Conor Lenihan: What I learned working for a Russian oligarch

Only outcomes of war are negotiated peace deal or internal rupture with Putin replaced

Vladimir Putin and his entourage should have been heading into a dignified retirement rather than the maelstrom of war and proxy war. Photograph: Ringo Chiu/AFP

The invasion of Ukraine has shone an intense light on the personage of Vladimir Putin – president of the Russian Federation. If he was unsure or insecure about his place in history, he need not worry now.

For the worst of reasons he has implanted the word Russia into everyone’s mind. Prior to this crisis people in the western world had apprehensions about Russia that you could dismiss as phobias. Unfortunately for Russians, the Russophobes look like they were right all along.

Back in 2011, after losing my Dáil seat, I was invited by Viktor Vekselberg, a Russian oligarch, to become a vice-president of the Skolkovo Foundation – a $10 billion innovation project dubbed Moscow’s effort to build their own Silicon Valley from the ground up. (Vekselberg has been on the US sanctions list since the annexation of Crimea in 2014.)

The Russian authorities were trying to lessen their economy’s over-dependence on oil, gas and commodities. For me it was a great opportunity to operate at a much higher level than I could ever have managed in my previous governmental role as minister for science, technology and innovation.

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Having moved to Moscow to take up the job I stayed for the best part of four years and got a very privileged insight into how the Russian business, investment and political scene work. Putin is at its centre but by no means enjoys untrammelled or total power. Around Putin is a confederation of politicos, intellectuals, billionaire oligarchs and securocrats. Of those insiders who are invited to the top table, Igor Sechin, currently head of Rosneft, is believed to be the most powerful. He has been noticeably silent on the invasion of Ukraine.

Mystery and intrigue surrounds “who is in and who is out” at any one time in the Kremlin. Hence the contradictory coverage by media and other analysts of Putin’s position in the wake of the invasion decision. The televised coverage of the decision by the Russian national security council to recognise the breakaway, pro-Russian republics in the Ukraine suggests Putin may in fact be on the back foot.

Distinctly nervous

The military and civilian leadership of this council looked half-hearted about the decision. I watched it in Russian and the language and body language of members looked distinctly nervous. It had the appearance of one of those staged videos released by Saddam Hussein at the time of the Gulf War in the 1990s. One way or the other, the invasion of the Ukraine will unleash another power struggle within the Kremlin, however well-masked from prying western eyes.

Putin by no means enjoys untrammelled power. Around him  is a confederation of politicos, intellectuals, billionaire oligarchs and securocrats

From a Russian perspective there are only two outcomes – a negotiated peace deal or an internal rupture with a change of leadership. The global and financial consequences are too enormous for things to be left the same.

The current Russian power elite have been in place since the time of Boris Yeltsin. They are referred to as the “Yeltsin family”. All of them did well thanks to the crash-course transition to capitalism following the collapse of the Soviet Union. They are a resilient bunch and have seen worse times than now. That said, many of them, for age and family reasons, probably felt they were due a well-deserved rest.

The speed of the western sanctions has taken many of this group by surprise. The prospect of Russia becoming a “pariah” state for the next 10 years is not a comforting thought for either the insiders or the Russian public. Putin and his entourage should have been heading into a dignified retirement rather than the maelstrom of war and proxy war.

Classic populist

Putin has wider support in his country, beyond his “vertical power” group. He is still widely credited with having rescued the country from financial and economic collapse. If there were a robust or competitive election, Putin would be replaced by either someone from the old Soviet-style communist party or alternately someone from the far right. In Russian terms, Putin is a classic populist borrowing support from both left and right.

Two years ago, I was told Putin had developed a long-term illness that would push him towards retirement. This would point to his relative isolation both at internal and external level.

Two years ago, I was told Putin had developed a long-term illness that would push him towards retirement

The soaring price of oil and gas combined with his significant partnership with Beijing means Russia has a backstop – but that can only shield Putin for a while.

The Chinese leader, plus internal pressure, will probably dictate a peaceful resolution of the current crisis. The tactics deployed by the Russians in Syria, Georgia and Crimea are not viable options in Ukraine. The global dislocation of energy and food markets are urgent and point to a swift cessation.

The current Moscow line appears to be that a guarantee of future military Ukrainian neutrality plus acceptance of its tutelage over eastern Ukraine and Crimea would make for a cessation of hostilities. The demand that Ukraine forgo its EU membership for the foreseeable future is unrealistic.

Further civilian bombing of hospitals and fleeing refugees will only make a resolution intractable with a corresponding inflammation of world opinion. The crisis has revealed a significant shift in world power. Beijing, not Washington, holds the keys to ending the war.

This has raised both welcome and unpleasant repercussions, depending on your viewpoint. Putin has performed his own pivot to the Far East. Much of his previous rhetoric has been about creating Russia as a “Eurasia” power. This has been accomplished at the price of burning his bridges with Europe.

Russia will, of course, continue to supply oil and gas into Europe but the Europeans will seek to offset this dependence via the US and recycled Russian resources via China.

Conor Lenihan is a former minister and vice-president of the Skolkovo Foundation