Institute of Modern Russia

Republic.ru: The Kremlin’s Сunning. Why Is Putin’s Final Term Becoming a Game?

• Author: political commentator Tatiana Stanovaya.
• On February 21, the Kremlin announced that Vladimir Putin is planning to run in the 2018 presidential campaign. Stanovaya argues that although the news is not surprising, the devil is in the details.  
• Accounting for the varying emphasis given to the news by the Russian media, one thing stands clear: the elections must produce a historically high result for Putin. But even more important than that, he has handed in his notice: his next term is set to be his last.  
• The argument goes that the Russian electorate will be offered to vote not for President Vladimir Putin himself, but rather for the so-called “federal agenda” which has been set out over the course of the last six years, but has only begun to be put together.  
• The choice of the larger agenda is logical: in 1999 and 2004 Putin’s personal qualities were prime factors in his electoral success, but as the years have gone by the process has become increasingly devalued, and he is now facing a crisis of legitimacy.  
• The basis of this “final round” is that it gives Putin a chance to prepare the country for a change in the elite, and effectively to finish what he started. The message to the electorate is clear: support Putin, there won’t be another chance.  
• Stanovaya contends that presenting the question of the end of the Putin regime is a very smart political move. At face value this new contract looks like a cunning trick, but scratching the surface reveals that the regime has run out of resources and is preparing for the transformation of the political system.
• The reshuffling of the elite and the loss of some political heavyweights over the last year signaled that the system was on the move. The regime, once extremely sensitive to change, seemed to have suddenly begun to transform itself.  
• Stanovaya believes it was an illusion: the appointment of “technocrats” is the sole way of preserving the regime.  
• The idea behind “Putin’s final term” is an attempt to give meaning and legitimacy to the obstacles that Russia has faced over the past few years. The main role in overcoming these obstacles was assigned to Vladimir Putin, who will be offering his voters the chance to vote for a “historical presidency.”
• Putin might indeed be relying on securing such a strong mandate that he will be able over the course of the next six years to form a new regime, and appoint a new successor. But all this pre-election cunning might turn out to be simply a reflection of the unfulfilled dreams of one man, having done everything so that no one could stand against him, concludes the author.

Republic.ru, Кремлевские хитрости. Зачем нужна игра в последний срок Путина на выборах-2018, Татьяна Становая, 22 февраля 2017 г.

Vedomosti: New Nomeklatura: A Package Method

• Author: political scientist Nikolai Petrov.
• Over the last two weeks five Russian governors unexpectedly resigned. All of them were unpopular and deemed weak by the Kremlin, thus making them a burden on the eve of the 2018 presidential campaign as opposed to helpful drivers.
• Petrov writes that the Kremlin seems to have established a new routine--urgently announcing that a certain Russian governor is resigning, organizing a discussion of a potential successor in the media, and issuing a presidential decree to appoint a new acting governor.
• The routine aims at showing both the public and the remaining governors who the boss is in the country.
• The resignations follow the same “package” pattern, as with earlier “purges” among the siloviki.
• All the successors are young technocrats who may be used as potential implementors of liberal reforms, but even without that they can serve as “effective managers.”
• Petrov argues that observers should not be misled by what may seem like a positive shift in the elite structure. These new appointments stand to prove that authoritarian modernization should be expected at best, while a strengthening of authoritarian control is a more realistic explanation.

Ведомости, Новая номенклатура: Пакетный метод, Николай Петров, 20 февраля 2017 г.

Carnegie.ru: New Containment. Did Russia Grow Disappointed with Trump?

• Author: Alexander Baunov, editor-in-chief of Carnegie.ru.
• The cooling-down of Trump’s rhetoric on Russia and Putin is the result of the many efforts undertaken by the U.S. establishment and media to contain the unconventional behavior of the new American president.
• Baunov notes that the resignation of Michael Flynn over his contacts with the Russian ambassador in the U.S. serves as an example of scapegoating in the midst of the anti-Russia campaign in the West, as reaching out to foreign diplomats per se is not typically bypassed even by officials in Russia, where the risks of being accused of treason run much higher than in the U.S.
• The author argues that such mistrust of own citizens is a characteristic of authoritarian regimes, and it seems that the U.S. has imported the idea of a “foreign enemy” from Russia, as the anti-Trump campaign exploits the Russian scare in full.
• The U.S. domestic rhetoric is typically anti-Russian, therefore Trump’s public enthusiasm and willingness to deal with the Kremlin, while no one forced him to reveal it, were perceived by the Kremlin as a sign that these are his true beliefs.
• It is also noteworthy that the Kremlin and its propaganda machine rejoiced in Trump’s victory not just because of Trump’s beliefs but also because he prevailed over “the common enemies”—those whom Russia fought as well (Hillary Clinton, liberal and ultra-conservative politicians, major U.S. media).
• Given Trump’s promise of a “big deal,” the Kremlin’s problem is that it has no bargain chips, while the list of its requests is long: lifting of sanctions, recognition of Crimea, no more NATO expansion, no more meddling in Russian domestic policies, acknowledgment of Russia’s global power status.
• Baunov also notes that the swings of the Kremlin propaganda—first in Trump’s favor and now away from it—shows that if it was so easy to quell the raging anti-Americanism in society, Russia’s true feeling for the U.S. is perhaps long unrequited love.
• The rhetorical distance that both Trump and Putin are maintaining after the Flynn scandal, however, will allow for a more constructive dialogue, concludes Baunov. Trump being viewed as “Putin’s favorite” was a problem for both.
• Without Trump casting a long shadow over the U.S. relationship with Russia, true detente is more likely to take shape.

Carnegie.ru, Новая сдержанность. Разочаровалась ли Россия в Трампе, Александр Баунов, 17 февраля 2017 г.

RBC: Fiscal Political Economy: Why Raising Taxes Will Hinder Reforms 

• Author: political scientist Kirill Rogov.
• Fiscal reforms, including, among others, raising income tax up to 17 percent (currently Russia has a flat rate of 13 percent), have been at the center of all discussions in the government’s economic bloc this February.
• The public is thus gently being introduced to the idea that a tax increase is inevitable.
• The government is also calling for business to “come out of the shadows,” with an eye to, once again, increasing the effective tax rate and pouring more money to the budget.
• However, according to Rogov, Russia’s abnormally large “shadow economy” (40 percent of GDP) is the result of two factors—poor administration of law and weak regulation.
• Thus, what the government is trying to achieve will give the economy a short-term boost and help it gain a few statistical points in terms of GPD rate, but the real effect of these fiscal reforms in the long term will be zero or even negative.
• The 2008-2009 crisis brought Russia face to face with a new political and economic reality: as investment activity and growth rates were declining, the public sector was growing.
• But by that time a new coalition had been formed within the Russian elites. It was brought together by their shared interest in amplifying the role of the military and police.
• This coalition creates demand for geopolitical tensions and foreign confrontations. And as a result of its activities, the country’s budget has been distorted to allocate almost 40 percent for defense and law enforcement.
• This coalition is not willing to change the current budget structure; therefore, the government’s economic bloc will continue its torturous efforts to squeeze additional money from the economy and the public.

РБК, Фискальная политэкономия: почему повышение налогов помешает реформам, Кирилл Рогов, 22 февраля 2017 г.  

Nathan Andrews helped compile this week's roundup.