Weekly Overview Cables - Ukraine War, Cooptation of Russia's financial elite and coercion against Russia's earnest nationalists.
*side note: we shall take a separate and closer look at the “Black Sea grain deal” impasse on Thursday’s cables.
Ukraine War Updates.
1) There are some reports of Ukrainian progress around Bakhmut and Zaporizhzhia.
In the meantime, Russia continued missile strikes against civilian targets - resulting (amongst other casualties) in a destruction of a UNESCO world heritage site - a cathedral in Odessa.
2) Ukraine regained half of its lost territory since February 2022.
The Secretary of State Antony Blinken confirmed that approximately 50% of the territories lost to Russian invaders since the February of last year, have now been reconquered.
This is a legitimate military target - a crucial transport route into the peninsula: allowing for the delivery of essential military logistics and heavy mechanized armor.
Nonetheless, the railroad section of the bridge remained unharmed - so a major disruption in the near term is unlikely to materialize.
4) Poland tank maintenance hub for Ukraine is now live and operational.
5) The White House confirms that Wagner is not fighting in Ukraine.
6) Putin suffers a major embarrassment as he is forced to cancel a trip to South Africa due to an arrest warrant.
South Africa’s presidential administration has now announced that Putin (based upon a ‘‘mutual agreement”) will now skip the BRICS summit in August - failing to join his counterparts from India, China and Brazil.
This is because Putin is facing an arrest warrant from the International Court of Justice (ICJ), and as a signatory, South Africa is obligated to execute the warrant.
That even his closest BRICS partner is unwilling to strain relations with the West, and prefers the option of the Russian President skipping the summit, is a testament to Putin’s isolation on a global stage.
7) The European Union once again upgrades its role in the Ukraine war.
The Union will propose a dedicated fund to maintain Ukraine’s military stock for the next four years - at a total cost of up to $22bln.
Putin’s post-coup regime management continues: co-option of the elite + coercion of true believers.
We have previously touched upon Putin’s ‘‘next steps” after the attempted coup in June.
Although the attempt itself demonstrated how increasingly out of touch, isolated, and complacent Putin had become, and how most of the key actors within the elite, party political apparatus, and the military itself chose to hedge their bets and not rush into backing their President (who, no matter how illegitimate and criminal, is still a tad bit more legit than an outright thug -Wagner leader Prigozhin), it was nonetheless too soon to announce Putin’s inevitable demise.
In the near-term, Putin has clearly been weakened by this move - but it is still unclear how things will unfold in the long-term.
He could still come out on top - he could still use this incident to successfully weed out the remaining weak links/traitors, and promote those who have been truly loyal (like his chief of National Guard, and former Bodyguard Viktor Zolotov - who is now getting tanks for what is essentially a glorified riot police force).
Our primary focus has thus far been on Putin’s immediate actions in relation to Prigozhin himself.
He has been too generous and inconsistent in regards to dealing with Prigozhin specifically - a man who took over a whole city, a military command HQ, and several generals as hostages (and killed Russian pilots trying to stop him), was rewarded with a meeting at the Kremlin.
This is a dangerous precedent to set - and sooner or later, Prigozhin will have to be dealt with and serve as a warning to other wannabe usurpers of power.
(side note: and it is certainly true that the Kremlin’s propaganda machine is in an overdrive mode - throwing its resources into a campaign to discredit Prigozhin and present him as a self-serving corrupt thug. This would then create a ‘‘permissive environment’’ for Putin to deal with him definitively - without turning him into a martyr.)
But Putin’s regime is far more complex, multifaceted, and wider in reach than just Prigozhin/rebellious mercenaries.
There are many more stakeholders to deal with.
And Putin engaged in fresh new tactics in relation to two such stakeholders: 1) the financial elites - the wealthy business class, and 2) the true believers/patriots - the fervent nationalists to the right of Putin.
(side note: oligarchs are no longer a good term - unlike 1990s era of Berezovsky type tycoons, nowadays, the biggest business magnates don’t really have much political power - only the Kremlin (and a few local governors/warlords) have that)
It was therefore very instructive to watch what had happened in the past week.
1) Let’s start with Putin’s move in relation to the elites: when Putin ordered the seizure of the Russian operations of the foreign companies - Danone and Carlsberg - after plutocrats close to him expressed an interest in said assets.
Now, although the seized assets are currently held under the “temporary management” of Russia’s federal property agency, it is likely that pretty soon they will be gifted away to businessmen close to the Kremlin (sold for pennies).
All authoritarian regimes rely on the combination of four tools to remain in power: legitimacy, cooptation, coercion and general apathy/confusion.
Legitimacy in this context means strictly performative (as opposed to procedural/legal/democratic mandate etc) - delivering specific desirable outcomes sought by the wider population: security and safety, low crime, rising real wages, government services that function to a decent standard - essentially, material prosperity + order.
Coercion includes direct “neutralization’’ of political threats, in addition to a general atmosphere of censorship and control by the state.
Up until the Ukraine war, Putin has always been a fan of Vladislav Surkov’s “managed democracy’’, Andropov-style targeted/preemptive measures vs general atmosphere of repression.
But the war in Ukraine has changed the calculus - we now see more of the China-style general repression: where speaking against the war can land you in prison for many years.
What about apathy and general confusion (in relation to the viability/possibility of political alternatives)?
Well, and once again, up until mid 2010s, Putin could also rely on general political apathy - rising real income, total media control (little penetration by social media) and lack of clear political alternatives had made his rule pretty solid.
But then, the dual shocks of oil fracking revolution in America (lowering oil prices), and sanctions post Crimean annexation in 2014, meant that the Russian economy was slowing down.
Real growth in prosperity and living standards was anaemic.
Add to that, the rise of Alexei Navalny and his generation of social-media savvy politically active demographic led Putin to a number of drastic measures - including a plan to assassinate Navalny.
All of this is to say that the performative legitimacy and apathy parts of the equation were weakening - forcing Putin to rely more on coercion and cooptation even before the war.
And these trends are now on steroids - as the war drags on, and mobilization expands, higher % of Russian public will be gradually shaken out of their apathy.
Consequently, we see (and will continue to see) more of the radically foolish general repressive acts against the wider population - like jailing fathers for their school-age daughters’ anti-war drawings.
We will also see more of a cooptation going forward - the financial elites surrounding Putin will once again get extra perks for sticking around.
Putin needs to convince them that they have more to gain for their personal loyalty to him and to his regime.
And it is also a useful reminder that power in Russia flows in one direction only - that the elites should not forget who can make things happen for them.
2) Targeted political ‘‘neutralizations’’.
We will also see more of this: removal of specific political threats from the wider political arena.
Frankly, it was surprising that it took this long for Putin to get Igor Girkin thrown into jail.
(Side note: Girkin, is also known as Strelkov - the OG responsible for the first campaign in Donbas - dragging Russia into the campaign in Eastern Ukraine. Most intel has since confirmed that Putin was originally content to leave things at Crimea, but was later pulled into the Eastern Ukraine - and his appetites kept growing from that point onwards)
In many ways, Girkin was a bigger threat to him than Prigozhin - the latter had amassed an army and wealth thanks to Putin’s permission - something that can eventually be taken away (unless one is too late).
But Girkin was a voice for a significant segment of the Russian public - estimated at around 7-15% (according to number of polls over the past 1.5 years), and that are: 1) fervent believers in the war in Ukraine, 2) support the notion of Russian expansionism and imperialism, and 3) have negative assessment of the Kremlin’s performance in this war.
Now, Putin himself had initially positioned the war as Russia’s mission to return historic lands (comparing himself to Peter the Great).
(side note: he also justified the invasion with an imminent security threat. Accusing NATO of placing missiles - and planning to do the same with nukes - in Ukraine. That was (in addition to being a ridiculous casus belli) a pitch for performative legitimacy - “I am keeping you safe”).
But the reason Girkin in particular was so dangerous, has to do with the third point - he was successful in painting the Kremlin as ineffectual and corrupt in prosecution of this war (aligning with Prigozhin’s rhetoric).
And if Putin had previously estimated (still erroneously) that it was better to leave Girkin alone and not provoke this base of fervent nationalists, well now, the calculus has changed definitively - there is simply too much pressure on his regime for Putin to remain complacent to (thus far) peripheral, but rapidly escalating political danger.
Russian history is full of examples where bad performance in the war (1905, 1917) translates into domestic uprising.
Indeed, Putin himself referred to 1917 when first speaking about Prigozhin’s coup.
(side note: which was a strange way to grant wider legitimacy to a coup attempted by a select and relatively small group of people this June - the 1917 revolution did after all come as a result of devastating performance in the war).
It is thus clear that events of the past occupy a sizable real estate in his mind.
Strictly from his regime’s perspective therefore, Girkin’s detention was on balance, probably a good move.
But the decision is also revealing - Putin is clearly taking a short position on his own military in Ukraine.
For if he was confident in near-term success and victory, he would probably risk leaving Girkin alone for just a little more - to then prove him and his ‘‘real patriots’’ wrong with Russia’s imminent victory in the war.
It is pretty clear therefore, that Putin himself does not believe in a reversal of fortunes and victory anytime soon: he probably estimates the war dragging along for much longer (with little exchange in territorial gains) and/or sees Ukraine turning the tide as a plausible near-term possibility.
Both outcomes are far from ideal… And crucially, neither scenario is permissive of Putin’s continuous gamble of leaving Girkin free to attack his regime - such complacency was a luxury that Putin could no longer afford.