Teaching Comparative Government and Politics

Tuesday, November 13, 2012

Which way, now?

Before he took a few days off to rest an old sports injury, President Putin spoke to an assembly of foreign experts about Russia's future.

Vladimir the victor

VLADIMIR PUTIN seemed a fit and relaxed 60-year-old as he spoke to this year’s meeting of the Valdai club of mostly foreign analysts and commentators… He had the air of a man with few concerns either about his own position as president of Russia or about his country’s future…

Putin

As for the economy, the overwhelming message from Mr Putin was that everything was going well: “I am doing fine,” he said, at one point. His response to suggestions that Russia needed substantial reforms was striking for its smugness (one of his advisers asked rhetorically “why do we need to change?”). Changes to courts, the judicial system and the bureaucracy were all on the way, Mr Putin claimed…

Economic indicators suggest that Mr Putin cannot boost social and military spending while sticking to the fiscal discipline that has served Russia well throughout his rule. Moreover, the Russian state continues to be a drag on the economy… under his government the role of the state in the Russian economy has been increasing. And, although his prime minister, Dmitry Medvedev, insists that Russia is going ahead with its ambitious privatisation plans, they are unlikely to diminish the state’s influence much…

As oil and gas revenues, which still account for up to half of state income, are falling away in importance, the economy needs to be rebalanced towards new firms, small enterprises, services and manufacturing. But the deadweight of corruption, ill-protected property rights, taxation, bureaucratic obstructiveness and the absence of the rule of law make it all but impossible for such businesses to start up and grow. Those like Mr Putin who insist that all is well are ignoring the likelihood that, faced with such problems, potential investors will move to places with more hospitable and predictable business climates…

The figures show a continuing trend of capital flight and emigration of skilled youths. Taxed on this, Mr Putin insisted that other countries were similarly affected and that this was just another by-product of globalisation.

Mr Putin yet again talked up Russia’s improving demography, with higher birth rates and lower death rates. But one poll before the Valdai club showed that 68% of Russians on above-average incomes want their children to study abroad and 37% want their children to leave Russia for good. These numbers are a harsh comment by Russia’s middle classes on their country’s future.

It does not help that, after almost 13 years at the top, Mr Putin lives in a bubble. Previous ministers… who might have pressed the case for reform, are gone from the government. There are still reformers around Mr Medvedev… But there is already speculation about how long a weakened Mr Medvedev will stay. Right now, Mr Putin is certainly running the government—and there is no sign that he has any appetite for change.