Reading Russia Right

IMGXYZ433IMGZYXOn November 3, 2005, the Carnegie Endowment for International Peace hosted a meeting entitled “Reading Russia Right” with Dmitri Trenin, of the Carnegie Moscow Center. The discussion focused on Trenin’s recent policy brief of the same name. George Perkovich, Vice President for Studies at the Carnegie Endowment, served as chair. A summary follows below.

The attendees divided into idealist and realist groups, which differed not only in their policy recommendations, but in their analytical frameworks. The idealists emphasized democratization as the leading indicator of development and gave greater weight to the influence of US policy on Russia. The realists emphasized economic development as the leading indicator and argued US policy could influence Russia only on the margins.

These two different approaches produced starkly different assessments of Russia today. Trenin and the realists noted that Russians enjoy great freedom outside politics. While Russia has fallen in the Freedom House rankings, it has risen on the “IKEA index.” Russia was never a democracy under President Boris Yeltsin, so President Vladimir Putin is not a step back. Millions of Russians now travel abroad. Even when the siloviki (current and former members of the security services, like the FSB) came to power, this resulted in their corruption, not in a national security state. The idealists took a much dimmer view, seeing Russia as increasingly unfree. Putin has gutted all institutions except the presidential administration. The state intervenes more and more in the economy, most conspicuously in the energy sector. A recent INDEM study showed corruption has risen dramatically under Putin, with the bureaucracy stifling economic initiative.

The two groups likewise disagreed about the Russian consumer boom. Idealists found it hollow and argued it will collapse unless oil prices continue to rise at a rapid rate. They acknowledged the healthy macroeconomic picture and the Stabilization Fund, but doubted the state’s ability to manage the economy in times of crisis. Several attendees recalled de Tocqueville’s observation that people rebel when their economic prospects are improving. Endemic corruption shows property rights haven’t truly taken hold. Trenin and the realists, on the other hand, saw the consumer boom as part of a strong, long-term trend. The regime can weather minor crises, such as the failed monetization of social benefits, by buying off the populace. Young Russians have irrevocably internalized property rights.

The idealists saw Russian foreign policy as neo-imperial, citing interference in the 2004 Ukrainian presidential election, aggressiveness in the Baltic states, and the Shanghai Cooperation Organization. The realists saw it as post-imperial, a slow process of retreat as Russia transforms from an empire into a nation-state. One attendee noted that any Russian imperial fantasy involving the SCO would be “pathetic” because Russians constitute just five percent of the organization’s constituents.

These divergent views on the nature of the Putin regime and its behavior led to contradictory recommendations for US policymakers. Idealists insisted that accepting any distinction between democracy and freedom is conceding to “Putinism” (soft authoritarianism). Moreover economic freedom is also on the wane. Queried one participant, “Can the West afford to look at Russia as just a huge gas station?” This camp made the case for more active US support for Russian democracy, particularly in connection with next year’s G8 summit in St. Petersburg. In general they advocated for a more confrontational posture and more pressure on the Putin regime. The realists, in contrast, suggested “outreach, not overreach.” Democratization is unachievable in the short term and high-toned rhetoric only reduces US credibility: the gap between word and deed is too obvious. Quipped one realist, “You can’t do a Schroeder and a Sharansky in the same breath.” The US should cultivate ties with young Russian consumers and bring Russia into the WTO. It should also bring China and India into the G8. According to the realists, the US can influence Russia’s development only on the margins. One attendee remarked that such a restrained course might be difficult to pursue. He pointed out that the Bush administration initially adopted the realist policy, but that public and congressional pressure forced several course corrections.

Perhaps the sharpest disagreement between idealists and realists was on the time frame for change in Russia. Realists called the Putin regime stable in the short- to medium-term. Trenin conceded that shocks would occur, but said the regime would withstand them. Idealists called the Putin regime highly unstable, noting its over-centralization, poor information flows, and dysfunctional institutions. Divisions within the ruling elite could prevent agreement on a succession strategy for the presidential election in 2008. This could provoke a crisis for which the regime will have no answer.

In looking at the future, the realists made an argument similar to the one made by Andrei Shleifer in “A Normal Country” (Foreign Affairs, March/April 2004). They saw Russia’s corruption as typical of a country at its level of development. As the economy grows and liberalizes, said the realists, corruption will lessen and the political system will become more democratic. Trenin maintained that over the long term liberalism and nationalism will coalesce behind democracy. The result, he said, will be Western-style institutions without a pro-Western orientation. The idealists strongly disagreed. They saw Russia becoming a petrostate. In their view the state is likely to retard economic growth. It will not permit the formation of a liberal-nationalist political alliance or the emergence of a middle class.

At the end of the discussion both sides faced unanswered questions. “If Russia is ready for democracy, then why is nothing happening?” The idealists had no reply. “If economic development comes first, why is Russia becoming a petrostate? Can this be the foundation of political development?” The realists had no reply. In closing one participant warned that both sides must attend to the political consequences of their work and avoid creating new myths. Such myths could play into the hands of unsavory political forces like the National Bolshevik Party (NBP) or the siloviki. Moreover they could blind the analytical community to new developments.

Summary prepared by Matthew Gibson, Junior Fellow with the Russian and Eurasian Program at the Carnegie Endowment for International Peace.