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The Power Vertical

Russia's 'Deep State' Crisis

Vladimir Putin (right) and Vladislav Surkov talk at a meeting in the Siberian city of Kurgan on February 13.
Vladimir Putin (right) and Vladislav Surkov talk at a meeting in the Siberian city of Kurgan on February 13.
Vladislav Surkov may be about to get a second act. And Aleksei Kudrin is standing offstage, biding his time and waiting to make his move.

Surkov and Kudrin are about as different as Russian officials can be. One thing they have in common, however, is that each played a key role in maintaining the authoritarian political system President Vladimir Putin established more than a decade ago.
 
The flamboyant Surkov's stock-in-trade has long been the murky world of political subterfuge. As the architect and overseer of Russia's simulated democracy, he deftly utilized diversion and intrigue to create enough of an illusion of pluralism to give the country's ruling cabal the space to govern undisturbed.
 
The cerebral Kudrin, in contrast, specialized in sound economic management. As finance minister he led the green-eyeshade set of bean-counting economists who kept the country's books balanced (albeit with an assist from high oil prices), even amid mind-bending corruption.
 
Another thing Surkov and Kudrin have in common is that they both came to the realization that Russia's political system needed to evolve and reform -- or risk stagnation and decay. And this caused each of them, to varying degrees and for different reasons, to either defect or be banished from the ruling circle.
 
Surkov realized that the simulated pluralism he painstakingly constructed needed to be expanded to give more of society -- especially the emerging creative class -- more of a voice. This meant bringing more parties into the State Duma, a proposition that put him in direct conflict with the ruling United Russia.
 
He also understood, correctly it turns out, that Putin returning to the presidency would be a risky move that would inflame the emerging middle class and divide the elite. Surkov reportedly favored Dmitry Medvedev remaining in the Kremlin, albeit with Putin remaining informally -- yet firmly -- in charge as "national leader." This set him against the siloviki clan of security-service veterans surrounding Putin -- and ultimately with Putin himself.
 
In the wake of the disputed State Duma elections in December, Surkov was unceremoniously tossed out of his job as the Kremlin's deputy chief of staff and the regime's chief ideologist. To add insult to injury he was replaced by his archrival, Vyacheslav Volodin, a staunch Putin loyalist.
 
Surkov, however, appears on the verge of a comeback of sorts. The daily "Kommersant" reported this week, citing unidentified officials, that he may be named chief of staff of Prime Minister Medvedev's incoming government, where he will also hold the rank of deputy prime minister.

"The decision with regard to Surkov is essentially final. However, there is always a chance, of course, that some last-minute changes could be made," the daily quoted one official as saying.
 
Like Surkov, Kudrin also realized that the system needed to change, albeit for different reasons. A skilled economist, he understood that if Russia was ever going to modernize its economy and diversify it away from its dangerous dependence on oil and gas, the political system needed to open up to give the fledgling entrepreneurial class space to grow and develop.
 
Just days after Putin and Medvedev announced their job-swap plan at the September 24 United Russia congress, Kudrin resigned as finance minister and has been critical of the regime ever since. Last week, for example, he said the street protests that were violently broken up by police on May 6 should be a signal to the regime that political reform is necessary.

Despite his defection, Kudrin will also likely remain a player. He is personally close to Putin, who has called him a valued member of his team. He has also been repeatedly touted as a top candidate for prime minister should Medvedev falter in that role.
 
Kudrin's (temporary) defection and Surkov's (temporary) expulsion, which took place just months from each other, are indicative of a deep fracture in the inner core of Russia's ruling elite, or what I prefer to call the Deep State. This group of about 30 people includes what political analyst Nikolai Petrov of the Moscow Carnegie Center calls "shareholders" and "managers."
 
Shareholders, Petrov explained in a recent interview, "are semi-autonomous players due to the fact that they control essential parts of the wealth or management system." Managers, on the other hand, owe their position in the elite to their technical skills -- for example in political organization and intrigue or sound financial management.
 
Igor Sechin, who leads the siloviki clan and lords over Russia's energy sector, is a shareholder. So are businessmen Gennady Timchenko and Yury Kovalchuk.
 
Surkov and Kudrin, on the other hand, are managers, and very valuable ones at that.
 
The elite now appears to be divided between managers, who understand that the system needs reform, and shareholders, who fear that change could threaten their wealth. (This conflict closely mirrors the conflict between the technocrats and the siloviki that is often referenced on this blog).
 
In this intramural skirmish, the shareholders won the first round -- Putin is back in the Kremlin and political reform appears to be cosmetic at best. But the upheaval in society over the past several months is spooking much of the elite -- and proving to a degree that the warnings of people like Surkov and Kudrin were correct after all.
 
-- Brian Whitmore

Tags: Vladislav Surkov,Aleksei Kudrin,Deep State

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Comments
     
by: Marko from: USA
May 16, 2012 22:52
I wouldn't disagree with you that some reform is necessary (and that there is some disagreement about direction among Putin's high level supporters), but this seems overstated (and again there are those troubling contradictions). Crowds of 2,000 to perhaps 20,000 are reasons to completely scrap the Russian political and economic system-- apparently in favor of Western-style systems that already failed miserably in Russia once? Yet far larger crowds (and way more unhealthy economies-- Russia is still the fastest growing economy in the G8) in Western European countries like Greece, Spain , Italy , etc are not grounds to alter those systems at all? That is what the commentariat (and you Brian) is/are telling us, but I'm missing the logic? Additionally, the Russian "opposition" is a very diverse group politically but a very narrow group geographically (basically doesn't exist outside of Moscow). Why would adoption of liberal free market policies for example appeal to leftist communists and anarchists (who would hate those policies)? Wouldn't giving in to certain segments of Moscow's population alienate Putin supporters in the rest of Russia's many time zones? Surely, the people around Putin, whatever disagreements they may have amongst themselves, understand those realities as well...

by: La Russophobe from: USA
May 16, 2012 23:32
It's really very misleading to refer to actions by the Kremlin that "inflame the emerging middle class and divide the elite". It's misleading because you imply that the middle class and elite at issue are national, and they are not. They are exclusively in Moscow, and as such represent an insignificant force in the nation as a whole. Putin has casually shrugged off their antics, which become more ludicrous by the day. Most recently, they have agreed to march and camp out without the slightest visual hint of criticism of the Kremlin, a big step back towards Soviet times and a clear sign of weakness and capitulation. What's next? No talking either?

by: Eugenio from: Vienna
May 17, 2012 18:17
"Russia's 'Deep State' Crisis" :-))))))))))))) Finally we know what state is in a state of a crisis: it is not Greece, not Portugal, not Spain, not Italy, not the US - it is Russia :-))))))))))

About This Blog

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or

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