Think Again: Vladimir Putin

"Putin Has Established an Autocracy"

Yes, but it won't last. Reasonable people can agree that Russia's postcommunist evolution is a textbook case of what not to do. Nearly two decades after the fall of communism, Russia is not a democracy. But neither is it an absolute autocracy in the mold of, say, Cuba or North Korea. It sits somewhere in between. It is a semiauthoritarian regime in democratic clothing. That is to say, Russia pretends to be democratic. In this imitation democracy, formal institutions that appear democratic conceal a system that is at once authoritarian, oligarchic, and bureaucratic to the point of paralysis. It's hard to decipher the line between real and fake. Yes, Russia has political parties, a parliament, trade unions, and youth movements. But in reality they are all Potemkin villages. Russia's elites have been perfecting such masquerades for centuries. Today, the Kremlin even humors a marginal liberal opposition and other forms of dissent that, unintentionally, by their very presence, are part of the sham.

This pseudo democracy may turn out to be even more dangerous and destructive than the pure autocracy Russians suffered for decades. Authoritarian or totalitarian regimes at some point create a longing for freedom. Imitation democracies, on the other hand, only serve to discredit liberal democratic institutions and principles, and the citizens living within them may at some point actually prefer a real "iron hand." That is not to say that the cause of Russian democracy is without hope. Russians elected both Boris Yeltsin and Vladimir Putin expecting that they would ensure order, support democracy, and achieve Western standards of living. They did not elect extremists, nationalists, or communists as their leaders, despite the severe hardships and humiliating poverty of the 1990s.

Today, 70 percent of Russians say they are ready to live in a free society. For perhaps the first time in Russian history, there are no insurmountable barriers to prevent that from happening. The largest remaining barrier is the political and economic elites. Because they are not ready to live in a competitive society, they try to convince the world that Russia is not mature enough to be truly free. In this, they are aided by the West, which tries hard not to upset the Russian president for fear of undermining relations with the country. Eventually, the West will have to decide whether it wants cozy relations with the Kremlin, or whether it wants Russia to be free.

"Putin Created an Economic Miracle"

No. This is a popular refrain of both the Kremlin and Western businesses operating in Russia. On the surface, the economy Putin is leading looks impressive. The country's GDP rose from $200 billion in 1999 to $920 billion in 2006. Economic growth was nearly 7 percent in the first half of 2007. Russia's economy is now the 10th largest in the world. But these economic gains have a false bottom -- high oil prices -- and have been achieved, at least in part, by protectionism. Putin has failed to crack down on inflation and has been forced to freeze food prices. Corporate debt held by Russian companies rose from $30 billion in 1998 to $384 billion in 2007. And Russian investors increasingly prefer to take their cash abroad. Elites, who pretend to be outwardly confident in Russia's future, are moving to London and other European capitals in droves.

Calling Russia an "energy superpower," as the Kremlin likes to do, is a tacit admission of its failure to diversify the economy. Oil and gas account for more than 63 percent of Russian exports and 49 percent of the federal budget. Russia demonstrates all the key characteristics of a petrostate: a fusion of power and business, the emergence of a hyperrich rentier class, systemic corruption, state intervention in the economy, and rising inequality. Like other petrostates, Russia also shuns modernization. The proportion of goods and services in Russia's exports is a mere 1.7 percent, while high-technology exports contribute a pathetic 0.3 percent.

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