RUSSIA WATCH
No. 4, December 2000
BUTTRESSING RUSSIA’S DEMOCRATIC FREEDOMS
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How is one to assess the state of democracy in Russia today? Is the appropriate yardstick how far Russia has come since the days of Brezhnev? Or is it rather how Russia measures up to the standards of established democracies? Perceptions (and misperceptions) oscillate almost schizophrenically. Examining the Russian President’s actions for signs of authoritarian restoration, one finds much to support this view. Alternatively, when looking for evidence of democratic state building in Russia one finds support for this proposition as well.
Deputy Secretary of State Strobe Talbott has been among the most committed optimists. In a speech at Oxford University last January, he argued that Russia is “a pluralistic society and political system, not just by comparison with 1945 but by comparison with 1991, when political power was still concentrated in one institution, the Communist Party of the Soviet Union. Now power is dispersed among numerous competing entities at various levels. For the first time in their history, Russian citizens are voters in real elections.”
Noting the “dark underside” of changes since the fall of Soviet communism, Talbott continues: “The implosion of the monolithic police state has left a vacuum of the kind that nature—especially human nature—abhors. In place of the old, bureaucratized criminality there is a new kind of lawlessness. It’s what my friend and colleague, Bronislaw Geremek, has called the ‘privatization of power’ and it has quite literally given a bad name to democracy, reform, the free market, even liberty itself. Many Russians have come to associate those words with corruption and with the Russian state’s inadequacy in looking after the welfare of its citizens. For all these reasons, Russia’s first decade as an electoral democracy has been a smutnoye vremya, or time of troubles.”
Expressing a more pessimistic view of Russia’s post-Soviet history, New York University Professor Stephen Cohen finds that Russia’s “economic and social disintegration has been so great that it has led to the unprecedented demodernization of a twentieth-century country.” In Failed Crusade, Mr. Cohen asserts, “Russia today has elements of democracy, but it does not have a democratic system. Among the essentials missing are a constitution providing for a meaningful separation and balance of powers; real national political parties other than the Communists; reliable rule of constitutional, civil, or criminal law; any serious effort by ruling elites to curb systematic high-level corruption and other abuses of office, much less prosecute them; and guarantees of elementary human rights, which are being violated on a massive scale everywhere from the streets of Moscow and Russia’s prisons to Chechnya.” (continued on page 4)
TOP NEWS
Duma Strives for First Balanced Budget in Russia’s Post-Soviet History
The State Duma adopted its 2001 budget on December 1. The rapid adoption of the budget was ensured by an informal coalition in the Duma composed of liberal factions voting according to their convictions, parties that originally had pro-Kremlin agendas, and parties that turned pro-Kremlin after Putin came to power.
The 2001 federal budget is the first balanced budget in Russia’s post-Soviet history. It is, however, based on an optimistic prediction of economic development. It projects 4 percent GDP growth in 2001. Total revenues are expected at $39 billion, almost 40 percent more than 2000 budget levels. The projected level of inflation is 12 percent and the exchange rate is 30 rubles to the dollar. Revenues are based on estimated oil prices of $18-19 per barrel (roughly two dollars below current prices, which have been dropping). The above economic development scenario is based on recent economic growth, which was caused by ruble devaluation in 1998, and not by structural reforms.
The new budget also presupposes $1.8 billion in loans from the IMF and $3.2 billion in debt restructuring that will not likely be forthcoming next year. That may cause a potential budget gap of $5 billion. However, if oil prices remain steady, Russia may yet receive enough additional budget revenue to cover that gap.
The budget calls for significantly increased expenditures on defense, law enforcement and security activities—$4 billion over 2000 levels. A substantial part of the increased defense budget will be spent on implementation of the military reform and on upgrading of equipment. –David Rekhviashvili
Duma Passes Laws on State Symbols; Adopts Soviet Anthem
On December 8, the Duma passed bills reinstating the Soviet-era anthem (with new words), approving the Tsarist-era two-headed eagle as Russia’s official coat-of-arms, and retaining the tricolor as the state flag. Also passed was a law approving use of the Soviet red flag by the Russian Armed Forces. Putin expressed support for the Soviet anthem and other symbols, saying: “if we agree that the symbols of previous eras, including the Soviet era, mustn’t be used at all, then we will have to admit that our fathers’ and mothers’ lives were useless and meaningless, that they lived in vain. Neither in my head nor my heart can I do that.” –Ben Dunlap
U.S. “Spy” Gets 20-Year Sentence; Pardoned by Putin
American businessman Edmond Pope (pictured), was convicted in a Russian court for espionage and sentenced to 20 years hard labor, the harshest sentence allowable by law. Putin subsequently pardoned the former U.S. Naval officer on “humanitarian grounds;” Pope suffers from bone cancer. According to the ruling, Pope, who was arrested in April, had bought top-secret documents about a high-speed underwater torpedo. Pope’s lawyer maintains that the information he obtained was already in the public domain. A member of the Commission on Presidential Pardons criticized what she labeled “spy mania” when recommending that Putin pardon Pope. –Ben Dunlap
Media-Most , Gazprom Strike Deal; Gusinsky Arrested
Media-Most, Russia’s largest privately-owned media company, known for its sharp criticism of the Putin government, signed a “peace treaty” on debt payment with its creditor, Gazprom-Media. Both sides predict that Media-Most will settle its debts by July 2001.
Gazprom, the state-controlled gas monopoly, took Media-Most to court in May, alleging that Vladimir Gusinsky (pictured), the owner of Media-Most, had transferred assets from his media enterprises to companies in Gibraltar in an attempt to avoid paying large outstanding debts to Gazprom.
According to the recent agreement Media-Most will pay a $211.6 million credit to Gazprom-Media in stocks of companies owned by Media-Most. Payments on other credits are to be made by July 2001. Alfred Kokh, chief executive of Gazprom-Media, asserted that NTV will remain independent both of the state and any tycoons, since according to the agreement, no one entity will hold a controlling interest in the network. Gazprom-Media withdrew its suit against Media-Most holding.
Meanwhile, the Chief Prosecutor called for the arrest of Gusinsky on fraud charges. Gusinsky is accused of illegally receiving a $300 million credit against the shares of insolvent companies to be liquidated. Gusinsky has claimed that the case against him is solely political and refused to show up for questioning. Gusinsky was placed on the Interpol wanted list in November, and arrested by police in Spain as Russia Watch was going to press. –David Rekhviashvili
Military to Shrink 20% in 5 Years
On November 9, the Russian Security Council finalized the outline of the upcoming military reform.
Over the next five years 600,000 jobs, both military and civilian, will be cut from the so-called power ministries and government agencies, including the Defense Ministry, the Interior Ministry, Federal Border Guards Service, intelligence services, railway troops and civil defense troops. Military personnel will be cut by 470,000; civilian staff will be reduced by 130,000.
The upcoming reform is aimed at making the armed forces more efficient and eliminating duplication in military structures. According to President Putin, the state can no longer afford to support a cumbersome and inefficient military system. Opening the meeting of the Security Council, Putin announced: “We discussed the matter at length. We have run out of time. The decision has to be made today, and implemented.”
Funding for the military will not be reduced. At present, nearly one-third of the state budget goes to defense. Reform will provide the remaining military personnel with twice as much funding as they have now. –David Rekhviashvili
Russian Investigator Drops Mabetex Money-Laundering Probe
Russian authorities abruptly ended their investigation into senior Kremlin officials who allegedly channeled millions of dollars through the Swiss-based construction company Mabetex. On December 13, Russia’s chief investigator into the Mabetex case, Ruslan Tamayev, dropped charges against a number of former Kremlin officials, including Pavel Borodin, the former head of the presidential administration under Yeltsin. Tamayev cited lack of evidence as the reason for closing the case. The decision by Russian authorities to close the Mabetex case comes in contrast with their pursuit of Vladimir Gusinsky, the media magnate and frequent Kremlin critic, who was recently arrested in Spain on an international warrant (see story above).
–Ben Dunlap
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Buttressing
Russia’s Democracy
(continued from page 1) A similarly harsh judgment is rendered by the recent report of the U.S. House of Representatives Advisory Group on Russia, chaired by Republican Congressman Christopher Cox. The Cox Report concludes: “Russia today is more corrupt, more lawless, less democratic, poorer, and more unstable than it was when President Clinton and Vice President Gore took office—a society some Russian and American observers chillingly describe as ‘Weimar Russia.’”
Other observers present a more complex picture of Russia’s democracy.
A recent Economist report summarizes both positive and negative trends of the last decade. On the one hand, it notes: “After 70 years of one-party rule, isolation, repression and bouts of mass murder, Russia is now governed not by Communists but by rulers who profess democracy. Compared with the Soviet era, most people can choose where they work and live, travel abroad, meet foreigners, try to get rich without being punished for it, worship freely, set up political parties, and complain individually or with others about most of the country’s plentiful problems…For anyone familiar with the horrors of the past, it is a cause for great rejoicing.” On the other hand, The Economist finds: “menaced media, fixed elections, an over-mighty security service, harassment of the opposition, xenophobia, and racism.”
A recent Freedom House survey of former communist countries grouped Russia together with Romania and Yugoslavia as “transitional governments” and gave Russia’s democracy a rank of 4.25 on a 7-point scale (with 7 being the least democratic).
Higher marks: free and fair elections; civic organizations.
Lower marks: civil rights; rule of law; accountability of state officials to the citizens; freedom of press; corruption.
(From Nations In Transition, available at www.freedomhouse.org.)
A November report by the Carnegie Endowment for International Peace locates Putin’s Russia in a “gray zone between democracy and authoritarianism.” It argues: “Putin has not ruptured the basic democratic constitutional framework that governs Russian political life nor engaged in wholesale abridgments of rights and liberties. Yet his dubious attachment to democratic norms is now evident, and he has set about weakening all major sources of power independent of the executive branch. This rollback is evident in his taking back of power from the regional governors, his attacks on independent media, and his challenges to Russia’s business oligarchs.”
Kaleidoscope of Contradictions
In sum, Russia presents a kaleidoscope of contradictions. There have been extraordinary, indeed, almost inconceivable changes in Russia since the Soviet period. In the communist system, citizens had no alternatives to the Communist Party, no free press, no free speech, no freedom of religion, no freedom of movement. Buying and selling without government permission was a crime; opening a business was impossible. Today, Russians can think, speak, worship, teach, buy, sell and travel more freely than imaginable in Soviet times.
At the same time, the last few years have seen signs of a powerful return of the pendulum towards authoritarianism in Russia—one that reflects deeper trends across the countries of the former Soviet Union. Leaders who believe they are undertaking great tasks to rebuild their country seek to mobilize cooperation and support, not criticism and dissent. Public demands for appropriate order and economic performance create a permissive environment for sliding back into authoritarianism. It is no accident that such thoughts find resonance in leaders who began their political careers in Communist Party structures, and even less surprising in those whose formative professional years were spent in the secret police.
Moreover, the democratic institutions inherited from the Yeltsin era, though vastly more “civilized,” as Russians say, than in the days of Soviet domination, are still weak and in disarray. National newspapers are generally free from overt state censorship, but many are controlled by powerful tycoons who have no qualms about using their media outlets as weapons against political and business enemies. In recent months, the Russian government has moved to gain control of Russian Public Television (ORT) while NTV, the largest private TV network, has found itself under extreme pressure from law enforcement and tax authorities. Regional mass media are often coerced or co-opted by overbearing provincial authorities or local mafia kingpins. Hundreds of political parties have been created; 43 participated in the 1995 parliamentary elections and 26 ran in the 1999 race. But, with the exception of the Communist Party, many political parties are little more than vehicles for the ambitions of a few leaders, and surveys show that average citizens put little trust in parties. Civic organizations proliferated in the early 1990s, but most non-governmental organizations (NGOs) lack the resources necessary to mobilize members and influence citizens’ lives. Courts are underfunded; judges are overworked and overly influenced by the executive branch. Legal culture is underdeveloped; few people look to the courts to decide disputes, even when the law is clearly on their side.
Since he took office a year ago, President Putin has pledged to “strengthen the state,” and he has undoubtedly attempted to improve the effectiveness of the Russian government in ways that are both necessary and often beneficial. A government that cannot fulfill its essential functions—protecting citizens, enforcing laws, collecting taxes—has no legitimacy to rule. Moreover, the collapse of the Russian state would have dire consequences for Russians’ lives and liberties, and for the safety of the rest of the world. But intense focus on strengthening the state (and particularly state security and law enforcement structures) at the expense of other equally important institutions in society can have dangerous consequences. Invigorating organizations such as the FSB (the domestic successor to the KGB) and General Prosecutor while at the same time weakening organizations that derive their authority directly from citizen members, such as NGOs and political parties, threatens democratization. The underlying dilemma is reflected in political theory. A government strong enough to perform its essential functions, beginning with ensuring citizens’ freedom, is simultaneously strong enough to abuse those same rights (see sidebar).