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The Age of Impunity: Russia After Communism and Under Putin

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The Age of Impunity: Russia After Communism and Under Putin Russian President Dmitry Medvedev and Prime Minister Vladimir Putin–Maxim Shipenkov/AFP/Getty Images Images Shipenkov/AFP/Getty Vladimir Putin–Maxim and Prime Minister Dmitry Medvedev Russian President The Age of Impunity: Russia After Communism and Under Putin By Michael Weiss and Julia Pettengill Copyright Henry Jackson Society, 2011 About the Henry Jackson Society The Henry Jackson Society: Project for Democratic Geopolitics is a cross-partisan, British think-tank which seeks to pursue, protect and promote the principles of free and democratic societies. Our founders and supporters are united by a common interest in fostering a strong British, European and American commitment towards freedom, liberty, constitutional democracy, human rights, governmental and institutional reform and a robust foreign, security and defence policy and transatlantic alliance. The Henry Jackson Society is a company limited by guarantee registered in England and Wales under company number 07465741 and a charity registered in England and Wales under registered charity number 1140489. For more information about The Henry Jackson Society’s activities, our research programme and public events please see www.henryjacksonsociety.org Acknowledgements The authors would like to thank Taylor Brudos, Dr Paul Gunn, Belgin Palaz, Katharine Thane, Erik Tropp and Edward Winfield for their research assistance. 2 About the Authors Michael Weiss Director of Communications A widely published journalist, Weiss has expertise in the Israel-Palestine conflict and human rights in the Middle East. He recently wrote HJS’s Media Briefing: “Fatah-Hamas Reconciliation: A Preliminary Assessment” and co-wrote “The Syrian Opposition: Analysis with Original Testimony from Key Figures”. Weiss has been published in Slate, The Wall Street Journal, The Weekly Standard, The Daily Telegraph, The New Criterion, The Guardian, Beirut’s Daily Star, Asharq Alawsat, Foreign Policy, Prospect, Standpoint, Democratiya and The New Republic. He keeps a regular blog on foreign policy and the Middle East for the Daily Telegraph and one on culture for The New Criterion. Julia Pettengill Research Fellow Julia Pettengill is the co-author of “Regional Actors and the Fatah-Hamas Unity Deal,” and “A Guilt Beyond Crime: The Future of Genocide Prevention in the Anglo-American Sphere”, published by the Henry Jackson Society in 2009, and cited in the Conservative Party Human Rights Commission’s 2010 report “Those Who Bear the Greatest Responsibility.” Pettengill holds an MA in Modern History from the University of St Andrews, and worked as a writer and researcher prior to joining HJS as a Research Fellow in May 2011. 3 Introduction “The clock of communism has tolled its final hour. But the concrete structure has not completely collapsed. Instead of being liberated, we may be crushed beneath the rubble.” Alexander Solzhenitsyn made this prediction just prior to the collapse of the Soviet Union in 1991, and the revival of Russian autocracy in the last decade has sadly demonstrated the prescience of Solzhenitsyn’s prophecy.1 This is not to say that the Russia of 2011 was fated to endure the “sovereign democracy” of Vladimir Putin, as is all- too-often suggested. As the country prepares for its next round of pantomimed elections, it is important to reflect upon the developments and decisions which led the country to its current state. Indeed, a closer inspection reveals a country which is reaping the consequences of poor decisions made in the panicked days of the first post-Soviet decade. Seven decades of totalitarianism left the country with a devastated economy, atomised society and perverse political culture. The political developments of the twenty years following the collapse of the Soviet Union bear significant implications for Russia’s future political development, and important lessons for transitioning societies around the globe. This report provides an overview of the key developments of post-Soviet Russia which contributed to the current status quo, including the formative decisions of the Yeltsin era; the origins and reasons for the success of “Putinism;” the merger of oligarchic and state interests under Putin; the decline in political freedom; Putin’s economic policy and foreign policy. Protestors on the Berlin Wall near Brandenburg Gate in 1989. -- Robert Maass/Corbis 4 “THE REVOLUTION BETRAYED”: THE YELTSIN YEARS Boris Yeltsin was elected president revolutionise the economy through been established in every Russian of the Russian Federation in “shock therapy” was headed by region, with local branches in December 1991, riding a wave of Yegor Gaidar, Anatoly Chubais and hundreds of cities and towns. popular support after facing down Dmitry Vasiliev, rebel idealists who While the infrastructure was in the attempted coup by hardline had read Hayek and Friedman under place, the GKI erred significantly in members of the Politburo in 1991. the covers during the Brezhnev its two-phased programme to win Yeltsin rose to prominence as a era. The Financial Times’ former political support. The first mistake democratic populist during the years Moscow correspondent Chrystia was to offer workers and managers of glasnost and perestroika and, as Freeland memorably dubbed them up to 40 per cent shares in their president, brought in the economic “McKinsey revolutionaries”: while old companies and to grant them “young reformers” responsible for they all had a “Big Idea” about how the right to buy 51 per cent of the managing Russia’s transition for to transform their country, they voting shares at cut-rate prices. The communism to the free market. The were less interested in overseeing managers took advantage and then reformers’ hopes of privatising Soviet the detail-oriented execution of that some. Soon followed the spate of assets and building a widespread transformation.4 The result was a so-called “Red directors”— former middle-class did not materialise as shock therapy administered without factory managers who became envisioned: by the time Yeltsin left circuit breakers. wealthy rent-seekers overnight but office in 1999, ten per continued to run their cent of the population businesses like corrupt owned half of Russia’s and unaccountable state wealth, 50 per cent enterprises. Instead of owned less than a fifth, free enterprise, a kind of and between 30 and 40 kleptocratic feudalism million people subsisted persisted. According to below the poverty line.3 Joseph Blasi, a Rutgers After the collapse of the University professor Soviet Union in 1992, the who advised Chubais weakened rule of law, and GKI, two-thirds an acquaintance with of medium and large market principles and the Russian companies institutions underpinning retained their old Soviet social and political directors because of stability presented a the GKI’s over-generous daunting combination incentives package.5 of challenges for the The most ruthless and newly-formed Russian Russian Federation President Boris Yeltsin stands atop an armoured personnel carrier urging self-aggrandising of Federation. Many Russians to resist a central government takeover by Soviet hardliners– AP these Red directors of the most important building The economic reformers took their were the gazoviki and neftyaniki – blocks of the new state were put practical inspiration from the broadly the managers of Russia’s enormous into place incorrectly or not at all. successful and unprecedented natural gas and oil companies, The Supreme Soviet, (the Soviet- privatisation policies imposed who lacked any regard for minority era parliament) was not dissolved in Poland beginning in the late shareholder rights or corporate until 1993 in an action which 1980s. However, unlike their Polish governance. Not that this was provoked a constitutional crisis; counterparts, the young reformers entirely their fault for none had what had remained of the pre- had no political base of their own had a crash course on ethics, democratic body was dominated by – they served exclusively at the transparency or even proper apparatchiks and Bolshevik managers pleasure of Yeltsin and with the bookkeeping methods. The historian of publicly owned enterprises. backing of Western economists Robert Conquest recalled visiting St Their political predominance – and relied on coaxing wary a Petersburg toward the end of the hobbled a comprehensive and Soviet elite into accepting mass Soviet era and inquiring about the principled economic liberalisation privatisation. In 1991, Chubais state of Russian roads. He was first programme, leading to governance founded the State Privatisation met with shrugging complacence: by half-measures and compromised Committee (GKI) to administer the “Our roads are bad.” expediencies. auctioning off of vast state assets. By the end of the year, GKI offices had “...Yes. Why is that?” The team appointed by Yeltsin to 5 “It’s our weather - an isotherm runs majority stake in the tin factory. organisations engaged in unlikely down the Finnish border.” business practices. In one of the Red directors also typically owned most infamous examples of this “And seriously?” more shares than they were lawfully practice, the Russian Orthodox entitled to, a fact which the GKI “They were built by the state.” Church imported cigarettes and overlooked and which the chaotic alcohol duty-free. Elsewhere, “Yes, but we have roads in England legal system was unable to redress. misbegotten tax havens, known as which were built by the Roman state As a result, although most Russian ofshornaya zona, were established
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