Russia's Future

IMGXYZ2881IMGZYXRussia is both a resurgent power on the international stage and a key partner for Europe. However, the country still faces a myriad of social and economic challenges, and there is growing disquiet in Europe and elsewhere that democracy and civil liberties in Russia are being weakened. Concerns have been raised at the increasing state control of the media and the judiciary, legislation restricting non-governmental organizations, and politically motivated judicial cases. Meanwhile, strengthening and modernizing the country’s weakened institutions remains a significant challenge.

At a briefing co-organized by Carnegie Europe and the EU-Russia Centre, Carnegie’s Lilia Shevtsova discussed these issues. She was joined by Gunnar Wiegand, director for Russia in the European External Action Service.

Economic Environment

• 2008 Economic Crisis: Shevtsova argued that the economic crisis was a missed opportunity that did not generate any significant effort to transform the Russian system. Instead, the Russian authorities reinforced the status quo by using Western resources and technology to revamp the Russian economy and save the traditional Russian state.
   
• Reforms Needed: Wiegand confirmed that the crisis provided an opportunity for change that was missed. However, he underlined that the economic crisis demonstrated to the Russian government that the economy’s dependence on raw materials was not sustainable and that reforms were needed if Russia was to remain a power in the developing world. To achieve these reforms, Russia teamed up with Europe and the United States on a series of concrete actions, such as the agreement on the Partnership for Modernization and the promotion of Russia’s accession to the World Trade Organization.
   
• Current Situation: The economic situation continues to be disastrous, reminiscent of the Soviet Union in 1985, said Shevtsova. However, Moscow remains unwilling to take the political and structural steps needed to modernize Russia, such as the de-monopolization of political and economic power. Wiegand argued that Russia is attempting to achieve economic modernization without social or political modernization. All in all, he concluded, no real progress has been made to improve Russia’s economic situation, particularly since there are no incentives to build small and medium enterprises, which had been at the heart of economic progress in Western Europe and many of the new Member States.

Government vs. Public

• Illusion of Stability: Shevtsova suggested that Russia actively puts forward the impression of a politically stable country. Its ruling class has been tremendously successful in maintaining basic stability through extensive funding to Russian pensioners, security forces, and the administration. During the discussion, Shevtsova stressed that Russia’s foreign policy agenda could not promote change as long as the current power structure in Russia remains in place. Instead, the Kremlin’s current foreign policy—including its participation in the “reset” with the United States—has become a means of preserving the status quo.
   
• Divided Public Opinion: Recent surveys show divided domestic public opinion about Russia’s future: 43 percent of respondents described Russia as being on the wrong track, while 47 percent said the opposite, explained Shevtsova. At the same time, more than 80 percent said they do not know where their government is headed and agreed that the Kremlin is failing to tackle national problems like the economy, inflation, and security. Thirty-five percent of young people described themselves as ready to take to the street in protest, since there are few legal instruments in place to allow them to express their frustration with the authorities.

Internal Government

• Division of Powers: Shevtsova noted that the internal stability of the government, with the division of powers between President Medvedev and Prime Minister Putin, has been also unchallenged. She added that only 12 percent of interviewed Russian citizens believe that President Dmitry Medvedev is the real leader of their country. On the international scene, Prime Minister Vladimir Putin and Medvedev have been successful in playing the “good-cop/bad-cop” strategy. As a result, they managed to appease both Russian hardliners and Western leaders. However, Shevtsova pointed out that currently, the tandem seems to have outlived itself; Putin is expected to run for president in the 2012 elections, replacing Medvedev.
   
• Upsurge of Nationalism: Regarding the upsurge of nationalism and xenophobia in Russia, Shevtsova underlined that the authorities have used nationalist rhetoric to break down the opposition and consolidate their own position. She added that nationalist movements—while often bringing thousands of people to the streets—lack any real structure, political agenda, and leaders; so far, she concluded, they function primarily through social networks.

Government’s Future

• 2012 Elections: As for the 2012 elections, Shevtsova noted that every time the Kremlin has rigged elections, it has actually undermined its own authority. According to the latest surveys, United Russia will not be able to reach more than 35 percent of the vote in Moscow, Kaliningrad, and some other cities, which will increase manipulative actions by the government and delegitimize the election process.
   
• New Regime: Shevtsova stressed that it is impossible to predict whether a change toward a more liberal regime is possible for Russia in the foreseeable future. At the moment, a further degradation of the social and political fabrics—leading either to an implosion or total depression and atrophy of the Russian system and society—seems more likely. She also underlined that a liberal awakening in Russia could be brought about not by political parties, but by a growing civil society.

Russia and the EU

• Possible Negotiations: Wiegand argued that while it was up to the Russian people to bring change to their country, the EU had legitimate interests in Russia’s future, both as direct neighbors and as trading and investment partners. In this context, Wiegand talked about the various negotiations that the EU entertains with Russia, with the aim of reaching a common vision and using shared approaches. He noted that since 2004 the situation had improved. However, he stressed that while there has been movement in the right direction, particularly in regard to the economy and trade, more needs to be done, especially concerning human rights and the rule of law.
   
• Pre-Requisites for Cooperation: Wiegand concluded by stating that the European Commission cannot make any further agreements with Russia without concrete steps by the Kremlin toward the rule of law and democracy. The message from Europe to Russia was going to be one of cooperation, but only on the basis of clear rules and respect of the rule of law, he said.
   
• Russia’s Weak Rule of Law: Wiegand argued that while some improvements have been made in the rule of law in Russia, such as massive efforts to train judges, any progress toward the rule of law was a consequence of a top-down approach from Medvedev. He noted that the verdicts against oil tycoons Mikhail Khodorkovsky and Platon Lebedev sent a negative signal to the international community and confirmed the impression that Russian and foreign companies still operate in a dangerous and uncertain environment.