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Economics

Russia: Cuckoo in the Nest

26 June 2006

Russia: Cuckoo in the Nest

 By Gwynne Dyer

On Sunday, July 1st, the Russian rouble will become a fully convertible currency, traded under the same rules as dollars, euros, pounds and yen. The date was obviously chosen by President Vladimir Putin to impress his guests at the G8 meeting in St. Petersburg in mid-July with Russia’s economic progress, and there really has been quite a lot of progress on that front since he took over. But the Group of Seven, “the world’s most exclusive club,” was originally meant to be an annual gathering of the leaders of the biggest industrialised democracies.

It would be stretching the term to say that the new member of the Group of Eight, as it became in 1996, is a democracy any more. While sections of the Russian press still conduct raucous political debates, the all-important medium of television has been brought under direct or indirect state control, and more and more power has been concentrated in Putin’s hands. He talks openly of a “managed democracy,” and his chief economic adviser, Andrei Illarionov, resigned last December saying that Russia was no longer free or democratic.

It’s equally questionable whether Russia is really an industrialised power any more. The Russian economy resembles Nigeria’s or Iran’s more than those of its fellow G8 members: oil and gas account for 70 export earnings and 30 percent of its entire economy. Even after six years of Putin’s rule, Russian oil production has not risen back up to the level of the early 90s, and only the high price of oil worldwide gives Russia some prosperity at home and some clout abroad.

Then there is Moscow’s ruthless exploitation of its role as the supplier of a quarter of central and western Europe’s gas to extort a better price for its gas exports. Last January’s crisis over Russian gas supplies to Ukraine, which led to cuts in deliveries to countries further west as well, has made western European countries nervous about increasing their dependence on Russian gas exports. (And the crisis may reignite next week, when newly confirmed Ukrainian prime minister Yulia Tymoshenko faces a Russian demand for a further huge price increase.)

Since the whole purpose of inviting Russia to join the G8 was to encourage the growth of democracy and a modern free-market economy in the ex-Communist giant, Russia’s fellow G8 members are filled with consternation at the way things have turned out. However, they are at a loss for how to deal with the cuckoo in their nest. Quiet persuasion doesn’t seem to work, but neither does noisy outrage.

When US Vice-President Dick Cheney criticised Moscow’s democratic deficit and its bullying energy policies during a visit to Lithuania on Russia’s own border last month, Putin counter-attacked by condemning the US invasion of Iraq: “Comrade Wolf knows whom to eat. He eats without listening and he is clearly not going to listen to anyone.” But Putin doesn’t feel the need to listen either — and neither do Russians in general.

The remarkable thing about Putin’s rule is that after six year in office he continues to have the approval, according to reasonably reliable opinion polls, of 77 percent of his fellow-citizens. Indeed, though Putin has sworn to obey the constitutional ban on a third consecutive presidential term and leave power after the March, 2008 election, there is massive popular support for changing the constitution to allow him to stay on for another four years (59 percent yes, 29 percent no). What’s the matter with the Russians? Doesn’t everybody want democracy?

No, not everybody wants democracy. According to Leonid Sedov, a senior analyst at the VtsIOM-A polling agency, about 80 percent of Russians say that they dislike democracy, although they are less clear on what they do like. Only three percent want the return of the tsars, some 16 percent want a tough authoritarian ruler like Stalin, and the rest are scattered all over the political map. But they know they like Putin, because he has given them back stability, prosperity and self-respect.

It’s a reaction to the chaotic process of de-Communisation under Boris Yeltsin in the 1990s, which was misleadingly called “democratisation,” and it doesn’t necessarily mean thatRussians would dislike real democracy. (They were keen enough on it in 1989-91, before “democratisation” impoverished most of them.) Russians are still among the best-educated populations on the planet, and once the middle class feels prosperous and secure enough, the demand for democracy is likely to re-emerge. But that may be years away, and what are the democratic majority in the G8 to do with this authoritarian cuckoo in their nest in the meantime?

Put up with it, and pretend not to notice that it doesn’t really fit in. Nag it about its more severe human rights abuses, and demand that it give at least lip service to its democratic principles, but don’t drive the regime out into the cold. When the tide finally turns in Russian society, the survival of formal democratic structures and the rule of law in the country, however much abused in practice, will make the task of building a genuine democracy a lot easier.

In effect, that is what the other seven members of the G8 have decided, and they are probably right. Of course, the fact that Russia has all that oil and gas to sell may have influenced their decision too.

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To shorten to 725 words, omit paragraphs 4 and 6. (“Then…increase”; and “When…general”)