Changing and growing

Occasionally, I feel to urge to do a bit of political analysis. This urge has grasped me yesterday, so I did an analysis of Mr. Putin's State of the Union Address of yesterday. It's also published on Newsvine.

It is interesting to analyse the State of the Union Address given yesterday by Vladimir Putin, President of the Russian Federation, especially if read after US Vice-President Cheney's remarks at the 2006 Vilnius conference a few days earlier.

Surely, nobody will object to Mr. Putin's strategic goal for Russia to become a country with a flourishing civil society and stable democracy, guaranteeing human rights as well as civil & political freedoms while building a competitive market economy protecting property rights and improving the nations defence.

Yet, the speech breathes an oppressive combination of swaggering calls for unity in the face of menacing competition, and a lack of self-assured confidence that is the prerequisite for a dependable great power and international partner. Seeing how this State of the Union Address is a carefully crafted piece of consensus opinion of the ruling Russian administration, it would indeed appear that Russia is returning to its age old paradigm of feeling surrounded by ominous foreign powers which are vying after the nation's sovereignty, as very recently explicitly stated by Aleksandr Solzhenitsyn.

This does not bode well for Russia and the world.

On domestic issues, there is a lot of very clear sighted analysis of present problems as well as awareness of the current window of opportunity to resolve many of those problems, due to the "favourable economic situation" (read: oil price). Since the oil price is not explicitly mentioned, it is obviously a somewhat painful recognition that this window of opportunity has opened without Russia's initiative and thus might close again at any time.

Mr. Putin pays a lot of attention to necessary changes in bureaucratic and economic structures, stressing the importance above all of economic growth which is to achieve a doubling of the Russian GDP by 2010. This is to be reached by changes in infrastructure monopolies, which account for an ever increasing share of the economy, and by a reduction in the scope of government intervention. We almost think of laissez-faire when reading about the Russian people who "can achieve this better life if only we do not get in their way. At the very least, we must not get in the way, and it would [be] better still if we help." Competition appears to be accepted in the abstract as a governing principle of order, but it is considered to be a zero-sum game and not one to mutual advantage.

Yet, despite of all the recognised need for growth and change, there is a surprising reluctance, if not resistance to reform: "We do not need reforms purely for the sake of reforms. We do not need a permanent revolution." This, I think, is a clear indication of the deeply rooted fear that the administration harbours towards the mutual interaction between the political and the economic sphere in an open society. Witness the very opaque elimination from political life of Mr. Putin's potential rival, Mr. Kodorkhovsky. Evidently, Mr. Putin still thinks in terms of a command economy which has to supply growth, but must not interfere with politics. While such an approach is comprehensible in the aftermath of some chaotic transformation years dominated by a financial oligarchy, it is doomed to fail in the long run. One of the key factors to be observed is Mr. Putin's hope for greater transparency of how political parties are financed.

Sustainable growth in the face of technological and organisational innovation requires constant reconfiguration of the economy and the regulatory environment. Failure to do so will lead to stagnation and the breakdown of growth, which Russia is already beginning to suffer from.

I'd like to note some specific points of interest now.

1) Russia's membership in G8 seems to be of outstanding reputational relevance.

2) The Russian currency should become fully convertible.

3) Russian demographics poses a formidable challenge to growth, especially given the low overall density of population. The relative attractiveness of Russia as an immigration targets from other CIS Member States requires an effective immigration policy.

The address also contains several foreign policy statements, not the least important of which is an outright declaration that the CIS is Russia's sphere of strategic interest. This constitutes an explicit demarcation of scope of the Putin doctrine, which some CIS members will fail to agree with.

Otherwise, Russia aims for stability and predictability of the international order under the rule of international law.

Russia aims for true integration into Europe as a foregone historical choice. In that choice, Mr. Putin fails to realise however that the establishment of a cordon sanitaire of formally indepentent satellite states between herself and her partners of integration cannot be seen as a committment to equitable partnership.

The State of the Union Address also touches on the modernisation of the armed forces. While there is talk about the move to a professional army, air force and navy, to be completed by 2007, it is not clear at all that this means the abolition of compulsory military service - on the contrary: From 2008, the much feared compulsory service is halved to one year. Russia is also planning to introduce new strategic weaponry.

By way of introduction, I mentioned US Vice-President Cheney's speech in Vilnius, former part of the Soviet Union and now firmly entrenched in the EU and NATO. Already the fact that Mr. Cheney is able to launch his attack on Belarus and opponents of reform and further opening in Russia - or imitation of the West, as Mr. Solzhenitsyn would put it - from that vantage point must be perceived as an act of aggression on the part of the Russian administration. For, whether one agrees with the current US administration's evangelism for formal democracy or not, it is hard to overlook the discrepancy between Russia's strategic goal as stated in Mr. Putin's address, and its present day political life, where foreign support of broad voter participation and the promotion of independent news media organisations are suppressed, and influential political rivals jailed.

One of the key issues of Russian self-confidence remains with its perception of its own history. As long as Russia fails to accept that there are dark spots in its history (as in every other nation's), it is unlikely to be a fully dependable member of the international community of open societies. But there is hope: Earlier this year, we have celebrated the 50th anniversary of the Secret Speech with which Nikita Khrushchev started the first reform movement within the Soviet Union, doing away with Stalinism (which, incidentally, is being revived in today's Russia). It may be the next President of Russia who realises that the breakdown of the Soviet Union was a historical bonanza rather than a catastrophe - even for the Russian people.

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