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RIA Novosti
October 29, 2004

MOSCOW (RIA Novosti political commentator Yuri Filippov) - With the opening of debates on the presidential draft law on the appointment of governors, the State Duma is in fact deciding Russia's future.

After a series of terrorist attacks in Russia, President Vladimir Putin suggested changes to the country's political system to wage a more effective war on terror. The main idea is concerned not with the appointment of governors, but with changes to the procedure for electing the executive heads of the 89 constituent members of the Russian Federation.

Under the current system, the governors of territories and regions, mayors and the presidents of Russia's 21 national republics are elected at general regional elections. But Putin believes that they should be elected by legislative assemblies of the regions upon the recommendation of the president. He suggested a rather harsh procedure: if the candidate suggested by the president is blackballed twice, the president may dissolve the regional legislative assembly; and if the new regional head is mistrusted or works badly, the president may discharge him.

What is the essence of this reform? And why the Federation Council and the bulk of regional bodies of power have actually supported it, despite the protests of the opposition parties and criticism in some Federation members?

In a word, the idea is to remove excessive politicisation elements from the Russian state system, to replace politicians, which hinder its effective operation, with managers and bureaucrats. From this point of view, the reform fits the framework of the policy that Vladimir Putin has been pursuing for more than four years.

The specific feature of Putin as president is that he became the leader of a political system whose organisation and nature categorically did not suit him - and many other people. The new president inherited from Boris Yeltsin a corrupt, ineffective state without a stable economic base or moral prestige. After his first inauguration in May 2000, Putin felt as a driver in an uncontrollable car that runs by itself. This is why he launched the reform of the state since the first day of his presidency and will evidently not stop until the last day of his tenure.

During his first term, Putin rather easily put in their place the so-called oligarchs, who had acquired for peanuts the best pieces of the former Soviet property during the Yeltsin rule. They had grown used to entering any office in the Kremlin without as much as knocking and stealthily influenced the adoption of key political decisions.

A bit later, when the focus in Russian politics shifted towards pragmatic centrism, the temperature of political struggle between "liberals" and "Communists" went down. That struggle diverted considerable resources from constructive endeavour, was not geared to the Russian economic cycle and hence did not have a positive influence on economic growth and did not ensure civil liberties for the bulk of the population.

Putin also launched a reform of the regional elite groups, depriving them of a part of their political functions and trying to raise their responsibility for the results of their regions' economic development. In 2002, the regional leaders lost the right to sit on the Upper House of the Russian parliament and started losing top places in the rating of top politicians to figures of a truly federal scale.

If the next step in the state reform - the new procedure for electing regional heads - is taken, the trend of de-politicisation of the operation of the regional elite groups may become irreversible.

Putin's political reforms are ultimately designed to solve economic problems. Competitiveness is one of the most frequently used words in his annual state of the nation addresses. Last year, the president suggested the national goals of doubling GDP within ten years and combating poverty. Unlike political reforms, these are not instruments but strategic goals of the state. However, despite reforms, politics is still hindering the economy. Russia has set several records in economic growth rates, but the president and many other leaders are dissatisfied. They point to the excessively large oil and gas element of this growth. What will happen if prices of raw materials fall? What other resources could be used in this case?

Finance Minister Alexei Kudrin, whom experts view as one of the Putin's inner circle, has admitted recently that there is no common economic space or common market in the country. Each region has its own, a limited and relatively isolated market, which is protected by all kinds of local protectionism, with the institute of generally elected regional heads as the political cover.

Kudrin probably used too much black paint for the picture, but he clearly expressed the essence of the problem and the presidential team's attitude to it. One of the reasons that are hindering Russia's economic progress is the excessive politicisation of the economy, especially in the regions. The imperial Russia before the 1917 revolution and the Soviet Union, which was ideologically set for a planned economy irrespective of the economic effectiveness of this method, had the same disease.

The recent example of the domination of politics over economy was the activities of the "market fundamentalists" in Russia of the 1990s. They advocated liberalisation because their liberal ideas called for it, and liberal ideas were more important to them than the dwindling of GDP, per capita incomes and average life expectancy.

The territorial-administrative division of Russia is based mostly on political and ideological, rather than economic, principles. The goal and main cause of its viability is the political rent which the regional elite groups get from their privileged position that makes them uncontrollable by the federal centre or their electorates.

The brightest example is the North Caucasus, which became a seat of crime and a supplier of cadres to international terrorism in the 1990s. There are seven national republics there, seven mini-states with their own presidents and governments, state flags and anthems, and other attributes of a state.

The titular nations in these republics could be proud of this, if not for the Europe's highest unemployment rate (70-80% of adult population in Dagestan, Ingushetia and Chechnya). Per capita incomes in these republics are the lowest for Russia and members of their ruling clans are simultaneously the Godfathers of the local Mafia groups. The worst thing is that they cannot control the situation in the region, let alone effectively fight terrorism, as proved by the strange behaviour of the Caucasian presidents during the Beslan tragedy.

In fact, the only thing that the North Caucasian elite groups have learned to do well since President Yeltsin invited the Federation members to "take as much sovereignty as they can digest" in the 1990s is keep in rein their impoverished population and get donations from the federal centre.

The task of Putin's reform is to cleanse this marsh for civilised life there, to take control of the situation so as to formulate the foundations of a rational and responsible governance, without which democracy, human rights and a common market are unthinkable. Of course, amendments may be made to the approved measures, including under the influence of criticism by regional heads. After all, not all of the national republics of Russia suffered such a fatal failure in national development as the North Caucasian ones. But, one way or another, the President has set the course in the right direction.