Am I imagining things, or are Indian takes on Russia almost uniformly positive?
Sify.com (India) November 15, 2004 The new Russia: Out of the red By Mohan Guruswamy
Most of us in India seem to be still viewing Russia through the filters of the Yeltsin era, when its economy was in the doldrums and acutely contracting. The politics were chaotic, Yeltsin was prone to drunken binges (which compounded a severe heart condition), the military had gone to pieces. Russia’s only growth area was crime; the Russian mafia not only took a commanding place in Russian life, but also increasingly began to dominate organised crime in the mother country of organised crime - the US. Russia seemed to have become the metaphor for moral and economic decay.
But, for the past five years, Russia has been witnessing a quiet resurgence. In early 1991, in a conversation I had with the then Indian Ambassador in Moscow, he vehemently disagreed that the Soviet Union seemed on the verge of collapse. On my return, I learnt that our ministry of external affairs (MEA) considered such thoughts heretical. During the Vajpayee years, our leadership’s eyes were fixed Westward, possibly because their hearts, and their moneys, were there. Now, with the MEA under a new management, we seem to be missing the Russian story once again.
But, like it or not, the Russians are coming.
The economic decline of the Soviet Union began in the Brezhnev era of the 1970s and early 1980s, when the economy stagnated for the first time after the Revolution. These 'years of stagnation' marked the end of almost half a century of gody zastoya - unprecedented growth and change. The Russians also refer to this period as marazm, the period of senility. It was during gody zastoya that the moral degeneracy of the state, reflected in rampant corruption, cronyism, nepotism and rank inefficiency, reached new heights. In a system where the state controlled all means of production and services, it inevitably led to shortages.
The leading Russian poet of that period, Andrei Voznesensky, said it all in a poem about queues:
I am 41st for Plisetskaya, 33rd for the theatre at Taganka, 45th for the graveyard at Vagankovo, I am 14th for the eye specialist, 21st for Glazunov, the artist, 45th for an abortion (When my turn comes, I’ll be in shape), I am 103rd for auto parts (They signed me up when I was born), I am 10,007th for a new car (They signed me up before I was born)
Very clearly, the Communist train had been derailed. The Russians even had a joke about how three generations of Soviet leaders would have resolved the situation: "Stalin would have shot the engineers, exiled the crew and got someone new to drive it. Khrushchev would have pardoned the crew and put them back to work. Brezhnev would pull down the shades and pretend we’re moving!"
Yuri Andropov, the urbane and reflective KGB spymaster who took over after Leonid Brezhnev died, not only seemed aware of the malaise but about how far behind the West the Soviet Union lagged. In 1960, after Yuri Gagarin’s historic space flight, Nikita Khrushchev had promised the world that the Soviet Union would overtake the West in 20 years. Andropov knew that the Iron Curtain would one day have to rise and, if not handled carefully, would lead to the obliteration of everything that was actually achieved under Communism. Andropov died after cannily elevating the relatively young Mikhail Gorbachev to the Politburo. Did he strike this first deathblow to Communism with malice aforethought?
It was during the late Gorbachev period that I first visited Russia. Forty years earlier George Orwell returned to Britain exulting after visiting the Soviet Union: "I have seen the future and it works!" The Russia I visited in March 1991 wasn’t working at all. One afternoon, the little corner store near the Indian Embassy at Moscow’s Ulitza Obukha had just one loaf of coarse brown bread. GUM, Moscow’s 'State Department Store' abutting the Kremlin, where the Soviet nomenklatura (equivalent to our VIPs) shopped, had a little more, mostly babushka dolls that concentrically disgorged a series of recent Russian despots. Babushka-wise, Gorbachev begat Konstantin Chernyenko, who begat Andropov, who begat Brezhnev, who begat Khrushchev, who begat Stalin, who begat Lenin, who, in a sense, begat Nicholas the Great.
Gorbachev’s halfhearted attempts at reform, the much-vaunted Perestroika, and the rising tide of a new political consciousness in Eastern Europe, only accelerated the slide. The loss of the East European empire, the salutary lesson administered to the Soviet Union in Afghanistan, and the venality and monumental corruption of the Brezhnev marazm period, left Mikhail Gorbachev little room to restore order to the command economy. Instead of producing goods at prices determined by Gosplan (Gosudarstvennyi planovyi komitet, the State Planning Committee), producers circumvented 'the plan' and produced and sold at will in a parallel, officially unsanctioned, system of barter, exchange and misappropriation. The producers reported what the authorities wanted to hear and did what they were forced to do to exist in the parallel market system. What had happened in China during Mao’s Great Leap Forward was now happening in Russia - a large, primitive and increasingly criminal market came to exist in the Gorbachev twilight.
Then, a botched coup in August 1991 saw Boris Yeltsin clamber atop a T-72 tank of the elite Taman Tank Division and clench his fist, creating an image of defiance that captured the imagination of the Russian people and the world. In a series of stunning moves, Yeltsin dismembered the Soviet Union by engendering self-serving nationalism, topping it with decolonisation. The Soviet Union disappeared for good on December 25, 1991.
The Yeltsin promise soon disappeared in a haze of vodka and crony capitalism. In The New Russians, Hedrick Smith tells us what the old Russia of Brezhnev and Gorbachev was like. In The Oligarchs, David Hoffman tells us about the Yeltsin years, when great power and wealth was cornered by a very few. What also happened was the dramatic emergence in the Kremlin of Vladimir Putin, a former KGB agent of the First Directorate and, later, a minor functionary in St Petersburg’s city government. Putin had been head of the FSB (Federal'naya Sluzhba Bezopasnosti, the Federal Security Service), then prime minister, becoming president when Yeltsin retired. Now, another 'new' Russia under Putin has begun to emerge.
The demise of Communism brought the destruction of Russia’s economic system and introduced a market economy based on democratic principles. Instead of the state making the most mundane decisions - such as what the citizen would consume, the factories produce, and the stores sell - there were millions of new decisionmakers. Prices were unshackled, but instead of goods reappearing, prices shot up. It took years for a semblance of stability to be restored.
The public sector, Russia’s vast but inefficient production system, factories, stores, banks, farms, oil and coalfields, power plants, defence and ordnance works, airline, railways - everything other than private property - was sold, in theory to the general public, workers and financial institutions. But, in reality, they were appropriated by a new class of crony capitalists, well-connected political hangers-on and former bureaucrats - the Oligarchs.
The Oligarchs wanted the kind of order that was good for them alone. Then, some Oligarchs began to taken more interest in politics than in their businesses. Among them were Boris Berezovsky, a former researcher with the prestigious Institute of Control Sciences, Vladimir Gusinsky, who trained to be a stage director and once drove a Moscow taxi, and Mikhail Khodorkovsky, a former Komsomol (Communist Union of Youth) apparatchik.
All were adventurers who came to great wealth and power during the Yeltsin years. Berezovsky and Gusinsky came to have extensive interests in media and built TV empires. While Gusinsky restricted himself to his media business, Berezovsky combined a political career with a clutch of industrial enterprises. He was elected to the Duma in the very elections that swept Putin to power.
Berezovsky was an early supporter of Putin. Gusinsky took on Putin, paying for his folly when the banks pulled the plug. He now lives in London, a fugitive from Russian justice. Berezovsky himself is holed up in Paris. Khodorkovsky, last of the politically-ambitious Oligarchs to go, became Russia’s richest man and controlled Yukos, which controlled a major fraction of Russia’s oil production and refining. When Khodorkovsky began to show more political ambition than Putin liked, the system moved on him. Khodorkovsky now languishes in a Moscow jail facing a slew of criminal charges and Yukos is on the verge of dismemberment. The remaining Oligarchs are toeing the line.
With the power of the Oligarchs broken, Putin set about intervening in the reforms process, skewed in the Yeltsin years. A strong government controlled inflation and industrial unrest, and largely curbed the impunity of the Russian mafia and the corruption of the new elite. On a recent visit to Russia, I saw evidence of renewed and vigorous economic activity everywhere. The diffidence and hopelessness of the Gorbachev and Yeltsin years have gone. A new and confident Russia is emerging.
In place of the old Soviet Union, there is a Russia seeking both its destiny as a modern European nation and an active global role. Russia is still a military superpower. It has the natural and human resources, and the technological base, to return it to the pinnacle of world power. Ironically, the biggest challenge to Russia comes not through its paucity of riches but its falling birth rate. The country is contracting at a significant demographic rate, and by midcentury will be much smaller than many Indian states. But, then, so are Japan and the European Union. Among the developed economies, only the US will be growing.
Russia’s Gross Domestic Product (GDP) growth has been among the world’s fastest growing during the past five years, averaging over 6.5 per cent, and an annual trade surplus of more than US$ 50 billion during each of the past five years. It is expected to be 7.9 per cent in 2004, and its GDP is expected to cross US$ 540 billion. The gains from investments in the Russian stockmarket were the second highest in the world since 2001. This year, the current account surplus is expected to be US$ 36 billion and the trade surplus US$ 62 billion.
All this was predicted when the oil price was only US $30.4 a barrel. It has crossed US$ 55.4 this week and is expected to keep rising. The beleaguered Yukos is not expected to pump much oil in the near future, nor are Iraq and Nigeria. With the former Texas oil wildcatter, George W Bush, set for another term as US president (barring a miracle), high oil prices seem to be making the new world economic order. President Putin, who has practically endorsed the Bush candidacy, has good reason to do so. Russia is the world’s second-largest producer of oil, pumping out more than 8.4 million barrels a day (MBA), of which it consumes only 2.68 MBA and exports 5.76 MBA at prevailing market prices.
Russian growth impacts the Commonwealth of Independent States (CIS) economic zone, in whose shadow it exists. Russia’s growth is only seventh in the region: Ukraine leads with 12.7 per cent, followed by Tajikistan (11.1 per cent), Azerbaijan (10.6 per cent), Belarus (10.3 per cent), Georgia (9.4 per cent) and Krygyzstan (9.2 per cent). With a savings rate in excess of 33 per cent of the GDP and FDI growing, Russia is on an investment spree. There is evidence of this all over: everywhere you turn, you see frenetic construction activity; the shops are full and brimming.
If Moscow is now spruced up and more orderly, St Petersburg positively gleams. The fashionable Nevsky Prospekt would compare favourably with any great European high street. Putin has shown the world what an energetic and determined leadership can achieve. Two years ago, I was strolling through the Kremlin gardens in the company of a Research and Analysis Wing (RAW) officer when we suddenly spotted President Putin walking by with just a couple of security officers. He was bronzed by the Crimean sun and had the purposeful stride of a prizefighter.
It’s a new Russia he was striding along.
The author is an economist and heads a think-tank, Centre for Policy Alternatives, Delhi
Courtesy: Hardnews Syndication Service
===== Nu, zayats, pogodi!
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