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Russia's Putin looks isolated in new Kremlin term

Russian President Vladimir Putin listens during an interview with German public broadcaster ARD at the Novo-Ogaryovo residence outside Mosco
Russian President Vladimir Putin listens during an interview with German public broadcaster ARD at the Novo-Ogaryovo residence outside Mosco

By Timothy Heritage

MOSCOW (Reuters) - Angry and intimidating, Russian President Vladimir Putin sat alone at the head of a long table this week scolding his government for failing to carry out his orders.

Ministers squirmed in their seats on each side of the table as Putin humiliated them one-by-one in images shown repeatedly by state television. One dared to answer back. The next day he was out of a job.

The tactic of showing television footage of Putin ruthlessly in command is typical of his long rule, intended to burnish his image as the ultimate arbiter. But Wednesday's dismissal of Deputy Prime Minister Vladislav Surkov, once a trusted aide, has underlined how isolated Putin is a year into his third term.

Surkov was, until December 2011, a member of Putin's inner circle, the architect of the political system that concentrated power in the president's hands.

He was demoted from the Kremlin to the government when anti-Putin protests challenged the very foundations of the structure he had created. He had become more distant from Putin, often speaking out of turn.

Since Surkov's departure from the presidential staff, veterans of the spy and security agencies and other conservatives known as the "siloviki", or men of power, have gained the upper hand in shaping Putin's thinking and are behind what the opposition sees as a Soviet-style clampdown on dissent.

Putin has in the past two years been abandoned by, forced out or become distant from the more liberal thinkers who once influenced him, leaving him politically isolated as his popularity wanes and the economy slides towards recession.

"I won't say that power is slipping from his hands but he is not as strong as he was," said a source once close to the Kremlin and the government. "At the start of the 2000s, he was a unifying figure. He is no longer that."

SHIFT IN KREMLIN TACTICS

Surkov's initial fall from grace as the top Kremlin strategist was a result of the emergence of a protest movement, born out of anger over alleged electoral fraud, which Putin initially appeared poorly prepared for.

His replacement by a less sophisticated operator, Vyacheslav Volodin, heralded a shift in policy towards anti-Western rhetoric and tougher tactics against the protesters.

It is a trend that has continued as Putin sought to tighten his grip on power by rebalancing the forces around him after a drop in support, although the drop was not dramatic enough to prevent him winning a presidential election in March last year.

The choice of Dmitry Medvedev to replace Putin as president in 2008, when constitutional term limits forced the former KGB spy to step aside temporarily, had appeared to secure a role for the relatively liberal reformers.

But the man Medvedev saw off in 2008, ex-KGB former defense minister Sergei Ivanov, is now in the ascendancy as head of Putin's Kremlin administration.

Alexander Bastrykin, the head the government's powerful Investigative Committee, which is sometimes likened to the FBI is another influential figure.

Igor Sechin, another ex-KGB conservative aide who has long been at Putin's side, also has Putin's ear as head of state oil major Rosneft, which has grown under his tutelage into the world's largest publicly listed energy company by output.

More liberal reformers, such as Putin's finance minister until September 2011, have been sidelined. Although Kudrin, a darling of the West, is widely believed to still have an informal line to the Kremlin, he has proved reluctant to rejoin a team he portrays as taking Russia in the wrong direction.

Other economic liberals who featured prominently in Putin's first spell as president, from 2000 until 2008, but are now gone include economic aide Andrei Illarionov and Mikhail Kasyanov, his first prime minister who is now in the opposition.

German Gref, the architect of liberal market reforms during Putin's first term, no longer has a direct control over policy although his position as head of state-controlled Sberbank means he has not entirely left the fold.

Medvedev himself has watched meekly as the more liberal of his reforms as president have been reversed by Putin and his own position is in danger as prime minister.

The more hawkish forces in the Kremlin have been repeatedly undermined him and his team, and Putin could make his long-term ally the ultimate scapegoat if the economic slowdown that has taken growth from 5 percent in early 2012 to just 1 percent in the first quarter of this year continues.

TOUGH TACTICS

The clearest sign of the shift towards the more conservative forces has been the increasingly tough approach towards the protest movement, mainly led by middle-class residents of Rusisa's biggest cities.

In the 12 months since Putin has been back in the Kremlin, parliament has passed a series of laws which his opponents say are repressive and meant to silence them. Several opposition leaders, including anti-corruption blogger Alexei Navalny, face the threat of jail over what they say are trumped-up charges.

The protests have dwindled but at a price to Putin's image.

"I remember the times of (Soviet dictator Josef) Stalin very well. I should say our current leaders are returning to those times by putting pressure on any sign of civil activity," said Lyudmila Alexeyeva, a veteran human rights campaigner.

Putin denies taking Russia back towards Stalinism but said in his annual television question-and-answer session last month that the country needed order and discipline - words often used by Stalin's admirers in Russia.

Like this week's choreographed dressing down of the government, the televised phone-in, which this year lasted a record 4 hours and 47 minutes, looked outdated, critics said.

Although Putin has often used the format to show his command of facts and figures and his readiness to address Russians' everyday problems, there are signs that it is no longer enough to keep people happy.

To regain popularity, Putin has shifted towards patriotism, to appeal to the blue-collar workers in the provinces who are his traditional support base, and to populist economic measures.

Now 60, he issued a series of decrees on taking office as president a year ago which promised more kindergartens, housing and other potentially costly measures to the budget.

But they have not been carried out by the cash-strapped government - it was Surkov's role to oversee their implementation - and dissatisfaction is starting to grow, pollsters say.

Putin has talked often about the need to reduce Russia's heavy reliance on exports of energy and other natural resources, leaving it vulnerable to a drop in the price of oil, but has avoided doing so because of the risk to his popularity, potentially hitting voters in the pocket.

"There are great reserves of patience in Russia," Lev Gudkov, head of the Levada Center, an independent polling group that says Putin's ratings are now much lower than at their peak before the 2008-09 financial crash, said this week.

In a recent Levada poll, 41 percent did not want Putin to run again for president in 2018, against 28 percent who did.

"People are dissatisfied ... you can campaign, try to convince and make promises, but they feel the decline in living standards," Gudkov said. "Regardless of the propaganda, and the populist statements, Putin's social (support) base is falling."

OLIGARCHS UNSETTLED

Putin's first presidential term from 2000 until 2004 was marked by the consolidation of power by reining in rebellious regions such as Chechnya and clipping the wings of super-rich businessmen who had amassed power as well as money.

His second term until 2008 saw an oil-fuelled economic boom and a tightening of his political control, including the dismembering of the huge Yukos oil firm and its transfer into mostly state hands after the jailing of its owner, Mikhail Khodorkovsky, who had clashed with Putin.

Putin's spell as prime minister until last year was largely spent dealing with the recovery from the 2008-09 economic crisis and continuing to pull the strings as prime minister, to smooth the way for his return to the Kremlin.

The fourth stage of his domination of Russia has, critics say, been marked by political and economic stagnation.

Putin has sought to win over voters by promising to get tough on corruption and taking steps to force government officials and members of parliament to keep their money in Russia rather than abroad.

He sacked Defence Minister Pavel Serdyukov, a long-term ally, last November after an investigation into the illegal sale of ministry property.

Polls regularly show corruption is the problem which Russians most want Putin to resolve, but also indicate they have little confidence that he will be able or willing to do so. Some see him as one of the creators and beneficiaries of the political system, as part of the problem.

His efforts to ensure Russians keep their money in Russia has also started to unsettle the wealthy businessmen on whom he depends. The risk of tightening legislation to limit the transfer of money abroad is that he discourages businessmen from keeping it in the country in the first place.

Capital flight has continued and some tycoons, such as telecoms-to-banking oligarch Mikhail Fridman, are threatening to diversify abroad, basing their companies outside Russia and taking their money with them.

Many Russia analysts regard the threat posed to Putin by the potential loss of support from the wealthy tycoons known as oligarchs as much bigger than the dangers he faces from the political opposition, which is easier for him to control.

Most observers expect Putin to serve out his presidency but also say his ability to secure another six-year term in 2018 will recede unless he starts pulling Russia out of stagnation.

(Additional reporting by Douglas Busvine, Maria Tsvetkova, Polina Devitt, Alexei Anishchuk, Darya Korsunskaya and Jason Bush; editing by Philippa Fletcher)

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