Page numbers in italics refer to illustrations.
1998 financial crisis, 1–7, 17–19, 108
2008 global financial crisis, 81, 99, 110–11, 115, 118–20, 122–28, 127, 151, 185n39
Abalkin, Leonid, 28
Abramovich, Roman, 51
Aganbegyan, Abel, 28
Alekperov, Vagit, 35
Algeria, 82
Anti-Corruption Foundation, 139–40
Asia-Pacific Economic Cooperation (APEC), 139
Austerity, 20, 143, 155, 158–61. See also Spending cuts
Baikal Finance Group, 46
Bank of Moscow, 124
Bank of Russia. See Central Bank
Bankruptcy, 104
Banks, 80; bailout of, 123, 124, 140; lending between, 123; sanctions and, 145–46; Sochi Olympics and, 140. See also names of specific banks
Bashneft, 162
Beijing Olympics, 115
Belgium, 142
Bendukidze, Kakha, 34
Berezovsky, Boris, 12, 13, 16, 17, 35–36, 175n59
Bermuda, 80
Blackmail, 12
Black market: in St. Petersburg, 8–9; taxation and, 33
Blavatnik, Leonard, 55
Bogdanchikov, Sergey, 44
Bribery, 32–33, 79, 87–88. See also Corruption
BRICS, 115
British Virgin Islands, 80
Budget deficit(s), 155–56; and 1998 financial crisis, 3–4; debt and, 18; devaluation and, 149; energy companies and, 15; inflation and, 21, 69; oil prices and, 59, 77, 155; Reserve Fund and, 125; social programs and, 104; Soviet breakup and, 5; subsidies and, 27; taxation and, 15
Budget surplus, 20, 64–68, 65, 73–78, 74
Bunin, Igor, 10
Burgaz, 48
Central Bank, 2, 6, 19, 61–63, 123, 124, 126–28, 149–50, 152–53
Chechnya, 14, 24, 115, 116, 133
Cheka, 68
Chevron, 44
Chubais, Anatoly, 13
Chukotka, 41
Cisco, 130
Cold War, 137
“Color revolutions,” 115–16
Communist Party, 10, 19, 31, 61, 75, 108
Communist Youth League, 42
Competition, as obstacle to development, 158
Compliance, 32–33
Corporate taxes, 33
Corruption, 80–83; Artamonov and, 87; business and, 87–88; in defense sector, 116–17; energy companies and, 51; as excusable, 113; extraction of, 88; Gazprom and, 50–52, 55; high level, 88; infrastructure and, 139–40; khozyain and, 90; modernization and, 129–30; as obstacle to development, 89, 96, 157, 158; security services and, 8–9; Sobchak and, 9; Sochi Olympics and, 139–40; tracking of, 8–9; in Ukraine, 144; at VEB, 155; Yakunin and, 84–86. See also Bribery
Countersanctions, 147–48
Credit: 1998 financial crisis and, 18; 2008 financial crisis and, 120, 123, 124; energy sector and, 15; inflation and, 6; as obstacle to business, 158; Sochi Olympics and, 140
Crime, organized, 10–11
Crimea, 111, 138, 145, 153–54, 158
Croatia, 142
Currency: in 1998 financial crisis, 2, 18–19; in 2008 financial crisis, 126–27; in 2014 oil crash, 148–49; devaluation, 18–19, 81–82, 127–28, 149–50, 152; inflation and, 72; oil prices and, 149; oligarchs and, 12–13; Stabilization Fund and, 67–68
Customs Union, 146–47
Czech Republic, 82
Debt, 18, 60–64, 63, 68, 121–23, 151–52, 153
“Deep and comprehensive free trade agreement” (DCFTA), 143–44
Defense spending, 10, 116, 116–17, 118, 118, 161. See also Military-industrial complex
Deficit. See Budget deficit(s)
Delyagin, Mikhail, 28
Democracy, 115
Deripaska, Oleg, 70, 98–99, 142
Devaluation, 18–19, 81–82, 127–28, 149–50, 152
“Dialogue of Civilizations” conferences, 85
Districts, federal, 26
Dubov, Vladimir, 43
Duma: and 1998 financial crisis, 1; 2011 elections for, 132–33; Communist Party in, 19; corruption and, 44; debt and, 61; Gazprom and, 16–17; industrial subsidies and, 6–7; Ishaev and, 30; oil rents and, 44–45; oligarchs and, 13; Our Home is Russia party in, 9; pensions and, 110; Primakov and, 20; spending cuts and, 18; taxation and, 47–48, 60; United Russia in, 133; Yeltsin and, 6–7
“Dutch disease,” 67
Dvorkovich, Arkady, 131
Dzerzhinsky, Felix, 68–69
Economic Development Ministry, 60
Education spending, 34
Elections, 133–34; 1995 Duma, 9; 1996 presidential, 13, 19; 1999 Duma, 109; 2000 presidential, 109; 2011 Duma, 132–33; regional, replaced by appointment, 27; in Ukraine, 115
Energy companies: 2008 financial crisis and, 125–26; debt and, 152; export duties and, 47–48; and Gazprom takeover, 48–50; investment slowdown and, 138–39; Khodorkovsky and, 41–44; monopoly, 53–56; natural gas, 53–56; oil sector, 56–58; ownership rights and, 39–40; prices and, 38, 54, 56, 57–58, 59, 65; productivity and, 38–39; property rights and, 40; rents and, 44–45; revenues of, 40–41; tax revenues and, 40, 54–55, 57; Yeltsin and, 15. See also Gazprom
Entrepreneurial class, emergence of, 10
Eurasian Economic Union, 142
Exchange rate, 77, 126, 127, 149, 150, 151
Exports: currency devaluation and, 2, 45, 81–82; diversification of, 131; energy companies and, 47–48; Gazprom and, 53–56; Georgian, 146; mafia and, 8; monetary policies and, 70, 126; oil prices and, 40–41, 119, 148, 154; steel, 95; taxation and, 57–58, 119, 150; trade deals and, 141–42; Ukrainian, 144
Extraordinary Commission, 16
Exxon, 44
Farm subsidies, 3
Federal districts, 26
Federalism, 24–25
Federation of Independent Trade Unions of Russia (FNPR), 101
Fedorov, Boris, 16
Fedun, Leonid, 48
Finance Ministry, 60, 65, 74, 78. See also Kudrin, Alexei
Financial crisis: 1998 Russian, 1–7, 17–19, 108; 2008 global, 81, 99, 110–11, 115, 118–20, 122–28, 127, 151, 185n39
Flat tax, 34, 64. See also Taxation
Food stores, 91–93
Foreign currency debt, 63–64
Fradkov, Mikhail, 26
France, 143
Frye, Timothy, 157
FSB: Khodorkovsky and, 45; Putin in, 17
Gaidar, Yegor, 5
Galitsky, Sergey, 92–93
Gastronoms, 91
Gavrilenkov, Yevgeny, 61
Gazprom, 11, 16–17, 38, 48–54, 86–87. See also Energy companies
Georgia, 115–16, 117, 132, 146
Gerashchenko, Viktor, 6, 19–20, 69, 71
Germany, 143
Glazyev, Sergey, 45, 71, 74–77, 137–38
Globalization, 84–85
“Go Forward, Russia!” (Medvedev), 129
“Gold ruble,” 68
Gorbachev, Mikhail: 1998 financial crisis and, 3–4; resignation of, 5
Gref, German, 27–30, 31–32, 50–51, 55, 62
Grocery stores, 91–93
Gross domestic product (GDP): budget balance as percentage of, 7, 14, 15, 135; debt to, 60–61, 62, 63; education spending as percentage of, 34; government spending as percentage of, 20, 34; growth in, 62, 82; health spending as percentage of, 34; military-industrial complex and, 10; military spending as percentage of, 116, 118; pension deficit as percentage of, 111
Gryzlov, Boris, 26
Guggenheim Museum, 96
Guriev, Sergei, 83
Hanson, Philip, 83
Health spending, 34
Highway tax, 160
Illarionov, Andrei, 72
Income tax, 33, 64. See also Taxation
India, 115
Industrial inspections, 32
Industrial subsidies, 6–7. See also Subsidies
Industry: diversity of, 79–80; retail, 90–91; state-run, 83–87; steel, 93–95, 96–97; in welfare provision, 104. See also Energy companies
Inflation: benefits of, 70–71; consumer price, 1995–2002, 69; Dzerzhinsky and, 68–69; effects of, 69; exports and, 70; fighting, 72–73; interest rate and, 72; investment and, 71–72; Kudrin on, 72; lobby in favor of, 69–71; money supply and, 6; oligarchs and, 12–13; Stabilization Fund and, 73; standard of living and, 151; subsidies and, 6–7, 71, 73; as tax, 69; wage stagnation and, 160–61
Infrastructure: corruption and, 139–40; as obstacle to development, 158
In-kind benefits, 104–7
Inspections, industrial, 32
Interbank lending, 123
International Monetary Fund (IMF), 1, 5, 18, 20, 71
Investment: 1998 financial crisis and, 4; 2005–13, 139; 2008 financial crisis and, 119, 120; 2013–15, 159; corruption and, 80–83; decline in, 138–39; export industries and, 70; external, 122; industrial revitalization and, 76–77; inflation and, 72; Ishaev and, 28–29; in Kaluga, 87–90; Magnitogorsk and, 95; Medvedev and, 132; oil prices and, 122; in oil production, 39; pensions and, 109–11; political stability and, 40; property and, 80–83; sanctions and, 145; savings fund and, 67–68; slowdown, 138–39; taxation and, 57; from tax havens, 80; Yukos affair and, 47
Itera, 49–50
Jackson-Vanik Amendment, 146
Kadyrov, Ramzan, 133
Kadyrov family, 116
Kaliningrad, 19
Kalmykia, 41
Kaluga, 87–90
Karelia, 24
KGB: black market and, 8–9; dismantling of, 11. See also Security services
Khodorkovsky, Mikhail, 11, 34, 41–46, 47, 52, 82
Khozyain, 90
Kiriyenko, Sergey, 16, 17, 19; in 1998 financial crisis, 2
Kommersant (newspaper), 31
Kovalchuk, Yuri, 84
Krasnodar, 92
Krasnoyarsk, 16
Kudrin, Alexei, 47, 57, 59, 62, 63, 72–78, 111, 131–32
Kulaks, 37
Labor market: efficiency in, 101–2; puzzle of, 100–103; rules of, 99; unemployment and, 99
Labor unions, 101
Lebedev, Alexander, 11
Lebedev, Platon, 45
Lend-Lease agreement, 39
Lisin, Vladimir, 86
“Loans-for-shares” scheme, 12
Macroeconomic indicators, 28–29
Mafias, 10–11
Magnit (supermarket), 92–93
Magnitogorsk steel mill, 93–94, 96–97
Magnitsky, Sergei, 146
Magnitsky Act, 146
Mail.ru, 80
Malaysia, 131
Marx, Karl, 84
Maslyukov, Yuri, 19–20
Medvedev, Dmitry, 100–101, 128–33, 142, 154, 158, 161
Menatep Bank, 41–42
Mexico, 141
Military-industrial complex: and 1998 financial crisis, 3; gross domestic product and, 10
Miller, Alexey, 49–50
Mining, 12
Mitrova, Tatiana, 53
MMM pyramid scheme, 75
Modernization, 128–31
Moldova, 146–47
“Monetization of benefits,” 106–7
Money laundering, 80
Money supply: 1998 financial crisis and, 4–5; inflation and, 6
Mortgage market, 102
Nabiullina, Elvira, 149, 152–53
National Welfare Fund, 64
Natural gas, 53–56. See also Energy companies
Natural gas prices, 54
Nayyem, Mustafa, 144
Nesterenko, Tatyana, 145
Netherlands, 67
Nevzlin, Leonid, 42
Nickel, 12
9/11 attacks, 115
Norway, 66
NTV (television channel), 35
Obama, Barack, 142
Oil prices, 17–18, 38, 39, 57–58, 59, 65, 74, 74, 77, 118–20, 122, 148–50, 155. See also Energy companies
Oil sector, 56–58. See also Energy companies
Oligarchs: Putin and, 44–46; Putin on, 34–35; rise of, 10–14; as staying in Russia, 82–83; taxation of, 34–37
Olson, Mancur, 22–23
Olympics: 2008 Beijing, 115; 2014 Sochi, 139–40, 155
Oneksim Bank, 12
Orange Revolution, 115–16
Organized crime, 10–11
Our Home Is Russia, 9
Ozero dacha cooperative, 84
Patrushev, Nikolai, 26
“Peace dividend,” 114
Perestroika, 3
Petrov, Nikolai, 33
Piñera, José, 109
Platon, 160
Polterovich, Viktor, 70
Poroshenko, Petro, 137
Potanin, Vladimir, 12, 16, 34, 35
Power: of mafias, 10; of oligarchs, 13; of security services, 11; vertical, 24–27
Primakov, Yevgeny, 20–21
Privatization: government revenues and, 12; oligarchs and, 11, 42
Production decline, 10
Productivity: of energy companies, 38–39; improvements in, 80, 82; wage growth vs., 113
Property: corruption and, 80–83; energy companies and, 40; investment and, 80–83; state, 11, 12
Property Management Department, 14
Protectionism, 140–44
Protests, 86, 99, 101, 106–7, 115–16, 134, 144–45
Provinces: power over, 24–27
Pussy Riot, 135
Putin, Vladimir: first address to Federal Assembly, 22; at FSB, 17; Gazprom and, 48; at Guggenheim Museum, 96; on in-kind benefits, 105; Khodorkovsky and, 43–44; Medvedev and, 128, 131–32; as monetarist, 68–73; moves to Moscow, 14–17; on natural gas, 55; on oligarchs, 34–35; oligarchs and, 44–46; on pensions, 107; protests against, 134; Sobchak and, 8; on Soviet collapse, 107; St. Petersburg and, 8; Vyakhirev *and, 48–49
Quality of life: defense spending and, 10; increasing, 99; inflation and, 151
Rachinsky, Andrei, 83
“Raider attacks,” 88
Red Directors, 94–95
Regulatory compliance, 32–33
Rents: energy companies and, 44–45
Reserve funds, 59–60, 64–68, 65, 73–78, 74, 125
Resource extraction tax, 41, 58
Retail industry, 90–93
Revolutions, 115–16
Rodina (party), 71
Roosevelt, Franklin Delano, 30
Rose Revolution, 115–16, 117, 146
Rosneft, 18, 46, 52, 56, 138–39, 152
Rosselkhozbank, 123
Rotenberg, Arkady, 51, 87, 160
Rotenberg, Boris, 87
Ruble: in 1998 financial crisis, 2, 18–19; in 2008 financial crisis, 126–27; in 2014 oil crash, 148–49; devaluation, 18–19, 81–82, 127–28, 149–50, 152; “gold,” 68; oligarchs and, 12–13. See also Currency
“Rule of the Seven Boyars,” 13–14
Rutskoi, Aleksandr, 28
Rybolovlev, Dmitri, 82
Saakashvili, Mikheil, 115, 117
Safety net, 104–7. See also Social programs
St. Petersburg, 7–9
Sakhalin Island, 56
Sakharov, Andrei, 134
Sanctions, 145–48
Saudi Arabia, 82
Savings, 59–60, 64–68, 65, 73–78, 74
Sberbank, 152
Security Council (Russia), 26
Security services: expansion of influence of, 11; Putin’s control of, 26. See also KGB
Semiboyarschina, 13–14
Serdyukov, Anatoly, 117–18
Sevastopol, 111
Severstal, 95
Shadow economy. See Black market
Shamalov, Nikolai, 84
Shevardnadze, Eduard, 115
Shokhin, Alexander, 61
Shuvalov, Igor, 47
Siluanov, Anton, 111
Skolkovo Innovation Center, 130
Slovakia, 82
Sobchak, Anatoly, 7–9
Social contract, 99–100, 104, 111–13, 112, 113
Social programs, 27–28, 42–43, 104–7
Social welfare, 27
Soros, George, 17
South Africa, 115
South Korea, 1
South Ossetia, 117
Spears, Richard, 175n1
Spending cuts, 10, 14–15, 20, 155–56, 160–61. See also Austerity
Stabilization Fund, 64–65, 67–68, 73, 74–77
Standard of living, 99
State-run firms, 83–87
Statism, 23
Stock prices, 120
“Strategy for the Development of Russia through 2010,” 31
Stroigazmontazh, 86
Stroyev, Ygor, 28
Subsidies: 1998 financial crisis and, 3, 4; corruption and, 88; energy sector, 126; farm, 142; Gref and, 27–28; inflation and, 6–7, 71, 73; rail, 86; Yeltsin and, 6
Supermarkets, 91–93
Surgutneftegaz, 48
Tatarstan, 24–25
Taxation: 2008 financial crisis and, 125; of black market, 8–9; corporate, 33; cuts in, 66–67; debt and, 62; “Dutch disease” and, 67; of energy companies, 15, 54–55, 57; energy companies and, 40, 41; federalism and, 25; flat, 34, 64; Gazprom and, 16–17; highway, 160; individual income, 33, 64; inflation as, 69; by mafias, 11; as obstacle to development, 157, 158; of oligarchs, 34–37; Putin on reforms for, 22; rates, 33; resistance to, 15–16; of resource extraction, 41, 58; Temporary Extraordinary Commission and, 16
Tax havens, 80
Tech firms, 80
Temporary Extraordinary Commission, 15–16
Terrorism, 115
Timchenko, Gennady, 51, 86, 87
Trans-Pacific Partnership, 141, 142
Turnover tax, 33
Ukraine, 5, 115–16, 137–38, 141, 143–46, 153–54
Ulyukaev, Alexey, 72
Unemployment, 99, 100–101, 102–3, 160–61
Union of Right Forces, 31
Unions, 101
United Russia, 45, 132, 133–34
United States, 52, 85, 91, 102, 141, 145–46
Uralkali, 82
Uralvagonzavod, 161
VEB (bank), 80, 110, 123, 140, 152, 154–55
Vedomosti (newspaper), 102–3, 119
Vekselberg, Viktor, 55
Venezuela, 82
Vertical power, 24–27
Veterans, bonuses for, 134
Virgin Islands, 80
VKontakte, 80
Vladivostok, 19
Vote rigging, 133–34
Vyakhirev, Yuri, 48
Vyakhireva, Tatiana, 48
Wage decline, 150
Wage stagnation, 160–61
Wealth: accumulation of, 30–31, 59–60, 79, 84
World Economic Forum, 125
World Trade Organization (WTO), 33, 141–42
World War II, 137
Yakunin, Andrei, 86
Yakunin, Vladimir, 83–85
Yalta Conference (1945), 137
Yalta Conference (2013), 137–38
Yandex, 80
Yanukovych, Viktor, 144
Yeltsin, Boris: 1998 financial crisis and, 1–2; market prices and, 5–6; oligarchs and, 12–13; Primakov and, 21
Yevtushenkov, Vladimir, 162
Youth League, 42
Yuganskneftegaz, 46