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Thursday, March 10, 2005

Russia – Orientalism means Poverty and Corruption

This is no way to reform a decaying country

by StFerdIII

Putin – the smiling KGB operative who speaks foreign languages, inspires hit Russian pop songs [‘I want a man like Putin’], enjoys 80 % approval ratings, and charms Western leaders – is another Russian imperialist in the tradition of the Tsars and the Communist criminals. It is clear that Putin’s policies and those of his small ruling clique have nothing to do with improving Russian society. Their policies are aimed at firstly creating or stealing wealth for themselves and their party [ie. Government], and secondly to create a strong Russian state which can extend its influence over the former Soviet Republics and beyond. Putin’s pathetic attempt at subverting the Ukraininan elections last year, illustrates his desire for empire.

One man, one party, one state was Hitler’s description of Fascism. It is also a pithy summary of corrupt Orientalism and it applies to present day Russia. Only one party dominates Russian politics and it’s Parliamentary Duma – United Russia – which is Putin’s personal party. The lack of a durable multi-party system [Putin raised the minimum limit to have a party to 50.000 members], and fewer opposition parties gives Putin's United Russia increased access to administrative resources that can be used to disrupt the 'democratic rule of law'. As Putin's ‘reforms’ continue to amass power for his regime and for United Russia, the lack of accountability has led to an increased number of abuses of power.

The lack of political accountability is reflected in the judicial systems and economy. The courts are famously corrupt and ineffective. Federal and regional elites are closely associated with criminal groups. Many experts state that the Russian legal system too often tends to concentrate efforts on relatively small offenders, while senior officials engage with those suspected of organized crime. Corruption, illegality and an unholy alliance of mafia-politicians and corrupt judges dominate society.

Mafia ridden businesses dominate most market segments and what the mafia has not taken the State owns. For example state ownership of the oil industry is a fait accompli after the illegal dismantlement of Yukos. Putin wants to control oil, which provides for 40 % of Russia’s budget. But mafia, state ownership and corrupt markets only limit Russia’s potential. The GDP of Russia is now back to its 1993 level and is lower than that of Holland [U$430 Billion vs. U$470 Billion]. GDP per capita is about 70th in the world at $2100 per person, and though GDP growth is averaging 5-6 % per annum, personal incomes are still low at about U$500 per month on average and inflation is running at an unsustainable 13% per annum.

The economy and political structures are thus not in good shape. Poverty is rife outside Moscow and St. Petersburg. Without the high price of oil Russia would be in dire straits. In Moscow and St. Petersburg the average monthly income is about U$800-1000 – better than 10 years ago, but not enough to build a vibrant and politically active middle class. Without a strong middle class with independent and well informed business owners, society inevitably falls into dictatorship and Orientalist government. Russia has many reforms to enact but a great priority is to create a middle class and as well: lower inflation; impose good governance; further broaden the tax base; stimulate real non-mafia competition in industry through investment and regulatory reforms; and start to fund needed social programs and infrastructure build.

Change in Russia will not happen until political reform, and the creation of a middle class, is matched by media diversity. Informed media debate does not exist in Russia. The media is either state owned or state coerced. Journalists like the former Editor of Forbes Russia, magically disappear in car accidents or shootings once they criticize the state. According to the Committee to Protect Journalists in their book
Attacks on the Press in 2004.

, there has been a purge of independent voices on Russian national television and a wide suppression of Russian news coverage during the Beslan hostage crisis. Putin is increasingly exerting Soviet-style control over the media. In fact CPJ's analysis suggests that the press operates with less freedom than it did in the closing years of Soviet communism.

Fascist tendencies color foreign policy. Like Fascist regimes in the past, current day Russia feels besieged by evil Westerners – intent on destroying the motherland. Russian paranoia cites NATO’s expansion into Eastern Europe, US military bases in Central Asia, US forces in Afghanistan, Iraq and soon other Middle Eastern states, and supposed Western meddling in the Ukrainian election as proof that the West is hostile to Russian interests. This poor analysis is used by the government, through media owned outlets to excite nationalist feeling and state support. As such Russia has a citizen body that is for the most part, extremely nationalistic and anti-American. This of course affects Russian politics and policy setting – an ‘un-virtuous circle’ of state manipulated racism.

However on the optimistic side, Putin might be his own worst enemy. His take-over of the Russian state might actually misfire. Russian youth know about the West and economic and political freedoms. There is a reason why there is a huge diaspora of Russians throughout the world, and most young Russians including many of its women, yearn to leave. If Putin’s so called reforms lead to nothing, and don’t improve society, and people some years from now, are still poor with no political voice, there might be an Orange revolution in the Motherland. A lot will depend on the courage of reformers currently fighting for change and how much, and how far, the EU and USA will support their cause. In the interests of security and economics, the West should be far more active in supporting democracy movements in Putin’s Fascist Motherland.

Sources:
Center for Strategic and International Studies (CSIS)

http://www.csis.org/ruseura/ponars/policymemos/pm_0361.pdf
World Bank -
http://www.worldbank.org/cgi-bin/sendoff.cgi?page=/data/countrydata/aag/rus_aag.pdf.
OECD -
http://www.olis.oecd.org/olis/2004doc.nsf/linkto/eco-wkp(2004)27
BBC-
http://news.bbc.co.uk/1/hi/world/europe/1113850.stm
Open Democracy
http://www.opendemocracy.net/forums/thread.jspa?forumID=128&threadID=44028&messageID=59416#59416
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For those optimists who believe in Russia’s economic future you can read Goldman Sachs’ paper on the long term prospects [2050] of four economies: Brazil, Russia, India and China. The analysis is wrong and a little silly.
http://www.gs.com/insight/research/reports/99.pdf


They believe that
Russia will surpass Germany in the total size of the economy, GDP per capita at PPP, and even GDP per capita in nominal dollar terms, to become a full-fledged member of the small club of the most highly developed nations. Dream on.
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