The Russia Conundrum
People are puzzled by Russia. It truly is like one of its famous matryoshka dolls--inside the big doll there are more little dolls, each smaller than the last. The big doll is that it is an authoritarian state run by the secret police, the siloviki, or higher police. They are the go-to people when you want anything done. That was so back in 1986 when I was in Moscow to assist in the release of our Moscow bureau chief, Nick Daniloff, and nothing has changed except the name--the KGB is now the FSB. These grim enforcers have been at the core of the Russian state for decades, an elite group with an unshakable belief in their mission to promote national greatness above all else. Their influence waned during the era of President Boris Yeltsin; today, it waxes under President Vladimir Putin.
The siloviki hold a third of all the top government jobs and more than half the leadership positions in ministries, agencies, and state-run companies. Seven from Putin's inner circle, including his chief of staff and his deputy, control nine state-dominated companies with assets equal to 40 percent of the country's GDP. These men, the new Russian oligarchs, don't just have political connections in the Kremlin; they're in the Kremlin. Putin himself, of course, is a former head of the FSB.
The principal focus of Putin and his men is energy. Russia provides nearly half of Europe's natural gas and a third of its oil. When the new Gazprom pipeline under the Baltic Sea is ready, Europe will depend on Russia for up to 80 percent of its gas, giving it enormous leverage over the Continent. How concerned should we be?
Pluses--and minuses. When the Soviet Union dissolved in 1991, we assumed Russia would rejoin the international community, democratize its political system, and guarantee civil rights. It didn't happen. Putin has consolidated the state's grip over national television, turned the upper house of parliament into an appointed body, vitiated the power of locally elected regional governors, effectively seized control of the courts, and developed a form of state capitalism that tolerates private companies only if they are subservient to the state's agenda. Putin's strategy is less to enhance democracy than to build a strong Russia.
This slow transformation into a one-party state may raise concern in the West, but it is largely supported by the people. Popular legitimacy comes from genuine elections, with real choices and more-or-less honest vote counting--even though Russia lacks the democratic components of an independent court system and free media.
The Russians don't miss Yeltsin's pseudo democracy, marked by turmoil, decay, and loss of prestige. They welcome Putin's commitment to order, his efforts to enhance national pride, and his reining in the oligarchs to bring about a fairer distribution of income.
But there has been a cost. Greater state control and diminished respect for the rule of law have inadvertently created the very conditions that encourage corruption, a situation neatly summarized by Putin's former economic adviser, Andrei Illarionov, as one in which bureaucrats "tend to make decisions that have a higher rate of return for themselves, not for the country."
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