Opinion: Putin, Aslund, and the Conventional Wisdom
RIA Novosti
August 12, 2005
by PETER LAVELLE, RIA Novosti political commentator

MOSCOW -- Anders Aslund's paper "Putin's Decline and America's Response" is an exercise in being right on some issues and wrong for even more reasons.

Predicting that Russia would experience a "color revolution" only months ago, he has, as is his practice, changed his position. Instead of a revolution from below, Aslund now claims Vladimir Putin's style of governance threatens Russia with imminent political crisis.

Aslund, a senior associate at the Carnegie Endowment of International Peace, sums up his position on Russia in the paper's introduction: "The goal of his second term has been to remove all centers of power but his own, to the point where his regime is now utterly dysfunctional because of over-centralization and secrecy, leaving too few and poorly informed decision makers. The question is no longer whether President Putin will hang on to power after his second term expires in 2008 but whether he will survive that long."

These are bold statements, open to critical interrogation. Using the subtitles from his paper and contents therein, many of Aslund's assertions are either exaggerations and/or part of a political agenda that has more to do with American foreign policy goals than with Russia's continued political and economic evolution. Aslund is also incorrect to romanticize Russia's "democratic achievements" while Boris Yeltsin was president and errors when claiming Putin's tenure has created a new regime type. Both approaches minimize many of the continuities with the Yeltsin era.

"A Successful First Term"

Aslund is certainly correct when pointing out Putin's successes during his first term: economic growth, market-friendly reforms, introduction of a 13% flat tax on personal income, modernization of the tax and legal codes, and balanced foreign policy. Russia watchers, for the most part, universally accept this rendition of Putin's first four years in office. However, according to Aslund, there are "blemishes." He cites the "ruthless war in Chechnya," without mentioning that the second war in Chechnya was a reaction to the second time Daghestan had been invaded by Chechen terrorists. No responsible Russian leader would have allowed that to stand.

Aslund also harps on another favorite issue of Western pundits and the "commentariat" - "Independent media were reined in and taken over by Putin loyalists." The ownership structure of television networks certainly did change; oligarchs were not longer allowed to use the airwaves to fight turf wars for material gain.

One has to question if Aslund remembers how television time was sold to the highest bidder during the 1999 parliamentary elections. The oligarchs weren't interested in free speech, to them any kind of speech had an expensive price tag attached.

As for "taken over by Putin loyalists," it is unclear whom Aslund is referring to. Possibly he has Gazprom in mind. Gazprom has developed a massive media empire, but its motives may be more benign than Aslund may think. Russia's media advertising market is growing leaps and bounds and interest in media assets is a savvy business endeavor. Robert Murdoch, interested in buying a stake in Ren-TV, would surely agree.

Media changes under Putin have not been as dysfunctional to the operation of government as Aslund would seem to imply, with the partial exception of Chechnya coverage and perhaps also some other terrorism-related and security-related matters. While the prior-information role of the media has not been too badly harmed, its real-time opinion functions and immediate-reaction functions have been weakened.

"One Failure after Another"

In this section Aslund states ... "Putin has done little good." "Four disasters stand out: the Yukos affair, the Beslan hostage drama, the Ukrainian elections, and social benefits reform." On all four counts, Aslund misreads the meaning and importance of events.

The Yukos affair is probably the most misunderstood issue during Putin's time in office. The Yukos affair has certainly been ugly and the Kremlin has had to pay dearly for it, but it was also very necessary. Aslund explains Putin's aim behind the Yukos affair is "to enhance his political control by arresting the most politically active oligarch, while his aides want to seize Yukos' assets."

Sadly, it is a matter of record that jailed ex-oligarch Mikhail Khodorkovsky threatened to have Economics Minister German Gref fired if legislation preferential to Yukos' interests was not passed into law. Aslund confuses state interests and sovereignty with the interests of one individual. Like it or not, but the governments of energy export countries - with the exception of the United States and the United Kingdom - control this lucrative and very strategic sector. Why should Khodorkovsky, of all people, after the free-for-all of Russia's privatizations of the 1990s, have been allowed to determine the country's energy and economic future? It would have been a dereliction of duty for any head of state to permit a bandit like Khodorkovsky to sell one of Russia's crown jewels to a non-Russian oil concern. For those going to the wall in the name of globalization and open (but not fair) markets, witness the American response to a Chinese oil company interested in buying into America's oil patch. Again, sadly, Aslund prefers not to address these issues.

What is worrisome, and a concern I share with Aslund, is how the Kremlin is redistributing oil assets and recasting ownership of Russia's oil patch. Elements within the presidential administration engaged in a tug-of-war through state-owned surrogates Gazprom and Rosneft craving up Yukos assets is not encouraging. However, with Gazprom's "ring fence" soon to be abolished and Rosneft to IPO sometime next year, greater outside oversight of both companies will come about.

On the issue of Beslan, Aslund demonstrates no sensitivity what so ever - he always looks for the worst. Aslund devotes 266 words to this subject in this section. He damns the authorities and speaks out in support of his own notion of vigilantism. There is much evidence that Russian officials made mistakes and were not forthcoming. However, Aslund could have been at least more balanced in his presentation. He should have mentioned that Putin didn't tie bombs over kids heads, deny them water for days, and watch them drink their own urine. Many hostage crises go awry in many parts of the world. If the U.S or Israel had managed to save a similar number of hostages in similar circumstances everyone would be portraying it as a triumph.

Nor does Aslund condemn terrorism against Russian civilians or even expresses any interest in why terrorism is a serious problem under Putin's regime. For the record, Vladimir Putin didn't fire anyone at Izvestia for printing explicit photographs of the Beslan tragedy: oligarch Vladimir Potanin did. Izvestia's editor was fired not for producing quality journalism, but for sensationalism - publishing photographs that increased terrorism's terrorizing impact.

The next "failure" Aslund set his sights on is Ukraine's "Orange Revolution". Aslund states: "The third recent policy mistake was Russia's conspicuous involvement in the Ukrainian presidential election."

Indeed, Russia's involvement was conspicuous, but so was that of so-called Western NGOs. The "Orange Revolution" has been betrayed - to use Aslund's own words. People like Aslund have been part of that "betrayal." Instead of attacking the Kremlin, Aslund should re-examine again his lost hope of a truly revolutionary change of elites and political ethos in Ukraine - many people who waited in freezing weather had hoped for the same. Ukraine's great orange has been squeezed of its great hope. It would have been more interesting if Aslund had explained why the likes of oligarch Yulia Timoshenko have had to rely on Putin's strategy to deal with Ukraine's oligarchs' grip on the economy. One does not have to be a fan of the "gaz princess" to understand the challenge of reining in (other) oligarchs who have no interest in the national interest or a market economy. Ukraine's revolution has not been betrayed (yet); it is only dealing with changes that many take a very long time to work out (and no different from Putin's Russia).

Aslund's "fourth big policy failure" is a softball pitch. The "monetization" of social benefits is common all over the world. Giving people cash allows them to make choices in a market economy. Phasing out the Soviet "daycare center" is a bold and forward-looking agenda and a smart move to root out corruption in state services. Aslund is correct in saying that the implementation of this reform was not carefully thought out, but overlooks the fact that Russia's civil society is not as weak as many claim. The government learned a valuable lesson from this: what society will do when it is angered and why, and, importantly, which officials are fit to lead when a difficult situation arises.

What is also overlooked is how Putin rules through informal referenda (as the current Duma has been purposely designed to pass unpopular, though needed reform legislation). Hundreds of thousands of citizens took to the streets to be heard and to demand a reaction from the authorities. Which they got.

"The Nature of Putin's New Regime"

Aslund identifies three primary characteristics of Putin's second term in office as concentration of power, minimized check and balances, and "skilled manipulation of elites" - all apparently either anti-democratic or hostile to a Western definition of democracy. Indeed, due to Aslund's rigid America-centric worldview concerning the promotion of democracy throughout the world, to the point of blinding him, he is simply unable to consider Russia-centric issues motivating the Kremlin's behavior.

Aslund continues, it would appear, to support the suppositions that the golden age of Russia's democracy was during Yeltsin's presidency, when Russia's economic policies were formed by the IMF, young Westernized "reformers" were in government, and a small group of oligarchs who captured the "commanding heights" of an economy that was in disarray. Why these circumstances are favorable for democratic development is rarely, if ever, considered.

Putin's Kremlin, on the other hand, has hardly abandoned Russia's democratic project. For a solid democracy to emerge in Russia, the Kremlin has pursued policies to develop a strong and effective state, tighten control over far-flung regions, assure no single group of super-wealthy oligarchs determine the country's economic policies, and counter terrorist-driven separatism. This may not necessarily promote democracy, but without dealing with issues, democracy will surely have little chance of sinking deep roots in Russia.

There is no doubt that the Kremlin has centralized power under Putin, particularly in comparison with the dangerously decentralized rule of Yelstin. However, centralizing power, without explaining the intention behind doing so, sounds sinister or intentionally anti-democratic. Centralization of power is not inherently anti-democratic.

Also, it is unclear whether Aslund is equating "centralization of power" with "concentration of power" (executive vs. all other power centers, governmental and private) and "centralization" of power (geographic). Some of the Kremlin's centralization has been necessary, some unnecessary, some of it is still insufficient; although most would probably agree that some aspects of centralization have been helpful vis-a-vis extremist oppositions in the Duma.

The State Duma, often referred to as a "rubber stamp," has passed bills that have, more often than not, promoted the development of Russia's market economy and even democracy.

Some social reforms are unpopular, but necessary. Putin's reform project is not stalled as commonly believed. Some structural reforms have slowed down, whereas others and little noticed regulatory bills are regularly passed into law.

Changes to the electoral laws are often described as anti-democratic. However, raising the threshold for a party to enter the Duma demands all parties to appeal to the entire electorate. Niche parties, parties that exist to promote a few individuals, and similar parties unwilling to unite will essentially cease to exist. Is this bad for democracy? Demanding that political parties be better organized and relevant just might save Russia liberal-conservative's parties from the dustbin of history.

"How Can This Regime End?"

Aslund's latest pet project predicts the political demise of Putin. The premise behind prediction is due to the policy paralysis, institutional deadlock, and corruption that Putin has created around himself. This is all over-stated. Though this should not be interpreted that all is well and pristine in Putin's Russia.

Maybe from distant Washington it appears nothing is happening in the Kremlin. However, a cottage industry has come into being observing the Kremlin's economic liberals - Finance Minister Alexei Kudrin and German Gref's Economics Ministry - fight to defend fiscal restraint against those in the government from dipping into the enormous cash pile accumulating the Stabilization Fund and federal government surplus for populist programs before the upcoming election season. Also watched closely is Gazprom-Rosneft tug of war to become Russia's national energy champion. To Aslund this is paralysis, but many observers call this politics in action.

There is one point in which Aslund is correct - Putin is not as strong within the Kremlin as most observers contend. More than anything else, Putin is an arbitrator balancing different interests and policy directions. This has always been his role since 2000 and very much in line with how leaders rule in most countries. We have recently witnessed how Putin's arbitration works. After the empowerment of the security forces and other government agencies to take on Yukos, Putin swayed in the opposite direction. With the "Oligarch War" fought and won (though with heavy "causalities"), the shift has been to start protecting the business community. This is, of course, a hard sell after the Yukos affair, but foreign investors have taken a renewed interest in Russia. The country's booming stock market is a testament to this.

On corruption, one has to wonder if Aslund made an effort to read the recent INDEM report. Aslund claims, "The unanimous judgment of Russian insiders is that the Kremlin has never been as pervasively corrupt as it is today." This is a gross simplification and in many ways wrong. There are other very important conclusions that can be drawn from INDEM's corruption report. First example, it is more risky to accept bribes than it used to be, so greater amounts must be paid to justify that risk. This would indicate that corruption in Russia is declining. The most encouraging news is that those demanding a bribe and those willing to pay now put themselves at greater risk.

Putin's rule is far from being as unstable as Aslund claims. There are strong differences of opinion behind the Kremlin's walls, but opinions that have no interest in plunging the country into instability.

"Implications for the United States"

This part of Aslund paper needs little commentary. Putin long ago dismissed the notion that Russia will be "graded" by the United States. Mikhail Gorbachev and Boris Yeltsin accepted this proposition in return for political support and financial aid. Both paid dearly for doing so. Both are hated or merely dismissed by the Russian electorate today. Putin has learned the valuable lesson of always being concerned with public opinion at home ahead of foreign criticism.

The Conventional Wisdom

It is a pity Aslund is more interested in writing and thinking like a journalist than a scholar to establish the West's "conventional wisdom" regarding Russia. Scholars should be introspective and apply counter-intuitive thinking. Aslund indulges in neither. Aslund's judgment is also skewed by an over-reliance on a romanticized past. Russia's reform project faces numerous and difficult problems. These problems are just that and not Putin's "authoritarian plot" that Aslund finds so appealing.

The opinions expressed in this article are those of the author and may not necessarily represent the opinions of the editorial board.

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