Russia After Four Years of Putin

by academician Nodari Simonia, director of the Institute of the World Economy and International Relations of the Russian Academy of Sciences
RIA Novosti

Vladimir Putin’s achievements during his four years as president should be viewed in light of what he inherited from previous leaders. Although his predecessors are proud of their legacy, their efforts (except for Yevgeny Primakov’s short premiership) were destructive. Indeed, the old system was obsolete and had come to an impasse. I wrote books about this in 1975 and 1991. But the question is: why was it necessary to destroy not only the system but also the productive forces, thereby reducing Russia’s economic potential by half and confining 40% of the population to poverty? The pseudo-liberals did create something, though. Their main achievement was bureaucratic capitalism, or oligarchic capitalism, as it is referred to in Russia. Russian capitalism, which is comparable to the type of capitalism in Indonesia under Sukarno, was the worst in the world. During Sukarno’s rule, corruption infected nearly every sphere of human activity and developed into a lifestyle. The parasitic nature of Indonesian capitalism lay in the fact that oligarchs did nothing but pump natural resources and transfer the profits offshore. In Russia, the gap between a small group of people increasing their wealth by similar business practices and the huge number of "ordinary" people was growing. The country was confidently sliding into the Latin American development model.

One of Vladimir Putin’s achievements was preventing the country from falling into this abyss. From the very beginning of his term, the president tried to find a compromise with the oligarchs on their new relationship with the government. He suggested that they continue to increase their businesses, pay taxes and stop dictating to the authorities the privileges and laws they wished to follow. This approach was ineffective. However, when Vladimir Putin began acting and punished the most defiant oligarch, Russian "Liberals" and their Western colleagues complained that democracy was ending and Russia was returning to its Soviet past. As a scientist who spent many years studying the history of social development of Western and Eastern countries, I share the president’s indignation when he said: was there any democracy at all?

Indeed, how can there be an end to something that has never existed?

Only someone unversed in politics or a superficial historian or a politician could say that the domination of oligarchs in the economy is compatible with democracy.

Yeltsin’s rule was authoritarian. But his authoritarianism was weak and demoralised society. Only an interested party or an ignorant person could mistake the anarchy in state structures and Russia’s foreign policy for democracy. During the decade of Yeltsin’s rule, the middle class remained small and undeveloped and, together with small and medium-sized business, suffered from the pressure of the oligarchs and officials, and organised crime. In other words, there was no social basis for democracy.

I think many of those – in Russia and abroad – who are not interested in a strong Russia know exactly what I mean and simply pursue double standards. They made no warnings, however, about democracy ending when many top managers of the largest U.S. energy corporation, Enron, were convicted of fraud, or when Italy faced a similar scandal around the dairy giant, Parmalat. Then why was the arrest of the Yukos corporation supposed to do away with (non-existing) democracy in Russia? Some people have said there must be some political motivation, but refused to elaborate. Indeed, there is a political aspect to the problem. Khodorkovsky was ambitious enough to attempt to bring back a political system in which oligarchs could dictate the authorities what laws to adopt and order them to leave loopholes to "optimise taxes" (as they termed simple tax evasion).

Vladimir Putin’s attempts to give a civilised shape to the Russian bureaucratic capitalism are his main achievement. However, he had to tackle other pressing issues which were the government’s and other agencies’ competence. Vladimir Putin came to power without his own team and had to form one while in office. That is why he moved forward cautiously and slowly, especially considering that the amount of work ahead of him was and still is quite large. One of his main concerns is to preserve and consolidate the current stability in society.

Putin’s undoubted historical achievement is averting the centrifugal trends in the Russian Federation that threatened the country’s integrity. Russia’s basic institutions are no longer shattered, and painstaking efforts are being made in the administrative reform. New laws to reduce abuse on the part of officials and their clients are being adopted. The shameful period of many-months’ wage and pension arrears – the most typical feature of the Russian "democratic period" – has almost come to an end. The State Duma has adopted three packages of anti-bureaucratic draft laws at the president’s request over the objections and opposition of many ministries. But officials of all ranks have managed to find loopholes in these laws too, and therefore the position of small and medium-sized business has remained the same. Nonetheless, the president and his administration are drafting new laws to change the situation.

Equally remarkable are Vladimir Putin’s efforts to strengthen the country’s defence capacity and security. Under Yeltsin, the defence sector collapsed, scientific research and developments were suspended, and highly trained personnel was lost. This all took place under the slogan of "conversion". The Internet, which marked the beginning of the new post-industrial era in the human history, emerged and was at first only used in the U.S. defence sector only. The remains of the Russian defence industry were preserved thanks to Soviet weapons sales. Sometimes, Russia even delivered weapons (such as Su-27 and Su-35) that the Russian army could not afford to China, India and other Asian countries. The situation is now changing. In 2003, Russia’s Air Force was supplied with updated fighters and in 2004, it will be provided with a Tu-160 strategic bomber. The Missile Force is being consolidated too.

An assessment of Vladimir Putin would be incomplete without due consideration for his foreign policy achievements. In the past two years, I could see how respectful the world leaders became to the Russian president. The indulgent and therefore humiliating attitude typical of Yeltsin’s rule is gone. Russia’s foreign policy is no longer one-sided. The upset balance in Russia’s relations with the West and the East has been restored, slowly but surely, thanks to the energy and efforts of President Putin. The earlier debates about Russia’s orientation (pro-US, pro-EU or pro-Chinese) in its development are becoming apparently pointless. The president has made it clear to everybody – Russia’s foreign policy is go