Putin and USAID: The Makings of a Grip Too Tight on Power

In September 2012, the Russian government, headed by President Vladimir Putin, mandated that the U.S. Agency for International Development (USAID) cease operations, as their services were no longer needed. USAID began working in Russia in 1992 shortly after the fall of the Soviet Union, and since then USAID-Russia has approved over $2.5 billion in expenditures. Given that the organization has operated in Russia for more than twenty years, its expulsion begs the question: why now? The political motive behind Putin’s action soon became apparent, with the Foreign Ministry shortly thereafter accusing USAID of attempting “to influence political processes, civil society institutions, and elections at various levels, through distribution of grants.”[1] Thus, Putin’s dismissal of USAID is consistent with the Kremlin’s recent tactics of marginalizing NGOs with links to his opposition and to foreign sources of financing. Moreover, the USAID episode fits within a broader framework of Putin’s contempt for democracy, civil society, “ordinary” Russians, and due process.[2] While intended to help consolidate the President’s power, these tactics also ultimately hold the potential to undermine it.

Under Putin, Russia has long practiced a genre of governance labeled “managed democracy” or “competitive authoritarianism,” characterized by questionable electoral processes and minimal accountability. Freedom House currently classifies Russia as “not free”; on a scale from one to seven—with seven being least free—Russia is rated at five and a half.[3] Among its Central and Eastern European (CEE) neighbors, Russia is one of only a handful of nations currently trending away from civil liberties and democracy since the fall of the Berlin Wall. However, the movement away from democratic norms has not been without its opposition. This year especially, President Putin finds himself in an increasingly hostile domestic landscape. Recent protests—directed against election fraud and corruption and calling for an end to the Putin regime—have drawn international attention.

Putin’s response has been to mount a campaign that portrays the discontent as externally generated and to attack the civil society organizations that pose a threat to his political authority. While the Kremlin claims that Russian civil society is “fully mature” and in no need of “external direction,”[4] the non-governmental sector tends to disagree.[5] In July 2012, Putin signed legislation that required NGOs to register as “foreign agents” if a portion of their funding originated from abroad. As a result, these organizations are subjected to government audits that place an undue burden on them. Since funding for prominent democracy and human rights groups such as NGO Memorial, Transparency International, and Golos—an election-monitoring organization which brought to light voting violations and election fraud in December 2011, spurring mass street protests—accounts for about half of USAID’s $50 million budget in Russia, it makes for an easy target.[6] Though Putin’s strategy of starving civil society organizations from external funding in order to solidify his hold on power is arguably shortsighted, the Russian President is right to be wary of the potentially subversive effects of aid to these civil society organizations. Putin is wrong, however, to use the blunt instrument of terminating USAID’s efforts as a means to stifle such subversion, since doing so eliminates a key funding source for other NGOs that provide important social services like health care and humanitarian assistance. In other words, Putin emphasizes USAID’s assistance to political and democratic actors, but fails to properly acknowledge USAID’s support of health, environmental, and economic organizations.

Russia’s tumultuous past has led many Russians to prioritize stability, sometimes over democracy and individual liberty.[7] This explains, in part, why Putin has managed to hold onto power for so long despite his corrupt and anti-democratic tendencies. Since the end of the Cold War, NGOs have filled an important gap left by a government plagued with the economic and social shortcomings characteristic of autocracy. The purpose of USAID-Russia was to assist Russia’s post-Cold War political and economic transition by helping  “the Russian people improve public health and combat infectious diseases, protect the environment, develop a stronger civil society, and modernize their economy.”[8] USAID’s efforts are not entirely motivated by altruism and likely do exhibit the biases of politicized aid; at the same time, the good they have done in Russia cannot be discounted.

In the face of political strife, economic disarray, and social disillusionment, many of the organizations funded in part by USAID have strengthened Russia’s social fabric and provided support to a large number of Russians living in difficult conditions. For example, USAID funded programs dedicated to the eradication of polio and tuberculosis, and information campaigns on HIV/AIDS. Moreover, the organization has provided welfare assistance to over 80,000 children and helped to restructure the electricity sector. Finally, the World Bank and the Russian government enacted considerable judicial reforms based on USAID best practices.[9] Writ large, NGOs, which rely greatly on external funding from USAID, have become key actors in promoting social stability in Russia. The difficulty of disentangling the altruistic and political thrusts of USAID’s Russian initiatives means that Putin’s outright rejection of USAID could have the unintended consequence of making Russians more acutely aware of the costs associated with his quasi-authoritarian rule.

The forced exit of USAID could signal two perilous trends. First, it could signal an attempt by Putin to rally the Russian people against an outside enemy—the resurgence of a confrontational diplomatic strategy. Second, as this article argues, it could reveal that the Putin Administration is running out of options; he is taking steps to reduce democratic mechanisms in order to consolidate and assure his political longevity by attacking foreign-funded civil society organizations. The Kremlin aptly symbolizes this dilemma of all Russian leaders: “it is a fortress behind which the administration protects itself from the wrath of the people it pretends to govern.”[10]  The post-election crackdown on political dissent, characterized by the assault on USAID, recent laws censoring the Internet and restricting freedom of assembly, and the harsh response to the Pussy Riot protests, demonstrates Putin’s willingness to bolster his “fortress.” However, as a consequence of Putin’s strategy, much of Russia’s non-governmental sector has suffered a “body-blow.”[11]Putin’s intent may be to target his opposition, but by antagonizing the United States and ostracizing key NGOs, he may be further unraveling an already-fragile social framework and inflaming “the wrath of the people.” How long can Vladimir Putin remain in office as he continues to burn the candle at both ends: persecuting democracy and undermining social stability?