With one hundred days in office and a war with Georgia under his belt, Dmitry Medvedev still has Western politicians confused. Who is really in charge – he or his mentor, Vladimir Putin? Is Medvedev really a liberal? But then why the “disproportionate” attack on Georgia?

In the days when the stability of the entire post-Soviet region rests on a shaky truce between a seemingly power-hungry Russia and a tiny former Soviet republic with a potential to become the next Yugoslavia, Western policy-makers could really use a better articulated Russia policy. That many journalists have difficulty finding Georgia (let alone South Ossetia) on a map is already bad enough. What’s more alarming is that few have any real understanding of how Russia works internally.

When a nation that’s labeled as “backtracking on democracy” attacks a tiny, southern neighbor with a democratically elected government, no amount of propaganda is going to improve its bad PR. Russia, according to the latest spin, is turning away from the West. Yet in the short memory of current events, what has been overlooked is just how pro-Western Russia’s government has been all along. Instead of backtracking on Yeltsin’s “democracy,” Medvedev and his continuation of the Putin Plan was, at least until this month, as committed to Western economic integration as Russia’s first post-Soviet leader Boris Yeltsin ever was, and perhaps more so.

Reforms vs. Democracy

Central to the misunderstanding of the Putin years is the continual equation – by the West and also by Russia’s marginalized liberal opposition – of pro-market reforms with democracy. A pro-Western, liberal policy has never been democratic in Russia, neither in the time of Yeltsin nor at any point thereafter. Russian journalists working for major publications privately admit to the difficulty of using words like “elections,” “opposition,” and even “politics” with a straight face in today’s Russia. So I will use these words with implicit quotation marks throughout this essay. As for who is actually in charge, for lack of a better understanding we should use the official one: it’s a tandem relationship. As president, Medvedev has official powers, but not unofficial ones – namely the influence and authority to control the myriad of forces that actually rule Russia. If anyone today has that power, it’s Putin.

To understand how the West has misconstrued Putin, it’s important to realize that Russia not only doesn’t have a real opposition, but if it did, it would hardly be one the West would want to deal with. Meanwhile, the recent power struggles within the Kremlin – which resulted in the selection of Medvedev as Putin’s successor – reveal the extent the Putin administration struggled to pull its population westwards. To get its Russia policy right, the United States must start treating Russia as it is, rather than as the United States would like it to be.

At the heart of Putin’s policies are pro-market reforms aimed at economic Western integration that are well in line with what Yeltsin advocated first with his shock treatment, then with his string of reformist and neo-liberal prime ministers. Medvedev’s interview with The Financial Times in March clearly outlined his commitment to this course: “There are several priorities – to maintain economic stability, to develop economic freedoms, to promote social programs and to ensure that Russia sustains its position in the world,” he said. It was also telling how often the new president stressed Russia’s “open” economy. Social programs are his only addition to Putin’s course.

While their economic reform policy has been generally the same, Russia’s leaders have used different means to get to their ends. Yeltsin, for instance, unsuccessfully juggled free-market reforms with strengthening democratic tendencies begun during Gorbachev’s perestroika. Putin, inheriting the inevitable failures, took a more realistic approach. He realized that the West was far more interested in the free-market, economic part of the transition than the democratic part, and would welcome Russia as an equal-playing partner based on the former rather than the latter. He also understood, unlike both Gorbachev and Yeltsin, that it would be impossible to implement both at the same time. Thus, Putin focused on economic integration and free-market reforms. To that end, he did what he had to do – which meant putting democracy on hold and stifling what Kremlin spin-doctors like to call “destabilizing factors,” such as an oligarch-controlled media.

This transition to a free market isn’t complete, of course. But given the chaos Putin inherited, the pro-Western economic integration has proceeded relatively smoothly. Russia is anything but a welfare state today. At 24%, it has a moderate corporate earnings tax. Meanwhile, spending on health care constitutes just 3.5% of its GDP (the United States, by comparison, spends 15%) – this in a country whose mortality rate for men exceeds Iraq’s. Foreign investors – who provide a better indicator of a country’s capitalistic trajectory because their measuring stick is money, not ideology – are eager to capitalize on steadily rising salaries, consumer spending, and the commercial real estate boom that has ensued. It’s no wonder that foreign investment has been growing steadily each year. “The future will exceed by a big stretch the plans for 2020,” Michael Klein, chairman and chief executive of the institutional clients group of Citigroup, waxed euphoric. “Russia is clearly one of the most successful economic stories of the decade, the first scale economy to sustainably avoid the resource curse.”

Swollen Bureaucracy

On the other hand, the bureaucratic apparatus has swelled. By the end of his term, Putin had still failed to rein in the corruption and dispel the lack of transparency that developed toward the end of the Soviet era and grew rampant under Yeltsin. But because these issues stand out as the chief hurdles on the way to economic growth and Western integration, the problems have been high on Putin’s agenda. While Medvedev’s “national priority” projects aimed at improving social welfare can be brushed away as more talk than action, corruption and bureaucracy are problems that the Putin administration had begun taking very seriously. Sergei Naryshkin (then Putin’s vice premie and now Medvedev’s Kremlin administration chief), meeting with foreign investors last fall at the Baltschug Kempinsky, Moscow’s most luxurious hotel, outlined plans for how the government was going to cut red tape in order to accommodate business interests. At the end, during a question-and-answer session that primarily addressed curtailing bureaucracy, I heard him asking the investors in the audience “what else [he] could do for [them].”

Medvedev’s first moves while in office were cabinet and administration reappointments that highlighted a new focus on tackling economic crime and revamping the judicial system. He appointed a new Federal Security Service (FSB) chief from the security service’s financial directorate, sacked a justice minister, and announced plans for judicial reform of everything from finances to cadres. Medvedev attacked corruption with a vengeance, establishing a council that would battle the problem in all departments in tandem with anti-corruption legislation that had been brewing for months ahead of the elections. He also laid out a national program to “reeducate” officials and the public. Such efforts might ultimately do little to squeeze bribery out of Russia’s national culture. But they illustrate how important the problem is for Putin and now for Medvedev as they struggle to forge a pro-market culture in Russia.

WTO Membership

But the fundamental illustration of just how important Western integration and liberalized trade has been for Russia’s leadership from Yeltsin to Putin to Medvedev is the issue of World Trade Organization (WTO) membership. Medvedev recently reiterated an unequivocal commitment to becoming a WTO member. For Putin, the reality of accession has been more nuanced: one of the chief problems domestically is the question of whether Russia is economically ready to join. No matter how stellar its economic performance and how committed it is to denationalization (Medvedev boasts that over 80% of Russian oil is refined by private companies, a higher percentage than for Norway), there is much to be done to boost domestic industry. Putin, who raised timber export tariffs in a measure of support for the domestic timber industry, is well aware of this.

Russian public opinion is mixed on the WTO. When I asked Alexei Etmanov, a labor union chief who attended a St. Petersburg labor convention during the July 2006 G8 summit, what he thought of joining the organization, he replied that he didn’t think anything, in the sense that WTO membership would hardly affect the lives of working Russians. Polls show a similar disinterest. According to the independent Levada polling center, the number of people who think WTO accession is in Russia’s best interest has been steadily declining since April 2002. By April 2006, it was 45%. People who believed accession went against Russia’s interests had grown to 27%. According to the All-Russian Center for Public Opinion, when asked whether Russia should “wait” with accession, 36% said it should.

Democracy or Populism?

In the 1990s, Boris Yeltsin frequently resorted to despotism precisely to stand firm on his pro-market reforms. Putin has inherited and expanded on this particular tradition of delinking economic and political reform. Contrary to what the Western media imagines, Putin’s crackdowns on the media and the oligarchs were, according to opinion polls, some of the Russian leader’s most popular endeavors. The most socially unpopular – and hence undemocratic – policies were utterly pro-market.

One vivid example is the 2004 monetization reform, which drew thousands into the streets for rallies involving both left-wing and right-wing parties. Apart from replacing benefits for the elderly and the disabled with cash – this much was reported by the Western press – the reforms set out to dismantle a whole way of living etched deeply in the minds of at least two generations of Russians. For many, acquiring benefits was nothing short of a job. To obtain the status of “invalid,” with advantages like guaranteed free medicine and discounted or free utilities, meant days, perhaps weeks, of waiting in lines, obtaining documentation at different agencies, and even paying bribes. Yet these citizens had no other way of receiving medicine and social care. It turned out that the cash that replaced these “jobs” was not nearly enough to pay for medicine in a liberalized economy where expensive foreign drugs now dominate the local pharmaceutical industry.

I have called some of the above policies “undemocratic.” But in order to understand this, we need to distinguish between “populist” and “democratic,” at least in Russian terms. Russia doesn’t have a system of democratic procedure. The Russian leadership is perfectly aware of this, as are Western leaders and Western journalists. Yet all parties choose to pursue their dialogue as if these procedures actually exist but are being violated. Because Russia has no functioning democratic procedure, it also has no opposition in the Western sense of the word. Therefore, to speak of policies as being “democratic” or “undemocratic” makes no sense whatsoever. We can only argue whether they are “popular” or not to try to understand whether they would be democratic if Russia had a true procedural democracy.

Russia’s Failing Opposition

A real opposition in Russia would help shed light on Putin’s policies by its dissent and criticism. This, at least, was the idea in the West. And, in fact, we can attribute the misnaming of Putin’s policies as “anti-Western” to the Western media’s habit of quoting pro-Western, pro-market critics of Putin and defining them as “the opposition.” But those pro-Western, pro-market critics represented by Boris Nemtsov, Yegor Gaidar, and Grigory Yavlinsky hardly constitute an “opposition” and never really did. For one thing, during the 1990s they were part of the government and were actively involved in implementing Yeltsin’s policies. But these figures and the movements for which they stood were hardly ever popular. One exception is Boris Nemtsov, who commanded some 50% popularity in a 1997 opinion poll on potential presidential candidates. But like the rest of the reformers, he came to be demonized following the 1998 economic crash.

The West attributed the failure of the “liberal opposition” to get into parliament in 2003 to Putin’s efforts to stifle it. But the election results for the opposition Yabloko party and the Union of Right Forces (SPS) were never particularly stunning. Yabloko, with an official platform of “liberal democracy,” garnered its most successful vote in the first State Duma during the 1993 elections – but even that was just 7.8%. In 1995 it was 6.8%, and in 1999 it was 5.9%. In 2003, the party failed to pass the 5% threshold. SPS, whose official ideology is “liberalism” without mention of democracy, was created just ahead of the 1999 parliamentary elections, where it got 8.5% of the vote. By 2003, it too failed to enter the Duma. Flaws in the election certainly reduced the vote counts for these two groups. But even in a completely free election, such parties would never get more than the traditional allotment for the liberal intelligentsia, which is 10% of the vote (with perhaps 20% in St. Petersburg and Moscow).

In fact, to understand what a democratic parliament in Russia could resemble, we need look no further than the Duma of the 1990s – one that was dominated by an opposition consisting of Communists and the radical nationalists of the Liberal Democratic Party of Russia (LDPR). On one occasion, in 1995, the Duma issued Boris Yeltsin a vote of no confidence; on another, it tried to impeach him (both measures were populist in that they had broad popular support). Obviously, liberals weren’t at the forefront of these efforts. Today, when it’s impossible to imagine an opposition getting a majority in the Duma, parliament is in effect emasculated. In the words of Vladimir Zhirinovsky – the LDPR chief and virulently ultra-nationalist, veteran populist – “The opposition by definition cannot make any decisions, no matter how many seats it has in parliament. Its job is to criticize.”

To be sure, Putin did try to marginalize Russia’s “liberal right” to some degree from the very start. These efforts have become increasingly heavy-handed – with suppressed rallies, often violent clashes with riot police, and outright harassment of certain political figures. The rationale behind these tactics is unclear, since there appears to be no point in trying to suppress liberal movements that have virtually no support in the population as it is. Using force on them is more likely to have the opposite effect.

According to one probable but Byzantine explanation, Putin actively ostracized his reformist predecessors to distance himself from everything that the public perceived to be wrong with the 1990s reforms. He has done so in order to further his own policies – which just happened to go in the same direction. Because Putin’s policies are far more pro-Western than national sentiment would otherwise allow, the liberal opposition – which continues to position itself as unabashedly pro-Western – would serve as an effective scapegoat, a magnet for the criticism of “selling out” to the West. The idea that the liberal opposition is a more radical variant of Putin’s pro-Western policy would also explain why SPS and Yabloko have floundered so disastrously in repeated attempts to renew their platform, forge a bloc, and engage populist sentiments. His “stifling of the opposition,” then, was another ploy to further his pro-Western agenda in the face of anti-Western sentiment.

Searching for Russia’s “Real” Opposition

Many observers, including me, have sought in vain for Russia’s “real” opposition. Around 2006, at the height of foreign fears of rising “racism” in Russia, the most likely candidate for an authentic opposition was one grounded in nationalism. But the slew of small, socially right-wing grassroots organizations failed to come together to form a solid, comprehensible platform and break into the political establishment. The exception is the LDPR and Zhirinovsky, its outspoken leader. Conveniently for the Kremlin, however, he has a penchant for voting for practically all Kremlin-initiated policies.

Then, just before the Duma elections late last year, the Western media tellingly began registering what it had failed to notice for 15 years. The Communist Party of the Russian Federation (CPRF), usually ignored by journalists focused on a “beleaguered” liberal opposition represented by Garry Kasparov and his unregistered Other Russia movement, had suddenly become the “only real opposition party in the Duma,” according to The Washington Post. It was “still standing,” according to The New York Times. And even Kasparov, in a Washington Post op-ed, cited the Communists as “actually” getting more votes than they were “allowed” by the government.

In other words, there was a lot of hope that Russia would finally grow itself a real opposition – even if this opposition was Communist. After all, the Communist Party functioned more like an opposition party than the liberals ever did. For instance, it vigorously opposed Yeltsin’s policies from the start, so there could be no confusion about what it was they opposed. It also could claim to represent a large group of Russians. When it reorganized itself in a new and modern version in 1993, after Yeltsin banned the party following the dissolution of the regime, the Communist Party quickly forged a considerable core constituency. In the first round of the 1996 presidential race, for instance, its candidate Gennady Zyuganov came in three percentage points behind Yeltsin’s 35%. By 1999, the Party was still getting 22% of the parliamentary vote. In the latest elections, sensing the current vogue in Russian politics, young, educated professionals began to lean leftward away from SPS and Yabloko. Among the Communist Party’s campaigners in Moscow were successful entrepreneurs who boasted of their patronage of what they saw as not your grandfather’s party.

But while the CPRF is actively courting this growing contingency, it’s clear where its loyalties are. At the top of its agenda is “uniting the class struggle with the national freedom movement,” essentially combining a big chunk of Soviet ideology with patriotic, nationalist sentiment. More specifically, it stands for nationalizing the country’s natural resources, making the country’s stabilization fund available for social betterment, guaranteeing free medicine, housing, and education, and reviving the country’s scientific and industrial standing.

There are good reasons why the Communist Party, currently the largest opposition in Russia’s parliament, insists on these Soviet vestiges at the expense of modernizing itself. “The majority of citizens have a positive view of the Soviet period,” Leonid Dobrohotov, a Soviet historian and advisor to Zyuganov, told me. “It would be absurd not to take that into account. When the CPRF was formed its base consisted of a typically Soviet contingent – the elderly. Now that is changing. There is more of the intelligentsia.” Essentially, the CPRF’s program is an honest reflection of what independent polls show. According to an ongoing study by the Levada Center, a steady 34-48% of respondents support a Soviet model of government – nearly twice as many as those that support a Western-style democracy.

The party’s leadership is well aware of the trap. To remain a representative opposition, it needs to keep its traditional contingency. But to affect policymaking in Moscow, it needs to reform. “The CPRF has two options – modernization or marginalization,” says Oleg Smolin, a representative of the party’s new intellectual contingency who headed the Moscow electoral list. Smolin admits that the party has to change. But the conditions for that change aren’t ripe. “The party is made in such a way that it can only be reformed from the top, unfortunately. Everything depends on what Zyuganov will do.”

But the Communist Party also has to play by the government’s rules in order to get into parliament. According to a centuries-long tradition in Russian politics, the opposition must be hand-crafted from the top or else unpredictable, “destabilizing factors” will develop. When one of the leaders of the Just Russia bloc’s election list turned out to be the outspoken young Sergei Shargunov, he was immediately crossed off the list. “I didn’t hide my critical position,” he told me. “And my presence had not been agreed upon in the presidential administration. The president said I should be taken off the list.” The CPRF must operate in a similarly constrained environment.

Toward a Real Opposition?

No expert, however well-connected, knows for certain what’s actually happening within the Kremlin. Putin has ensured that politics at the highest levels is conducted in air-tight secrecy. Journalists and pundits are left to puzzle over a few high-placed arrests within government ministries and the business world. The biggest mystery, of course, has been the choice of Medvedev as successor when, for over a year, it seemed likely that the hawkish former Defense Minister Sergei Ivanov would get the nod.

Possibly the most important – and least-understood – aspect of Russian politics today is the power of the siloviki (the politicians who represent the security forces who ascended to power under Yeltsin and Putin). “In Russia there is politics for dupes and real politics,” Yulia Latynina wrote in Novaya Gazeta in January. “For dupes there is the British Council affair, the Nashi movement, and all those ‘national’ projects. And there is real politics, which recently consists mostly of arrests. It is striking that the arrest of (co-owner of the Arbat-Prestige perfume chain Semyon) Mogilevich is the hardest blow to the siloviki party that could have been delivered by Gazprom and Dmitri Medvedev.” Somehow, and we don’t exactly know how, Medvedev managed to win out over the hardliners, something he would not have been able to do without Putin’s help at the time.

We may not learn for a long time who is really in charge in Russia – Putin or Medvedev. Nor can we answer to what extent Putin has control of the siloviki without resorting to uninformed speculation. From what we can gather so far from his eight-year tenure, however, Putin “trampled” on democratic process, among other things, to tamp down this particular populist sentiment. If he hadn’t, the West might be dealing with an opposition both illiberal and genuinely threatening.

U.S. Policy

Whether or not Medvedev, with Putin’s help, will be able to steer Russia in the same direction of Western integration after its war with Georgia and that war’s geopolitical consequences depends, to a large extent, on the ability of the United States to curb its military posturing and stop aggravating the anti-Western, hawkish forces that both Putin and Medvedev have evidently been struggling to appease and subdue.

The United States is on the threshold of a new policy toward Russia, and its new leaders will need to understand where Russia’s internal priorities currently stand. They will also need to understand that as they support one course – liberalization – they cannot expect the Russian leadership to make good on its other pledge – democratization.

So far, there has been little meaningful difference between the Democrats and the Republicans in their Russia policy. The last two presidents were both committed to engaging Russia economically. The Bush administration apparently tried to balance this approach with regular hounding on the democracy front; the Clinton administration hardly even bothered to do that.

Today, neither John McCain nor Barack Obama offers anything inherently new to offset this policy. McCain has been a staunch critic of Putin’s “undemocratic” policies for many years and doesn’t appear to harbor any plans of switching trajectories. His latest suggestion, before the conflict with Georgia, that Russia be dropped from the G8 is a typical example of the carrot and stick that have been used to get Russia to do what the West wants it to do – which is economic integration and democratic reform. The current deliberations on expelling Russia from the G8 are already seen as a measure that will have little effect on Russia. What aggravates Russia’s siloviki and fuels their positions are the military policies that the United States insists on – getting former Soviet republics to join NATO and installing a missile shield in Eastern Europe. Whether or not Russia is a member of the G8 will have little effect on reining in these often destructive political forces.

Obama’s approach promises more nuance though little in terms of fundamental shift. It’s important to note that one of Obama’s foreign policy advisors is political analyst Michael McFaul of the Hoover Institution. McFaul’s interest in Russia originates in the anti-Communist movements of the 1980s and his neoliberal views on Russia’s democratic and economic course are as staunch as those of any in the current administration. While this indicates that we shouldn’t expect a turnabout in Obama’s approach to Russia if he is elected in November, his own statements reflect a carefulness that is long overdue. Besides his earlier comments on a willingness to “talk” to leaders of rogue states, he had recently spoken against dropping Russia from the G8, explaining this stance with the necessity to engage Russia on nuclear non-proliferation.

So far, it’s difficult to forecast what this will mean. On the one hand, all it might indicate is that Obama won’t make empty threats. On the other, it may suggest that he is aware of the damage of making two inconsistent demands at once. In that case, after a reality check, Washington may well adopt a more sober view of Russia and discard its dated, early 1990s-era illusions.

Sober or not, the West should support and encourage the liberalization of Russia’s economy and its global integration, and should keep its pressure moderate, so as not to aggravate hawkish forces within the administration. It’s pointless to expect this course to change, for lack of a better alternative: it would be disastrous to disengage Russia, both for the West and for Russia itself.

Finally, we shouldn’t brush off Moscow’s commitment to democracy, albeit on its own terms. What Putin has come to understand – if he did not understand this from the very beginning – is that before a stable, lawful democracy can be possible in Russia, its citizens must be certain of something they have never been certain in all of Russia’s history – that they own their property and that it will never be taken away from them. Two decades of private ownership is hardly enough for assets to be passed down to the next generation – and it appears this is precisely what Putin has been counting on – at least policy-wise – in his insistence on stability and economic growth, even when it comes at the expense of democratic procedure.

Anna Arutunyan, a contributor to Foreign Policy In Focus (www.fpif.org), is a Moscow-based journalist. She writes for The Moscow News weekly, and is currently completing a book on the Russian media.

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