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26 November 2015

The trucker: from pro-Putin electorate to “the fifth column”

Who is to blame and what to do? 

Truckers’ protests have gripped Russia. After the physicians' protests, they have become yet another challenge for Moscow. The Kremlin, however, intends to respond to this even greater socially and politically dangerous phenomenon in the same way: by distancing itself from it and undermining the significance of the phenomenon publicly, while refusing to yield significantly in terms of the decisions already taken. Just as with the physician protests, in the eyes of the Kremlin, it is not even a social protest, but a corporative protest in the eyes. In it, the Kremlin identifies the “imprint” of external forces aimed at disrupting the situation in the country.

Who is a trucker in the eyes of the Kremlin? Frist of all, he is the owner of the small business and perhaps not necessarily well-groomed. One must say that both the authorities and Russian society have a rather negative attitude towards businesses, characterized by a lack of trust. “Businessman” is virtually synonymous with the term “crook.” The Levada-Center conducted a survey on the image of the Russian entrepreneur in the eyes of Russians in 2010: 51% of respondents stated that their main trait was “greed”, 41% considered them prone to cheating and machination. This image is radically different from the image of an entrepreneur in the West where they are attributed rather positive characteristics. Truckers are fortunate only in that attitudes towards small businesses are far more forgiving than to those towards large corporations. That being said, entrepreneurs make up about 1% of the economically active population (15-72 years of age).

Thus business, as a subject of political life, exists only at the level of big companies which have forged avenues for dialogue with the authorities. Small and medium-sized enterprises are in fact a “statistical error” whose interests can be easily disregarded. And the individual entrepreneurs, who make up the majority of those that have taken to the streets, pose no threat in the eyes of the authorities; not least because there are few of them and they act individually. No wonder that the Communist Party of the Russian Federation (CPRF) refers to truckers as “petty bourgeois” in their articles and not as proletarians while practically refusing to identify with them politically, and yet it speaks in favor of supporting their claims… just in case.

That is why the authorities also allow themselves to speak depreciatingly about truckers. The Federal Road Transport Agency accused them of trying to blackmail the state and labeled protesters “shady individual carriers” who, according to the agency, control nearly 20% of the market. Dmitry Peskov, the President’s spokesman, urged people not to dramatize the situation and advised addressing questions to the government. Maksim Sokolov, the head of the Ministry of Transport, said in his interview for Russia 24 that the actions of truckers against the imposition of tolls for heavy vehicles using federal highways are an attempt by business to influence decisions taken long ago.

The authorities see the problem not through a socio-political prism, but rather a monetary relations one as a trucker is a source of income. The government began to consider imposing tolls on heavy goods vehicles using federal highways in 2010, against the backdrop of the 2009-2010 crisis. It was decided (and Vladimir Putin as head of the state was dealing with it personally) that new sources of revenue will be used to bolster the newly recreated Federal Road Fund. There was also a lack of budgetary funds at the time, while the problem of roads remained one of the main fundamental infrastructural obstacles to the country’s economic development. However, a swift decision was impossible; amendments to the Budget Code were only adopted in 2011 and the toll collection system was due to be launched in 2013. However, in late 2012 Putin – by that time already president – decided to postpone the launch until late 2014 as the system was totally unprepared.

To be more precise, it was unclear at that moment who would manage it and how. Clarity emerged as late as the summer of 2014. Thus, in order to accommodate new players, the imposition of tolls was again postponed for a further year - until November 2015. Rostec owned by Sergey Chemezov, who himself initiated the establishment of RT-Invest Transport Systems Ltd (RTITS), aspired to form the management of the toll collection system in summer 2014. RTITS is 50.01% owned by Rostec and RT-Invest (25.01% of which belongs to the same Rostec and 74.99% - to Tsaritsin capital Ltd. owned by Andrey Shipelov and Vadim Agafonov). Chemezov, at the time, argued that: given the policy of import substitution, the toll collection system should be built using only domestic technologies and components. He believed this to be quite a convincing argument for his company RTITS to be vested with the function of system operator, without the need for a tender, which indeed it was. However, Rostec subsequently sold a stake to Igor - the son of a businessman and friend of Putin Arkady Rotenberg – who increased his stake from 25% to 50%. Currently RTITS is controlled by Rotenberg, and Rostec is only indirectly involved. Gazprombank earmarked 27 billion rubles for the implementation of the RTITS project. 

An anonymous employee of Rostec told Vedomosti last year that the corporation simply did not want to be involved in the project, which is somewhat hard to believe. In all probability, Chemezov’s structures have been hit hard by the crisis and it became a question of whether he could handle the project which requires investment. Besides, Chemezov  possesses many assets, but he does not have his own bank whereas, contrarily, the Rotenbergs have a lot of opportunities to execute public procurement contracts and they have far fewer problems with financing. Even more so, since an advisor (formerly vice-chairman) to Gazprombank, which gave RTITS money, is Roman Rotenberg, Boris Rotenberg’s son and Arkady Rotenberg’s brother.

What we are left with is a classic Putin scheme: a solution to a nationally important administrative task (boosting the Road Fund and improving road infrastructure more generally) is aligned with the corporate interests of those close to Putin. On the one hand, it is a socio-political burden for the businessmen, but on the other – it is a way of functioning thanks to access to preferential financial resources and public procurement. Putin’s motives are entirely transparent: it seems to him that such an important task should be entrusted to the responsible elite; they may be stealing, but one can count on them – or so he believes.

The question as to “how” (to build a toll collection system) appears to be secondary here. It was explained to Putin that Russian truckers are “spongers” who ruin national highways with their trucks, but do not want to pay for the maintenance of which, unlike their fellow, foreign drivers. Whereas truckers themselves are, on the contrary, prepared to pay, but in accordance with transparently calculated tariffs (groundless tariffs are one of the main pretensions to the Ministry of Transport) and via a system which works; the Plato toll collection system has, so far, often failed. 

Finally, truckers are perceived by the authorities as a resource which can be used to disrupt the situation in the country in the interests of so-called external forces either directly or indirectly. Drivers have to make excuses, swearing their allegiance to Vladimir Putin and reaffirming that they are not the fifth column. However, according to Putin, truckers do not represent the pro-governmental majority, but they actually oppose him, since the president is convinced that the people favor stability. In summary, it turns out that the outlook appears as follows: crooks who ruin roads with their trucks and do not want to pay tolls prevent the country from rising from its knees and strive to blackmail the authorities, acting (consciously or not) in the interests of the US State Dept.

The answer to the question “who is to blame?” (as understood by the authorities) is clear whereas the answer to the question “what should be done?” – not quite so clear. The authorities have made, and are prepared to make, further minor concessions. However, at the moment, they have no intention to abandon tolls entirely. Thus, pressure will be exerted. Milder or tougher methods will be implemented precisely: health professionals could be surreptitiously pressured via the healthcare system, whereas truckers will be squeezed via the apparatus of repression. The consolidation of transport companies and a sharp reduction in the number of individual entrepreneurs is inevitable as a consequence. Haulage will become more expensive, and it will be paid for by Russians, who face a 1.5% increase in inflation, according to estimates by Herman Gref, while television reports will not place the blame on the authorities, but on “greedy businessmen.” The latter will be given a public roasting by the Kremlin for the rise in prices (whilst instructing the Prosecutor’s office and the Federal Antimonopoly Service to check price lists, which has happened a good many times already). Entrepreneurs have nothing to count on under the current system and this is one of the systemic reasons why Russia is sliding towards authoritarianism. And, at the moment, there is no one in a position to protest against it. 

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