Why Putin and the Other Oligarchs May Prefer War to Peace

Everything that’s happening indicates that Russia will soon invade Ukraine (possibly after China’s Olympics ends tomorrow). The Russians will blame the Ukrainian government for provocations the Russians and their Ukrainian supporters have themselves caused and even claim it’s the Ukrainians who have attacked the Russians.

An invasion may not make much sense to the rest of the world, but Alexander Gabuev, a senior fellow at the Carnegie Moscow Centre, argues for The Economist that “elites have hijacked Russia and conflated the country’s interests with their own” and that’s “why Vladimir Putin and his entourage want war”. Further economic sanctions might even be in the Russian oligarchy’s interests:

. . . When it comes to Ukraine, people in Moscow and the West can be forgiven for assuming that the Kremlin’s policy is informed by a dispassionate strategy derived from endless hours of interagency debate and the weighing of pros and cons. What actually drives the Kremlin are the tough ideas and interests of a small group of longtime lieutenants to President Vladimir Putin, as well as those of the Russian leader himself. Emboldened by perceptions of the West’s terminal decline, no one in this group loses much sleep about the prospect of an open-ended confrontation with America and Europe. In fact, the core members of this group would all be among the main beneficiaries of a deeper schism.

Consider Mr Putin’s war cabinet, which is the locus of most decision-making. It consists of Nikolai Patrushev, the head of the Security Council; Alexander Bortnikov, the head of the FSB (the main successor agency of the KGB intelligence service); Sergei Naryshkin, the head of Russian Foreign Intelligence Service; and Defence Minister Sergei Shoigu. Their average age is 68 years old and they have a lot in common. The collapse of the Soviet Union, which Mr Putin famously described as the greatest geopolitical catastrophe of the 20th century, was the defining episode of their adult lives. Four out of five have a KGB background, with three, including the president himself, coming from the ranks of counterintelligence. It is these hardened men, not polished diplomats like Foreign Minister Sergey Lavrov, who run the country’s foreign policy.

In recent years members of this group have become very vocal. Messrs Patrushev and Naryshkin frequently give lengthy interviews articulating their views on global developments and Russia’s international role. According to them, the American-led order is in deep crisis thanks to the failure of Western democracy and internal conflicts spurred by the promotion of tolerance, multiculturalism and respect for the rights of minorities. A new multipolar order is taking shape that reflects an unstoppable shift in power to authoritarian regimes that support traditional values. A feisty, resurgent Russia is a pioneering force behind the arrival of this new order, along with a rising China. Given the state of affairs in western countries, the pair contend, it’s only natural that they seek to contain Russia and to install pro-Western regimes in former Soviet republics. The West’s ultimate goal of a Colour Revolution in Russia itself would lead to the country’s conclusive collapse.

Washington sees unfinished business in Russia’s persistence and success, according to Mr Putin’s entourage. As America’s power wanes, its methods are becoming more aggressive. This is why the West cannot be trusted. The best way to ensure the safety of Russia’s existing political regime and to advance its national interests is to keep America off balance.

Seen this way, Ukraine is the central battleground of the struggle. The stakes could not be higher. Should Moscow allow that country to be fully absorbed into a western sphere of influence, Russia’s endurance as a great power will itself be under threat. On a personal level, the world view of the hard men is an odd amalgam of Soviet nostalgia, great-power chauvinism and the trappings of the Russian Orthodox faith. The fact that the new elite in Kyiv glorifies the Ukrainian nationalists of the 20th century and thumb their noses at Moscow is a huge personal affront.

Why then are the people around Putin not scared about possible fallout from a new round of far-reaching economic sanctions? In their eyes, the sanctions that the West imposed to punish Russia for the annexation of Crimea and the war in Donbas were intended largely to check Russia’s rise. America and its allies would have found a way to introduce them one way or another, they were just looking for an excuse. Since 2014 such views have solidified. Messrs Patrushev, Bortnikov and Naryshkin all find themselves on the U.S. Treasury’s blacklist already, along with many other members of Mr Putin’s inner circle. There is no way back for them to the West’s creature comforts. They are destined to end their lives in Fortress Russia, with their assets and their relatives alongside them.

As for sanctions by sector, including those that President Joe Biden’s team plans to impose should Russia invade Ukraine, these may end up largely strengthening the hard men’s grip on the national economy. Import substitution efforts have generated large flows of budget funds that are controlled by the coterie and their proxies, including through Rostec. The massive state conglomerate is run by a friend of Mr Putin’s from his KGB days in East Germany, Sergey Chemezov. In a similar vein, a ban on food imports from countries that have sanctioned Russia has led to spectacular growth in Russian agribusiness. The sector is overseen by Mr Patrushev’s elder son Dmitry, who is Mr Putin’s agriculture minister.

Similarly much-touted financial sanctions have led to a bigger role for state-owned banks which, unsurprisingly enough, are also filled with KGB veterans. If anything, further sanctions wouldn’t just fail to hurt Mr Putin’s war cabinet, they would secure its members’ place as the top beneficiaries of Russia’s deepening economic autarky. The same logic is true of domestic politics: as the country descends into a near-permanent state of siege, the security services will be the most important pillar of the regime. That further cements the hard men’s grip on the country.

After two years of Covid-induced self-isolation for Kremlin bosses, there is a clear tendency toward tunnel vision and a dearth of checks and balances. Russia’s interests are increasingly becoming conflated with the personal interests of the people at the very top of the system.