Unmasking President Putin's Grandiose Myth

[Happy Times]

Unmasking President Putin's Grandiose Myth

Op-ed in the Moscow Times
November 28, 2007


Most political leaders are mediocre, a few are heroes, and some are just plain lucky.

In Russia, many see President Vladimir Putin as a hero—an authoritarian reformer who has brought economic growth and stability to Russia. But let's scrutinize his record a little closer. Russia's outstanding achievement is that its gross domestic product has increased six-fold from $200 billion in 1999 to $1.2 trillion this year, but this is primarily a result of the market reforms undertaken in the 1990s.

The real growth rate is not outstanding. The whole Eurasian region, from China to the Baltics, has been growing at rates from 7 to 11 percent annually since 2000, but Russia's growth rate has only been 6.7 percent. In spite of its abundance of oil and gas, it ranks 9th among the 15 former Soviet republics in growth for this period. The reason is that Russia is lagging behind in most reforms.

Financial stabilization remains incomplete. Last year, inflation stopped at 9 percent, but it is rising. Before the State Duma elections, the government has abandoned macroeconomic caution. Although inflation is rising, the government is sharply increasing public spending. At the same time, it has imposed informal price controls on gasoline and food, and this has caused some shortages. In this way, detrimental Soviet economic thinking has been revived.

What political stability is possible when nobody knows anything about Russia's political future after March 2008? In his speech on November 21, Putin said, "In the next several months, a complete renewal of Russia's highest state power will take place," but he refuses to explain what he meant, thus leaving the country in complete uncertainty. He also has not explained what the well-advertised "Putin's Plan" is.

Putin has built a personal authoritarian system in which he makes all major decisions himself. This overcentralization of power leaves the decision makers poorly informed about everything they decide, and the government-controlled media has suffocated all policy debate. As a result, fear is rising with the steadily increasing repression.

As a consequence, central decisions are few and of poor quality. During his second term, Putin has undertaken virtually no economic reforms, and therefore has not contributed to economic growth. His entire endeavor has been to reinforce authoritarianism and to let his KGB friends from St. Petersburg indulge in lawless renationalization and larceny that has impeded investment and production, especially in energy.

Personal authoritarian systems are not very stable because they depend entirely upon one ruler. If he leaves office, such a system usually collapses. Since Putin has conscientiously undermined many state institutions, he has obviously intended to stay on all along.

This system has no other legitimacy than economic growth. Fortunately, Putin has not developed any ideology, even if he toys with Russian nationalism. Nor does he have any party. After all, United Russia is only a bunch of state bureaucrats. It is interesting that Putin's big Moscow speech on November 21 managed to mobilize only 5,000 supporters. When the regime fails to deliver steady high economic growth, it is likely to be frail even while maintaining a policy of repression.

Everybody around Putin is completely corrupt, but many think that the president himself is honest. In February 2004, presidential candidate Ivan Rybkin named three men as Putin's bagmen, including Gennady Timchenko, cofounder of oil-trading company Gunvor. After Rybkin made this statement, he vanished from the political stage. In September, the Polish magazine Wprost wrote that Timchenko, a former KGB officer and member of Putin's dacha cooperative in St. Petersburg, has a net worth of $20 billion. Officially, Timchenko sells the oil of four Russian oil companies, but how are the prices determined to generate such profits?

In a sensational interview in Germany's Die Welt on November 12, Stanislav Belkovsky, the well-connected insider who initiated the Kremlin campaign against Yukos in 2003, made specific claims about Putin's wealth. He alleged that Putin owned 37 percent of Surgutneftegaz (worth $18 billion), 4.5 percent of Gazprom ($13 billion) and half of Timchenko's company, Gunvor (possibly $10 billion). If this information is true, Putin's total personal fortune would amount to no less than $41 billion, placing him among the 10 richest in the world.

These shareholdings have been rumored for years, but now a prominent international newspaper has published such allegations made by a well-informed source. If these numbers contain any truth, Putin would be the most corrupt political leader in world history, easily surpassing Ferdinand Marcos of the Philippines and Zaire's Mobutu.

Last year, a private arbitration tribunal in Zurich, Switzerland, ruled that Putin's close St. Petersburg friend from his days in foreign intelligence, IT and Telecommunications Minister Leonid Reiman, is the beneficiary of telecommunications assets presently valued at $6 billion. Putin's only reaction was to block this information in Russian media.

Both the World Bank and Transparency International assess that corruption in Russia has increased after 2004, while it has declined in most post-Soviet countries. Recently, a few senior officials have been arrested for organized crime, but this has nothing to do with the actual fight against corruption. The common view is that these arrests are only part of a turf war among Putin's KGB men from St. Petersburg.

Nor has Putin brought some law and order to Russia, according to an excellent analysis by Brian Taylor of Syracuse University. Despite sharply rising expenditures on law enforcement, the average annual murder rate under Putin has been higher than under Yeltsin. According to Taylor's report, no country outside of Iraq and Afghanistan has suffered so many terrorist attacks as Russia (even outside of Chechnya) after September 11.

The final claim of Putin's supporters is that he is reestablishing Russia on the world stage and restoring its military, but even that is not true. Military reform has stopped, and hundreds of conscripts are driven to suicide every year because they are exploited as slave labor. Military procurements and wish lists focus on the priorities of the Cold War in the 1970s—intercontinental ballistic missiles, nuclear submarines and aircraft carriers—rather than new smart weapons for contemporary military needs.

My verdict is that Putin has had tremendous luck, which he has utilized to build up an anachronistic authoritarian reign. One could draw a historical parallel between Putin and Tsar Nicholas I, who ruled from 1825 to 1855 to the benefit of nobody except his own close circle. Abundant oil revenues have made it possible for Putin to avoid difficult reforms and to allow his inner circle to indulge in some of the worst corruption the world has ever seen.

http://www.iie.com/publications/opeds/oped.cfm?ResearchID=850

[Letum]

Don't throw outdated press cuttings at us! At least not with out giving your own comment or opinion along side.

[Happy Times]

Don't throw outdated press cuttings at us! At least not with out giving your own comment or opinion along side.

Is isnt outdated, i think its very actual.
There, happy?:p

[XabbaRus]

Well it is outdated but then Happy Times has an axe to grind against Russia so I'd take it with a pinch of salt. It's an op-ed piece so is taken as one person's interpretation.

[Happy Times]

Well it is outdated but then Happy Times has an axe to grind against Russia so I'd take it with a pinch of salt. It's an op-ed piece so is taken as one person's interpretation.

Yes, its just Western propaganda, what does he know compared to the Subsim Russia apologists.


Anders Åslund


Anders Åslund has been a senior fellow at the Peterson Institute since 2006. He is also an adjunct professor at Georgetown University. He examines the economies of Russia, Ukraine, and Eastern Europe, as well as focuses on the broader implications of economic transition. He worked at the Carnegie Endowment for International Peace from 1994 to 2005, first as a senior associate and then from 2003 as director of the Russian and Eurasian Program. He also worked at the Brookings Institution and the Kennan Institute for Advanced Russian Studies. He earned his doctorate from Oxford University.

Åslund served as an economic adviser to the governments of Russia, Ukraine, and Kyrgyzstan. He was a professor at the Stockholm School of Economics and the founding director of the Stockholm Institute of East European Economics. He worked as a Swedish diplomat in Kuwait, Poland, Geneva, and Moscow. He is a member of the Russian Academy of Natural Sciences and an honorary professor of the Kyrgyz National University. He is co-chairman of the board of trustees of the Kyiv School of Economics and chairman of the Advisory Council of the Center for Social and Economic Research (CASE), Warsaw.

He is the author of eight books, including Russia's Capitalist Revolution: Why Market Reform Succeeded and Democracy Failed (2007), How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia (Cambridge University Press, 2007), Building Capitalism: The Transformation of the Former Soviet Bloc (Cambridge University Press, 2001), How Russia Became a Market Economy (Brookings, 1995), Gorbachev's Struggle for Economic Reform, 2d ed. (Cornell University Press, 1991), and Private Enterprise in Eastern Europe (Macmillan, 1985). He is also editor or coeditor of 13 books, including Challenges of Globalization: Macroeconomic Imbalances and Development Models (2008), Europe after Enlargement (Cambridge University Press, 2007), and Revolution in Orange (Carnegie Endowment, 2006).

http://www.iie.com/staff/author_bio.cfm?author_id=455

[XabbaRus]

Russia apologist? This op-ed is almost a year old....and other reforms are being put in place.

Happy Times you have made it abundantly clear that you are anti-Russian and have an axe to grind. Therefore I am sceptical of anything that is against Russia that you post. It isn't objective as it suits your point of view.

I'm neither an apologist or anti....I try to take an objective balanced view not based on national prejudice......

The thing is I have noticed on here (unfortunately) and other forums that posts made that are either neutral or are more in favour of Russian actions get jumped on an jeered at.

[Skybird]

Not commenting, just pointing out that I scan several Russian newspapers, and like the Pravda has a reputation of being very government-friendly and pro-Russian propagandistic, the Moscow Times appears to excel in being extremly critical of the government and everything that does not follow western-styled order and understanding.

so, the paper's usual bias should not be left out. I must admit that of Moscow Times, Pravda and Itar Tass I would not consider any of being balanced and representative for what I would call "centre" in the way I would understand the NYT or Der Spiegel being "centre".

what the article comes down to is finding Putin guilty of not running the show like Western system would suggest a show should be run. That is neither a surprise, nor are there no reasons. Yeltsin allowed that in the first years of his ruling, and it costed Russia dearly. The result was western exploitation and the rise of the oligarchs that in the end threatened to even challenge the state - a ambition that Putin cut short with determination and without mercy.

Russia is no Western economy and no Western democracy, nor is it Asia. Russia ia Russia. accusing it of the obvious - that it does not wish to do like the West does his own things - makes no sense. You could as well accuse the Chinese for not having round eyes.

[Happy Times]

Russia apologist? This op-ed is almost a year old....and other reforms are being put in place.

What parts of it were outdated except Putin changed his title? What reforms? For the better?

Happy Times you have made it abundantly clear that you are anti-Russian and have an axe to grind. Therefore I am sceptical of anything that is against Russia that you post. It isn't objective as it suits your point of view.
Yes, im trying to get the point a cross that this Russia is a threat.
Im skeptical of your objectivity, you cant even difrentiate with my opinions and someone im referring to.


I'm neither an apologist or anti....I try to take an objective balanced view not based on national prejudice......

Im suppose to believe that when you yourself are offended by my posts because your wife is Russian. I think you are more of a russophile with blinders than im anti russian..

The thing is I have noticed on here (unfortunately) and other forums that posts made that are either neutral or are more in favour of Russian actions get jumped on an jeered at.

Maybe because there isnt currently many Russian actions we should be accepting.

[XabbaRus]

I am offended by your posts because many of them are just an anti-Russian because you don't like Russians...You don't differentiate between people and government.

Are you saying if I was truely 100% objective I wouldn't get nor have a right to be offended when someone compares Russians as a whole to the the Bruno guy because my wife is Russian.

[Bruno Lotse]

I am offended by your posts because many of them are just an anti-Russian because you don't like Russians...You don't differentiate between people and government.

Are you saying if I was truely 100% objective I wouldn't get nor have a right to be offended when someone compares Russians as a whole to the the Bruno guy because my wife is Russian.
Hold on to your Natasha.

Bruno guy

[Happy Times]

Not commenting, just pointing out that I scan several Russian newspapers, and like the Pravda has a reputation of being very government-friendly and pro-Russian propagandistic, the Moscow Times appears to excel in being extremly critical of the government and everything that does not follow western-styled order and understanding.

so, the paper's usual bias should not be left out. I must admit that of Moscow Times, Pravda and Itar Tass I would not consider any of being balanced and representative for what I would call "centre" in the way I would understand the NYT or Der Spiegel being "centre".

I wouldnt compare Moscow Times with Kremlin controlled media, their bias can hardly come close.

what the article comes down to is finding Putin guilty of not running the show like Western system would suggest a show should be run. That is neither a surprise, nor are there no reasons. Yeltsin allowed that in the first years of his ruling, and it costed Russia dearly. The result was western exploitation and the rise of the oligarchs that in the end threatened to even challenge the state - a ambition that Putin cut short with determination and without mercy.

Yet the article was about how Putin is the biggest oligarch ever and things have gone for the worse or stayed the same.

Russia is no Western economy and no Western democracy, nor is it Asia. Russia ia Russia. accusing it of the obvious - that it does not wish to do like the West does his own things - makes no sense. You could as well accuse the Chinese for not having round eyes.

Its Russia that has lately been keen to impose its ways to others.

[Happy Times]

I am offended by your posts because many of them are just an anti-Russian because you don't like Russians...You don't differentiate between people and government.

Are you saying if I was truely 100% objective I wouldn't get nor have a right to be offended when someone compares Russians as a whole to the the Bruno guy because my wife is Russian.

I can understand where your coming from but that hasnt been my intention. Ofcourse you should stand up to your woman if someone insults her. But my sincere opinion is that the attitudes, that Bruno takes to extremes, are very common in Russia, based on the Russians i know in Finland, in the net and reading about the rise of xenophbia, nationalism and re writing of history in Russia.
Dont think for a bit that i wouldnt be happy if the development would go for the better, that is in everyones interest. I just call it like i see it, none of us is totally obejective to anything. And the article in quoestion wasnt against the people, it was against the goverment.

And yes, hold on to your Natasha,
no pun intended.;)

[Skybird]

Its Russia that has lately been keen to impose its ways to others.

It has a pendant on the other side of the pacific that is not a bit different, and has been keen as well to impose its ways onto other - by even a much bigger war recently. Different to Russia, it failed, though.

Prussian king Fritz I. : "Russia - do not provoke it, do not seek it's friendship". That sums it up nicely for me. I read it today in a german editorial and liked it immediately.

[OneToughHerring]

It seems to me that the west was ok with Russia for a long time, especially during Jeltsin's time when Russia was given the role as provider of cheap natural resources to the west. Putin sort of began to change this by pulling back a little on the privatization and the emergence of the oligargs etc. This has sort of made the west see Putin as 'evil' and the reason isn't so much a matter of Putin's Russia not respecting human rights etc. but economical pressure from the west.

IMHO neither the west nor Russia's leaders would like to see a more humane Russia that would try harder to live in peace with it's neighbours (not necessarily always possible), not engage in long wars when can be avoided, would look after the weak in the society, etc. This is made even more true by the war on terror and whatever crusades Washington happens to invent. Both Russia and the west seem to be fine with the present system of oligargs and Russia selling cheap oil etc. to the west so on the inside Russia will probably stay the same. On the outside, foreign policy-wise there might be some change but not much.

[Happy Times]

It seems to me that the west was ok with Russia for a long time, especially during Jeltsin's time when Russia was given the role as provider of cheap natural resources to the west. Putin sort of began to change this by pulling back a little on the privatization and the emergence of the oligargs etc. This has sort of made the west see Putin as 'evil' and the reason isn't so much a matter of Putin's Russia not respecting human rights etc. but economical pressure from the west.

IMHO neither the west nor Russia's leaders would like to see a more humane Russia that would try harder to live in peace with it's neighbours (not necessarily always possible), not engage in long wars when can be avoided, would look after the weak in the society, etc. This is made even more true by the war on terror and whatever crusades Washington happens to invent. Both Russia and the west seem to be fine with the present system of oligargs and Russia selling cheap oil etc. to the west so on the inside Russia will probably stay the same. On the outside, foreign policy-wise there might be some change.

You believe that?:hmm:

[sergbuto]

Happy Times you have made it abundantly clear that you are anti-Russian and have an axe to grind. Therefore I am sceptical of anything that is against Russia that you post.
On the other hand, it makes life easier. One does not even need to read his posts concerning Russia to find out their content, they are all the same no matter what happens or what is discussed. :)

[Happy Times]

Happy Times you have made it abundantly clear that you are anti-Russian and have an axe to grind. Therefore I am sceptical of anything that is against Russia that you post.
On the other hand, it makes life easier. One does not even need to read his posts concerning Russia to find out their content, they are all the same no matter what happens or what is discussed. :)

And your only argument against is that i hate Russians, tells smething about your bias, Serg. Ofcourse anything that Russia or Russians do is above critcism, they are victimised constantly by their evil neighbours.

[OneToughHerring]

It seems to me that the west was ok with Russia for a long time, especially during Jeltsin's time when Russia was given the role as provider of cheap natural resources to the west. Putin sort of began to change this by pulling back a little on the privatization and the emergence of the oligargs etc. This has sort of made the west see Putin as 'evil' and the reason isn't so much a matter of Putin's Russia not respecting human rights etc. but economical pressure from the west.

IMHO neither the west nor Russia's leaders would like to see a more humane Russia that would try harder to live in peace with it's neighbours (not necessarily always possible), not engage in long wars when can be avoided, would look after the weak in the society, etc. This is made even more true by the war on terror and whatever crusades Washington happens to invent. Both Russia and the west seem to be fine with the present system of oligargs and Russia selling cheap oil etc. to the west so on the inside Russia will probably stay the same. On the outside, foreign policy-wise there might be some change.
You believe that?:hmm:

Pretty much. It's only the fringe political groups in the west who make a fuss about things such as human rights etc. The rightwingers are more than happy to deal with a Russia that doesn't care about the poor who are very large group and Russias input to the various western wars is also welcome. The oligargs run around buying football clubs etc. in the west, doesn't look like anyone is saying no to their money.

[Happy Times]

It seems to me that the west was ok with Russia for a long time, especially during Jeltsin's time when Russia was given the role as provider of cheap natural resources to the west. Putin sort of began to change this by pulling back a little on the privatization and the emergence of the oligargs etc. This has sort of made the west see Putin as 'evil' and the reason isn't so much a matter of Putin's Russia not respecting human rights etc. but economical pressure from the west.

IMHO neither the west nor Russia's leaders would like to see a more humane Russia that would try harder to live in peace with it's neighbours (not necessarily always possible), not engage in long wars when can be avoided, would look after the weak in the society, etc. This is made even more true by the war on terror and whatever crusades Washington happens to invent. Both Russia and the west seem to be fine with the present system of oligargs and Russia selling cheap oil etc. to the west so on the inside Russia will probably stay the same. On the outside, foreign policy-wise there might be some change.
You believe that?:hmm:

Pretty much. It's only the fringe political groups in the west who make a fuss about things such as human rights etc. The rightwingers are more than happy to deal with a Russia that doesn't care about the poor who are very large group and Russias input to the various western wars is also welcome. The oligargs run around buying football clubs etc. in the west, doesn't look like anyone is saying no to their money.

Yet it was Socialist Gerhard Scröder,with Nord Stream, who did the deed, that got the Oligarchs a stranglehold on Europe. Our own socialist ex PM Lipponen became a consult for the gas pipe when Gerhard called. Its the rightwingers in Finland that have driven energy independence from Russia, i bet you would call them nationalists.

[OneToughHerring]

It seems to me that the west was ok with Russia for a long time, especially during Jeltsin's time when Russia was given the role as provider of cheap natural resources to the west. Putin sort of began to change this by pulling back a little on the privatization and the emergence of the oligargs etc. This has sort of made the west see Putin as 'evil' and the reason isn't so much a matter of Putin's Russia not respecting human rights etc. but economical pressure from the west.

IMHO neither the west nor Russia's leaders would like to see a more humane Russia that would try harder to live in peace with it's neighbours (not necessarily always possible), not engage in long wars when can be avoided, would look after the weak in the society, etc. This is made even more true by the war on terror and whatever crusades Washington happens to invent. Both Russia and the west seem to be fine with the present system of oligargs and Russia selling cheap oil etc. to the west so on the inside Russia will probably stay the same. On the outside, foreign policy-wise there might be some change.
You believe that?:hmm:
Pretty much. It's only the fringe political groups in the west who make a fuss about things such as human rights etc. The rightwingers are more than happy to deal with a Russia that doesn't care about the poor who are very large group and Russias input to the various western wars is also welcome. The oligargs run around buying football clubs etc. in the west, doesn't look like anyone is saying no to their money.
Yet it was Socialist Gerhard Scröder,with Nord Stream, who did the deed, that got the Oligarchs a stranglehold on Europe. Our own socialist ex PM Lipponen became a consult for the gas pipe when Gerhard called. Its the rightwingers in Finland that have driven energy independence from Russia, i bet you would call them nationalists.

Well I don't necessarily see Lipponen or Scröder for that matter to be nothing more then center-right politicians looking for some special deal for money etc. For example Katainen has talked about "a new attitude toward Russia". And right-wing republicans in USA have called Russia "the best ally in war against terrorism". I would say that especially the neo-cons and their Finnish counterparts are under the surface very close to modern Russia.

[Digital_Trucker]

......... And right-wing republicans in USA have called Russia "the best ally in war against terrorism". ...........

I'd really be interested to know where that quote came from and in what context:hmm:

[Happy Times]

It seems to me that the west was ok with Russia for a long time, especially during Jeltsin's time when Russia was given the role as provider of cheap natural resources to the west. Putin sort of began to change this by pulling back a little on the privatization and the emergence of the oligargs etc. This has sort of made the west see Putin as 'evil' and the reason isn't so much a matter of Putin's Russia not respecting human rights etc. but economical pressure from the west.

IMHO neither the west nor Russia's leaders would like to see a more humane Russia that would try harder to live in peace with it's neighbours (not necessarily always possible), not engage in long wars when can be avoided, would look after the weak in the society, etc. This is made even more true by the war on terror and whatever crusades Washington happens to invent. Both Russia and the west seem to be fine with the present system of oligargs and Russia selling cheap oil etc. to the west so on the inside Russia will probably stay the same. On the outside, foreign policy-wise there might be some change.
You believe that?:hmm:
Pretty much. It's only the fringe political groups in the west who make a fuss about things such as human rights etc. The rightwingers are more than happy to deal with a Russia that doesn't care about the poor who are very large group and Russias input to the various western wars is also welcome. The oligargs run around buying football clubs etc. in the west, doesn't look like anyone is saying no to their money.
Yet it was Socialist Gerhard Scröder,with Nord Stream, who did the deed, that got the Oligarchs a stranglehold on Europe. Our own socialist ex PM Lipponen became a consult for the gas pipe when Gerhard called. Its the rightwingers in Finland that have driven energy independence from Russia, i bet you would call them nationalists.

Well I don't necessarily see Lipponen or Scröder for that matter to be nothing more then center-right politicians looking for some special deal for money etc. For example Katainen has talked about "a new attitude toward Russia". And right-wing republicans in USA have called Russia "the best ally in war against terrorism". I would say that especially the neo-cons and their Finnish counterparts are under the surface very close to modern Russia.

http://members.aol.com/taedisonjr/foil.jpg

[OneToughHerring]

......... And right-wing republicans in USA have called Russia "the best ally in war against terrorism". ...........
I'd really be interested to know where that quote came from and in what context:hmm:
It was in the lead up to the onset of the war on terrorism, around the beginning of the Iraq war. I can look around for a link if that sounds so amazing.

Happy Times,

what, the fact that US and other right-wingers are in bed with the Russkies bothers you? That sheet's been going on for decade(s) now, ever since the emergence of a new Russia. I guess you don't like Nokia for doing business with the Chinese either.

[Digital_Trucker]

It was in the lead up to the onset of the war on terrorism, around the beginning of the Iraq war. I can look around for a link if that sounds so amazing.


No link necessary. Might be hard to find a link from five years ago anyway. :rotfl:

[Frame57]

We have a local talk radio host named Jack Armstrong. He was in Russian recently and what he conveyed is that they generally like Putin. (Which in Serbian means "farting") There are no more bread lines there. In fact the Moscow scene is looking more and more like the west. When things go bad or good here the President will get the blame even if what led to something becoming better or worse started with the previous administration. Who ever has the "Conn" gets the blame or credit.

[Platapus]

We have a local talk radio host named Jack Armstrong. He was in Russian recently and what he conveyed is that they generally like Putin. (Which in Serbian means "farting") There are no more bread lines there. In fact the Moscow scene is looking more and more like the west. When things go bad or good here the President will get the blame even if what led to something becoming better or worse started with the previous administration. Who ever has the "Conn" gets the blame or credit.


Same as in America. Presidents are always taking the credit for favourable economy changes even though the cause of the change was a while ago.

Take credit for the good, and deny responsibility for the bad. That is the politician's axiom. :nope: