Russian President Vladimir Putin has been able to build a sustainable authoritarian state, with its economy surviving the shocks of a full-scale war and the following economic sanctions.
The key to Putin's success is a team of talented liberal economists who run the state's monetary and fiscal policy.
They have reformed Russia's economy and financial sector and allowed the country to weather several major crises. Some of them have been recognized as the world's best.
Many of them have repeatedly paid lip service to liberal values and democracy.
Yet, the so-called liberals were instrumental in bringing Putin to power. Now, they play a vital role in keeping Putin's Russia afloat.
Katie Marie Davies
The full-scale invasion of Ukraine became a watershed moment for many. Some of the liberal economists resigned and left Russia, while others kept their jobs, with their supporters claiming that they were not morally responsible for Putin's crimes.
"Financially, (those who kept their jobs) are enabling the war," Ukrainian political analyst Volodymyr Fesenko told the Kyiv Independent. "Some people kill, and others facilitate the work of those who kill."
Putin's privatization czar
One of the heavyweights who propelled Putin into office in the 1990s was Anatoly Chubais.
He got acquainted with Putin when both of them worked at the Saint Petersburg city government in 1990-1991.
When Chubais was the head of Russia's state property committee and a deputy prime minister in the 1990s, he was in charge of privatization.
The reform was controversial and unpopular, with critics accusing the government of rigging privatization auctions. At the same time, Chubais' privatization became one of the key economic reforms that resulted in Russia's transition to a market economy and stable economic growth in the late 1990s and early 2000s.
Chubais, who was President Boris Yeltsin's chief of staff in 1996-1997, facilitated Putin's appointment to the presidential administration, according to Yeltsin's son-in-law Valentin Yumashev, who succeeded Chubais as the chief of staff.
Putin became a deputy head of Yeltsin's property management department in 1996 and one of Yeltsin's deputy chiefs of staff in 1997.
Katie Marie Davies
In 1998-2008, Chubais spearheaded another major economic reform. As the CEO of Russia's electric power monopoly, the Unified Energy System of Russia, he privatized part of the monopoly's assets and created an electricity market in Russia.
He later became Putin's envoy to international organizations.
In March 2022, Chubais stepped down from this position and left Russia. Bloomberg reported that he had resigned due to his opposition to the war against Ukraine.
Chubais hinted at his position, saying that his ally, the late liberal politician Yegor Gaidar, "understood the strategic risks (of Putin's regime) better than I did and I was wrong."
Putin's finance guru
Like Chubais, Alexei Kudrin also worked with Putin back in Saint Petersburg.
In 1996, Kudrin moved to Moscow and became the head of the presidential administration's financial audit unit.
Together with Chubais, Kudrin helped Putin to get an appointment at the presidential administration, according to Yumashev. Putin became Kudrin's successor as head of the financial audit unit in 1997.
Putin repaid the favor by appointing Kudrin as his first finance minister in 2000. He held the job until 2011.
Under Kudrin, the Russian government repaid most of its foreign debt. In 2010, he won the Finance Minister of the Year award from the London-based Euromoney magazine.
Oleg Sukhov
Kudrin was the only member of Putin's team who supported the 2011 protests against rigged parliamentary elections and spoke at one of the rallies.
However, this did not prevent Kudrin from rejoining Putin's team as head of the Accounts Chamber in 2018.
He stepped down from the post during Russia's full-scale invasion of Ukraine in November 2022 but did not publicly link his resignation to the war.
In December 2022, he became a corporate development advisor at Yandex, which was once one of Russia's liberal tech startups but has become a key pillar of Russia's digital dictatorship.
Another liberal on Putin's team, Arkady Dvorkovich, hinted that he was against Russia's invasion in March 2022. He said that "wars are the worst things one might face in life, including this war" and that his "thoughts are with Ukrainian civilians."
Dvorkovich, a former deputy prime minister and current head of the International Chess Federation, also stepped down as chairman of the Skolkovo Foundation, a state-run high-tech hub.
Later he backtracked, saying that he was "proud of Russian soldiers' courage."
Putin's banker
German Gref also got acquainted with Putin when he worked with him at the Saint Petersburg city government in the 1990s.
Putin appointed him as economy minister in 2000, and he held the job until 2007. Gref has been praised for his performance as minister and his commitment to liberal reforms.
Since 2007, Gref has been the CEO of Russia's largest state-owned bank Sberbank. He has transformed Sberbank from an obsolete Soviet-era state monopoly into one of the world's technologically advanced banks.
One month before Russia launched its full-scale invasion against Ukraine, Gref led a team of confidants to warn Putin about disastrous economic consequences if tensions over Ukraine escalated further, the Financial Times reported in December 2022.
However, Gref and the other confidants were "too timid" to directly tell Putin that he should not launch a war, according to the Financial Times.
After the invasion began, Gref "was completely bereft, in a state of total shock," the Financial Times reported.
However, Gref remains in his post 20 months into the full-scale invasion.
Putin's central banker
Elvira Nabiullina, a member of Gref's team, is yet another bulwark of Putin's regime.
She was Gref's successor as economy minister in 2007-2012 and has led Russia's central bank since 2013.
Nabiullina has won praise worldwide for her sound monetary policy.
Despite predictions of an economic collapse as a result of a lengthy war and international sanctions, her policy helped the Russian economy to weather the storm in 2014, when Russia invaded Ukraine and occupied Crimea, and later in 2022 when Russia launched a full-scale assault.
Nabiullina was named the central banker of the year by Euromoney magazine in 2015 and the U.K.'s Banker magazine in 2017.
Along with Gref, Nabiullina was also among the confidants who warned Putin of the disastrous economic consequences of an escalation in Ukraine, according to the Financial Times.
Similarly to Gref, she decided not to resign when Russia launched its full-scale invasion of Ukraine.
Katie Marie Davies
Economic success
Putin's economists, including Gref and Nabiullina, performed much better during Russia's full-scale invasion of Ukraine than the siloviki – the army and intelligence services, analysts say.
"In the conditions of stress, liberals and technocrats performed successfully," Sergei Sazonov, a Russian-born political philosopher at New York University, told the Kyiv Independent. "And the (siloviki) turned out to be a failure."
Moreover, Putin's liberals have been given a lot of autonomy to pursue their policies, in contrast with the tightly controlled military and security sector.
"Putin gives autonomy to economists because they don't have any tools to overthrow him," Sazonov argued. "And where there are such tools, there is no autonomy."
Among the siloviki, Putin values personal loyalty more than competence, he added.
Are economists responsible for war?
One of the justifications used by supporters of Putin's liberal team is that, by guaranteeing economic and financial stability, they are supposedly aiming to help the Russian population, not Putin's war machine.
Sazonov believes that Putin's liberal economists should not be vilified for their efforts to help the Russian economy survive and develop.
Russian political analyst Dmitry Oreshkin said that there is no simple answer to the question of moral responsibility.
He argued, however, that the liberal economists who remain in their jobs back Putin's regime, and "you can't support Putin's regime from a moral standpoint."
Fesenko said that "they must be definitely held morally and politically responsible."
"They hold top government jobs and are part of Putin's team," he added. "They might not have supported the war, but they haven't condemned it either."
Fesenko also said that Putin's liberals "are working to keep financial stability and mitigate the impact of Western sanctions."
One of the arguments against Putin's liberal economists is that their support for Russia's economy allows the Kremlin to finance its war of aggression.
Sazonov argued that military expenses would be financed anyway, regardless of whether the liberal economists helped Russia's economy stay afloat or not. If the economy shrinks, resources will just be redistributed from the civilian sector to the military one, he said.
He compared Russia to North Korea, where extreme poverty coexists with an oversized military sector.
But Oreshkin said that if Putin's liberal team resigned, a severe economic crisis might take place. It would have an impact since "the less money you have, the more difficult it is to wage war," he added.
"Although, I don't know if this would play a decisive role and put an end to Russia's aggression," he said.
Some of Putin's liberals have already been held politically responsible for the war by the West, with sanctions imposed against Nabiullina, Gref, and Kudrin.
Criminal responsibility is more complex.
Oreshkin and Fesenko said that a court should determine whether Putin's liberal economists should be held criminally responsible for their role in Putin's administration.
"It's necessary to find out where legal responsibility ends and moral responsibility begins," Oreshkin said.
Oreshkin and Sazonov said they personally believe there is no crime in their actions, while Fesenko believes that "criminal responsibility is possible."
Fesenko referred to trials against Nazi economists as an example.
Walter Funk, Nazi Germany's economy minister and central bank chief during World War II, was sentenced to life in prison for war crimes at the Nuremberg trial in 1946 and was later released on health grounds.
The situation with Hjalmar Schacht, who ran Germany's economy and central bank before the war, was more difficult.
Although he helped Hitler come to power and financed Germany's preparation for the war, he was acquitted in Nuremberg in 1946. He was convicted at a German denazification trial in 1947, but the verdict was later overturned.
Putin's gray cardinal
The issue of both criminal and moral responsibility is more clear in other cases.
One of Putin's liberals, Sergei Kiriyenko, has gone much further than others in his support for Putin's regime.
Kiriyenko served as prime minister in 1998, when Yeltsin appointed Putin as head of the Federal Security Service (FSB). He also used to be an ally of liberal politician Boris Nemtsov, who later became one of Putin's main opponents and was killed in front of the Kremlin in 2015.
"Nemtsov was killed in his conflict with Putin, and Kiriyenko, on the contrary, became part of (Putin's) system," Oreshkin said. "Here, there's no doubt about his legal responsibility (for the Kremlin's policy)."
Despite his supposedly liberal credentials, Kiriyenko chose a different path.
In 2016, Kiriyenko became Putin's first deputy chief of staff in charge of Russia's whole domestic policy – a crucial job previously held by the Kremlin's gray cardinal Vladislav Surkov.
In this capacity, Kiriyenko micro-managed the Kremlin's crackdown on the opposition and independent media and orchestrated Putin's rigged re-election in 2018 and the falsified referendum on effectively making him president for life in 2020.
In 2020, the EU and UK sanctioned Kiriyenko when evidence emerged that the Kremlin was responsible for the assassination attempt on opposition leader Alexei Navalny.
Days before the full-scale invasion, Kiriyenko was sanctioned by the U.S. Soon, Kiriyenko became responsible for expanding Russia's bureaucracy to the occupied regions of Ukraine.
He visited the occupied city of Mariupol in May 2022 and Kherson when it was still under Russian occupation in June 2022.
In October 2022, Kiriyenko said at a forum that Russia would win if the war against Ukraine became a "people's war." In a style mimicking Russia's anti-liberal hardliners, Kiriyenko said that NATO had launched a war against Russia to liquidate it as a sovereign state.
But even if some of Putin's liberals are criminally responsible, they may still get away with what they have done.
"The crucial issue is whether it will be possible to hold them accountable (at all)," Fesenko said.
Note from the author:
Hello! My name is Oleg Sukhov, the guy who wrote this piece for you.
I was born in Russia and moved to Ukraine in 2014 because I couldn't stand the suffocating atmosphere of that totalitarian country. I used to think it might be possible to transform Russia into a liberal Western-oriented country. Now it's clear that it's a lost cause.
But at least I can atone for the crimes of my homeland by exposing its barbaric aggression against Ukraine and providing objective and independent coverage of what is going on there. I'm also trying to contribute to Ukraine's transformation into a full-fledged Western liberal democracy strong enough to defeat Russia.
Our publication needs help from every one of you — support Ukrainian wartime journalism, become a member of the Kyiv Independent.
