Thursday, January 13, 2005

Putin risks

Here's an interesting article-- Putin's risks--on some of the risks that Putin and Russia run with the moves to consolidate power at the top. It's from AEI.


But the Kremlin's authoritarian project--while deplorable in its own right--carries even greater risks than commonly appreciated. Although officially justified as necessary to "strengthen" state and society, these policies in fact are likely to do the very opposite, destabilizing Russia's politics, economy, and national security. In evaluating the current situation, some leading analysts in Moscow privately spoke last fall of a "GKchP-2 scenario," a reference to the unsuccessful August 1991 hardliner putsch, whose perpetrators sought to prevent the breakup of the Soviet Union but instead brought about its speedy collapse.

The cumulative effect of Putin's re-centralization has been to raise the center of political gravity to the very top at precisely the time when the Russian state will need every available ounce of stability and maneuverability to absorb severe shocks and navigate sharp turns. The regime's course is made even more perilous by its efforts to remove or obscure the road signs of societal feedback, which Russia's increasingly emaciated democratic politics and constrained media are less and less capable of providing.

There's more.

UPDATE: This article would seem to suggest that Russia is primed for the kind of revolution that Georgia and Ukraine have had. The real problem though is that there is no opposition in Russia that is organized and there is no opposition candidate like a Yuschenko to rally around. Putin has been effective in dealing with any opposition in Russia so that there is none really that could serve as the focus for any kind of revolution.

There is also a second problem. Democracy and its philosophical underpinning, liberalism, are bad words in Russia today. Democracy is what the Russians had when they were swindled by privatization and then, as if that weren't enough, effectively rolled again by the collapse of the ruble. After 1998, the year of that financial collapse, the people in Russia, many of them, found themselves worse off than they had been at the end of the Soviet period. (Many had savings in the bank at the time. Those savings were wiped out overnight by the collapse.) All of this happened on democraciy's watch. That fact has served to jade many people's opinion about the desirability of democracy to this day.

The interesting thing for the Ukrainians is that democracy has never really been in play here so it could not be blamed for the financial problems that have occurred in the Ukraine, the smae ones that affected Russia, by the way. So democracy hasn't been a bad word here, fortunately for the Ukrainians.

And there is a third problem. There is a real suspicion of the US most of all, but of the EU too, in Russia today. Many of the reforms that took place in Russia were pushed by advisors from the US, many of whom were linked to the government. And some of them made money on speculation at the same time they were giving their advice.

I wrote this to one of my classes the first summer I was here:

When communism fell, it was natural for the West to look to help to bring some relief to the people. They (we) did this by counseling a series of market reforms to stimulate economic activity which would raise all boats. There was even sincere human feeling in this. (We sent money but it inexplicably--at least from our point of view, but explicably for Soviet-wise observers on this end-- ended up in Swiss bank accounts.) The only way to help the people in the long run was to create economic activity which would create jobs and wealth for those people. So we counseled market reforms and urged the privatization of state assets.

The reasoning for doing this first was the argument of self-interest that is so crucial to all of our institutions in the west and most particularly the United States. The self-interest argument went this way: If you get assets into the hands of people even if those assets only end up in the hands of a few people, those people will take care of them and not do anything with them or with the system to jeopardize those assets. On the contrary, those same people will work to create transparent systems and enforceable laws so that their property will be protected. So get these assets into their hands and the whole system will improve and will even, as an added benefit, move these countries to democracy. (The desire for transparency will do this.) This
is textbook thinking and the answer would get these guys an A in any course at least in modern systems and economics. The problem is that we consider this to be based on universal principles. In fact, this point of view is culture-bound to the West. And Russia is not in the West.

What actually happened is that these oligarchs--the ones who ended up with the property-- as they came to be known, siphoned off the profits of these companies--drained them of value--converted that value to dollars by raiding government accounts of hard currency (a little bribe here and a little bribe there got them dollars in exchange for their rubles) if the company did not generate hard currency in the first place and socked those dollars away in accounts in Switzerland and the US. No movement toward better systems or any movement to better anything. And there was not much value left in these economies to create jobs and stimulate economic activity. (This is changing somewhat now but it is precarious at best.) So the people, who were first impoverished and abused by the party, in the end when the party lost power and the democrats took over, were abused and impoverished by the democrats. Except it turns out that the impoverishment was more thorough and complete under the democrats than had occurred under the communists. And we, in the West, especially the United States, held their coats and nodded our heads while they did it.

Add to this some remnant of the paranoia many Russians still have left from the Cold War and you have a real problem with any US involvement at all in Russia. The same is true to a lesser extent of the EU. But the upshot is that there would be no looking to the West for anything not even moral support if a revolution were in the offing.

So it looks like the grounds are not all there for a repeat of Georgia and Ukraine.


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