[lbo-talk] Investing in Russia? Some LBO folks have asked

Chris Doss lookoverhere1 at yahoo.com
Tue Jan 4 06:43:12 PST 2005


BTW, Peter Lavelle, whose post started this whole thing, has (what I think is a) good overview of Putin here:

Getting to know your “Inner Putin” - A ten-step approach By Peter Lavelle Published on June 30, 2004

I am often asked if I like or dislike Vladimir Putin. I have always thought this to be an odd question. I don’t know the man and I suspect I never will. It is probably better to ask me, “Do you understand Putin?” or “Do you understand what Putin is doing and why?” Personally, as this is a private newsletter, I think I do to some extent. The following check list is a ten-step approach for you to better understand Putin or what could be called your “Inner Putin.”

1. Putin’s authoritarianism: Yes, Putin is a tough guy. And yes, he is authoritarian, but more importantly he represents and respects the concept of authority. For him authority is the only barrier against chaos. Chaos is not an abstract idea to him or to most Russians. Russia’s chattering classes talk endlessly as to what should happen in Russia. The loudest chattering comes from either Russians writing for Western media or the usual suspects who tell Western media what they want to hear. Putin is not a chatty person – he likes to see heads roll at midnight. [Who knows? Maybe one day Putin will become a Nike spokesperson: He likes to “just do it.” Gorbachev settled to promote cheap fast food for Pizza Hut – now there is a difference in caliber!].

2. Putin’s attitude on mass media: The Kremlin has a tight grip on the electronic media. It took a few years, but the Kremlin now assures that the electronic media will not be used for private material gain of the few. There is a misperception about Russia’s electronic media: it does not work on the principle of “everything is forbidden except for what is allowed,” but rather “everything is allowed except for what is forbidden.” This is not a prefect world for some, but it sure is an improvement over the Soviet period and the chaos of the Yeltsin years. And, just imagine if the oligarchs were still controlling the electronic media – the highest bidder would be allowed, due to simple and outright media manipulation, to determine government policy and the country’s economic future.

3. Putin’s mission for Russia in the world: Assuring Russia’s rightful place in the international political and economic order. This does not mean bullying its way to get what the Kremlin wants. Russia is an important source of raw materials and energy for the world. Russia will leverage its comparative advantage as much as possible. Also, again to throw cold water on an old idea: Russia should not be seen as a bully to its neighbors. Russia lives in a tough neighborhood, a great deal of what Putin has done in regard to the CIS and the other former Soviet republics is far more defensive, not offensive and chauvinistic.

4. Putin’s attitude to the oligarchs and private property. Plain speaking, Putin hopes to destroy the oligarchs and their grip on the economy. Sure Boris Berezovsky helped him out a bit, but that help probably, more than any other reason, is why Putin does not like the oligarchs. Why should Berezovsky, Gusinsky, Khodorkovsky, Potanin and the rest of group of bandits be allowed to decide Russia’s future? Private property is a real dicey issue. Owning a vegetable stand in a street market is one thing, but a small group of former thugs making billions of dollars off of Russia’s natural resource endowment is quite another thing – especially when billions of dollars are hidden from view and spirited abroad. Taking virtue from necessity, an authoritarian mindset is needed to correct this gross injustice. Putin is far from finished with the oligarchs. Once Khodorkovsky and Co are finally expropriated and imprisoned, the campaign against the rest of them will continue. When the campaign against oligarchy is complete (sometime close to when Putin leaves office in 2008), it should be expected that property rights will have been defined and enforceable in a court of law.

5. Putin’s sense of democracy. Let’s be frank, Putin’s sense of democracy is a political reality that legitimizes his policy agenda and absolutely nothing more. Kremlin spin doctoring “elected the people” (in both the December Duma vote and March presidential election). This was necessary in light of the unpopular reforms the Kremlin is forcing through the Duma a present. The liberal-conservative parties (SPS-Yabloko) were full of good ideas. However, the chances of electorate success, even without Kremlin recourse to “administrative resources,” were dim at best. The Kremlin played to the conservative nature of the Russian electorate and won an overwhelming victory. Now it is using those electoral victories to push through badly needed reforms that are not very popular.

6. Putin’s sense of civil society. Civil society as an idea is an abstraction worldwide. It is impossible to define this concept with precision. Civil society, more often, is identified by a set of practices promoting social and civil welfare. For Putin, civic activism is fine as long as it is not perceived to be at cross-purposes with national interests. Foreign and oligarch funding for political activism is obviously suspect. The vast majority of private and domestic social activism is welcomed. Putin, time and again, is most interested in how money is earned and/or generated and for what purpose. Don’t be surprised to see some NGOs backing their bags; Russia certainly didn’t need Peace Corps backpackers.

7. Putin’s approach to fighting terrorism. The authority mindset (for others the authoritarian mindset) sees the sources of terrorism to be exterminated. An uncompromising approach to domestic policy agendas is certainly seen in how the Kremlin fights terrorism at home and beyond. Fighting terrorism is a not a political issue. It is an issue of administration and use of force. (The outcome of this approach is obvious for all to see).

8. Putin’s sense of history. The Soviet Union was not the “evil empire” for Putin (or the vast majority of Russians who remember and lived in the Soviet Union). The Soviet Union was the country in which he was born, lived and even served. Returning Soviet symbols and rituals that create a since of national unity is not as frightening as the usual suspects in the media claim. What was wrong with the former system was the control of the Communist Party of the Soviet Union. Nothing like that controls Russia today.

9. Putin’s relationship with the military and security forces. These are the only two institutions (maybe the legal system as well) that survived the Soviet collapse intact. Coming from their ranks, there is every reason to believe that Putin feels comfortable with the cadres of both. As incompetent as both the security forces and military can be, both remain a point of reference for Putin after the political and economic deluge of the 1990s.

10. Putin’s sense of Putin: He has been given a mission – call it fate if you wish. He is not an apparatchik who climbed the ladder to power (not institutionally or democratically). The Soviet Union collapsed, Yeltsin’s Russia almost committed suicide, and Putin was left standing. Putin didn’t attempt to save Russia – Russia came to him out of a sense of survival.

After reading the above, you may come to the conclusion that you like (more) or dislike (more) Vladimir Putin. This of course is fine. But, liking him or disliking him is not the point – a better understanding him is the point. Take a look inside yourself - examine your “Inner Putin.”

===== Nu, zayats, pogodi!

__________________________________ Do you Yahoo!? Send a seasonal email greeting and help others. Do good. http://celebrity.mail.yahoo.com



More information about the lbo-talk mailing list