Russia Enters Calmer Waters
February 6, 2013
Last winter’s demonstrations in Moscow and elsewhere have more or less died out. This is an expected outcome as this non-movement always lacked of a leadership. Neither did it have any common program beyond the goal “Putin out!” But nature and society alike abhor a vacuum: there was no answer to that question. Polls claim that those participants that had any political identity divided quite evenly into nationalists, communist and new leftists and modernizers. The last ones are routinely called liberals in outside media. That is a problematic piece of terminology, because in Russia even self-nominated liberals are often supporters of a strong state.
This is not the end of opposition in Russia. There will be re-births and new declines. Part of the lesson should have been learned already of the Arab Springs. One can call together demonstrations through social media, but nothing compensates repeated face-to-face contact in building a genuine political movement. It has to be an organization. And Russia lacks the Muslim Brotherhoods and traditionally politically active armies in place to fill the organizational vacuum left by the street demonstrations.
The regime in power continues to put out potential bush fires. This and that visible oppositional is put in front of court and very probably condemned in due course. Foreign aid to NGOs is squeezed out and other barriers to cross-border contacts will be established. Some Russians vote with their feet and many more at least consider the possibility. But on the level of large-scale politics the regime sits tight – for the time being at least. At least three large dangers loom.
The first one is complacency. It has economic as well as political roots. The macroeconomic situation of the country is better than perhaps ever before. Economic growth is a multiple of most European levels, unemployment a fraction of some. Inflation is lower than ever in independent Russia, official reserves are as high as they have been. Both investment and consumption grow faster than aggregate production. Both the budget and current account have a surplus.
This is a dangerous situation, as the Russian policy advice consensus is right when it calls for profound but at the same time difficult decisions. The low hanging fruit of systemic change were picked years ago, though they continue to impact the society now and in the future. Neither can one count on continuous growth in export. On the other hand, a collapse of them – even of gas prices – is not in the cards.
Typically the decisions now ahead are difficult, socially divisive and without a ready-made recipe. Russia is not alone in this respect. Pension reforms are nowhere particularly easy. No political regime finds it easy to allocate scarce resources between social needs, much needed infrastructure investment and military outlays. Preparing for demographic change is a common European challenge.
The regime should also be able to control itself. Though statistics are inevitably murky, corruption is widely seen as the big problem faced. There is a fair possibility that Vladimir Putin is finally serious about fighting corruption. He is also ready to call it a systemic feature of his country, and thus also of his own regime. If the former Defense Minister Serdyukov actually goes to court, a leaf in Russia’s history has turned. There was no necessity for doing that: a dismissal with lukewarm thanks would have sufficed.
But if that is the case, the Putin regime has to be able to control the Pandora’s box. In a society where so many people reportedly have files of negative material on so many others, a war of everybody against all would be easy to ignite. And when there is no political opposition or alternative society ready to take and use power that would be a recipe for catastrophe.
Finally, though new goods and services have flooded Russian markets, export-wise Russia remains as dependent on energy and other commodities as before. Being rich in resources is glorious, but they cannot continue maintaining an economy which is growing. Measured – as it should – in constant prices the share of the wide energy sector in Russia’s GDP peaked at about thirty per cent. It has already declined, and may well reach ten per cent in a couple of decades. This at least is what the Russian experts say, and the policy makers seem to concur.
This is a tall order and must imply a new kind of integration in the world economy. The first months of Russia’s membership have shown that Russia tends to be more apt in defensive than offensive measures. The country is testing the limits of what WTO membership allows in terms of protectionism and such. Established members are testing the limits of Russia’s resolve.
But that, naturally, was fully to be expected.
Pekka Sutela
Nonresident Senior Associate Carnegie Endowment, Washington D.C. & Visiting Professor at the School of International Affairs, Paris
