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The Economist (UK)
November 3-9, 2001
Changing Russia
Hope gleams anew

At home and abroad, things have never looked brighter for Russia's president, Vladimir Putin. Will it last?

IT IS hard, looking back over the past decade or so, to imagine a better few weeks for Russia—at home or abroad. Since September 11th, Vladimir Putin has done a lot to make the West like him. He has embraced the American-led anti-terrorist coalition, calling the air-strikes on Afghanistan “measured and appropriate”. He has started closing a clutch of controversial foreign military bases. Even talks about talks with Chechen rebels have begun.

At home, the economy is still growing and reforms continue; the corpse of the Kursk submarine has been raised; and a notorious tycoon-cum-politician from the Yeltsin era, the railways minister, Nikolai Aksyonenko, is facing corruption charges.

When he emerged into public view two years ago, Mr Putin looked like a colourless compromise, in hock to the Yeltsin-era magnates and the hard men of the armed forces and the security services. He liked consensus and caution, not bold moves. The rhetoric was sometimes friendly and liberal but was rarely turned into action.

Not now. Particularly on foreign policy, he shows a striking sureness of touch, for example over the closure of two of Russia's remaining big Soviet trophies overseas, an electronic listening station in Cuba and a naval station in Vietnam. Hardliners moaned, but Mr Putin was adamant: they cost too much and were irrelevant to Russia's real needs. Russia has also softened on America's missile defence; a deal now looks in sight when Mr Putin meets President Bush this month. Relations with NATO have never been warmer.

Mr Putin is also reshaping Russia's stance in the former Soviet Union. Old-fashioned twitchiness about spheres of influence has lessened. American soldiers are now in Uzbekistan, with Kremlin blessing. Russia is pulling out some soldiers and weapons from a base in Abkhazia (a separatist bit of Georgia) and promises to do the same from Transdniestria (a Russian-speaking enclave of Moldova). Russia's presence in both places, in defiance of international obligations, has stoked fears of neo-imperialist schemes in the old empire.

Now the tone is very different. Mr Putin has been remarkably polite to Georgia, telling it to sort out the Abkhaz problem without Russia, if it wants to cope with a messy result alone. As Transdniestria's elections in December draw near, its peppery separatist leader, Igor Smirnov, looks vulnerable; the Kremlin is much chummier now with his Moldovan opponents. A top Russian general is even talking indirectly to Chechnya's president, Aslan Maskhadov, officially still a wanted criminal.

Economic reform is speeding up too. This week Mr Putin promised more tax reform and a new financial intelligence service to fight money-laundering; reiterated his country's eagerness to join the World Trade Organisation (WTO), the body that regulates global commerce; and said his country wanted “normal, candid and reliable” relations with the outside world.

An economic adviser, Andrei Illarionov, once a notorious gloomster, is also sounding very cheerful. Even falling oil prices will not stunt Russia's economic growth, he says, though this is likely to be 4% next year, down from last year's record 8% figure. Russia is even thinking of paying back some of its foreign debt early. Though high oil prices and the effect of the huge devaluation in 1998 gave the economy a terrific fillip, restructured old firms and new businesses are helping too.

Change is least visible in politics. Regional elections are still tarnished by money and skulduggery. The bureaucracy is almost untouched. The squeeze on the independent press continues: Anna Politovskaya, the most intrepid Russian reporter dealing with Chechnya, has fled to Vienna after receiving threats. But the competent and well-publicised salvaging of the Kursk did strike a good note, in sharp contrast to the lies and confusion that surrounded the tragedy of its sinking as it unfolded in August last year.

But how deep does all this go? Kind words from Washington and London have given a gloss to Russia's image. But some hard truths remain. One is that although some interests overlap, others do not. Russia has little difficulty in supporting airstrikes against a common enemy, the Taliban. But any American move against, say, Iraq may be another story.

Another problem is that many of the people who matter in Russia still think very differently from Mr Putin. Even some of the president's own team sing a different song. Many senior soldiers still want to halt a final retreat from empire. This week Georgia, whose president, Edward Shevardnadze, is in political trouble, said Russian planes had again bombed its territory. Like Mikhail Gorbachev ten years ago, Mr Putin may find it hard to make a pro-western stance pay off at home.

A lot of powerful people still resist economic reform too. Over the past ten years many people have done well out of Russia's entrenched protectionism, bureaucracy and cartels. They would hate to see them dismantled in favour of the international competition, openness, normality and reliability praised by Mr Putin. And for all the current back-slapping, Russia must still grow even faster if it is to catch up with the West reasonably soon. Foreign investment is still puny, despite an oil deal worth $12 billion announced this week. Huge tracts of the economy, such as the banks, utilities and the public sector, are largely unreformed.

A third question is sincerity. Mr Putin's motives are inscrutable. He may have calculated that now is the time to woo the West with grand gestures and spontaneous concessions, in the hope of a grateful payback later. Those hopes might include easier terms for joining the WTO or a new grand alliance with NATO, possibly at the expense of some of Russia's neighbours.

These are not immediate worries, though. Mr Putin's huge popularity means that his new foreign policy faces no direct threat. Most Russians are delighted to see their country more popular and respected, and glad to avoid a direct entanglement in Afghanistan. Even slow and patchy economic reforms are better than none. Still, real change in Russia, and real trust from the West, will take years, not weeks.

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