Crisis: political system gets a chance for reactive and revolutionary modernisation
Nikolai Petrov
There has been much discussion of how adequate the government's actions are in the face of the economic crisis. I don't think they are, but I am not an economist, so I will leave such assessments to the professionals.
The problem is that the financial crunch has rapidly grown into a broader economic crisis and is now outgrowing the purely economic sphere, increasingly attaining an important social and political dimension. The goals our political system is now facing are urgent and of paramount importance, crucial for its very survival, even.
Consequently, the crisis-related issues to be taken care of are not purely economic, and anti-crisis measures should therefore have political and administrative aspects to them. In this respect, the government's actions look totally inadequate, and their plans unrealistic.
This crisis can be likened to a violent forest fire, to which President Dmitry Medvedev reacts by showing up with a watering pot and some sand and suggests weeding the plants and trimming the paths. Prime Minister Vladimir Putin arrives next, for he is the one responsible for fire safety. He doesn't bother to mention his earlier blunders or explain why an abandoned campfire in distant woods has caused such a blaze in our forest. He says we don't have to change anything, but distributes a couple of fire extinguishers.
The government policies in fact look surrealistic. At the first signs of the crisis, the Prime Minister announced that Russia would not be affected at all, calling it a true island of stability. Later, they carefully avoided any mention of the crisis, only describing the adverse consequences of the Western crisis.
When oil prices plunged to one-third of their previous rate, the parliament simply ignored the fact. They adopted the 2009 federal budget that had been drawn up assuming oil prices would remain high, and the government assured us that it didn't have to be adjusted.
The President also avoided the "C word" in his State of the Nation Address. He suggested only one reason for the problems - they had blown in from America - and no ideas of how to deal with them.
The Prime Minister later spoke very optimistically at the ruling party congress, swearing that Russians would not be affected and that the government was not going to go back on any of its pre-crisis plans. He then signed Concept 2020, a plan drafted under very different circumstances, when the government had been euphoric about Russia's economic miracle.
Concept 2020 sounded utopian last year and is doubly utopian now.
Medvedev's utopias
As for President Medvedev's "revolutionary package", he decided it would be premature to lower the prohibitive eligibility barrier, but parties that gained between 5% and 7% of the vote in a parliamentary election could be granted one or two seats each. Why not, when there weren't any at the latest vote and none are expected at the next? Even the number of political parties has decreased since last December.
Another change affected the procedure for appointing members to the upper parliament house, the Federation Council. The recently adopted requirement that potential members have worked in the region they represent for a specified period was replaced by a requirement that they have a parliament mandate of any level.
In short, the change replaced the single-pass scheme that business executives and retired military and civil officials used to get parliament seats with a double-pass one: they will have to get themselves elected to some village legislature first, say, through a United Russia party list. The President says this way is better, but without explaining why.
It could be that his political reforms are not as pointless as they seem at first glance but to figure that out, one must look at them from the Kremlin's perspective on the current political system's problems, as well as the government's current goals.
One problem, say, is that the upper house does not ensure a real representation of the regions in parliament. The problem is obvious and much discussed. It is equally obvious that considering the regions' interests in lawmaking is highly important, the more so during the crisis. But will Medvedev's skin-deep reforms really change anything?
What good can any measures be unless worked out through a deep analysis of the current developments and evaluation of existing institutions and procedures?
Just a cover
The constitutional reform involving an extension of the presidential tenure recently initiated by the Kremlin has an absolutely transparent purpose - to pave the way for a restoration, for Putin's return to the Kremlin as Russia's next president.
They are doing it now in case they need it early - for example, if the popularity of the Putin-Medvedev tandem begins to plummet. As of now, it is on the rise.
The other components of Medvedev's political reform are probably there for cover, which is probably why no one has bothered to work on them properly, almost a month after the presidential speech.
But why didn't Putin just stay for a third term or give a go-ahead to the term-extension scenario, which was designed even before the 2004 elections, as Medvedev has admitted almost openly?
Some would say that he was afraid to let go of the "reins" even for a minute, much like Boris Yeltsin, who was said to have asked for this "nuclear briefcase" back as soon as he regained consciousness after his coronary bypass surgery. As for Putin, by switching from President to Prime Minister (and back?), he never had to let go. He must, however, have underestimated the impending crisis, which implies much more challenging government goals to meet.
It is also important that, with the crisis to deal with, the West won't have time to fuss over the way power is taken over or kept in the Kremlin. The latter clearly opted for a policy of flexing last summer, without much heed for the West's reaction, either.
There seems to be no sense to the current hasty constitutional reform other than to prepare for an early election. Other speculations cannot be called serious - suffice it to mention the ungrounded statement by liberal economist Arkady Dvorkovich, who said that extending the presidential tenure has economic reasons. I'm just curious - what limit was he suggesting to stretch it to, 60 years? Such is the length of the hypothetical "Kondratiev cycles," [a theory by Soviet economist Nikolai Kondratiev that states that Western capitalist economies are susceptible to high performance volatility.]
As for President Medvedev's argument that a president should be given more time to implement the reform package, I can only comment that, first, before asking for more time, one should at least have a solid reform plan, and second, we aren't dealing with a lack of continuity here, with the Putin-Medvedev duo, but rather with a lack of change.
Goodbye, Sochi
It is extremely important to determine a specific planning period. If an athlete takes off as if for a short distance when he needs to run a mile, he might run out of breath too quickly. If a doctor administers fever reducers to a patient with gangrene, saying it is important to maintain high tonus and get well soon, the patient might pay for this kind of optimism with his life.
So far, the Kremlin is acting as if it expects the crisis to end soon, counting on its international reserves to "cushion" the adverse repercussions.
Admittedly, some measures are also being taken that assume the difficult period will last - for example, the current preparation for an early presidential election if things get too out of hand - but the government clearly considers the pessimistic scenario to be highly improbable.
Importantly, even the termination of the crisis won't mean the economy will immediately get back to normal. Its extensive oil-based growth potential has been nearly used up, and new instruments and motivation schemes need to be devised for the future, apart from anti-crisis plans.
What should change is the underlying political and economic paradigm, because the one the government used before the crisis no longer works and is unlikely to become functional again.
The Stalin-style industrial modernisation that emphasises nanotechnologies as nuclear and space technologies won't work in the post-industrial phase of development. It is time we learned to emphasize human resources, not technologies.
The very idea of state corporations and extensive development, including gigantic investment in more Arctic mineral projects, in ambitious PR projects like the APEC 2012 summit involving a suspension bridge linking Vladivostok with the Russky Island, or the grand plans for the 2014 Sochi Olympics, are far removed from the changing realities. These plans are unlikely to survive the crisis.
Popularity and confidence problem
Just like the first storm measures a ship's reliability, this crisis will be a test for Russia's political structure. Our political system's main problem is weak government institutions, all except perhaps the President-Prime Minister team.
This duo's high confidence rating is the basis upon which the whole political system rests. Therefore, the whole system finds itself hostage to popular confidence in one person. There were earlier warnings of the danger of this President-centered structure, but this danger doubles in a crisis.
In 1998, with the President's popularity extremely low, the opposition-led parliament assumed the role of political stabilizer. The upper house then contained influential regional governors who had their own high legitimacy.
This time around, the country lacks institutions that could restore some stability if the leader's popularity rating drops. Unfortunately, the latter scenario is inevitable in a deep economic crisis that causes an economic slowdown and plummeting living standards.
What we see now can be described as "social schizophrenia:" having faced the adverse effects of the crisis, people turn to their leader as if grabbing at a straw. This situation cannot sustain itself long.
A day will come when the pyramid of ungrounded social expectations, carefully built by the Kremlin, will collapse. The greater the gap between these unrealistic expectations and reality, the more society will suffer. Here again, it is very important that we correctly estimate the length we have to run.
By this, I mean that we must evaluate the potential duration and scale of the crisis in advance. If it lasts for a year or more, as most experts estimate, no strength margin will help this system.
Thus, what the authorities must do is brace both the institutions and the public for a difficult period ahead, rather than waste resources on the pointless pretence of relative prosperity. A danger foreseen is half avoided.
Less money, more independence
As the global financial crisis unfolds, the existing government system's impotence to successfully deal with its challenges becomes ever more obvious. So far, the government seems quite capable of solving the problems of a dozen large banks and companies, but what will it do and how it will deal with the problems of hundreds, thousands and tens of thousands of small and medium-size businesses? ? It will be physically incapable of tackling these problems in the same manner.
The only way out is through decentralisation, that is, delegating part of the authority and resources to regional and municipal governments. There is no reasonable alternative to that. Otherwise, we are in for an administrative collapse.
The key element of all anti-crisis administrative schemes is the need for more time, both for decision-making and for implementing the decisions made. Suppose the required resources have been provided to deal with a problem, but the unmanageable, slow and over-centralised system is incapable of prompt reaction to new challenges.
Consider the following example: a major company providing jobs to the bulk of a town's population goes bankrupt. The problem is aggravated by the fact that that same company controls the local public utilities such as the heat and sewage systems and the water supply. If it closes down, the residents will have to be evacuated in winter.
On the other hand, the plant's bankruptcy could be prevented. Both solutions would require time, because even if the money is provided promptly, the plant's regular operation is unlikely to be restarted in a short time.
The wisest regional leaders seem to have realized that their roles are expanding during this difficult time, while the strongest of them, such as Moscow Mayor Yury Luzhkov and Tatarstan President Mintimer Shaimiyev, have already shown signs of insubordination as the federal government becomes inevitably weakened by the crisis.
The Kremlin is becoming visibly unnerved, since officials certainly know that regional political elites will inevitably grow more independent. The problem is that the Kremlin isn't doing anything about it yet, while there is still time for institutional manoeuvres -time that will very soon run out.
Psychological problems are among the most serious repercussions of the crisis. The government team, lulled by the recent successful years into believing that the "Russian economic miracle" was the result of their wise policies and right course they realized, has difficulty changing. It needs to be overhauled.
What is the upside?
A development cycle can be regarded as a system going through a chain of crises of various intensity and complexity. After going through each one, the system becomes stronger and more mature.
The current economic crisis is more than a stability test. It is a chance for our economic and political systems and for each one of us as well.
The main beneficial effect of the crisis will probably be the Kremlin's decision to abandon, fully or partially, voluntarily or reluctantly, its paternalistic policies with regard to Russia's regions and the Russian citizenry.
The whole political pattern changed with the onset of the crisis. The modernisation "from above" that optimists expected to occur when Medvedev became president was removed from the immediate agenda - that is, if it was ever there at all. A "reactive" modernisation, emerging as a response to new challenges as the system's struggle for survival, is much more realistic now.
What we are witnessing is the beginning of this kind of modernisation, as the system is facing ever new challenges rather than adjusting to a changing environment.
