In the run-up to the 2018 presidential election, the Russian political system has entered a period of radical personnel change. Although President Vladimir Putin’s regime has undergone three sweeping transitions in the past, the current upheaval points to a more fundamental change in the system of Russian governance: real power is now increasingly concentrated outside formal government institutions. Consequently, regardless of what Putin decides about his future, his regime will need to adapt to the challenges of this new system to ensure the future stability of Russia.

null
Tatyana Stanovaya

founder and CEO of political analysis firm R.Politik. Reality of Russian Politics

 

Understanding the driving forces behind the three previous transitions helps to shed light on why and how Russia’s governance system has evolved so dramatically. From 2003 to 2004, the Russian government underwent its first wave of personnel changes, as Putin sought to expand the influence of his close associates and cull officials connected to former president Boris Yeltsin. To secure political dominance, the Kremlin sought to strengthen its power vertically by establishing control over key positions, institutions, and processes. Appointments during this period were largely based on personal loyalty to the president. This expansion of power continued until 2007, when Putin’s associates occupied positions at every level of the administration and key roles in managing the economy.

In 2008, when Dmitry Medvedev became president, a second period of transition began. But, despite the large number of personnel changes, the functioning of the regime remained largely the same.

In 2012, after Putin was again elected president and Medvedev was appointed prime minister, a third wave of personnel changes occurred. Many ministers followed Putin to the presidential administration, leaving the cabinet more technocratic and politically weak. In addition, the eruption of anti-Putin protests in Moscow and St. Petersburg (mostly against manipulations during the Duma elections) and the implementation of conservative—and even reactionary—reforms led to the erosion of the most central liberal reforms of Medvedev’s presidency and a resurgence of Putin’s close friends and associates.

This third overhaul completely undercut state governance and reduced the government to handling local and technical matters. From 2012 to 2013, the cabinet made no large-scale administrative decisions, even as economic growth began to slow. To the detriment of managing the country’s pressing social and economic challenges, all discussions centered on implementing Putin’s “May Edicts,” which the president signed to deliver on his campaign promises to modernize Russia’s economy but were deemed by some as unrealistic.

As a result, Putin’s regime began to deteriorate from within. Corruption became rampant and the state administration became inefficient. These and other problems reduced labor efficiency, inhibited development, and lowered the regime’s willingness to embrace change. By the end of 2013, the state showed growing signs of administrative impotence, while disagreements between the president and his government began to intensify.

The 2014–2015 Geopolitical Crises

In 2014, a series of geopolitical conflicts brought the government to the brink of crisis. Sanctions imposed on Russia in response to its annexation of Crimea and intervention in the Donbas, the resulting isolation and lack of access to global financial markets, and the substantial and prolonged decline in global oil prices forecasted real catastrophe for Russia. As hopes evaporated that oil prices would rebound and sanctions would be lifted, economic problems and foreign policy tensions became the new norm in Russia.

However, Putin took nearly two years to come to terms with these new realities and the ineffectiveness of his government to revise his personnel structure. The increased administrative strain on the regime due to the events of 2014 and 2015, including significant military campaigns in eastern Ukraine and Syria, essentially forced the government to operate with greater efficiency. The decisionmaking power was essentially transferred to the military and securities institutions. The Security Council took over the handling of key managerial issues. The Federal Security Service (FSB) took on a larger role in the legislative process. The Ministry of Defense elevated its profile to such an extent that some military officials started supplanting diplomats in the foreign policy sphere. Putin began managing Russia’s actions in Syria and Ukraine himself, which created a vacuum in domestic leadership. As Putin neglected administrative issues, state governance became routinized.

The rise of a managerial and governance core amid geopolitical and economic crises has led to Putin’s largest personnel transformation since he took office—one that has affected all levels of governance. The personnel changes of 2016 and 2017 have been characterized by elite conflicts, the shift of power out of formal institutions, and a new class of technocrats.

The Elites’ Rise Amid Conflict

From 2000 to 2014, Putin preferred not to air the government’s dirty laundry in public and instead sought to resolve elite conflicts in private. Most of the conflicts involved players of relatively equal stature in the system—for example, the conflicts that occurred between the two energy-producing giants, Gazprom and Rosneft, and between the FSB and the Federal Protective Service (FSO). Putin would often try to assuage both sides and closely supervise the ensuing settlement.

Since 2014, however, the infighting has grown due to the increasing structural imbalance in the regime. More power is now concentrated in the military and security services than in other parts of the system, and the conflicts have become less horizontal (between equal sides) and more vertical (with some players taking advantage of politically weak institutions).

Notably, the protracted conflict between the FSO and the FSB resulted in a weakening of the FSO, which gradually became more technocratic in makeup. At the same time, Viktor Zolotov, former head of the president’s security service and former commander of the Interior Ministry’s Internal Troops, slowly rose in power. He was appointed to lead the newly formed National Guard, charged with building a strong secret service. Zolotov met Putin in the 1990s while working on the St. Petersburg mayor’s security team, and he remains a close confidant of and conduit to the security forces. The National Guard is accountable to Putin himself and is charged with deploying during states of emergency and periods of mass unrest, terror, or other violent attacks. Zolotov has created a new center of power that is displacing the FSO as a counterbalance to the FSB.

The FSB’s expansion of power has been accompanied by a parallel media campaign aimed at depicting it as the only force that can help the president maintain order. In reality, the FSB is simply attempting to occupy the country’s administrative vacuum that emerged with the geopolitical crisis. For example, it has been behind an increasing number of criminal cases, mainly involving governors. Leaders of several regions, including Sakhalin, Kirov, and the Komi Republic, have been prosecuted by the secret services. While such cases were exceptional or the result of local conflicts in the past, they are now becoming routine. The FSB has demonstrated to elites (as well as to Putin) that it is an influential player in the system, now also operating as an anti-corruption force with exclusive privileges.

Fights for power aside, the ineffectiveness of state institutions is a significant driver of conflict among elites. The weakness of federal institutions has also become particularly noticeable, where administrative efficiency has declined during Putin’s third term. In response, other governance structures, including the Central Bank, the Security Council, the FSB, and the presidential councils and conferences, have stepped up and taken control of key policy decisions.

In this context, the November 2016 arrest of then minister of economic development Alexey Ulyukayev for allegedly taking a bribe was somewhat predictable. Ulyukayev’s arrest—instigated by the FSB—exposed a number of ideological and institutional conflicts among government elites regarding the state’s role in the Russian economy. Like other government ministers, Ulyukayev opposed the sale of Bashneft to Rosneft, because he believed it amounted to pseudo-privatization (Rosneft is largely viewed as a state-run company). Rosneft’s CEO Igor Sechin responded by emphasizing the company’s right to buy the asset (arguing that it is not state-run).

Ulyukayev’s subsequent resignation exemplifies the current adversarial approach to personnel decisions and the structural imbalances within the regime. More powerful players—motivated by a growing demand for diminishing resources—can use security structures to overstep their legal powers. The Ulyukayev case demonstrates that institutional conflicts have created a situation in which the government body originally tasked with implementing state policy has lost its authority. In other spheres of the government, the prime minister and his colleagues are under powerful pressure from elites who have direct access to Putin and the security services. These dynamics have led to greater instability in personnel selection and provoked frequent rotations among the least politically protected government officials—ministers and governors.

The Old Guard

As conflicts inside the regime have intensified over the last two years, another curious trend has emerged: Putin’s close associates have started leaving influential positions for ostensibly less important ones—seemingly being pushed out by Putin in favor of those more easily managed, such as young technocrats with less political experience and a lower affinity for pretenses. One notable example from 2015 is Vladimir Yakunin’s resignation from Russian Railways. At the time, the story was noteworthy because Vladimir Putin had never fired one of his friends so publicly before. Yakunin decided not to accept a mere senatorial post in the State Duma and instead chose to take a position at the Russian-established think tank Dialogue of Civilizations Research Institute—thus effectively bowing out of high politics.

In 2016, several additional government officials with varying degrees of connection to Putin lost their jobs. They included the FSO head Yevgeny Murov, Vnesheconombank chair Vladimir Dmitriyev, Federal Customs Service director Andrey Belyaninov, and presidential administration head Sergei Ivanov. In each case, the Kremlin expressed dissatisfaction with the officials’ inefficiency or neglect of important state issues. This signaled that the Kremlin’s—or even Putin’s—needs had changed. For the first time in many years, Putin began prizing efficiency over loyalty. The shift is perhaps a function of the maturation of Putin’s regime. The personnel replacements of the 2000s were necessary to ensure loyalty in the system. By Putin’s third term, however, the system was already fully under his control.

In this context, what it means to be Putin’s friend is changing, as is his attitude toward his friends. The president’s associates are losing their indispensability and political value. In the past, firing friends required significant compensation and public accolades. Today, Putin seems to be more indifferent to the feelings and priorities of his friends. He no longer makes any effort to defend associates who come under pressure, evidenced by the prosecutions of close figures working with the head of the Investigative Committee, most notably Alexander Bastrykin, a former classmate of Putin.

However, there can be exceptions, as Ivanov’s resignation in August 2016 demonstrates. Fatigue was cited as the official reason for Ivanov’s departure, and he was transferred to the far less influential position of special presidential envoy for environment and transportation. In reality, Ivanov resigned because his political status as one of Putin’s closest associates no longer corresponded to the position he held as head of the presidential administration. The role of chief of staff to the president was losing its significance, becoming more routine and technical than political. In his new job, however, Ivanov has retained influence. He oversees the Kremlin’s working group on relations between businesses and law enforcement agencies and also lobbies for the state-owned Rostec corporation. He also presides over Arctic exploration and Russia’s climate policy.

The Ivanov case highlights the routinization and technocratization of the state apparatus. Russia’s power vertical is losing its resources, while government officials are facing more political risks and professional responsibility. This is true of the presidential administration, the prime minister’s cabinet, and regional governments. As the political value of the power vertical erodes, the Kremlin has started selecting technocratic figures for key government positions.

Since 2014, real power has become increasingly concentrated outside formal government institutions. Influential players prefer to eschew formal titles and responsibilities. Putin’s associates, who are unwilling to take the risks associated with governing the country, have found more comfortable positions outside the state apparatus. They manage state corporations (Rostec CEO Sergei Chemezov), run pro-regime media (Rossiya Bank chair Yury Kovalchuk), or head various charitable foundations and private companies (the Rotenberg brothers).

The New Technocrats

Putin’s influential appointees are being replaced by technical figures with far less political gravitas. Continued involvement in the conflicts in Syria and Ukraine forced the regime to reduce the costs of domestic governance in order to save time and resources. Under the old governing model, too much energy was spent on discussions and decisionmaking.

In its place, a vertical model of decisionmaking—one more comfortable for the president—has emerged. It is easier for him to deal with subordinates who have less experience and less personal history with him. Putin’s inner circle now increasingly consists of yes-men technocrats rather than elite partners. His new associates do not ask many questions, nor do they engage in discussions. The president no longer requires advice and simply needs people who can be ordered around.

Vyacheslav Volodin’s appointment as the speaker of the State Duma is an important part of the process of replacing political appointees with technocrats. Volodin’s former role as first deputy chief of staff of the presidential administration was filled by Yeltsin-era reformer and head of the energy corporation, Rosatom, Sergei Kiriyenko. In recent years, Kiriyenko has distinguished himself as one of the most influential and competent state managers. He has been able to find common ground with both the security forces and influential groups from the president’s entourage. The Kremlin sought out Kiriyenko because of his success as a manager of a state corporation.

In his new role, Kiriyenko seeks to reduce conflict in all aspects of the presidential administration’s work—be it in relations with governors, the civil society, the expert community, or the “progressive class.” Kiriyenko is changing the Kremlin’s approach from one of opposition to one of cooperation, thereby reducing the administrative and political costs of governance.

Technocrats are also becoming governors. As of October 2017, almost half of the new regional leaders are technocratic executives. As former deputy ministers, presidential envoy office employees, heads of agencies, or Federal State Unitary Enterprise executives, they all represent the nonpolitical, nonideological executive branch and are characterized by professionalism. Now, executives are also in power at the gubernatorial level, an additional sign of the current trend toward a technocratic government.

The rise of technocratic governors solves the Kremlin’s problem of managing the regions from the federal center without diluting political control. More receptive to orders from the top, this new class of governors can be easily integrated into the executive. Distributing power among politically autonomous regional players is no longer necessary, as governors are now part of a power vertical in which they are no longer political leaders of federal subjects but are simply government officials. Their status resembles that of “ministers of regional affairs.”

The year 2018 is bringing new challenges that promise another wave of personnel and structural changes. Putin’s third term is drawing to a close, and the Russian political establishment knows that Putin will have to make a decision about his future shortly after his reelection. Putin will have three options: stay in power after 2024 by repealing the constitutionally established presidential term limit, leave the presidency but retain de facto leadership by installing a figurehead president, or transfer power to a true successor. Regardless of which option he chooses, significant and swift personnel changes and institutional reforms will be required.

Whatever changes 2018 and 2024 bring to Russia’s leadership, the broader political system will become increasingly depersonalized in the years ahead: the personal relationships among officials and key figures of the power vertical will be devaluated. For the first time in decades, the system, rather than the president, will be the source of stability in Russia. And this means that, at least in the short term, Russian policy will likely become even less predictable.