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My objective is to see Russia advancing as a modern civilized country.

EVENTS

15 December 2009 

Mikhail Kasyanov: It is my firm belief that it is Yeltsin's Russia that has a future, not a Putin's one

Mikhail Kasyanov is the main speaker in the seminar Yeltsin's Russia and Putin's Russia - What Happened and What Could Have Happened?, organized by Finnish Institute of International Affairs on 15 of december. The former Prime Minister of Russia Mikhail Kasyanov analyses the political and societal developments in Russia in the 1990s as well as Russia's current trends. What are the opportunities taken, lost and still on the table and what is the potential for the new wave of reforms in the country.

Presentation at the seminar held in Finnish Parliament

December 15, 2009

Twenty yeas ago the Berlin Wall has fallen. This event came very suddenly and triggered many important events all over the world and soon produced collapse of the Soviet Union. It was probably the only case in history when totalitarian state was destroyed more or less peacefully. Significant part of the credit for that should be given to Boris Yeltsin who became the first president of the new Russia and led the country through the first years of its existence.

These were very difficult years. Almost everything was lacking: functioning economy, budget resources, foodstuffs, the statehood itself. By trial and error, step by step, the new system, the new state, the new economy were gradually being shaped. One cannot deny that a lot of terrible mistakes were made during this period of time but many people including myself were sure that the vector of development was nevertheless correct. Most of these mistakes were considered then as inevitable trade-offs on the way to democratic state and the system of market economy.

I remember quite well what was the general mood in the elites and wider circles of population at the end of 1999 as Russia was approaching the new political cycle. Just a year passed since devastating financial crisis of 1998 and we badly needed consolidation in the society and political will to reinvigorate the reform process and move the country towards the route of sustainable development.

At that moment Yeltsin made a difficult personal decision to resign in order to give way to the new generation of leaders capable to make the necessary change possible. People from Yeltsin's inner cycle manage to convince him that Putin was the right person to choose as a successor of his mission. Supported by the official media they made the whole country believe that this was just a man for the task. I had very few doubts whether to accept Putin.s proposal when he invited me in January 2000 to become a Prime Minister and run the government.

As described in my recent book called "Beyond Putin", written together with journalist Evgeny Kiselev, the initial plan of economic and social reforms suggested by me and accepted by Putin looked quite impressive and challenging. And we actually did a lot.

The list included fiscal stabilization and creation of the stabilization fund, budgetary and tax reform, Customs Code and measures to approach WTO accession, pension reform, innovative ways of market-based support of agricultural production, structural reforms in the natural monopolies and mining. As a result, economy started to perform much better giving people a hope.

During that time we achieved huge success at the international arena as well. After 9/11 and intense cooperation with the West Russia-NATO council was launched. We thought that Russia one day would even join the block. For instance, I remember well that then Finnish Prime Minister Lipponen complained to me about his concern that Russia suddenly became closer to NATO than your country.

A lot has changed since that time when Russia was actively modernizing itself on the basis of universal values of democracy and market economy, when Russia and the West started to deal with each other like real partners. Unfortunately, during second Putin.s presidential term all the institutes of democratic society in Russia were deliberately demolished and replaced by their imitations. Foreign partnership gave way to zero-sum strategy and endless wrangling.

It was not a coincidence that after the anti-democratic turn all the reforms started by my government were stopped and some even reversed. I would like to remind that when my government left the office in 2004 the price of oil was around 25 dollars per barrel –seven times lower that its peak value and at least three times lower than now. At that time we supported high economic growth, while running significant budget surplus and undertaking important reforms. Now the budget is deeply in the red, no reform takes place and the economy is contracting.

Experts estimate the extra benefit received by Russia during 2004-2009 at one trillion euro. The fact is that nothing has been done during this period to modernize and liberalize Russian economy. Out-of-date public sector, Soviet social system, old infrastructure, squeezed and depressed private sector are the best indications of the real economic results of Putin.s rule.

Let.s get back to the current period. A lot of people with liberal views expected that after so-called Russian presidential elections of 2008, turned de facto an appointment of Medvedev, liberal trends would start to reappear in Russian politics. They have built their tactics on trying to widen nominal gap between Putin and Medvedev, calling others to bet on the new president as the only hope to achieve political change. But after year and a half of the new president.s term there is absolutely no sign that nice words Medvedev sometimes pronounced would ever turn into real action.

Thus the tolerance tactics apparently failed. Change of the Constitution to extend presidential term, increasingly manipulated and falsified elections at every level, war in Georgia, the new law on use of armed forces abroad, almost traditional January gas cut-off for half of Europe, continued oppression of dissenters and political opponents. These events became the main highlights of Medvedev's presidency. New stage of Khodorkovsky trial has turned harassment political show having nothing in common with jurisprudence. Dmitry Medvedev who for whatever reasons has chosen to invest himself personally in all these deeds demonstrated definite loyalty to earlier Putin's course the results of which he seemed to condemn in his public speeches.

On November 12 Medvedev delivered his second address to the nation. Expressing criticism of the situation in Russia he recognized that Russian economy was too dependent on natural resources, infrastructure was too old and social sphere completely out-of-date. He admitted that corruption reached levels never seen before and in this sphere Russia was driven to the bottom of the world leagues as certified by international agencies.

That was absolutely correct analysis of reality. One would even say it was brave decision to make this view public. But it already became evident that Putin's model could not perform during the crisis and Medvedev's evaluation was just a recognition forced by reality. Despite all the authorities' assurances that Russia will be a safe heaven, its economy was quickly plunging as compared to its peers from the so-called BRIC group.

While being very critical of the economy Medvedev spared no word of criticism neither of the political system nor the elections. Just the opposite, he regarded existing political model as nearly perfect and quite efficient. He also said that political parties registered by the government cover all the spectrum of people.s political views and no more are needed, pledging to forcefully stop "any attempts to divide the society using democratic slogans".

In other words, Medvedev strongly reconfirmed that despite Russia badly needs modernization, there would be no political change. In his speech he was in fact asking people to recognize his legitimacy as president and to support his half-modernization strategy. But Medvedev is viewed by most of his audience as no more than assistant to 'strong guy' Putin. They cannot imagine Medvedev without Putin and they do not take his intentions seriously enough, always looking for corresponding Putin.s confirmation.

So mistaken were those who thought that the crisis would pave the way for democratization of the system as it happened in Gorbachev.s Soviet Union 20 years earlier. Nothing of the kind. Nobody at the top was going to relax controls of public life in order to share responsibility with the society. The government tightened the screws of political system even more to establish de facto one and a half party system. Elections as democratic institution disappeared completely.

Shameless falsifications at the October regional elections shocked even the people who long ago got used to tricks of the so-called Russian 'sovereign democracy'. In Derbent, Dagestan armed people blocked access to at least one third of the polling stations. In Moscow civil servants and even some private business employees had to get in advance their absentee ballots to vote under authorities' guidance. Numerous cases of evident violations of the law and falsifications were reported. This time not only democrats, commonly excluded from the electoral process early at the stage of registration, expressed their protests – even the tightly controlled official 'opposition' political parties have chosen to briefly boycott parliamentary sessions. Everything was OK – the authorities replied, being afraid of showing any weakness.

Nevertheless, recently we saw some attempts by the Western leaders to start cooperating with Kremlin on global issues like disarmament, Iran or Afghanistan. Russian authorities consider this willingness to cooperate only as a sign of weakness. It would be naive to expect that they will easily get back on track of mutual understanding with its main partners. It will not happen because of the values' gap. It is evident that understanding by the Russian authorities of such concepts as democracy, human rights and freedoms, market economy and international security is far from the standard meanings. Moreover, it is worth stating that values by the Russian authorities are much closer now to North Korean or Iranian ideals: that elections mean appointment; that human rights and freedoms must be subject to control by the government; and that the war is the same as humanitarian operation. Moreover, they insist that such understanding must be accepted by others and already achieved some success in the West.

For instance, despite the fact that Russia did not perform properly under its obligations in post-war Georgia, EU quickly lifted its moratorium on negotiating the new framework cooperation agreement. Both the European Union and NATO softly returned to the 'business as usual' in its relations with Russia. Russian leaders were right to make a conclusion that there was no direct threat from the West to almost any kind of their behavior. This is another source for increased so-called assertiveness of the Russian foreign policy.

***

Ladies and gentlemen! For a lay observer situation in Russia now, after a year of deep economic crisis, looks almost the same. One has to admit – so far authorities were quite successful in managing the public mood. Social temperature is generally kept under control and political atmosphere is not that tense, as one could have imagined.

Indeed, so far Putin's system proved to be fairly stable. Moreover, intensively fueled by oil and gas money, which temporarily hide problems, and supported by official Western tolerance and respect, which helps to demonstrate to the public that Putin's system is just like any other, it can last for at least several more years. But the last months hve demonstrated that elites are already tired of Putin. His power is based not on real political support but on intense propaganda and strong administrative machine. KGB mechanisms of controlling the society still work: people are quite scared and therefore reluctant to struggle for their rights.

I believe there are quite powerful groups not only in Russia but here in the West as well, which would like Russia to be mini-Soviet Union – alien but fairly isolated from the outside world. For different reasons they see it as the most convenient system for themselves. And this is one of the sources of longevity and stability of the Putin's system which is clearly contradictory to the logic of the modern world.

Several questions arise in this regard.

First. Could the system somehow reform itself? Having demolished the elections and domesticated the media, current authorities deprived themselves of the important mechanisms of self-correction and feedbacks. As opposed to Gorbachev's time nomenklatura, position of the current ruling group is different. Indeed, some people within the power system are afraid of real freedom for others and the resulting competition that would leave them no chance. Others are wary of real criminal charges, which they will certainly face after change of power. Medvedev.s address clearly demonstrated no intention to really repair this system.s most evident ills despite recognition that it is wrong and inefficient. Therefore, there should be no hope that this system will reform itself.

The most realistic scenario is that continued inertia will lead to Putin's return to presidency to continue exercise his model of "capitalism for friends". Due to the reasons I just mentioned, many bureaucrats and business people aligned with them will support it while strongly disliking Putin's system as such. The latest election tricks look like a rehearsal for future performance. I have no doubt Putin will be back as president in 2012 or may be even earlier.

Second. Where could the inevitable change of the out-of-date system come from then? One likely source is revolutionary disorder. The longer this system lasts, the bigger will be the blast as further inefficiencies and mistakes of Putin's regime duly accumulate over time. The issue of Russia's disintegration, which was previously more a figure of speech, is unfortunately much closer to reality now. Recent events at the Northern Caucasus demonstrate that not only Chechen republic but the whole region is now a zone of permanent conflict very poorly controlled from the center. Situation in the other regions of Russia has also changed. Take national republics which used to exchange their formal political loyalty to the Kremlin for material economic concessions and now require more and more. Deprived of any legal political possibilities to influence the life in their regions, regional elites started to seriously think of Moscow as at best useless.

I still believe that we still can avoid catastrophic scenario. But any positive developments can take place only if the system and its creators are faced with pressure. This pressure might come from different angles: economic and social problems intensified by corruption and mismanagement, growing discontent of the people and moral pressure from the elites, and proper Western reaction to evident abuses of power and many violations of Russia's international obligations.

Last but not least. What shall we do? In my opinion we, Russian liberals and real friend of Russia in the West should provide for this pressure. Explain to people that current policy of Russian leaders is doomed to failure. Create proper atmosphere of criticism and in the society. Make Russian authorities comply with the Russian Constitution and international obligations of the country. And destroy the impression that Putin's system is a normal and decent one. Only in this way we can alter the current trend leading to a great turmoil not only for Russia but for the whole world.

***

Boris Yeltsin turned out to be a tragic figure. Historic mission of his life – to destroy communism in Russia – had been compromised by his own choice of the successor who restored the most ugly features of the Soviet regime in the new Russia. Yeltsin had to personally watch that development without any chance to repair his grave mistake and this fact certainly poisoned his last years.

Nevertheless, it is my firm belief that Putin's Russia has no future. It will become evident to the majority of my compatriots and I will do whatever I can so that it happens sooner rather than later.

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