#7 - JRL 7208
Moscow Times
June 4, 2003
Succes d'Estime, But Greatness Is a Tall Order
By Christopher Granville
Christopher Granville, chief strategist at United Financial Group, contributed this comment to The Moscow Times.

In olden days, when polite St. Petersburg society spoke French, the past week's gathering of top world leaders in the city at the invitation of President Vladimir Putin would have been called a succes d'estime for Russia. The same goes for the subsequent G-8 summit in Evian, crowning the first year in which Russia has featured in the entire G-8 process -- including the periodic meetings of the now misnamed G-7 finance ministers circle -- as a full-fledged participant. These events must be reckoned tokens of esteem for Russia's new-found stability and economic recovery under Putin.

As commentators never tire of pointing out, the size of Russia's economy does not qualify the country for membership of the G-8. But even the political gesture of Russia's full membership in that elite club would not have been made in the absence of the impressive turnaround in the Russian economy.

Putin himself often speaks on this theme of internal transformation as the key to recovering international influence and status. It has featured prominently, for example, in his last two annual state of the nation addresses. Last year's speech contained a splendid passage about Russia's foreign relations, in which Putin challenged the usual world view of the Russian political class. He painted a sober, realistic view of a world without particular friends or enemies: "No one is out to get us, but no one holds a brief for us either." His message was one of self-reliance. The country would sink or swim by its own efforts or failings.

Putin warmed further to this theme in his latest state of the nation speech delivered last month. Russia's national project was presented as regaining its rightful place among the world's most advanced countries by means of strong economic growth. Hence the headline call for the doubling of the country's GDP in this decade. Russia will walk tall in the world, said Putin, when its economy is strong and its people enjoy decent living standards.

All this makes a refreshing change from the more familiar instinct of trying to hold on to residual Soviet great power status by the fingernails. But the fine-sounding project of renewing the country's power, pride and dignity through a domestic economic miracle will require statesmanship of a very high order from Putin in the remainder of his presidency. It may prove an impossibly tall order.

On the positive side, some of the necessary conditions for achieving the ambitious goal that Putin has set himself are visible. First of all, Putin gives no sign of having any illusions about the starting point. On the contrary, he tends toward refreshing bluntness about the realities of mass poverty, the economy's lack of competitiveness and the corrupt, bloated and generally value-subtracting bureaucracy.

Another qualification for success is the right underlying values. Putin's critics often point to the incoherence of his typical mix of liberal and nationalist rhetoric. He typically combines talk of civil society, democracy and human rights, economic freedom through property rights and competitive markets with calls for strong defense and the consolidation of society in the face of the threat of losing market share and geopolitical influence.

One reply might be that there is nothing unusual about political leaders appealing to various sources of support and wanting to "have things both ways." A perfect contemporary example is British Prime Minister Tony Blair denying that there is a choice to be made between Thatcherism and social justice or between Europe and the United States. But closer inspection reveals a clear underlying consistency in Putin's political values. Unlike the dominant ideological tradition dating back through Soviet to tsarist times, Putin favors the individual over the state. National greatness, he said in the latest state of the nation speech, is not just a matter of the state but also of a modern and developed society -- which can only flourish by restraining the "dependency-inducing" state bureaucracy. Private initiative, he continued, is the key to economic growth, and "the country's success depends crucially on the success of its entrepreneurs." In a more normal political environment, Putin would be classified without difficulty as a center-right leader -- pro-business and patriotic.

Another hopeful sign is Putin's stand against isolationism. In that same speech, he celebrated the legal immigration (7 million people since 1989, mainly from other CIS countries) that has mitigated Russia's demographic crisis. More to the point, he called for amendments to the new citizenship law enacted last year and which the police have used to leave a million or more immigrants stateless. In the same vein, he called for Russia's integration into the world economy to be strengthened by establishing the full external convertibility of the ruble, for capital as well as current transactions.

The problems start, unsurprisingly, in the practical sphere. For one thing, simply being president keeps Putin too far removed from practical administration. The Russian presidency is cast in the Gaullist style of France's Fifth Republic -- as a plebiscital, nonpartisan and father-of-the-nation office, with a consequent authoritarian undercurrent. This formula delivers obvious power but also a less obvious impotence -- even before the Russian political system matures to the point reached by France in the 1980s where a president must often cohabit with a government based on his opponents' parliamentary majority.

Even as things now stand in Russia, the president hands down broad policies and goals, with the implementation outsourced to the prime minister. But the prime minister is a bureaucrat without the political capital to force through tough measures -- such as stripping the bureaucracy itself of many of its powers, to take a topical example. And if the prime minister aspired to independent political action, that would prevent results in another way -- by provoking a power struggle with the Kremlin (as in fact occurred in 1997-98 between President Boris Yeltsin and Prime Minister Viktor Chernomyrdin).

One answer might be for the president to roll up his sleeves and descend into the bureaucratic trenches. But there is a more efficient way, hinted at recently by Putin in his signal of readiness to make his second-term government much more accountable to the majority in the new State Duma due to be elected in December. This proposed enhancement of parliamentary government amounts to an impressive admission by Putin, who is in many ways typical of the "top-down" reformers who regularly crop up in Russian history, of the limits of top-down reform. In practical terms, he implied that the government could use the Duma to help overcome obstruction to reform inherent in the bureaucracy.

The success of Putin's second term will depend on building further on this principle. This means not only mobilizing the resources of parliament but also of the best available talent for the new government team. It boils down to delegating, or power sharing, while at the same time putting his ample political capital -- that is, popularity -- at risk in support of a much stronger team. Only by taking such risks will Putin have any chance of obtaining the desired rewards of "domestic growth and international recovery." The mere cautious conservation of power without any such risk-taking would rule out the greatness that Putin seeks for Russia and which he could yet achieve for himself.