Bloomberg.com’s audio program On the Economy talks with Marshall Goldman about Gazprom, Putin, Medvedev, oil and gas, and the “Dutch disease.” Goldman’s new book Petrostate: Putin, Power, and the New Russia just came out on Oxford University Press. You can download the interview here.
You Might also like
By Sean — 9 years ago
The British medical journal Lancet is no stranger to controversy. Many will remember how in 2004 and 2006 the journal published studies on Iraqi casualties resulting from the American invasion. Its estimate of 654,965 excess deaths related to the war caused a firestorm in the press.
Lancet is back in the media limelight with its recent study “Mass privatisation and the post-communist mortality crisis: a cross-national analysis.” The study’s authors, Prof. David Stuckler, Dr. Lawrence Kind, and Prof. Martin McKee, commit the sin of all sins by arguing that “Rapid mass privatization as an economic transition strategy was a crucial determinant of differences in adult mortality trends in post-communist countries; the effect of privatization was reduced if social capital was high.” Namely, that the “shock therapy” of the mid-1990s led to 3 million premature deaths in Eastern Europe and the former Soviet Union. In Russia in particular rapid privatization was a continuing factor to the five year drop in life expectancy between 1991 and 1994, resulting in an estimated 1 million premature deaths.
Defenders of rapid privatization have jumped all over the authors’ findings. In a letter to the Financial Times, Jeffery Sachs, the stanchest apologist for “shock therapy,” called the study a “confused polemic” and that his policies had “no discernible adverse effect in these countries on life expectancy. If anything, its effects were positive.” The study cited one article by Sachs and for some reason he took this as its authors taking him to task personally. Methinks the ideologue doth protest too much.
The Economist blamed everything but shock therapy for any rising mortality rates. They condemned Lenin and Stalin for creating the planned economy (If the Economist really wants “the blame game to start at the beginning” why not begin with Ivan Grozny for establishing serfdom), Brezhnev’s geriatric auto-piloting for failing to start reforms, Gorbachev for “running printing presses red-hot,” the all-time favorites of “poor diet, smoking and, especially, drinking,” and the West’s failure to prepare for the Soviet collapse. Basically everything but privatization is given a accusatory nod. Apparently admitting that privatization had any adverse effect would be like questioning the existence God himself. In the end, the editorial concludes “correlation is not causation.” Maybe, but correlation certainly doesn’t help.
To Sachs charges in particular, the Lancet authors replied:
First, [Sachs] conjectures that rapid mass privatisation “probably played zero role” and that “a rapid transition … had no discernible adverse effect”. We provide robust evidence that rapid privatisation increased unemployment, reduced access to healthcare, formerly provided by state-owned companies, and depleted the state budget for social safety nets.
Second, Prof Sachs seems unaware of the causes of the post-Soviet mortality crisis. He argues that Russia’s devastating mortality surge in the 1990s resulted from diets high in saturated fats and red meat, dating back to the 1960s. While poor diets are a factor in the underlying death rate, they cannot plausibly explain the massive fluctuations that occurred at this time. Instead, there is a wealth of evidence that these additional deaths were substantially due to changes in hazardous drinking.
Nobel Prize winning economist, Joseph Stiglitz had this to say in regard to the Lancet study:
In retrospect I think “shock therapy” was a disastrous economic policy. It was ideology trumping good economic analysis. The comparison between the successes in China and the failures of Russia tell a clear story of how bad “shock therapy” was.
The defenders [of shock therapy] say things like, “We were worried that if we didn’t engage in rapid change, there could be reversals.” The critics of that view said: “If you proceed in this reckless way it will result in alienation, failure and reversals.”
It was a matter of judgment, of course. We hadn’t gone through these experiments. But there were other historical experiments on which we could base judgments. None were identical. More reversals occurred in the shock therapy countries, whereas the countries that proceeded in a more careful way have typically moved to reinforce a more democratic direction.
This last sentence is worth thinking about. Not only did privatization contributed to increased mortality, the political fallout from this disastrous policy might had led to Russia’s authoritarian backlash. Interesting.
And so the debate over the 1990s and its legacy continues . . .Post Views: 295
By Sean — 10 years ago
Western leaders have been hoping and praying that Dmitri Medvedev will be more “liberal” in foreign and domestic policy. According to a LexisNexis search the new President elect’s name is often followed with words like “liberal,” “liberal instincts,” “liberal inclinations,” and the like. It’s not that Medvedev hasn’t given Westerners any reason to hope. Take this exchange from Medvedev’s 18 February interview with Itogi for example:
But now we will soon have a new holiday, the Day of the Lawyer. If only it could help create the rule of law.
I agree. To overcome the legal nihilism preventing the country from developing harmoniously is a long and difficult job. As it turned out, to establish a workable model of a market economy is much easier than laying the foundations of a state in which people respect the letter of the law. This is another demonstration of the thesis that democracy cannot occur in any given place after two or three years. It requires painstaking, persistent work to improve the legal and political system. Of course, one can not forget the distinctive characteristics of the Russian situation. You know, justice has always relied on a mechanism for enforcing its implementation, some kind of public stick. But if it is not based on a set of moral imperatives, on internal convictions and moral principles, if it simply aspires to the crude power of a punitive machine, then the structure it creates will be flawed and ineffective. In the nineteenth century, the Russian government was far from perfect but it was a developed system based on a set of moral and religious values. In the twentieth century, the second part of this disappeared: people were deprived of their faith in God and the state came to demonstrate either naked coercion, which at times was extremely cruel indeed, or weakness and complete failure. These are both equally bad. We all remember what the well known doctrines of the thirties and forties led to, when the talk was of class dictatorship and the presumption of guilt in criminal trials. This helped resolve some tactical problems, but in the long-term planted a time-bomb that ended the very existence of the Soviet state. You have to feel what justice is, accept it voluntarily, not obey it in some insanely prostrate way. The explosion was inevitable, it would have happened sooner or later. People rushed to the other extreme and took to systematically breaking laws. This is what happened in the nineties.
Do you think that the current system of justice is better?
Though based on quite good, solid regulatory framework, our judicial system continues to function, getting its bearings from old traditions. Disregard for the law in various sectors of society remains widespread. Until we change people’s attitudes, until we convince them there is only one law and no one is above it, there will be no change for the better. The strength of the rule of law consists in the fact that no one can influence it. Neither pressure from various authorities, including the most powerful, nor pressure from business nor social forces. Justice should be in harmony with all the participants in this process, and refuse to cave in to anyone.
These are fine words, Dmitry Anatolyevich, but how can they be put into practice?
You can start small. For example, recommend that judges at all levels keep to a minimum all contact with businessmen and even representatives of public services. To retain maximum independence and objectivity.
You can’t put people in a cage.
You don’t have to. It’s enough if you can completely eliminate the personal factor. The more faceless the legal machinery becomes, the stronger it is. I am absolutely convinced of this.
I guess we will have to see which Medvedev Russia and the world will get. Instead of getting to carried away with liberal fantasies, perhaps we should take heed of what Putin told reporters in regard to how his protege might approach foreign policy:
“I have the feeling that some of our partners cannot wait for me to stop exercising my powers so that they can deal with another person. I am long accustomed to the label by which it is difficult to work with a former KGB agent. Dmitry Medvedev will be free from having to prove his liberal views. But he is no less of a Russian nationalist than me, in the good sense of the word, and I do not think our partners will have it easier with him.”
Oh yeah that. Nationalism. No matter how liberal Medvedev may seem, if anyone thinks he’s going to go against Russia’s short and long term national interests, or more importantly, against the interests of Russia’s elite class, then keep dreaming.
Plus Medvedev has more pressing issues at hand. First and foremost is to establish his own power base in the Kremlin and in Russia’s regions. That process is already starting. Medvedev doesn’t official become president until early May, yet yesterday Putin ordered that the presidential administration to begin working for Medvedev, along with giving him a presidential level security detail. The Moscow Times is speculating that one of Medvedev’s first moves will be to fire the current cabinet and put his own guys in power. Potential members of Medvedev’s “clan” are his former law school chums from Leningrad State University. They include Anton Ivanov, chairman of the Supreme Arbitration Court; Ilya Yeliseyev, deputy chairman of Gazprombank; Konstantin Chuichenko, head of Gazprom’s legal department; and Nikolai Vinnichenko, head of the Court Marshals Service. This group is already being dubbed as the “civiliki.” All of these guys have come up on Medvedev’s tail. For example, between March 2001and March 2005, Chuichenko went from heading Gazprom’s legal department to being elected to the supervisory board of Sibneft. The others on this list shot up to important positions in media, energy, and the legal system. And the ride on Medvedev’s tail brought others riding on the civiliki tails. Such is the nature of Russian “networkism,” as Alena Ledeneva told Graham Stack in December. The question now becomes whether there will be a clash between Medvedev’s clan of civiliki and the siloviki.
If establishing a base in the Kremlin was difficult enough, it appears that he will have to do the same in Russia’s regions. Andrei Serenko’s recent article in Nezavisimaya gazeta, “Revenge from the Underground,” is a good example of what Medvedev might face. Serenko notes that the Presidential elections produced cleavages between provincial political elites. In Volgograd, for example, elites split into a “high turnout party” and a “low turn out party.” The former, mostly comprising of governors and mayors, saw the election as a test of their “professional aptitude and administrative effectiveness.” Translated, regional leaders saw high turnouts as a way to demonstrate their loyalty to the center, and specifically Putin’s choice, Medvedev. The latter are those elites’ local rivals. The “low turnout party” were those who recently lost power to the local political bosses and now seek to exact “administrative revenge.” The hope was that lower numbers for Medvedev would give the “low turnout party” a way to discredit their rivals in Moscow’s eyes.
As Dmitri Savelev, the director of the Institute for Effective Government, told Serenko, an “administrative partisan movement” has arisen in Russia’s Central and Souther provinces bent on returning ousted “old elites” to power. One way to do this was by messing with Medvedev’s local returns. The “Yarolsav opposition,” for example, tried to discredit their rivals by “intentionally discrediting the numbers of [Yaroslav] Governor Bakhukov and lowering the electoral returns for Dmitri Medvedev in the region to 30 percent, and at the same time increasing the returns for Liberal Democratic Party to 20 percent and more.” It doesn’t seem like the Yaroslav “low turn out party” was very successful. Returns show that Medvedev got 63 percent compared to Zhirinovsky’s 13 percent. In the Duma elections (also held on March 2), United Russia got 49 percent compared to LDPR’s 13 percent.
This doesn’t mean that Medvedev isn’t going to have to reestablish central control. As Serenko concludes, while regional leaders formed a united front for December’s Duma elections, the presidential election has “intensified competition among various groups of regional elites, thereby shaking the stability of the regional political system which was formed during the rule of Vladimir Putin. It’s obvious that the task of restoring this stability will be one of the priorities for Dmitri Medvedev’s administration.”
Taming the center and the periphery. Sounds like Dima already has a lot on his plate even before he actually gets to sit at the table. And people wonder why Putin is sticking around as Prime Minister.Post Views: 207
By Sean — 9 years ago
The Putin cult continues. Even though he’s no longer President, he’s still the man. Russians are still curious about Putin’s many movements, appearances, and events reports the Moscow Times. Where will he be today? What did the vozhd say on his working trip to Kazakhstan? Just who are those lucky personages graced with his exalted presence? What a better way to follow the goings on of “Mr. Erotic Dream” than to give him his own website! To quote, Italy’s Gay TV host Alfonso Signorini, “Won-der-ful!”
Putin’s web site, which will be located at www.premier.gov.ru, promises to offer detailed information on Putin’s activities. For example, visitors will be able to click on a horizontal timeline to find out where Putin is at that moment and what he is doing, while an interactive map of the country will show where he has been and where he is planning to go, Peskov said.
“It will be a modern site with good anti-hacker protection,” he added.
Putin will not address Russians regularly like President Dmitry Medvedev has started doing through a new video blog launched this month on the Kremlin web site, Peskov said. But Internet users will be able to send questions to the prime minister.
What’s next a 24/7 Putin webcam?Post Views: 274