Source: Carnegie

Russia's Image Problem Begins at Home

By Andrew C. Kuchins

Originally published in The Moscow Times on July 20, 2004.

I arrived in Moscow a year ago under the illusion that after a traumatic decade Russia was stabilizing, becoming more predictable, maybe even rebounding. While the past year has been extraordinarily interesting intellectually, thoughts of stability and predictability must once again be set aside, if only for a time. In fact, there has been so much negative news that friends now say to me: "Gee, Andy, it seems like ever since you arrived in Russia the place has gone downhill." Just for the record, I acknowledge the coincidence but not the causal link between the two.

The Yukos case and the jailing of Mikhail Khodorkovsky have been on the front pages now for nearly a year, and while the endgame is near, the final result is not known. But it does seem that even if the company, recently Russia's largest and acknowledged to be one of its best, is not bankrupted, it will cease to exist in its present form. The most positive thing one can say is that this is a case of very selective justice, but for now the dark cloud of possible further deoligarchization blocks much of the sunlight of Russia's fabulous macroeconomic story.

A series of terrorist attacks in Moscow and elsewhere have rocked our sense of stability and security. And the brutal murder of the talented journalist Paul Klebnikov on July 9 brings back the memories of Russia 10 years ago, when the country was rife with gangland slayings and criminals ran rampant. President Vladimir Putin is right that Russia has an image problem, but it is not the making of an international conspiracy of Russophobes posing as philanthropists, nor is it something that a more energetic diplomatic corps can cure. It is a reality that Russians have made.

While I am not one to idealize the 1990s in Russia as some kind of democratic utopia, the clear erosion of democratic principles and open society that has taken place over the past four years has badly tarnished Russia's image. The parliamentary and presidential election cycle this past year was a textbook case of a managed democratic spetsoperatsiya, or special operation. Putin is genuinely popular, but the legitimacy of his re-election was marred by the Kremlin's heavy-handed tactics and the lack of any serious opposition. Russia now has a more compliant parliament, but it also has a much higher representation of nationalist conservatives and no liberal-democratic parties. The nascent multiparty system is badly damaged. There are no longer any independent national television stations. Who knows if there will be anything worth watching next fall after the demise of popular current affairs shows like "Svoboda Slova," "Namedni" and "Lichny Vklad"? Civil society remains weak and intimidated by arrests, harassment and other recent measures.

In order to stave off despair and the urge to simply return to the United States, I must step back and look at recent events in a broader historical perspective. This leads me to four points. The first is that this is not the Soviet Union and we are not returning to that. While democracy and open society in Russia have suffered some setbacks recently, if we consider where the country was 20 years ago, what has happened since that time is truly remarkable. Back then, people were debating whether the Soviet Union was totalitarian or authoritarian. Today the debate is whether Russia is a quasi-democracy or a semi-authoritarian state. In 1983, the late Ronald Reagan labeled the Soviet Union an "evil empire." Having lived here in the early 1980s I would agree that it was a pretty threatening and nasty place. While Russia may be flexing its muscles in the weak states on its periphery, we are very far from the evil empire days.

The second point is that even in the best-case scenario, the conventional wisdom when the Soviet Union collapsed was that a successful transformation into a market democracy was at least a two-generation project. Looking back at other revolutions and transformations, these are rarely linear processes. There are ups and downs along the way, or in terms of revolution, periods of reaction or Thermidors. Many features of Russia today suggest a reaction against the revolutionary period of the 1990s. How long-lived it will be is an open question.

My third point gives me more optimism about the future. Nearly all mature democracies are based on a large and enfranchised middle class that has rights and stakes they will defend against other entities, including an overbearing and avaricious state. The current Russian socioeconomic structure does not provide a solid foundation for democracy. At most, the middle class comprises 20 percent of the population; more than 40 percent barely get by, while more than 30 percent live below the poverty line. Then you have a very thin layer of super-rich that comprise no more than 1 percent of the population, but they account for the proliferation of luxury cars on the streets. In fact, the streets of Moscow offer a fairly accurate reflection of class structure: You see quite a few luxury cars and hordes of aging domestic models, but relatively few middle-class cars. The good news is that the middle class in Russia is steadily growing. Perhaps by the 2011-12 election cycle, Russia's socioeconomic structure will be more conducive to democracy.

My final point is a reality check on our expectations. At present, Russia is a relatively normal middle-income country. With a per capita GDP of around $2,500, we should not compare it with wealthy democracies like those in Western Europe, or the United States or Japan. A more apt comparison set for Russia now includes countries like Argentina, Mexico and Brazil. Middle-income countries are not typically mature democracies, and they are more prone to economic booms and busts. They do typically have weak legal systems, high levels of corruption and less free media.

Putin has set an ambitious goal for Russia to grow rapidly from a middle-income country to a low-end developed economy with a per capita income matching that of Portugal. But in order to sustain high growth levels to meet this worthy goal, he will need to address the legal, political and social weaknesses of middle-income countries that Russia shares. The question of property rights must be resolved once and for all. The judicial branch of government must be made more independent. The transparency and effectiveness of government and business will be improved by strong and independent media and civil society. Diversifying the economy from such high dependence on natural resources will also help sustain growth in the long term, as well as promote a prosperous middle class. All of this will, of course, take time and focused effort. So despite negative trends today, while I am packing my bags, it is only for a vacation, and I look forward to returning to Moscow to see how Putin turns things around in his second term. In current-day Russia, it is principally his responsibility to improve the image of Russia, not that of his diplomats.

Andrew C. Kuchins, director of the Carnegie Moscow Center, contributed this comment to The Moscow Times.