Weekly 4 July 2020

Putin’s referendum victory

Hello! This week our top story is on how Russians voted ‘yes’ in Putin’s constitutional referendum marred by unprecedented levels of electoral fraud. We also look at the political turmoil in neighboring Belarus, and what happens when Russian celebrities fall foul of the ethical standards upheld by Western brands.

Constitutional referendum delivers big win for Putin

The outcome of Russia’s constitutional referendum was exactly as predicted and the stage is now set for Vladimir Putin to remain president through 2036. In the end, neither coronavirus nor an economic crisis was a problem for Kremlin planners, and 77.9 percent of Russians voted in favor of the constitutional changes (an even higher vote share than Putin received in the 2018 presidential election). It was all made possible by a voting process outside of existing electoral law, a divided and inactive opposition, and widespread apathy.

The results

They likely opened the champagne in the Kremlin as the results came in Wednesday evening. Officials surpassed even their own electoral targets set (in February RBC reported (Rus) the Kremlin wanted 60 percent turnout with 70 percent ‘yes’ votes). The final result was not only higher, at 76.7 percent, but 68 percent of the electorate took part, meaning an absolute majority — 58 million of Russia’s 109 million voters — backed the constitutional changes.

  • How did the Kremlin achieve this? The main oddity of the referendum was its unique legal status: a popular vote was not needed to pass the constitutional changes (two-thirds support in parliament would have sufficed), but Putin wanted additional legitimacy for his plans to rule through 2036. The unusual process was christened an ‘all-people vote’, a form of legal innovation that allowed the Kremlin to circumvent the strict norms that usually govern elections and referendums.
  • This paved the way for a huge variety of different electoral frauds. Firstly, voting took place over a week, making normal election monitoring impossible and helping to boost turnout despite the pandemic. Secondly, it allowed intense pressure on voters — officials actively campaigned for a ‘yes’ vote, state pollsters published exit polls while voting was still ongoing, and the first results were announced at 14:30 — seven hours before voting ended. Similarly, normal election law would never have permitted a simple ‘Yes/No’ question to approve 206 constitutional amendments. The final results show the the most falsification in the history of voting in post-Soviet Russia, according to election analysts.
  • The official results contrast with exit polls carried out by opponents of the amendments. In Moscow, they showed 54.9 percent voted ‘no’ (the official figure was 34 percent), and 63.1 percent were against in St. Petersburg (officially, 18 percent).

A divided society

Despite the falsification, independent observers concede that — with the exception of major cities — Russians voted in favor of the changes. And the referendum did not lead to significant street demonstrations. In Moscow, under 500 people turned out Wednesday to protest.

  • The country was split (rus) on the main amendment (‘resetting’ Putin’s presidential term count), according to experts. Denis Volkov at independent pollster Levada Center explained that the Kremlin successfully mobilized half of society, while the opposition was split. Much is explained by a dwindling appetite for protests. If there had been a charismatic organizer, people may have taken to the streets, according to Volkov. But there was no such person. Coronavirus also put people off protesting.
  • Falling standards of living are a key driver of protest in Russia, but lockdown has warped the sensation of an approaching crisis, and state handouts ahead of the referendum (for example, 20,000 rubles ($280) for every child) were an important factor.
  • Despite all this, the main goal of the vote — a new legitimacy for Putin —.was not necessarily achieved. Even before the amendment to ‘reset’ Putin’s term count was announced, 47 percent of Russians said (Rus) the main goal of the constitutional changes was to extend Putin’s rule beyond 2024, and they are unlikely to have been convinced. The current regime may appear durable, but it’s actually “susceptible to rapid changes caused by a series of accidents,” said political scientist Grigory Golosov.

Why the world should care

For many, Putin’s political position looks more secure than ever. There is little to prevent him from ruling through 2036, and it will be easier to ‘win’ elections (Federation Council head Valentina Matvienko has already suggested holding future elections along the lines of the referendum). But this shouldn’t be overstated: Putin’s legitimacy is now more fragile than it has been for two decades, and Russia’s political elite understands this very well.

Belarus heads for political turmoil as election approaches

As Putin puts the pieces in place to remain president through 2036, his Belarussian counterpart Alexander Lukashenko is facing a serious political challenge. Belarus will hold presidential elections on August 9 and, according to surveys, Lukashenko will get only a tiny percentage of the vote. Two of his three main opponents have already been arrested.

  • Lukashenko has been ruling Belarus for 26 years, longer even than Putin has led Russia. To date, he has won elections by combining populism and brutal crackdowns (including the murder of opposition politicians). But now ‘Europe’s last dictator’ is facing a perfect storm. In addition to unhappiness with Lukashenko, Belarus is locked in a conflict with Moscow. Financially dependent on Russia, Belarus is facing an economic disaster. The coronavirus was the latest blow, and empty government coffers forced Lukashenko to become the only ‘Covid-19 dissident’ among European leaders.
  • The Belarussian economy, like its Russian counterpart, has stagnated over the last decade (average GDP growth of 1.1 percent since 2011). But while the Russian authorities have ensured financial stability, Belarus’ external debt has risen (Rus) to 34 percent of GDP. This is the result of failed attempts to revive a Soviet-style planned economy with new industrial equipment purchased in the West. Lukashenko was able to carry out these sorts of economic experiments because of his friendship with Russia: Belarus traditionally received cheap Russian oil and sold it to the West at a large mark-up. However, Lukashenko fell out with the Kremlin last year when he blocked political integration with Russia (this was one scenario to allow Putin to preserve power through 2036) and Belarus lost its oil discount. The Belarusian economy was already in recession when the coronavirus hit.
  • In the past, Lukashenko would have raised the salaries of state employees ahead of an election. But the state’s coffers are empty. And Lukashenko even became a ‘Covid-19 denier’ in a desperate attempt to keep the economy on track. Lukashenko coined the term “coronapsychosis”, and refused to implement a lockdown. “From the outset he said there was no extra money. Maybe this was the truth, but it really angered people,” according to Belarussian political analyst Artyom Shraibman.
  • In the elections, Lukashenko has three main opponents. The first is popular video blogger Sergey Tikhanovsky: he was arrested first. After his detention, his wife, Svetlana, registered as a candidate in his place. The second is Viktor Babariko, the former head of bank Belgazprombank, which is owned by Russia’s state-owned gas giant Gazprom. There is some speculation Babariko may be the Kremlin’s candidate, but Belarussian experts don’t agree. Babariko was arrested in mid-June on embezzlement charges. The third candidate is IT businessman, Vyacheslav Tsepkalo, who was simply removed from the ballot. Tikhanovskaya and Babariko are still in the race, but the electoral commission has a week to find a reason to remove them.
  • It is unclear how Lukashenko plans to get out of this sticky situation. Polling by Belarussian media (there are no independent sociologists in the country) gives Lukashenko no more than 10 percent of the vote. The most popular challenger is Babariko, who managed to get 435,000 signatures in support of his candidacy (about 5 percent of Belarus’ entire population). Even if the frontrunners are removed from the ballot, the protest vote for any candidate other than Lukashenko is likely to be big.

Why the world should care

Minsk has traditionally played Russia and the West off against one another, and the consequences could be dramatic if the political situation in Belarus spins out of control. Lukashenko is a consummate political survivor, but his future has never looked so uncertain.

When Russian celebrities and Western brands collide

The reaction of some Russians to the Black Lives Matter movement has led to Western brands re-thinking their collaborations. Xenophobia and other types of abusive behavior look like they will become more financially risky for Russian celebrities.

  • Last week we wrote about how socialite and former presidential candidate Ksenia Sobchak was dropped as a brand ambassador for German car company Audi after posting repeatedly about BLM protests. According to The Bell’s sources, Sobchak’s Audi contract may have been worth up to $400,000 per year. Sobchak filed a lawsuit against the German media outlet that reported on her posts, but she is unlikely to receive damages. Lawyers told The Bell that this case is a legal precedent: Russian celebrities have never filed lawsuits over the loss of contracts in this way before.
  • A major case of a brand ambassador being ditched took place earlier this year when Pampers (owned by Procter & Gamble) and J7 (owned by PepsiCo) dropped TV host and blogger Regina Todorenko. Forbes estimated (Rus) Todorenko might lose up to $80,000 as a result of her comments about domestic abuse.
  • The response of Western companies to such transgressions in recent years has been mixed. When tennis star Maria Sharapova admitted to doping in 2016, Nike immediately backed out of a $70 million collaboration. But, Nike didn’t react in 2018 when its local brand ambassador, footballer Alexander Kokorin, was jailed for two drunken fights in downtown Moscow. During the fights (caught on security cameras), and in court, Kokorin wore Nike clothes. It’s unclear if Kokorin still has a partnership with the brand, but he recently posted a photo of himself wearing Nike’s new premium sneakers.
  • Fashion designer Ulyana Sergeenko and businesswoman Miroslava Duma faced a backlash in 2018 over casual use of racist language. The incident occurred when Duma posted an invitation from Sergeenko to a fashion show in Paris that used lyrics from a Kanye West song with the word “niggas”. Duma was subsequently removed from the board of an international publication about children, The Tod, which she helped set-up. Sergeenko gave a video interview (Rus) in February about the events in which she said she became an outcast as a result of the outcry. “Before we lived as if we were at Christ’s bosom, but since we have had to count our money, and take responsibility.”
  • At least some of this comes down to cultural difference. “Russia is an abusive country: here companies behave vulgarly, and are less politically correct,” said Andrey Amlinsky, the former creative director of agency BBDO and owner of the advertising firm Creative Strategies. In 2004, Amlinsky authored one of the best known slogans in Russian advertising — ‘I suck for kopecks’ — that was used to promote LG vacuum cleaners.

Why the world should care

There is unlikely to be a sudden end to tone deaf pronouncements by Russian celebrities that cause outrage in the West. But Russian influencers, bloggers and sports stars are gradually realising they risk financial losses by falling foul of Western ethical standards.