With economic headwinds on the horizon, generational conflict brewing,
and new political forces developing, Russian society is changing -- and
changing rapidly. But the political system remains ossified.
So what can we expect in 2013? Below are several trends and issues to keep an eye on in the coming year.
The Oil Curse: Energy Prices And The Creaking Welfare State
If 2012 was all about politics, 2013 will also be about economics.
The Russian economy, the cliche goes, rests on two pillars -- oil and
gas. And both will come under increasing pressure as the year unfolds. World oil prices, currently hovering between $90 and $100 per barrel,
are expected to be volatile for the foreseeable future. And any sharp
drop could prove catastrophic for the Russian economy.
Energy experts and economists say Russia's budget will only stay
balanced if oil prices remain between $100 and $110 per barrel. Five
years ago, the figure needed for a balanced budget was $50 to $55. Meanwhile, Moscow's dominance of the natural gas market is being
challenged by the development of new energy sources like shale gas and
liquefied natural gas.
Nikolas Gvosdev,
a professor of national security studies at the U.S. Naval War College,
suggests this could have far-reaching implications for Russia.
"The Russians are going to have to face, just as the Saudis did in the
1980s, the possibility of dropping energy prices," he says.
The flush days when petrodollars could power Russia's economy and lubricate Putin's political machine are coming to a close. How the political system responds to these challenges will be a key question in 2013.
Leading Russian economists like Deputy Prime Minister Arkady Dvorkovich
and former Finance Minister Aleksei Kudrin have stressed the need to
diversify the economy away from its dangerous dependence on nonrenewable
energy. Both Putin and Prime Minister Dmitry Medvedev have likewise
made calls for diversification. But despite all the rhetoric, there has been little real action.
Part of this is due to fierce resistance from powerful figures in the
Russian elite with ties to the energy industry, like Rosneft CEO
Igor Sechin, a longtime Putin crony. But the reasons for inaction are actually much more fundamental.
Diversifying and modernizing Russia's economy would entail a degree of
decentralization and the subsequent development of alternative centers
of economic power. According to Edward Lucas this, in turn, would
eventually lead to new centers of political power with more independence
from the Kremlin than Putin appears willing to tolerate.
"The decoupling of gas and oil prices, the large quantities of liquefied
natural gas on world markets, the growth of shale gas have all
[diminished the regime's] ability to collect natural resource rents,"
Lucas says. "And the collection and distribution of those rents is
central to its model."
With resources declining and no economic diversification program in
sight, the authorities appear to have concluded that they need to reform
the country's creaking social welfare system. But such a move is
certain to be politically volatile, especially since Putin's main base
of support is now the rural poor and the working classes.
The Kremlin is still haunted by the protests that broke out in 2005 when
the government attempted reforms to the social safety net.
Fathers And Children: The Looming Generational Conflict
When Putin took power in 2000, the 40-something former spy looked like
an energetic young leader, especially compared to his geriatric
predecessor, Boris Yeltsin. But more than a decade later, he and his team are aging together. And by
most accounts, they intend to remain in office at least until 2018 --
and possibly until 2024. By that time, much of his ruling circle will be
in their 70s.
The comparisons to Leonid Brezhnev that accompanied Putin's return to
the Kremlin were not superfluous. In addition to the fears of
stagnation, the graying of Team Putin also sets the stage for a
generational conflict within the elite.
"The lack of institutional mechanisms for promotion and rotation is a
problem because, when you don't have that, it leads the younger
generations to get frustrated if they don't believe there is a way to
advance within the system," says Gvosdev. "If everything is blocked off
it creates tension. You can't just freeze the government establishment
because the energy of people is going to be directed toward breaking
into it or replacing it, and that becomes a danger."
How this generational discord develops will be one of the key underlying
trends to watch in 2013. This is especially true since a whole new
cohort entered the elite over the past four years.
During his presidency, Dmitry Medvedev made a concerted effort to bring younger cadres into the Kremlin, which analysts say
added a political element to the generation gap.
"Real fragmentation is taking place by age because Medvedev rejuvenated
the system of administration," prominent Moscow-based sociologist Olga
Kryshtanovskaya told the daily
Nezavisimaya gazeta this summer. "The more conservative older part of the elite was
irritated by this and moved toward Putin. And those who were younger
moved toward Medvedev in hopes of a quick career if Medvedev remained
for a second term."
The young guns who came in with Medvedev are also ideologically inclined
toward greater pluralism. "Many observers are convinced that these
leaders are giving financial support to the opposition," Kryshtanovskaya
said.
The generational gap in the elite is mirrored by a similar one in
society as the cohort born after the fall of the Soviet Union -- and
which has only faint memories of the chaos of the 1990s -- comes of age.
"This group of citizens sees itself as not only post-Soviet, but non-Soviet," says
Masha Lipman of the Moscow Carnegie Center. "They don't consider themselves to be vassals of the state. They are more free thinking."
Lipman adds that this younger generation is helping fuel Russia's civic
awakening. "This process is irreversible," she says. "And as Russia
continues to urbanize and cities become centers for younger people, this
process will only accelerate."
Strange Bedfellows: When Aleksei Meets Aleksei
When speculation emerged that anticorruption blogger Aleksei Navalny and former Finance Minister Aleksei Kudrin
may be cooperating politically, it raised eyebrows among Kremlin-watchers.
The reason for the interest goes much deeper than an abiding
fascination with these two emerging players on the political scene. An alliance of the Alekseis would have pointed to one of the key
developments analysts have been watching for since mass protests broke
out a year ago: collaboration between the technocratic wing of the elite
and moderate elements in the opposition.
Such a marriage makes sense in many ways. Elite technocrats understand
that Russia is dangerously dependent on energy exports, that current
levels of corruption are unsustainable, and that in order for the
economy to diversify and modernize, the political system will need to
become more pluralistic.
Moreover, as moderate opposition activists come to understand that a
colored revolution in Russia is unlikely, they are more likely to place
their hopes in evolutionary change. And in the event that the Putin regime begins to look dangerously shaky,
overtures from inside the halls of power to the opposition will become
more likely.
"We are going to see more people toying with defection to the opposition, people opening up back channels," says
Mark Galeotti,
the author of the blog "In Moscow's Shadows" and a professor at New
York University. "We're going to see the economic elite trying to reach
out [to the opposition] and this is going to be very dangerous for the
state."
On the opposition's Coordinating Council, a bloc is already emerging
that seeks to negotiate political change with willing elements in the
Kremlin, rather than trying to topple the regime, according to press
reports.
The faction apparently includes 16 members of the 45-seat council. In
addition to Navalny and his backers, it reportedly includes
socialite-turned-activist Ksenia Sobchak and her supporters as well as
longtime opposition figure Ilya Yashin, and entrepreneur Aleksandr
Vinokurov, the co-owner of Dozhd-TV.
For his part, Kudrin has been
trying to position himself
as a bridge between the opposition and the authorities to foster what
he calls "evolutionary change" toward greater pluralism. So has
billionaire oligarch and former presidential candidate Mikhail
Prokhorov.
If a bridge is ultimately built between the opposition and the
technocratic wing of the elite, it could result in negotiated political
reforms, in the coopting of a vital wing of the Kremlin's opponents --
or a measure of both.
"I think it is more likely that as we see divisions within the regime
that one faction tries to exploit public discontent," says Lucas. "It
will still be kind of inside baseball rather than a 1917-style change."
Beyond The Street: Will The Opposition Mature?
Bouts of soul searching are an inevitable ritual after the past few opposition demonstrations.
The heady days of December 2011 and January 2012, when dissenters found
their voice and discovered they were not alone, are a fading memory.
Likewise, the period from the beginning of the year until Putin's return
to the Kremlin in May, when the opposition seemed to control the
national conversation, is also over.
And opposition leaders look increasingly uncertain about what to do next.
"They're
focusing on the glory days,
the revolutionary days of December through May. But nobody is thinking
about what happened after May, when they lost control of the agenda,"
says
Sean Guillory,
a fellow at the University of Pittsburgh's Center for Russian and
Eastern European Studies. "How are they going to recapture the agenda
and how are they going to really start making connections with society?"
The opposition, of course, is not a unified movement. It comprises
nationalists, leftists, and liberals, united only by their opposition to
Putin.
Will a single leader emerge in the coming year? Will the Coordinating
Council, an elected body designed to bridge the divides in the
opposition and establish a bond with civil society, prove an effective
form of collective leadership?
"A process we are going to see is the opposition actually beginning to
fragment," says Galeotti. "You will begin to see ideological blocs, real
opposition movements rather than just the generic 'we want Russia
without Putin' thing. But it will be a painful process."
What happens with the opposition, whether it is able to move beyond the
street and develop into a potent political force, is a trend to watch
because there is a deep well of discontent in society to potentially
tap.
"They have this feeling of stagnation," says Lucas. "Of institutions
that don't work, of a public life plagued by lies, evasions, and
propaganda. They want more decent behavior by public officials and
public institutions and they aren't getting it."
This post appears courtesy of Radio Free Europe/Radio Liberty.
