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Summary of lecture by Yevgeniya Albats, 15 November 2011

On 4 December 2011, parliamentary elections will be held in Russia. Everything indicates that the United Russia party, which supports Prime Minister Vladimir Putin, will get a majority in the State Duma. On 15 November 2011, the RUFS project together with the Swedish Institute of International Affairs (SIIA) organized a lecture by Dr Yevgeniya Albats, journalist, author and editor of the magazine “The New Times”. The lecture was commented by Lena Jonson, director of the Russia Programme at SIIA, Carolina Vendil Pallin, project manager of RUFS at FOI, and Torbjörn Becker, director of the Stockholm Institute of Transition Economics (SITE). The seminar was moderated by Nathalie Besér, SIIA.

Albats is known as one of the sharpest critics of Prime Minister Putin in Russia. In a letter to the readers of The New Times (a Russian-language magazine in spite of its name) in late August 2011, she wrote that a return of Putin to the presidency would be a national disaster. A month later, Putin declared his candidacy for the 2012 presidential elections. The outcome of the two elections in Russia – the parliamentary elections on 4 December 2011 and the presidential elections on 4 March 2012 – is obvious in advance, according to Albats.

At the seminar, Albats compared Putin’s government to a “Russia Inc.”, where Putin is the CEO. Putin became president on 7 May 2000. After a few days in office, he issued a decree creating the federal enterprise Rosspirtprom, which received the state share packages from 70 companies in the alcohol industry, including shares of the largest liqueur spirit and vodka factories. A businessman loyal to Putin and long-time friend of his from St Petersburg became CEO of Rosspirtprom. At the time oil prices were still low and the income from the sale of alcohol was important to the Treasury.

After Rosspirtprom followed Gazprom, the state gas company. In June 2000, Putin appointed his former colleagues from his time in the Committee for Foreign Economic Relations of the St Petersburg city administration, Dmitry Medvedev and Alexei Miller, to lead this group. In order to tackle the next lucrative industry, the oil industry, Putin had to deal with “the family”, a circle of close associates of former President Boris Yeltsin, who still held sway. Putin followed a simple principle that belonging to the Corporation (the KGB in this case) was more important than professional skills and formal education.

Putin established his power by three parallel processes. The first was a complete re-forming of the political spectrum and what he himself calls the “power vertical”. It began with the Presidential Decree on 13 May 2000 on the establishment of seven federal districts, into which all Russia’s regions were divided. Later on, the power vertical was completed with the removal of elections of regional governors on 11 December 2004. At the same time, he created high barriers for referendums and for the creation of political parties, and removed the possibilities for independent candidates to be elected in single-member constituencies in parliamentary elections.

The second process involved removing the Yeltsin elite from the highest echelons of government and state-controlled companies. In 2003, the members of “the Family”, such as the head of the presidential administration Aleksandr Voloshin and Prime Minister Mikhail Kasyanov, were forced to resign.

The third process involved a redistribution of property. First, media oligarchs such as Boris Berezovsky (majority owner of the main TV channel ORT) and Vladimir Gusinsky (owner of the independent TV channel NTV) were forced to leave the country. Next followed the arrest of Mikhail Khodorkovsky, the CEO of the petroleum company Yukos, and the scrutiny of oligarch companies loyal to Yeltsin. In January 2003, 66 of the country’s largest companies – e.g. the railway company, the oil company Zarubezhneft, the airline Aeroflot, electric power companies and the defence industry – passed into the hands of the Putin-loyal clan.

Like Putin’s former economic advisor and now critic Andrei Illarionov, Yevgeniya Albats argues that the Putin regime in Russia should not be called a corporate regime, which alludes to Mussolini’s Italy, but a corporatist one. A corporatist regime, according to Illarionov, is characterized by a systematic redistribution and takeover of substantial financial resources for the benefit of strong groups (corporations), who hold political power, and their allies. According to the experts, among them Albats, Putin and his entourage now control assets worth over 6 000 billion rubles, i.e. 10–15 per cent of Russia’s annual GDP. This system, Russia Inc., is dependent on one person – Putin.

The election results, as mentioned above, are more or less easy to figure out. However, Putin’s United Russia party has, according to Albats, lost some of its attraction. Ratings have dropped and Putin seems to have lost some of his former talent for public relations. When, in connection with the announcement that he would run for president, he said that “everything was decided a long time ago”, he angered many Russian voters. According to opinion polls, young voters in large cities – a category that has hitherto been part of Putin’s core supporters – are abandoning him. In Russia, the Internet has emerged as an alternative channel for many who want to express their discontent or just gather information, said Yevgeniya Albats.


For further analysis of the political situation in Russia before the elections, see RUFS Briefing No. 10, The Russian Elections - Putin Inc. out of sync? by Carolina Vendil Pallin.

FOI, Swedish Defence Research Agency

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