ladimir Putin has initiated some high-profile battles against corruption. But to many he seems increasingly isolated and out of touch
Dec 1st 2012 | MOSCOW | THE ECONOMIST
STATE-RUN television is not usually the place to find news of corruption scandals involving officials close to Russia’s president, Vladimir Putin. Murky business dealings have never been a bar to government service. When high-level bureaucrats fall, they usually go quietly. But viewers have recently been treated to quite a spectacle on Channel One: evening broadcasts full of current and former ministers, their lovers, their expensive homes and millions in misappropriated funds.
This nascent anti-corruption campaign began in October with the dismissal of Anatoly Serdyukov as defence minister. He was fired after investigators linked a company spun off from the ministry to a $100m fraud. That a high-level official with ties to Mr Putin could be so publicly dumped was unprecedented. But since then, a $200m embezzlement case over a satellite-guidance system has threatened Mr Putin’s chief of staff, Sergei Ivanov. And on November 27th Rossiya-1 channel aired a documentary linking a former agriculture minister, Yelena Skrynnik, to a reported $1.2 billion fraud.
For Mr Putin, taking on graft in his own circle has several benefits. It is popular: between 2005 and 2012, corruption rose from tenth to third in the concerns of ordinary Russians. It is also an issue that unites his opponents. Mr Putin may dismiss democratic worries, but he sees himself as a popular leader, responsive to the national will. Legitimacy of a kind matters deeply.
Eight months after his election to a third term, Mr Putin’s support looks shaky. The polls give him some of his lowest approval ratings ever. So he feels “compelled to carry on a populist course, as if the elections were still ahead of him,” says Nikolay Petrov of the Carnegie Moscow Centre. Fighting corruption also defangs the most resonant complaint of the opposition.
Launching corruption cases against his inner circle can also rein in excesses that make Mr Putin politically vulnerable and the state ineffectual. In his 12 years in power, bureaucratic corruption has gone “unpunished, unattended, and uncontrolled”, says Elena Panfilova of Transparency International, a lobby group. Worse, state employees now feel emboldened to siphon off resources even without sustaining social stability. Targeting a few high-profile officials can be a way to “introduce a certain level of fear,” Ms Panfilova notes.
A disruptive public war on corruption also can create more infighting among political and business clans. That seems to be happening at Rostelecom, where two managers are being questioned about a $225m fraudulent loan from VTB, a state-run bank. Control over lucrative telecoms licences may be the real point. Yet an anti-corruption purge can also take on its own uncontrolled momentum, which could make Mr Putin weaker, not stronger.
All this feeds a sense of uncertainty, with the Moscow political elite “disoriented,” according to Mr Petrov. Investigative files on the two defence cases have existed for years, only to resurface now. Are the rules changing? What could be unearthed tomorrow, and against whom? At the same time, the mood of rudderless leadership has been worsened by questions over Mr Putin’s health.
For much of October and November, Mr Putin worked at his Novo-Ogaryovo residence outside Moscow, rarely going to the Kremlin and cancelling foreign trips to Bulgaria, India and Turkey (though he is now going to Turkey next week). News reports discussed a possible back problem caused by flying an ultralight plane beside some wild cranes in September. The Kremlin dismissed this, saying only that Mr Putin had pulled a muscle while exercising. In another political system, the story might have stopped there, but in Russia the mystery took on symbolic resonance.
Over the years, Mr Putin has played on traditional Russian deference to the leader while relying on manipulation of the media. The “charismatic aura” for Mr Putin, says Lev Gudkov of the Levada Centre polling group, has produced a system like “Byzantium, only on television.” The real point of the story about Mr Putin’s back was not the supposed ailment but the breaking of a taboo over discussing his health—and his future.
The biggest concern is Mr Putin’s isolation. His claim to Germany’s Angela Merkel that Pussy Riot members had hanged the effigy of a Jew in 2008 was bizarre and inaccurate (in fact, the band was protesting against anti-Semitism); either he was misleading her or he had himself been misled. Mr Putin has spent over a decade in power and Yevgenia Albats, editor of the liberal New Times, talks of the “typical syndrome of an ageing general secretary”.
Compared with his early years in charge when he relied on economic aides like German Gref and Alexei Kudrin, Mr Putin has less faith in the counsel of those around him and more certainty in his own judgment. After a difficult year, he believes that he “owes his position to a hard-fought electoral victory, unlike his colleagues who have no mandate from the voters”, says Sergei Guriev of the New Economic School. On many issues, says one former adviser, Mr Putin “thinks he understands the situation, but in fact it can be quite incomprehensible for him”.
Decision-making in the Kremlin appears to be on hold. Mr Putin has slowed down progress on the budget, on pensions and on privatisation. This may partly be a prudent move to sit out recent turmoil in global markets. But the danger of what Chris Weafer of Troika Dialog calls a “deliberate policy of inactivity” is that Mr Putin waits too long, acting only when the next political or financial crisis hits him.
As for the campaign against corruption, it will go only so far. Corruption is a pillar of Putin-era stability as much as a threat to it. Much of what could be called corruption has become formalised, if not legalised, through official tenders, court rulings and bank-approved loans. That makes it both more prevalent and amorphous—and harder to eliminate.
Alexei Venediktov of the Ekho Moskvy radio station likens the situation to “turbulence” in an aeroplane. The ruling class may know “in which direction and with which pilot” they are flying, he says; but the plane is shaking disconcertingly.