Vodka Politics: Alcohol, Autocracy, and the Secret History of the Russian State

by Mark Lawrence

  23

  Medvedev against History

  We must always remember that today’s present was the future for all those Russian heroes of World War II, who won freedom for all of us. We are reminded that the same people who won over such a cruel and relentless Nazi enemy back then should—no, must!—conquer corruption and backwardness to establish a modern and livable country.

  The nationalist timbre of 2009’s Russia, Forward! manifesto harnessed the glory of Russia’s historic sacrifices to meet the political challenges of both the present and future. “What will Russia be like for my son, and for all of our children and grandchildren? What will be the country’s international position? How can we make Russia richer and more free? I have answers to these questions,” the author paused. “But before I formulate them, I would like to assess Russia’s current situation.”

  And that is where the anti-establishment takedown really began. Channeling the spirit of some Soviet-era dissident, the author launched into an exposé of Putin-era stabilnost. Apparently the global financial crisis—which pummeled Russia far harder than any other G-20 member—prompted some sober political soul searching. Russia, the manifesto claimed, was not living up to expectations: a backward economy reliant on oil, gas, and mineral exports instead of manufacturing and innovation, and everywhere infested with corruption. The roots of these problems are in the people’s “traditional vices of bribery, larceny, sloth and drunkenness, that we should be determined to get rid of.” The failings of Putin’s Russia were not just economic, but political and demographic as well.

  The institutions of democratic governance have been stabilized, but they are far from ideal. Civil society is weak; grassroots activism and self-management are too low. Even more problematic: every year there are fewer and fewer of us left.

  Alcoholism, smoking, car accidents, lack of access to modern medicine and environmental pollution cut short the lives of millions. And the rate of births can’t compensate for the population decline.1

  Finally—someone familiar with the intricacies of Russian politics, economics, demographics, and culture was smashing the Putinist facade. Yet—strangely—the man so keen to speak truth to power was the power: Russia’s new president, Dmitry Medvedev.

  Dmitry Who?

  If vodka isn’t the quintessential symbol of Russia, then the bear certainly is. From early tsars unleashing trained bears on unsuspecting subjects and nondrinkers (chapters 3 and 4) to Misha, the cuddly bear mascot for the 1980 Moscow Olympics, the bear has grown to symbolize great Russian power. In the political realm, the acronym of Putin’s “Interregional Movement ‘Unity’” was MeDvEd, the Russian word for “bear.”2 (When it was rebranded “United Russia,” they even kept the bear.) And so it was a complete coincidence that when it came time to anoint a successor after his presidential term limit expired in 2008, Vladimir Putin turned to his own bear—Dmitry Medvedev. But who was Medvedev? And how could he be so critical of his patron, Vladimir Putin?

  Like Putin, Dmitry Medvedev was hardly predestined for Russia’s top post—he largely “fell upstairs,” as political scientist Daniel Treisman has put it.3 The only child of college professors, the studious Dmitry earned a law degree from Leningrad State University, where he later taught until 1999. In his youth Medvedev admitted to smoking and drinking but “without fanaticism. I tried it—like everything else, but nothing more.” In a campaign interview he explained how “dad and mom always handled vodka responsibly,” which shaped his own moderation.4 In the St. Petersburg city government under mayor Anatoly Sobchak, Medvedev first met Vladimir Putin—and when Putin rose to the Kremlin administration in 1999, he took Medvedev and a handful of others with him.

  After becoming president in 2000, Putin installed his campaign manager/chief of staff Medvedev as chairman of the board of Gazprom, the lucrative “national champion” natural gas company. Among Gazprom’s many acquisitions under Medvedev was the independent NTV television channel of Yeltsinera oligarch Vladimir Gusinsky.5 While still with Gazprom, Medvedev moved into Putin’s Presidential Administration (PA) before being appointed first deputy prime minister in 2005. That same year Putin put Medvedev in charge of Russia’s four National Priority Projects (NPP): high-profile government initiatives to improve public health, education, housing, and agriculture. When Putin decried Russia’s “critical” demographics in his 2006 State of the Nation address, it effectively became a fifth charge for Medvedev’s National Projects Council.

  Billed as “Russia’s New Deal,” these National Priority Projects looked like a good-faith effort to use Russia’s petrochemical windfall to address key political shortcomings. Medvedev’s position gave him firsthand expertise on Russia’s debilitating social problems and the state’s efforts to address them. His media image was overwhelmingly positive, as Medvedev ensured that popular initiatives, including pay raises for teachers and doctors, were being fulfilled. But beyond the public relations benefits of doling out thirteen billion dollars in government largesse, the National Priority Projects became just another bureaucracy working in parallel to (but not always in concert with) standard government institutions. As economist Leonid Abalkin lamented, the projects were developed “in private, without engaging scholars and specialists,” and ignored those who had judged the projects’ success—“that is, Russian citizens.”6

  Outside of education, the results were disappointing. Fleets of new school busses and ambulances, computers and medical equipment appeared, but they were still just drops in the ocean. By 2008 half of respondents to a Levada Center opinion poll said the projects had not affected them at all, with a similar number believing that the money was ineffectively spent. Indeed, classified American government cables released through WikiLeaks estimated that “between 10 and 30 percent of NPP funds was diverted to kickbacks in return for program award, and thus not spent as intended.” The leaked cables from 2008 concluded that “nearly three years after their launch, and despite Medvedev’s personal involvement, most experts agree that the projects have been too small in scope and have failed to reform social systems in need of deep structural changes.”7

  With the storm clouds of global financial crisis looming on the horizon, and an uncertain conclusion to Putin’s second presidential term, 2008 was a pivotal time for post-Soviet Russia. With United Russia’s legislative supermajority at his back, Putin could easily have amended the constitution to allow him a third consecutive term—but he did not. Instead, in late 2007 Putin tapped Medvedev—trusted friend and head of both Gazprom and the National Priority Projects—for the country’s top post. Medvedev immediately announced that he would run for the presidency only if Putin would be his second-in-command prime minister. With two-thirds of the electorate willing to voting for whomever Putin chose, Medvedev easily won the 2008 presidential election with 71.2 percent of the vote.8

  Hope For Change?

  There was a certain amount of déjà vu to Dmitry Medvedev’s 2008 inauguration. Just as when Putin took the same long walk through the Kremlin’s opulent Andreyevsky Hall eight years earlier, Russia had a new leader whom few people knew much about and whose victory seemed more like the coronation of a system insider than the result of a contentious electoral battle. In 2000 critics scoffed that Putin would be a weak leader—puppet to the Yeltsin-era oligarchs ruling from the shadows. Similarly, in 2008 it was assumed that Medvedev would be a pawn, with the real power moving to the prime minister’s office headed by Vladimir Putin—“the former president and current secret president of Russia,” as American satirist Stephen Colbert took to calling him.9

  Although both Putin and Medvedev were previously little-known, little in stature, shared the same hometown, worldview, values, and unshakable trust in each other, there were palpable differences between the two. Whereas Putin was former KGB and product of the security services, Medvedev was a former law professor with a more liberal, Western orientation. While Putin was seemingly guided more by intuition and emotion, Medvedev was cooler—intellectu
al, reasoned, and reflective.10 Plus, if his inauguration speech was any indication, Medvedev was more willing both to acknowledge the weakness of civil society and the rule of law and, later, to confront corruption and alcohol in the name of the general good.

  Perhaps the biggest difference between the two presidents was the external economic and political environment they confronted. Putin inherited a non-threatening geopolitical situation and stable global economy. Medvedev would not be as fortunate. The investment bank Bear Stearns collapsed two weeks after the “bear” Medvedev secured his electoral victory. The bursting of the U.S. housing bubble decimated securities and pounded global (including Russian) financial institutions, marking the beginning of the Great Recession. With falling demand, the sky-high price of Russia’s main exports—oil and metals—plummeted, taking Russian stability with it. On July 11, 2008, global oil prices hit a new record of $147 a barrel—by the end of the year it was only $34.11

  With Medvedev on vacation and Putin in Beijing for the summer Olympics, tensions between Russia and its southern neighbor, Georgia, exploded into outright warfare. To hear Ronald Asmus’s telling, Russia was like the schoolyard bully who had long tormented the neighborhood kids. Little Georgia finally snapped and punched back against the bigger kid, Asmus explained, “and there was little doubt that he would be drubbed in return.”12

  Indeed, the Russian military crushed the Georgian forces as they rolled into the contested regions of Abkhazia, South Ossetia, and beyond. The perception of Russian aggression spooked already jittery foreign investors, who pulled out of the Russian market en masse. Trading on Russian stock markets was halted to prevent complete free fall. Large banks and companies went bankrupt. The economy shrank by eight percent; the stock index lost eighty percent of its peak value; unemployment spiked, and Russia’s currency reserves took a major hit. Although Russia wobbled, however, it did not fall down: prudent injections of liquidity and stimulus funds saved a complete collapse of the banking system and supported major companies without renationalization. The Kremlin weathered the storm better than analysts predicted, but the crisis tempered expectations for continuous prosperity while underscoring the dangerous economic consequences of pervasive corruption and overreliance on oil and gas exports.13

  Medvedev’s presidency was marked by well-meaning attempts to increase transparency and confront Russia’s “legal nihilism.” All government tenders would be published on the Internet to shed light on the bureaucracy’s shady back-room deals—yet there was no one to follow up on them. All high-level officials, from the president on down, were required to annually declare their income and wealth. The ease with which these regulations were sidestepped also created tremendous cynicism. Medvedev himself—president and major stakeholder in one of the world’s largest lumber companies as well as former chair of the board of Gazprom—declared only eighty-four thousand dollars in savings and one Moscow apartment. Taxpayers soon learned that, from top to bottom, Russia was being run “by the poor husbands of very rich women.”14 But it was a start, at least.

  While the anti-corruption efforts grabbed headlines, social issues—including Medvedev’s National Priority Projects—were sacrificed to the global economic crisis. “The fate of the national projects is becoming less and less enviable,” said Ruslan Grinberg, head of the Economics Institute of the Russian Academy of Sciences, at the end of 2008. “The volume of financing was not significant to begin with. These were little islands of support in a sea of dilapidated infrastructure.” Critics who had claimed that the projects were nothing but campaign populism just shrugged as they were de-funded and de-prioritized after the election.15

  The conventional wisdom is that Medvedev was a pliant stooge who simply kept the seat of presidential power warm for Putin’s return in 2012. A closer examination of social and health issues, however, exposes significant rifts within the Kremlin monolith. After a 2010 discussion of social problems by his National Projects Council, the usually cool-headed Medvedev lost his temper and on Twitter criticized officials for delivering thick reports that never offered action plans or solutions. The president even publicly called out finance minister and longtime Putin acolyte Alexei Kudrin, imploring him to increase funding for social projects “for the sake of the country’s future.”16 It would not be the last time the two would butt heads.

  Overcoming decades of neglect in healthcare would be an especially onerous undertaking. While Russia (at least nominally) still has a system of universal healthcare as part of its Soviet inheritance, the system had only moderately improved since the dreadful Yeltsin years. Band-aid reforms only exacerbated problems and red tape: new requirements of citizens to buy medical insurance contradicted the mandate of universal care; meanwhile, the old system of tying doctors to patients only in specific residential districts prevented many from receiving acceptable treatment. While the well-to-do either pay for high-end services at home or abroad, the most needy and marginalized—pensioners and the handicapped—are effectively denied care if they can’t come up with a bribe.

  That the healthcare system is increasingly geared toward personal enrichment at the expense of social well-being has made it an appealing target for anti-corruption activists like blogger Alexei Navalny. In 2010 Navalny was tipped off that the ministry of health and social development posted a tender to develop a two-million-dollar computer network connecting doctors and patients to be delivered within sixteen days of winning the bid. “Without a doubt,” Navalny claimed the system had already been developed at a far lower cost, leaving plenty of room for kickbacks. More than two thousand of Navalny’s readers deluged the Federal Anti-Monopoly Agency with complaints, until the health ministry withdrew the contract. In the meantime, his readers found other egregious tenders for expensive technology projects to be built in an impossibly short time frame. Navalny waged a withering online campaign against the health official in charge of contracts, whom, for obvious reasons, he referred to only as “Mr. Unibrow.” Within a week Unibrow was gone. Such rapid and tangible successes inspired Navalny’s next project, RosPil.info: a crowd-sourcing website where any reader can upload suspicious government tenders—from the health ministry and beyond—for review by the online community and a team of lawyers. If the suspicions are well-founded, Navalny trumpets the fraud on his blog, leading the agency to be buried in an avalanche of hostile correspondence. As he admits, none of this would have been possible without Medvedev’s anti-corruption initiatives. In the end, Navalny’s online community is effectively doing what the Anti-Monopoly Agency and the federal prosecutor’s office should be doing but aren’t.17

  Suspicious tenders are only part of the problem: bribe-hungry physicians, outmoded equipment, and dilapidated facilities mean that hospitals are more often seen as sources of headaches than as cures for them. Today over half of Russians avoid seeing a doctor to treat their illnesses—meaning that the diseases enumerated in the past two chapters may actually be more prevalent since many prefer to suffer in silence rather than seek out medical treatment. “What’s most upsetting,” says pollster Marina Krassilnikova “is that two-thirds of the population are certain they wouldn’t receive good medical care if it were needed.”18

  Despite highly visible upgrades to ambulances and the like, still “people say there’s been no improvement whatsoever,” according to Aleksandr Saversky, head of the grass-roots Patients’ Rights Protection League. Especially when it comes to corruption—just as Murray Feshbach explained to 60 Minutes some fifteen years earlier—the best way still to get decent medical treatment in Russia is to bribe providers for the services they are legally obligated to provide for free.19

  If Russia ever hopes to confront its gloomy demographic future it will have to tackle its dysfunctional healthcare system. Promoting a healthy and vibrant citizenry requires more than occasional splurging—it means grappling with the corruption that permeates the system from top to bottom. While the National Priority Projects boosted physician salaries, much of those funds di
sappeared to graft and kickbacks. Like judges in the equally corrupt legal sphere, the abysmally low pay of doctors forces them to resort to accepting bribes just to make ends meet. Even private clinics have been affected: increasingly employing unqualified staff who bought their medical credentials instead of earning them. “Most clinics are geared toward one thing,” one nurse said in a recent exposé, “and that’s earning money. State bureaucrats earn good money. All the rest of us real people earn very little. That’s what’s making the corruption grow.”20 Unless the government overhauls the healthcare system to help confront its continuing demographic struggle, the pervasive corruption will likely increase, in Saversky’s words, “until the whole system collapses like a house of cards.”21

  And Then… Unexpectedly… Something Happened

  By far the most dramatic split between Putin and Medvedev came over vodka. As president, Putin had occasionally spoken out against Russia’s national shame, but like similarly half-hearted admonishments of the imperial, Soviet, and post-Soviet past, words were rarely matched by deeds that would threaten financial interests. For eight years under Putin the world’s hardest-drinking country had no semblance of an alcohol policy, and the only political initiatives backfired spectacularly—bankrupting the national champion Rosspirtprom and poisoning thousands of Russians in the process. Reforms meant to reduce dangerous samogon and illicit third-shift vodka had the exact opposite effect (chapter 22). Anti-addiction services were nonexistent; measures against drunk driving were half-hearted; and there were no attempts to address the ever-growing wave of drunken children. “Adolescent alcoholization in Russia has an enormous scale,” claimed Interior Minister Rashid Nurgaliyev in 2010, citing statistics indicating that eighty percent of teenagers were regular drinkers and that the average age that Russian kids started drinking had dropped from sixteen to thirteen.22