Russian President Vladimir Putin toasts the victory of the Russian ice hockey team at the Ice Hockey World Championship last month.

Russian President Vladimir Putin toasts the victory of the Russian ice hockey team at the Ice Hockey World Championship last month. AP Photo/Yuri Kadobnov, Pool

What Does Putin Want?

Russian President Vladimir Putin wants respect, sure, but also money. How that shapes his relations with the West. By David Frum

In September 2009, Václav Havel and 11 other European dignitaries published an open letter challenging the United States and other NATO countries: “Are we willing to accept that the borders of a small country can be unilaterally changed by force? Are we willing to tolerate the de facto annexation of foreign territories by a larger power?” The questions were prompted by the Russian carve-up of independent Georgia after the brief Russian-Georgian border war of 2008. The answers were already evident by the time they were asked: Yes, we would accept the intrusion. Yes, we would tolerate it.

The decisions from which the West recoiled in 2009 informed the actions that Russia has taken in 2014. Five years later, the borders of a much larger country, Ukraine, have been unilaterally changed by force. The conquered territory, Crimea, has been annexed not only de facto, but by a juridical act of the Russian state. The attack on Crimea took Western intelligence agencies by surprise. U.S. intelligence was briefing journalists that Russia would not invade Crimea up until the day Russia invaded Crimea. Too bad no one at the CIA was reading the astute new book on Russia by Ben Judah, a Russian-speaking British journalist who has been reporting on low life and high life in and around Moscow, as well as in the bleak cities of the hinterland, for more than a decade. Judah explains the manic self-confidence—and the insecurity—of Vladimir Putin’s Russia. His core insight: the fragile empire, as his title describes Russia today, is such because it is built on a foundation of plunder.

Judah advances two predictions, both borne out by the early phases of the Crimea crisis: So long as Putin retains power, Russia can never evolve into a normal state. Anything resembling the rule of law would put an end to the organized looting that has so fabulously enriched Putin and his inner circle. At the same time, Putin cannot afford to push his confrontation with the West to an outright breach. His entourage of bureaucrats and oligarchs has stashed tens of billions of dollars of ill-gotten gains in Western investments and bank accounts, where the fortunes could be traced and sequestered if the United States government were ever sufficiently provoked. A crooked dictator of a small banana republic can secret a few million dollars in a Dubai bank account. But the sheer scale of the thievery committed by Putin and his group requires haven in assets available only in advanced economies: ranches in Australia, French government bonds, London apartments, stocks traded on the Tokyo or New York exchanges. That’s the dilemma of the political crook. He can store money where it is protected against adverse events at home or where it is beyond the reach of the U.S. Treasury Department—but not both. Putin leads a brutal regime, but also a vulnerable state.

Judah is not the first to try to follow the Russian elite’s money. One common theory goes that, under Putin, former KGB agents have renationalized the state assets seized during the Yeltsin years by self-made oligarchs like Boris Berezovsky and Mikhail Khodorkovsky. In the process, the intelligence cabal has lavishly rewarded itself. But Judah’s narrative suggests a different picture: Putin is the ultimate Berezovsky, not his antithesis—a lone actor, not the leader of a KGB putsch. Putin was nobody very important in the Soviet-era KGB. His ex-KGB associates ranked even lower than he did. He maneuvered deftly through the aftermath of the Soviet collapse, rising from involuntary retirement in 1990 to a job at St. Petersburg State University, then to the deputy mayorship of St. Petersburg, then to Moscow and four years of skillful self-ingratiation with President Boris Yeltsin. Yeltsin appointed Putin head of the security service, then prime minister, then his successor as president.

Vladimir Putin’s Russia Is Built on a Foundation of Plunder

The most notorious story of Putin’s time in St. Petersburg, from 1990 to ’96, assigns him blame for the theft of tens of millions of dollars’ worth of emergency food assistance from Germany. Judah interviewed a partner in one of the corrupt business enterprises Putin allegedly developed further along his path to power. It was a medical-supply company that accepted donations from Yeltsin-era oligarchs to provision badly underequipped Russian hospitals—and then scraped 35 percent off the top, supposedly for investments in the Russian economy. By 2005, according to the ex-partner, the fund had accumulated more than $200 million, some of which went to the building of Putin’s infamous Black Sea palace—though the Kremlin steadfastly denies this.

Putin may be a Soviet man, as Judah puts it, but he owes his rise to post-Soviet conditions. And when he at last goes, he is unlikely to leave anything enduring behind. Judah quotes Putin’s own spin doctor Gleb Pavlovsky, a manufacturer of Putin’s (highly artificial) macho-man image: “Everyone has an interest in the [Putin] system—and everyone is disloyal to it!” The corrupt Russian president has forfeited his ability to prevent the petty corruption of police and inspectors—“corruption that Putin would not have wanted as it undermines his legitimacy,” Judah writes. He has “removed everyone capable of fighting corruption in the bureaucracy and made his image reliant on the bureaucracy. This gives officials impunity to behave in a predatory manner.” Moscow’s orders are disobeyed in the provinces, and Putin is left to try to look all-powerful without any mechanism other than intimidation to impose his will.

Putin has tried to build support by improving standards of living, promoting Russian nationalism, and suppressing dissent—at least on television, the medium most available to the Russian majority. (He’s been much less interested in controlling the Internet, the medium of the Moscow elite.) But larger economic forces have buffeted him all along. By fateful chance, Putin took power at almost exactly the right moment. Oil earnings quintupled between 2000 and 2007, and revenues from gold, aluminum, and other resources also spiked. The Russian economy grew by an average of 7 percent annually over the eight years before Putin temporarily stepped aside from the presidency in 2008, and real incomes skyrocketed 140 percent. Consumer goods proliferated: Ikea opened in Moscow, and modern supermarkets offered dozens of varieties of frozen pizza even to the bleak towns on the Siberian railway. And then the financial crisis of 2008–09 hit Russia harder than it did any other G-20 economy, including Greece. One-third of Russia’s foreign-currency reserves evaporated in a few months in an effort to protect the ruble. The Russian stock exchange lost 80 percent of its value. (Even now, the natural-gas producer Gazprom is worth only a little more than one-fourth what it was worth before the crisis.)

The strengthening Russian economy had brought with it destabilizing change, which the downturn only intensified. During the Putin years, Russia has become the planet’s second-largest magnet for migrant labor, after the United States. The main source of this labor: the Muslim republics of Central Asia. “Putinism has created a huge racially distinct underclass,” Judah writes, made up of Uzbeks, Tajiks, and Chechens, “unprotected by the (ignored) labor code.” In reaction, Putin presents himself as the champion of Russian nationalism, appealing to the Russian people and—not so incidentally—to the European far right, too. Judah shrewdly observes, “As the country became less Russian ethnically, it was becoming more so culturally.”

No wonder Putin has responded so fiercely to the “color revolutions” in the former Soviet states in the mid-2000s, and to the second Ukrainian uprising, in 2013–14. “A successful pro-Western democracy in Ukraine,” Judah writes, “would undermine Putinism by example.” If Ukrainians and Georgians could overthrow corrupt authoritarian leaders, then Russians might be tempted to follow suit. In the period from 2005 to 2012, Putin developed paramilitary groups loyal to himself and to his United Russia party, if party is the right word for an organization that exists only to ratify decisions taken by its leader. Putin and his circle, Judah observes, “clearly suspected they were not legitimate enough to rely on the army and police” should unrest develop and anything like the Orange Revolution seem to be at hand.

That “Orange hour” has not struck yet. Judah interviewed leading activists in the 2011–12 wave of opposition to Putin’s return to the presidency. He respects their courage, but highlights their limitations. The dissidents who sound the most liberal—the protégés of economic reformers like Yegor Gaidar and Anatoly Chubais—are also the most compromised by their association with the catastrophes of the 1990s in Russia: the disappearance of jobs, the collapse of living standards, the inflating-away of Soviet-era savings. Some of the leaders of the next generation are so parochially caught up in central-Moscow luxe that they could never possibly reach out to the Russia beyond their circles. More-populist figures, like the anti-corruption campaigner Alexei Navalny, express a rage that can sound lawless, even violent.

As Judah worriedly reports:

Navalny sometimes speaks like Putin. A decade ago Putin promised to “liquidate the oligarchs as a class”; now the blogger-challenger lashes out at the London-based Russian-Jewish oligarchs, [the now-dead] Boris Berezovsky and Roman Abramovich, hollering that “we must exterminate these thieves who are drinking our blood and chewing our livers.”

Navalny denounces Muslims and Chechens in language that sometimes shocks his own followers but may resonate with public opinion. Judah concludes that “the crisis of Putinism has, ironically, left Putin vulnerable to a ‘real Putin.’ ”

Meanwhile, members of the educated elite look to emigration as their personal solution. “The best thing money can buy is a European passport,” Judah notes. Less privileged Russians yearn nostalgically for Soviet times. “It is important not to think that Russians who [still support Communism] are fools,” he warns. “They are not nostalgic for ‘empire’ or for the days that Russian tanks ruled in Prague. Those who vote for the Russian Communist Party are nostalgic for the welfare state.” Putin can’t supply that, but Ukraine offers him his grand chance to regenerate the popularity he enjoyed a decade ago, when living standards surged and his bare-chested machismo still seemed novel. “For Russians, Ukraine is not really abroad,” Judah writes. For Putin and his circle, Ukraine is—as Putin said to George W. Bush in 2008—“not really a state.”

The problem is that Russia is decreasingly functional as a state, too. Despite the careless analogies offered in the first hours of the Crimea crisis, Putin isn’t Hitler. He’s a combination of Tony Soprano and one of the backup dancers for the Village People, posing as a Siberian tough guy to compensate for the aching weakness of his country and his position in it. Here is the scariest possibility of all: an increasingly precarious and spooked Vladimir Putin—a leader who cannot afford a confrontation with the West—may yet, through his own need for domestic image management, tumble his country and the world into the widest crisis since the end of the Cold War.

NEXT STORY: Still a Long Way from Asian NATO

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