Russia is in a crisis because its economy is geared to raw materials
Of course, crisis is to blame for everything. The dishes coming out of the political kitchen have an increasingly strange taste. Last week we were presented with two dishes. As the first course, Dmitry Medvedev addressing a conference on world politics at Evian (France) lamented the unipolarity of the world which he saw as the root of all evil. The second course was the suggestion that Putin was overstaying his welcome in the Prime Minister's seat and that a search was underway for a new candidate for Premier. We have asked political scientist Stanislav Belkovsky to comment.
Popular polarisation
Question: Throughout last week, taking the cue from Dmitry Medvedev, the media was drumming it into our heads that the unipolar world is to blame for all the world's problems, including the financial crisis. This is another way of saying that the United States is to blame. Do you believe that there would have been no crisis if the world were multipolar?
Answer: Indeed, the world is totally dependent on American financial markets. But this is the consequence of globalisation and not unipolarity. In other words, it is the consequence of the removal of administrative and trade barriers and the formation of a global financial market in which the United States plays the dominant role.
But that is only half of the truth. The other half is that the Russian crisis stems from the model of its economy which depends on commodity prices and the state of the American financial market.
It is clear that we are on the threshold of major changes in the whole world. The era when liberalism prevailed in the economy, which began in the 1970s and 1980s with the advent of Ronald Reagan in the US and Margaret Thatcher in Great Britain, is drawing to a close.
A new historical period is beginning which will see national governments playing a bigger role in fighting transnational corporations and international financial institutions, increased administrative restriction in all areas and a tendency towards relative economic isolation.
In fact the world is where America was in 1929. To combat the Great Depression Roosevelt had to introduce the New Deal which included "gentle socialist" instruments in the economy.
Question: Are we moving in the right direction in this changing world?
Answer: No, because we need to change the model of our economy. It should stop relying on raw materials, but that would require a colossal effort. There is no one in the country able to exert such effort because the ruling elite has grown up in the context of a raw materials economy which it regards as God. There needs to be a change of elites, which is a very complicated and painful process.
The measures the Government is taking to ward off the financial crisis pursue one goal: saving the private purses of a few hundred members of the ruling elite.
There was nothing to prevent investing money in the development of the domestic economy: the infrastructure, industry, the revival of science and education. But none of this has been done, and what is more, it has been deliberate because the ruling elite saw no point in such investments.
A raw materials based economy is a free ride when you can afford to do nothing. Oil is pumped from wells explored during the Soviet period through pipelines built under the Soviet government. Today it is common to revile the USSR, but the foundation of the riches of the present elite was built under the Soviet government. As a result you don't spend money on anything but restaurants, casinos and other services which are financed by oil and gas revenues.
Question: Sooner or later the world will overcome the crisis. What will be Russia's position then?
Answer: Everything depends on whether or not there will be a change of elite. If not, its position will be unenviable because we will continue to depend on the external world. Without changing our economic model we will become a semi-colonial country similar to Nigeria where several hundred people will live in luxury while tens of millions will languish in poverty.
Look for the Prime Minister
Question: Some media attacked Putin with a vengeance last week. They write that Putin has been Premier too long, that he has botched all his projects and that they are looking for another Prime Minister. How much truth is there in these reports?
Answer: I almost agree with this. However, I do not know that the search for a new Premier is underway. It won't get underway until Vladimir Putin decides, by himself, to quit. Putin needs good timing in order to quit. He needs a plausible pretext to announce his resignation. After all, he cannot quit by admitting honestly that he has ruined the economy.
Such a moment could occur in the spring of 2009 when the new President of the International Olympic Committee is up for election. Mr Putin clearly has his eye on that job. It is not by chance that he is already an informal sporting official, President of the European Judo Association and even a Merited Coach in Russia. Without any publicity he won that title two years ago. In general, he is very keen on sports and the Sochi Olympiad is an important personal project of his. So it is quite possible that he could accept an offer to become the head of the IOC and use it as a pretext for quitting his current post. But this is only a hunch on my part.
