From: "Dietwald Claus" <dietwaldclaus@hotmail.com>
Subject: A latter day George Kennan? A Second Look at Andrei Illarionov.
Date: Tue, 04 Apr 2006
Those who for years have claimed that Russia is turning back on modern democracy, liberal economics, and civilized foreign policy have just landed the coup of the year: a real bona fide defector from within the Kremlin itself. And he’s telling it all.
Listening to Andrei Illarionov, special economic advisor to the president of Russia for almost five years, it becomes difficult to ignore those voices who have barked at the passing caravan for years. In the last few months of 2005, he had already become increasingly outspoken in his criticism of the Kremlin’s politics. But after resigning (being fired?) from his inside post, Mr. Illarionov barred no more holds, and went into full attack mode on his former employer: democratic rollback, economic mismanagement, energy warfare. Not much new one might say, but it’s one thing whether such accusations are leveled by outsiders and foreigners; it’s quite another thing when the same indictments come from somebody who has been deep inside the beast for half a decade.
Mr. Illarionov has had a knack for controversy throughout his career. Most prominently, he has been a vociferous critic of the Kyoto protocol, attacking the science behind the theory of global warming, posing serious questions in regards to the feasibility of the Kyoto targets, and lobbying intensively and unsuccessfully against the protocol’s ratification by Russia. He has been one of the key advocates of establishing the stabilization fund, using it to pay off the national debt rather than dumping the money into the domestic economy. It may not have endeared him to the general public, but nobody can deny the economic soundness of this idea. He also has been one of the most consistent advocates of continued privatization in all sectors of Russia’s economy. And while his ideas were hardly original, there is something to be said in favor of defending basic principles of good economy policy. In a country that only half a generation ago was stuck in the mire of official Marxism-Leninism, such voices are desperately needed: good ideas don’t suffer wear and tear.
And now he is turning his sharp criticism against the Putin administration itself. In other words, life for those defending the current Russian government has become a lot harder. It will not do to simply dismiss him as a disgruntled ex-employee whose hunger for revenge is leading him down the bridle-path of russophobia. While the words of ex-employees should be taken with a grain of salt in general, they should not be dismissed out of hand often enough, their perceptions are unusually keen and insightful. And while russophobia may be a good parry against foreign critics, against a Russian it is not convincing. Any criticism of Mr. Illarionov’s claims has to be based on a careful analysis of what he has to say.
On March 7th, 2006, Mr. Illarionov visited the Cato Institute, which made available the slides of his presentation at www.cato.org. Subtitling the presentation “The 2006 Long Telegram”, Mr. Illarionov casts himself as a latter-day George Kennan, the American diplomat and scholar whose famous “Long Telegram” from Moscow in 1946 helped kick-starting the Cold War into full gear: Kennan’s harsh analysis was arguably an important corrective to the foolish perception of Stalin as a benevolent “Uncle Joe”; clearly, Mr. Illarionov would like to do so the same and provide an anti-dote to George Bush’s assessment of Mr. Putin’s soul.
Just like Kennan’s indictment of Stalin’s USSR sixty years ago, Illarionov’s indictment of the Putin administration today is brutal and to the point: according to him, the political program of the Putin administration can best be compared to the terror regime of Zimbabwe’s Robert Mugabe, if not that of Stalin. Putin is “establishing total control of executive power over public and social life”, thereby destroying “virtually all non-state political and economic institutions of modern civilized society legislative and judicial powers, political parties, regions power, businesses, mass media, NGO, religious organizations.”
In Putin’s Russia, so Illarionov tells us, the state media is dominated by general anti-Western, and particular anti-American and anti-European hysteria. Russian businessmen, fearing arrest, contemplate emigration, while the population at large is being pushed towards a state of violent strife between the various social and ethnic groups. Ordinary Russians no longer want to work in the market economy, but instead dream of careers as corrupt officials and state employees. Those opposing the regime face at the least harassment and expulsion, but also risk being physically hurt and taken hostage. Foreigners are routinely barred from entering the country, if they are not kicked out for being critical of the regime.
On the foreign policy front, Illarionov equates Russia to rogue regimes such as Saudi Arabia: using its current leverage as a key supplier of oil and gas, it is ruthlessly attacking democratic regimes in Georgia and Ukraine while simultaneously supporting dictatorships and abetting international terrorists. When it comes to promoting the ideals of modern Western civilization, Russia may talk the talk, but it certainly does not walk the walk.
Putin’s henchmen, according to Illarionov, are not only rolling back democracy in Russia as fast as they can and violating every standard of decency in international affairs; they are also wrecking havoc with the national economy: rather than continuing the Yeltsin governments successfully policies of economic liberalization, the current government is turning the country into a corporatist state at the expense of economic development. In the process, it is destroying thriving private industries, driving up inflation, stunting GDP growth, and reducing foreign direct investment. Apparent successes, such as increased stock market values, higher consumption, and greater foreign trade volumes are illusions, fueled solely by high oil prices.
In effect, he is accusing the Putin administration of fascism what else should one call a political system that combines state capitalism with single-party political rule, and an aggressive foreign policy? If his analysis is correct, the world would be well advised to take drastic measures against the current Russian regime. The last thing this troubled planet needs right now is the largest country on earth turning back the political clock by seventy years.
Watching Mr. Illarionov present his ideas, one is struck by Mr. Illarionov’s reasoned tone. If what he says is indeed true, one might forgive him for becoming emotional and raising his voice in despair. Mr. Illarionov, however, is not strident. He speaks in heavily accented but excellent English. He is calm, modulating his voice pleasantly and appropriately. He is serious maybe too much so for an American audience, but the topic does not call for wise-cracks. He does not bore his audience by over-relying on his graphs and slides, but uses them merely as props for a continuous and smooth speech. His personal style may not be gripping, but in combination with what he says, his presentation surely is. In short, Mr. Illarionov is a persuasive public speaker, accustomed to academic and political audiences, not town-halls.
But does Mr. Illarionov’s 100 page “j’accuse!” hold water? Is Mr. Illarionov the new George Kennan who will open the eyes of a blinded West to the terrifying realities inside Putin’s Russia? In 1946, one had to accept or reject Mr. Kennan’s claims almost on faith alone. Many doubted him and would not believe that Uncle Joe’s Soviet Union was in fact no better than Hitler’s Reich other’s, for whatever private reasons, accepted his indictments wholeheartedly. But, whether one agreed with Kennan or not, in either case it was almost impossible to verify the situation on the ground. The USSR was a closed country, and foreign visitors were effectively barred from seeing anything the authorities did not want them to see. Today, the situation is different. Not only can anybody who wishes to live anywhere in Russia, but the amount of information about the internal and external affairs of Russia freely available is sheer overwhelming.
A number of points made by Mr. Illarionov may seem persuasive to those who have never visited Russia. For anybody who has spent even a few days here, however, they seem strangely at odds with reality.
Take, for example, Mr. Illarionov’s portrayal of the Russian media as a ferocious propaganda machine against the West in general, and America and Europe in particular. Maybe Moscow media is different from that out here in the province, but in my personal experience, Russian TV, rather than being dominated by hysterical propaganda, is depressingly similar to Western TV: inane game-shows, horrid soaps, and general entertainment, including an endless stream of Western and Russian movies throughout the day. Occasionally, one can find a something good, but mostly it’s erunda. The news shows focus predominantly on domestic and local affairs and vary in quality, depending on the channel. While the take on international issues is somewhat different from that of Western news, and sometimes squarely at odds with it, any objective observer will agree that it is mostly quite factual. However, while for Westerners it is very hard to get the Russian take on world events, those Russians who wish to know the Western perspective can watch Euronews on cable. Russian radio is not much different, either. Nearly all stations broadcast music all day, and even Radio Russia, the official state radio station, serves mostly entertainment.
For readers of certain Western newspaper’s editorial pages, Mr. Illarionov’s interpretation of the Khodorkovsky case may seem persuasive. According to this, the case has put the chill into the bones of every honest and successful businessman in Russia. Instead of worrying about what businessmen in most countries worry about exchange rates, profit margins, the quality of their employees Russian businessmen are instead sitting on packed suitcases, gauging when it will be best to get the hell out of Dodge. However, those who currently live in Russia will be scratching their heads and wonder what kind of businessmen Mr. Illarionov may be consorting with. The vast majority of businesspeople in Russia do not worry about the police kicking down their doors even if they haven’t paid all their taxes and they certainly do not contemplate leaving the country anytime soon. Many ordinary Russians including businesspeople are in fact outraged by the Khodorkovsky case. However, they tend to see the scandal not in the fact that he’s now in prison learning new useful skills, but that not more people like him face the music in the same manner. Whether this is due to the Kremlin’s propaganda, or whether it is fair, is beside the point: the important issue here is that most Russians do not see things the way Illarionov claims they do.
Mr. Illarionov is even more off the mark on the general state of domestic politics, where he compares the political situation of Russia to that of Zimbabwe, currently ruled by the racist militarist strong man Robert Mugabe whose policies have resulted in the whole-sale prosecution of ethnic minorities, streams of refugees fleeing the country, the collapse of the economy, and famine. One does not have to live in Russia or even know much about Russian affairs to take issue with this point: even the most skeptical observer of Russia’s current politics has to admit that while Russia may not have a picture book democracy, comparing it to Zimbabwe is beyond the pale intellectually on par with those college students who accuse George W. Bush of being a new Hitler.
I will not go into a discussion on Mr. Illarionov’s take on Russia’s foreign policy. Whether or not Russia’s most recent actions towards Ukraine and Georgia are legitimate and justifiable has been discussed at great length from almost every perspective across the entire spectrum of the Russian Commentariat. Mr. Illarionov’s analysis of Russia’s foreign policy is shared by some, though not by all. He is not adding anything new to the discussion, merely reiterating the most hostile interpretation of Russia’s motives and recent actions.
All in all, Mr. Illarionov’s assessment of the political situation in Russia is quite obviously far off the mark. One may excuse him for this and take into consideration that he has just recently been fired from what most people would consider a dream job for an academic. Ex-employees often do talk badly about their former place of work. However, considering his prominence and high standing in many circles, Mr. Illarionov would be well advised to cool his temper and not undermine his credibility on an issue where he is widely considered an expert: Russia’s economy.
At first glance, Mr. Illarionov’s presentation merely confirms what many critics have been saying all along: Russia’s current economic boom is unhealthy, the non-resource economy is suffering from Dutch disease, and the government is following an unsustainable development strategy. Had Mr. Illarionov limited his presentation to economics, many observers, including myself, might just have accepted it at face value. That may be laziness, but often there is little point in blowing against the wind of consensus without good reason. While cynics may disagree, on average and in the long run, the majority tends to be right. But, given the obvious falsehoods of Mr. Illarionov’s assessment of Russia’s other political areas one should pay closer attention even to those aspects that seem uncontroversial. Ideas, like people, can be judged by the company they keep.
Due the limited space of this article, I will only analyze two of Mr. Illarionov’s key points:
Mr. Illarionov makes an amazing statement on the condition of Russia’s economy that should raise some eyebrows and tempt even the most sanguine reader to look a little closer: since 1999, despite high oil prices, Russia’s economy has been performing much worse than the economies of other oil exporting countries, including Iraq! In other words, Russia’s economy has performed worse than a country currently at war, and under international UN embargo for several years! Or has it? Comparing the effect of oil prices on different oil-exporting countries during the same time period makes a lot of sense: while oil prices vary over time, they do not vary significantly by location. The problem with Mr. Illarionov’s analysis, however, is that he compares Russia’s average GDP growth 1999 2005 with, for example, that of Saudi Arabia 1971 1981, United Arab Emirates 1971 1980, Oman 1974 1985, and Iraq 1973 1979. The only thing these time periods have in common is that they are all longer than 5 years. Calling this approach unorthodox would be generous. Among professionals, it is referred to as ‘fishing’ and generally seen as anathema to proper scientific method. No academic worth his salt would allow himself to be caught ‘fishing’ in the open Mr. Illarionov, however, proudly presents his catch to the public the man has a lot of nerve.
But, this is not all: to further show how Russia’s economy is underperforming, Mr. Illarionov has yet another trick up his sleeve: comparing actual to potential GDP growth. It is common practice among economists to compare current economic growth with historic averages, but Mr. Illarionov is doing something quite different. He is not saying that Russia’s economy could perform better than it has a clearly uncontroversial statement. The difference is that Mr. Illarionov is putting detailed numbers to this claim. In 2005, while real economic growth was 6.1%, potential economic growth as calculated by Mr. Illarionov was 15.3%. How he knows that potential GDP growth in 2005 was exactly 15.3% as opposed to, say, 11.7%, 27.1% or 6.6%, he does not tell. But, he is not just able to calculate potential GDP growths for 2005, he can do so for every one of the past six years! Each time, this ‘potential GDP growth’ is widely at odds with real GDP growth and apparently unrelated to any historic averages. Mr. Illarionov is not on a fishing expedition here, but merely engaging in econometric flimflam. And rather sloppy flimflam, too, since in the year 2000, real GDP growth actually exceeded potential GDP growths! I am certain that most laypeople and experts find it very difficult to understand how anything can be greater than its potential.
Besides some highly original data fishing and flimflamming, Mr. Illarionov presentation is a text-book example of how to use statistical data selectively and misleadingly in order to prove an arbitrary point. Impressive as his tables and charts may appear, at closer inspection most of them turn out to have been selected and presented in a manner that is not technically justifiable: scales of comparative data do not correspond, while others are chosen to deliberately over- or understate trends, depending on what Mr. Illarionov is trying to say. Almost always, these distortions are cleverly done, hard to spot at first glance, and difficult to criticize immediately. Criticizing each and every one of them would require far more time than Mr. Illarionov’s original presentation. Clearly, Mr. Illarionov knows exactly what he is doing.
Anybody who has had to with politics in any detail is familiar with the phenomenon that reported opinions tend to sound less reasonable than they are. The strange phenomenon with Mr. Illarionov is that when one reads directly what he has to say, and looks at the data he provides to back up his opinions, he appears increasingly unreasonable. In fact, he gives the impression of not only being wrong, but outright dishonest.
For the critics of the Putin administration, this poses a problem. When Mr. Illarionov left the Kremlin in a fury, they accepted him wholeheartedly into their camp. In fact, they had already been waiting for him as friction between him and the Putin administration was increasing in the preceding months. He was to be their key witness, not only to preach to the choir, but most importantly to convince those who have been reluctant supporters of Mr. Putin.
As it turns out, Putin’s critics would be better off without Illarionov. Since Mr. Illarionov’s conclusions are not much different from those of the other critics, the scandalous methodology of his analysis becomes salient and casts a serious shadow over the credibility of those who agree with him, but whose methodologies are not as easily accessible. If this high-profile, well-regarded critic engages in so many dishonest tricks, manipulations, and sleights of hand to come to his conclusions, what does this say about the other people who share his points of view?
Those of Putin’s critics who base their messages on sound and fair analysis do themselves a disservice if they continue to call on Mr. Illarionov as their witness. Any lawyer who found himself stuck with such a witness for his case would do well to withdraw him and keep him out of the hands of the opposing side. In the future, while other critics of Putin will hardly be tempted to denounce Mr. Illarionov, they will most likely try to downplay his importance. In a not so distant future, Mr. Illarionov probably will find himself politely ignored by those who currently embrace him as their new best friend. He may continue to receive invitations, but he will not be given the limelight for much longer. He is too much of an embarrassment.
Andrei Illarionov is no latter day George Kennan. Rather than decisively influencing the course of history, by next year he may find himself limited to giving speeches at partisan think-tanks, Rotary Clubs, and Russian Studies Departments. What a sad end to an illustrious career.
Dietwald Claus
Kirov, Russia.