia’s largest general freight company, FESCO, was also unhappy about the priority for BAM, claiming that, as well as being commercially doubtful, it represented a commitment to coal exports and therefore Russia’s continuing status as a ‘raw material appendage’
(Alikhanov in Vedomosti, July 22, 2014). Dvorkovich, after funding allocations had been finalised, admitted that concentrating on the TransSiberian had been an option, but declared that it was rejected on the grounds that maintaining BAM increased flexibility and spread risk (Soveshchaniye 2014c).
24
The table offers a very rough-and-ready comparison of the cost of the new
BAM/TransSiberian capacity with other international and domestic infrastructure spending. It shows that not only is the new capacity very expensive, but also that it will leave resource export capacity through Pacific seaboard ports still well below that of a major international competitor, Australia, as well as European Russian outlets.
One is not surprised that there are those who believe that the capital expenditure will not be recouped (Inozemtsev in Vedomosti, February 2, 2013). Having said that, there is no greater confidence in the TOSER strategy, although it at least requires less money from the state.
[INSERT Table 1 here]
Evaluation of the policy process
Despite the scepticism just expressed, it is not the purpose of this article to pass judgement on the success or failure of the final policy outcome. It is sufficient for our purposes to note that the policy process has dealt with complex and controversial issues, requiring high levels of specialised knowledge among a wide range of policy participants. Consultation processes have been subjected to major pressure and considerable demands have been made of leadership. How have the process and leadership coped? Have we observed the over-personalised policy process described at the beginning of the article, or the over-institutionalised soglasovaniye problem?
These questions will be answered by reviewing the RFE policy process under three headings: access, procedures, and leadership.
Access
25 Here the question is whether the established institutionalised participants in the
Russian policy process have been undermined and replaced by a small circle of people – whether cronies or siloviki - with personal connections with Putin, or whether alternatively Putin has brought into the process new institutionalised participants as competitors to or replacements for the established ones.
We have observed an elaborate bureaucratic process involving established holders of specialised knowledge, above all specialised government agencies, staffed and led by typical and traditional officials and coordinated by deputy prime ministers. While some of these might have a closer relationship to Putin than others, none could be described as either a crony or a silovik.
There are also non-state participants, above all business, and there is certainly a crony/silovik presence here. Names such as Sechin,8 Timchenko, Chemezov and
Usmanov appear regularly, as having commercial interests in production and infrastructure projects. Timchenko is particularly prominent in RFE-related business, and a recipient of significant state and FNW funding for his projects (Yury Trutnev
2015). Russian Railways, headed by Yakunin, who has both a silovik background and close personal ties to Putin, has been a major recipient of government largesse.
But there are many other businesses, also with their demands on the public purse, run
8 At the meeting in July 2013 at which Putin signalled the end of Ishayev’s career, he stated that he had consulted with the absent Sechin before the meeting, who had confirmed that the management of RFE development was poor (Stenografichesky otchet 2013).
26 by people without any close connections with Putin that one is aware of. That is, you do not have to be a crony to be involved. People who are not cronies have personal access to Putin on major matters, including more or less regular publicised meetings with major business leaders who are not cronies (For example, Vstrecha 2014a).
Business, incliuding non-crony business, is also represented on commissions and at meetings. (See footnote 9. For another example, see Uchastniki 2014.)
What of alternative institutional sources of policy input? There is no sign of the presidential administration operating as a second government. Indeed it is conspicuous by its absence. The relevant presidential assistant is present at meetings chaired by Putin, but according to participant lists not otherwise. The presidential administration’s structure is still very ‘politically’ oriented, with no obvious economic policy capacity. There is the input of the ASI into the TOSER strategy; the Duma and
ONF have played no role. While ASI is said to have the personal backing of Putin, there is no suggestion that it is anything other than a participant in formal bureaucratic processes, and it can have its ideas implemented only through a formal government structure (Freinkman and Yakovlev 2014, 12).
It is true that MFED represents a new regional approach to bureaucratic administration, one that has been more widely applied since the ministry’s creation
(Ot redaktsii 2014). But it is nevertheless a government ministry, fighting fierce bureaucratic battles with other ministries, certainly not without some personal support from Putin but nevertheless within the bureaucratic mainstream. In summary, policy participants are still bureaucratic and institutionalised, indeed of a predominantly traditional kind.
27
Procedures
That institutionalist finding is largely based on publicly available information.
Unsurprisingly, there is clearly a lot going on behind the scenes. Often in the publicly available source no decision is made, or the decision apparently made is then overturned somewhere out of view.
It is probable that a lot of this is standard ‘smoothing’, of institutional policy participants negotiating in unreported meetings and informal circumstances. More important is the attack on formal procedures within the open policy process. We have seen matters brought to cabinet and other formal meetings without completed soglasovaniye. The most striking case was the March 2013 cabinet meeting, to which
Ishayev’s development program was presented without the sign-off of the Ministry of
Finance. As another example, Medvedev opened the April 2013 meeting of the government’s RFE commission, which brought funding issues to the fore, with the words:
Today colleagues prepared with great difficulty a list of directives, with many
still not signed off. We will have to achieve that right here at the meeting,
because these are indeed objectively difficult directives. The views of agencies
are divergent (Zasedaniye 2013b).
It is unusual, in Russian and broader policy practice, for matters to be brought to high- level meetings with such a degree of disagreement.
One of the claims of those presenting the personalist view of the policy process summarised at the beginning of this article is that economic policy initiatives are
28 increasingly presented without the approval or even knowledge of relevant specialised agencies. Examples include Putin’s 2012 decree on the impermissibility of strategically important companies responding to regulatory enquiries abroad
(“Gazovyi eksprompter” in Kommersant, September 12, 2012); the transfer of contributory pension funds to the Pension Fund (Gaaze in Novoye vremya, September
1, 2014); and the offshore financial amnesty announced by Putin in his December
2014 address to the nation (Butrin and Visloguzov in Kommersant, December 10,
2014).9
It cannot be said that there was no consultation in the case of RFE policy making – the consultation and discussion were extensive, even exhaustive. The issue is not so much consultation as soglasovaniye, the procedure which allows those who are consulted to give force to their views. Changes in soglasovanie mean that the views of those consulted no longer necessarily have the weight they had in the past. The effect of the weakening of soglasovaniye is added to by an atmosphere of extreme urgency, through pressure put on ministers to meet directive (porucheniye) deadlines.10 Some quotations from Medvedev provide a sense of the atmosphere. The
9 That care is need can be seen from the case of the controversial local sales tax.
Babitsky (in Vedomosti, November 21, 2014) claims legislation on was sent to parliament without consultation. Reports exist, however, of a lengthy policy debate, albeit without rigorous soglasovaniye (Papchenkova, Tovkaylo, Titov in Vedomosti,
September 16, 2014).
10 Medvedev introduced the use of the directive as a coercive mechanism. Putin has continued the practice, albeit less abrasively. Fortescue 2012, 133-4.
29 first is from the March 2013 cabinet meeting just mentioned, at which Ishayev’s RFE program was accepted without the soglasovaniye of the Ministry of Finance:
It is time to draw a line under discussion of the program. I understand all the
complexities we are up against. I understand the concerns of the Ministry of
Finance – there is much there that is valid. I understand that specific problems
have not been fully worked out. But if we don’t bring this work on the basic
parameters of the state program to an end, then we won’t get anything done at
all (Zasedaniye 2013a).
As already described, despite the fact that members of cabinet agreed to approve the program on the understanding that six months would be allowed to finalise funding issues, Medvedev signed it into law a few days later, almost certainly in order to meet a Putin-imposed deadline.
At a meeting soon after of the government RFE commission, he said of the same program:
It is without doubt not dogma; it contains a mass of problems, of which
colleagues have spoken; there are internal problems and inconsistencies; and
there is of course the problem of a funding deficit. But we cannot endlessly
discuss the fate of the program, what it contains, whether there is enough
money or not. Work has to begin, because overall its core, the basis of the
program, is a good one ... So let's move forward (Zasedaniye 2013b).
So we have policy participants agreeing to proposals which they likely have not had the opportunity, formal or informal, to work through, with which they are clearly not
30 in agreement, and indeed which they consider to be entirely impractical, and all because ‘something has to be done’.
As they agree, however, they could well be calculating that they are committing themselves to very little. An anonymous official, commenting on a rather aimless discussion chaired by Putin in late 2012 on whether to return to the idea of setting up a state corporation for RFE development, is quoted as saying: “The authorities too often re-examine their own decisions. There isn’t time to work on new projects, there are endless meetings, decisions are constantly re-examined, we have to redo the documentation and calculations. … Clearly there is a ‘crisis of an administrative genre’” (Lyutova, Pis’mennaya, Kostyenko in Vedomosti, November 30, 2012). At the meeting in July 2013 at which Putin strongly criticised the RFE policy process and in doing so signalled the end of Ishayev’s career, one of his major concerns was the failure to implement decisions, or even, he implied, to treat them as decisions. “If we
… come to a general conclusion that the matter can be implemented – then that is what in the end we must do” (Stenografichesky otchet 2013).
Even having something approved by cabinet and draft legislation sent to the Duma does not mean that the matter is over. A draft is sent to the Duma, presumably in order to meet a deadline, with the open or tacit understanding that the parliamentary approval process provides the opportunity to continue intra-executive conflict and negotiation. We have seen an example in the case of the TOSER legislation.11 Even
11 Ben Noble is carrying out doctoral research on this topic at St Anthony’s College,
Oxford.
31 adopted programs and laws quickly become dead letters. The RFE development program approved in March 2013, in circumstances of clear haste and disagreement, was declared to be redundant six months after it was adopted. In an extraordinary statement to the government’s Expert Council in June 2013 Medvedev admitted that ministries operate under great porucheniye pressure to draft documents quickly, and that non-lead ministries, lacking time and expertise, are likely to agree to anything presented to them. That having been admitted, he nevertheless argued that government agencies were far better equipped, in terms of time, capacity and procedures, to handle policy development than the presidential administration or parliament (Vstrecha 2013).
It might be argued that the leadership has succeeded in ramming through important but contentious change that otherwise would have languished in a quagmire of soglasovaniye. But a more pessimistic interpretation is possible. Cabinet agrees to a program which the Ministry of Finance insists – and Medvedev agrees – entails spending at least fourteen times more than is realistic; a few months after the program is approved the strategy underlying it is replaced with an entirely new one; it then transpires that the content of the program itself will hardly change; and work on implementing the program begins before funding arrangements have been made. On a broader scale major commercial bets of considerable risk are forced through on the basis of ‘we have to do something’. It is a situation of what I call ‘policy irresponsibility’; one could go so far as to claim that the policy process has lost legitimacy in the eyes of participants. (Stanovaya [in Politcom.ru, December 8, 2014] uses similar language.)
32 The picture we have observed in RFE policy making is not that of the ‘inner circle’ drawn at the beginning of the article. Most decisions are not made out of the blue or by a small group of trusted colleagues. Rather they are argued over at great length by interested bureaucratic and non-bureaucratic agencies. But some of the elements of the ‘inner circle’ picture are there: a sense of extreme urgency and the collapse of regular procedures, producing policy irresponsibility. In the author’s view both the urgency and the breakdown of procedures are reactions to the soglasovaniye problem, rather than in order to provide the opportunity for Putin and his cronies to seize more power and rent. While not underestimating his hunger for power and theirs for rent, a lot of RFE policy making do not touch upon either.
Leadership
As indicated in the introductory part of the article, leadership has an important part to play in dealing with the soglasovaniye problem. Contemporary Russia might seem to be a classic case of leadership tackling the problem head on. Vladimir Putin presents the image of a particularly strong and aggressive leader. A common characterisation of his third presidential term, in particular, is that of ruchnoye upravleniye, in which no issue is or can be decided without his personal involvement (Gontmakher in
Vedomosti, June 14, 2012).
Putin himself insists that it is not the case that he decides everything (Interv’yu,
2014). He is indeed often reluctant to take decisions, even when implored to do so by policy participants. Even after Yakunin’s ‘I ask you to bring an end to this discussion here at this meeting’, and the Minister of Transport’s ‘We’ve been through this repeatedly in accordance with your instructions’, at the September 2014 meeting at which Trutnev and Galushka endeavoured to strip money from the
33 BAM/TransSiberian project, he still hedged his bets (Soveshchaniye 2014b). Various explanations for his diffidence can be offered. Reasonably convincing is that he has a priority ranking of policy issues, and only those very high on the list – that relate directly to his own personal power, the positions of his closest cronies, and some first- rank matters of foreign policy – receive his undivided and resolute attention. If we apply that reasoning to the current case, it suggests that, to the extent that Putin has been irresolute in RFE policy making, he does not, despite all his statements to the contrary and the apparent objective importance of the issue, see it as of the highest priority.
That might suggest a refinement of the priority argument: that Putin does not see those aspects of RFE policy making that are in the public domain as first priority.
Despite apparently having his direct support the TOSER strategy is not something to which he has any firm commitment. Equally the resource categories discussed here – coal and to a lesser degree iron ore and copper – are not key, despite the fact that some of his cronies have a direct involvement in them. For him the key sector is hydrocarbons. Not least because they are not heavily dependent on rail infrastructure, oil and gas have received little attention within the RFE policy process. It could therefore be hypothesised that they are dealt with differently and much more expeditiously by Putin. This is not the place to test that hypothesis, although it can be briefly mentioned that there have been very drawn-out policy debates in the hydrocarbon sector, and to a significant extent they have been dealt with through a similar bureaucratic process to the one which has been described in this article
(Yenikeyeff and Mekhdi, 2013; Gustafson, 2012; Fortescue, 2014). It could also be noted that, if Putin does not see coal, iron ore and copper as of first priority, then, if
34 current policy outcomes are implemented, considerable amounts of state money will nevertheless be spent on them.
Another reason given for Putin’s policy diffidence is that he is reluctant to expend political capital by taking sides, particularly on issues that he does not see as of the highest priority. If that is a valid explanation for his behaviour, it suggests that he is more an arbiter than an activist leader, without the autonomous power to drive policy.
Putin is indeed often described as an arbiter, needing to keep a balance between various powerful forces in the political arena and doing so at least partly by refusing to take one side over the other (Whitmore, 2010, 1005; Gaaze in Vedomosti, March
12, 2012; Glikin and Kostyenko in Vedomosti, August 21, 2012). This description does not fit with the other, stronger image we have of him, as an autocrat. It must also be said that he does not fulfil even the arbiter leadership model well, given that it is ultimately the task of even an arbiter leader to take sides.
The final possible explanation is that he is very aware of the dangers of ruchnoye upravleniye, because it leads to policy irresponsibility, and so he works hard against the pressures to engage in it. The problem here is that whether he does so or not is not entirely up to him. Policy circumstances require leaders to decide things; in current
Russian circumstances policy participants have become ‘irresponsible’ and therefore require him to decide a lot. His frustration with the situation can be detected at the
September 2014 meeting in which Trutnev and Galushka tried to have
BAM/TransSiberian funding transferred to their TOSER program. Trutnev and
Minister of Transport Sokolov had diametrically opposite memories of what had been
35 agreed at a meeting chaired by Medvedev a few days earlier. Putin, one imagines somewhat wearily, responded:
I will find out whether the government made a final decision or not, but in any
case a decision must be made. To drag things out further is not acceptable. If
the matter hasn’t been decided definitively, then I will ask the head of the
government to sort things out without delay (Soveshchaniye 2014b).
Even in these circumstances he expected the government to resolve the matter.
Medvedev, however, is clearly not strong enough to force policy through, and his efforts to do so have a desperate and counterproductive tone to them. That might be a matter of personality and the hand that he has been dealt by Russia’s political gods.
But it is also a matter of the semi-presidential constitution, in which a strong prime minister can only be seen as a threat to the president.
Conclusion
To summarise the findings under the three headings. In terms of participants the RFE process has not matched the ‘inner circle’ picture presented at the beginning of the article. Cronies do not have a dominant role, and siloviki are almost entirely absent.
Some new institutional participants are present, but struggle to assert themselves. The full range of established institutions - the appropriate ones for the circumstances - are present and prominent.
They have had to cope, however, with significant changes to procedures. Indeed the attack on procedures has been so severe that policy participants have become ‘policy irresponsible’. The established way of doing things, in which they were guaranteed a
36 say, if not a veto, has been broken down through the deliberate undermining of the soglasovaniye process and a harshly imposed sense of urgency. Policy participants go along with it, because they have no choice and believe that there is a good chance that a decision made in such circumstances can be reversed. The consequences of the weakening of soglasovaniye have been particularly severe because Putin has not been able to balance it with the right degree of judicious leadership. The problem, though, is not his excessive involvement, but rather his continuing leadership diffidence.
There is some evidence that Putin is de facto merging the posts of president and prime minister, not by creating a second government in the presidential administration but by involving himself more directly in the affairs of government. This involves ever increasingly sidelining Medvedev, including by dealing directly with deputy prime ministers (Gabuyev, Mel’nikov and Surnacheva in Kommersant, December 20, 2013) and chairing operational policy meetings with government ministers (Butrin and
Mel’nikov in Kommersant, February 5, 2015). He appears to be relying simply on his presence, rather than also providing himself with a significant alternative policy- making capacity. The model is his crisis-management experience as prime minister.
While Russia certainly has some new crises to be managed, it is not a good approach to such long-term strategic policy as the ‘turn to the East’.
If the conclusion were simply that the Putin regime is suffering the expected consequences of total ruchnoye upravleniye, that would not be to say anything new.
Many have already made the point, one worth making since it is highly unlikely that a system as complex as Russia’s can be run by ruchnoye upravleniye alone or forever.
But the more important aspect of the conclusion is that the situation described has
37 come about not so much because of Putin’s thirst for power and fear of not directly controlling everything. He does not control everything, and his claims that he does not want to are plausible. It is also not a case of Putin wanting to destroy old institutions because he wants to deal only with cronies and siloviki. Without underestimating their presence and importance, they are not everywhere and there are still significant policy actors of an essentially bureaucratic institutionalised nature.
This suggests that the problems of the Russian policy-making process derive not just from Putin’s personalistic tendencies or from it being limited to an ‘inner circle’.
They therefore cannot be solved simply by removing him and restoring strong institutions. An important part of the problem is in those institutions themselves, suggesting that solutions are constitutional and structural. This raises such issues as parliamentarism versus presidentialism, semi-presidentialism versus full presidentialism, technocratic versus ‘political’ ministers, and even democracy versus authoritarianism. It is unlikely that any of these will receive much practical attention in current circumstances, to the detriment of Russian policy making.
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49 Table
Table 1. Comparative cost of resource-export infrastructure
Cost, $US Period of Added Total
billion* expenditure capacity, capacity, mtpy
mtpy
Australia 30** 2000-10 360 720
Russia – 16 2015-17 66 124.4****
BAM/TransSib***
Russia – rail to NW 13.6 2015-25 83.4 301.8 ports
Russia – rail to 4.8 2015-20 70.8 133.4 southern ports
*$US1=R35.
**includes all export-related infrastructure, both state and private.
***Mainlines only. Does not include ports or connecting lines from deposit to mainline.
****Mineral traffic only.
Sources: Australian Bulk Commodity Exports 2012, 2; Pasport 2014a; Pasport 2014b;
Pasport 2014c.
50