Special Report on Russia: Enigma variations

RUSSIA

Enigma variations
Nov 27th 2008
From The Economist print edition

Russia is not the Soviet Union, but what is it? A recovering world power—or a corrupt oligopoly with a market economy of sorts? Arkady Ostrovsky (interviewed here) explains why it is both

AFPON DECEMBER 25th 1991 the Soviet flag above the Kremlin was lowered for the last time and the last president of the Soviet Union, Mikhail Gorbachev, made his resignation speech. “The totalitarian system has been eliminated…free elections…free press, freedom of worship, representative legislatures and a multi-party system have all become reality.”

A few hours later, America’s then president, George Bush senior, declared victory in the cold war. “For over 40 years the United States led the West in the struggle against communism and the threat it posed to our most precious values…That confrontation is now over. The United States recognises and welcomes the emergence of a free, independent and democratic Russia.”

The collapse of the Soviet empire was inevitable, rapid and largely bloodless. In its aftermath the world watched, with a mixture of hope and despair, the emergence of a new country that turned out a lot less free and democratic than advertised. Confrontation with America did not disappear but took on a new meaning.

In early August this year the Russian army, for the first time since the Soviet collapse, crossed an internationally recognised border and fought a short, victorious war: with Georgia. Russia’s leaders said they were defending two breakaway territories, Abkhazia and South Ossetia, from Georgia’s aggression. But at home they also hinted that this was a proxy war with America which had tried to muscle its way into what Russia calls “the region of privileged interest”. It was a defining moment for Vladimir Putin, Russia’s president until the election in March this year of Dmitry Medvedev and still the man who, from his new job as prime minister, holds the reins of power.

To many, the conflict brought back memories of the cold war and portrayed Russia as a Soviet Union mark two, trying to regain its former territories. All the signs appear to be in place: Russia is ruled by former KGB men like Mr Putin who see enemies everywhere; its political opposition is crushed; independent journalists occasionally get killed; and the state media pump out anti-American propaganda. Once again military parades are being held in Red Square. And in his belligerent state-of-the-nation address on November 5th Mr Medvedev threatened to station short-range missiles in the Kaliningrad region, aiming them at Europe, unless America backed off from its plan to put a missile-defence system into eastern Europe.

But the parallels with the cold war are misleading. Russia is not the Soviet Union. It does not have a communist (or any other) ideology, nor does it have much faith in central planning. It has private businesses, a free market of sorts and a great taste for consumption. Russian firms are listed on foreign stock exchanges. Their managers fly business class to factories in the Urals, read financial newspapers and labour over spreadsheets on their laptops.

Members of the country’s elite have many personal ties with the West: they own property in London, send their children to British and American universities and hold foreign bank accounts. But none of this stops the Kremlin from being anti-American and autocratic.

So far the state has not interfered in people’s personal lives. It gives them freedom to make money, consume, travel abroad, drive foreign cars and listen to any music they like. They are even free to criticise the Kremlin on radio, in print and on the internet, though not on television. And although Russia’s elections are stage-managed, the support for Mr Putin is genuine. During the war in Georgia it hit almost 90% in opinion polls. The biased television coverage plays its part, but unlike Soviet propagandists, who told people what to think, Russian propagandists tell people what they want to hear, says Georgy Satarov, who used to be an aide to a former president, Boris Yeltsin, and now runs INDEM, a think-tank. What people want to hear, especially as they are getting richer, is that their country is “rising from its knees”, sticking its flag in the Arctic Circle, winning football games and chasing the Americans out of Georgia.

Mr Putin has positioned himself as the symbol of a resurgent nation recovering from years of humiliation and weakness. In fact, few Russians in the 1990s brooded on such feelings; most were too busy getting on with their lives. But there was one group that had good reason to be aggrieved: members of the former KGB. When Mr Putin came to power in 2000, they projected their views onto the whole country. America’s hawkishness towards Russia made their job easier.

Mr Putin also accurately sensed and cleverly exploited nostalgia for Soviet cultural symbols. One of the first decrees of his presidency in 2000 was to restore the Soviet national anthem. Soviet icons were revived not because of their connection with communism but as symbols of stability, continuity and power. A TV show, “The Name of Russia”, based on a British programme, “100 Great Britons”, lists Joseph Stalin as one of the country’s five all-time greats. Most Russians associate him not with repression and terror but with the power and respect which their country once commanded.

“Our foreign policy is clear. It is a policy of preserving peace and strengthening trade relations with all countries…Those who want peace and seek a business relationship with us will always find our support. And those who try to attack our country will be dealt a deadly blow, to deter them from sticking their snouts into our Soviet backyard.” Stalin made this speech in 1934, reflecting on a recent world economic crisis which, as he explained, “spread to credits and liquidity, turning upside down financial and credit relationships between countries…Amidst this storm…the Soviet Union stands separately, like a rock.”

Similarly, in reaction to the current economic turmoil, Mr Putin declared the Russian economy to be a “safe haven” for foreign capital. On the other hand, “the trust in America as the leader of the free world and free economy is blown for ever.”

A love-hate relationship
The paradox of Russia’s nationalism is that its patriotic zeal closely follows the American model. One of the biggest pop hits in Russia a few years ago was a song called “I Was Made in the USSR”, first performed in 2005 in the Kremlin, in front of Mr Putin. “Ukraine and Crimea, Belarus and Moldova—it is my country…Kazakhstan and the Caucasus as well as the Baltics—it is my country…I was born in the Soviet Union; made in the USSR,” its lyrics go. As the audience rose to applaud, it was perhaps unaware that the tune was the same as Bruce Springsteen’s “Born in the USA”.

Konstantin Ernst, the boss of Russia’s main TV channel, which churns out nationalistic, anti-American propaganda, worshipped Francis Ford Coppola, an American film-maker. These days he produces American-style blockbusters on a Russian theme and sells distribution rights in Hollywood.

The loudest anti-Americans in Russia are not the unreformed communists but the well-dressed, English-speaking speechwriters from the perestroika era. The Kremlin’s confrontation with the West is based not on differences of ideology or economic systems but on the conviction that Russia is no different from America and that the West’s values are no stronger or better than Russia’s. Any public criticism by Western leaders of Russia’s behaviour is therefore seen as deeply hypocritical.

America looms much larger in Russia’s mind than Russia ever did in America’s. To compete with America, Mr Medvedev even scheduled his recent state-of-the-nation address to coincide with the American election. Russia wants to be like America and follows in its footsteps. Unfortunately, says one American former official, “they followed our mistakes and not our system of governance.”

Russia’s war in Georgia and its unilateral recognition of South Ossetia and Abkhazia copied the West’s recognition of Kosovo in the Balkans, even though only a few months earlier Mr Putin had said that unilateral recognition of Kosovo was “immoral and illegitimate”. Conversations with Russian officials often end with the plaintive question: “What have we done that you haven’t done?”

Igor Shuvalov, the first deputy prime minister and Mr Putin’s right-hand man, was in London (where his son studies) when Georgia erupted. The war showed that Russia and the West are now cemented together, he argues. “It showed that all our values are exactly the same. Russia is a civilised country, we all want to live well, like ordinary Americans, we want to protect ourselves from external threats like you do…Perhaps we do not have such a sophisticated democratic infrastructure, but in essence American presidential elections are no different from ours.”

The confrontation between Russia and the West is not about different values, he says, but about different interests, financial and geopolitical. “Friends are only friends until you start splitting the money. These [Western] countries need to have access to oil and gas, and to get it they are prepared to use any means, including accusations that Russia has a different system of values. All…Russia is doing is defending its interests. We want to live peacefully, but the West cannot tolerate the idea that we are an equal partner, that we are the same. Now there is no more time for niceties.”

Yet although the Russian elite has adopted a Western lifestyle, it rejects key principles of Western governance. Lilia Shevtsova of the Carnegie Moscow Centre, a think-tank, argues that “hostility towards America and the West sustains the authoritarian and corrupt rule of the rent-seeking elite which portrays its narrow corporate interests as the interests of the nation.” In Georgia, Russia was defending not so much the separatists but its own ruling class and its value system. By imitating and repelling America at the same time, Russia tries to ward off a hostile value system that includes democracy and the rule of law. The Kremlin sees its relationship with the West as a zero-sum game: if it resurges, America will decline.

A long way to go
A few years ago Mr Putin said Russia’s national idea was to be competitive. The Kremlin asserts that Russia has regained its status of “a mighty economic power”. Its goal is to achieve economic and social development which befits “a leading world power of the 21st century” by 2020.

This special report will draw attention to the many things that stand in its way. The country is beset by chronic and dangerous weaknesses. Its economy depends on natural resources and cheap credit, and its private business, which pulled the country out of the 1998 crisis, is constantly being harassed by the state. Corruption is so pervasive that it has become the rule. Russia’s population is shrinking by 700,000 a year. And its neocolonial methods of governance in the north Caucasus have created a tinderbox.

The gap between rich and poor is growing. Moscow’s exclusive outskirts look like American suburban shopping malls writ large, yet villages not far away lie abandoned. The rich and powerful are steeped in luxury, yet the average Russian earns a mere $700 a month. Russia is building pipelines to Europe but much of its own country has no gas or even plumbing. Russia’s “great leaps forward” have rarely benefited its own people, who have traditionally been seen as a resource. Most Russians grumble about their lives, but see “international prestige” as a consolation prize.

Russia has the potential to develop into a strong and prosperous nation, but the Kremlin’s nationalism, hostility towards the West and authoritarianism make the task more difficult. A two-minute video made by a Russian soldier captured in Georgia (now on YouTube) illustrates the point. As they smash up neat Georgian barracks, the Russians curse their own poverty and hail their victory in the same breath. “They [the Georgians] had everything,” one Russian soldier says. “They had nice barracks, good furniture, and we live like tramps. But they got screwed.”