When Vladimir Putin returns to the Russian presidency on Monday, May 7, the pageantry surrounding his inauguration will aim to portray a picture of unassailable strength, a confident master of his domain invulnerable to pressures from within or without. But things are not quite as stable as they seem. Over the next few years, Russia's domestic and foreign policies will be shaped by an unfolding and increasingly sharp conflict between the consequences of the two events that took place in the past four months: Putin's reelection and the ensuing mass protests that erupted in more than 100 of the largest Russian cities.
Yes, the protesters represent a small minority of the Russian population, as the Kremlin never tires of reminding us, and the demonstrations seem to have sputtered out for now. But what of it? When has there been a truly great modern revolution started by a majority of the people? Or one that took place all at once?
Instead, what we may be seeing is a Russian version of a familiar post-authoritarian democratization that swept through Greece, Portugal, and Spain in the 1970s, South Korea and Taiwan in the 1980s, and Mexico in the 1990s. Having reached unprecedented prosperity and personal freedom, the middle class in each of these countries began to demand a say in how its country was governed.
This is not just a political conflict. It is a clash between two moral sensibilities, two political moralities, and two visions of what constitutes meaningful and dignified citizenship. This means that neither side is likely to give up, retreat, or compromise. It will be a struggle to the bitter end, no matter how long it takes.
But it may not be that long. Before Putin's reelection, a poll showed that 35 percent of Russians polled said they thought the election was "dirty" -- i.e., fraudulent. That means that, with all the caveats and margins of errors, millions of Russian citizens do not consider Putin a legitimate president. They were convinced that the Central Election Commission, the Kremlin's wholly owned subsidiary, would produce whatever numbers the boss ordered.
The Kremlin is well aware that millions may feel angry and cheated, which is why no meaningful liberalization is likely after the inauguration. Authoritarian regimes do not tinker with the system when they feel insecure. With the regime badly needing to bolster the legitimacy bruised in the Duma and presidential election, foreign policy is likely to be shaped by the domestic need for an external enemy. So I would not expect any new "resets." Quite the opposite is more likely, as this week's threats by high-ranking military officials to strike preemptively at missile defense sites in Europe remind us.
But everyone, including top government ministers and establishment economists, know that even with all the nationalist bluster Moscow's PR shop can kick up, the system cannot continue indefinitely without a radical de-centralization of politics, the economy, and the justice system. Foreign investment is down, and net capital flight is at a record high so far this year because of what investment analysts euphemistically call an "unfavorable institutional environment." Translated into plain English, this means Russia has a perverted legal system, with courts for sale, universal and absolutely shameless corruption, shakedowns of businesses, thievery, and inefficiency.
In the short term, Russia's most serious risk stems from a near-fatal dependence on the price of oil. Twelve years of Putinism have moved Russia perilously close to being a petrostate, with all the political, economic, and social niceties those are known for. According to UBS analysts, a $10 change in oil's per-barrel price changes the price for balancing the budget by 1 percent of Russia's GDP. Last September, Alexei Kudrin, then finance minister and deputy prime minister, estimated that if the price falls to $60 a barrel, Russia's economy would register zero growth or even contract. To balance the national budget in 2004, Russia needed oil at $27 dollars a barrel. Last year the break-even point was $115. Thus far, the projection for this year is $117.
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