Streetwise Professor

November 11, 2007

Russia Roundup

Filed under: Economics,Energy,Politics,Russia — The Professor @ 10:28 am

A few things that caught my eye in my Friday flight delay readings:

1. This report by the European Council on Foreign Relations makes several points that I have been advancing on SWP for the past year or so. (Passing strange, perhaps, since ECFR is supported by George Soros, not exactly a kindred spirit of yours truly.) In a nutshell, Europe (even absent American support) has every objective advantage vis a vis Russia–population, wealth, human capital, even military capacity–but Russia beats EU like a drum. And it does so for one reason–the lack of a coordinated European strategy towards Russia. The EU has been a colossal failure in overcoming collective action problems when dealing with Russia. Call it divide and conquer, call it disaggregation, call it whatever; Russia has ruthlessly exploited the individual interests of EU member states, and induced individual countries to fall prey to the prisoner’s dilemma. Europe’s vaunted soft power has proved a poor match indeed for Russian hardball. Europe’s abject failure makes a mockery of the EU’s pretensions to superpower status. It has proved masterful at coordinating state meddling in the lives of its individual citizens, and an abject failure in coordinating responses to common threats.

2. I find the whole Putin as Father-of-the-Nation thing truly creepy. This harkening back to the birth of the Romanov dynasty represents just another attempt of the Putin clique to implement Orwell’s dictum that he who controls the past controls the future. The equation of the 1990s to the Time of Troubles is a real stretch, but is intended to communicate several messages. Most importantly, during the Time of Troubles, Russia (or more properly, Muscovy) was invaded by foreigners (Poles, to be specific); the present Russian elite similarly wants to assert that Russia experienced a virtual foreign conquest in the 1990s, and that Putin et al drove out the invaders. All they need is some foreigner’s ashes to shoot out of the Tsar Cannon to symbolize their victory.

And speaking of an interesting twist on historical revisionism, the Putinist view of the Bolshevik Revolution is that it was A Coup Led By Dangerous Radicals. Richard Pipes, call your office. It is ironic indeed to see the Pipes interpretation of the Bolshevik Revolution given such a ringing endorsement by the current Russian government. It is the right interpretation, but the motives for its adoption are very interesting. Putin et al want to delegitimize any challenge–current or historical–to the current political order. To double up on the irony, the current administration clearly admires–and arguably wants to emulate many aspects of–the Stalin era which cemented the control of the Bolshevik/Communist Party. That is, the Bolshevik’s destabilization of the Provisional Government was bad, but Stalin’s stabilization of the Bolshevik’s control over Russia is good. OK. Whatever. What is stabilized is a matter of secondary importance; stability itself is the primary thing.

Robert Coalson has an interesting take on this:

The logic of the analogy between the Bolshevik Revolution and the Time of Troubles leads to the conclusion that Soviet dictator Josef Stalin was the strong, authoritarian leader-for-life who pulled the country out of chaos and, through a far-sighted program of industrialization and collectivization, created a country that was capable of withstanding the onslaught of Nazi Germany and of competing in the Cold War for decades. The Kremlin, of course, is wary about direct praise of Stalin, largely because of how such statements are seen in the West. In addition, the means by which Stalin came to power — infighting, betrayal, show trials, and persecution — are clearly less savory than the image of the Grand National Assembly that elevated Mikhail Romanov on a wave of national unity.

Putin has co-opted the Stalinists. However, Putin has made enough overtly pro-Stalin statements over the years to have lured away virtually all the Stalinists from the Communist Party. He has restored Stalin-era state symbols and has stated directly that the country has no need to feel guilty about its past. During Putin’s years in power, Stalin’s reputation has grown steadily, with more and more Russians stating that he played “a positive role” in Russian history. State television commentator Mikhail Leontyev wrote in “Profil” this month: “What Stalin inherited from the Bolsheviks as an object of state — in fact, imperial — restoration was an absolutely Asiatic formation that could only be managed by Asiatic methods — literally those of Genghis Khan. That is, by using ‘the masses’ as raw material, fuel for the historical process. There were no other means for managing that country, for saving it, for securing it in the midst of an aggressively oriented environment.”

But the analogy between the revolutionary period and the Time of Troubles is emphasized in Putin’s Russia. Both were times of internal division, chaos, famine, foreign intervention, and widespread suffering that presented an existential crisis to the country.

3. Read this article on the nationalization of protection rackets in Russia and tell me that the country has glowing growth prospects. In essence, there is an informal tax structure operating in parallel with the formal tax structure. (The formal structure, by they way, actually has some admirable features.) The state protection rackets are effectively taxing entrepreneurial activity in Russia. This will inevitably dampen growth.

4. An article by Aleksandr Aleksandrovich Konovalov in Nezavisimaya Gazeta (reproduced in Johnson’s Russia List 2007-#223) is worth reading in full. This part is of particular interest:

Actually the last thing the behavior of President Putin in recent months resembled was the behavior of a “lame duck,” that is, the politics of a departing president. More likely just the opposite, he was never so active in making new appointments, and they obeyed strict logic. Only people who were close and absolutely loyal were appointed to key political posts. Moreover, what was required of them was not so much experience and knowledge of the subject as the ability to
monitor large financial flows. In effect it turns out that a system of state corporations with gigantic budgets and very questionable economic effectiveness is being created in parallel to the government. All this does not seem like preparing for departure and the replacement of the government, but instead seizing the dominant heights in the economy and politics that will make it possible to preserve this power.

In practice only two obstacles can arise to implementing such a plan. First, it is essential that the voter all the same votes for Zubkov as president, and second, there is a likelihood, though a small one, that coming to the Kremlin, as president Zubkov would get out of control and want to “steer” (the ship of state) himself. At any rate, Russian political history is still unaware of any case where a politician (even a very weak one) resisted such a temptation if the winds of fate put him in the position of an absolute master.
[Emphasis mine.]

As for the first task — the election of Zubkov as president — it does not look complicated. In conditions where 40% of the voters are willing to vote for anybody President Putin points his finger at, it is not hard to “develop” the necessary additional 10%. But then no one would undertake to guarantee the stable and loyal behavior of the person selected by the president of Russia. It was actually specifically to ward off such a threat that all the appointments and changes in the power structures were in fact undertaken. But, I repeat, the president’s decision to be at the top of United Russia’s list in the upcoming elections once again shuffled all the cards.

The President Is Not Playing by the Rules

One gets the impression that before the United Russia congress, Putin’s plans began to change; and decisions are being made in terrible haste, “on the run,” as people say. One gets the feeling that the president suddenly realized (or someone
explained to him) that power in Russia cannot be given away for half a year or even for half an hour. You will certainly not get it back. There are feverish searches underway for a way out of the trap in which both the president himself and his closest associates have found themselves. If such things exist, of course. In any case, from the outside one gets the impression that the
president no longer trusts anybody. That is why Vladimir Putin’s announcement at the United Russia congress that in certain conditions he might take the post of prime minister after leaving the office of president seems so hasty and not well thought-out. It is becoming clear that even during the parliamentary elections, Putin plans to obtain the mandate of the undisputed national leader. He may agree to take the post of prime minister or he may not, and the second option is still the most likely.

How would all this be organizationally formalized? Apparently, two offices would appear in the Kremlin. The plaque “President of the Russian Federation” would be hung in one, while “National Leader of the Russian Federation” would be hung in the other. That is absurd! An official can function in a system of coordinates that is understandable to him. Who should be given the highest honors and which office should one try to get into to resolve one’s problems? All these and a multitude of other questions must have precise and clear answers. Otherwise some of the officials would begin running to one office, and some — to the other, and some would actually begin to recreate the customary system with the understandable hierarchy of relations.

If Putin all the same decides to become a strong prime minister under a nominal, weak president, theoretically such a system would provide him with some temporary advantages. The world is familiar with examples of such systems. But given the current Constitution, the consciousness of the present officials might actually become muddled from such an arrangement. And such a situation could end in nothing but a grandiose internal argument. It is very doubtful that Russia has sufficient resources and reserves of political stability to survive such an experiment.

This is quite in accord with my earlier analysis of Putin’s alternatives; most importantly, Konovalov recognizes that the premiership or other non-presidential posts are very poor substitutes for the presidency given the formal powers invested in that office. The immediate implication of this is that Putin must find some way to circumvent the current constitutional ban on a third term.

Konovalov also lays out one of the two competing positions on what is going on in the Kremlin today. The first is that Putin is playing a masterful game of chess: keeping his opponents guessing; raising, then dashing, the hopes of would be successors; pulling surprises; but all according to an overall plan to retain the presidency. The second–the one that Konovalov advocates–is that Putin is riding the tiger. He desperately needs to stay on top; his fortune, power, and perhaps his life, depend on that. But he has no well-considered plan to do so. His ruthless underlings are restless, and jostling for position. He has a preternatural obsession with stability, and knows that one wrong move could plunge the Russian elite–and the nation–into a chaotic war of all against all. So he is extemporizing, experimenting, furiously floating trial balloons, encouraging “grass roots” movements of support, all with the object of finding some way of staying atop the tiger–instead of under its claws.

I do not know which story is correct, but if I had to choose, I’d choose the riding the tiger alternative. Devious Master Plans are the stuff of fiction and movies. Political decisions are usually extemporized in conditions of great uncertainty. Leaders are seldom puppet masters, but are buffeted by events largely outside of their control. Successful leaders are those that are best able to respond to the vicissitudes of circumstance, and keep one step ahead of their rivals.

Regardless of which explanation is correct, the ultimate conclusion is the same; Putin will remain President of Russia, or at least will make every effort to do so. Given that he is likely almost completely unconstrained by any moral scruple, and he has many resources at his command, the odds are in his favor.

5. From an article in the Moscow News (again via JRL 2007-#233), a story about Boris Yeltsin that echoes a theme in my post Mocked By the Fates:

A few years ago, Russia’s ex-president was celebrating his birthday and Alexander Livshits, his former aide on economic issues and Russia’s deputy prime minister in 1996-1997, phoned him to congratulate.

According to Livshits, who later retold the story to journalists, after exchanging niceties the two men engaged in a conversation that, among other things, touched upon Russia’s economy performing amazingly well.

“Well, Alexander Yakovlevich, it isn’t that difficult to do today, with oil prices hovering above $40 a barrel. If we only had that price back in, say, 1995, we could have moved mountains,” Yeltsin lamented.

Well, that’s enough for one night. So much to read–and to write–and so little time.

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