Yabloko-style reforms or China’s experience: the question "Who is Mr. Putin?" remains unanswered

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Persistent rumors about a Cabinet dismissal, which have recently grown into open media expectations that “heads will roll”, have received support during Duma debates on amendments to the 2001 budget.

After a furious debate, which finally turned scandalous with demonstrative walkout by the Communists and Agrarians, the amendments which finally allowed the Cabinet to resume repayments to the Paris Club were passed. However, finance minister Aleksei Kudrin failed to convince the Duma to lift restrictions on privatization of large enterprises.

Meanwhile, a Cabinet delegation hoped until the very last moment to convince the Duma to cancel the notorious budget item No. 100: this would have given the Cabinet a possibility to make up a shortfall of 15 billion rubles through urgent sales of state-held shares.

As the Vremya MN paper noted, the fuss over the amendments to the budget has once again demonstrated the weakness of the current Cabinet. Some observers were much more decisive about the issue: they described the situation as the beginning of a Cabinet crisis; probably an overall government crisis.

It is hard to argue with such a standpoint; especially given that the Kremlin has done nothing to help the Cabinet – according to the paper, “the presidential lobby in the Duma is now just an observer. It seems they wanted to see whether the Cabinet would be able to find a way out of the situation.”

So, Kasianov’s Cabinet has failed to cope with the situation; and, as Nezavisimaya Gazeta wrote the next day, “Alexei Kudrin had to admit that the idea of privatization of large enterprises was unprincipled”.

According to the Vek weekly, the conflict between the Duma and the Cabinet over the amendments makes one think that the “honeymoon” between the executive and the legislative branches of power has ended.

According to Vek, the first signs of “impending cataclysms” are already obvious: for instance, the intention of the Communists to move a vote of no confidence in the Cabinet. Rumor has it that Gennady Zyuganov received the idea from some “senior officials, who are said to want to check the prime minister’s durability”. (However, the Kremlin, in turn, has sent the Communists an angry note, concerning their obstruction during budget amendment debates.) Alexander Kotenkov, presidential representative in the Duma, warned the deputies that if the activities of the major committees, which the Kremlin allowed the Communist Party to control right after the parliamentary elections, are paralyzed because of such moves, the question of “replacing” their leadership is likely to be raised. The Kommersant newspaper, commenting on Kotenkov’s statement, did not doubt that the pro-presidential majority in the Duma is really likely to hold the redistribution of the spheres of influence. On the other hand, the paper says that actually, the current layout of forces in the lower house of parliament is rather convenient: the Kremlin has long since found a common language with the majority of the heads of the Duma committees. That is why, according to Kommersant, Kotenkov’s words are rather a “mild reminder that the Communists’ fate in the Duma is still in the hands of the Kremlin, and exceeding the limits is not worth it”.

According to the Vek newspaper, now is not the time for the Cabinet to be dismissed; so far it has done nothing about reforms, except for slight budget cuts. According to the paper, the Cabinet’s real troubles still lie ahead: they will start after the first attempt at reforms; for instance after the beginning of the housing reform, which has been often discussed lately. (It is even supposed that this topic is likely to be touched upon in the presidential letter on the state budget). The paper believes that the attempt may turn out to be fatal. And the point is not that the beginning of the housing reform will mean another phase of “tightening belts” for Russians, but that it is highly likely that no economic effect will be achieved: “Unlike in early 1990s, not only decrees and resolutions are necessary for carrying out structural reforms, but also a huge professional staff; a subtle organization of new social relations.” And so far, these are only dreams; consequently, everything will remain as it is: “pipelines will keep breaking, and roofs will remain full of holes, while utility fees will continue growing”. That is when the Cabinet will have to resign.

However, according to Vek, all these conflicts are most unlikely to seriously worsen relations between the president and the Duma. In order to push through the necessary amendments to the budget, as well as liberal reforms, the president has the necessary support: not only with the Unity Duma faction, but also with the right wing. However, if the reforms fail, and the president decides to return to the “stabilization course” and a moderate Cabinet, he will always be able to get the left wing, the Communists and People’s Deputy Duma factions, to support the regime.

According to Vek, the current conflict between the Duma and the Cabinet is “a sign that the Russian political process is returning to its traditional course of fluctuations: from attempts at a liberal breakthrough to the policy of stabilization and regression.” The weekly notes that unfortunately, at the same time “there is still a shortage of strategies for Russia, which would take into consideration the real economic and human potential of the country. And if there are no strategies, there is no development. And time is running out.”

The Obshchaya Gazeta paper says in one of its articles that the current opposition to the regime (or, to be more precise, the two oppositions) are as much responsible for the situation in Russia as the president and the Cabinet.

“The sum of these three elements – the regime and the two oppositions – is in fact the political system of modern Russia,” says Obshchaya Gazeta. At the same time the right and the left oppositions, despite all their external differences, are not in fact very different at all: “Both have shown their inability to win power, and both are objectively supporting the regime.” According to Obshchaya Gazeta, the similarity between the two oppositions is visible in that they are both extremely limited in terms of public support – which in the long run leads to their political helplessness.

The Communist Party will never be able to come to power, for “one glance at Shandybin, Ilyukhin, or Makashov arouses horror in any normal cultured person”. This also concerns the right wing, since “ordinary people reject the right at gut level, just like the intelligentsia rejects the Communists.”

At the same time, the characteristic feature of both oppositions is their very strong ideological rhetoric. The favorite topic of the Communists is the “occupation regime”, Russia being sold out, anti-Semitism, and, of late, pro-Stalinism. While Yavlinsky “considers his duty to make necessary and unnecessary statements against the Communists and the Soviet regime”. Obshchaya Gazeta stresses that both the Communists and Yavlinsky use rhetoric aimed at maintaining the sympathies of “narrow segments of the electorate”, which simply scares away the majority, who are “not anti-Semitic or pro-Stalinist, who have no hatred for the long-deceased Soviet regime, when they used to live better then they do now.”

Amazingly, the radical rhetoric of both oppositions combines very well with their readiness for compromises with the regime. Yabloko leader Grigory Yavlinsky often mentions the “pseudo-opposition” of the Communists, since so far no criticism of the regime has stopped the Communists supporting many of the government’s decisions. However, the right are also ready to join the Cabinet right after their indignant criticism – on certain conditions, of course.

There is an impression that both the right and the left realize that they will never be able to come to power, and are glad to participate in significant decision-making by any means available. “The regime has no difficulties with controlling such oppositions,” says Obshchaya Gazeta, and “Managed democracy is the regime’s system of managing the oppositions.” In such a situation the new law on political parties, which establishes strict state control of them, (with the help of state funding as well), is just legalization of the existing state of affairs, when “the regime needs both oppositions, and both oppositions play certain roles.”

According to the magazine Kommersant-Vlast, the present budget crisis has in fact, overcome the limits of the government crisis: “It is a crisis of the whole political system created for Putin.”

According to the magazine, the prime minister was deprived of real power long ago: “Management of Cabinet ministers is often carried out directly by the president, without asking the permission of the prime minister.”

However, sometimes the president asks the prime minister for his opinion, “especially since as a rule, he does not trust the opinion of one person only, even among his closest team members”. For instance, having received a package of deregulation bills from Economic Development Minister Herman Gref, Putin at once called Prime Minister Mikhail Kasianov and asked what he thought of the proposed innovations. However, the magazine believes that in fact the head of state does not appreciate the opinion of his prime minister very much: look at the appointment of Yevgeny Nazdratenko, ex-governor of Primorye (Maritime territory, Russian Far East), an ardent opponent of quota auctions, as the head of the State Fisheries Committee, to which Prime Minister Kasianov strongly objected. It is senseless to ask, given such personnel policies of the president, whether the prime minister has any hope of establishing economic strategies of his own.)

According to Kommersant-Vlast, the president as well as the prime minister is to blame for both the scandal over repayment of Russia’s foreign debts and gaps in the 2001 budget. It is absolutely clear that in order to solve the current issues today “big money and strong political will are necessary, which the Cabinet does not have and cannot have”.

The point is that “the period of Putin’s adjustment to power has obviously gone on for too long”. The magazine says that the president should once again determine and announce which path he chooses (naturally, the path in question is the path of liberal reforms, since increased state intervention in the economy would be “fatal for the country”). Then, in accordance with the choice made, he should start to carry out distinct personnel policies.

“Russia does not need a technical prime minister, who simply holds the situation in place, and is responsible for nothing. Only a really authoritative politician can be the prime minister, who understands the economy very well, and at the same time has freedom of action,” concludes Kommersant-Vlast; adding that so far there is no such person in Putin’s team.

Andrei Kolesnikov, an observer of the Izvestia newspaper, gives his view on the situation in the Vek weekly. It seems to him that the prime minister is not cornered: “On the contrary, Prime Minister Kasianov has started frantically explaining the policies of the Cabinet, and is currently acting as the press-secretary, head of the department for government information, and spokesman for the Cabinet.”

Kolesnikov notes that among previous prime ministers, only Serge Kirienko was able to be so publicly active, which made it possible for him to continue his career as a politician after his dismissal.

Kolesnikov thinks that “the current prime minister is also gradually becoming a politician; and, instead of humbly awaiting the blows of fate from behind, above, left and right, he has started to counter-attack.” In particular, that is why Kasianov has in fact ignored the whole story with the vote of no confidence in the Cabinet, which has been initiated by the Communists.

Overall, Andrei Kolesnikov is rather skeptical about the prospects of reforming the Cabinet. From his point of view, there is a certain logic in uniting the state financial structures (the Finance Ministry, the Taxes and Duties Ministry, the Federal Tax Police Service, the Customs Committee): it is much easier to manage such an organization. Besides, merging social services departments is also quite rational, since they are also connected with each other. Nonetheless, such restructuring makes sense only if there is a “real reform breakthrough”, which demands that all the forces should be concentrated. Otherwise, Kolesnikov notes, it will be just bureaucratic nonsense.

As for the political reform of the Cabinet, according to the Izvestia observer, it makes no sense at all economically: “It is a completely bureaucratic game, which creates all the conditions for transferring some officials to other, more stable positions.” In these terms, Kasianov’s Cabinet turned to be a “Cabinet of equal opportunities”: each of its members “can be taken to a career peak, but equally, has a chance to be brought down.”

Nonetheless, Kolesnikov shares the opinion that the Cabinet reform is inevitable, and in May the new structure of the Cabinet will be approved. Of course, if nothing else happens before then…

Recently, Moskovsky Komsomolets also discovered “a political crisis in the air”, the first crisis since Vladimir Putin was elected president. All of a sudden, it became clear that the “political configuration which has existed in Russia over the past year has exhausted its resources.”

Unfortunately, nothing has been done during that year. The Cabinet has not taken to the “actual structural reforms.” A reform of natural monopolies is out of the question, and the stream of oil export dollars has bypassed the treasury.

The Cabinet has even failed to take advantage of the president’s unique rating. The president’s team has made it the goal itself, and therefore it has been wasted, as Moskovsky Komsomolets says.

Of course, if the president conducted unpopular reforms, this would spoil his rating. However, reforms are impossible in Russia without the president’s support.

In the opinion of Moskovsky Komsomolets, another reason for the crisis is the fact that the president does not appreciate the political structure around him, which is working, despite all its demerits. The crisis in the president’s circle might have started because of Sergei Yastrzhembsky’s appointment Voloshin’s deputy for public relations. The newspaper says that the new special informational department will inevitably start to conflict with the existing press service and the Domestic Policy Department.

However, Moskovsky Komsomolets says that this hardly worries the president: “he views his team merely as his subordinates. And it is not difficult to find subordinates, unlike brothers-in-arms.”

Moskovsky Komsomolets says that, judging from Herman Gref’s visit to China and Nazdratenko’s return to power, the president himself is unaware what he should do to gain the necessary results. Therefore, in summer the situation may be as follows: there will be a lot of talk about reforms, but the government will care only about the president’s rating, so as to enter 2004 calmly, and only after that begin unpopular reforms.

A lot of media have commented on Gref’s trip to China. Nikolai Vardul, a journalist of Kommersant-Vlast, has said that Russian reformers may soon have to be oriented to the Chinese model of reforms. Liberalism may yield to Russia’s enormous foreign obligations. This situation is leading to reinforcement of the state’s role.

Novaya Gazeta is of the opinion that recent misfortunes of the Cabinet are caused by the incompetence of the president’s devoted team. Its ineptitude has lead to the confusion surrounding MiG fighters that Austria was allegedly “eager” to buy and to the scandal over debts to the Paris Club, since someone told the president that the Paris Club was sure to reschedule the payments. As a result, the government had to apologize to the whole world and ingratiate itself with the Duma so that it would adopt amendments to the 2001 budget. Novaya Gazeta optimistically thinks that these scandals may change Putin’s conduct and make him show his actual strategy to the country and the whole world. That is why rumors are circulating that the president has offered Stepashin the prime minister’s position. It is also rumored that the president intends to rely on intellectuals from Yabloko and use Mikhail Gorbachev’s authority for improvement of relations with the US. Of course, Gorbachev will hardly become an official, but he may consent to a specific mission on some conditions. It is even rumored that Putin may discontinue the campaign in Chechnya. According to Novaya Gazeta, this conjecture may be supported by Stanislav Ilyasov’s appointment as prime minister of Chechnya, since Ilyasov does not conceal his intention to put an end to the war.

Novaya Gazeta notes that these are optimistic scenarios, but the Cabinet may realize that it should not miss this chance, for it may prove to be the last one.

Itogi magazine says that in 1999, Sergei Stepashin was dismissed from the prime minister’s position in a most unpleasant way. But now the team of St. Petersburg special services officers has nominated him as a candidate for prime minister again, since he is devoted to the president, holds liberal viewpoints on the economy, and comes from St. Petersburg. According to rumors, Stepashin has made it clear that he is ready to enter the Cabinet again.

Meanwhile, according to Itogi sources in the Presidential Administration, Security Council Secretary Sergei Ivanov is also rumored to want the post of prime minister. In this case the Security Council will be taken over by Yevgeny Primakov, who is now bored to tears in the Duma.

The magazine notes that it may seem that the president is fulfilling some plan by shifting officials around. However, the problem is that the president has no plan at all. According to the magazine, there is a crisis of ideas in the Kremlin. The president has not made up his mind yet what to do first: to carry out sweeping state reforms in order to make the government more compact and efficient, or to implement a number of social reforms, e.g. in the fields of health care, education, and the pension system. The president does not dare display his political will. Therefore, Itogi comes to the conclusion that “if the president starts reforms, they will be motivated not by primary needs of the economy but by tactics of the clans surrounding the president.”

It seems that neither banishing tycoons from the government, nor changes at the top of the political Olympus are radically changing the Russian political tradition.

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