Russia's Future

Figure 1.--.

Russia today is a very different state than the Soviet Union. hTe terrible attrcitities of the Stalinist era no longer occur. It is not, however, a Western democracy. The West's concern with Islamic Fundamentalistrs, perhaps better called Islamo-Fascists, have taken the focus off Russia. There is concern that Russia was headed toward a Fascist state. Post-Cold War Russia has many similarities with post-World War I Germany. Tghere are prevalent attitudes toward race and nationalism in Russia that are troubling. There are also prevalent attitudes that Russia has a right to cintrol political trends in neigboring countries. It is unclear at this time where President Putin is taking Russia. It seems clear now that Putin is moving Russia toward an authritarian state, just how authoritarian we are not sure. Just how auhoritative is unclear. His suppression of independent media is troubling as is his suppression of oposition political parties and an independent judiciary. Some authors contend that he sees economic integration with the West as essential. But yet he seems to believe that Russia requires a different political and social political structure than the West. My concern, however, is that President Putin is taking Russia down a path very different from that of asn> Western Europe and now Eastern Europe. Here I don't mean to say America, but the Western world in general.

Russian View

A Russian reader has provided us a fascinating view of developments in his country. Here we have his Russian text. The translation is a computer-generated text and thus is not yet a very good assessment of our Russian readers's original text.

Russian text

Вы писали 27 августа 2005 г., 13:13:26: My concern, however, is that President Putin is taking Russia down a path very different from that of Western Europe and now Eastern Europe. Here I don't mean to say America, but the Western world in general. Dennis, пути построения нового общества бывают самые разные. Успешное развитие Германии и других стран совсем не означает приемлемость этого пути для России. Учитывая недалекое коммунистическое прошлое нашей страны нельзя идти полностью по пути этих стран. Большой процент населения страны помнит те преимущества, которые в социальном плане давала прошлая жизнь и видит те проблемы, которые имеют место в настоящее время. Эти люди неприемлют путь развития свободного предпринимательства. Должно пройти время чтобы выросло новое поколение, которым ценности капитализма (или свободного предпринимательства) гораздо ближе чем коммунистические. Пока прошло еще не так много времени. Старая система управления экономикой имела свои недостатки это ясно каждому. Но кто сейчас стоит во главе новой системы? Те же самые чиновники, которые были при коммунизме. Они не привыкли работать инициативно, всю жизнь их учили, что только надо правильно выполнять команды сверху, так они продолжают работать и в настоящее время, боясь из-за своей инициативы лишиться своего места. А молодые специалисты еще просто не выросли. Что бы сейчас не делали специалисты старого времени, они всё будут делать с оглядкой на прошлое. Ещё хочу сказать что не всё абсолютно в вашей системе экономики нравится нашим людям. Мне тоже не всё нравится, но не в этом дело. В настоящее время у нас в стране совсем непростая обстановка. Основная масса денег вращается всего в нескольких городах. В первую очередь конечно в Москве и в Петербурге. У меня после недавнего посещения столицы вообще создается такое впечатление, что мы усиленными темпами строим капитализм в одном отдельно взятом городе - Москве. Там уж действительно система свободного предпринимательства в действии. А вот в остальной России нет такого количества инвестиций в производство по простой причине - все деньги в центре. Если в Москве жители не хотят идти на работу где заработная плата составляет 15000 рублей и меньше, то в других городах такая заработная плата является максимально возможной и человек рад получить работу в 3-4 тысячи рублей. Такая разница совсем не нравится гражданам наше страны. Все эти перекосы идут от времени правления Ельцина. Путин сейчас вынужден танцевать на лезвии бритвы чтобы не ввергнуть страну в новый хаос. Пока ему это удается. С трудом, но удается. Не знаю что пишут о России ваши средства массовой информации, но поверьте уж мне на слово, что сейчас у нас в стране потихоньку наводится порядок. Темпы экономического роста составляют около 10% в год, переоборудуются промышленные предприятия новым высокотехнологичным оборудованием и многое, многое другое. Кстати, мы добросовестно выплачиваем в сроки (и даже досрочно)свои внешние долги, что можно сказать не о каждой стране. Но не все предприятия сразу - все и сразу переоборудовать невозможно. Нужно еще время. Да, сейчас наш бюджет построен в основном на нефтедолларах, но доля других отраслей промышленности неуклонно растет. В советские времена промышленность страны характеризовалась плановой экономикой и конечно в первую очередь все усилия были направлены на противостояние в холодной войне. Вы пишите что было низкое качество потреьительских товаров. Это не совсем так. Очень многие товары тогда были хорошего качества и работают до сих пор (например у моих родителей до сих пор хорошо работают холодильник и стиральная машина, купленные ими в конце 60-х, начале 70-х годов). Конечно они уже морально устарели, но старики к ним привыкли и не хотят менять на новые современные. Почему эти товары нельзя было увидеть раньше (в прежние времена) на прилавках магазинов в других странах? В странах шедших по социалистическому пути они были. А вот в других странах за "железным занавесом" их не было. Как раз из-за этого самого "занавеса". Как не было в наших магазинах товаров из стран западного мира. А сейчас, я уже писал раньше, нас просто не очень-то хотят пускать на внешние международные рынки опасаясь конкуренции. Впрочем, пока еще у нас не очень большое количество товаров, которые могут соперничать с товарами из других стран. Но на это опять же нужно время. Пройдет еще какое-то время и мы займем свою нишу на международном рынке различных качественных товаров. Единственная отрасль промышленности в которой мы безнадежно отстаем от других стран, по моему мнению, это автомобильная. Те автомобили, что выпускаются в нашей стране для продажи нашим гражданам очень и очень в современном смысле отсталые. Здесь мы отстали лет на 20 или даже 30. По крайней мере лично я никогда не стану покупать автомобиль российского производства, пусть г-н Немцов обвинит меня в непатриотизме в этом случае, но я лучше куплю подержанную японскую машину, чем новую русскую.

English text

HBC'writes, " My Concern, however, is that President Putin is taking Russia down a path very different from that of Western Europe and now Eastern Europe. Here I don't mean to say America, but the Western world in general."
Communism: Dennis, there are many different ways of constructing a new society. The successful development of Germany and other countries in no way indicates the acceptability of this way for Russia. Taking into account the recent Communist past of our country, we cannot perfectly follow the path of these countries. A large proportion of the population of the country remembers those advantages, which were given in the social plan previously and it sees those problems, which occur at present. These people reject the free enterprise route to development. We will have to wait until a new generation rises, to which the values of capitalism (or free enterprise) are much nearer than communism. Not enough time has passed so far.
Commamd economics: The old system of management of the economy had its deficiencies this is clear to everyone. But who is now at the head of the new system? Those same officials, who were there under communism. They are not used to showing initiative; for their entire lives they have been taught that it is only necessary to follow command s from above and that is how they continue to work at present, afraid of losing their positions because of showing initiative. Meanwhile, young specialists have simply not taken their place. Whatever the old time specialists do, they do looking back to the past. I also want to say that our people do not like everything in your economic system. I also do not like everything, but that is not the point.
Important cities: At present, in this country, we have a very complex situation. Most of the money is turned over in just a few cities. First of all, certainly in Moscow and in Petersburg. After a recent visit to the capital, I get the impression that we are pressing forward to build capitalism in one city alone - Moscow. Free enterprise is already in action there. But in the rest of Russia there isn’t the same investment in production for the simple reason that all the money is in the centre. In Moscow, people will not accept work for less than 15000 roubles, while in other cities such a wage is the maximum possible and people are glad to obtain work for 3-4 thousand roubles. Our citizens dislike this difference. [HBC note: Russians tend to quote pay levels by the month. The exchange rate is very roughly 30 roubles to the dollar or 50 to the pound.]
President Putin: All these problems date from the Yeltsin era. Putin is now forced to dance on a razor blade to avoid plunging the country into new chaos. So far, he has succeeded, albeit with difficulty.
Economy: I do not know that they write about Russia in your mass media, but take my word for it that our country is slowly being brought back to order. The rate of economic growth is about 10 percent per annum, industrial enterprises are re-equipping with new, high technology equipment and there are many other improvements. By the way, we honestly pay out on time (and even ahead of time) our external debts; not every country could say the same. But not all enterprises can re-equip immediately. More time is needed. Yes, our budget is built on the foundation of petrodollars, but the share of other branches of industry is steadily growing. In Soviet times the industry of the country was characterized by the planned economy and, certainly, most effort was directed towards opposition in the Cold War. You write that the quality of consumer goods was low. This is not entirely true. Many goods were of good quality and still work, (for example, my parent's refrigerator and washing machine still work well, and they were purchased at the end of the 60s, or beginning of the 70s). Of course, they are obsolete, but the old folks are used to them and do not want to change them for new modern appliances. Why couldn’t you see these goods on the counters of stores in other countries, previously? In countries following the socialist path, they were. But in other countries on the other side of the "Iron Curtain" you could not find them, because of this very "curtain". In the same way, our stores did not contain goods from the western world. But now, as I already wrote earlier, they simply do not want to allow us into the external international markets, fearing competition. So far, we don’t have many goods, which can compete with goods from other countries. But this needs time as well. In time, we will fill our niche in the international market for different types of quality goods. The only branch of industry in which we hopelessly lag behind other countries, is, in my opinion, the automobile industry. Those cars that are released in our country for sale to our citizens are very backward. We are 20 or even 30 years behind. Personally, at least, I would never buy a Russian car, let Mr. Nemtsov accuse me of being unpatriotic if he will, in this case, but I would be better off purchasing a second-hand Japanese car, than a new Russian one.

HBC View

HBC does not want this discussion to be an America vs. Russiaa discussion. We do not think there is one single, correct economic and political pattern. Each country can not help but be influenced by its historical experience. We do not operate under the illussion that America has all the right answers. In facr the countries of North America and Europe (and now Japan, South Korea, and Taiwan) have developed tremendously productive economies and democratic socitis with a wide range of varying social and political structures. We do not begin to say which country has developed a better society. While there emense differences, there are certain core values that all of the Western countries have in common. We believe that these key values are what define Western civilization and has made Western countries so successful. Even with all the diversity of modern Western countries, they all have incorporated these core values to varying degrees.

Russian historical experience

There is no doubt that Russia, like all countries, has and will be influenced by its historical experiences. And a sucession of conquerors have moved over the vast Russian steppe--the Vikings, Mongols, Litianians-Poles, Sweeeds, French, and Germans. This history has created a desire for security. It is thus understandavle that leaders that have offered security and order have over time had an appeal to Russians.

Economy

We do not mean to say that Russian industry turned out worthless products. Some Russian products were sturdy, durable, and well egineered. Of course this was especially true of military euipment, but was also true of some consumer goods. The vast majority of Soviet output, however, was uncompetitive with Western products. Our personal knowledge of Russian goods is very limited. HBC readers do have some knowledge. One reader writes, "Most Russian cars made for the domestic market are dreadful and although they are cheaper than new western cars, a second hand Japanese one probably does represent better value. However, Russia also makes cars for export. These are maybe only ten years out of date, and they are able to compete with western cars on grounds of price. Reliability of export models is also significantly higher; in some cases, at least in the past, Russian export cars were more reliable than western ones." Another HBC reader writes, "In the 70’s, my father gave me a Soviet made camera, which, for all that it was cheap, lasted until 1993 and gave good quality pictures – a telling contrast with my Japanese digital camera which gave up the ghost after 18 months. Some western countries, like Britain, carried on limited trade with Warsaw Pact countries. However, while many Soviet era goods were made to last, I would question whether the quality of their performance even approached Western standards, outside of a few specialist industries." It is fair to say I think that there was a great demand for Western consumer goods in Russia and Russians generally preferred Western to Soviet-built goods. This became apparent when the economy was opened to foreign goods. Few Russian factories could compete with foreign companies, let alone compete in the international market. This is a problnm Russia faces today, its industry is simply uncompetive. Our reader it seems appears to believe that many of the problems stem from the Yeltsin interlude and Russia's experiment with democracy and capitalism. The reason Russian industy is uncometitive and inefficent, in seems to us, is largely the result of the decaded of Communist rule, a system of stte-controlled command economics and the lack of competitive, market pressures. Today we do not know of a single category of Russian industrial products that is competitive in the West. The Russian economy seems to have stabilized in recent years, but we suspect that this is primarly becuse of export earmings from high oil prices. Our Russian reader is more optimistic. We hope that he is correct. We do disagree in particular when he writes that the reason Russian is unable to export industrial producrs because "... THEY simply do not want to allow us into the external international markets, fearing competition." Unlike the Soviet Union, the imports of Western countries are not controlled by any central authority. There is in effect no "they" to exclude Russian products. Individual private companies make these decissions. The best example of the success of China in exporting and China is still a country that is still Communist. One gets the impression that many Russians believe that there is some sort of conspiracy in the West to harm Russia.

Core Western values

Democracy is a term that has been used variously by different countries. The Soviets for example claimed they had a democratic system. We believe that there are certain core values without which a country can not develop a modern, productive system. First is a democratic political stricture. The importance aspect of democracy of course means rule by the majority, but there has to be provision and protection for minority groups, includung political, religious, cultural, and ethnic minorities. Second there has to be the rule of law, meaning established laws that even government officials can not violate. Third there has to be freedom of expression which allows individuals not only to openly express their opinions, but access to mass media even when he criticises government officials and policies. Four there has to be protection of property rights. There may be other important elements to the success of the West, but it seems to us that these four are the most important. Countries vary in how effectively they adhere to these core values, including America and Western Europe. Our point is that the most wealthy, successful countries rate high in these core valies and the poorest, least successful countries rate poorly in these core values. Our opinion is that adherence to these core values is not just moral issue, although moraliy is an element. We believe that socities that incorporate these core elements unleash the inate capacity of the human mind and spirit and create socities that are enormously productive and create just socities that provide affluent life styles.

President Putin (2000- )

We have been following Russian developments from afar to assess President Putin's administration of modern Russia. He took power in 2000. It strikes us that his primary effort has been directed at establishing state authority over every important sector of Russian society and to limit disent. Little of what he is doing seems directed at addressing Russia's major economic and social problems. It also strikes us that President Putin has moved to curtail the development of the core values of modern Western society. That is not to say that he seems to be building a Stalinist dictatorship, but we now know where Putin was headed. He has not constructed a Stalinist totalitarian state. His use of viloence is very realm but not the hideous terror of Soviet totalitarianism. President Putin's decession to move Russia away from the basic Western values has a wide range of economic and political consequences. Fortunately for President Putin, he seized power at a time of low oil prices and that intertnational oil prices rose to record levels, over $100 a barrel. Given that Russia's primary export commodity is oil nd gas, it led to record export income leading to unprecedented prosperity, much like an Arab oil shiekdom. This is a major factor on Putin's undeniable popularity in addition to his cultivation of Russian nationlist sentiment. This only began to change when American shale oil began to impact supply. The oil price cracked (2014). This and Western sanctions because of Russian military aggression in Crimea and the Ukraine have adversely impacted the economy. A Russian blogger has provided some addotional useful insights into how Russia has developed in the nearly two decades of Presudent Putin's rule.

Created: August 27, 2005
Last updated: 7:42 PM 8/23/2017