Kremlin Wary of Discontent as it Shovels Riches to Elites (2024)

Patriotic sentiment and “unification around the leader” are far from the only motives for the loyalty of Russia’s elite. People connected to Chechen leader Ramzan Kadyrov and his security services, for example, are not only participating in the war but trading grain in the occupied territories.

Since February 2022, 892 new agriculture companies have appeared in occupied Ukraine, istories reported, and more than half of them are registered to people from Russia’s regions, including Ali Zaiyev, a member of Kadyrov’s entourage.

The Russians took nearly five million tons of grain from Ukraine in 2023 and Putin’s cronies lined their pockets with the proceeds.

Another Chechen, Valid Korchagin, 25, who is linked to the family of Kadyrov associate Senator Suleiman Geremeev, became a co-owner of the Ilyich Iron and Steel Plant in Mariupol, an opportunity created after it was seized by Russian troops.

In 2023 Korchagin passed his share to Alash Dadashov, the 29-year-old director of the Moscow branch of the Akhmat sports club.

At the same time as these carve-ups of Ukrainian assets, the State Duma adopted laws favoring the Russian National Guard and private companies close to the Kremlin. In April it handed the National Guard control of state information systems.

Some deputies are also lobbying on behalf of the advertising giant Rus Outdoor, which earlier this year was given the right to extend contracts for advertising structures on state land for up to 10 years. In return, it pledged to increase “social advertising,” which in practice means supporting the war in Ukraine.

Oligarchs connected to the oil and gas industry are also seizing opportunities to make money, in spite of international sanctions. In response to Western countries setting a maximum price for Russian oil delivered by sea at $60 per barrel, Russia created a “shadow fleet” to circumvent the restrictions.

Moscow began buying used tankers around the world, and in February 2023 about 600 were transporting Russian oil and petroleum products. By December that number had grown to 1,089.

Smaller-scale entrepreneurs are also trying to make money by buying up housing in war-ravaged Mariupol, while a considerable number of ordinary workers are going to the occupied territories in pursuit of higher salaries.

At the same time many Russians are still living in poverty.

Almost 90% of Russian regions did not comply with Putin’s decrees to increase public sector salaries, adopted 12 years ago, and economists say that the public sector cannot keep up with inflation and wage growth in the commercial sector.

While official statistics report the poverty level in Russia at a historic low, critics have accused the Kremlin of massaging data to exclude more than three million of the poorest people. They also argue that the poverty line introduced by Rosstat is below the subsistence level, suggesting the real level of poverty is higher.

Without officially acknowledging the difficult living conditions of many Russians, pro-Kremlin analysts have spoken of their fear that there will be outbreaks of public discontent and are trying to predict what might provoke popular anger.

Writers close to the Kremlin on the “Nezygar” Telegram channel have warned that protests could be sparked at the federal level by a new wave of mobilization, tax reform, or even abrupt changes in tariff policy.

At the regional and local levels, they say rebellious sentiment could be stoked by almost any local event. The construction or preservation of environmentally harmful facilities, for example, or the violation of personal and public space, inter-ethnic conflicts, the indifference of officials, or the consequences of corruption.

A columnist in the business newspaper Vzglyad warned that inter-ethnic conflicts and the growth of nationalism — both among Russians and other peoples — may become Russia’s weakness. In line with Putin’s propaganda, the paper claimed such conflicts would only occur if provoked from the outside by “enemies of Russia,” but admitted their effect could be disastrous.

It is obvious the Kremlin lacks confidence in both its elites and the people. The authorities are doing their best to buy the loyalty of the elites, by creating the conditions for them to enrich themselves from the war.

But at the same time, they are trying to avoid triggering popular discontent, and declaring any unrest to be “the machinations of the West.” It is a long way from the “patriotic consolidation” trumpeted by Kremlin propaganda.

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 Edgeis CEPA’s online journal covering critical topics on the foreign policy docket across Europe and North America. All opinions are those of the author and do not necessarily represent the position or viewsof the institutions they representor the Center for European Policy Analysis.