the place of economics in russian national identitysome protection to the dwindling band of liberal economic man-
agers in his government, ensuring that they kept in control of the
ministries of finance and economic development, and the Central
Bank. However, personnel from the security forces (the siloviki)
formed a powerful bloc in the Putin Administration, and in the
course of the 2000s they managed to tighten their control over
the military industry and energy sectors of the economy. The silo-
viki often wrapped their economic agenda in patriotic clothing,
sometimes appealing to Russian Orthodoxy. An early example
is Vladimir Iakunin, a founding member of Putin’s Ozero dacha
collective who went on to become head of the powerful Russian
Railroads (Russia’s largest employer) and a sponsor of religious
charities (Dawisha 2014: 99). A later entrant is the forty- year old
investment banker and billionaire Konstantin Malofeev, a mon-
archist and Orthodox patriot who came to prominence providing
support for Ukrainian separatists in 2014 (Weaver 2014).
Putin’s first presidential term saw the passage of some impor-
tant new reform legislation, such as cutting personal income tax
to a flat rate of 13 per cent, a new tax code, a land code, a new
labour code and bank deposit insurance. Measures that aroused
public anxiety, such as pension reform and the privatisation of the
electricity monopoly, went ahead, but at a cautious pace. Unlike
in China, where the yuan exchange rate was held down as a tool
to promote export- led growth, the Russian ruble was freely con-
vertible. Limits on capital flows in and out of the country were
progressively lifted, and Russia achieved near- full capital account
convertibility by 2007 (Sutela 2012: 154).
In the early years of his presidency Putin acted quickly and
decisively to restore the ‘power vertical’, reining in the autonomy
that Russia’s regions and especially ethnic republics had seized
in the 1990s. To preserve national unity, the federal government
took steps to redistribute resources from richer to poorer prov-
inces and sought to develop lagging regions such as the North
Caucasus and Russian Far East. In 2003 Putin appointed Dmitrii
Medvedev deputy prime minister in charge of a new programme
of ‘national projects’, signalling the federal government’s concern
with nationwide development goals. In 2005 four projects were
launched to promote the modernisation of farming, health care,