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Mainstream, Vol XLVI, No 21

Significance of Vladimir Putin’s Presidency

Wednesday 14 May 2008, by Vladimir Radyuhin


Russia has a new President. On May 7, President Vladimir Putin has stepped down after serving two straight four-year terms and his chosen successor, Dmitry Medvedev, who won the presidential election overwhelmingly in March, has taken over.

Putin will keep his hold on power as the Prime Minister. Medvedev has asked him to head the government and he has agreed. All the same, Putin’s departure as the President marks the end of an era that will be remembered, above all, as a triumphant restoration of Russia’s integrity, economic power and global clout.

When Putin took over from Boris Yeltsin, Russia was teetering on the brink of chaos and was torn apart by Islamist rebels. It was described in the West as “the sick child of Europe” who had little chance of recovery. Under Putin, Russia rose like a phoenix. He reined in Chechen separatists and eliminated the terrorist threat to the nation. Today Russia is the eighth largest economy in the world in Purchasing Power Parity (PPP), according to the World Bank. Last year, the Russian economy grew by more than eight per cent and foreign investment surged by a factor of 2.5 to touch $ 100 billion—a record growth for any of the 15 leading national economies. Even as the International Monetary Fund scaled down this year’s forecast for the global economy, the Russian Government has revised upwards its estimates for domestic growth. A country almost bankrupt 10 years ago has amassed over $ 500 billion in foreign exchange reserves—the third biggest after China and Japan. Average wages soared from $ 80 a month in 2000 to over $ 640 now.

While high energy prices have spurred economic growth, political stability and credible economic policies have been the decisive factors behind the country’s transformation from a post-Soviet wasteland to a thriving market economy and “energy superpower”.

In domestic politics, Putin pursued the so-called “managed democracy”—the Kremlin prefers to call it “sovereign democracy”. To ensure a solid pro-government majority in Parliament, he imposed tougher election rules for the Duma, Lower House, abrogated direct elections to the Federation Council, Upper House, and discouraged business tycoons from financing Opposition parties. This might have slowed down Russia’s evolution as a full-fledged multiparty system but saved the country from the Yeltsin-era crippling conflicts between the executive and the legislature that eventually climaxed in an armed showdown in October 1993.

Putin once said he was not a politician but a public servant hired by society to do a job. Yet few political leaders in the world can match his talent of appealing to different social groups at the same time. As one sociologist remarked, “the President can be all things to all people” and “is a mirror in which everyone sees a reflection of themselves”. Putin’s popularity rate remained above 70 per cent throughout his presidency, even as his economic policies favoured the rich more than the poor. Although the poverty level has come down, the gap in the incomes of the richest 10 per cent of the population and the poorest 10 per cent widened from 13.9 times in 2000 to 15.3 times in 2006, according to official statistics. Experts at the Russian Academy of Sciences’ Economics and Mathematics Institute have registered an even wider gap of 30 times.

For all that, people are confident about the future. An opinion poll taken last month showed that 60 per cent of Russians think the country is moving in the right direction, while the opposite view is shared by 25 per cent. Eight years ago, the proportion was reverse. The number of people who have adjusted to the new capitalist realities steadily increased during Putin’s presidency, and exceeds 60 per cent today.

RUSSIA’S transformation in foreign and security policy has been nothing short of spectacular. After years of humiliation and retreat, Russia has regained its great power status and global role. Putin has put Russia on an equal footing with the West. His famous Munich speech in February 2007, where he blasted the US global policies as a disaster and proclaimed the unipolar world dead, underscored Russia’s return to the international stage as a leading power. Its international standing is probably higher today than during the best of Soviet times.

One of Putin’s most impressive achievements has been the synchronisation of Russia’s domestic and foreign policy goals. What Russia is doing internally helps it win stronger position in the world, and its foreign policy serves to facilitate domestic growth. Putin has renationalised much of the oil industry sold off for peanuts by his predecessor. Contrary to the advice of domestic and foreign liberals, he refused to break up Russia’s natural gas monopoly, Gazprom, which is today one of the most powerful companies on the planet. State control over the sector has allowed the Russian Government to turn energy into a powerful foreign policy instrument for influence, more effective than Soviet-era tanks and missiles. Moscow has consolidated its hold on oil and gas flows from Central Asia and dictated its terms of the energy game to Europe. The US-backed attempts by the European Union to talk tough with one voice to Russia on energy issues have fallen flat as European nations, one by one, negotiated lucrative deals with Moscow to build new pipelines and to offer Russia assets and technologies in exchange for access to its oil and gasfields. Putin’s foreign policy has been singularly pragmatic. The globetrotting President visited 66 countries and territories on five continents, undertaking more than 190 trips to push the interests for Russian investors and open new markets for Russian exporters. He became the first Kremlin leader to visit Brazil and Saudi Arabia and first since Stalin to travel to Iran. He ventured as far afield as North Korea, Chile and Australia. He went to Malaysia thrice, India four times and China seven times. Putin restored close strategic ties with India to the Soviet-era level, but he would not let even his Indian friends take Russia for granted as they used to at the time of the Soviet Union. Neither the special nature of strategic partnership with Moscow nor the multi-billion purchases of Russian arms helped New Delhi win any privilege in getting access to Russian energy resources.

By any measure, Putin is the best leader Russia has had in the last 100 years. Some Russian pundits have even compared him to Franklin D. Roosevelt, who similarly restored the belief of the American nation in its future. This is not to say Putin’s presidency has not been marked by setbacks. An overblown, inefficient and corrupt bureaucracy is one of his biggest failures.


UNDER Putin, the bureaucracy has emerged as the real ruling class. It controls major companies, lobbies its interests in Parliament and dictates its will to the judiciary. Corruption has increased several fold since Putin came to power and the value of bribes paid to government officials is officially estimated to be almost equal to the Russian state’s annual revenues. Rampant corruption strangles small and medium businesses and slows down economic growth. Bureaucratic omnipotence is the reverse side of Putin’s efforts to strengthen Central Government authority, and has been aggravated by state control of the electronic media and lack of political competition.

Another problem is the continuing heavy dependence of the economy on oil and gas and other commodities. The growing wind-fall of energy export revenues has suppressed the will for economic diversification. Labour productivity remains abysmally low; in some industries, it amounts to one-twentieth and even one-thirtieth of that in Europe and the US.

However, it is too early to evaluate Putin’s legacy. He is certainly capable of achieving much more. Summing up his eight years in power, Putin, in a February address, made a straightforward and unembellished analysis of the problems that defied solution during his presidency and set the tasks for his future Cabinet. These include building a knowledge-based economy, overcoming the acute demographic crisis, narrowing the rich-poor gap and creating a strong middle class that would make majority of the population. Putin called for a fourfold increase in labour efficiency over the next decade and sweeping retooling of industry on the basis of new technologies. The ultimate goal of his plan is to turn Russia by 2020 into “the most attractive country to live in”. This is a tall order, but then the tasks Putin has successfully accomplished over the past eight years have been no less daunting.

(Courtesy : The Hindu)

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