Putin Seeks Solitude Amid Russia's Perfect
Storm
Russian President Vladimir Putin celebrated his
62nd birthday Tuesday in a peculiar fashion: by himself in the Siberian
forests. For the past few days, Putin's spokesman, Dmitri Peskov, has brushed
off journalists' questions about why the president decided not to celebrate his
birthday in Moscow or do other work as he has in previous years. This is just
another odd piece to an increasingly complex puzzle surrounding the stability
and future of the Russian president and his government.
Current Instabilities
Russia is in the eye of the perfect storm.
Though the crisis with Ukraine has been reduced to a simmer, Russia has seen a
strategic reversal in its critical borderland. In addition, the crisis moved
the West to enact sanctions on Russia and loosen many financial and economic
ties to the country. Now the Kremlin is in the midst of an economic crisis that
is every bit as serious as the Ukraine situation. In the past two days,
Russia's central bank used $1.6 billion of its currency reserves to shore up
the Russian ruble. Since the start of 2014, the central bank has injected $51
billion in currency reserves to keep the currency stable. The Russian economy
is projecting flat growth for 2014, while foreign investment into Russia has
fallen by 50 percent. The Kremlin may have $630 billion in its reserves, but
these funds are being used quickly in an attempt to fill the cracks.
Concerns over Russia's financial stability have
erupted into public battles between the various Kremlin factions. On Tuesday,
Russian Finance Minister Anton Siluanov, a key figure in the liberal economic
clans, publicly called on Putin to cut Russia's ambitious defense spending
program. Russia is set to start a 10-year, $770 billion defense rearmament
program in 2015. Siluanov reportedly rejected the plan during recent budget
drafts in September, prompting Putin to move decision-making on defense
spending under his office and away from the Cabinet.
While Siluanov's argument against defense
spending is financial, Putin also has to consider the security and political
ramifications of such a decision. Russia's continued struggles in its
borderlands will require a robust military. Moreover, Putin is using the
defense budget to appease Russia's various security and defense circles.
The Rise and Fall of Russian Leaders
Though Putin has ruled Russia for 15 years in a
centralized and autocratic fashion, like any other leader he must balance
various factions within the country. His ability to manipulate the various
political clans is what brought him to power. The lack of that ability is what
caused the downfall of Boris Yeltsin in the 1990s, and many leaders before him.
Yeltsin was unable to manage the competition between his own loyalists, the
more liberal circles of economists and the security and defense circles.
Yeltsin wildly shifted policies in order to retain a grip on power, such as his
economic shock policies and the restructuring of the Federal Security Services.
Such erratic moves contributed to the Russian economic crash, the breakdown of
the security services and the erosion of Russia's military as it fought a
savage war in the North Caucasus.
Yeltsin's stumbling enabled Putin's rise to
power. Putin understood that a Russian leader could rule only as long as he
could balance the competing groups. Putin is a former KGB agent, tying him into
the security circles, while his knowledge of Russia's need for Western
technologies gives him an understanding of the more liberal economists. In his
first years in power, Putin divided Russia's assets and tools of power between
the clans, keeping them in constant competition and positioning himself as the
ultimate arbitrator.
The problem now is that the clan system has
begun to crumble. The security circles are being blamed for failures in
Ukraine, while the liberal economic circles are being blamed for the sour
economy. Many personalities and groups are putting their own positions (and
financial revenues) before the betterment of the state. Putin continues to try
to maintain balance, as seen in the recent weeks of budget debates between the
liberals and security circles. But Putin's 15 years of success at balancing the
clans came during times of rebuilding and resurging for Russia. Now, Putin is
attempting to find balance from a position of weakness.
Putin's grasp on power is not easy to gauge
from outside the Kremlin. The decision for new leadership is made within the
Kremlin walls, not among the people. Previous Russian leaders, from Nikita
Khrushchev to Leonid Brezhnev to Yeltsin, were removed or pushed aside by the
ones closest to them. Thus, it seems fitting that the current Russian leader
chose to celebrate his birthday far from the Kremlin and its clans.
"Putin
Seeks Solitude Amid Russia's Perfect Storm is republished with
permission of Stratfor."
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