Russia’s two steps backward, one step forward

OP-ED: “Putin’s KGB Instincts Serve Russia Badly,” by George Melloan, Wall Street Journal, 14 February 2006, p. A23.

OP-ED: “Don’t Blame Russia: Moscow moves to market principles. Why cry foul?” by Yuri V. Ushakov (Russian ambassador to U.S.), Wall Street Journal, 13 February 2006, p. A17.

ARTICLE: “Russia Says It Plans to Loosen State Monopoly on Gas Exports: Government allowing private companies to export could spur new capital projects,” by Buy Chazan, Wall Street Journal, 13 February 2006, p. A4.

ARTICLE: “Russia's New Foreign Policy: Moscow's Mideast Challenge to America: Following the collapse of the Soviet Union, Russia seemed to cede much of its influence in the Middle East to the United States. No longer. Now, Moscow appears eager to present itself as a counterbalance to Washington in the region -- with major geopolitical consequences,” by Charles Hawley, SPIEGEL ONLINE, http://www.spiegel.de/international/0,1518,401078,00.html

Melloan’s analysis, as usual, is pretty good, and it basically tracks with my point that Putin and the “power guys” know how to acquire power, but not what to do with it. But there shouldn’t be any surprise about Moscow playing the diplomatic card in the Mideast. Russia, former military superpower, now has zero military power projection capability. Remember back when a Soviet ship could actually show up somewhere and create a bit of drama, almost a standoff? Well, no more.

I wrote a future projection piece on Russia for my old company CAN back in the early 1990s, and in it I basically said the Russians would, in the absence of military power, essentially seek to leverage old ideological relationships wherever possible. No surprise and no great leap of analysis there: you simply go with what you’ve got left at end of the day.

But clearly Putin is at the limit of his imagination, and here Melloan and I are in perfect agreement:

Empires endure when they reward people with trade and commerce and a degree of freedom. Russia has just passed a law curtailing the activities of NGOs and further suppressing development of a genuine civil society. Its empire has little attraction except to dictators in Belarus and Uzbekistan trying to ward off democratic forces. Russia’s president came up through a cruel system and it may be that nothing he learned as a secret policeman taught him how to shape a modern state, let alone restore the Russian empire.

Putin definitely thinks he’s being clever on connectivity: allowing plenty of social and economic stuff but trying to deny the political. As for the military connectivity, that’s as much our fault as his: we’re plenty comfortable breaking heads all over Southwest Asia, but whenever Putin and company do in Chechnya (and no, it’s not that much uglier than our version, as uncomfortable as they may sound to some), we get all squeamish diplomatically.

I mean, you think about how much Russia lost in the last 20 years (a massive retreat from sub-Saharan Africa, through the Middle East, out of Eastern Europe and even out of much of what used to be the Soviet Union) and then you wonder why they might felt paranoid about their grip on “national power,” and the reach for energy resources becomes a whole lot more explainable. Crude, yes, and a step backwards, yes, but hardly unexplainable.

Moscow will say their recent behavior on pricing energy exports is just normal “market principles,” and there’s some truth to that, but there’s also plenty of truth to the charge that Putin seems to think that selling energy equates to pol-mil power, when it doesn’t.

There is a natural limit to this, and that limit is Russia’s continuing and large need for outside capital to upgrade its infrastructure throughout the economy--not just in the energy sphere. Right now, Gazprom’s death grip on the gas market is restricting the ability of independent Russian producers to attract foreign money for this most capital-intensive industry. It’s an old issue: control the pie too much and it won’t grow.

So do I expect Putin or his successors to give up control over the energy sector out of their love for democracy? No. I expect them to loosen their grip out of greed.

I recently had a book sent to me by someone who saw my CSIS talk, and came away with the impression that I favor dictatorships over democracy because I note how often states, especially in Asia, have developed their economies fastest with essentially long-running single-party state systems (Japan did it, so did South Korea and Taiwan, Singapore and China still). The book, The Democracy Advantage: How Democracies Promote Prosperity and Peace, by Morton Halperin et. al., is a great exposition of the reality that, all things being equal, democracies outperform autocracies in development and economic performance. No argument there, just a more realistic sense on my part about the sequencing of development under certain culture conditions. Societies that place heavy emphasis on consensus tend to favor single party systems for the tumultuous period of rapid economic development because it’s their hedge on controlling destabilizing cultural change.

Obviously, a full dictatorship hurts development across the board, because it tries to control politics, society, and economics and growing connectivity with the outside world (usually, restricting that connectivity quite heavily through sheer restrictions or the imposition of heavy taxation, aka corruption). But single-party rule that encourages and directs export-led developmental growth (and yeah, I’m still talking about South Korea and Japan until quite recently, in a historical sense) is a very different bird from you full-service, full-sector dictatorship. Yes, seeing that single-party approach morph into true multiparty democracy is certainly a step forward, but expecting that to come before its time is counterproductive, because democracies with low levels of GDP per capita are inherently unstable.

So while the Halperin et. al book is good, it “destroys” only the strawman myth that dictatorships outperform democracies in economic growth, when all things are equal, but again, thing are rarely equal. China, for example, has centuries of history that have featured disintegrating peace and integrating war. Expecting China to embrace full-bore democracy with everything else going on there is not just unrealistic, its very naïve. Yes, we push them in this direction, but so long as the direction is there, we must remain patient on the degree. Rome wasn’t built in a day and it wasn’t built as a democracy, and, quite frankly, neither was the United States. Check out who actually had the vote when our country began, and then be more cognizant of the fact that our growing markets drove our democratic development more than our democratic institutions drove our markets.

We see this time and time again in America: until your minority gets money and can use it for political clout, it tends to be treated badly. But achieve enough economic success, and pretty soon you’re not just gays or Indians or whomever that can be ignored. No, all of a sudden you’ve got friends in DC that promote your interests and raise your profile politically.

So yes, always nice to push democracy. Just keep it real about how much change we can expect a society and political system to make while it is simultaneously opening itself up to the powerfully reformatting process that is modern globalization. There is a Goldilocks speed here, and the train’s engine can’t travel any faster than the caboose.

Comments

[Kenneth Elmshaeuser]

Dale Franks wrote an article "The Problem with Democracy" ( http://www.qando.net/details.aspx?Entry=3175 ) that covers concept that Democracies are a means to an end, not the end themselves.