Russia Profile
www.russiaprofile.org
September 28, 2007
Russia Profile Weekly Experts Panel:
Charting the Course for Russia's Future
Introduced by Vladimir Frolov
Contributors: Stephen Blank, Eugene Kolesnikov, Andrei Lebedev, Andrei Seregin
In his lengthy recent conversation with a group of Western Russia watchers, President Vladimir Putin unveiled his vision for the country's future after he leaves office in May 2008.
Although most of the reporting on Putin's meeting with members of the Valdai Discussion Club was focused on Putin's comments about his surprise choice of Viktor Zubkov to be Russia's new prime minister and Putin's plans to run for president in 2012, the entire text makes for extremely interesting reading. (The full transcript is available on the Kremlin's web site).
It reveals Putin's ambition for Russia to become a strong, responsible and cooperative international player without any messianic missions. Putin does not want to see his country repeating the fallacies of the Russian Empire and the Soviet Union in pursuing an expansionist foreign policy, and strongly warns his potential successors against what he called "faking superpower." He wants Russia to be respected, not feared, and sought as an honest broker to solve the world's problems. This is the foreign policy legacy Putin wants to leave to the next generation of Russian leaders.
His remarks also show Putin's strong preference for a liberal international economic system where economic cooperation and trade are not hindered by purely political calculations or double standards. Putin, a former KGB spy, is criticizing the United States for boosting the role of intelligence services in screening foreign investment. He makes it clear he sees through the European hypocrisy on energy policy and efforts to obstruct the construction of the Nord Stream gas pipeline.
He also describes his strong interest in developing a viable multi-party system in Russia and his personal efforts to support a variety of political parties - from United Russia to the Union of Right Forces and Just Russia. Putin specifically says that he is genuinely concerned by the highly personalized nature of the Russian political system and wants, in his own words, to "broaden the field."
The text also reveals Putin's pragmatic streak, solving problems without much regard to ideology. He criticizes the liberal ministers in his team for having created a "liberal government structure that does not work" - meaning the failed administrative reform of 2004 that created a three-tier federal government structure with duplicating functions.
So what do Putin's comments tell us about the direction he wants Russia to take after his departure? What do they tell us about the nature of the political system Putin wants to leave behind when he retires in 2008? What kind of foreign policy does Putin want his successor to pursue?
Eugene Kolesnikov, Private Consultant, The Netherlands
One of Putin's most amazing achievements, and one that will have a lasting impact on Russia's future, is the application of classic project management approach to the state. The Bolsheviks invented state planning to turn communist Russia into an industrial superpower. Putin, uncharacteristically and unexpectedly, managed to apply best project management techniques pioneered in the West to push capitalist Russia into a major post-industrial power.
The concept of Kremlin, Inc., which focuses on the creation of state-controlled industrial champions, or the concept of an energy superpower that incorporates Russia's natural abundance of resources, are just two aspects of this state project management approach.
Project management starts with a vision. It was declared as early as July 2000 in Putin's first address to the Federal Assemblya strong, effective and democratic state, a strong and competitive party system and a competitive economy incorporating moral values, social justice, and an independent foreign policy.
The ruling elites were consolidated around this vision by getting rid of recalcitrant oligarchs and mobilizing the state-conscious siloviki. Project management in times of crises requires power centralization. This was achieved by creating the power vertical. A thorough risk assessment was conducted and each major risk, such as the demographic crisis, territorial integrity and military weakness were addressed. Inefficient assets, such as a dubious friendship with the West and the nominal loyalty of former CIS countries maintained through oil and gas subsidies were ditched.
Existing strategic assets were identified and used as the main initial vehicles of development. These include natural resources, nuclear power, ship building, the military-industrial complex, and space industries. Other strategic sectors were also selected as necessary for future economic and societal transformation, including infrastructure and power generation, information technology, nanotechnology and education. Each of these assets is managed as a complete project in its own right.
A system of checks and balances necessary for effective state project management is being created through the new party system. The feedback and improvement loops in state management have also been established. They include key performance indicators for regional governors and individual accountability and responsibility of ministers that can be observed in televised government meetings.
The project management aspects discussed above are just examples of a more complex and thorough mechanism created by Putin. Managing Russian reform as a state project is perhaps the only way for Russia to bridge the gap with the West. No invisible hand of the market was ever going to achieve that. If this project continues, and Putin obviously wants to participate and thus help maintain its momentum, Russia's future looks bright. This is the main legacy of Putin as I see it.
Andrei Seregin, Research Director, Imageland PR Agency, Moscow, Russia
Charting Russia's future by examining Putin's words to Western Russia-watchers may be a tricky and misleading thing to do, but they may still reveal things that have not been spoken about.
The main point to consider is that under any political and economic circumstances, whatever the plans of Russia's ruling elites, the obvious objective conditions at home and abroad will define the shape of Russia's power-succession process. It is no secret that the time for extremely unpopular domestic policy steps has come in Russia; some inevitable reforms are long overdue.
After the parliamentary and presidential elections have passed, the new Duma and the successor will face a difficult reality. They'll have to raise domestic energy prices, require citizens to pay full-price housing and utilities bills, fix Russia's ill-fated taxation system (making people pay taxes on market price of their homes, land and other possessions, as well as fighting the ominously prevailing tax-evading practices in Russia) and support or reform monstrously the corrupt social and healthcare system.
And all that must be done notwithstanding the obvious lurking macroeconomic troubles - the crisis of the real estate bubble, development and other markets and the urgent need for support of Russia's shaky banking system. Financial analysts fear the likely budget and foreign trade deficit, inflation hikes and sharp reductions of disposable income of Russians - at least to the point, where decreasing consumer confidence of Russians starts affecting their political affiliations.
It is easy to see that there is no reason for Putin himself to preside over all this, losing much of his popular support for uncertain reasons. The successor will do the job much better - elected under strict compliance with most democracy procedures, but lacking popular support, he is sufficient to stand through likely hardships. And then comes act two - Putin is back again as a savior of the nation. This scenario might have seemed ridiculous even this summer, but the fall has seen it being steadily realized.
Stephen Blank, The U.S. Army War College, Carlyle Barracks, PA
(Dr. Blank's views as contributed to Russia Profile do not represent the position of the U.S. Army, Defense Department or the U.S. Government)
I would take the speech more seriously if it were consistent with the actions of the Russian government at home and abroad. Certainly the economy is not becoming more liberal, quite the opposite as we see state takeover of more and more industries in the metals and industrial sector and consigning foreign investment to an exclusively minority role in more and more cases or essentially expropriating foreign investors like Shell, BP and Mitusi.
Similarly Putin's avowed concern for a truly multiparty system is merely words. The reality is that, more than any single individual, he has done his best to ensure that Russian political parties are empty vessels and creatures of the Kremlin. For him to lament the personalization of Russian politics is merely to shed crocodile tears, something he is very good at doing. And there is good reason to doubt that the administrative reform of 2004 set up a liberal structure. It's unlikely that anyone in Russian politics is or was trying to do so then, or that Putin and his team would recognize genuine liberalism if they encountered it. Certainly they are terrified of it as Vladislav Surkov's speeches indicate.
As for the hypocrisy of the EU as regards Nord Stream, Russian energy politics and threats directed against other CIS and European governments also invoke this tribute that vice pays to virtue. Indeed Russia's efforts to shut out foreign investment and politicize energy use preceded Brussels' reply. And in any case, there is plenty of hypocrisy to go around.
Likewise in foreign policy: Putin may say that Russia should eschew messianism and fake superpower status, but under his watch Russia now calls itself an energy superpower, although he has refrained from doing so personally. Neither is Russia acting like an honest broker in the world; instead it is frankly acting to grab as much influence and power as it can.
Thus it is not by their words that we need to judge Putin and his government, but by their actions. And those actions show that Russia is becoming ever more of a police state due directly to the actions of Putin and his colleagues.
Andrei Lebedev, Senior Associate, the State Club Foundation, Moscow
Putin's remarks at the Valdai Discussion Club add little to what has been known all along. The Russian president charted his course long ago and has stuck to it ever since. This course provides for Russia retaining its status as a world power - but not a superpower, internally united politically and aspiring for intensive economic growth. This country should be aware of its national interests and be capable of securing them.
Fine model, isn't it? One could easily substitute virtually any other country name for Russia: France, Germany, China, Brazil, Japan, South Africa, you name it. The slogans are infallible. It's the ways and means of realizing them that causes incessant arguments. Not in Russia, however. Freedom House may go hog wild denouncing the Kremlin's fallacies in the area of cropping the field of Western-style democracy. Nobody in this country seems to pay real attention. But let's wait for results of the anti-corruption campaign, which is bound to unfold shortly. This is what people will love and value best, since it will give them hope that justice prevails. The economic course set in the last few years will be followed. The recent minor changes of the guard in the cabinet stress fine tuning, not direction change: more government, less market. Let the opponents decry the state corporations, warning that this policy virtually made the Soviet economic machine screech to a halt. Other serious market players do it - Scandinavians, the Netherlands, Australia, not to mention Venezuela and other Latin American countries. Only hard facts, such as rigorous competition, alternative gas routes competing with the Gazprom network, for example, could change this train of thought.
There will be no change in foreign policy, either. No American hypocrisy about Kosovo being "unique" or ABM rockets in Eastern Europe posted against non-existent Iranian missiles will change the status quo. It's nothing personal, but if it suits Russian interests, Russia will supply weapons to Syria and help Iran build its nuclear power plants. If it does not, Russia will freeze the Bushehr project and help denuclearize North Korea. As far as the North Pole is concerned, we only claim what is due.
The United States behaves in the same way, whether the president is Clinton or Bush. Renouncing superpower status, Russia becomes an Ordinary World Power. It takes time to learn the rules of the game between the OWPs. But Putin is a quick learner.