Source: Valdai Club
Vladimir Putin is the Ultimate CEOWhat are the differences and similarities between the Occupy movements in the USA and in Europe, the Arab Spring, the Orange Revolution in Ukraine and the London riots?
First, I think that it's difficult to compare what goes on in different societies. Things start for different reasons and there are different results. So, I would be careful about comparing these very different scenarios. Also, we're talking about quite a wide span of time.
The Orange Revolution took place at the end of 2004 and early 2005. It almost feels like the last century if you think about what has happened since then – particularly the global financial crisis.
And I think, in many ways, what we certainly see here in the United States with the Occupy Wall Street movements and the Occupy movements in general is a reaction to the world we are living in after the financial crisis and the bailout – a world in which people feel it has already been proven in some sense that big business is getting too much, that banks are getting too much, and that the government is serving their interests inequitably and not serving the interests of what they call the 99 percent.
So, I think that's what those movements are about. The Arab Spring has many complex facets, each of which is different. It's different in each of the Arab countries where it is taking place. This is one important thing to understand about the Arab Spring. But I think, fundamentally, you could describe it as people being fed up with the lack of opportunity. I view this as a different kind of narrative than the narrative of the colored revolutions in Europe. In those situations, to my mind, there was a lot of frustration with the lack of opportunity and with the living conditions, but those revolutions occurred at a time of relevant economic growth and prosperity for both the region and the world. Thus, I think there was much more of a political character to those revolutions.
Is it possible to say that a new social revolution is coming after the global financial crisis, or that the leftist ideology is on the rise?
This is an interesting question and something I think about a lot because not only do we have political spectrums from the left to the right in the United States, in Russia, and in other countries, but there is also a kind of global political spectrum.
You have a country like Venezuela which is very hard to the left and trying to restore what we consider to be somewhat discredited notions of socialism, and you have the United States or the United Kingdom adopting really tough fiscal austerity measures and conservative economic policies.
I think of the Occupy movements as not representing the 99 percent as they claim to do, but rather as representing a shift toward greater activism on the part of the people generationally. And here the time component is very important. There are generations of people in the West who no longer have a collective global memory that leftist policies, including socialism and communism, had their moment and were “tried.” I think there is a revival occurring because the generations have started to change, and they are seeing real injustice around them. And I don't disagree with that. But there has been a kind of revival of the idea that “let's give these policies that seem so morally appealing a try.” Whereas, if you tried to do this back in 1992, I think people would have reacted very differently.
What can you say about Russia in this regard?
I think there are real risks and concerns facing Russia. I think the model of growth Russia has enjoyed for the past decade – even with the interruption of the crisis – is not a long-term sustainable model.
I think President Medvedev, Prime Minister Putin, and certainly former minister Kudrin, all made it clear that they understood this, and they were always preparing for the proverbial rainy day – by way of the Stabilization Fund and by trying to invest in modernization and technological development. However, it is hard to be optimistic that it will be successful in the short term or even in the middle term due to the sheer inertia of a very large society, which has been practicing certain bad habits for a very long time. The foremost among them, of course, is corruption.
The problem is that unless you have a really disjunctive event, a revolution of a kind, and I am not calling for a revolution, as I think the Russian people are uninterested in one, as when Russians undergo a revolution it usually means suffering for the average person, without massive and disjunctive change, it's hard to see how corruption is going to be rooted out any time quickly or any time soon. It's difficult to see how the fundamental economic order is going to change. And without these things, what you will have is a gradual leveling off of the revenues from Russia's mineral and energy extraction, which is the main source of the revenue of the Russian economy, which has a trickledown effect.
At the same time, you will have increasing demands on the Russian budget because of a population that is getting older. Russia has the same post-World War II baby boom that we had in the United States and that other countries in Europe had. And Russia is experiencing and will continue to experience demands for healthcare, retirement benefits and social welfare payments for people who do not have an income of their own. And ultimately the government will not be able to sustain that.
So, under those conditions, a relatively young small working population is burdened with having to take care of that generation, and that generation itself is perhaps feeling that it is not receiving what it is due. And then, of course, you have an additional factor in Russia – a very long wave of immigration from the former Soviet republics, many of whom are not legal and are poorly treated in Moscow and elsewhere. Thus, there is a lot of destabilizing factors socioeconomically, racially and politically. If, for example, there is a major meltdown in Europe, which is now just next door, as Russia and the EU border each other in Kaliningrad and the Baltic region – they are close together and do a lot of trade – this could be a factor triggering a broader meltdown in Russia. I think this is when the scenarios begin to get scary.
Speaking of this scenario, what do you think the next president, probably Putin, will do to avoid this meltdown in Russia?
Putin has in many ways said all the right things, but even before you look at what he says, think about who he is. He has a lot of baggage and intelligence experience, a tough guy image, and he has the colorful personality to go along with those things. But fundamentally he is a competent manager. You could call him the ultimate CEO. He is the guy who turned Russia around when it was an unprofitable, unsuccessful enterprise. He turned it around and made it successful. Now, like many great CEOs, he does not have a lot of tolerance for dissension in the ranks. He is not particularly interested in what the factory worker thinks about where the country should be headed. He has his own ideas. And, by and large, right now, they are sensible ideas. What he is saying is that he wants to modernize the country. He clearly supported Medvedev's modernization initiatives. He has looked for good ideas.
I think the problem is going to be in implementation.
If you just take for example the case of Skolkovo, you can say that this is a very good idea that has been waiting for a long time for its moment of opportunity. It seems to have some momentum right now and it certainly has resources from the government. However, it is hard to see how things will work even if the best-case scenario goes forward, even if you have a number of international companies that move in and start to employ Russians. How this can possibly be scaled up not only for Moscow and the other traditional centers of the Russian economy, but also to regions where some of these dire circumstances exist that I just noted, where older people have no social safety net and young people face unbearable burdens?
It is very difficult to see how in the short and middle term you can make the progress that needs to be made. And I will be quite frank. I think Putin has a contradiction that he is sitting on, which is that in order for his political movement to succeed and in order for him to continue to hold on to the political power in the country, he depends on what has been called a managed democracy, on a strong hand, and on his informal authority. All these things trickle down through the system and help to enshrine and protect corruption at the lower levels. The question is how to root out dysfunctionality in the system at the lower levels, where on the highest levels of the system you rely on it.