Pavel K. Baev has a good article up about Vladimir Putin's conspicuous absence from the Gazprom annual meeting earlier this month, when Alexei Miller had to give a long list of bad news, including an 85% dividend cut, a 35% cut in investments, and delays in production plans across the board. But it's not like Putin has just been sitting in his dacha - we've been treated to a long list of hands-on management and personal appearances, from the humiliation of Deripaska at Pikalyovo to the complaints over pork prices at a supermarket. Baev lists some of these activities here:Duties of prime ministers are certainly complex, but few apart from Putin have taken to making blitz appearances in unexpected places and performing small miracles by reviving paralyzed plants. It started in the small town of Pikalevo, Leningrad oblast earlier this month where TV crews arrived just in time to show Putin stepping out of the helicopter, making a brief tour around the empty enterprises and forcing the owners to strike a deal to re-start production, not even leaving them the pen with which the contract was signed as a souvenir (Nezavisimaya Gazeta, June 11). Then came the visit to Barnaul where the prime minister inspected the foundation of a new medical center, but the mere fact of his presence in Altai krai was enough to resolve the labor conflict at the Rubtsovsk tractor plant that suddenly saw demand from new customers (Kommersant, June 20). After the visit to Ilya Glazunov's personal art gallery where the artist was eagerly attentive to the prime-ministerial advice, some commentators started to worry about Putin's connection with reality (Ezhednevny Zhurnal, June 16). Last week he paid a surprise visit to a super-market in Moscow and expressed dissatisfaction with meat prices, accepting reassurances that they would be immediately revised down (Vremya Novostei, June 25). Yuri Kobaladze, the executive director of the company that owns the chain (and a former general from the Foreign Intelligence Service) had the nerve to clarify later that it was only light hearted, but July sales were nevertheless duly announced (Moscow Echo, June 25).
The resemblance of this "manual management" to the trademark style of North Korean "great-and-dear" leaders is more than a little amusing (www.grani.ru, June 26). The public relations effect from such attention to local problems is inevitably short-term, but it creates an increasing demand for quick fixes of such complex problems as, for instance, the stagnation of the "mono-cities" built around one or several industrial enterprises (Rossiyskaya Gazeta, June 26). The simple proposition that the depth of economic decline requires serious reforms in the overloaded system of bureaucratic rent-extraction from every business activity is not present in the recently revised anti-crisis program. The "ideology" of this plan boils down to the expectation that rising oil prices will restart the growth engine that worked so wonderfully during Putin's presidency, while the hands-on tackling of some local situations will help in defusing public protests. (...)
Gazprom is both a tool and a victim of this "it-will-pass" policy that has already transformed the crisis into stagflation. Putin's micro-management of the company's activities is never advertised, but his hand is unmistakable in the brinksmanship tactics that defines the development of parallel gas conflicts with Ukraine and Belarus. Compromises in these quarrels are always only a means toward the end of denying them any independent say in gas matters. Putin quite sincerely does not see how this tough behavior damages Gazprom's reputation in Europe, much the same way as he cannot grasp the logic of the diminishing effectiveness of performance by this overgrown corporate behemoth under his enlightened guidance. Gazprom is allowed to reduce its contributions to the state budget and is granted permission to increase prices for domestic consumers despite their diminishing incomes, its every acquisition or investment in Europe is backed by all the necessary foreign policy resources - and it is still in far more trouble than its glossy annual report admits. Every crisis brings reinvigoration to businesses that can learn, but Putin remains adamant that his course has always been faultless.
