Crisis Within Russian Elites Ripples Outward

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Crisis Within Russian Elites Ripples Outward

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A public discussion between representatives of two different Russian political groups has gained a wide coverage in the media.

On January 16, Head of Rosnano Anatoly Chubais  stressed that Russia is one of the poorest and energy wasteful states. He added that a major part of the population is poor or very poor.

Chubais is a Russian politician and businessman of Belarusian Jewish origin. He has been participating in the state’s political and economic life since early 1990s. He was responsible for privatization and a key figure introducing so-called shock reforms introducing “market economy” after the fall of the USSR. Chubais served as a deputy prime minister, a minister of finance, a head of the president administration, the head of OAO Unified Energy System of Russia [a state electric power holding]. Now he’s serving as the head of another state company, the Russian Nanotechnology Corporation (Rosnano).

Politically, Chubais has always been a member of the pro-Western, liberal group of the Russian elites. Chairman of the Accounts Chamber Alexei Kudrin, CEO and Chairman of the Executive Board of the state bank Sberbank Herman Gref are other well-known members of this group. All these persons have been actively participating in the Russian political life sine 1990s. These persons have been shaping the Russian internal and foreign economic politics on the basis of recommendations from the International Monetary Fund and other pro-Western international ogranizations.

On January 19, the Director of the Information and Press Department of the Ministry of Foreign Affairs Maria Zakharova publicly slammed Chubais’ remarks. He stressed that Russia is “the wealthiest state” and that Chubais, the person playing a key role in the Russian economy for decades, has to answer why the majority of the population is poor.

Zakharova is a member of the “team” of Foreign Minister Sergei Lavrov and a public voice of the part of the Russian elites, which is being formed by the national industrial capital and top security officials and military service members.

This public discussion is another signal of the existing deep contradictions within the Russian political elite. Persons affiliated with the global financial capital still have a strong influence in the country. This is why it has been possible to observe contradictory actions over the past years. For example:

  • Actions towards the situation in eastern Ukraine in 2014-2015;
  • Some of the economic and fiscal measures of the government are uncoordinated or even make each other difficult. On one hand, the government make steps to ease the situation for small business. On the other hand, the government is increasing taxes and penal duties.

It is easy to explain this situation if one takes into account that different groups of the Russian elites have a different understanding of the development path of the economy and state. The Russian top leadership is balancing between these groups exploiting a complex check-and-balance system. This is a common political practice. However, the aforementioned groups have a contradictory vision of the situation. Therefore, it appears complicated to make system and consistent steps to reform the state economy. Thus, the Russian leadership has to employ micromanagement approaches to solve key issues and turn into reality global projects. For example: the Kerch Strait Bridge, the development of Russia’s Far East, the transit of power resources and issues with the power industry.

The existing contradictions within the Russian elites came out from the clandestine area to a public sphere because of the current complicated economic situation, the economic blockade from the West, the growing tensions within the society. The above mentioned public face-off was not possible in Russia just a few years ago.

This shows the expanding split within the Russian political leadership as well as the increased activity of persons and powers backed by the global financial capital. In turn, the formally “patriotic” part of the elites is not happy with the current state of affairs. This will be among other factors that may fuel the internal political crisis, which some experts expect in Russia in the coming years.

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