Efficiency and compromise

Alexandra Prokopenko

In the 18th century, in the Falun mines in Sweden, miners found an “iron man” – the remains of a miner whose organic tissues were completely replaced by pyrite. Pseudomorphosis occurred with him: the replacement of the internal content with a mineral while maintaining the original external form. Something similar happened to the essence of a small group of liberals and numerous technocrats who have been managing the economy of the Rossiya fortress for the past ten years.
Technocrats who do not participate in politics and have abandoned public criticism for the sake of the possibility of reforms, liberals like Alexei Kudrin, German Gref and Elvira Nabiullina are convenient for Vladimir Putin. They successfully lead the Russian economy through all the trials, they see the problems, they know how to solve them, gracefully bypassing the political.
The man-made crisis due to the Russian invasion of Ukraine is no exception. From today, the situation in the economy does not look as gloomy as it seemed at first. Instead of a collapse, Russian GDP will face a gradual decline with a low point in 2023, and then a slow adaptation to new conditions and reverse industrialization. And most importantly, this crisis can be fought by ignoring its cause.
Behind the backs of Russia’s aging leadership, young professionals from the Presidential Administration, the Government Apparatus and ministries are struggling with problems in the economy. They are the new elite of the country. They speak foreign languages ??fluently, know modern management methods and work on decisions that are important for the economy on a daily basis. Few of them, after the start of the war, decided to leave their posts and leave the country. The majority continues to work, having adopted the new rules of the game after their older comrades.
Without sentiment
The fashion for talented young people with good English and practical skills instead of party and KGB cadres was introduced by German Gref, when in 2000 he headed the Ministry of Economic Development. Conscripts of that period: Elvira Nabiullina (head of the Central Bank), Arkady Dvorkovich (head of FIDE), Anna Popova (head of Rospotrebnadzor), Stanislav Voskresensky (governor of the Ivanovo region), Alexei Likhachev (head of Rosatom) and other statesmen. Having moved from the Ministry of Economics to Sberbank, Gref made a managerial revolution there and, already from the chair of the state banker, continued to train officials.
The two main educational programs for civil servants today are the RANEPA presidential management training program and the Leaders of Russia competition . They are supervised by the first deputy head of the presidential administration, Sergei Kiriyenko, and Vladimir Putin meets with graduates . Most young Russian bureaucrats have gone through at least one of them. Now they work in ministries in high positions, work in the Presidential Administration, head the regions.
The main objective of all these management courses is to show employees of ministries and departments that, in addition to vertical work on instructions from superiors, there is also horizontal work – through communication between departments without directives from management, goal setting from the result and a system of key performance indicators. True, this still did not solve the main problem of the Russian public administration system – the lack of a transparent system for the formation and evaluation of performance indicators of civil servants. Therefore, praise from Putin or someone lower in the vertical remained the main criterion for success.
And the authorities praise when officials follow instructions, regardless of the ethics and feasibility of the task. Moreover, often when setting tasks, the manager is well aware that within the framework of written norms and rules, the issue cannot be resolved. A subordinate will never be directly ordered to break the rules, sometimes, on the contrary, they will even emphasize the need to comply with them. But when an effective subordinate delivers a result, they will not be asked how it was achieved. And those who will refer to the impossibility of the task will be parted.
Excessive reflection and moral torment in this system is rather a minus, since it makes it difficult to focus on the result. Efficiency and loyalty are the main components of success. “Slava (Vladislav Surkov) was freaking cool designing the architecture of the LNR and DNR in 2014. Clearly, without sentimentality, everything worked – as requested, and done, ”one director of a department in the economic ministry told me in the winter of 2022. The transfer of residents of the Donetsk and Lugansk regions from formal Ukraine with health care and social security systems to the gray zone of the schemes of the self-proclaimed republics, he called “costs”.
Career steps
The system of public administration in Russia is permeated with informal practices that are not taught in management courses: businessmen close to the Kremlin receive presidential resolutions for their letters, bypassing bureaucratic procedures; questions worth trillions of rubles are coughed up outside of meetings; the president may give a verbal order to the minister to resolve the issue in favor of a particular state capitalist; the FSB can have its own opinion on the economic issue, and so on.
Young technocrats get the skills to work with such informal practices already at the place of service from their senior comrades, becoming members of the social group of federal civil servants.
This has a significant impact on their self-image, as bureaucratic technocrats become outsiders (external) in relation to other social groups.
The main distinguishing feature of organized groups of outsiders is a sense of deviation from the norm, making them feel that they are all in the same boat. They form a special subculture : a set of practices and concepts about what the world is and how to live in it, suggesting a more liberated view of moral standards. The moral career of a technocrat has several stages.
The first is not to reject informal practices out of the blue, but to rationalize them as you gain experience in interacting with them. For example, telling himself that people practice much worse things than his social group. “We do it because we have always done it, and the most important of the arts is to learn how to do it the way it has always been. We do not ask why we do this, for whom, why. He is indecent. In the end, we don’t kill anyone, we don’t torture, we don’t deprive anyone of life or freedom,” an employee of the Government Office explained to me.
The second stage of the moral career: to participate in informal practices only partially, finding it appropriate at a strictly defined time and in a strictly defined place. During this period, generally accepted moral ideas become inapplicable to work.
“In anticipation of a meeting with the prime minister, we somehow discussed the construction of the road and what kind of hemorrhoids we would have to go through in order to carefully withdraw land for construction. At first, such discussions seemed wild to me, but then I got used to it. It’s just work. And then, we are not trying for ourselves, but for the people,” recalled a deputy of one of the ministers.
At the third stage, such an idea is fixed as true, because other members of the social group of federal civil servants see the situation in a similar way. Moreover, a kind of reverse cargo cult is emerging: as if officials from other countries behave in exactly the same way, and whataboutism becomes a point of view from a rhetorical device.
Efficiency and compromise
Modern technocrats are not only RANEPA graduates and young “Leaders of Russia”. In the 2010s, many people from business and consulting went to work for the state with a sincere desire to benefit people. “You’re sorting through the taxation of an entire industry, coming up with almost surgical solutions,” one federal official explained his motives. “Well, after that, how can I go to trade stocks or manage a coal mine?”
When they entered the civil service, they understood that various moral compromises awaited them. But each such compromise was perceived as a necessity in order to continue a career, to maintain a position within the community, to be useful – that is, to remain effective.
The habit of being efficient largely explains the reluctance of a large part of the technocrats to quit and publicly declare their disagreement with the war. “By paying taxes, we all support government policy in one way or another. Here the choice is either to leave or continue to do their job, one of them argues . – I don’t see a more interesting job for an economist than the post that I hold now. We are at the epicenter of a grandiose structural transformation of the economy.”
Some believe that by retaining their position, they will be able to at least ensure that the life of Russians does not worsen, and possibly atone for their silence:
“To influence something while remaining in the Russian Federation and not being in the system of power, almost impossible. Of course, in a global sense, I do not influence anything here either, but I am very close. Maybe I’ll be in the right place at the right time to do the right thing.”
The need for efficiency prevents the technocrat from rallying around the leader. The situation with the approval of the military operation in Ukraine is more like an ” imposed consensus” – the war did not split the elite, but did not unite it either. Technocrats evaluate the “special military operation” and the decisions behind it not in terms of ethics and morality, but in terms of efficiency, and everything is not brilliant here. “The blockheads are crooked, they could, of course, be more careful, more humane, save the civilians, watch where the rockets are fired, choose the time of the bombing,” one of the informants condemns. “Fool Grandfather, that he got us into this. What he expected is not clear. But now what to do? – echoes another.
None of my interlocutors supported the invasion of Ukraine. But no one was ready to publicly state their position: “This will not change anything and will not help anyone. Yes, and it’s scary, they’ll suddenly put you in jail. ” The shock of the start of the war and the shock of numerous sanctions, as well as Putin’s threats to deal with the fifth column, further atomized people. Their own well-being and safety came first for technocrats, and because of the atmosphere of fear and suspicion, it became risky to share plans and assessments of the situation.
They try to avoid talking about this even in the inner circle. The Kremlin feels such sentiments of the elite: speaking to officials and businessmen at the St. Petersburg Economic Forum, Putin called on them to “link their future and the future of their children with Russia.” But public support for the special operation so far looks more like an application to share the shrinking budget pie and a pragmatic reminder of oneself to the president than a sincere agreement with anti-Western goals. Those who returned and stayed for various reasons are waiting for the redistribution of the assets of the outgoing Western companies.
Only the loyal will survive
The meeting of the Security Council on February 21 showed live how the decision-making system in Russia has changed. The collegial-deliberative model, where the opinion of the presidential entourage was considered important and sometimes decisive, was replaced by a situation where there can be only one source of decisions – the president. Such a system makes it possible not to focus on the mood either in the ruling elite or in Russian society. And now Putin likes those who are ready to anticipate his desires and follow them unconditionally.
It is said that Putin likes to talk about the unlearned lessons of history not only to Western diplomats, but also to his Russian colleagues. By May, sislib economists stopped reporting to the president about the dire consequences for the Russian economy associated with sanctions and the continuation of the war. Each time they responded with angry philippics against the West and a reminder of the important historical role of Russia.
But in favor is the presidential aide Maxim Oreshkin, who had a hand in Putin’s keynote speech at the St. Petersburg Economic Forum about how European business suffers from sanctions.
Denis Manturov, Minister of Industry and Trade, who has been in charge of import substitution since 2014, was promoted to Deputy Prime Minister. It was not possible to successfully replace imports , but “Manturov always knew how to beautifully explain to the president that everything was going according to plan.”
The Ministry of Economic Development is submitting an overly optimistic forecast to the government, where, apparently, the impact of Western sanctions is deliberately underestimated. There are many in the state apparatus who are ready to fit in with the new rules and even get ahead of themselves, anticipating the president’s wishes.
Seeing how Putin’s old associates behave, for example, at the same meeting of the Security Council, technocrats agree with the new order and consider it acceptable: the pseudomorphosis is coming to an end. Professionalism is replaced by loyalty.
And now, with an unwavering hand, they are writing a law on forcing businesses to conduct a special operation, lowering the parameters of “voluntary” battalions in state-owned companies, which must be formed at the expense of companies, agreeing to rotational business trips to the military administrations of Kherson and Zaporozhye.
But there is also a problem: it is impossible to be effective in the midst of the moral and institutional ashes that have become a consequence of the war. Such success is short-lived, even if it exists. Ultimately, technocrats will be overtaken by disillusionment, resource cuts, and radicalization.