TCS Daily


Putin on the Writs

By Marta Glazier - March 17, 2004 12:00 AM

Once again there is opining in Moscow. How so many people can be so cocksure of President Vladimir Putin's intentions and the consequent direction of Russia astounds me. Recently, I was in the newsroom of The Moscow Times discussing the design preferences of a potential advertiser when our Deputy Editor stormed into the room exclaiming, "Putin just fired the government!" Let the Games begin!

In the midst of so many tumultuous changes (Presidential Administration turnover not one of them), the Yeltsin-era Mikhail Kasyanov was booted for Mikhail Fradkov, who the pundits claim is a complete "unknown" and has been chosen to execute Putin's wishes. Now, just for kicks, let's say that is true. Yes, Putin has replaced a Soprano-type family member with a man with little political clout, but with experience in essentially two areas: tax collection/corruption control and relations with the European Union.

Maybe, just maybe, Putin (and I share this view) thinks that corruption and tax evasion, are intermingled and potentially the most destructive problems in post-Soviet Russia. And let's say that Putin recognizes how important foreign relations are in this quickly shrinking world, and in particular, Russia's relationship with the EU, as well as the effect these relationships could have on his ambitious plans for Russia's economy. And maybe, like any CEO or good manager, Putin wants someone working for him who is smart and fresh, responsive and even malleable, depending on the position - someone untouched by ugly political entanglements and tainted experiences. In a nutshell, appointing Fradkov as Prime Minister could mean that Putin's priorities are to fight corruption and improve relations with the EU, while simultaneously looking out for Russia's best interests.

When it comes to Putin's power and his diplomatic intentions, the words "dictatorship," "authoritarian" and "Soviet" have been thrown around like "blini" lately. Is it wrong for a politician to consolidate power? I thought that that was what politicians did. With 71.2% of the popular vote and "well over 90% in several ethnic republics," it seems Putin's power may be superceded by his popularity. A dictator? The strange thing is that while this fear of history repeating itself exists, Russians love a strong leader and stalwart state. So, perhaps Russians themselves are victims of their own yearnings for a robust state that inspires pride and nationalism.

Fradkov is known as a "skilled diplomat", according to the BBC, "and good negotiator who has good external relations." I have yet to meet a Russian in person with these skills I don't mean to be insulting, but it is rather like the Jamaican bobsled team; "tact" is just not an expectation that Russians have with one another in terms of communication.

It is possible Putin understands that Russia's relationship with the European Union, whether for the purpose of Realpolitik diplomacy and/or for economic gains, needs to be a priority of his administration. And Fradkov has some sense of how the diplomatic game is played, at least according to his resume. Considering the current decision-making in Brussels regarding Russia, appointing a Prime Minister who has at least a modicum of familiarity with "diplomacy" seems like a wise move.

The reality is that for Russia and Western Europe to have comparable goals, then they need to start from a similar foundation. According to Bloomberg News, Russia believes it would suffer annual trade losses of €300 million from the extension of the Partnership and Cooperation Agreement with Central and Eastern Europe, due to current tariff privileges that Russia enjoys trading with former satellite states. This is a significant portion of Russia's trade and GDP, and such a trade loss would, therefore, damage its struggling embryonic economy.

To demonstrate this point in real terms: the city of Moscow does not even have a sewer system capable of draining the winter's snow while it is melting, or the capacity to break the ice on sidewalks to keep city residents from falling and breaking a limb, or a system that enables people to obtain proper treatment once they do break a bone. Taxes on €300 million of international trade could buy a lot of snow blowers and shovels, not to mention provide jobs for a lot of city's unemployed and help improve its decaying infrastructure. Russians are rebuilding a society from the radical damage of a centralized economy, and every bit of capital helps.

Maybe Mikhail Fradkov has the CV to decrease corruption and improve relations with Russia's neighbors, thus facilitating the restoration of the country's economy and feeble infrastructure. It is possible that this new PM has an ability to convey Russia's interests in such a way that the EU and Russia's more distant friends can appreciate the insignificance of fighting climate change when there is excessive poverty and corruption.

It seems to me that Putin has one thing on his mind: growing Russia's economy. And that includes its trade interests in the surrounding countries (the actual trade effects of the EU expansion remain unclear. Russia and the EU disagree in terms of their predictions). Over the past eight years, living standards have improved dramatically and the creation of a middle class has been initiated. By contrast, most of Western Europe is middle class, most Europeans live in a clean and safe environment where venturing out on a sidewalk in January is not the equivalent of signing up for an arm cast of plaster. Russia's government does not have the luxury of planning 20 years down the road whether for future trade or environmental benefits. The Kremlin has to focus on paying for basic state funded institutions.

Of course, Putin is fighting tooth and nail for every cent that Russia can make from trade and exports. He knows that oil will not be $35 per barrel forever. Following the "de-planning" of a centralized economy, what 80 years of poor Soviet living has done to Russia requires quite a different set of economic priorities than perhaps her friends in the European Union are prepared to empathize with. Russia has a myriad of complicated problems and it may just be that like any exceptional CEO saving or rebuilding a company, Putin has consolidated his power to be effective; and the Russian people have supported this because he is merely doing his best trying to straighten it all out.


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