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Putin Power Now Weakening Russia

While the Russian opposition’s hopes fade for immediate reforms, Vladimir Putin is quickly consolidating his power base after sealing the election victory. Putin reserves the right to choose regional government officials, keeping the ones he likes and throwing out any pesky reformers–even after they’re elected. He has not allowed smaller parties to  join together to better their chances at the polls. A new set of liberalizing legislation may be passed as early as next month, says a Putin ally in parliament, but the Kremlin will not allow new elections to be held after the legislation takes effect.

Why the delay? As the same parliament member explains in the WSJ, keeping opposition groups in a never-ending phase of incubation is ideal: “These newly formed parties will need to accumulate a lot of experience and that doesn’t happen at a snap of the fingers.”  He reasons that they must “feel the political struggle” at the local level before playing with the big boys at the national level. But as the Journal notes, “many parties that were shut down in recent years had already been successful on the national scene.”

Russia’s resource curse continues to be the strongest bastion of the Putinocracy. Today, two thirds of the country’s exports and almost half of its federal revenues are tied to the price of oil. Sales and purchases of foreign exchange represent the single instrument used by the Russian Central Bank to manage the money supply. With an eye on current spending and investment trends, Russia’s balance of payments won’t become a problem if oil prices continue to go up, and as long as prices keep drifting north, the Putinocracy can continue to buy the acquiescence of a critical mass of Russia’s population.

This works for Putin; it doesn’t work as well for Russia. If the country’s oil wealth is ever going to serve as the basis for general prosperity and development (as, for example, happened in the United States in the 19th and 20th centuries), an effective and transparent legal system that promotes new enterprises and additional foreign investment needs to take shape. But since the oil money allows the Putinocracy to prosper without a general commitment to serious reform and good governance, Russia isn’t taking advantage of its oil prosperity to lay the foundations for a true national renaissance.

Over the last ten years, the investment climate in Russia has seriously deteriorated compared to other emerging markets. That doesn’t look set to change; it is springtime in the Kremlin, winter for the country as a whole. This is a shame; Putin took power determined to make Russia great once again. It is Russian nationalism that in the end will condemn him most bitterly for the lost opportunities he now represents.

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  • Jacksonian Libertarian

    Where are the George Washington’s?
    Do other cultures just not produce honorable men?
    Ambitious power hungry people for as far as the eye can see, and not a one of them deserving of the power they eagerly grasp for.

  • jetty

    “Putin reserves the right to choose regional government officials, keeping the ones he likes and throwing out any pesky reformers–even after they’re elected…”
    When Putin came to power, he knew that reform meant having the entire country under rule of law. But to do that, the governors had to adhere to federal law. The governors were entrenched and surrounded themselves with close friends and relatives so that elections were meaningless. Putin then passed a law giving the President authority to remove these governors (decried by via Meadia). Yet even with that, Putin had to spend quite a bit of political capital to remove the governor of the Lennigrad region. He can’t do that for all 80+ oblasts. Nepotism reigns supreme.

    Meanwhile, the judicial process is still highly corrupt as is everything else. Prosecutors (DAs) phone in the verdict to judges, tax collectors and other government officials employ vaguely written laws for their own political gain, and the overall climate for small business development is still oppressive (thanks to the governors and the Duma).

    The problem isn’t Putin.

  • Gene

    If my ongoing political survival depended on high oil prices, I’d sure borrow from the 20th-century communist playbook and work hard to support oil-suppressing green movements in the west. Money well spent. I’m not accusing anyone of anything, I’m just sayin’.

  • Kris

    jetty@2: I hope you retain enough self-awareness to realize you’re voicing a standard justification of dictators.

    Gene@3: I would also try to ensure ongoing tension in major oil-producing regions (such as the Middle East, to pick an example purely at random).

  • jetty

    @Kris: I hope you realize that the problems in Russia run deep, that Russia has been an authoritarian country for 1000 years, and that no single person is going to change this at the moment. Change there will be slow and incremental. It will be another generation or two before Russia is ready for more – until then, the people will approve of a leader that keeps the peace.

  • Kris

    jetty@5: “the people will approve of a leader that keeps the peace.”

    Is Putin’s popular approval qualitatively different from the popular approval of the elected governors he removed?

  • Kris

    jetty@5: In the spirit of comity, I will allow that you might be tired of the depiction of Putin as the new Stalin. I, in turn, am tired of the narrative that Russians need a strong hand, and that Putin is but a patriot who is oh-so-reluctantly providing it.

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