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It was an inauspicious start to the year for President Vladimir V. Putin. Thousands of angry Russians have been taking to the streets to protest cuts in welfare benefits such as free transportation and subsidized medicines for retired people, war veterans, and other disadvantaged groups. The reform, launched on Jan. 1, replaces the benefits with cash payments -- a move favored by economists to curb the state's welfare burden and increase its transparency. But pensioners complain that the compensation doesn't nearly make up for what they have lost.
After staying silent for two weeks, Putin moved on Jan. 17 to resolve the controversy. Without withdrawing the reforms, which affect some 40 million Russians, he slammed his government for poorly implementing the plan and ordered a 27% increase in pensions on Mar. 1. Will anyone in Putin's administration take the fall? Although under fire even from pro-Putin parliamentarians, Prime Minister Mikhail Fradkov will probably survive.
But the public protests are raising broader questions about Putin's aloof and authoritarian governing style. Rather than increasing stability, these critics argue, Putin's tendency to concentrate power in the Kremlin's hands may lead to a weaker political system, and in the longer term even put Putin's presidency at risk. "The more you toughen the regime, the more you make it inflexible and narrow the field for maneuvering," says Lilia Shevtsova, senior associate at the Carnegie Moscow Center, a think tank.
It's hard to believe that Putin could be in serious trouble. His personal rating, while falling, is still 69%. The Russian Duma is packed with loyalists from the pro-government United Russia Party, and the opposition remains divided. But the recent protests follow other problems in the first year of Putin's second term. The government's poor response to the terrorist attack in Beslan last fall underscored the failure of Putin's Chechnya policy. And Putin miscalculated by interfering in the recent Ukrainian election.
What concerns political analysts is that by boosting the power of the Kremlin and quelling debate, Putin is stymieing decision-making. He's also marginalizing key interest groups needed to implement reforms effectively. When economic adviser Andrei Illarionov recently criticized the slow pace of reform and the government's decision to renationalize oil giant Yukos, Putin demoted him. The President may be in danger of surrounding himself by yes-men. "In the political sphere, competition is no less important than in the economic sphere," Illarionov warned at a press conference on Dec. 28. "Limiting competition in all areas of our life will lead to only one thing: stagnation."SUPPORT IS SLIPPING
As a result of his decisions, Putin's political base has narrowed. He has largely lost the support of big business because of the Yukos affair. He has alienated regional leaders by his decision to abolish direct elections for 89 provincial governors and make them presidential appointees. In public, governors have paid lip service to the reforms, even though they strip them of their independence. But privately many are angry. Some analysts speculate that regional authorities may have sabotaged implementation of the welfare reforms to embarrass Moscow and extract more financial support from the Kremlin.
Putin's moves to calm his population will likely prevent a more profound crisis. But the protests are a warning that Russians are still ready to show their dissatisfaction if their living standards are threatened. That should give Putin pause, particularly because the economy is slowing. Moscow Narodny Bank Ltd. says that Russia's gross domestic product grew 4.5% in the fourth quarter of last year -- down from 8.9% in the fourth quarter of 2003. This year, ministers predict growth will fall short of 5%.
Does all this mean the Putin administration will collapse? Unlikely. But the fact that Russians are even speculating about such a scenario is a big change. By Jason Bush in Moscow