October 20, 2017

THERE'S NO YURI ANDROPOV TO SAVE THEM THIS TIME:

Is Vladimir Putin Losing His Grip? (ANDERS ÅSLUND, 10/19/17, Project Syndicate)

In many ways, Russia has been moving backward in recent decades. In the 1990s, Russia was a freewheeling place, where virtually everything was allowed. Moscow had 20 daily newspapers, with views ranging from liberal to Stalinist. Today, Russian civil society is severely stifled, and to watch television in Moscow is to find 20 channels controlled by the Kremlin.

In 1991, Boris Yeltsin, in one of his first actions as President, broke up the old KGB into several agencies, cut its staff by half, and slashed its budget. Today, the KGB's successor, the Federal Security Service (FSB), has seized complete control over Russia's security apparatus, including by arresting high-level generals in other law-enforcement agencies. The result is a single security service that is more powerful than at any time since Stalin - and viewed as independent from the Kremlin.

On the economic front, too, Russia has backtracked. In 2003, Russia's private sector produced 70% of the country's GDP. Today, the state sector generates most of the country's output, squeezing out small and medium-size enterprises, and five big state banks dominate the financial market.

Moreover, Putin's policy of "de-offshoring" has imposed such cumbersome controls on the business leaders of the 1990s that most have sold off their assets in Russia and decamped to London or Monaco. This trend has been accelerated by Russia's lack of any real property rights, which has enabled the Kremlin to cut Russia's wealthy down to size at will, often targeting the most law-abiding among them. Small wonder that forecasts for annual GDP growth are stuck at 1.5-2%.

The regime wants to change this pattern. In May 2016, Putin asked three expert groups to recommend economic-reform programs: a liberal group led by former Finance Minister Alexei Kudrin; a technocratic group led by Economy Minister Maxim Oreshkin; and the more statist Stolypin Club led by Putin's business ombudsman Boris Titov. Each group has delivered thousands of pages of expert reports.

But any shift toward respecting the rule of law would be incompatible with the kleptocratic character of Putin's regime, implying that genuine reform is out of the question. The mandate given to the three groups thus appears to have been little more than therapy for social scientists, a way to keep them busy - and out of the opposition.



Posted by at October 20, 2017 6:42 PM

  

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