By Nick Pinnington
SINCE Russia invaded Ukraine in February, there has been a persistent question over whether Vladimir Putin could be toppled from the inside.
Did his allies believe that the invasion was a step too far? Wouldn’t the fear over their sanctioned wealth and a subsequent economic downturn be enough for them to act?
Such hope is wishful thinking. Ever since taking power, Putin has taken precautions to ensure that his hold over the country remains strong. And patronal networks are a key player in this strategy.
Through these patronal networks, Putin offers key positions of power and wealth, in exchange for complete loyalty and obedience.
Notably, many of these networks are defined by their personal nature, and often consist of former colleagues and friends of the president.
These relationships span almost every sector in Russia and the benefactors are often known as oligarchs.
Igor Sechin, a Putin ally and colleague since the 90s, was appointed CEO of state oil company Rosneft in 2004. Sergei S Ivanov, son of Putin’s former KGB colleague and political ally Sergei B Ivanov, is CEO of Alrosa, Russia’s leading diamond mining company.
Former Putin colleague, Alexei Miller, was made CEO of gas company Gazprom in 2001. Following this, Putin’s childhood friend and judo sparring partner, Arkady Rotenberg, made billions through investment in gas and pipeline construction firms.
Even Russian social network Vkontakte is under the control of Vladimir Kiriyenko, son of prominent Kremlin politician Sergey Kiriyenko.
Therefore, the combination of received material benefits alongside a personal relationship, create a deep loyalty to Putin and a perpetual reliance on the president.
Putin needs these oligarchs to run the country’s key institutions and offer him support. In turn, the oligarchs need Putin for the continued security of their positions and subsequent wealth and influence.
Yet, it has been frequently suggested in the media that the consequences of the invasion of Ukraine might undermine loyalties.
The argument is that sanctions imposed upon individuals allied to Putin may destabilise his patronal system. If they can be stripped of their wealth and assets, then the material benefits of supporting Putin disappear, and a motive to remove him from office emerges.
But a number of factors complicate this fair, but oversimplified argument. The announcements of sanctions targeting oligarchs’ assets look great on paper, but are difficult to enforce in reality.
In late March, Reuters reported that legal and enforcement challenges meant EU members had only successfully frozen a small proportion of the assets belonging to listed individuals, weeks after the announcement of sanctions. Naturally, Putin allies will have been grateful for the extra time to move assets out of harms way.
Furthermore, the relationship between the president and his allies is not equal risk. History shows there are consequences for oligarchs who step out of line.
Most famously, Mikhail Khodorkovsky, the then-richest man in Russia as a result of his ownership of Yukos oil company, was arrested in 2003, following public criticism of Putin. In the following years, Yukos’ assets were seized and transferred to state-owned oil companies, including Rosneft, whilst Khodorkovsky spent ten years in prison.
This exemplifies that, if necessary, Putin can replace oligarchs.
In contrast, the oligarchs cannot replace Putin.
In a hypothetical scenario where Putin is removed from power from within, the consequence is uncertainty. Uncertainty over whether individuals could retain their influential positions. Uncertainty over whether a new president would punish, reward or disregard them altogether. Uncertainty over whether they could guarantee their wealth, or whether they run the risk of losing everything.
This reliance gives Putin a stranglehold over the country, with effective control over every key resource sector, including oil and gas. Putin’s allies have limited options. Either endure the financial hit of sanctions, and enjoy the wealth that remains, or step out of line and face the consequences. A European diplomat summarised the situation as follows. If oligarchs complain, saying “I lost $4bn of my $5bn”, Putin simply replies with “do you want to keep the $1bn?”
It is this dependence on the president which quashes any hopes of a coup from within the inner circle.
As long as Putin remains in power, his allies can benefit, provided they accept the consequences of association with the president. Step out of line, and you could lose everything.
As a senior Kremlin official bluntly stated: “The smart oligarchs get how things work here and the dumb ones aren’t oligarchs anymore”.
Opinion articles featured on Redaction Report reflect the views of their author, not those of the publication as a whole. Only Editorials display the opinions of our management.
Nick Pinnington is a freelance journalist.
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