- (october 2013)
Putin's Russia.
On 24/11/2011 Putin assumed presidential powers again, after briefly stepping
down and letting his trusted pupil Dmitry Medvedev be president for a few years.
The democratic
world rolled their eyes: here is another autocrat who wants to stay in power
no matter what while pretending that his country is democratic.
There are
two problems with this simplified interpretation: 1. Putin was and is the
most popular and trusted politician in the country; and 2. Reliable witnesses
think that Putin honestly believed his return was necessary to save Russia
(or at least his party United Russia) from trouble (do not forget that Putin
did save Russia when it was sliding into anarchy and bankruptcy following
the capitalist rape and the Chechen insurrection of the 1990s).
The West likes to think that Russians yearn for democracy like the Arabs,
but there is nothing resembling the Arab Spring in Russia.
Most Russians are indifferent to politics because the Russian people do not
have a tradition of true multiparty democracy. Whether under the czars,
under communism or under Putin, their country has always been run by the
most powerful man (or woman) in the country. The rare elections simply rubber
stamped his or her rule.
The bottom line: Putin is as legitimate a leader as it gets. And certainly
enjoys a higher approval rating than the democratically elected Congress of
the USA.
Putin faces three order of problems: 1. economics; 2. domestic politics; 3.
foreign policy.
1. Russia's economic growth has slowed down to 1.5%, although Putin keeps planning for 5%
(an old Soviet attitude, the idea that the central government decides GDP).
Such a slow growth rate, possibly leading to a long period of
stagnation, would be worrying enough, but the underlying fundamentals are even
more disturbing.
To start with, Russia's productivity is about 20% of the USA.
Capital markets are underdeveloped. Foreign investment is tiny.
The biggest sector of the economy (energy) is in the hands of state bureaucrats
(more later about this).
The inefficiency of government spending is the consequence of a vast system of
chronic corruption.
The percentage of GDP that is lost to corruption is obviously not known, but
estimates can be as high as 15%.
The way the national budget is allocated would be alarming anyway: education
and health spending have gone down, whereas defense spending has gone up.
Balancing that budget still depends on oil and gas exports. Without gas and
oil i estimated (based on official Russian statistics) that government debt
would be about 10% of GDP, enough to make the budget of the USA and even
Greece look good.
Attempts at reforms that would change these fundamentals collide with
vested interests.
A lot of that oil and gas wealth depend on two giant corporations: Gazprom
and the newly created Rosneft, now the largest oil company in the world.
Gazprom is a colossal bureaucracy that totally missed the revolution in natural
gas (i.e. fracking). Russia is literally a decade if not two behind the USA
and Canada.
There is every indication that Rosneft will be as slow as Gazprom at adapting
at new technologies.
Since energy is such a crucial sector of the Russian economy, this situation
does not bode well for the future, and may actually explain why economic growth
is suddenly so sluggish.
The consequence is that Putin has to prepare the Russian population, especially
the youth, to a growing gap between expectations and reality.
It actualy helps that the Russian population is declining: Russia does not
need to create as many jobs for young people as, say, Spain. It is therefore
twice scary that Russia has a problem of youth unemployment.
This leads to problem #2: domestic politics. Western media are obsessed with
the democratic opposition, notably the man who unsuccessfully ran for
mayor of Moscow, Alexei Navalny.
However, that man lost, and would have lost in a freer
election: Russians do trust Putin's men in every position of power.
The democratic opposition did relatively well in the september 2013 regional
elections, but they lost everywhere, and unfair Kremlin practices can only
be partly blamed for it.
Like it or not, the illiberal politics of the Kremlin are popular with the
Russian public.
Putin has been able to create an alliance with popular forces that is often
underestimated in the West (mainly because Western politicians are failing
to create the same alliances back at home).
For example, Putin enjoys the full support of the Orthodox church, which
appreciates his constant appeal to traditional Russian values and the Kremlin's
anti-gay and anti-decadence stands (hence the law discriminating against
homosexuality and the arrest of the rock band Pussy Riot, widely derided in
the West but widely jsutified by religious Russians).
The identification of state and church is probably the single most stunning
departure from the Soviet era. The Orthodox church is getting back the lands
that were expropriated by the Soviet Union, something that no other religious
group is getting (not even the Catholic church).
The illiberal policies, therefore, do not constitute, per se, a truly
undemocratic attitude: they reflect the will of the people as much as
Obama's stand on gay marriage reflects the will of the people in the USA.
The damage that these illiberal policies is causing is more subtle and hard
for Putin himself to appreciate. They undermine the urban elite, the very
group that, more than anyone else, could transform Russia into a vibrant,
modern nation. This is a tiny percentage of the population, unnecessary for
Putin's rule, but indispensable for taking Russia to the next plane of
development.
Ditto for banning foreign non-governmental organisations (NGOs) and slowly but
steadily criminalizing domestic NGOs by broadening the definition of "treason".
These are the agencies that, by working outside the government, were creating
not only a more transparent society but a more modern one.
Unfortunately for Russia, Putin can dispose of this opposition elements without
fearing any reprisal from the masses.
Putin does not fear the democratic opposition, which is a lot less popular
than him. He does fear a diferent political entity, less publicized in the
Western media: the populist nationalist right.
The "Russians" block is an emanation of that spirit.
The first symptom that nationalism was getting out of control came in december
2010, in december 2010 when football hooligans and xenophobic extremists
joined in rioting against the police following the murder of a football fan
by illegal Muslim immigrants and the release of those same suspects by the
police.
There never were comparable riots to protest Putin's illiberal policies.
The xenophobic urban thugs can cause trouble that the democratic opposition
cannot.
Worse: the appeal of these urban thugs is much broader, because the
under-employed youth blames the millions of illegal immigrants
(mainly from Central Asia) for its economic woes.
Navalny is now championing laws that would restrict immigration from Central
Asia and the Caucasus. Putin cannot match his rhetoric for a simple reason:
Putin's foreign policy of keeping those very countries into the Russian sphere
of influence. The last thing that Putin wants to do is to increase the
separation between Russia and the former Soviet republics, but that's precisely
what many people would like to see in order to keep illegal immigrants at bay.
The Russian youth, in general, is another emerging problem.
Putin won the people's trust by providing stability and some certainty
about the future.
Stability is no longer enough for the young. It was for their parents, who went
through the traumatic experience of the collapse of communism. People
born after 1991 have little patience for the inefficiencies and backwardness
of the Russian system. They are "wired" and aspire to high-tech jobs and
to the kind of modern life they see in Western films.
They listen to rock music, not to Russian folk music.
Sadly, many young Russians are emigrating to the West despite the fact
that Russia has incredible natural resources. Russia doesn't offer
them an attractive future. During the Cold War the Soviet Union lost many
brilliant scientists to the West, but it was always able to retain some
world-class physicists and mathematicians. It looks like modern Russia might
not be able to do the same.
On the other hand, older Russians know that, for better and for worse,
this is very much a Putin-dependent system. Whenever
Putin does not act, nothing happens, as demonstrated by recent floods
that showed the complete inability of the system to provide even minimal
help to the people (until Putin in person showed up and personally directed
the rescue mission).
Putin's strength also rests on the dysfunctional West: Russians are deeply
aware that Western Europe is bankrupt and that the USA is ungovernable.
Compare with Putin's economic miracle and Russia's stable government.
Third, foreign policy.
Putin honestly cares for Russia's safety and
for Russia's dignity. Both issues resonate with ordinary Russians
in a way that the West underestimates.
Hence, Putin's stand on Syria: Putin was right that the civil war would
benefit mainly the Islamic fighters, and many of them are from Chechnya,
and they might go back to cause trouble in Russia if they win in Syria.
The West reads all sorts of hidden intentions in Putin's stands, but maybe
we should learn to take his words at face value. He was right on Iraq (it
did turn out into a nightmare for the USA and the whole region). He was right
on Georgia (the Georgian president started that war, and the West was
hypocritical in defending Georgia's raid against its
separatist republics after supporting Kosovo's independence from Serbia).
And now Putin feels that he has been proven right on Syria: Western support
for the opposition/rebels has resulted in the rise of Islamic fighters,
the very enemies that the USA is fighting with its drone strikes in Pakistan,
Afghanistan, Yemen and Somalia. From Putin's viewpoint, Obama is simply
adding Syria to the list of the countries that will have to be cleared of
Al Qaeda terrorists in the near future.
(And it is hypocritical again that the USA sides with the democratic opposition
in Syria after siding with the ruling Sunni leader of Bahrein against the Shiite
masses that were demanding democratic elections and were attacked by the army
just like in Syria).
Russia vetoes military action against Syria the same way that the USA consistently vetoes action against Israel, widely considered to have violated international law in its occupation of Palestinian territories.
Putin is still angry at what NATO did in Libya, interpreting a United Nations
mandate to protect civilians as an invitation to overthrow Libya's government
and istall a puppet government. In his view the traumatic transition in Libya
has caused the country to fall into anarchy and he can easily point at the
assassination of the US ambassador in Bengazi as evidence that he was right:
that ambassador would still be alive if Qaddafi's government had not been
overthrown by NATO bombings.
The West also tends to ignore the fact that Putin has supported the USA
several times: in Afghanistan, with Iran, with North Korea. It is not true
that Russia has always opposed the USA. On the contrary, it has mostly
helped the USA. When Russia dares contradict the USA, the Western media
present it as a Cold War kind of stand, not a principled decision but a
geopolitical tactic. There is, instead, a strong chance that Putin is simply acting
according to his beliefs, and that he thinks (and most Russians think) that
the facts have proven him right over and over again.
The West also misses some of the internal reasons that dictate Putin's
choices. For example, a community of Circassians lives in Syria.
They moved there when Russia took the region from the Ottoman Empire in the
19th century. Their roots are inside what is now Russia. The more Syria falls
into anarchy, the more likely that Russia might face a wave of immigration
from Syria.
There are also about 30,000 Russian citizens living
in Syria. And, as mentioned, there are already Chechen fighters in Syria,
who might some day return to Chechnya to fight the Russian army.
Last but not least, the Russian Orthodox church feels strong
about protecting other Orthodox churches around the world, and Syria
has a sizeable Orthodox community.
These reasons alone would be enough for the Russian public to support
Putin's stand. It is much more than one man's aversion for he USA.
Let us not forget that the Russian population sided with Putin on Syria,
whereas every poll showed that the population of the USA was not siding
with Obama. One president had his country behind him, the other one didn't even have
his own country behind him. And, internationally, Obama was way more
isolated than Putin (in fact, more isolated than Assad of Syria himself).
A lot was weird about Obama's stand on Syria, not much about Putin's.
One basic problem in the relationships between Russia and the USA is the
lack of trust. Russia (not only Putin) feels that the USA took advantage
shamelessly of the collapse of the Soviet Union to surround Russia with
military bases. There are now soldiers of the USA in Eastern Europe, in
most of the Middle East, in Afghanistan, in Mongolia and, of course, in
Korea and Japan. Meanwhile, the European Union has absorbed half of
the Soviet Union's sphere of influence in Europe and is currently trying
to absorb Moldova, Ukraine and Armenia (in one fashion or another).
Even Serbia, that Russia defended when NATO was bombing it, has opted to
join the European Union.
In 2010 Russia's ally Viktor Yanukovich was elected president of Ukraine
defeating the West's favorite, Yulia Tymoshenko, and even proceeded to throw
her in jail in late 2011. Nonetheless,
Ukraine is about to sign a free-trade deal with the European Union that looks
like and smells like a first step towards integration into the Western economic
sphere. Russia retaliated by imposing extra customs checks on Ukrainian imports
and threatening sanctions.
From the Russian point of view, the European Union has no need for Ukraine:
the only reason to be so eager to deal with Ukraine is to weaken Russia.
This reinforces Russia's feeling that the West is ready to take advantage
of any Russian moment of weakness.
Putin honestly felt that Hillary Clinton was conspiring to overthrow his
government through NGOs (Russia started expelling foreign NGOs in september
2012). Look at what NGOs like USAID were doing in Russia and it's hard to
believe in Clinton's good faith and not to justify Putin's paranoia.
(Forget Snowden. He is irrelevant, and probably an annoyance. He didn't tell
the Russians anything that they didn't know already.)
It doesn't help that Western Europe is investing in
new pipelines to circumvent Russia and provide access to
competing oil and gas markets in Kazakhstan and the Caucasus.
Until recently all gas routes between Central Asia and Europe went through
Russia, thus strengthening Putin's economy. How should Putin interpret this
strategy if not as direct blow to his power?
One has to wonder where the bleeding will stop.
Belarus is run by what many consider the last communist czar,
Alexander Lukashenko, who has traditionally sided with Russia because the
West treats him like an embarrassment. However,
Russia and Belarus got into major arguments that peaked (so far) with
Belarus arresting a Russian businessman, Vladislav Baumgertner, head of potash
firm Uralkali, and Russia banning imports of Belarusian pork.
Russia cannot just blame the West for a problem
that it has not been able to remedy: there doesn't seem to be a single country
in the world that
prefers economic ties with Russia over economic ties with the West.
This has multiple causes: credibility (Europe has expanded over the decades
and almost always successfully); respect for independence (even the most
powerful European countries, such as Britain and Germany, have refrained
from trying to influence the outcome of elections in other countries of the
European Union);
and rule of law (that reassures members on what will happen to the union
in the future). Unions with Russia tend to be dominated by one country
(Russia), are not clear in the way they are run and will evolve, and
have a poor record of accomplishments.
Historically, Russia also faces a poor record: many former colonies of the
Western powers (starting with the Americas) got richer under
European domination,
whereas too many former Russian "colonies" (such as Prussia, the Baltic
republics, Poland, the Czech republic, Slovakia) got poorer under Russian
domination. An alliance with Britain and Germany, no matter how declining
their power might be, is still viewed by ordinary people as something to be
proud of, whereas an alliance with Russia is rarely seen that way.
That is a problem that Russia needs to address if it wants to be treated
as a world power not only because of its nuclear weapons.
Putin has probably made a colossal mistake when it comes to the Arab world:
he had defended one dictator after the other,
well knowing that millions of ordinary Arabs were not on his side.
As one dictator after the other has fallen, Russia has become less and less
welcome in the Arab world. No wonder that Putin is making such a last stand
on Syria: Russia is out of every other Arab country.
Interestingly, Putin does not seem to perceive China as a threat, despite
the fact that it is China's phenomenal ascent that is threatening Russia's
place as second major power of the world.
China's growing population along the border with Siberia clearly provides
an odd contrast to Russia's sparsely populated Siberia. On top of that,
it is more likely that Siberians are attracted to China (by the weather
if not by the booming economy) than viceversa.
China also competes with Russia for the natural resources of Central Asia.
However, Putin's Russia seems more comfortable coexisting with China than
with the West. One reason, of course, is that China did not surround Russia
with military bases and did not try to attract Russia's neighbors into
a Chinese-dominated alliance.
There are good news, however. First and foremost,
Russia does have huge shale oil and gas resources that only await to be
exploited. It is just a matter of time.
Russia is already beginning to shift its focus from Europe to the Asian
markets, where China can help fund and man modernizing projects.
Secondly, there are very competent economists in Putin's government.
They created the Silicon Valley of Russia, Skolkovo, which could become
an important incubator of technological startups.
Even Russian NGOs, that still operate, are actually very competent and
resilient.
In foreign policy
Lavrov is widely admired as one of the best foreign ministers in the world.
Lavror is probably annoyed by his naive American counterparts
(and by their silly mistakes that complicate things for Russia too).
See also: Russia, Syria and the West;
The logic of Russia's isolation;
The West is wrong on Russia;
Russia the peacekeeper.
TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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