Oligarchs out, 'siloviki' in? Why Russia's foreign policy is hardening.

Western sanctions on Russia have mostly targeted business elites close to President Vladimir Putin. But experts say the military-security establishment, or siloviki, have Putin's ear now.

The West's response to Russia's alleged military aid to Ukraine's rebels has been based on the idea that the biggest influence in Russian President Vladimir Putin's inner circle are the so-called "oligarchs." Hurt the business elite that stand beside Mr. Putin, goes the theory, and you pressure the Russian president himself.

And the oligarchs are reportedly hurting, as Western sanctions – given extra bite by plummeting oil prices – have eaten away at their fortunes. So why are the Ukrainian rebels still pushing their offensive and talking of building a 100,000-strong reserve army to bring the fight to Kiev?

The reason, according to some accounts, is that it is not the oligarchs who hold Putin's ear now. Rather, it is Russia's military-security establishment, collectively known as the siloviki, who are shaping the Kremlin's foreign policy.

"The role of what we call the defense-industrial complex is rising rapidly in Russian society," says Alexander Golts, an independent military expert. "It's not just the armed forces, but also the [80,000 strong] interior troops, the Federal Security Service [FSB], police, and other security organizations. The key narrative of the siloviki, that Russia is surrounded by enemies and must defend itself from external aggression and internal subversion, has become the main theme on nightly TV broadcasts."

A siege mentality?

The siloviki have been using the deepening chill between Russia and the West over the past decade to gobble an ever-greater share of the national budget, far more access to the media and vastly increased clout in the Kremlin corridors of power. Amid a surge in patriotic sentiment since the Russian army's bloodless seizure of Crimea last March, some polls suggest the military's public popularity has risen by as much as 10 times in the past decade.

The group's ranks include current FSB chief Alexander Bortnikov, a career KGB officer, and the head of the powerful Interior Ministry, Vladimir Kolokoltsev, who controls the country's police forces as well as the 80,000-strong interior troops – a virtual domestic army with its own artillery, armored forces, and air support. Perhaps Russia's best-known silovik is Defense Minster Sergei Shoigu, who, aside from Putin himself, is one of Russia's few genuinely popular public officials. Mr. Shoigu is well-regarded largely for his competent management of the Ministry of Emergency Situations – Russia's version of FEMA – which he headed from the early 1990's until 2012.

Being key cogs in the Kremlin's bureaucracy, the siloviki speak in "officialese" and give few hints as to what their personal politics might be. But leading Russian hawks, including members of Mr. Putin's inner circle, regularly express views in the mainstream media that might have been considered marginal just a few years ago.

For example, Nikolai Patrushev, former chief of the FSB and current secretary of the Kremlin Security Council, recently gave an extended interview to the government newspaper Rossiskaya Gazeta, in which he claimed that the West had "dusted off" its old blueprint for destroying the USSR and was actively applying it against Putin's Russia.

"Putin these days surrounds himself with the commanders of state structures, and they bring this mentality of a beleaguered nation that must defend itself at any cost," says Alexander Konovalov, president of the independent Institute for Strategic Assessments in Moscow.

Experts say Putin probably believes that the West is out to overthrow him, perhaps with a "colored revolution" like the one that unseated Ukrainian President Viktor Yanukovych almost a year ago. They say Putin is ramping up internal security forces and granting them broader powers to track down and squelch subversion.

"Our government is worried. Putin knows that internal troubles can blow up in Russia very quickly," says Alexei Mukhin, director of the independent Center of Political Information in Moscow. "A lot of attention is being given to police reform, strengthening security systems, with the goal of nipping revolution in the bud."

Waxing power

The siloviki's growing power and influence is evident from the Kremlin's budget. Russia's post-cold war rearmament program began nearly a decade ago, but went into high gear after Vladimir Putin returned to the Kremlin in 2012 for an unprecedented third term as president. This year Russia's military budget is the equivalent of $80 billion, a 30 percent increase over last year.

Moreover, Putin has exempted the defense sector from the across-the-board 10 percent cut in government spending ordered amid the current economic crisis.

The increasing allocations to the military have worried Russia's liberals, even those allied with Putin. Former Finance Minister Alexei Kudrin, for example, resigned in 2011 over the uncontrollable growth of military budgets. Mr. Kudrin and other liberals continue to criticize the expanding military budget, without success.

"There is a growing number of people dependent on the defense-industrial complex, and they are Putin's core constituency. With their families, they number about 10 million people, strategically placed, and that's a really important factor here," says Mr. Golts. "Taking care of them is probably more important than the stated goals of rearmament and modernizing the military, which are probably largely unattainable anyway. This definitely plays a role in skewing Russian politics" toward more militarist and nationalist viewpoints.

"This is not so much about the money, as it is about politics," says Mr. Konovalov. And the siloviki offer Putin a direct defense against political threats. "Putin knows the policies he's pursuing are alienating him from the big business interests he was formerly close to. At some point he's got to be worried about the security of his power, and so it's not an accident that he keeps the siloviki close to him."