America’s China Policy Is Not Working
The Dangers of a Broad Decoupling
This past Sunday, a few minutes before two o’clock in the afternoon, the Garden Ring road in Moscow, a ten-mile-long, multilane circle that wraps around the city center, was covered in a light, wet snowfall. The organizers of Russia’s opposition protests had hoped to organize a human chain that would stretch across the entire ring, which at an average width of a foot and a half per person, they estimated would take 34,000 people.
At exactly two o’clock, the hour the demonstration was supposed to start, the patch of sidewalk where I was standing near the Sukharevskaya metro station was thick with people standing arm in arm, chatting and joking, white ribbons pinned to their winter coats. A young couple, Alexei and Nina, had just arrived. “We wanted to be with all these people,” Alexei told me. The crowd around us was buoyant and cheerful; meanwhile, cars with ribbons hanging out of the passenger windows were making laps around the ring road, their drivers honking their horns in solidarity. “They can’t decide for us,” he said, referring to Putin and his allies in the Kremlin. “We’re here to show that we can decide for ourselves.”
A few steps down, a group of young men were waving at the passing cars and taking pictures. “We want to say that we exist, we’re also here,” said Georgy Avilov, a 26-year-old information technology specialist. He was with two friends: Nikita Ananin, an engineer, and Denis Vavayev, a lawyer. “The government has to consider our opinion,” Ananin said. “After all, we’re not a small group,” he explained, pointing toward what had now grown to be a solid line of people that disappeared around the bend of the ring road.
As Russian Prime Minister Vladimir Putin looks toward this Sunday’s presidential election, a contest he is all but assured of winning, he will have to confront a difficult question that will linger long after his likely victory: Why have so many of these people, members of Russia’s burgeoning urban professional class, turned against the very system responsible for their status?
Under Putin’s tenure—first as president, then as prime minister, and now as aspiring president again—the country has undergone a profound economic and social transformation, with one of the more palpable effects being the creation of a true Russian middle class, made up largely of educated urban professionals in Moscow and Russia’s other millioniki, cities of more than one million people. The fact that this very group is the driving force behind the anti-Putin mood that has taken root in Moscow and many of Russia’s other cities is a testament to both the successes and the disappointments of the Putin era: A large segment of Russia’s population is now materially secure enough to worry about its civic voice and believe that it would be better off under a more equitable system than the one over which Putin presides.
In this particular way, Russia does not resemble the countries of the Arab Spring, where revolutionary fervor was stirred up by idle young people who were frustrated with their countries’ unpromising economic futures and felt they had nothing to lose. The situation in Russia is essentially the opposite: It has an aging population and a relatively stable, if not positive, macroeconomic outlook, and its proto-revolutionaries would have much to lose if the country’s political order were destabilized.
But that does not mean their desires will be easy for the Kremlin to sate. Those agitating for political change in Russia speak in the vocabulary of “dignity,” of wanting to have a representative voice in what I have heard many here call a “normal” or “civilized” system—the world they see online and during their increasingly frequent travels to the West. And it is hard to imagine Putin bringing about such a political and social order, given that it would require him to go against his own political instincts and loosen his hold on power.
Russia, unlike most developing economies, has long had a sizable intelligentsia, which functioned as a sort of middle-class-in-waiting. These were Soviet-born people—doctors, professors, and so on—who had many of the trappings of middle-class status, such as high education, professional careers, and ownership of their apartments (thanks to the post-Soviet privatization of real estate) but earned little. “Russia always had a proto-middle class,” said Kingsmill Bond, the chief Russia strategist at Citigroup who has been traveling among the country’s provincial cities for 20 years. “Income and information turned them into a proper middle class.”
Between 1999, the year Putin became prime minister under Boris Yeltsin, and 2008, when the global economy crashed, Russia’s GDP grew at seven percent a year, even faster than it did during Stalin’s rapid industrialization in the 1920s and ’30s. The effects were dramatic: Real wages tripled and the poverty rate fell by half. The markets for real estate, cars, mobile phones, and other consumer goods exploded; today, more automobiles are bought every year in Russia than in Germany, and nearly 45 million Russians use the Internet regularly.
Much of this economic growth was fueled by rising oil prices, which peaked in July 2008, and some economists suggest that Putin simply got lucky by having his tenure coincide with a decade-long uptick in oil prices. (The actual fraction of Russia’s GDP growth credited to oil is under some dispute, with estimates ranging from one-third to a half to nearly all.) Clifford Gaddy, an economist specializing in Russia at the Brookings Institution, has likened this dependency on oil and gas to an “inverted funnel,” in which an overwhelming share of value in the overall economy comes from a small number of concentrated industries. As Gaddy explained, “You can’t say that the development of the middle class was all directly attributable to rents from oil and gas—but without that inflow, it would have been impossible.”
Some of the Putin administration’s early economic reforms, led by the ministers Alexei Kudrin and German Gref, also had an undeniable hand in stabilizing the economy after the shocks of the 1990s and building a base for the rapid growth of the 2000s. In his first few years in office, Putin played the role of authoritarian modernizer, pushing through a number of new laws on land ownership, deregulation, tax reform, and deposit insurance. He lent welcome predictability to the country’s political economy.
Before long, however, under the cover of global energy prices that continued to rise and rise, Putin’s Kremlin pursued a course of nationalization and allowed officials at all levels of the state bureaucracy to enrich themselves in exchange for loyalty. Putin offered the country’s professional class an implicit contract: Hand over your say in politics and be granted broad possibilities for personal fulfillment, whether in career success, foreign travel, or unprecedented consumer choice. For the most part, this arrangement held, as the country’s urban professionals lost interest in the affairs of government and focused on their private lives. As Maria Lipman, the editor of the journal Pro et Contra at the Carnegie Moscow Center, put it, the deal was a “pact of non-intrusion” through which “people and the government lived in two parallel worlds.”
The middle class began to lose faith in this pact in the fall of 2008, with the onset of the global economic downturn. The fall of oil prices and the tightening of credit markets hit Russia hard. Salaries went down—after years of 15 to 20 percent annual growth in wages—and many employees, especially in the real estate sector, lost their jobs. The Russian government had to spend $200 billion to prop up the value of the ruble, which many have since argued amounted to a bailout for the oligarchs, since they were on the hook for huge loans from Western financial institutions denominated in dollars and euros.
In the end, the Russian economy survived thanks to government intervention and a rebound in oil prices, although it took enough lumps along the way that white-collar professionals began to question just how secure their station was. “Throughout the 2000s, the system was constructed on the idea that the state had a dominating role and was able to provide a guarantee of stability and well-being,” explained Andrei Yakovlev, the vice rector of Moscow’s Higher School of Economics. “The crisis showed that maybe this idea wasn’t so dependable.”
At the same time, the state was revealing itself to be less than dependable in other ways, too. The penetration of corruption into everyday life, from bribes to the traffic police to under-the-table payments to elementary schools, became too onerous to ignore. Transparency International now ranks Russia 143 out of 183 countries in terms of corruption; according to Sergei Guriev at the New Economic School in Moscow, it is as corrupt as countries with average incomes equal to only a third or a quarter of Russia’s. One study by two independent Russian research centers, the Public Opinion Foundation and the Indem Foundation, suggested that over the past five years the amount of the average bribe has doubled, to 5,290 rubles ($178).
Other insults began to mount as well, especially on the roads, where government officials and those with connections drive “as if they are exercising their feudal privilege,” as Lipman put it, often mounting blue sirens on their cars to bypass Moscow’s infamous traffic. In February 2010, a car crash in Moscow, in which a Mercedes carrying the vice president of Russia’s largest oil company, Lukoil, struck and killed two women in a passing car, set off a public outcry. It spawned an instant protest hit, the song “Mercedes S666” by Noize MC. (The chorus goes: “Get out of my way, plebes. Fear us, pathetic slaves! Patricians are on the road!”)
Another turning point came in the summer of 2010, when a spate of uncontrollable forest fires appeared to overwhelm both the local and federal authorities. Moscow was filled with dense, acrid smoke for weeks on end. Volunteer brigades of young men went out with mobile phones and their own cars to rescue those trapped by the fires—a step toward establishing a workable precedent for the kind of civic cooperation that has exploded since last December.
But even more than rising incomes or dissatisfaction with government performance, the Russian middle class has been shaped by a deeper and, in a way, more irreversible shift: It began to develop a more humane and trusting attitude, and its tastes and interests were starting to resemble those of their counterparts in, say, Copenhagen or Dublin. As Vladimir Bogdanov, a 34-year-old manager for Intel in the city of Nizhny Novgorod, explained it to me, members of Russia’s emergent middle class identify themselves by their values and habits, which have become softer, more European. “It’s the way we dress, the way we talk, the way we drive our cars, the way we behave in restaurants, the way we act in business meetings,” he said. For many of Russia’s educated city-dwellers, it became possible to live entirely inside this world, far away from whatever opaque games Putin was playing to centralize his power. “We got used to this other lifestyle, other ways of conducting our life: in business, in leisure, in relationships,” Bogdanov said.
And so, by one or two years ago, the Russian middle class was left in a state of quiet rebellion: It was untrusting of, even hostile toward, the state and had largely given up on government. Instead, it was busy constructing its own alternative world. It only needed an external trigger to bring that latent discontent to the surface. That would come in the form of two events: first, Putin’s announcement last September that he, not Dmitry Medvedev, would seek to return as president; and second, last December’s parliamentary elections, which were marked by widespread evidence of falsification meant to boost the results of the pro-Kremlin party United Russia. These elections were not necessarily any dirtier than earlier ones, but what had changed were the expectations and tolerance of the country’s urban professional communities.
Not everyone in the halls of power was unaware of this looming explosion of middle-class dissatisfaction. Throughout the past several years, Mikhail Dmitriev, the president of the Center for Strategic Research, a think tank in Moscow with ties to the government, was preparing reports documenting the rise of the Russian middle class (showing, for example, how the per-capita GDP of Moscow is now higher than Belgium’s) and this population’s growing dislike of the ruling regime. He first noticed this shift—what he called an appearance of a “radical antigovernment attitude”—during focus groups he assembled in his office in December 2009. “It was unexpected, a total shock,” he told me. “It was a signal that something was indeed changing in the social environment.” Last year, Dmitriev and his colleagues told officials in the Kremlin that support for both Putin and Medvedev was plummeting and that political upheaval was possible, even likely. They were rebuffed. “From the state itself we heard silence,” he said.
Since December, the protests in Moscow and elsewhere have been not so much political rallies with a set list of short-term demands but rather a living manifestation of a kind of counter-society, a way to conjure up in real life the world that so many middle-class Russians had long been living in their own minds. Ilya Krasilshchik, the 24-year-old editor of Afisha, an arts and culture magazine in Moscow, and one of the organizers of the first protests in December, said he thinks of each demonstration as a “celebration of civilization.” As he put it, “We get to see the city the way we’d like to see it, with the people we want to see in it, with the ideas we want to see in it.”
This politically mobilized middle-class constituency is still a minority. By the admittedly imperfect measurements of the Center for Strategic Research, the Russian middle class now represents just under a third of the population; the most recent data by the Levada Center, the country’s most respected independent polling agency, suggests that Putin could win as much as 66 percent of the vote in Sunday’s election. But this community, given its outsized involvement in media, business, and culture, has influence that resonates far beyond its actual numbers. And one perhaps unintended effect of Putin’s “power vertical,” in which all decisions, no matter how minor, flow down from the federal center, is that what happens among a small group of people in Moscow can quickly set the agenda for the rest of the country.
Among the capital’s educated professional elite, opinion is almost uniform. “People who voted for United Russia are like users of Internet Explorer,” goes one joke. “Apparently they are in the majority, but among my friends there isn't a single one.” This sense of humor and vitality is what gives the current movement its strength—100,000 people would not gather to watch an earnest speech by traditional opposition activists such as Gary Kasparov or Boris Nemtsov—but it may also, at least in the short term, mark its limitations. As Krasilshchik of Afisha said to me, most of the young urban professionals at the Moscow demonstrations do not think of themselves as taking part in a “revolutionary battle with concrete ideas, concrete slogans, concrete people.”
For now, the protest movement is an evolving platform to showcase the values that have come to define the self-made universe of the Russian middle class—among them, honesty, fairness, and transparency—and to try to graft them onto the actual everyday life of the country. As such, the movement is not going to resolve itself next week by preventing Putin from returning as president or keeping him from enacting this or that policy, but by changing the political culture in the months and years ahead. Bogdanov, the Intel manager in Nizhni Novgorod, put it succinctly: “We do not want anything that could be called a revolution,” he said. “We have a lot of things to lose.”
But so, too, does the Kremlin. It is much harder for Putin to present himself as a benevolent, stabilizing tsar while the country’s most educated and successful citizens are visibly working against him. Moreover, the Russian government needs this population to participate in its plans for economic modernization and innovation, without which it will remain dangerously addicted to oil and gas. And perhaps most worrying for Putin, at least in the near future, is the need to enact tax and social service reforms early on in his new term, which would likely hit pensioners and the working class—groups that have so far remained at least passive Putin supporters. His nightmare scenario is a middle-class population still out in the streets when the country’s blue-collar industrial workers also have cause to rise up.
What is certain is that Russian politics are forever changed; going forward, Putin can never return to the halcyon days of the mid-2000s, when his argument for “stability” trumped all others. He may indeed be forced to make real changes to the nature of his rule, which, almost Gorbachev-like, could sow the seeds of his own eventual undoing. Or, more acutely, a political crisis or crumbling support from within the regime could force him out of power within the next couple years. In any case, given that the constituency most opposed to him is only set to grow in the near future, it is hard to see how Putin could credibly run again in 2018, making this his last campaign. And that, for now, may be the victory with which the middle class will have to console itself.