The economic, military, and cultural elites of wartime Russia are undergoing a transformation, and their influence on the country’s leadership does not augur a quick end to the fighting.
Even though the established leaders of pro-Kremlin parties appear to be sabotaging Vladimir Putin’s call to make war veterans “a new Russian elite,” a number of processes underway are leading to a “natural” change among those at the top.
One is a redistribution of property, which has come in several phases and directions since the February 2022 full-scale invasion of Ukraine. First was the nationalization and redistribution of the assets of Western companies which had left the Russian market, with the seized assets given as rewards to loyal businessmen and business groups close to the regime.
The second was the nationalization of companies in the military-industrial complex and other “strategic” enterprises. These firms were Russian, but even if their owners demonstrated loyalty to the authorities and sold foreign assets, they could nevertheless be taken over if it was deemed to be in the interests of the state.
This was achieved by simply declaring them to be “strategic” and on this basis retroactively annul the decision to privatize it. That’s how Dalpolimetall, Russia’s largest lead producer, was nationalized.
In some cases the changes in ownership are enforced as revenge for apparent disloyalty. Deputy Minister of Finance Aleksey Moiseyev said the state will seize assets from owners who “cannot effectively manage the property” or “direct funds earned in Russia to support the Armed Forces of Ukraine.”
The seized assets are then transferred to more loyal businessmen who “follow state policy”by demonstrating support for the war, according to oligarch Vladimir Potanin. The Kremlin-aligned Nezygar Telegram channel reported in October that industrial assets worth 1.2 trillion rubles ($14.1bn), had been returned to state control, reversing their privatization between 1990 and 2010.
The seized property belonged to people who had left the country after the full-scale invasion “or to the nouveau riche who left Russia a long time ago, who got rich on privatization, who, as a rule, speak negatively about the current policy of the state,” the channel wrote. The assets “will be used for the benefit of residents loyal to the government,” it said.
In April 2023, legislation was amended to designate Russian business people who held foreign citizenship or residence permits as “foreign investors,” simplifying the transfer of “strategically important” companies to state management.
At the same time, there has been a consolidation of industrial mega holdings, bringing them under the management of Vladimir Putin’s most trusted allies and beneficiaries of the regime, including Deputy Prime Minister Dimitry Patrushev, son of one of his closest friends from his days in the KGB.
The result is a change to the regime’s business entourage. Those who suffered from sanctions and longed deep-down for democratization and renewed relations with the West are rapidly losing their influence, and being replaced by loyalists who have benefited from the war and are interested in prolonging it.
There’s also a change in the officer corps of the Russian army, which is increasingly brutal in its control of dissent. Soldiers who complain that the front is becoming a hotbed of organized crime, where drug trafficking, looting, and theft of equipment thrive, are transferred to assault units and sent to their deaths in a form of summary justice that so-called Z-bloggers say is increasingly common.
The main military prosecutor’s office has forbidden consideration of complaints against frontline commanders, despite soldiers and their relatives complaining en masse about beatings, executions, criminal orders and extortion.
There have been reports of soldiers having grenades stuffed inside their bulletproof vests and blown up, being put into freezing pits without food or water, and shot at point-blank range, but the prosecutor’s office is ordered to bury such complaints.
As a result, whistle-blowers are liquidated while sadists and murderers remain in command. The officer corps, which was not distinguished by high moral standards even before the war, is increasingly dominated by criminals, and the continuation of the war gives cover for their illegal activities.
The elite is also changing in the cultural sphere. Ever since the full-scale invasion, the authorities have made clear they would punish celebrities for stepping out of line, while undesirable writers have been declared “foreign agents,” extremists and “terrorists”.
Former Minister of Culture Vladimir Medinskiy became head of the Writers’ Union in February, turning it into another instrument for building a “vertical of unanimity”. Putin sent greetings to an extraordinary congress of the union, at which Medinskiy announced the consolidation of all creative forces to be pro-Russian, and other participants called for abandoning dissent and “a return to the positive elements of the USSR.”
The Kremlin, lacking the resources to intensify combat activities, appears comfortable with the current intensity of the war. As more people appear in Putin’s entourage who have a personal interest in continuing the fighting, their presence is an increasingly important consideration for those assessing the Kremlin’s readiness for peace.
Kseniya Kirillova is an analyst focused on Russian society, mentality, propaganda, and foreign policy. The author of numerous articles for CEPA and the Jamestown Foundation, she has also written for the Atlantic Council, Stratfor, and others.
Europe’s Edge is CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions expressed on Europe’s Edge are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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