Meanwhile, the siloviki are firmly entrenched in the seats of power. The patriotism on display is a mix of Soviet nostalgia, revenge for the failed coup of 1991, the desire to translate oil wealth into political punch – and the self-serving instinct of an elite corps convinced that the spoils of power are legitimate compensation. Vast sums are quoted when it comes to discussing what top officials, including the President, are putting to one side. Some Kremlin insiders have hugely enriched themselves over the last few years, and their chief desire must be to secure ill-gotten gains abroad or at home.
Lubyanka
Does it matter that the people who run Russia are more or less linked to what Russians still call, with fear and uneasiness, the Lubyanka, meaning not only the stately building on Novaya Ploshad (New Place) but also the institution, the tradition and the clandestine violence associated with the secret service? The formative phase of the Kremlin’s incumbents today has a direct impact on domestic affairs as much as Russia’s foreign policy. The post-Soviet Russian elites, with the exception of the majority of business leaders, still define power in terms of distrust and control, awe and anxiety.
When spies take over the political process, it is in a way their field of competence, but in the economy they can do a lot of damage. Russia’s economy is still today almost one-dimensional. Everything depends on the continuing flow of oil and gas at high prices. Russia is conspicuously weak in manufacturing, except in the weapons sector and high-tech industries. Spooks can be relied upon to understand power, but do they understand real-world business? What do they know about modernizing companies, developing markets, cooperating with partners abroad, managing ever scarcer human resources? Both the brutality of the early years, when enemies were jailed and assets seized, and the more subtle ‘vacuum-cleaner’ method exposed by Shvartsman are not conducive to running efficient businesses that have to compete in the world market. Compared with China, Russia has attracted little direct foreign investment except in the natural resource sector. What the ‘vacuum-cleaner’ recipe amounts to is a practice where accusations can be fabricated and assets acquired at artificially depressed prices and redistributed to cronies irrespective of their management genius.
A bullying foreign policy combined with intimidation at home, however, is a deterrent for those investors from the West who are badly needed to upgrade, or in most cases reinvent, Russian industries for both consumer goods and capital assets. On both counts Russia is not yet part of the modern world, and the key problem is that the ex-KGB echelons do not think in market terms. Russia does indeed present, from time to time, some high-tech marvel at air shows abroad or sells to China cutting-edge information technology for sophisticated military and intelligence use, or boasts the biggest vacuum bomb the world has ever seen. But this is not representative of Russian industry at large, not even in the civilian aircraft industry which badly needs Western input. When a 100-seat passenger aircraft was rolled out in summer 2007, needed in large quantities to replace an ageing fleet of converted bombers, it was clear that both avionics and electronics had come from Western suppliers. Meanwhile, the expectation around the Kremlin that a flourishing weapons industry could be the fountain of rejuvenation for Russia’s economy fails to take into account that defence industries work in specialist markets, are not particularly sensitive to competition, are politically driven and are not renowned for their efficiency.
The siloviki republic
Perhaps the most serious area of insecurity is the political nature of the siloviki republic. The men around the Kremlin have shown that they know how to quash opposition, intimidate people, lean on television channels and sow fear in many people’s hearts. What they have failed to do is inspire long-term trust in the future, in the stability of institutions, in the continuity of political management. This is precisely what intelligence services are not good at. They are nervous about the future, and the mysteries surrounding the succession to Mr Putin are a worrying symptom of uncertainty that affects not only Russians but also the world beyond the Russian confines.
Putin and his people have built a new sort of corporate state through a combination of money and power without precedent in Russian history. About one quarter of Russia’s senior bureaucrats are siloviki, and the proportion rises to three quarters if one includes people who are affiliated in one way or another. This top echelon is linked through upbringing, outlook and material interest – a new ruling class. In the old Soviet Union what the communist leaders always feared was ‘bonapartism’, meaning the rise of a successful general, Napoleon-style, to prominence and power. The old KGB, comprising about half a million operatives working as secret police, intelligence organization and security agency, was never more than a combat division under the watchful eye of the Central Committee of the CPSU. It was a state within a state, subservient to the party bosses. Its leaders, however, were invariably among the better informed players in Moscow, sensing the slow decline of the Soviet system during the early 1980s, opting for reform from above and seeing, with ill-disguised horror, how everything was spinning out of control. Their low point came when the coup of 19-21 August 1991 failed, the head of the KGB who had helped to orchestrate the action against Mikhail Gorbachev was arrested and a jubilant crowd celebrated in front of Lubyanka – the headquarters of the old Cheka just as of Stalin’s NKVD. The anger of the people concentrated, instead of storming the building and seizing the files, on the statue of Felix Dzerzhinsky standing in front. ‘Iron Felix’ was duly dismantled by a huge crane. Neither Gorbachev nor Yeltsin seized the moment to dismantle the intelligence establishment and bring a reformed system under their control, thus implanting a self-destructing device into every attempt to create a more democratic system of control. Meanwhile, the intelligence experts sensed the danger and, humbled by the inept performance of their own superiors and by the conspicuous show of disdain by the Moscow crowd, vowed that this should never happen again. In due course, ‘Iron Felix’ returned, his bronze statue installed at Petrovka 38 – the headquarters of the internal criminal police: it is still open to debate whether the godfather of all Tscheckists will be reinstalled in front of the Lubyanka.
Now Russia is experiencing, instead of military bonapartism, feared by Soviet rulers, the rise of a former KGB colonel to the top, while it is not clear whether Putin is the product or rather the creator of today’s power-sharing system. Most likely he was a product in the early years, and the creator the longer he served in office. Nobody can say no to the FSB people at the top, as long as they run a tight ship and do not quarrel among themselves. The FSB has become the state itself. The government and the Duma are not in any way able or willing to challenge the Kremlin’s authority. The government executes the will of the presidential administration, and parliament rubber-stamps legislation coming from elsewhere. Of all the Soviet institutions, the intelligence services survived best, together with their mentality, their methodology, their omnipresent suspicion, and their methods of enforcing their will. Authority seems to be firmly in the hands of the siloviki.
The limits of power
Russia comes from a Hobbesian world and needs to make the transition to the social contract devised by John Locke to protect life, liberty and estate. As Russians get richer, whether at the top of the oligarch pyramid or closer to the bottom, they want security above all else. This not only includes physical security against murder and theft but also security of investment, guarantees of real-estate holdings and the protection of property in general. What the siloviki, through their upbringing, are unable to appreciate is the reassuring force of transparency, open debate, even political criticism – in short the wider attributes of the rule of law and liberal democracy. Dmitri Medvedev, judging from his 2007 Davos speech, seems to be the exception among Kremlin incumbents when he praises the purifying forces of the market and the need for democratic control. But whether this is lip-service to impress gullible Western audiences, or a deeper conviction of what Russia needs, only time will tell.