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22.02.2012. Russia Lucky Again?

Russia has been fantastically lucky in its relations with the foreign world in the past ten or twelve years. The new industrial revolution in Asia has triggered a long-term increase in the demand for top items of Russian exports: oil, minerals, power- and water-intensive products, and foodstuffs. Russia’s traditional rivals in the West have weakened. China is trying hard not to antagonize Russia, while keeping it on its side amid the mounting competition with the USA. Russia, which for centuries was built around the national idea of defense against external enemy, has found itself in a situation where nobody threatens it. This situation is so unique that challenges country’s national identity. External threats have to be invented now, and this is increasingly difficult to do.

This streak of luck was facilitated by Russia’s pragmatic and prudent foreign policy, though somewhat old-fashioned, in the spirit of the 19th century. Yet Russia has come through again: the world is revisiting geopolitical history on a new round and, as a result, Russia weighs far more geopolitically than its economy would suggest.

Inside the country, the situation has been far more alarming until recently, with a noticeable increase in the rift between the authorities and society, especially its active educated segment.

There were practically no people in government or anywhere close to it that would represent the battered and modified, but traditionally powerful intellectual class, the Russian intelligentsia. It has been ignored.

Part of the intelligentsia began to develop something like hatred towards the ruling class. There emerged sentiments reminiscent of 1989-1991 – “The worse for the authorities the better.”  Bourgeois quarters adapted themselves to the new conditions, but were angry with persistent hostile takeovers and corruption. Active well-educated young people – a generation that grew up after the collapse of the USSR – had no social mobility opportunities. The ruling class, noticeably half-Soviet, was aesthetically and politically alien to them. The emigration of the best of the nation was gaining momentum.

The rift was further widening due to the alienation of the masses, who got increasingly irritated at the corrupted bureaucracy and growing social inequality and injustice. Yet the bulk of the population continued to enjoy modest consumerism in the conditions of personal freedom.

The thieving bureaucracy and its political representatives could not make a solid support for the government. There emerged a situation where the authorities, in case of a crisis, would have no reserve among the elite, which repeatedly rescued them in the 1990s.

Meanwhile, the economic vector pointed to social problems, caused both by the worsening of the world economic situation and increasingly de-modernized Russian economy, a low level of savings and investment, and excessive social and defense commitments.

Last autumn, the situation seemed frightening, even though Russian society en masse was still relaxing after 70 years of Soviet hardships and the subsequent decade of revolutions. Also, there was no obvious social demand for reforms.

The most probable post-election scenarios were “stagnation minus” or “stagnation plus” that suggested prevailing degradation or modest growth. Neither would cope with the increasing challenges. The experts whose opinions I value and I personally were apprehensive that in two or three years the country would crack once again, as discontent at the top would merge with the discontent at the bottom, and off it would go…

This is where Russia had another stroke of luck. At first, the president-premier reshuffle caused a feeling of humiliation with a significant part of society. Dmitry Medvedev’s quitting the top post lost the liberal quarters the fig leaf they could use to cover their unwillingness to demand changes and appeasement with the turbid talk about modernization.

Against this background, a massive parliamentary election fraud became particularly intolerable. It provoked large-scale protests by economic and intellectual elites and the intelligentsia. But those protests began before the broad public awakened.

The authorities who had realized the need for reforms before and had been preparing for them (see Medvedev’s statements), but had been very reluctant to get them started (acting along the lines “You may go farther and fare worse”, or “It’s easy to start but it’s difficult to come to a stop”), had to announce them eventually. Putin’s and Medvedev’s latest articles contain almost all of the opposition’s demands. Of course, the slogans “down with Putin” or “annul election results” are missing in Vladimir Putin’s articles.

Should I believe in the possibility of elegant plots, I would assume some powers-that-be had masterminded the protests by the Putin-Medvedev reshuffle and election fraud, in order to push reforms. Reforms were necessary; they were being prepared anyway, and they were even becoming overdue. However, it would be too fine a theory.

Considering that the protesters in Bolotnaya Square and Sakharov Avenue are called U.S. agents, one might assume in journalistic fervor that the Americans decided to help Russia at last. But I do not overestimate the readiness of that occasionally altruistic nation to render assistance to us. The USA has no time for Russia at present.

I believe many of the election promises will be kept, though not all, because there is no – even if relatively – reasonable alternative to the course for reforms in the present situation or in the future.

A clampdown will only worsen problems. And I do not see any unrealistic radicals within the ruling group. There was a possibility that stagnation would continue, but the protests decreased it considerably. The country and society should be thankful for that to the people who rallied in Bolotnaya Square and Sakharov Avenue. And the longer they protest and the more demands they make, the farther reforms will go. These reforms will strengthen both the country, which the protesters wish good, and the authorities, which they detest. We should also thank Putin’s supporters, whether they rallied as volunteers or on order. They, too, lend their support on condition that the impertinent bureaucracy will be stopped and the outrageous systemic corruption will be curbed. The authorities will have to heed these not-too-radical demands.

Conservative modernization

Now, following dozens of analysts, I will offer my vision of critically needed changes within the framework of conservative modernization which the country seems to be facing.

The main idea of this course of development is to prepare for a modernization spurt by establishing effective state and public institutions, in addition to the power vertical. The 1990s were a period of revolutionary withdrawal from Communism and militarism; the 2000s were the counterrevolutionary restoration of governability. But Russia lost two decades to establish modern institutions that are crucial for modern development. These are a parliament with legislative (in the least) and – importantly – controlling functions, even if without the powers to form the government; a judicial system that would protect citizens’ rights, above all property rights; and municipal self-government. So far, I have not seen programs of presidential candidates that would make emphasis on building such institutions. Meanwhile, Russia cannot do without them.

A historical analogy is the comprehensive institutional reforms of Alexander II, which enabled Russia to make a powerful breakthrough in the late 19th and the early 20th centuries. It is important that Russia of today make that breakthrough before “the defeat in the Crimean War,” which is inevitable in case of inertial scenarios. A “defeat” in such a war, unlike that in the 19th century, may prove fatal.

The main objective of political modernization, the larger part of which has been announced already, is to launch a systemic war against corruption. It was helpful for the anti-Communist revolution, and later, in the 2000s, it helped restore governability. But now it has turned into the main factor in the country’s economic slowdown and deformed development, and the degrading public morals.

This could be remedied by prompt launching of a genuine competition between political parties, and the emergence of two or three “ruling parties.” One ruling party model does not suit Russia’s objectives of modernization, because of its totalitarian legacy. I fact, it is a poor copy of the Communist Party of the Soviet Union of the stagnation era. Clearly, Russia has to return to a mixed majoritarian proportional election system. A purely proportional system won’t work considering the current tendency for a global – not just national – weakening of political parties.

To launch the reform of the political system, Russia will have to hold a new parliamentary election in the next 12 to 18 months. This will enable it to restore the legitimacy of power, which was severely undermined during the 2011 parliamentary election.

Also, representatives of systemic opposition, which the authorities deliberately downgrade as “non-systemic,” should be admitted to the State Duma, at least as “backbenchers.” Bolotnaya Square must be represented in parliament – at least to ensure the minimally needed pluralism of opinions, lend weight to the authorities’ arguments in fighting corruption, and integrate part of the protests.

But most importantly, government officials must be replaced with younger-generation functionaries: for example, by calling up the “generation of freedom” (that grew up in the 1990s and 2000s) before it emigrates or dissolves. Aside from helping to form new institutions, this “Putin’s draft” can become the key lever in bloodless reforms and national modernization.

In overhauling the political system, we may even resort to emergency measures such as introducing maximum age for appointment of senior officials (say, 40 or 45 years). The sooner people with Soviet mentality quit the better for the country.

A genuine law-enforcement reform is overripe. It is critical to cleanse at least part of law-enforcement bodies of corruption, eliminate unreformable ones or set up new ones in order to create an effective “police baton” for the authorities to use for fighting corruption among bureaucrats.

A personalistic type of rule is inevitable in the near future. This is risky, but there is no other way for the country at present.  And we have to admit that Russian society has not earned genuine democracy and freedom yet. After getting these from top in the early 1990s, it broke down the state – the USSR, the former Russian Empire, and by the end of the decade it nearly ruined what was left of it – the Russian Federation. It is necessary to begin to gradually withdraw from the excessively personified system towards greater reliance on institutions. To this end, Russia needs to amend the Constitution and replace two terms of presidency with one six- or seven-year tenure.

In the political and ideological sphere, Russia should take measures to turn at least one of the leading federal channels into a public and – most importantly – independent one. The apparent way to do it is by selling it to foreign owners, no matter how unpleasant it may sound.

Cultural and educational measures are necessary to complete the long-standing task of de-Stalinization of the country, which was launched by the 20th Congress of the CPSU, continued during the democratization of the early 1990s, but was not fully implemented. Of course, we should not dismiss the best achievements and the best people who labored and served for Russia in the 20th century. And we certainly must rehabilitate – through the mass media (and, above all, through the Internet) and education programs – the identity of Russian society, its relationship with the country’s centuries-old history, especially its splendid 19th century. This relationship remains largely severed because of the 70 years of the Communist propaganda.

In the economic sphere, the key task is to complete privatization of property in Russia, regardless of how or when (in the 1990s or the 2000s) it was acquired. It is probably the key political task Russia is facing. The main thing is to legalize it along with the institution of private property. Private property must become sacred, while hostile takeover, sacrilegious; otherwise the political struggle will continue to focus around the possibility of re-division of property, with the country stuck in the vicious circle of post-Socialist transition.


Project “Siberia”

Russia must launch one or two powerful economic programs in place of largely imitative “national projects.” Obviously, it needs a program that would fasten it to the “Asian economic locomotive” and give a new impetus to the development of Siberia and the Russian Far East, by developing the infrastructure, high-level processing of raw materials and timber, creating an agricultural sector oriented towards the bottomless markets of Asia, and developing other “water-intensive” industries. This project (let us call it “Siberia) must enjoy maximum incentives and guarantees for massive foreign investments from the USA, the EU, China, Japan, and other Asian countries, but be carried out under Russia’s sovereign control.

Renewed development of Siberia is so obviously expedient economically and geopolitically that we need to consider moving the Russian capital, or at least part of the functions of the capital and federal bodies, to Siberia and the Far East, closer to the Pacific Ocean. Turning the Russian economy towards rising Asia would be like “cutting the window to Europe” which Peter I accomplished together with his associates. Amazingly, the election programs of the presidential candidates hardly mention it.

Aside from developing industries named in project “Siberia” and the general improvement of the investment climate, the state must focus on supporting a very narrow  group of industries – nuclear power engineering, aerospace, defense production of certain items, chemistry, gas and oil processing, and, possibly, pharmaceuticals. It is in these fields that innovative clusters must mushroom ubiquitously, with active involvement of foreign capital and technologies. It is time to part with the illusions of a new comprehensive industrialization/post-industrialization in the country that cannot compete with Germany in the quality of products or with China in the price/quality index.

In foreign policy, the scenario seems to be the most apparent.

Considering Russia’s cultural and historical roots and geopolitical challenges common with European countries, a markedly structural rapprochement with the EU would be most welcome. In other words, we should seek establish a “Alliance of Europe” (something similar to what Vladimir Putin proposed in his article published in Zuddeutsche Zeiting).

Yet, I repeat, the country needs a simultaneous radical economic re-orientation towards the markets of China and rising Asia, above all through reinforced development of Siberia and the Russian Far East.

A Eurasian Union is a correct project and must develop further, yet without the involvement of the unpromising countries of Central Asia which are nostalgic of subsidies. Russia has to help and protect them, but it must avoid the errors of the Russian tsars and Soviet commissars, who were carried away by the “big game” or messianism and burdened the country with a hopeless and heavily subsidized region for a century and a half.

On the whole, Russia should conduct an active diplomacy with minimal direct involvement, especially in conflict areas. The 2000s convincingly showed that, with rare exceptions, those who get involved come out as losers.

By following this generally realistic course Russia will enter the first half of 2010s as a powerful geopolitical player (the world’s third largest by its aggregate capabilities) with approximately the same level of economic development as today, but with an institutional and human potential for a modernization spurt. Otherwise, it will quickly degrade to an inferior state and lose its sovereignty even in a favorable situation.

If Russia fails to implement this or similar course, its luck may turn away. But I do believe Bolotnaya Square and Sakharov Avenue have pushed the country towards its realization.

The article is largely based on the conclusions stated in the Valdai Club report “Russia Should Not Miss Its Chance.” The author is grateful to Valdai Club members for the ideas used by the author herein.

// Published originally in Russian in the Vedomosti daily, February 22, 2012, No 32 (3046)