The “mistakes” he cites are the government takeover of oil giant Yukos; Moscow’s inadequate response when terrorists attacked an elementary school in Beslan in September 2004; and Putin’s interference in Ukrainian elections. Putin can rely only on his popularity, says Aslund, who has served as an economic adviser to the governments of both Russia and Ukraine. But, Aslund says, the president’s popular standing has slipped sharply.
Aslund was interviewed by Bernard Gwertzman, consulting editor for cfr.org, on January 18, 2005.
You’ve written in The Weekly Standard that the past year was a disaster for Putin. Can you expand on your thinking?
You can say that he has made three enormous mistakes. One is the confiscation of Yukos. Another is the non-activity of the Russian government in the Beslan hostage takeover. And the third is the Ukrainian presidential election, in which Putin very heavy-handedly and unsuccessfully intervened.
Let’s start with the Yukos issue.
The Yukos confiscation essentially means that Putin has made a joke of his excellent tax reform. It means arbitrary taxation is back. And the [October 2003] arrest of the head of Yukos, Mikhail Khodorkovsky, sends the message that you cannot be sure what will happen to you. He has also made a joke of his judicial reform, which seemed very good, but now we know it only means that a judge will decide whatever Putin wants. And as a consequence of this, we are now seeing that a company that accounts for 1 percent of the world’s oil production is being played around with and seems to have been taken over by four different companies in the course of a few weeks, which [creates] extraordinary instability in the economic sphere.
This sounds very much like the old Soviet system. Of course, there were many skeptics when Putin became president in 2000 because of his background as a KGB officer. Did he arrest Khodorkovsky and in effect seize Yukos because he wants to tighten his personal rule?
Yes. As I’ve understood Putin previously, from his first term, I could see four major aims: One was political control, which was always at the top. The second was high economic growth. The third was judiciary reform, which he talked a lot about and really seemed to be serious about. The fourth was a realistic foreign policy, getting the best for Russia, without any ideological concerns whatsoever. But what we are seeing is that the political control aspect in the last year or so has totally taken over from all the others.
There is a natural contradiction between political control and the other three aims. Now it is a total dominance of political control over everything else. Economic growth is declining. Oil production has actually fallen for the last two months. Judicial reform is done. And as a result of the Ukrainian fiasco, Putin successfully managed to unite the European Union and the United States, something that really had seemed quite impossible, but he united them against him.
Let’s talk about Beslan, where at least 344 people were killed, including some 172 children. Is this an indication of security forces’ ineptitude?
Let’s take the elements involved. First, the hostage-takers got to the school through the lines of various security forces. There were lots of police controls everywhere in the Northern Caucuses. Probably they had prepared the attack by hiding weapons in the school, because it appears these same people had repaired the school in the summer. And five hours after the start of the takeover, the minister of the interior and the chairman of the FSB [Federal Security Service] are on the spot, but they are not to be seen. They don’t seem to have done a thing until after the events are over.
Two crack Russian regiments are sent there and are on the spot very soon. But they don’t get any orders. They don’t have any plan. They have no ammunition. And they have no body armor. They are just standing there. At no time was the school cordoned off. There was total non-activity by the government. The local governor never came there. Only his spokesman appeared. The only government activity was essentially the spokesman of the governor of North Ossetia saying that there were 354 people in the school, when everybody knew there were more. It turned out to be 1,200.
The government continued with its ordinary activities and didn’t care about what was going on. The news coverage was minimized. Then in the end, on the third day, the local populace, who were furious, took the Kalashnikovs they had lying at home and attacked the school themselves. This meant there was no plan and it was totally chaotic. In the process, 11 of the special forces [troops] were killed, who were just standing there.
I didn’t realize that the locals started the fighting.
That’s a firm fact. Nobody on the government side talked to the hostage-takers. A former governor of Ingushetia, Ruslan Aushev, went into the school himself, but he had been ousted [from the governorship] by Putin. And Aushev, on his own initiative, got 26 hostages out. He was the only hero, but that was without any government support whatsoever. So it is easy to understand what happened. Putin was not in a mood to have to deal with the situation. Everyone knows that if Putin is not in a mood, then no one will remind him of the problem. It was a total desertion by the state.
I thought Putin was strongly anti-terrorism.
He is not. He is useless, if you look at what he has done. Yes, he is cruel. He never, never, ever complains about what the security forces do or do not do. If you look at the storming of the Moscow musical theater [after a hostage takeover in October 2002], he praised the security forces for what they had done. Long after, he said in a big interview he gave how fantastic it was that nobody in the security forces had been killed. He couldn’t care less about the hundreds of people in the theater who died from the poison gas used. He was concerned only about the security forces. None of his KGB appointees has been demoted. They are only promoted, even though they are very mediocre and very corrupt.
Why did Putin get so personally involved in the Ukrainian election?
I think he rightly saw the Ukrainian revolution under [Viktor] Yushchenko as a threat to himself. The issue is Russian domestic politics. Ukraine was going through real democratization, and Putin’s system in comparison looks totally anachronistic. It’s not by chance that people are reacting now in Russia, because they see how authoritarian and petrified the system is. I think it was democracy and not Russian foreign policy that drove Putin’s intervention in Ukraine.
You think the anti-government protests recently in the streets of St. Petersburg and Moscow by pensioners is related to events in Ukraine?
There are many things in it. Basically, it was a good thing to transform many of these “in kind” [retirement] benefits to monetary benefits.
Can you explain the background?
In Russia, there are many pension benefits you get through free services or free distribution, rather than in the form of money. And there were two fundamental problems with reforms passed last year. The first is that people were supposed to be compensated for free services, like transportation, that they had before. But in fact, it seems they only got one-third or one-quarter of the money they were promised. So it is a substantial cut of the standard of living of the poor. No doubt about it. It is quite atrocious, given that there is currently a sharp rise in the gross domestic product in Russia.
The other point is federal-regional relations. The regional governments were supposed to provide much of the money. The federation just pushed the expenditures down to the regions, and the regions have, of course, refused to pay. Part of the reason is that the new governors are to be appointed [by the central government]. So the current governors are undoubtedly behind [the protests]. First, they have not given the money for compensation to the people. And then they tell the people that it is the federal government which is to blame.
Putin doesn’t understand this. He is a control freak. He wants to appoint everybody and control everybody. And he thinks he can do it.
You suggest in your Weekly Standard article that Putin’s political career does not have long to go, even though he has just been re-elected. Do you think he will be forced out of office?
Well, by everybody. He has now an extremely narrow base. It’s a small group of former KGB officers from St. Petersburg. And then, he has had great popularity, which is now already fallen by about 20 percent in the last nine months.
What about relations with the United States?
The relations are close on terrorism and nonproliferation.
Putin will meet with Bush in Bratislava next month. What do you expect to come from that meeting?
Not much, because Putin is completely out of control. I don’t think he can save himself. He talks about “dark forces” which want to destabilize Russia and take the Northern Caucasus away from Russia. Russians understood this as implying the United States. I think Bush is far too nice to Putin for no good reason. Putin cannot deliver. And he is not benign. The only thing is he is But he is so weak, he is not dangerous.
That’s an interesting analysis. So you expect Putin to resign at some point soon?
I think he will soon be out of office. His staying in office now is based on one single legitimacy: his popularit