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Russia’s Destiny is now in Putin’s Hands

Dr. Arvind Gupta was Director General at the Institute for Defence Studies and Analyses, New Delhi. Click here for detailed profile
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  • May 21, 2012

    Vladimir Putin and Dmitry Medvedev have once again swapped their places. Putin, Prime Minister of Russian Federation for four years, has become the president, and he has appointed the outgoing president, Medvedev, as the Prime Mister. Medvedev will also head the United Russia Party to which Putin also belongs. Putin has been ‘ruling’ Russia for the last 12 years (eight years as President and four years as de facto president) and now has a mandate for another six and perhaps even 12 years up to 2024.Where is Russia likely to go under Putin?

    Medvedev, in his address to the Russian federal assembly in December 2011, had recounted his achievements as president. The long list included the successful handling of the Russia-Georgia war over South Ossetia, economic recovery from the devastating global financial crisis, and initiation of several steps aimed at modernising the economy, the launch of a Russian ‘silicon valley’ in Skolkovo near Moscow to promote technological innovation, increased spending on health and education, pension reforms, increase in the salaries of doctors, teachers and engineers, police reforms, war against corruption, military modernisation, reset of relations with the US and so on.

    This is indeed an impressive list backed by corresponding data. The Russian economy, which suffered a decline of over six percent in 2008-09, has subsequently been growing at the rate of four per cent per annum, a creditable achievement considering that Europe is now stagnating. Russia has large foreign exchange reserves and a current account surplus. Its per capita debt is among the lowest in the world. The state has pumped in large amounts of funds in women and child health care to shore up the dwindling population. The life expectancy of women has increased sharply up to 75 years. A slew of measures have been taken to encourage mothers to look after the family and also have jobs. Four million children have been born in the last four years. Pensions have been increased and arrears have been cleared. The salaries of doctors and teachers have also gone up.

    Russia has joined the WTO after long, bruising negotiations. This will open up new opportunities for Russian and foreign businessmen. Focussing on the Asia-Pacific, Russia is offering its territory for the construction of transport and energy corridors linking Europe with Asia-Pacific.

    Russia is all set to tap into opportunities offered by global climate change. With the melting of the Arctic ice in the summer months, the northern sea route between the Atlantic and Pacific Oceans through the Arctic Sea is opening up. Much of this route will pass close to Russia’s northern coast. Russia has put in place a vigorous policy to develop its northern territories and is pursing an aggressive diplomacy to maximise huge benefits that would accrue from the opening of the northern sea route. Thus, there is much that Russia has achieved in the past few years under Medvedev’s watch.

    Yet, Russia faces major socio-economic problems. Top leaders recognise the underlying reality that structural deficiencies of the economy remain unaddressed. The most glaring of these is Russia’s continued dependence on high oil prices. The Russian economy is in serious need of diversification, new investments and technological modernisation. Corruption remains a major problem. Socio-economic inequalities are rising. Physical infrastructure is poor. Democracy is weak. There have been visible, unprecedented mass protests on the streets of Moscow against Putin and the establishment in general. Businessmen and media persons have complained about state persecution.

    During his presidential campaign Putin wrote a series of articles in which he touched upon a number of these issues. He noted that the growth model adopted in the last few decades, based on high oil prices, had ‘almost exhausted’. The high oil prices due to geopolitical tensions and turmoil in the Arab world have kept the Russian economy afloat. A fall in oil prices below $100 billion per barrel will cause major economic problems in Russia. He emphasised the need to make the economy more efficient and remove bureaucratic hurdles to improve investor confidence. Both Putin and Medvedev have spoken of the need to curb inflation and bring down the interest rate.

    Medvedev during his tenure as president laid great emphasis on innovation. Putin is likely to continue with Medvedev’s innovation drive and has stressed the need to create matching human resource potential. It is interesting that within hours of taking over as President, Putin signed a presidential order on higher education aimed at raising the global rank of Russian universities.

    In Putin’s scheme of things, the focus of Russia’s growth should be the Russian family. He emphasises the importance of the family’s commitment to the “fate of the Fatherland”. He has an interesting take on religion. Even though Russia is a secular state, Putin believes that the traditional religions of Russia have an important role to play in strengthening the moral and spiritual values of society.

    President Putin has promised to increase public support for families with children. Women who come back to work after maternity leave will be given new opportunities in professional training. Child care systems will be strengthened. Young families will be given housing support. Putin has promised that schools will be improved, teachers will be paid better salaries and the quality and scope of vocational education will be improved.

    It would appear that during Putin’s watch, the state will remain at the commanding heights. It will have a say in all aspects of Russia’s policies. And that is where the issue of governance and political reforms comes in.

    The issue of political reforms becomes urgent as in recent months there have been large mass protests on Russian streets against Putin. The West has seen this as a growing sign of public dissatisfaction with the government and has speculated about the onset of a ‘Russian Spring’ similar to the Arab Spring. The government has dismissed these protests as motivated and agenda driven aimed at destabilising the government and society. However, many Russian critics have dismissed Medvedev’s four year rule as a period of missed opportunities when deeper political reforms could have been undertaken. They see Medvedev’s achievements as superficial and predict greater confrontation between the government and the public.

    Despite these criticisms, Putin enjoys certain support in Russia. His margin of victory is substantial, having officially secured 63 per cent of the popular votes, although some have disputed this figure. Russians see in him a provider of much needed stability. In global affairs Putin has relentlessly worked towards redeeming Russia’s place at the top table. Although Russia plays a weak hand due to structural problems in the economy and several deficiencies in the political and social order, Putin will try and leverage Russia’s substantial advantages—energy being one of them—to Russia’s advantage.

    Putin is in a unique position to guide Russia’s destiny. Russia is unlikely to have a Western style political system. It will in all likelihood remain a guided democracy controlled from the top. Rather than being dismissive of Putin, the West should take his views with greater seriousness and not indulge in wishful thinking. Russia will remain an important global player during Putin’s third term as president.

    The author is Director General, Institute for Defence Studies and Analyses, New Delhi. The views expressed here are his own.