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Mr. Margelov opened the session by declaring himself to be a realist who has a viewpoint that is more sanguine than those of two recent Carnegie visitors, presidential candidate Irina Khakamada or former prime minister Yegor Gaidar. He predicted that President Putin would be re-elected in March 2004, and the social situation in Russia will remain stable until 2008. Putin currently enjoys the trust of the electorate, but this trust should be reinforced by justice. Otherwise, stability would merely be a cease-fire before the next social war. Strength without justice degenerates towards violence, while justice without strength is powerless. Thus, Mr. Putin’s main challenge will be to find a golden mean between the two.
Russia inherited a host of problems from the early 1990s. These include the lack of democratic institutions, combined with the weakness of the central authorities; the pauperization of Russian society and the discordance of values; and the stifling of public freedoms by bureaucrats and oligarchs. However, the current situation is favorable for liberalization.
The Communists have been roundly defeated, and Russia has passed the point of no return with regard to totalitarian, one-party rule. Mr. Margelov admitted that the electoral success of United Russia owed much to the popularity of Mr. Putin. However, this success also indicated Russia’s return to the general course of history without the loss of its own identity. The Rodina electorate was tired of foreign lecturing and stirred by nationalistic appeals. Yabloko and SPS lost their place in the State Duma because they no longer enjoy a reformatory reputation. Many important reforms were passed by United Russia deputies in the previous Duma without significant input from SPS or Yabloko. Thus, many United Russia deputies have demonstrated a devotion to modernization.
Russia has enjoyed an annual economic growth rate of 6 percent for the last five years. The 2003 growth rate stood at 7 percent. Mr. Putin’s supporters now form a constitutional majority in parliament, and there is no doubt that the president will use this opportunity to deepen modernization.
Russia still faces a number of challenges domestically and on the international arena. The foundations of economic growth need strengthening. The economy should diversify to include more processing. Russia has to recover from the “Dutch disease” – the problem of energy exports crowding out industrial manufactures through a high exchange rate. Russia has to tackle the problem of corruption and increase the competitiveness of its exports. Poverty remains a major issue, with one-third of the population still below the poverty line. Internationally, Russia’s challenges include the competition between states, the war on international terrorism, the proliferation of weapons of mass destruction, problems in the Commonwealth of Independent States region. Lastly, issues related to accession to the World Trade Organization remain a challenge.
The most important challenge, however, is to achieve an economic break-through. Mr. Putin has spoken about the need to double Russia’s GDP. This is not an easy task: as Russia’s perestroika experience shows, it is hard to speed up and restructure at the same time. The state will continue to pay close attention to the energy and natural resources sector. The issue at stake is not just a fairer distribution of rent, but also the US-Russian and Russian-EU energy dialogues, as well as the energy relations in the Far East. Politics will remain the concentrated expression of economics.
Worldwide, violence remains the midwife of history, and so Russia should reintroduce government defense orders. In interstate relations, Russia will pursue a policy of openness and follow G-8 rules. The entire post-Soviet space will remain a priority for Russian foreign policy. At the same time, Russia will pay close attention to the related processes of globalization, regionalization and fragmentation. Moscow will also pursue relations with the EU, both centrally and with individual member-states, old and new. Russia sees for itself the role of a bridge between East and West, the Baku-Ceyhan pipeline notwithstanding. Further, Moscow wants to participate in a pan-European economic space.
The process of WTO accession has not been easy. Membership in any international organization involves a degree of loss of sovereignty, but the WTO is advancing “prohibited” conditions for membership. At the same time, Russia is very interested in the progress of the Common Economic Space with Belarus, Ukraine and Kazakhstan. The transnationalization of the economies of these countries can bring them socially closer together.
Russia is also developing the Shanghai Cooperation Organization, especially its anti-terrorism component. Moscow is interested in the stability of Russia’s southern borders, and will thus launch a new relationship with Georgia.
Russia has been cooperating with the United States in the international war on terrorism and the non-proliferation of WMDs. However, the whole of the West seems to be in a state of “converted Cold War” with Russia. The West’s position towards Russia does not depend on the social order in Russia – that is, whether it’s a czarist, “actual socialist,” or democratic state.
Mr. Margelov ended his prepared comments by observing that Mr. Putin has succeeded in building a wide coalition, which includes left-wingers. However, Russia’s political system is still in transition and has not yet reached a full stop.
In the question and answer session, Mr. Margelov argued that Russian-US relations are on the right track. He quoted US Secretary of State Colin Powell as saying two years ago that the United States and Russia agreed that they could disagree and not become enemies. Moscow was not insulted by Gen. Powell’s criticism of Russian domestic politics. Russia is not a “second, improved edition of the former Soviet Union,” and does not see criticism as a sign of enmity. There is a need to improve the “legislative speed-bumps” that are preventing Russian-US economic relations from reaching their full potential.
In domestic politics, Mr. Margelov blamed the Communist party for the emergence of Rodina. The Communists were not able to transform themselves into a social-democratic party on the Central European model. Further, their support base is limited, since they have no links with the trade union movement.
One of the risks facing Mr. Putin’s administration when he came into office was the disintegration of the country. The heads of Russia’s 89 regions were acting like 89 small czars, and Putin had to centralize power to prevent Russia from breaking up. The example of the former Yugoslavia shows how dangerous such a break-up may have been. However, this centralization of authority at home has not been accompanied by imperialistic policies abroad.
Instead of sending its tanks into Tbilisi during the recent political crisis in Georgia, Russia sent “one bureaucrat who speaks Georgian,” Foreign Minister Igor Ivanov, who helped ease the tensions. The Tuzla incident on the Ukrainian-Russian border was ridiculous, and even though certain Duma deputies saw it as being vital to Russia’s interests, the Russian and Ukrainian prime ministers and presidents took a much more sensible view of the situation. A major task for Russian foreign policy is to create a friendly or at least neutral neighborhood. Thus, Russia wants to see Ukraine, Georgia, Azerbaijan and other former Soviet states as allies in all spheres.
Mr. Margelov predicted that the coming years will witness the creation of new political structures and parties on the liberal and leftist flanks. A “total re-arranging of the old political blocs” is in progress. Taxes on oil producers may increase, which would not be a tragedy, but Russia’s main challenge in this sphere is not the level of taxation but the ability to collect taxes. Expelling Russia from international groups such as the G-8 to encourage domestic change is a bad idea, because “totalitarian, authoritarian regimes flourish in isolation.”
Summary prepared by Rashed Chowdhury, Junior Fellow with the Russian and Eurasian program at the Carnegie Endowment.
