I just read the original [Itogi interview at http://www.itogi.ru/russia/2009/44/145418.html] and I'm having a little trouble figuring out what exactly it was that Faulconbridge read. He certainly couldn't have written his piece based on Surkov's interview. Surkov's comments there were specific and thoughtful, and revealed serious concern with the course of Russian economic reforms. This much was clear even though the interview was clearly edited down from a much longer piece.

Surkov's remarks reflect the actual dilemma that the Russian leadership now legitimately finds itself in. His comments are quite pointed and self-critical (regarding the state of the economy). I was most struck by the
fact that he spent almost the entire interview discussing desired outcomes and symptoms of the economic malaise. His political references are completely distorted when they are taken out of the context of the attempt to reform the economy, which is what he is discussing in the interview. It is only at the very end that he really addresses the root cause of the inability to get the Russian economy moving, which is a lack of proper stimuli. This to me seems to me to cut to the heart of the matter.

Unfortunately, the current situation was a direct and easily predictable outcome of the development option chosen by the leadership in Russia in the early nineties. Back then, many of us who were engaged in the Russian market (as opposed to watching it from a distance) were aware of a serious effort to maintain and increase central control of the so-called "strategic sectors" (a term that anyone familiar with the Soviet economic debate of the previous decade will instantly recognize). I spent literally hundreds of hours discussing this situation with officials in Russian and Ukrainian government and business, and they never left any doubt that what was occurring was an effort at economic reform. Political reform was tolerated to the extent that it contributed to economic "modernization." (Does that sound familiar to readers of the Surkov interview?) Many of these people realized, even then, that the real problem with choosing a centralized, command-oriented supervision of strategic industries is that, given the vast pools of dormant wealth lying about in a raw-materials-rich country (which he also talks about), you eliminate much, if not all, of the stimulus for economic risk-taking and innovation. I was actually reassured by Surkov's passing reference to avoiding "totalitarianism," because I believe that it stems from a widely held understanding that, as the central command system accumulates resources, like some giant ball of gas and dust out in space, it becomes more and more difficult to escape its total embrace. It is good to know that the top leadership of Russia is still worried about this.

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