What's Wrong with Russia

Peter the Great built St. Petersburg three centuries ago as Russia's window on the West. But for a few days this week, the old tsarist capital will become the West's window on Russia. While the city has always been a showcase, the leaders of the G8 who are gathering there will find it an unusually quiet and tidy place. Homeless people have been relocated. Shopkeepers along the routes of official motorcades have been ordered to buy pots full of flowers (from approved sellers, natch) and 1,500 unsightly drink-and-cigarette kiosks have been bulldozed, without compensation for the owners. Two of the city's greatest and most outspoken democrats, liberal lawmaker Galina Starovoitova and former mayor Anatoly Sobchak, will be honored--but neither is likely to say anything embarrassing. They're both dead, present only as newly commissioned busts.

Welcome to Vladimir Putin's Russia. The façades are freshly painted; everything glints with the sheen of new money. In the run-up to the summit, the Russian president is not only honoring dead democrats but has taken to spending hours meeting with pro-democracy NGOs. So eager is he to burnish his liberal credentials, in fact, that last week he politely thanked environmentalist hecklers for interrupting him. As leaders of the world's leading industrialized democracies--plus Russia--gather this week to discuss, among other things, Iran and energy security, the larger questions may concern Russia itself. Just what kind of nation has it become under Putin, and where is it heading? "Times are changing; there is a new reality now," says top Putin aide Sergei Prikhodko. Or, as Dmitry Trenin of the Carnegie Moscow Center puts it: "Moscow has left the Western orbit. It's now in free flight."

Putin's hometown is a good place to track that new trajectory. Behind the Potemkin façades of spruced-up St. Petersburg, the view is unsettling. A once vibrant political culture has been replaced by a government of loyal yes men. Opposition activists are frequently followed, threatened and beaten. Racially motivated hate crimes are on the rise, along with a culture of radical nationalism. And in the place where Russia's free market was born, private entrepreneurs must forge business alliances with the local authorities or face being swallowed by powerful clans ultimately controlled by senior government and law-enforcement figures. In this sense, St. Petersburg is indeed a window on the new Russia. "Once, St. Petersburg was a real island of democracy, an example of liberalism for the rest of Russia," says rights activist and journalist Daniil Kotsubinsky. "Now it's one of the most corrupt, criminal and fascist cities in Europe."

What a change from a decade ago. Then, remembers Aleksandr Amosov, St. Petersburg was the most liberal, politically active city in Russia. Today, he says, "all the authorities think of are new ways to destroy independent political movements." In 1996, Amosov was one of 28 members of the local Assembly from the liberal Yabloko Party. Now he's one of just three. The 2004 elections were swept by United Russia, a party created by the Kremlin and heavily backed by almost all the local media. United Russia's ideology is simple: dogged loyalty to the local authorities and, ultimately, the Kremlin. How does that square with Putin's insistence, in a live Webcast last week, that "without democracy, there's no future for Russia"? Simple, explains a member of Putin's inner circle who asked to remain anonymous when discussing Kremlin strategy. "You must have stability before you can implement democratic values."

The state's near monopoly on power begins with city politics and reaches into all strata of society. Since Putin came to power, authorities have quietly but firmly turned the screws on the free thinkers for which the city was once famous. In recent weeks, police have been going around with lists of known political activists, like 24-year-old Kirill Strakhov, a supporter of the liberal Yabloko Party, knocking on their doors and suggesting they leave town. "The list must be very short," jokes Strakhov. "There aren't many of us activists left now."

This is far more than a G8 cleanup. Kirill Miller, an avant-garde artist who used to be one of the most prominent political activists in St. Petersburg, found out the hard way that times had changed. He organized a demonstration in 2003 against plans to turn St. Petersburg's zoo into an entertainment complex. The day after the protest, Miller says, men in black outfits and sunglasses grabbed him off the street, told him they were from the "special services" and drove him to a deserted suburban lot. There, the kidnappers cut off Miller's famous shoulder-length hair and beard with a knife. "They told me: 'There's a new order in Russia. Go and tell your friends to be quiet'," Miller says. He complied and now obediently sticks to art.

Instead of following unpredictable spirits like Miller, young people are encouraged to join officially approved youth movements like Our People and Young Guard. These groups are well funded; they organize football tournaments, concerts and dances, and offer the prospect of foreign trips and state scholarships. To the despair of St. Petersburg's old dissidents, the new youth movements have worked devastatingly well. A slew of surveys portray Russia's under-25s as the most politically apathetic in decades. "No one I know is interested in climbing up on barricades anymore," says 21-year-old Katya Stoyanova, who recently graduated from St. Petersburg University. "To me, the word 'democrat' means crazy, bearded old men who are always against everything."

Putin has made a virtue of patriotism. The old Soviet national anthem has been brought back. Advertising billboards carry nostalgic slogans like leningrad: hero-city, and russia is our motherland! State television has revived gala concerts celebrating Army Day, Police Day and the like, and a special channel, Zvezda, has been set up with Defense Ministry backing to glorify the military by showing patriotic Soviet-era war films. The president himself is no crypto-fascist, needless to say. But there's a dark side to the new nationalism. In St. Petersburg a new public holiday celebrating People's Unity Day last November was marred by ugly ultranationalist marches. And, warns Yuli Rybakov, a former Duma deputy and head of St. Petersburg's antifascism committee, authorities are turning a blind eye to a nasty rise in hate crimes. In the first six months of this year alone, six racist murders were recorded.

Valentina Uzunova, a senior sociology researcher at the local branch of the Academy of Sciences, estimates that there are several dozen extreme nationalist organizations in St. Petersburg, as well as 50 extremist Internet sites and two local radio programs. "Nationalists are the ones who now enjoy freedom of speech," says Uzunova, who blames, in part, Putin's new rhetoric of national pride for the wave of extremism. "Putin's policies are a good climate for these ideas to grow."

All this raises an obvious question: why are the authorities so apparently paranoid about young liberal activists, but blasé about skinheads? One reason, explains Markov, is that for all Putin's popularity, the Kremlin still has a lingering fear of an Orange Revolution in Russia. Ultranationalists are anti-foreigner, not antigovernment, and present no threat to the regime. Grass-roots youth movements, on the other hand, or pro-democracy NGOs, are another matter. Such groups formed the core of recent "colored revolutions," not just in Ukraine but Georgia and Kyrgyzstan as well.

No one really thinks that a Kiev-style revolution is imminent in Moscow. Yet that hasn't stopped those in power from worrying about it. The reason, perhaps, is a deep, and growing, sense that Russia has reached an ideal political settlement under Putin, which must not be disrupted or undermined by misguided youths with their heads full of naive ideas. Also, for those at the top, staying in power is also very lucrative. Aside from Putin himself, the men who run Russia stand at the head of what is essentially a vast, state-run network of patronage. The Putin-appointed governor of St. Petersburg, Valentina Matveyenko, for instance, has a son who sits on the boards of two of the city's biggest banks, St. Petersburg Bank and Vneshtorgbank. Both have grown rich in part from real-estate development rights granted by city hall (both banks have previously asserted that all contracts have been awarded fairly). And Vice Governor Yury Molchanov, once Putin's colleague at Leningrad State University, has a son who runs LSR, St. Petersburg's biggest construction firm.

Nationwide, with Putin's blessing, the state has taken over whole sectors of Russian industry and placed Kremlin courtiers at their helm. The Rosneft oil giant, for instance, is chaired by deputy chief of staff Igor Sechin; another deputy chief of staff, Viktor Ivanov, chairs Aeroflot and Almaz-Antei, a giant defense contractor. Industry Minister Viktor Khristenko heads Transneft, the pipeline monopoly that transports 93 percent of Russia's oil, and Finance Minister Aleksei Kudrin runs the diamond monopoly Alrosa, which controls 23 percent of the world's diamonds. "Believe me, everyone is in the game to make money," rails the exiled oligarch Boris Berezovsky, who served as deputy secretary of Russia's Security Council under Boris Yeltsin before falling afoul of his own protégé, Vladimir Putin. "No one ends their government service poorer than when they began."

To keep all the clans happy, Putin has to play a careful balancing act. That means giving the various factions--usually described as the liberals, the ex-KGB national-security types known as siloviki and the technocrats--their due. That also requires making sure that none get too far ahead, nor too far behind, lest they break away to form a powerful political opposition of the sort that transformed Ukraine.

The game, in the end, comes down to survival--not just of individuals currently in power but of the system that keeps them and their clans at the top. Thus Putin keeps everyone guessing as to whom he will choose to succeed him when he steps down in 2008. Given the Kremlin's near total control of Russia's media, and the opposition's single-figure ratings, there's no chance of a serious challenge from outside the Kremlin's charmed circle.

Whoever Putin chooses will inherit, well, what exactly? Democracy? A kleptocratic state? Something in between? No one knows, and that's the real issue at the G8 summit. Though it won't be openly discussed, the question is at least as critical to the future of Europe and the West as, for instance, Iran is. Will Russia eventually become a responsible "member of the European family," as Putin avowed last week? Or will it evolve into a kind of plutocratic and reactionary corporate state like South Korea once was (but without the industry or the work ethic)? It may be hard to tell. Clever Russian politicos will no doubt take care to dress things up so the system looks orderly, modern and civilized. Just like the gleaming façades of St. Petersburg.