Gorbachev endorsed Putin in an interview with the London Times. “I would vote for him and I support him. Based on what I know, and comparing him with other candidates, I would prefer Putin.” Gorby then added this:
“Putin has brought stabilization to Russia. Not everyone would have been able to cope with the kind of legacy that he inherited from Boris Yeltsin. I did not think he would succeed but he did succeed in preventing total collapse in the country. He began solving some important social and economic problems and re-established governance in Russia. That has opened the way to the possibility of launching real modernization.”
His “the possibility launching real modernization” is what intrigues me. It makes me wonder where Putin ranks in the pantheon of Russian modernizers.
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By Sean — 4 years ago
Over at the NYT, Paul Krugman has written some interesting posts on Russia’s economic woes: Putin on the Fritz; The Ruble and the Textbooks; Notes on Russian Debt, and Putin’s Bubble Bursts. Essentially, Krugman notes that falling oil prices and the collapse of the ruble have combined to add stress on the “terms of trade stock.” He explains:
What’s going on? Well, it turns out that Putin managed to get himself into a confrontation with the West over Ukraine just as the bottom dropped out of his country’s main export, so that a financing shock was added to the terms of trade shock. But it’s also true that drastic effects of terms of trade shocks are a fairly common phenomenon in developing countries where the private sector has substantial foreign-currency debt: the initial effect of a drop in export prices is a fall in the currency, this creates balance sheet problems for private debtors whose debts suddenly grow in domestic value, this further weakens the economy and undermines confidence, and so on.
Krugman fleshes this out in a longer column:
The proximate cause of Russia’s difficulties is, of course, the global plunge in oil prices, which, in turn, reflects factors — growing production from shale, weakening demand from China and other economies — that have nothing to do with Mr. Putin. And this was bound to inflict serious damage on an economy that, as I said, doesn’t have much besides oil that the rest of the world wants; the sanctions imposed on Russia over the Ukraine conflict have added to the damage.
But Russia’s difficulties are disproportionate to the size of the shock: While oil has indeed plunged, the ruble has plunged even more, and the damage to the Russian economy reaches far beyond the oil sector. Why?
Actually, it’s not a puzzle — and this is, in fact, a movie currency-crisis aficionados like yours truly have seen many times before: Argentina 2002, Indonesia 1998, Mexico 1995, Chile 1982, the list goes on. The kind of crisis Russia now faces is what you get when bad things happen to an economy made vulnerable by large-scale borrowing from abroad — specifically, large-scale borrowing by the private sector, with the debts denominated in foreign currency, not the currency of the debtor country.
In that situation, an adverse shock like a fall in exports can start a vicious downward spiral. When the nation’s currency falls, the balance sheets of local businesses — which have assets in rubles (or pesos or rupiah) but debts in dollars or euros — implode. This, in turn, inflicts severe damage on the domestic economy, undermining confidence and depressing the currency even more. And Russia fits the standard playbook.
Except for one thing, he adds, corruption.
The reason why Russian companies have so much debt is because elites have cannibalized the companies they run by skimming off the top and shipping that money abroad.
Where does the elite get that kind of money? The answer, of course, is that Putin’s Russia is an extreme version of crony capitalism, indeed, a kleptocracy in which loyalists get to skim off vast sums for their personal use. It all looked sustainable as long as oil prices stayed high. But now the bubble has burst, and the very corruption that sustained the Putin regime has left Russia in dire straits.
Basically, Putin’s kleptocracy worked fine and dandy as long as there were enough petrodollars to sustain the theft. Now that the price of oil has plummeted, those accrued foreign currency debts are coming back with a vengeance. So this economic crisis is no blimp, but based on the very structure of the Putinist economy. There’s no quick remedy for this.Post Views: 779
By Sean — 7 years ago
I’ve long argued that if Westerners are looking for liberals in Russia, all they need to do is turn to Vladimir Putin and the rest of the cabal that runs the country. True, caveats are in order. They are not the “liberal communist” variety that Slavoj Zizek speaks of. For the most part, the liberals in the Kremlin do not preach the sanctity of the free market while at the same time championing the “liberal values” that have become the market’s ideological correlative: democracy, tolerance, freedom etc., etc. Putin is far more of an old school liberal, though rhetorically he and his people speak the language of their American and European counterparts. Nor are Putin et al. classical laissez-faire liberals who eschew an economic role for the state. In their social-economic cosmology the state plays a fundamental role as initiator, facilitator, and stabilizer of economic development. They are situated on the conservative end of a particularly Russian liberal tradition that accepts capitalism as a fundamental truth, but only as far as it can bolster the Russian state’s transformation into the ever elusive Rechtstaat, or legal state. The Putinists do not pray to Locke or Smith but to the Russian pantheon of great reformers Speransky, Witte, and, I think most importantly, Stolypin.
Nothing confirms Putin being in the tradition of the latter more than his recent chairmanship of the committee tasked with erecting a monument to Stolypin in time for his 150th birthday in 2012. The monument will stand in front of the White House.
Here’s a snippet of Putin’s opening remarks on the Tsarist Prime Minister:
Pyotr Stolypin served his country for a long time and was its prime minister at a very difficult, truly dramatic period in Russia’s history, a time of political and social turmoil. The consequences of the Russian-Japanese war, revolutionary upheavals and economic decline presented a real danger to Russia’s territorial integrity and even sovereignty. Society was searching for answers to questions of fundamental importance to Russia’s development, including the perennial question of land ownership. The prime minister needed not only a will of iron but also personal courage and readiness to assume responsibility for the country at that time. Pyotr Stolypin had all of these qualities in full measure.
A true patriot and a wise politician, he saw that both all kinds of radical sentiment and procrastination, a refusal to launch the necessary reform were dangerous to the country, and that only a strong and effective government relying on business and the civil initiative of millions could ensure progressive development and guarantee tranquillity and stability in a large multinational country and the inviolability of its borders.
Furthermore, he thought that the state and society should not be divided from each other, that the state in the form of government and society in the form of public institutes should be united by a common responsibility for the country. When it served the interests of the state, he always assumed an uncompromising and tough stance and was never afraid of making decisions that were considered unpopular.
Pyotr Stolypin formulated the ideology of reform and also launched large-scale change in nearly all spheres of life in Russia. He believed that the main goal was to remove all obstacles and limitations to the development of productive forces. He thought it was necessary to release the nation’s creative energy and direct it towards creation. He achieved many of the goals he had formulated. He created foundations for social policy in Russia, reformed state institutions and government agencies and ensured the impressive growth of industries and an industrial breakthrough. I’d like to remind you that, at the time, Russia’s economy was growing at the highest pace in the world. It also implemented large development projects in Siberia and the Far East. The last, but not the least of his achievements was agrarian reform, which had a staggering potential. He said, yes, it was Stolypin who said it: “Give Russia 20 years of internal and external peace and quiet and it will change beyond recognition.” These words point to his deep belief in Russia and its people.
Putin could have been talking about himself.
I’m not the only one who thinks so. Olga Kryshtanovskaya told Nezavisimaya gazeta: “Of course it’s no accident that Putin sufficiently and consistently connects his stance to Stolypin.”
But it seems that the committee’s opening meeting was a big ceremony wedding the two Prime Ministers. Andrei Kolesnikov argues in Kommersant that committee’s members in and of itself point to Putin’s desire to drape himself in Stolypin’s legacy. In attendance were Moscow mayor Sergei Sobyanin, government ministers and representatives, provosts, archimandrites, Duma deputies, and also none other than the head of the Filmmakers Union, Nikita Mikhalkov. Was this a meeting for a monument or a shrine? According to Kolesnikov, Putin’s effort to directly connect himself to Stolypin isn’t just plainly evident from the who’s who at the meeting. It’s all too clear if you merely substitute “Vladimir Vladmirovich” for “Petr Arkadevich” in the Prime Minister’s speech, particularly where he talks about Solypin’s will, patriotism, and commitment to preserving the state’s interests while recognizing the need for reform. In an effort to put his money (or I should say other people’s money) where his mouth is, Putin even demanded that committee members give up a month of their salary to fund the Stolypin monument. “Members of the cabinet, and not only members of the cabinet, will have to direct at least a month’s salary to the Stolypin monument,” Putin said. They should think of it more as a personal tribute to Putin himself.
Pavel Pozhogailo, the head of the Regional Social Fund, got the message, and adjusted history accordingly: “[Stolypin] was a key figure who could lead Russia away from catastrope. His principal quality was that he could unite the divided. And he dealt with the task of bringing peace to society! You see, the moment he entered power he took ahold of the bacchanalia of terrorism! This courageous man could rally the healthy forces of society around himself and showed that the government was not a powerless! He returned moral authority to the government!” For him, Putin’s speech was nothing less than “magnificent.”
The only problem is that it’s hard to figure out who Pozhogailo is talking about here: Stolypin or Putin, or some mutant hybrid of the two.
But I think Mikhailkov summed it up the best with “Stolypin lives!”
Yes, in Putin’s Russia, Stolypin lived, Stolypin lives, Stolypin will always live.Post Views: 1,024
By Sean — 5 years ago
My new Russia Magazine column, “Sochi’s Workers: Invisible and Expendable,”
“The final stage in such a massive undertaking is always difficult,” Putin told officials in a meeting during the waning days of November. “A lot has been done, but it’s still a long way from perfection… [there is] still work to be done. We have the New Year and Christmas holidays ahead of us. I’d like to say, I think it should be clear that for you, New Year’s will come… on March 18 [the last day of the Paralympics]. For you and for everyone who is working on the Olympic venues.” With that, Vladimir Putin cancelled the Christmas and New Year’s holiday for some 95,000 people making the final push to ready the Sochi Olympics. A lot is riding on the Olympics, which begins in less than two months from now. It’s the most expensive Games to date, an estimated $46.1 billion—almost four times Putin’s initial estimate of $12 billion (Putin’s Games, a new documentary on corruption in Sochi estimates up to 50 percent of construction costs go to kickbacks), and the completion of this mega-construction project will come down to the wire. The stadium slated to host the opening and closing ceremonies isn’t finished, the pedestrian zone is half built, electricity goes in and out with a good portion of it powered by generators, pipes line the roads, signs reading “coming soon” dangle in restaurant fronts, and the drilling, stamping, and hammering are incessant.
The backdrop to all of this is a wide range of abuses. Human Rights Watch has cataloged those ranging from exploitation of laborers, forced evictions, harassment of civic groups, activists and journalists, environmental damage, and of course, the anti-homosexual propaganda law. While the last has gotten widespread coverage, I want to draw attention to the exploitation of laborers without whom Sochi would be impossible.
There is an estimated 70,000 laborers working in construction, 16,000 are foreign labor. They work long hours and for little pay. In its detailed report on worker abuses, HRW reported that workers got typically paid $1.80 to $2.60 an hour with a monthly average salary of $455 to $605. Their pay is routinely delayed, and sometimes they’re never paid at all. One HRW respondent, Yunus, said “I have no written contract. I got paid only in February: 2,400 rubles [$77] for December. I wasn’t paid after that. I worked for 70 full days without pay. We worked from 8 a.m. to 8 p.m. with no days off.” He quit before receiving the wages owned to him. Milorad Rancic, a migrant from Serbia, told HRW, “We got paid in pieces. For 10 days, maybe we would get $400. The rest of the month, we would get rubles, around 2,000 rubles [$63] at a time. Then, at the end of the month, when you tried to establish the balance owed, the employer would say, “Oh, we never kept track of it. We don’t have any record of it.” “Almost all employers routinely withhold wages for two months,” Semen Simonov, who works for Memorial’s Migration and Rights project, toldNovaya Gazeta. “People are used to this and don’t even bother. But there are people who’ve come to us who’ve worked in five Olympic sites and never received any money at all.” “There are 500 companies represented in the Olympic sites,” he continued. “I can’t say all of them don’t pay. But we can put together a list of those that don’t because people come to us every day and the list is growing.”Post Views: 1,721