Putin the Beast - wmwwmgflfHNANDTHEBEASF...

Info icon This preview shows pages 1–6. Sign up to view the full content.

View Full Document Right Arrow Icon
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 6
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: wmwwmgflfHNANDTHEBEASF mmflwwwsmdmmkcoMfimnaAmemMm$Hf NOTICE This material may be protected by copyright law (Title 17 US Code) Current issue Previous issues Discuss jreg uires registration) - World Economic Forum The magazine of the World Economic Forum “’0“ Enter Russia's economy is looking up. But, argues Andrei keywords: Ostalski, President Putin urgently needs to tackle I the endemic lawlessness and corruption that are - . . _ Se h eating away at soc1ety - and could yet devour him fl too Andrei Ostalski is editor of the BBC ’s Russian Service 2;. ;.- In Russia, the rule of law is not what it seems. A district low court in Moscow recently confirmed that the _ information ministry was wrong to deprive MNVK, a w television broadcaster, of its licence to transmit on national channel 6. It was the third ruling in MNVK’s favour — but to no avail. A tender to choose another i broadcaster has occurred. The winner, Media Socium, Y is already beaming its programmes to millions of viewers around the country. Amazingly, nobody — apart from MNVK — seems unsettled by the dubious legality of this. In any case, the authorities and Media Socium have an earlier legal ruling to back them. The TV-6 saga came to the fore because it involves many high-profile and popularjournalists. But hundreds of other cases where different courts make contradictory rulings go unnoticed by the general public. Russia is so huge -— and corrupt — that every legal party can somewhere find a sympathetic judge who can be persuaded, by cash or other means, to rule in their favour. This isjust one manifestation of I of6 12/30/2002 1:06 P Russia’s legal free-for-all. The law of the jungle applies: greed and brute force rule unencumbered. ALL THAT GLITTERS IS NOT GOLD A visitor to Moscow might conclude that Russia is in fine fettle. Gone is the drabness of Soviet times: the city centre bustles with shops and striking modern offices jostle with freshly restored jewels of traditional Russian architecture. On the outskirts, impressive new houses are springing up. The capital has become a cultural paradise: crowds throng in the many theatres, cinemas, galleries and opera houses; all-night literary cafe’s ply philosophical tomes along with food and drink. For the more materially minded, Moscow’s supermarkets, designer boutiques and exquisite restaurants lure customers with their glittering lights and dazzling choice of wares. This cornucopia is a reflection of economic success. Barter is giving way to normal monetary exchange. While the United States and Europe stumbled last year, Russia’s economy grew by 5% (and by 8% in 2000). Russians pay a flat rate of income tax set at a mere 13%. Unlike in the Yeltsin era, the government balances its books. But beneath this veneer lie terrible poverty and inequality — and a deep-rooted system of perverse economic and social relations. Healthy societies are based on notions of justice and a social contract, but in Russia the ethics and pseudo-legality of criminal communities — the so-called ponyatiya, or "understanding" — prevail. Worryingly, the ponyatiya is fast becoming acceptable to society at large as the basis of human interaction; one symptom is that ordinary Russians, and businessmen in particular, increasingly use a criminal idiom. The reasons for this criminalisation of society are manifold: many members of the new business elite are ex-convicts; the Soviet legacy of force and coercion is engraved into the nation’s psyche; and the new, democratic Russia has failed to maintain elementary law and order. I u . . China " 465‘ «a Poland l____'_'__ mu Cz-(h hp. 1__1 M RussionTC-CL Hungary I)? .4 J i ’2 I I \ Chart by bounford. com "At an early stage of Russian capitalism, bandits played a positive and necessary role. In the absence of a strong state, they were the only ones who enforced contracts," says Mikhail Leontiev, one of Russia’s best-known economic journalists. But although this early stage is over, Russia has yet to move on. Russians spend an astounding $37 billion a year — roughly as much as the govemrnent’s entire budget revenues — on bribes, according to INDEM, a Russian NGO. It is not only businessmen and gangsters who grease palms: ordinary citizens shell out $2.8 billion a year on kickbacks. They spend nearly $500 million a year to obtain places at prestigious universities; $600 million on "free" medical services; $370 million bribing traffic police and $275 million suboming courts. But the really big bribery takes place in the offices of the high and mighty who choose the winners of lucrative privatisation tenders, award government orders and grant business privileges and concessions. This racket rakes in a staggering $33.8 billion a year. INDEM concludes that Russia has "given up" and accepted bribery as a "natural way of life". Russia’s wholesale corruption and lawlessness have created a new elite, the so-called "oligarchs", who have acquired enormous political power with their ill—gotten gains. Less than 0.1% of the population is thought to run or own over a third of the country’s wealth. Yulia Latynina, a writer and economist, foresees that within her lifetime some 20—30 families will control around nine-tenths of the economy. . Healthy societies are based on notions of justice and a social contract, but in Russia the ethics and pseudo-legality of criminal communities — the so-called ponyatiya, "understanding" — prevail Even so, the oligarchs may be a necessary evil. Yuli Dubov, a successful entrepreneur and writer, thinks that they have played a vital role in creating a new Russia - and that the country cannot yet do without them. "These are people who lead the way, drive the change and build the new economy. It would be stupid to break the existing order of things while we haven’t got a clue about what we are going to replace it with," he argues. In the Russian business community, he points out, relations are governed not by formal rules or norms but by a code of honour, loyalty and friendship. Ms Latynina describes Russia’s emerging socio-economic system as "neo-feudal", complete with its seigneurs and vassals. Robber barons rule the roost; personal and clan loyalties matter more than such vague notions as property rights. It may seem medieval, but the oligarchs often provide the only succour (of sorts) from bandits and corrupt officials. When an oligarch seized a big timber factory in Ust-Ilimsk, a town deep in the Siberian taiga, no court or legal authority could (or would) do anything to help the dispossessed owner. Only after turning to another oligarch for help did he gain some redress: he now runs the factory on behalf of his benefactor, who has become its new owner. Such stories are common. In the brief era when Russian television was independent, property wars between oligarchs and their clans were often headline news. In Moscow, they battled over vodka production. In St Petersburg, they fought for control of the seaport and petrol distribution. Elsewhere, they warred over the biggest prize of all: oil reserves. These clashes often involved rival police too: even the militsia, it seems, has been privatised! Many foreign investors are attracted by the potential for vast profits in Russia’s lucrative oil and gas sectors, as well as in the many markets where there is scarcely any competition. Often, though, they get stung. Sawyer Research Products, an American company, claims that it has lost millions of dollars on its investment in a quartz plant in the town of Gus-Khrustalny, about 100 miles (160 km) east of Moscow. Foreign ambassadors in Moscow can name many other investors who have had their fingers burned or fallen victim to foul play: just ask the Dutch about the perils of investing in Russian electronics. Japanese diplomats tell horror stories about Sakhalin. "Contrary to what people believe, it is not the territorial dispute that thwarts Japanese investment into the Russian economy. What frighten people off are the sad stories of local mafias, business and authorities conniving to rob foreigners of their assets. These stories spread like wildfire," one said recently. It should come as no surprise, then, that Russia attracts less foreign direct investment than the tiny Czech Republic, let alone communist China. Mr Dubov thinks it is too early for most foreigners to venture into Russia. Ms Latynina is more optimistic, but would advise companies with particularly strong international brands to take the plunge first. Size and power is a safeguard, though not a foolproof one. Corporate giants, such as BP, have returned despite earlier losses; the Financial Times and Wall Street Journal feel that their formidable reputations provide some security. But the best protection of all, many believe, is still a ruka: a close contact with a high-ranking Kremlin official. NO LAUGHING MATTER A popular joke captures the crux of the problem well. ”Can you recommend a cost—effective way to protect fruit and vegetables from birds?" 3 reader asks the advice column of a newspaper’s gardening pages. "A life-size portrait of Vladimir Putin is really value for money," the columnist replies. "If you display the portrait prominently in your plot, the birds will certainly leave your produce alone. Some of them may even bring back last year’s harvest." The president (and former chief spy) may well appreciate the joke. Doubtless he does not mind being seen as a fearsome protector whose image frightens aWay bandits, mafiosi and profiteers. The problem is that without the backing of a free civil society, his autocratic management will not be enough to save Russia. On the eve of his election, Mr Putin promised to begin g his anti-corruption drive with legal reform. But after he won, he changed tack. He has brought some stability to the country, but at the cost of freezing the development of civic institutions. He has rammed some pro-market reforms through parliament, but has marginalised the opposition, an essential force in a proper democracy. He has taken power away from the Federation Council (the upper house) and turned parliament as a whole into a travesty of a legislative body. Hehas also undermined local authorities: regional governors are reduced to little more than obedient clerks. Media freedoms have been seriously curtailed. In short, Russia has become an authoritarian semi-democracy, a bit like South Korea was before 1987. To be fair, Mr Putin may understand that legal reform is urgently needed -— he has set up a committee under one of his trusted advisers, Dmitri Kozak, to look at it — but he has not thrown enough weight or money behind it. Judges’ salaries remain a joke; courts sit in derelict buildings; greed and sycophancy rule. Russia’s top priority must be to fix its legal system. It will not develop so long as ordinary citizens have no trust in the courts or the police. Unless he acts decisively soon, even the formidable Mr Putin, with all his KGB training, judo skills and extraordinary will power, may end up being defeated by the lawlessness that corrodes Russian society. Es Last update: Wednesday, July 17, 2002 at 1:28:13 PM. Email: wlinfiribworldlink.co.uk ...
View Full Document

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern