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24.12.07
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Reading Non-Fiction
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By Felix Goryunov
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During gloomy times, people are more willing to engage in guesswork. With the U.S. economy seemingly headed for a recession, both bankers and politicians are infected with an overwhelming feeling of uncertainty. As international investors shop around for a less vulnerable country in which to invest, politicians are warning that Russia, recently considered worth a second look, is on the verge of a totalitarian doomsday.
Three such warnings were published recently in a report from Center for Strategic and International Studies in Washington. The report would have read better than any Tom Clancy political thriller were it not for the fact that, despite a lot of detailed fiction about Russia’s domestic politics, its conclusion is outstandingly mediocre: Russia will become a democracy in no sooner than 10 years. And until that time, a lot of dreadful political and economic crises will roll over the country.
It seems fairly clear that the writers of the report started the report with a preconceived conclusion, which is hardly surprising, as Russia’s political enigmas, real or imagined, have always tempted Kremlin watchers in Washington.
Certainly, a political scientist would gain quite the reputation if he could correctly guess President Vladimir Putin’s next move or the mercurial ambitions of members of his inner circle. It seems, however, that everything happening in Russia must be considered not in terms of transient details, but with a long-term perspective. This is the only way to provide relevance to the country’s past, present and future as well as to its role and place in the contemporary world. Any top politician is more of a slave to national priorities than to current circumstances. A wise politician’s actions are hopefully dictated by the course chosen by the nation within a certain time frame. In this context, Russia is no exception and its development is predetermined by geopolitical, politico-economic, societal and political demands.
The core geopolitical demand for today’s Russia is deeper integration into the world economy. The reassertion of Russia’s stance as a great power and improvements in the standard of living are subservient goals to the path towards capitalist development Russia chose 16 years ago. This decision ended the competition between the two world systems – capitalism and socialism – that guided the history of mankind after World War II and the Cold War arms race.
The average person in the West, particularly in the United States, believes that the U.S. won the Cold War and that the immediate result of that victory was the disintegration of the Soviet Union and the end of the Warsaw pact. In fact, the primary cause for the collapse of the Soviet Union and of socialist regimes in Eastern Europe had a clear-cut domestic nature. The people living under “real socialism” were fed up with regimes that found resources to send men into space, but failed to provide the population with the most basic necessities. People wanted a way of life that was no worse than the one enjoyed in the West. They strived for a system of free enterprise and democratic freedoms. They disapproved of their countries’ autarchic economies and stood for their integration into the world market. “The real socialism” was defeated by grassroots political movements that denounced economic inefficiency and totalitarian political governance.
Every Kremlinologist knows how and why Russia failed to adapt its well developed industrial and R&D potential to the requirements of the world market in the 1990s. It is also well known that the market economy and democratic institutions were established in Russia from above without first achieving public consent. And few Kremlin watchers gave a damn when the first democratically elected Russian legislature in 1993 made a modest attempt to stop the economic and social degradation, only to be shelled by tanks on the orders of Boris Yeltsin.
Dragged into the Chechen war, robbed of her most lucrative public assets in dubious privatization schemes and brought to the brink of financial disaster by wayward financial policies, Russia in the late 1990s was not a country with which anyone wanted to do serious business.
It must also be remembered now that Russian democracy was managed by Yeltsin’s “Family” in alliance with a group of business tycoons who enriched themselves under his regime. Given this situation, it is no wonder that adult Russians continue to shudder upon hearing the word “democracy.” In the collective memory, it is associated with personal deprivation, the sway of graft and abuse over political power alongside a total disregard for the drastic social impact of economic policies perpetrated by the political clan in power. Such were the seeds of democracy planted in Russia’s political soil with the benign approval of the West.
Looking back at the first years of the 21st century, during which Russia’s economy started to overcome the havoc created by early reformers, it should be remembered that one of the first things Putin’s team did was create an institutional framework for the market economy. The tax, customs and land reforms, and a few other business-friendly laws along with the unification of regional laws and federal legislation contributed to an upheaval in the economy. To a large extent, thanks to these policies, Russia’s economy accelerated in a sustainable pattern simply by utilizing the production capacities created during the Soviet era.
According to the latest World Bank report on productivity growth in Russia, the efficiency of labor and capital in Russia between 1999 and 2005 grew at a rate of 5.8 percent, and this has been the driving force behind the overall GDP growth of 6.5 percent. This surge in productivity levels, though still lower than the average for the European Union, propelled output growth, driving up living standards. Russia’s real income per capita measured by purchasing power parity (PPP) rose from $5,964 in 1998 to $9,650 in 2005, the Bank reports. No less exemplary is the latest report of the International Monetary Fund (IMF), on whose neo-liberal advice Yeltsin’s appointees bankrupted state-owned enterprises and research laboratories in the early 1990s. Now the IMF describes Russia’s economic performance as no less exceptional than that of post-World War II Germany or Japan. The IMF says that Russia’s contribution to world growth in terms of PPP, will be half as large as that of the entire European Union and much higher than Japan’s or Brazil’s.
The long cherished dream of the average Russian for a better life is at last being fulfilled after eight years of infused stability. So far, President Putin is delivering on his promise to make Russia a prosperous country. The Russian people now enjoy the pleasures of a consumer society and believe they might live better if the Kremlin continues to follow the present course. They also freely travel abroad and see that their country is regaining the international respect lost after the collapse of the Soviet Union. These and other positive changes lie behind the average Russian’s support for the current president. And they are reasonably expected to support Putin’s appointee during presidential elections next March, once they are convinced that Dmitry Medvedev will continue the course.
To be sure, every politically conscious Russian is also aware of the Kremlin’s social and political failures, including the shocking disparity in incomes between the rich and the poor, the corruption in government and law-enforcement agencies, rigged court decisions, intolerance for dissidents, and the familiar brain-washing of viewers by major TV channels. There are also widespread doubts about various aspects of the government’s economic and social policies and budget priorities. The Russian business community believes that the economy’s institutional base, as well as the taxation of businesses, requires further liberalization.
These drawbacks of Russia’s politico-economic system are addressed by the media, by pro-government and opposition parties and public bodies, whether they are represented in the Duma or not. These concerns are undoubtedly known in the upper echelons of power, although they are not always shared or resolved, and this is the main problem with democracy in Russia: our society has not yet created the mechanisms that would make those governing accountable to the governed.
But this is not only Russia’s problem. Many nations that pride themselves on their democratic traditions sometimes fail to prevent their rulers from pursuing foolhardy policies at home and abroad. There is a lot of non-fiction literature to substantiate the point.
Felix Goryunov is the editor of www.rusbizconf.com, an English-language website covering Russia’s economy and investment opportunities. |
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