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Analysis & Opinion
12.02.10 Russia Profile Weekly Experts Panel: Back To The Future
Introduced by Vladimir Frolov

Contributors: Vladimir Belaeff, Stephen Blank, Ethan Burger, Vlad Ivanenko, Alexandre Strokanov

The Institute for Contemporary Development, a Russian think tank that claims to speak for President Dmitry Medvedev (he chairs the Institute’s Board of Directors, while his loyal aide Arkady Dvorkovich sits on the Board), released a report last week that paints a picture of Russia’s political future under a successful modernization program launched by Medvedev. The report’s suggestions draw obvious parallels with the policies of the 1990s. In fact, the authors claim the Russia needs “to go back to Boris Yeltsin’s Constitution” to ensure political competition as a prerequisite for economic modernization. But is this premise correct? What is the connection between a complete overhaul of the existing political system in Russia and Russia’s economic progress? Is there a link between political freedom and innovation?

The report recommends a drastic overhaul of the country’s political system, including a return to gubernatorial elections, direct elections to the Federation Council, a return to a mixed system of electing half of Duma members in single mandate districts, lowering the threshold for political parties to five percent, and shortening the term of office for the president and the Duma to five and four years respectively. The report also recommends the disbanding of the Federal Security Service (it would be split into two agencies – the Federal Counterintelligence Service and the Service for the Protection of the Constitution) and the Interior Ministry, and Russia’s accession to NATO and the European Union.

Its vision of Russia’s future also involves a multi-party democracy dependent on two centralist parties vying for a middle class vote – a right-centrist party and a left-centrist party, ostensibly byproducts of the United Russia Party and the Just Russia Party, with the Communists and the Liberal Democratic Party occupying a leftist, nationalist fringe. It also sees a genuinely free press, with state monopoly over television destroyed by the switch to digital TV, and an unashamedly Western-oriented foreign policy with no great power ambitions for Russia.

The report’s central premise is that there can be no development of a modern economy, especially an "innovation-driven economy," without an open political society. "Only a free person is capable of inventing something new," said Igor Jurgens, the vice president of the Russian Union of Industrialists and Entrepreneurs and one of the report's authors.

But is this premise correct? Does it really hold water, particularly in the Russian context? What is the connection between a complete overhaul of the existing political system in Russia, which is not ideal but much more liberal than in many countries, and Russia’s economic progress? Is there a link between political freedom and innovation?
Is going back to Yeltsin’s political system key to Russia’s modernization? Is aspiring to membership in NATO and the EU going to advance the cause of Russia’s modernization, or is it an exercise in futility in Russia’s case? Could the report’s recommendations be seriously considered by the Kremlin?

Vlad Ivanenko, Ph.D. in economics, Ottawa, Canada:

Among few maxims that I still remember from my engineering past, one tells that to meet a moving target, a guided missile should aim along its prospective trajectory. Only in the static world one can reach the goal by directing one's efforts toward the goal directly.

Going back to Yeltsin's time, which the Institute for Contemporary Development ostensibly claims is necessary to attain the objectives of Russia's modernization, is perfectly suitable for a static world. However, as the modern world passes through “interesting times”, I am afraid it has already gone past the “point of no return.” Thus, to find Russia a suitable place in the new global order, the Russian leadership should look forward instead of uncritically relying on past experience.

I would characterize the emerging economic environment with the following features. First, the world is becoming less globalized in the sense that countries that absorbed trade deficits before are taking measures to replace imports with domestic production. Secondly, the international financial system has lost stability, implying that for some time financial credit will be excessively affordable. Thirdly and related to the second point, governments in the United States and in parts of Europe will be increasingly proactive, replacing private investments with public programs partially funded through foreign borrowing.

In this environment, relying on the idea of liberalization is likely to lead Russia astray. The country does not possess sufficient economic “weight” to attract international investments on its own, while national private entrepreneurs, free from government supervision, would choose to serve the existing centers of gravity and, thus, perpetuate the state of high-income inequality and the “enclave,” or dual-type, economy that developed in Russia in 1990s.

An alternative path for this country, which I believe comes closer to its optimal trajectory, is for the state to assume the full responsibility for modernizing the national economy. Moscow should come up with a number of key projects and assure the inflow of funds for their implementation that can be carried out by private contractors, similar to the economic stimulus programs introduced by the Barack Obama administration in the United States. More specifically, I single out the program of natural resource development in Eastern Siberia, the region that may become an important supplier to the Chinese industrial machine for years to come.

Regarding the political system that exists in Russia today, I doubt that it is yet a binding constraint: judging by the Ukrainian experience, greater liberty does not necessarily go hand in hand with economic prosperity on the post-Soviet space. A more extensive argument of the above passage can be found in my paper “Russia’s Positioning amid Global Uncertainty” that is forthcoming in the journal Russia in Global Affairs.

Ethan S. Burger, Adjunct Professor, Georgetown University Law Center, Washington, DC:

Political and economic reforms are inseparable. People can debate whether the Chinese model might work in Russia, but as recent events suggest it will take decades to know if it has been truly successful in China. In any case, the Chinese population is roughly nine-times larger than Russia’s, China produces goods largely for foreign as opposed to domestic markets, and outspends Russia (and most countries) on research and development and improved education. China is moving forward, while Russia is standing still. Still, many specialists believe it would be difficult for the current Chinese leadership to hold onto governmental power without widespread use of its security police and army against its citizenry if the country’s real unemployment rate were to approach ten percent, and such actions have a way of only being effective in the near term.

The recent Institute for Contemporary Development monograph “Russia in the 21st Century: The Shape of a Desirable Tomorrow,” states in its introduction that now [Russian] society and its leaders must make a choice. . . failure to do so would discard a unique historical opportunity. This document is comparable to a presidential political platform in a country without genuine political parties. Significantly, neither president Medvedev’s nor Prime Minister Vladimir Putin’s names appear in the monograph’s 66 pages.

As its title suggests, Russia needs to take bold steps to flourish in the 21st century – a return to the past (be it the communist or Putin eras) will contribute to the country’s further decline. If the monograph’s recommendations were to be implemented (or attempted in a serious manner), it could counter the criticism that the Russian president’s alleged desire to make Russia into a state based on the rule of law is merely symbolic, since the Russian governmental structure largely remains in place, while Medvedev failed to prevent the conflict with Georgia, the cyber attack on Estonia, or to condemn fraudulent regional elections. President Medvedev is the chairman of the institute’s board of directors, and not surprisingly, some of Putin’s supporters in the State Duma have sought to disparage it as a return to the unsuccessful policies of the Yeltsin years.

For example, the report calls for reducing the size of Russia’s armed forces. The Ministry for Internal Affairs would be abolished, replaced by a Federal Criminal Police Service. The report also seeks to deal with the problems of depopulation, corruption and mismanagement of state enterprises. If these policies were pursued with vigor, together with a foreign policy compatible with Western goals on key issues, this could create the groundwork for Russia’s admission into the European Union and NATO.

Finally, one should avoid the trap of ignoring the lawless nature of the late president Yeltsin's rule. He attacked the White House in October of 1993 and oversaw what was probably a fraudulent approval of the Russian Constitution in December of 1993 (one should look at the results in Chechnya, recall the violation of the laws on campaign finance spending and the loans for shares scheme, as well as the process by which he obtained immunity not merely for himself but for his entire family as he gave up office). On the other hand, the state did not control television, and while corruption was still widespread, it did not seem to affect all aspects of society.

Alexandre Strokanov, Professor of History, Director of Institute of Russian Language, History and Culture, Lyndon State College, Lyndonville, VT:

The first comment that I would like to make is that the media’s coverage of the report was far from perfect, and in a way provided a distorted image of the document. The report is not a call “to go back to Yeltsin’s time,” nor does it “reject great power ambitions for Russia.” The latter assumption is incorrect because it contradicts the text, with one of the paragraphs being called: “Great Power of the 21st century.” I read the full report and my overall impressions were mixed but far from plain negative. I would recommend any expert who is going to comment on it to read it first, rather than base an opinion on some quotes published in the media.

Of course, the report reminded me of many Russian liberal party programs that I read while working on my three books about Russian Duma elections since 1993. It has the same mixture of good ideas, populism and the obvious spirit of the Manilov character from Nikolai Gogol’s “Dead Souls” – it has the same problems with the mechanism of implementation. Even the healthy suggestions and proposals are based on the belief that simple changes in the political structure will necessarily lead to quick and positive change in other spheres of life. This is what I call liberal “political determinism” in contrast to the Marxian “economic determinism.”

However, this report looks much better than others I have read in the past, for several reasons. It proposes a much more responsible foreign policy concept aimed at Russian national interests, rather than benefitting the so-called West in general. It recognizes the need for more serious attention in the social sphere: the health system, education, etc. This means that Russian liberals did learn something from the last two decades.

Is there a link between political freedom and innovation? Sure, going from an orderly and free society to a sort of police state that curtails previously existing opportunities would certainly harm the innovative spirit of the country. But such freedom is not critical at the beginning of the innovative wave; Russian history shows that modernizations never began this way. Moreover, this liberal approach may lead to counterproductive consequences, when all attention is channeled to politics leaving the real fields of economic, scientific and social innovation unattended. It is much easier to change the laws on elections, the presidential term or laws regulating the life of political parties than to start economic growth, achieve a scientific breakthrough and make people support modernization. A comparison between Mikhail Gorbachev’s and Deng Xiaoping’s approaches in this regard will be quite helpful, and the example of Ukraine, with its free elections but inefficient and unpopular government, should not be ignored.

The authors of this report correctly point to the fact that Russia needs to “re-start the mechanism of political competition.” They suggest their own recipes for it, but there can be many other approaches to this absolutely real issue, not necessarily connected with a return to Yeltsin’s electoral system, which was discredited in the opinion of many people who survived the “wild 1990s.” An open discussion about it in Russian society would certainly be a good thing, where voices could be heard from the right, as well as from the left of the political spectrum - the side that liberals love to ignore.

In their foreign policy suggestions, the authors of the report are thinking in the context of the Kremlin’s current approach. They call for a moratorium on NATO’s expansion toward Russia, support the Kremlin’s proposal for a new architecture of European security, the reform of the OSCE, etc. With regard to Russia’s membership of NATO, the reader should note that the report talks about a new NATO in a situation where Western countries are able to overcome their own “hawks.” This struggle against Western “hawks” may be much more challenging than merely expressing Russia’s sincere goodwill toward such cooperation.

An interesting detail in the report is the role of a successful joint Russia-NATO peacekeeping mission in one of the important countries in the third world. I just hope that this unnamed country is not Iran, because if it is, I will consider it an example of Manilov’s mindset. When considering such dangerous games, Russia should think twice before offering to pay this price for improved relations with NATO. Central Asia simply cannot afford another Afghanistan close to its borders. If the authors have another, more eastern “hot spot” in mind, they should not forget that without China’s involvement it is not going to be successful, and the key role there may be played not by NATO but by the Shanghai Cooperation Organization.

And finally, should the Kremlin take the report’s recommendations seriously? Yes, of course, but only as one of many opinions that certainly contains some interesting and valuable proposals from the liberal side, but do not represent a “road map” for the country’s actual modernization.

Vladimir Belaeff, President, Global Society Institute, San Francisco, CA:

First, a point of correction must be made. On its Web site, the Institute for Contemporary Development reports that Medvedev heads its Advisory Board (Popechitelskiy Soviet) – not the Board of Directors. The Chairman of the Board of Directors is supposedly an entirely different gentleman. This distinction is significant and substantial.

The report in question has a rather scattered vision: it not only proposes the deconstruction of key components of Russia’s security architecture, but also requires the dismantling of Russia’s national automobile inspection agency. Including this latter objective side by side with the others is analogous to advocating the dismantling of the USAF Strategic Air Command, and “by the way” also of the Fairfax County Sheriff Department… One begins to suspect that frustrated motorists at the Institute for Contemporary Development are trying to smuggle a bit of personal vendetta against their highway nemeses into the grand vision.

Some of the suggestions are clearly nonsensical – shortening the terms of office is not political modernization. In fact, the report does not explain how any of its political proposals are modernizing. The report appears to propose change for change’s sake, exploiting the current Russian vogue for “modernization.”

One should remember that Russian modernization is primarily oriented at the business and scientific sectors, and is driven at least in part by concerns that Russia may fall behind, or miss out vis-?-vis the innovation that drives First World economies. It is indeed accurate that the institute’s report advocates a return to “Yeltsin’s Constitution” – i.e. it proposes advancing “back to the future.” How this retrograde movement is to be qualified as “modernization” the authors do not explain.

So one is free to speculate that the underlying motive of the report is the nostalgia that the authors have for the Yeltsin era, perhaps because they were more comfortable then, or younger, or for whatever other personal reasons. If nostalgia for the 1990s is the underlying concept of the report, then the authors are rather unique for Russia and probably very lonely there. It is very unlikely that such advocacy would get a lot of traction with Russian citizens who know very well that their substantial improvement in economic wellbeing and living standards came after the chaos of the Yeltsin era ended.

The question of whether innovation requires political freedom of the liberal flavor is actually quite important. Advocates of liberal ideologies claim this to be so. But historical evidence does not support such claims. Over the 7,000 years of recorded history, human innovation took place in political settings that were monarchies, often quite distant from the liberal political paradigms. Practical political liberalism was implemented only around 40 years ago; human innovation has produced tangible positive results for thousands of years before that.

How “free” were Britain or Prussia in Newton’s and Leibnitz’s time? And even in our own era, countries like South Korea, Taiwan, Japan (with its one-party rule for 50 years) are examples of innovative societies with not-so-liberal political systems. The first jet airplanes were invented in Nazi Germany, as well as the first ballistic missiles (the V-2 rockets.)

Rather than a “modernization” program, Russia needs a process of social regeneration and evolution. Everyone (including the Russians) seems to have forgotten that Russia is emerging from 74 years of totalitarian one-party rule. It will take time to recover from that experience. Utopian liberalism failed Russia several times (in 1917 as well as the 1990s.) It will fail again, if implemented. Russia needs practical modernization, not political tinkering divorced from reality.

Professor Stephen Blank, the U.S. Army War College, Carlyle Barracks, PA:

First of all, the current Russia is not much more liberal than many other countries, quite the opposite. And it is heading in the wrong direction. I have no doubt in saying that wholesale renovation of the Russian political system is desirable. Many of the points here are to be emulated.

But it is a mistake to assume that Yeltsin was liberal or that his Constitution is. Neither he nor his government believed in checks and balances or the rule of law. Secondly, the Constitution of 1993 provides a license for presidential autocracy or so-called super-presidentialism. Many of the innovations of the 1990s personally suited Yeltsin so they endured, but they had no anchor in law.

Equal justice under law and freedom and civil rights guaranteed by law remain the enduring foundations of a liberal political system. Enforceable property rights and the rule of law underpin a market economy. I do believe that that these are essential and desirable goals to strive for if Russia is to recover from its permanent crisis and become a truly prosperous and secure place.

Of course, this means foregoing empire and autocracy, which is why the current elites will oppose it, but in the long run Russia has no choice, for the current course merely continues the delusions for the past and will lead to the disappearance of Russia as a great power, if for no other reason than through demographic and economic decline.
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