- The Washington Times - Sunday, September 19, 2004

Five years ago, an obscure former KGB officer named Vladimir Putin came to power in the Kremlin, promising a sharp response to a string of terrorist attacks blamed on separatist Muslim rebels from Chechnya.

A recent string of terrorist attacks blamed on Chechen rebels cleared the way for Mr. Putin to consolidate his hold on power in Russia in a way not seen since the dying days of the Soviet Union.

The Russian leader’s response to the bloody hostage drama at a school in Beslan, the culmination of a string of terrorist strikes that have killed more than 430 since mid-August, “certainly fits into the pattern we’ve seen throughout his rule,” said Nikolay Petrov, a scholar in residence at the Carnegie Moscow Center and a former adviser to the Russian government in the mid-1990s.

“When confronted with a crisis, his first instinct is always to concentrate more power in his own hands,” Mr. Petrov said.

Mr. Putin’s immense country embraces some immense contradictions.

Even in its shrunken post-Soviet state, Russia remains the world’s second-leading nuclear power behind the United States and recently passed Saudi Arabia as the world’s biggest oil exporter. It has a veto at the U.N. Security Council, a seat at the table of the elite Group of Eight, and a direct interest in conflicts stretching from southeastern Europe to northwestern Asia.

But in other ways, Russia is a shadow superpower — with a middling economy, a strapped and ill-equipped military, and a political culture that domestic and foreign critics fear is slipping further and further away from Western democratic standards.

Even as the dead were being buried in Beslan, Mr. Putin called for sweeping changes in Russia’s electoral system, demanding the right to appoint the governors of Russia’s 89 federal regions, now elected directly by voters.

Mr. Putin would also abolish direct election for representatives to the State Duma, the lower house of the Russian parliament already controlled by parties loyal to the Kremlin.

Mr. Putin justified the moves as part of a drive to improve the efficiency of the state and to head off ethnic and religious clashes that he said threaten to undermine the unity of the Russian Federation.

In a Sept. 4 address to the nation, Mr. Putin said the government “failed to react appropriately” to the challenges of terrorism and social division.

“We displayed weakness, and the weak are beaten,” he said.

The Bush administration has tried to walk a fine line on Mr. Putin, who forged a strong personal tie to President Bush in the days after the September 11 attacks.

Secretary of State Colin L. Powell, in an interview with editors and reporters at The Washington Times last week, said, “We understand the need to go after these kinds of murderers and terrorists.”

But, he added, “at the same time, we felt it was important to say to our Russian friends — not as anything but a friend — that as you deal with this kind of terrorist threat, you have to be careful that you don’t do it in a way that starts to undercut democratic institutions.”

Russia’s embattled pro-Western political voices have been much more outspoken.

Former world chess champion Garry Kasparov, head of a Moscow-based democratic opposition group called Committee 2008-Free Choice, accused the president of a “constitutional coup.”

“It is completely clear that the measures the president is insisting on have nothing to do with the fight against world terrorism,” Mr. Kasparov said.

“Vladimir Putin is proposing formally to consolidate an authoritarian regime, which is not in the least capable of either providing security for Russian citizens or guaranteeing the integrity of the Russian state,” Mr. Kasparov said.

Mikhail Gorbachev, who presided over the death of the Soviet Union and the chaotic birth of the Russian Federation, sharply criticized Mr. Putin’s recent moves in a commentary in a Moscow newspaper last week.

“Under the slogan of the war on terrorism, it is being proposed to sharply limit democratic freedoms, to deprive citizens of the opportunity to directly express their attitude toward the government in free elections,” he wrote.

Mr. Putin’s power grab has not been limited to the political sphere, detractors say.

The government largely controls the national television networks, and outspoken critics such as media baron Vladimir Gusinsky and oil billionaire Mikhail Khodorkovsky find themselves targeted by government prosecutors — and, in Mr. Khodorkovsky’s case, under arrest.

A day after releasing Mr. Putin’s proposals for political reform last week, the Kremlin gave its blessing to the takeover of the Rosneft oil giant by Gazprom, the state-controlled natural-gas monopoly.

Pavel Baev, an analyst with the Jamestown Foundation in Washington, said the takeover will give Mr. Putin and his allies much more direct control over Russia’s massive energy sector — and a steady source of funds for political patronage and counterterrorism moves.

The combined firm would find itself far more powerful if the government succeeds in the breakup of Yukos, the giant oil conglomerate once run by Mr. Khodorkovsky.

“In addition to paying taxes into the state budget, this energy monster could direct more funds to the media and channel a steady cash flow directly to the Kremlin administration,” according to Mr. Baev.

“The hyper-centralized system of power requires a large amount of ‘grease’ to turn its bureaucratic wheels; hence, the permanent need for soft money,” he said.

Some of that money is flowing directly into Mr. Putin’s one reliable power base — the Russian security and intelligence agencies where he once worked.

In the wake of the Beslan massacre, the Russian Finance Ministry announced last week a major boost in funding for the government’s security and border-control agencies.

Many of Mr. Putin’s top aides and political allies are drawn from the so-called “siloviki,” officials from Russia’s various security and intelligence agencies.

Despite the doubts over Mr. Putin’s record on democratic reforms and Chechnya, his government gets relatively good marks for its handling of the economy — particularly compared with the chaotic policies of predecessor Boris Yeltsin.

Russia has benefited from surging world oil prices and from the trade benefits of a deflated currency after the ruble’s collapse in August 1998.

The Carnegie Center’s Mr. Petrov said the economic good fortune allowed Mr. Putin to build the power of the central government in a way Mr. Yeltsin was never able to do.

“Yeltsin never had the money,” he said.

Mr. Putin also has appointed a team of economic reformers who have lowered taxes, deregulated a number of industries, overhauled the pension system and strengthened the government’s financial controls.

The economy grew by 7.3 percent in 2003 and the Economist Intelligence Unit (EIU), a global forecasting service, expects Russia to nearly match that in 2004.

But the economy remains heavily dependent on the energy-export sector, and the high oil prices may prove a mixed blessing, according to a recent EIU analysis.

“High oil prices help state finances and boost short-term growth, but also crowd out the non-oil sector, encourage cronyism and corruption, and weaken the urgency to reform,” according to the EIU. “No developing economy that is dependent on natural resources has grown fast, over a long period, in the past half-century.”

Mr. Putin’s government still must tackle some of the most difficult and politically sensitive reforms, including a banking sector and a legal system that have scared off many foreign investors.

Even Mr. Putin’s harshest critics concede he enjoys a base of popular support that no other Russian politician can match. He cruised to a second four-year term in March with more than 70 percent of the vote.

Many Russians say the plain-speaking, low-key president is a welcome change from the hectic 1990s under Mr. Yeltsin, when the economy was in a shambles and the country was still adjusting to the sudden loss of its superpower standing in the world.

Mr. Putin is the “un-Yeltsin,” in the words of leading political analyst Alexei Pushkov.

Nikolai Belyaev, chief administrator for the central Russian town of Lebedyan, said, “Personally, I like having a strong personality in a leader, because discipline is a very important part of life. Without discipline, there is no progress.”

Mr. Petrov said public opinion polls show that Mr. Putin has managed to be far more popular than the government he runs.

“The polls show a strong majority say they like the president, but then in the next sentence they say they aren’t satisfied with the economy, with the war on terrorism and other major issues,” he said.

Daniel Treisman, a political scientist at the University of California Los Angeles, argues that Mr. Putin’s dictatorial tendencies have been overstated in the Western press. Russia’s political, legal and economic shortcomings are fairly typical of the world’s emerging “middle-income democracies,” such as Mexico or Indonesia.

But he said Mr. Putin has shown a tendency to “reduce the autonomy of his political opposition.”

“Russia is not outside the norm, but it may be moving to the illiberal side of the spectrum,” he said.

It is in the Caucasus, a region riven by ancient communal tensions, that Mr. Putin’s “vertical integration” of power has faced its toughest test.

Mr. Putin said earlier this month that there could be as many as 2,000 potential ethnic or religious conflicts within Russia’s vast territory.

One reason Moscow has taken such a hard line on the separatists in largely Muslim Chechnya is the fear that other groups might be tempted to defy the central government.

The Russian president Friday angrily rejected calls from Washington and leading European capitals to seek a political settlement in Chechnya after Beslan, even reserving the right to make “pre-emptive strikes” against unspecified states to root out terrorist threats to Russia.

“You cannot think that by dealing with criminals we can make a deal for them to leave us in peace,” Mr. Putin said in Moscow. “This will not happen. Every concession leads to aggression, wider demands and multiplies our losses.”

But five years of brutal ground warfare has failed to subdue the Chechen resistance, and there are indications from the Beslan attack that the Chechen rebellion is spreading to other restive ethnic groups in the region.

Mr. Putin’s decision to centralize even more power and redouble the military campaign against the Chechens is “a sign of weakness, not of strength,” said Ariel Cohen, a Russia specialist at the Heritage Foundation.

“We see consolidation of political power, but we still don’t see the serious reforms on the security side,” Mr. Cohen said.

“Russia still has the security and military apparatus it inherited from the Soviet Union, which was designed to fight a very different kind of enemy.”

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