Leonid Radzikhovsky
The 10th Congress of the United Russia party is a landmark of Russian public politics
Whether you are United Russia's friend, foe, or are totally indifferent, you cannot deny that it is more than a party in power. It has no rivals to speak of, and possesses an absolute majority in the State Duma and all regional legislatures. It represents every group in the Russian ruling elite, and its leader has Russia's highest public rating. These are hard facts, whether you like them or not.
The congress gathered in a less-than-ordinary situation.
The party, like the entire country, has been making steady progress since its first Congress in December 2001. Its upward movement eventually became a ride up the escalator of oil and gas prices ¬- efforts becoming smaller and vistas becoming broader with every passing day.
Now, a global crisis has stopped this steadily climbing escalator. True, the crisis started through no fault of Russia - but there is no one to listen to Russia's complaints or wipe its tears. As the saying goes, if you dance, you must pay the fiddler. Russia had its years of living large, and now lean years (months so far) are coming for one and all.
How will the party and its leader respond? Things are all the more difficult because the challenge struck like a thunderbolt. Past euphoric years provided little opportunity to prepare for unpleasant surprises. Russia came through a bad systemic crisis in 1991, but has never experienced a global one - much like the present generation the world over, which has not seen such a bad economic disaster since the Great Depression.
This is the perspective from which we will analyse the United Russia congress.
Prime Minister Vladimir Putin's report and President Dmitry Medvedev's short address were certainly its principal events.
President Medvedev did not cross the limits of his state-of-the-nation address. He repeated each of the points that he considered to be of greatest practical importance to the party - promotion of public impact on the authorities with an emphasis on municipal executives' accountability to local legislatures, which makes United Russia more influential and much more responsible.
The party has no considerable rivals at the federal and regional levels for a number of reasons, and will have none in the foreseeable future. Still the crisis makes the political market just as volatile as the stock market, so United Russia should not rest on its laurels.
The situation is quite different at the municipal level, which federal television, Putin's charisma, and administrative resources influence much less effectively. Members of a small community know each other, concentrate on practical matters, and easily see who is true to his word and who is not. Here, United Russia will be hard-pressed in competing with Communists and other parties at elections, though it certainly has a handicap. Besides this, far more will depend on municipal elections now that town councils have the right to dismiss mayors.
United Russia finds itself in a contradictory situation. Its responsibility is growing far more quickly than its influence as interparty competition gets tighter. As a ruling party, it is more vulnerable than any other. Every setback, even in a small town, foreshadows larger failures - suffice it to look back at a recent Stavropol regional election, in which it did not receive the landslide victory it had expected. The party was in panic, which was understandable in its delicate position.
Considering all of this, the party should spectacularly improve its work; thus, President Medvedev's call to energise domestic policy and revive political competition was timely for United Russia and, even more so, for its local branches. Nevertheless, many political experts who focus on the larger picture and global matters shrugged off his call.
Vladimir Putin's address to the congress focused on the main issue - the Russian social and economic response to the global crisis. He made two calls to the party and the nation.
First, he told the population NOT TO WORRY. The state is not calling on the average citizen to tighten his belt. On the contrary, it says it will be true to ALL its pledges. The Prime Minister enumerated them - pensions, public sector wages, private deposits, and housing. To top it all off, he swore the rouble would not plummet as it did in 1991 and 1998.
All of this was not empty talk, though psychotherapeutic statements might be appropriate in a crisis. Mr Putin did not say soothing words, but rather quoted convincing facts and figures. With his address, he staked his reputation and United Russia's political impact. Economists have calculated that his initiatives will cost the state no less than 550 billion roubles in the next year alone.
Where will this huge sum come from, with oil revenues shrinking and export duties being reduced lest oil sells at a loss?
The answer is clear - the money should be taken from emergency reserves stocked up by Finance Minister Alexei Kudrin for a rainy day, as he chose to turn a deaf ear to curses coming from all sides against his so-called parsimony. The rainy day has come, and it is time to borrow from the Stabilisation Fund.
How long the fund and Central Bank reserves will last depends on the pace of the crisis, and on oil, metal, and other Russian export prices.
Here, I think, we can discern the undercurrent of Putin's address. Such optimistic practical promises, so responsible and so easy to check, are not made on a whim. Putin believes things will go well - or does he know it?
Intuition for a TURNING POINT is the greatest merit of a politician, doctor, soldier, sailor and financier. A physician can sense when a disease has reached its climax, a general when a battle reaches its peak, a sailor when a storm is at its worst, and a financier when prices have fallen to the bottom. Really, the darkest hour is just before dawn, when too many expect doomsday in panic and the rare wise minds expect an improvement - not by instinct alone, but from expert estimations. The LEADER intuitively chooses one of the many mutually contradictory forecasts as the basis of his strategy, and either triumphs or pays for his blunder. This is what his job is about, and there is no one else to take responsibility for his actions.
Mr Putin is optimistic about the two next years. He does not say why; it could be out of superstition, or perhaps he enjoys being secretive. I can only guess what he bases his forecasts on, and I don't think this is top secret.
As I see it, he believes we are living through the darkest hour now. Oil prices will hardly slide below the current $40-$50 a barrel and, by all appearances, will climb to $70-$90 next year. At any rate, this is an OPEC forecast that a majority of experts agree with, though you never can tell. Anyway, I repeat, it is the LEADER's duty to draw conclusions out of scant and contradictory information.
Mr Putin is one of the few who can foresee a silver lining for a weather-beaten and panic-stricken ship. The crisis is certainly not approaching its end; we will experience a production decline and, possibly, a general recession in 2009. Russia, like the whole world, will need a long time to recover from the depression, but nonetheless, it WILL NOT COLLAPSE. Even with current oil prices, Russian reserves will suffice, the budget will be reliable enough, even with a deficit, and hyperinflation and stormy devaluation are highly unlikely. The state will meet all its social targets, and the economic crisis will not develop into a social and political SYSTEMIC one.
This is what I see behind Mr Putin's optimism. He does not think bears will dominate the market for long, and expects bulls to replace them. There is an irony behind this statement, considering that United Russia's emblem is a bear.
As Putin made it known in his address to the congress, he hopes the crisis will revive small and medium-size business. Many companies will be ruined, but public economic activity will skyrocket as a means of survival. Government officials and corporate managers felt more comfortable than anyone else with petrodollars flowing in. This blissful stage is now gone, and the struggle for survival has begun; it is welcome as long as it does not trespass the law. The crisis will be stimulating and BENEFICIAL to Russia. The innovation economy needs innovative public conduct to get going. Russia has a chance to rise up from its cosy armchair.
Mr Putin says that he sees the survival and revival of business as his goal and duty. He is telling the truth, by all appearances. The Government will cut taxes and remove administrative obstacles, but the rest depends on the public.
This is how I understood the second part of his address, which concerned business circles and the middle class.
He called on the Government to calculate what is not dependent on it (world raw material prices), influence what it has the power to influence (the nation's economic conduct) and coordinate the two. This is the guiding principle of the state's strategy, the way he wants it to be.
I hope it is the right strategy.
