Putin Village
17. April, 2010 by Meelis KitsingIt’s a pity that Russia has not made much progress in the last decade. Seven years ago I published an article on Russia where I compared Putin’s reforms to building a Potemkin village. If published today, the article would still be an accurate description of Russia. At that time, my points seemed perhaps too harsh as Putin had served as the president for three years and Russia was in the middle of economic recovery. However, the recent special report on Russia by the Financial Times makes similar points.
Putin’s social contract for delivering increasing living standards in exchange for political passivity is no longer working. This outcome is not surprising given that the contract is based on something so volatile as the price of oil. No wonder that the Kremlin has decided to engage in the expansive interpretation of continental shelf and seeks opportunities for oil production in the Arctic.
Most importantly, citizens do not think that economy is improving and middle-class savings have been exhausted. Some experts argue that Russia looks more and more like the Soviet Union and point out similarities with the Brezhnev era. Sure, the GDP and real incomes doubled in the last decade. But this achievement had little to do with good governance and economic reforms. The growth relied on oil exports which created complacency and reluctance to carry out both economic and political reforms. Money from oil exports was used to buy political support and keep “semi-feudal” governance structures in place.
As the Financial Times points out “Kremlinology” is back in fashion as experts are looking for clues whether Putin or Medvedev will run for the president in 2012. Something as important as the choice of next president is characterized as a decision between two people. In this context, the description of governance process as a semi-feudal would be understatement. It is simply feudal.
Tags: economic reforms, Kremlinology, oil, Putin, Russia
