Putin's cure could be Russia's poison

By Nicholas Gvosdev

Published: September 17 2004

Despite Russia's impressive economic gains in the last four years, a third of the population still lives below the poverty line. The wave of terrorist attacks over the summer exposed the corruption that continues to plague law enforcement. The daunting task of rehabilitating Russia's many dysfunctional institutions, from border security to healthcare, grows m ore urgent by the day.
Vladimir Putin does not believe that further democratisation or decentralisation is the solution to his country's problems. The Russian president has been roundly criticised for his recent moves to strengthen central authority. These include plans to abolish direct election of regional governors; change voting mechanisms in the Duma, or parliament; and strengthen security services. Then came Tuesday's announcement that the government would merge its massive oil and gas interests into Gazprom, already 39 per cent state-owned, to create one of the world's largest energy companies. These are just the latest in a series of actions by the Kremlin that critics say demonstrate Mr Putin's disregard for the ability of citizens to chart their own destinies.

They highlight his belief that free choice has not produced optimal results for Russia. In a meeting with western analysts last week, Mr Putin railed against the failure of privatisation - how it had handed stewardship of the Russian economy not to efficient, professional managers but to oligarchs bent on fattening their fortunes at the expense of the nation. Vladimir Litvinenko, a leading economic adviser to Mr Putin, recently warned that the government was "losing control over companies' activities" and urged the state to become a more active shareholder within the Russian economy. His words undoubtedly inform Mr Putin's thinking.

Private capital, however, is still welcome in Russia - as long as it supports the Kremlin's economic agenda. This is the core of the Gazprom bargain: foreign investors will be free to purchase shares in Russia's largest industry, but not to challenge the state's goals for the industry. The president is gambling that enough businessmen will be willing to take up his offer. Direct elections, meanwhile , do not always foster popular welfare, he intimated. Democracy is power exercised for the people's benefit - not a popularity contest. He believes he has the mandate to forge ahead with his programme regardless of opposition.

Mr Putin told us plainly last week that he wanted "the right people" who would be "effective" at their jobs. If direct elections and free-market mechanisms are not up to the challenge, the administration must step in to ensure the "right people" do end up in charge of directing the Russian economy, the legislature and its regional administrations. Mavericks and independents - those who might challenge his vision for an orderly transition - need not apply. Mr Putin seems to share the sentiments expressed by Nikolai Leonov, a former KGB general, a leading figure in the Duma's patriotic "Motherland" bloc and mentor to many Russian officials, who opined that Russia's recovery could only occur under those he termed "people of the state" (gosudarstvennie liudi),individuals w ho combined "experience" and "strong intellectual capabilities" with deep "loyalty to the state". In finding such people, Mr Putin has recruited heavily from the security services. In turn, he has appointed his "envoys" to boardrooms and regional capitals.

Mr Putin is asking Russians to give up their remaining checks against arbitrary power and to trust his choice of people to manage the country. Whether he will have more success in empowering professional and honest officials and business leaders than would voters or shareholders is unclear. Revealingly, Murat Zyazikov, the governor of North Ossetia whose performance in the recent hostage crisis was so lacking, was Mr Putin's choice to lead that volatile region.

If Mr Putin's key proposals are enacted, there will no longer be political, economic or regional counterweights to the president's power. There will also be no way to ensure the president's men move forward on his agenda. Russians risk giving up precious freedoms with no guarantees of g reater security or economic prosperity down the road. It is a risky bargain. A recentralised, authoritarian and corrupt Russia could end up the Slavic equivalent of a banana republic, an "Upper Volta with missiles". This is not what Mr Putin wants. But his cure for Russia's ills, in its present form, may prove disastrous.

The writer is executive editor of The National Interest, a journal of international affairs