The Mikhail Khodorkovsky and Pussy Riot prison releases reveal the dilemma of mature Putinism

Khodorkovsky’s release may well have been intended to further those goals by sending a positive signal about Russia's future business climate

Share
Related Topics

The release of Mikhail Khodorkovsky, pardoned along with two members of Pussy Riot and the Greenpeace Arctic protestors, has been widely interpreted as a good will gesture ahead of the Sochi Winter Olympics in February. Vladimir Putin has invested the $50bn Games with huge personal authority and understands that his own prestige is at stake in their success. It therefore suits the Russian President to remove a significant potential spoiler and present a softer, humanitarian image as he prepares to play host to the world.

But there are also bigger considerations about Russia's political and economic future in play that go well beyond the immediate presentational demands of Sochi. With ten months to run on Khodorkovsky’s sentence, Putin toyed with the idea laying new charges that would have kept him in prison for many years to come. He eventually decided that the costs of doing so would outweigh the benefits and chose to take credit for his early release instead. A major part of this calculation will have been a recognition that the system he created to rescue Russia from post-Soviet decline has itself begun to exhibit signs of stagnation and needs to be reinvigorated if he wants to cement his legacy. Khodorkovsky’s release may be a way of drawing a line under the past.

A few days before Putin announced his amnesty the World Bank again downgraded its 2013 growth forecast for Russia from 1.8 per cent to 1.3 per cent. Projected growth for 2014 was also revised down from 3.1 per cent to 2.2 per cent, well below the 6-7 per cent that defined Russia’s resurgence during Putin’s first two presidential terms. In the context of an already widening budget deficit, this raises questions about his ability to fund the social transfers that have done so much to underpin domestic support. With a fiscal break-even price of oil now as high as $125 per barrel (up from $45 a decade ago), Russia also remains acutely vulnerable to an oil-price shock.

Russia’s energy dominance is, in any case, already in the process of being eclipsed as it loses market share in Europe and the United States, propelled by the shale gas revolution, overtakes it as the world’s largest producer of natural gas. This is the result of a decade in which Russia has consistently overplayed its hand leading to concern about the price and reliability of its energy supplies. Even Putin’s apparent success in engineering the recent pro-Moscow turn by the government of Ukraine comes with significant new costs attached in the form of reduced gas export revenues and new financial subsidies to Kiev.

The reality behind these figures is that Russia needs huge new injections of capital and technology to modernise its energy sector, replace ageing infrastructure and diversify into new areas of economic activity. With net capital outflows running at around $50bn a year, this money can only be found by persuading more Russians that their wealth is safe at home while attracting significant new investments from abroad. Khodorkovsky’s release may well have been intended to further those goals by sending a positive signal about Russia's future business climate. If so, it will only work if it is part of a larger reform effort that strengthens property rights, judicial independence and the rule of law, and thereby convinces investors that a repeat of the Yukos affair is unlikely.

In parallel to concerns about the economy, a debate has been taking place within the Kremlin about how to respond to the rise of the new opposition with some hinting that a more open and competitive political system might be in prospect, at least at a local level. The mass street protests that greeted Putin’s return to the presidency have been quelled thanks to a battery of new repressive measures, but not many see this as a durable solution as long as the underlying sources of middle class discontent remain unaddressed. The local elections held in September were in many ways the freest Russia has held in many years and allowed the opposition to make modest advances. Some want to go further and the release of Khodorkovsky could be seen as a gesture of accommodation whether he chooses to become involved in politics or not.

The dilemma of mature Putinism as it considers the future and its legacy for Russia is the choice between repression and reform. One raises the spectre of losing control and paving the way for anarchy, as Mikhail Gorbachev’s perestroika reforms eventually did. The other involves the risk of holding on too tight and sharing the fate of Hosni Mubarak by provoking an even stronger backlash at some point in the future. It is by no means clear how Putin himself will choose to resolve this dilemma, but it does at least seem as if the question is now being asked.

David Clark is chair of the Russia Foundation and a former Special Adviser to Robin Cook

Video: Pussy Riot members call prison release PR stunt 

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Employment Solicitor

Highly Competitive Salary: Austen Lloyd: MANCHESTER - Senior Employment Solici...

Senior Risk Manager - Banking - London - £650

£600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

Commercial Litigation Associate

Highly Attractive Package: Austen Lloyd: CITY - COMMERCIAL LITIGATION - GLOBAL...

Systems Manager - Dynamics AX

£65000 - £75000 per annum + Benefits: Progressive Recruitment: The client is a...

Day In a Page

Read Next
The economy expanded by 0.8 per cent in the second quarter of 2014  

Government hails latest GDP figures, but there is still room for scepticism over this 'glorious recovery'

Ben Chu
Comedy queen: Miranda Hart has said that she is excited about working on the new film  

There is no such thing as a middle-class laugh

David Lister
Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

The BBC’s wolf in sheep’s clothing

What will Evan Davis be like on Newsnight?
Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

Finding the names for America’s shame

The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

Inside a church for Born Again Christians

As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
Rihanna, Kim Kardashian and me: How Olivier Rousteing is revitalising the house of Balmain

Olivier Rousteing is revitalising the house of Balmain

Parisian couturier Pierre Balmain made his name dressing the mid-century jet set. Today, Olivier Rousteing – heir to the house Pierre built – is celebrating their 21st-century equivalents. The result? Nothing short of Balmania
Cancer, cardiac arrest, HIV and homelessness - and he's only 39

Incredible survival story of David Tovey

Tovey went from cooking for the Queen to rifling through bins for his supper. His is a startling story of endurance against the odds – and of a social safety net failing at every turn
Backhanders, bribery and abuses of power have soared in China as economy surges

Bribery and abuses of power soar in China

The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

Highland terriers steal the show at opening ceremony

Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
German art world rocked as artists use renowned fat sculpture to distil schnapps

Brewing the fat from artwork angers widow of sculptor

Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

BBC takes viewers back down memory lane

The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

Nicolas Cage shines in low-budget drama Joe

Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

Make your own ice lollies and frozen yoghurt

Think outside the cool box for this summer's tempting frozen treats
Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

Fiesta is UK's most popular car of all-time

Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
10 best reed diffusers

Heaven scent: 10 best reed diffusers

Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
Commonwealth Games 2014: Female boxers set to compete for first time

Female boxers set to compete at Commonwealth Games for first time

There’s no favourites and with no headguards anything could happen
Five things we’ve learned so far about Manchester United under Louis van Gaal

Five things we’ve learned so far about United under Van Gaal

It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little