Jeffrey Stroebel
Humanities 8
Mr. Stroebel
9 8 December 2003
A New
A popular Russian comedian has
joked: Much
has changed, but nothing has happened.
Or is it that much has happened, and nothing has changed?
(Yergin and Gustafson 147). In truth, a
great deal has changed in Tthe
chaos and uncertainty of the Yeltsin years is being replaced by an improving
economy and the creation of a legal framework that will replacea feeling of
stability that contrasts sharply with the Wild
West
atmosphere of the dismantling of the Soviet state. While serious questions about the status of true
electoral democracy and freedom of the press still exist, small vestiges
of Soviet-era thinking still remain, the
Overview:
A.
In what ways has
B.
Why are there significant
concerns about democracy in
C.
What are the strengths and
weaknesses of the current Russian economy?
D.
Why is Putin so popular?
Specific Questions:
1.
Describe Vladimir Putins life
and career before he became president.
2.
Why did Yeltsin choose Putin as
prime minister?
3.
Why was Putins election as
president in 2000 criticized as anti-democratic?
4.
Why did the
5.
Describe Putins relationship
with the oligarchs.
6.
What actions were taken against
Berezovsky, Gusinsky, and Khodorkovsky?
7.
Describe the structural reforms
that have been passed by the Duma since 1999.
8.
What factors contribute to
9.
What is the current situation in
10. How
did Putin respond to the September 11 attacks?
In what ways has
11. What
issues still remain contentious between
When Boris Yeltsin appointed
Vladimir Putin prime minister in August 1999, Putin was virtually unknown, both
to ordinary Russians and the outside world.
Born in s in the law
professors, Anatoly Sobchak, a strong supporter of Gorbachev who
was elected s
first post-communist mayor in 1991.
Putin resigned from the KGB and became a top aide to Sobchak, remaining
out of the spotlight but earning a reputation for honesty and efficiency in his
main job of recruiting foreign companies and promoting business. Nina Odling, a senior analyst at the Everyone
in government in
(Wines Putin
Retains).[2] Putin left
At the time of his
appointment, Putin was viewed as a tough, efficient politician who could use
his contacts in s
security services to protect Yeltsin and his associates, known in The
Family,
from criminal corruption charges once Yeltsin left the presidency. Although many initially viewed him as little
more than a puppet of The Family,
events soon enhanced his popularity and established Putin as an independent
political force. The resumption of the
war in s
strong rhetoric against the rebels immediately enhanced his stature. The media, controlled by the government and Family
insiders such as oligarch Boris Berezovsky,
constantly reinforced a positive image of the new leader. As one reporter noted: His calm
decisiveness, apolitical manner and comparative youth contrasted favorably with
the bombast, Kremlin maneuvering and indecision of the final years of an
increasingly infirm Mr. Yeltsin. When the Putin-endorsed Unity Party
surprisingly emerged from the December 1999 Duma election as a strong force,
Yeltsin felt confident enough to resign the presidency, making Putin acting
president. In Putins first
presidential order, Yeltsin and his immediate relatives were issued immunity
from any future prosecution. Putin also
named Mikhail Kasianov, a close Yeltsin associate, prime minister and retained
Aleksandr Voloshin, another Family
insider, as his chief of staff. With s
media and power structure behind him, Putin easily won March 2000
presidential election, defeating the Communist Party leader
Gennadi Zyuganov by a margin of 52% to 29%.
Putins huge victory
seemed to end the Communist Partys role as a major
factor in Russian politics. In the 1996
campaign against Yeltsin, Zyuganov won a majority in about half of Russias
89 regions, but in 2000 he won a majority in only 4 (Wines Putin Narrowly).[3]
Putins sudden rise, KGB
background, and virtually uncontested triumph in the presidential election was
seen by many as proof that the dream of establishing a democracy in farce. Russian journalist Yevgenia Albats
agreed. We have buried the
idea of liberal democracy in
she said after the election (Wines Putin Narrowly). Russias most popular television program, NTVs Kukly,
a puppet show that mocks public figures, attacked the president as a
heavy-handed danger to freedom. On one
show, Putin was portrayed as a surgeon in a hospital where the patients have
been clamoring for a doctor. The Putin
character appears at last, and reaches for his instruments: a hatchet and a
blowtorch. Others, however,
saw Putin as the manifestation of traditional Russian desires, predating the
countrys
tumultuous twentieth century. Former
dissident writer Vladimir Voinovich believes that Putin captured many peoples
hopes for the emergence of a strong figure to lead them out of s
misery. People always
expect that a kind and clever czar will come along, he said. Most of the people
simply want to live well, and they hope that a Putin or someone else will come
alonga strong man, he will bring order, subdue Chechnya, put all thieves and
corruptionists in jail, confiscate the money of the oligarchsand all will be
well
(Hoffman Russians
Rallying). Another former dissident, Gleb Pavlovsky, views
Putin as a comforting figure after years of turmoil during the Gorbachev and Yeltsin
eras. Putin arrived
as the man to stop the revolution
. After twenty years of revolution and
surprises, people are tired. Theyre exhausted by the notion of
thinking about an entirely new world, a new state, a new form of economy and
thinkingnew everything! (Remnick 81). For his part, Putin promised to
restore s
former status as a great power,
and endorsed the concept of strong, central authority: For Russians, a
strong state is not an anomaly. Quite
the contrary, [Russians] see it as a source and guarantor of order
(Starobin, Fairlamb, and Crock).
An While Putins presidency
was viewed as a new era in Russian history, an August 2000
submarine disaster, however, indicated to many how s.
On August 12, 2000 the nuclear submarine s
newest submarines, sank in the
Just as in the case of s inept lies
(Williams Soviet-Style).
Eventually, after a week of
futile rescue attempts, Nothing was left of
the people insideminced meat, said a Russian
navy spokesperson concluded, dismissing claims that swifter action could have
saved some of the crew. In late October,
however, a note was recovered from the body of a sailor proving that at least
23 of the men had survived the initial explosions. Further evidence also showed that the sailors
may have survived for as long as four days before succumbing to a lack of
oxygen. Clearly, the governments
delay in obtaining international help in the rescue efforts may have been
responsible for their deaths. Later, it
was revealed that the ship had been refitted in 1998 with controversial new torpedo
engines fueled with a volatile mixture of hydrogen peroxide and kerosene
because the new torpedoes were much cheaper.
Despite their cost savings, the new torpedoes were judged to be very
difficult to store and dangerous to use. After the sinking, several specialists
maintained that the first blast involved a misfiring torpedo engine, which
touched off a fire and the catastrophic detonation of the non-nuclear warheads
on board. When the remains of the
submarine were brought to the surface a year later, the damage was consistent
with the theory of an internal explosion.
Condemnation of the governments handling of the
affair from within Did Cost-Cutting).
In addition to the submarine disaster, Putins
first year in office was characterized by an effort to combat several major
problems that had weakened the central control of the government during the
Yeltsin era. These actions led to
allegations that the president was attempting to become a New Tsar. Specifically, Putin sought to regain control
of s
various regions, which under the leadership of regional governors had greatly
increased their autonomy from s rule, as well as
curb the powers of the oligarchs. Putin
stripped the governors of their automatic positions in the Federation Council,
the upper house of the Russian legislature, and created 7 super-governors
to exercise oversight over the 89 elected regional governors. These super-governors,
sometimes referred to as the eyes of the Tsar,
report directly to Putin and four of the seven had previously served with him
in the Federal Security Service.
Putin also
instigated a series of investigations to examine tax avoidance by s
leading businessmen. His purpose clearly
seemed to have been to frighten these oligarchs rather than collect taxes. With s
high rate of taxation, few if any businesses could demonstrate that they had totally
complied with the law. In July 2000, 21
business leaders met with Putin and heard him strongly warn them to pay their
taxes and not interfere in politics. At
least publicly, most of the oligarchs appeared willing to accept this new
role. Vladimir Potanin, the head of the countrys
largest nickel producer, commented: We
should say to people: You think we were
bad. But we want to be normal and
socially acceptable. Many oligarchs are tired of the lack of
well-defined rules and are waiting for the Kremlin to define the guidelines
(Ignatius Putin). Business leaders
would also like to see
Given the manner in which
privatization was conducted in the 1990s, everyone who benefited has something
to hide. Prosecution by the government,
however, has been highly selective.
Businessmen who are supportive of the government (such as Potanin) are
apparently safe; those who criticize it are not. An excellent example of this can be found in
the story of two of s
leading Yeltsin era oligarchsBoris Berezovsky and Vladimir Gusinsky. Both were subjects of intensive government
investigations, which have forced them into exile. Because these two men also owned two of the
countrys
three leading television stations (the other was wholly government-controlled),
it was difficult to discern whether their conflict with the government was an
effort by the government to eliminate corrupt business practices or to crush
press freedom.
Berezovsky, a strong Yeltsin
and Putin supporter who controlled ORT, one of s three major
television networks, broke with Putin in August of 2000, resigned his
seat in the Duma, and accused the president of favoring authoritarian methods
of rule.
Berezovsky then became a target for government investigation when,
a month later, he was accused of embezzling
millions of dollars of funds from Aeroflot, the national airline, which he
controlled.
Late in 2000, he fled the country and surrendered his control of ORT to
avoid prosecution.
Gusinsky, the owner of NTV, the only Russian television station frequently critical of the government, was under constant pressure throughout 2000 to also surrender his holdings to the government. Short on cash, Gusinsky had turned to the government-controlled natural gas monopoly Gazprom for a series of loans beginning in 1996. Unable to pay off his loans, Gusinsky claimed that the Putin government frustrated his attempts to finance a payoff. In June, he was jailed for three nights on fraud charges, which were later dropped. A month later, he was told he would be arrested again if he did not agree to sell his media empire. Under pressure, Gusinsky agreed:
I knew two days in advance that I would have to sign
it. I had two options. They said it more than once; there were
constant threats, threatening to put me in cells with TB patients, with AIDS
peopleeverything that can be promised was promised to me. I was indeed a hostage, and everybody
understood it this way. Let us put it this way: I consciously signed this
deal
. I thought it was dishonest; I had
no choice. When you have a gun to your
head, you have two options: to receive the conditions of the bandits or get a
bullet in your head. I did not want to have a bullet in my head. (Hoffman Media
Baron)[4]
Fearing for his life,
Gusinsky fled the country and recanted his July agreement, claiming that his signature
was invalid because it had been obtained under duress. A legal battle ensued over the control of
NTV, which finally ended in the summer of 2001 when Gazprom seized control of
the station and installed a new management team. Gusinskys
newspaper Segodnya and the magazine Itogi also suffered hostile
takeovers. Donald Jensen,
associate director of broadcasting at Radio Free Europe/Radio Liberty, believes
that the campaign against Berezovsky and Gusinsky had little to do with
fighting corruption but was simply a matter of enforcing political loyalty:
Putin has targeted Vladimir Gusinsky and
Boris Berezovsky, the most independent, but economically vulnerable barons,
whose media holdings are especially useful to him as he tries to consolidate
his rule. Virtually untouched have been
oligarchs Mikhail Khodorkovsky, Vladimir Potanin, Pyotr Aven and Mikhail Friedman. In fact, one reason for the relentlessness of
Putins
attacks on Gusinsky and Berezovsky is that they are business competitors of
oligarchs who back the Kremlin
. Thus,
Putin has settled for a social contract with the moguls under which he allows
them to do business so long as they back him politically and sometimes serve
the state.[5]
However, Paul Klebnikov, a senior
editor at Forbes and author of Godfather of the Kremlin: Boris Berezovsky
and the Looting of Russia, applauded Putins actions in going
after crony capitalists like Berezovsky and Gusinsky:
By indicating that he wants to apply the law to some
of s
most powerful tycoons, Putin has made a step in the right direction. If anything, Putin has been too hesitant and
haphazard in going after his countrys biggest
malefactors
. For most of the Yeltsin
years, they were allowed to dictate government policy, loot state property at
will and siphon off their earnings abroad.
The result was a ruined economy, a bankrupt government and an
impoverished population. In any just
society, these kinds of operators would end up behind bars.
Following the
takeover of NTV, opposition figures are still regularly shown taking issue with government
policies, although seldom appear on television directly
criticizing the president.
(Baker On NTV). As a result, the campaign against
Gusinsky eliminated a great deal of negative media coverage of the government. The controversy over NTV seems to
further reinforce the widely held view that attacks on businesses are highly
selective and designed far more to instill political loyalty than end corrupt
practices. The stifling of
an independent press is perhaps the most significant anti-democratic
development in Withoutwithout
Borders, an independent news monitoring service, ranked
On October 25,
2003, masked Russian security police stormed aboard the private jet of Mikhail
Khodorkovsky and arrested
Why was
Khodorkovsky arrested? The former
communist youth organization executive who used his connections within the
party to propel himself to wealth after the fall of communism has acknowledged
that this process was not totally above board.
Speaking to an American reporter before his arrest, he admitted: You could get away with not breaking any laws
because there werent really any laws. People, even in the West, tried to say I
broke the law, but they were never able to prove it. Not everything was ethical. This is not something for me to be proud of (Remnick
85). Russian scholar and Boris Yeltsin
biographer Leon Aron comments:
[I]t is likely
that in the 1990s he broke some laws. But in the
chaotic Russian economy of the time, when the state was privatizing its assets
on a grand scale, no large business in
The real reason
for the arrest may be that Khodorkovsky angered President Putin by becoming a
media darling and openly contributing to opposition political parties that
criticized the president as dictatorial and anti-democratic. A source who refused to be identified has
told the Washington Post, Putin hates Khodorkovsky (Baker and Glasser Oil Tycoon). His arrest may also be a sign of a power
struggle within Putins inner circle which has divided
between pro-business advisors, such as former Yeltsin chief of
staff Alexander Voloshin (who resigned in protest after the arrest), and the circle
of former KGB officials close to the president, who are known as the siloviki
(men of power) and deeply resent the wealth and power of the
oligarchs. Aron explains:
After
three-quarters of a century of limitless power, many in the largely Soviet-era
Russian senior bureaucracy are incapable of accepting an economic system in
which property and wealth are not directly conferred, withdrawn or at least
controlled by the state. If we dont like you, how
can you be rich?
That is the message that the state bureaucracy intends to send with Mr.
Khodorkovskys arrest. Other oligarchs, as well as hundreds of
thousands of owners of smaller businesses, must take heed
. Thus the Yukos affair is not simply a law
enforcement matter, as President Vladimir Putin has insisted. It is a major battle between two economic
cultures
The reaction to
Khodorkovskys arrest was predictable. Human rights activists such as Yelena Bonner,
the widow of famous dissident Andrei Sakharov, called it a glaringly
lawless action (Baker and Glasser Billionaires Arrest). The day after the arrest, the Russian stock
market suffered its largest loss since the economic meltdown of 1998 as
businessmen predicted that the fear generated by Khodorkovskys arrest could
jeopardize the economic success that has occurred during Putins
presidency. Charles Ryan, chairman of a
Putins actions crushing of the
independentagainst the media, the Khodorkovsky arrest,
and other
actions have raised serious questions as to his determination desire to
abandon past Soviet-era practices,.
He invited former KGB head Vladimir Kryuchkov, one of the key plotters
in the 1991 coup attempt, to his 2000 inauguration and supported as did his
support for restoring the old Stalin- era Soviet national
anthem. In announcing his support for
the restoration, Putin said:
If we agree that the symbols of the
preceding epochs, including the Soviet epoch, must not be used at all, we will
have to admit that our mothers and fathers
lives were useless and meaningless, that their lives were in vain. Neither my head nor my heart can agree with
this. Is there nothing good to remember
about the Soviet period of our country?
Was there nothing but Stalins prison camps and
repression? What about the achievements
of Soviet science, of the spectacular space flight of Cosmonaut Yuri Gagarin,
of the art and music of cultural heroes like composer Dimitri Shostakovich? (Putin
Pushes)
Putin is also
fond of saying: Anyone who does not regret the
collapse of the s desire to wipe
out all effective opposition and rule as an autocrat. Except for the Communists, the other major Duma
political parties have increasingly supported Putins agenda. By appealing to communist-era
nostalgia, Putin has picked up support from those who have
voted for the communists in previous elections.
Increasingly, all of The system of
checks and balances which existed in the Yeltsin years has completely
disappeared. All the formal structures
of power remainthe Duma, the Federation Council, the media, the
businessmenbut their substance, their content have been eliminated
(Wines Putin
Grows).
The
fourth
Duma elections, held in December 2003, indicate the lack of
any effective political opposition to Putin. The United Russia Party, which offered little
in the way of a political program beyond absolute support for the president,
won a smashing victory, capturing over 35% of the vote for party list seats and
over half of the single-district seats. Support for the Communist Party continued to
drop, down to 13% from their 24% total in 1999. The two main liberal, pro-market parties
failed to reach the five percent threshold to capture any party list seats (Baker and
Glasser Putin Allies). Throughout the election campaign, United
Russia availed itself of unprecedented assistance from the government as
all three of the government owned television statements spoke glowingly of
United Russia, savagely attacked the Communists, and
ignored the other parties. The Organization for Security and
Cooperation in Europe (OSCE) sharply criticized the unequal campaign opportunities and clear bias in the media on behalf of United
Russia. News was so tilted that 56
percent of all news coverage on one state network in November was about Putin
or United Russia, the OSCE found. In some schools, children were made to write essays extolling
United Russiaor, if they
preferred, the virtues of the local United Russia candidate. A popular
supermarket chain, signed an agreement with United Russia requiring all
clerks to wear party baseball caps and buttons, regardless of their political
views. On
Putins personal popularity, however, makes it
unlikely that any strong opposition will emerge. Further from Moscow, however, Putin has not
always been able to translate his own power into victories for his supporters
in local elections. Communists still
control 35 of Russias 89 governorships, and in July 2001, former Communist
Party boss Gennady Khodyrev defeated a Putin-endorsed gubernatorial candidate
in the important region of Nizhny Novgorod (Glasser A Communist).
The lack of any strong
political opposition has allowed the government to attack many of the problems
that have plagued worried about Putins authoritarian
tendencies have
been relieved to find him usingadmit that, at times, he has
utilized his enormous popularity to force through changes that
have only been talked about before. I
would even say it is the biggest step [toward reform] since 92 or 93,
said Yevgeny Yasin, economics minister during the presidency of Boris
Yeltsin. I believe theyre
working better than we did
. Theyre
doing what we thought up at that time.
Theyre
continuing the chosen course and theyve learned to avoid
our mistakes (Baker and Glasser Putin). Putin is currently so popular (a recent poll
indicates that 7782% of Russians approve
of his presidency) that one of the most popular songs in I Want a Guy like
Putin. Lyrics include lines I want someone like
Putin, full of strength, Someone like Putin who doesnt drink.
and I
want someone like Putin who wont hurt me, someone
like Putin who wont abandon me
(Putins
Popularity).
Although the song may be more a
commentary on the deficiencies of Russian men in general, Putin is generally
admired and presents a stark contrast from the way Russians viewed his
predecessor, Boris Yeltsin.
Questions regarding political
pluralism and a free, independent press have often taken a
backseat to economic and foreign policy issues since 2000. s
economy is still well behind that of the more developed countries of
s
exports (Lannin). As the worlds
second leading oil exporter (
In most former European
communist countries, the development of small businesses has led the way to a
healthier economy. In At
Last). Economic power is extremely
concentrated. Eight major business
groups, led by powerful oligarchs, control 85% of the income from s
64 biggest private companies (Tavernise Handful). Our hope that small
business would become the engine of reform and would take its proper place in
the economy has not yet come to pass, Putin commented in
December 2001. He laid the blame squarely
on government corruption, especially on permit-givers, inspectors and
regulators who
feed off small business at every stage of its development and who limit the
growth of businesses by constant
extortions. Bureaucracy is also to blame. More than 500 steps are legally required to
obtain a business license in s
There is
essentially a state racket at work, said Ioffe. In 2002, the Duma passed legislation that
eliminates bureaucratic licenses for half of s
small businesses. The president has
sent a signal that the attitude of the government is changing, but what lies
ahead will be very difficult, very painstaking work because it will mean
depriving officials who are financially doing pretty well (LaFraniere Cleaning
Up).
Despite the dangers of a lack
of diversification, s term in
office. As a result of the increased
revenue, many of the most serious economic problems that plagued four five consecutive
years (an
estimated 6.2 % in 2003, 4.13% in 2002, 5.5% in
2001, 8.3% in 2000 and 1.8% in 1999 when oil prices were below $20 per barrel). The currency also has remained relatively
stable, hovering between 27-32 rubles per dollar over the past three four years. Inflation, which often exceeded 50% during
the Yeltsin years, is estimated to be atwas only
16% in 2002 and is expected to has declined
further to
13% in 2003. State salaries
and pensions are being paid on time. The
2003 budget includes included a 33%
increase in social spending;, with much of the
money will
gogoing toward raising the pay of
doctors, teachers, and soldiers as well as other improvements in education,
healthcare, and welfare payments (Aris).
In the past two years, the country has maintained a budget surplus, alleviating
the need to seek additional foreign loans.
In November 2001, s credit rating,
which had been an immense casualty of the 1998 economic crash, recovered to a
point that JP Morgan declared Russian debt as less risky than emerging market
debt in general (Three Years). Although foreign investment has not recovered
from 1998, there are signs that domestic investment is increasing, reversing a
ten-year trend of capital flight as profits made in Russian money is
going into Russian assetsthats new. Its different from
the stealing and rape we saw during the 1990s
(Tavernise Not).
Although much of the economic improvement is undoubtedly the result of
higher oil prices, several other encouraging signs are present. Due to increased investment in new
technologies, oil exports have risen significantly in the past two years after
a decade of decline. Grain production, a
chronic problem during the late Soviet years, has also risen to the point where
n is
becoming a factor in world grain exporting markets. s leading grain
exporters at the beginning of the twentieth century, but increasingly imported
grain over the last three decades of communism.
The
2002 harvest is likely to match or beat last years record
of 85 million tons. Exports
in the 2002-03 agricultural year starting July 1 will rise nearly 50%, toreached
10 million tons, eclipsing the 8 million-ton record set in pre-revolutionary , and bring in revenues of $850 million. Most of Russias
grain exports go to Italy, Greece, Spain, and Northern Africa, but with labor
and farming costs less than half of Canadas, Russia is
well-placed to win new markets in Australia, Canada, and the Europe that have
been hit by drought and flooding. Priced at $85 to $95 per ton, Russian wheat is
$50 below is are
far from having the weight it they had in czarist
days, when it supplied one-third of global markets. Russias exports of 4.2 million tons of
wheat last year are still far behind the 26 million tons exported by the U.S.. Outmoded farm equipment, a
lack of fertilizer, and high transportation costs, which often account for over
50% of the total cost of production, still plague farm productivity.
Farm production could further greatly
benefit from the legalization of the private ownership of farmland. After 1991, the government removed most
subsidies to collective farms. As a
result, by 1998, over 80% of Russias farms were bankrupt and a third of the
available farmland was abandoned (Tavernise Farms). In 2002, the Duma approved a bill making it
legal to sell and buy agricultural land for the first time since 1917. It is hoped that the ability to buy land will
lead to more investment in modernizing Russias antiquated agricultural
system. Although prior to the new law
private farmers leased land from the collectives, they were reluctant to invest
in improving their land. If I invest
today and its taken away tomorrow, it would be a total loss, commented one
farmer. Its like if you rent an
apartment and you renovate it at your own expense; you can still be thrown out
in a month (Baker Experiment). The new
law prohibits foreign investors from owning farmland, but allows them to lease
it for up to 49 years, which some analysts believe will encourage the
development of large, efficient corporate farming. Once the new law becomes effective in 2003,
change will probably be slow. Private
farmers face an enormous task consolidating plots from the former collectives
into viable farms. In addition, owners
still wont be able to use their land as collateral to obtain loans to improve
their farms, because the law on mortgages does not cover farmland (LaFraniere Russian Lawmakers).
In most former European communist
countries, the development of small businesses has led the way to a healthier
economy. In Russia, there are fewer
small businesses today than existed in 1994.
Less than 30% of Russians are employed by small and medium-sized
businesses, in comparison with over 60% in Poland, Hungary, and the Czech
Republic, a condition that President Putin has referred to as a major concern
(Wines At Last). Economic power is
extremely concentrated. Eight major
business groups, led by powerful oligarchs, control 85% of the income from
Russias 64 biggest private companies (Tavernise Handful). Our hope that small business would become
the engine of reform and would take its proper place in the economy has not yet
come to pass, Putin commented in December 2001. He laid the blame squarely on government
corruption, especially on permit-givers, inspectors and regulators who feed
off small business at every stage of its development and who limit the growth
of businesses by constant extortions.
Bureaucracy is also to blame.
More than 500 steps are legally required to obtain a business license in
Russia, and hundreds more agencies then regulate almost every aspect of
business life. Each step in the
bureaucratic chain presents an opportunity to extract a fee, a consideration or
an outright bribe from a businessman or woman whose existence depends on
government approval. While large
businesses often have the political connections to cut through such obstacles,
small businesses are usually at the mercy of government bureaucrats who seek
bribes to supplement their meager official salaries. Alexander Ioffe of the Russian Entrepreneurial
Organizations Union, a small-business lobby group, maintains that most small
and medium-size businesses pay bribes in one form or another. There is essentially a state racket at work,
said Ioffe. In 2002, the Duma passed
legislation that eliminates bureaucratic licenses for half of Russias small
businesses. The president has sent a
signal that the attitude of the government is changing, but what lies ahead
will be very difficult, very painstaking work because it will mean depriving
officials who are financially doing pretty well (LaFraniere Cleaning Up).
Despite the general economic
improvement, many Russians, especially those living outside of At
Last). The average monthly wage is $115
and about a third of Russians have incomes below the poverty line of $40 per
month (Starobin, Belton, and Crock 70).
The middle class, defined as those families earning $1,000 per month in that
a majority of respondents spent 1 ½ to 2 times more than what they said they
earned
(Raff). In addition, extremely low
housing and food costs mean that Russians have a large amount of spendable
income. Private automobiles, for
example, have increased from 79 per 1,000 people in 1991 to 224 per 1,000 ten
years later (Starobin, Belton, and Crock 72).
When Ikea, a major European home supply store, opened in
Regardless of encouraging economic
statistics, few can argue that many Russians still remain
profoundly disappointed in their countrys post-communist
performance. As one Russian commented to
a reporter: Everything Marx
told us about communism was false. But
it turns out that everything he told us about capitalism was true
(Freeland 17). One-fifth of those Russians
identified as middle class indicate that they eventually hope to emigrate from
s
population in 50 years that indicated a dramatic decline to 94 million people,
52 million fewer than today (Demographic). Life expectancy in Intelligence
Study). Most of this is due to intravenous drug use,
but increasing levels of prostitution have contributed to rapidly rising HIV
and venereal disease rates as well (Karash).
Alcoholism also remains an immense social problem. Thirty thousand Russians die each year of
alcohol poisoning. A recent study
indicates that half of all Russian men who die, regardless of cause, are
drunk. Alcohol plays a major role in
road accidents, homicides, suicides, domestic violence, industrial accidents,
birth defects, and violent crime.
Orphanages are full of children abandoned by their alcoholic parents (Vodka).
Similarly frustrating is the
ongoing struggle in s
army has suffered over 4,000 deaths since the fighting resumed in August
1999. Chechen rebels claim that 80,000
civilians and 1,500 rebels have also died (Baker For Putin). People are being
killed through summary executions.
Detainees are being taken to temporary camps, where they are badly
beaten and tortured. Some of the detainees
simply disappear, says Russian Human
Rights activist Oleg Orlov who visited After
Two Years). Although the main forces of Chechen
resistance have been blasted away and some economic restoration has begun, the
area is far from pacified. They
are everywhere, commented one
Russian soldier, referring to the rebels.
This
is their home. We are just like
cosmonauts. If we step too far from our
ship, we are lost
. You know, here children
start firing guns when they are 12 years old, so every Chechen is a danger. The
only way to end this is to kill them all (Williams For
Russians). The October 2002 incident in which over 100
people died in a They
dont
know what to do in t have a plan. It is an endless conflict, says Alexei
Malashenko, a ). Putin, nonetheless, has vowed to stay the
course despite a November 2002 poll which indicates that 73% of the public
believes that the governments policy has been a
failure. Although critical of government
policy, the Russian people are undecided as to the appropriate course of
action, with 48% favoring negotiations with the rebels and 43% arguing for a
more vigorous prosecution of the war (Zolotov Polls). Putin meanwhile, has attempted to deflect
international criticism of human rights violations by linking we
wont
allow it
(Glasser Putins
War).
In his first year and a half as
president, Putin appeared to be attempting to reassert Russias former position
as a world power by resurrecting ties to old communist era allies. Well-publicized visits to former allies
China, Cuba, North Korea, and Vietnam, as well as diplomatic overtures to Iran,
Iraq, and Libya, led former Foreign Minister Andrei Kozyrev to label Putins
foreign policy as the old stuff of anti-Americanism spiced by the support of
rogue regimes from Slobodan Milosovic to Saddam Hussein (Tyler Putin
Nurturing). Putin seemed determined to
forge an alliance of Russia, China, and several Arab states as a strategic
counterweight to U.S. domination of international diplomacy. Combined with a new American president who
seemed eager to end the Clinton administrations practice of working with
Russia as an important strategic partner, it appeared that U.S.-Russian
relations were headed for difficult times.
Before taking office, President George W. Bushs new national security
advisor, Condoleezza Rice, described Russia as a declining power
(Perlez).
The terrorist attacks of
September 11, 2001, however, dramatically
altered the path of U.S.-Russian relations.
Immediately following President Bushs orders to place It
was a moment where it clearly said to me that he understands the Cold War is
over
(Sipress). Less than two weeks later,
Putin announced that Russia would give almost unlimited support to U.S. actions
against Osama bin Ladens al Qaeda network in Afghanistan,
promising to share intelligence, provide airspace for relief efforts,
participate in search and rescue missions, and increase its supply of arms to
anti-Taliban forces. More importantly,
just days after Defense Minister Sergei Ivanov had expressed opposition to the Hes
with us,
a senior And he is all by
himself
(Starobin, Belton, and Crock 67).
While Putins strong support
for the , with its
miniscule $8 billion annual defense budget, is ill equipped to
fight, Putin now has a strong ally in the he
is a real sponsor, that is a fact. Although evidence of direct ties to al Qaeda are difficult to substantiate,
Russian intelligence officials claim that bin Ladens organization has
provided money, training, and anti-aircraft missiles to the rebels (LaFraniere ). A bin Laden associative, Abu Daud, stated in
a 2000 interview that 400 Arab volunteers, trained by al Qaeda, had been sent to fight in Putin wants us (the
s doing in comments Russian
expert Michael McFaul. He
wants Bush to come to Were
in this war together (Carney).
With this new relationship, a
number of long-standing contentious issues between the s
ability to test missile defense systems.
In May 2002, Bush and Putin signed an agreement that will drastically
cut the number of both counties nuclear
missiles. The Bushs
Surrender,
implying that Putin had no alternative but to reduce Russian warheads
regardless of any
A more significant sign of
cooperation was the admission into NATO of the former No
one is planning to be our enemy in the modern worldnobody wants it and nobody
needs it
(Zolotov Putin). Others in Gorbachevized,
implying that he has sacrificed his own countrys interests in
order to please the United States, receiving nothing in return (Carney). They point out that the U.S. Congress has
refused to repeal a Cold War era law designed to punish communist governments
for their violations of human rights, which requires Russia to get annual
approval in order to receive normal trading rights with the U.S.. Even Many
would still say hes selling s giving and giving
and not receiving anything in return (Wines Tying
Russia). Clearly, Putin has been willing to sacrifice
long-held positions that are still popular with his own people in favor of a
close relationship with the U.S., which he believes is crucial for
Russias
economic development. Economic
policy is dictating all the other aspects of international relations, says
retired Russian General Vasily Lata. Putin
sees the future of (Baker Putins
Concessions).
Although s
strategic realignment has yet to produce many tangible benefits, clearly, in
Putins
eyes, it is better to be viewed as a significant partner of the In
just a few years, s key ally
(Ignatius Russia
Wins the War).
In addition to providing President Bush has labeled Iraq, Iran, and North
Korea as the axis of evil, and all threetwo of the countries that President
Bush labeled the axis of evil.. initially
opposed President Bushs efforts to deal
with Saddam Husseinpolicies in Since After the 1991 Gulf
War, has emerged
as s
leading trade partner. Since 1996, U.N.
figures show that had sold
s
current debt to Russian-Iraqi).
Prior to the U.S. invasion, tThousands
of Russians currently worked in Iraq, mainly
as technical advisors in the oil industry, and several Russian oil companies have had also
signed long-term deals with the Iraqi government to further develop vast
oilfields. The total value of these
deals is estimated to have exceeded $40 billion over
the next ten years (Baker Russia Defends). Clearly, led effort to
topple Saddam Hussein would present the possibility that thesupported
new Iraqi government
would repudiate past debts and that could will replace the
Russians
as developers of s
vast oil-producing capabilities. Any effort to
enlist Russian support for military action against Iraq would require financial
guarantees both to the Russian government and major Russian oil companies. Following President Bushs
visit to s
economic interests regardless of any action against
In addition to the strategic realignment
following September 11, continued conflict in the s second leading
oil producer, a study by the Petroleum Finance Co. (a Washington consulting
firm) notes that when Russias proven oil and
gas reserves are combined, it is by far the worlds leading energy
nation, with about 15% more proven reserves than Saudi Arabia. s
oil producing and exporting capabilities.
Since 1993, the West has invested only $5 billion in the Russian oil
industry in comparison to $13 billion in neighboring The
Russians have realized you can make more money by real capitalism than by
stealing,
comments the head of Petroleum Finance. (Ignatius ). The importance of Russian oil will only
increase. 2002 production is expected to
averagereached almost 7.7 8
million barrels per day (of which over 5.1 million are were exported),
up from 6 million in 1996, and estimates are that
Putins
response to the events of September 11, 2001, and the resulting strategic
alliance with the New Russia. This, however, is only the most visible sign
of a country undergoing vast changes after a decade of turmoil. The Russian economy, bolstered by significant
legal changes long-needed to permit a market economy to develop, is finally showing
progress. It is an economy still vastly
overly dependent on oil, but s
continued emergence as a significant energy provider can only further enhance
her international stature. There are
still significant questions in regard to Putins method of rule; however, in the
past two yearshas he has used his power more to push
through much needed reforms than or to resurrect an authoritarian police
state.? The continued high level of approval he
elicits from the Russian people may be a result of his success in quashing
negative media coverage, but it is just asalso likely to
reflect a genuine feeling that
On October 25,
2003, masked Russian security police stormed aboard the private jet of Mikhail
Khodorkovsky and arrested Russias richest oligarch, charging him with tax
evasion, fraud, forgery, and embezzlement.
The most serious of the charges is that Khodorkovskys oil company,
Yukos, failed to pay $5 billion in taxes dating back to 1998. The 40-year-old Khodorkovsky is estimated to
have amassed an $8 billion fortune since he obtained control of the company for
$309 million in the infamous Loans for Shares transactions of 1995. Today, the company is the worlds seventh
largest oil producer with a market value of $45 billion (Meier). Khodorkovsky had been a symbol of the
reformed oligarchs of the post-Yeltsin era.
Unlike most major Russian companies, Yukos openly declared its income,
allowed its books to be examined by outside auditors, issued quarterly reports,
paid its taxes, and became the first Russian oil company to pay dividends to
its stockholders.. In addition, the
company gave $45 million to charity in 2002 (Aron). Khodorkovsky himself became a media star, often
traveling to the United States where he courted a merger with U.S. oil companies
Exxon Mobile and Chevron Texaco, contributed $100,000 to first lady Laura
Bushs favorite charity, The National Book Festival, and had his
photograph taken with the president and first lady at the White House (Meier).
Why was
Khodorkovsky arrested? The former
communist youth organization executive who used his connections within the
party to propel himself to wealth after the fall of communism has acknowledged
that this process was not totally above board.
Speaking to an American reporter before his arrest, he admitted: You could get away with not breaking any laws
because there werent really any laws.
People, even in the West, tried to say I broke the law, but they were
never able to prove it. Not everything
was ethical. This is not something for
me to be proud of (Remnick 85). Russian
scholar and Boris Yeltsin biographer Leon Aron comments:[I]t is likely
that in the 1990's he broke some laws. But in the chaotic Russian economy of
the time, when the state was privatizing its assets on a grand scale, no large
business in Russia was cleanand the larger the company, the greater the
chance it committed violations. For
example, full payment of corporate taxes amounted to well more than 100 percent
of most businesses' profits. Tax evasion
was the only strategy that allowed an entrepreneur to pay salaries and invest
in his business. The real reason seems to be that Khodorkovsky
angered President Putin by becoming a media darling and openly contributing to
opposition political parties that criticized the president as dictatorial and
anti-democratic. A source who refused to
be identified has told the Washington Post, Putin hates Khodorkovsky
(Glasser and Baker Oil Tycoon). His
arrest may simply be a sign of a power struggle
within Putins inner circle which has divided between pro-business advisors
such as former Yeltsin chief of staff Alexander Voloshin (who resigned in
protest after the arrest) and the circle of former KGB officials close to the
president, who are known as the siloviki (men of power) and deeply
resent the wealth and influence power of the oligarchs. Aron explains:
After
three-quarters of a century of limitless power, many in the largely Soviet-era
Russian senior bureaucracy are incapable of accepting an economic system in
which property and wealth are not directly conferred, withdrawn or at least
controlled by the state. "If we
don't like you, how can you be rich?" That is the message that the state bureaucracy
intends to send with Mr. Khodorkovsky's arrest. Other oligarchs, as well as hundreds of
thousands of owners of smaller businesses, must take heed
. Thus the Yukos affair is not simply a law
enforcement matter, as President Vladimir Putin has insisted. It is a major
battle between two economic cultures
The reaction to Khodorkovskys arrest was
predictable. Human rights activists such
as Yelena Bonner, the widow of famous dissident Andrei Sakharov, called it a
glaringly lawless action (Glasser and Baker Billionaires Arrest) The day after the arrest, the Russian stock
market suffered its largest loss since the economic meltdown of 1998 as
businessmen predicted that the fear generated by Khodorkovskys arrest could
jeopardize the economic success that has occurred during Putins presidency. Charles Ryan, chairman of a Moscow brokerage
commented: the largest contributor to
growth in recent years has been
stability and the confidence that has led to investment. So by bringing these guys to book, he could
undermine the very stability that has been the underpinning of his
success. Putin maintains that the case
is isolated purely to Khodorkovsky and is not a first step in re-examining the
privatizations of the 1990s (Baker and Glasser Russian Stocks). Not a single oligarch issued a statement
condemning the arrest either. Olga V.
Kryshtanovskaya, a sociologist, argues that "The business elite is
panicked." They are not coming
together. They are not confronting
power. They think it's dangerous to ruin
relations with power, and think they will be able to make their own
agreements Most Russians simply
shrugged their shoulders in indifference or approved of the arrest. A poll taken a month after the arrest
indicated that 42% approved and only 18% opposed it (Baker and Glasser Russia
Alleges). "It is not an
exaggeration to say that a bit more than half of society hates the rich,"
said Leonid A. Sedov, an analyst for the Russian Center for Public Opinion
Research, an independent polling company.
"They feel the rich did not get their money in an honest way. And
in part, that is actually true."
"I'm on my feet working 12 hours a day," said Galina
Novosytsova, 45, a cashier at a sausage shop in a local food market. "I
have no savings, no car, no mobile phone. They got factories just like
that." (Tavernise Russia is Mostly
Unmoved).
Works Cited
After Two Years at
the Top, s
Putin Still an Enigma.
Aris, Ben.
Looking
East. Campaign
Aslund, Anders. Think Again: Foreign
Policy July/August 2001: 20-25.
Baker, Peter. Experiment in Land Ownership Has Few Takers in
Rural Russia. Washington Post 25 March
2001: A23.
---. On NTV, Kremlin
Is In Softer FocusFor Putin, a Little War That Wont End. 27 June 200126 October 2002: A18A23.
---.
Putins
Concessions to Limitedlimited
by the Bottom Line.
---.
---.
Russian-Iraqi
Oil Ties Worry
Baker, Peter and Susan B. Glasser. Billionaires Arrest
Deliniates The Battle for
---. Oil Tycoon Met Putin Before
Scuttling Merger.
---. Putin Allies Gain Control in
Election.
---. Putin Pushes
Reforms, With Power.
---.
---. Russian Stocks Plummet After
Oilmans Arrest Washington Post 28 October 2003: A1.
Banerjee, Neela and Sabrina Tavernise. Why U.S. Oil
Companies and Russian Resources Dont Mix. New
York Times 24 November 2002: C1.
Belton, Catherine. Meet the New Global
Grain Giant. Business
Week 4 November 2002: 66.
Brooke, James.
Carney, James. Our New Best
Friend. Time 27 May 2002: 42-46.
Demographic
Catastrophe Expected in Vremya 30 September 2000: A1.
DeYoung, Karen. Bush, Putin United
on
Freeland, Chrystia. s
Wild Ride from Communism to Capitalism.
Gessen, Masha. Putins
U.S.
News & World Report 27 May 2002:
22-24.
Glasser, Susan B. A Communist
Comeback in Russia. Washington Post 18 September 2001: A27.
---. Putins
War Persists as Sentiment Shifts.
---.
Hoffman, David. Did Cost-Cutting
Sink the
---.
Media
Baron Holds His Ground.
---.
Russians
Rallying Behind Tough Guy
Putin, Chechen War, Economic Upturn Boost Mood and Premiers Political Fortunes.
Ignatius, David. Putin and the
Oligarchs. Editorial.
---.
Editorial.
Intelligence Study
Raises Estimate of AIDS Spread.
Jensen, Donald. Putin
Rebuilds Oligarchy.
Karash, Sarah. Associated
Press 28 April 2001.
Klebnikov,
Paul. First Law and
Order, Then Democracy.
html>.
Koriukin,
Kirill. Bumper Harvest
Sprouts Export Plans.
041.html>.
LaFraniere, Sharon. Cleaning Up Russias
Culture of Corruption.
---.
---.
---. Russian
Lawmakers Grant Right to Sell Farmland.
Washington Post 27 June 2002: A22.
---. TV
Station Spared Closure in Russia. Washington Post 30 December 2001: A2.
Lannin, Partick. Kudrin: No Repeat
of 1998 Crisis. Reuters
20 August 2001.
McFaul, Michael. Testimony
&db=f5h>.
Meier, Andrew. Autumn of the Oligarchs. New York Times 5 November 2003: A:25.
Montaige, Fen. National
Geographic November 2001: 2-31.
Myers, Steven Lee and Sabrina
Tavernise. New
York Times 2 August 2002: A1.
Perlez, Jane. A New Look at New
York Times 24 December 2000: D4.
Putins
Popularity in Russia Solid after Rescue.
Raff, Anna. Middle Class is
Back and Growing, Moscow
Times 25 September 2000. 28 September 2000. <http://www.moscowtimes.ru/stories/2000/09/26/002.html>.
Remnick, David.
Post Imperial Blues. The New Yorker 13 October 2003: 78-89.
Safire, William. Reading Putins
Mind. Editorial.
New York Times 10 December 2001: A21.
Seward, Deborah. On 10th
Anniversary of Coup Attempt, Gorbachev Blames Reactionary Communists. Associated
Press 14 August 2001.
Sipress, Alan.
Starobin, Paul. Lets
Face It: Putin Is a Threat to Democracy. Business Week 3
July 2000. 1 January 2001. <http://www.businessweek.com/2000/00_
27/b3688147.htm>.
Starobin, Paul, Catherine Belton, and Stan
Crock. Putins
Business Week 12 November 2001: 66-72.
Starobin, Paul,
David Fairlamb, and Stan Crock. Putins
Business Week International 17 January 2000. 12 December 2001. <http://www.
businessweek.com/2000/00_03/b3664019.htm>
Tavernise, Sabrina.
Farms Become Big Business in Russia.
New York Times 6 November 2001: W1.
---.
Handful
of Corporate Raiders Transform Russias Economy. New
York Times 13 August 2002: A1.
---.
Not
Your Fathers
Soviet-Era Factory. New
York Times 17 June 2001: C1.
---.
Three Years On, Reuters 20 August 2001.
Tyler, Patrick. Putin Nurturing Old Friendships of a Soviet Past. New
York Times 13 December 2000: A8.
---. Putin
Pushes Soviet Hymn, Creating Disharmony. New
York Times 6 December 2000: A1.
Vodka, not Beer, Is
the Real Issue.
Weir, Fred.
Christian
Science Monitor 24 October 2001: 6.
Williams, Daniel. For Russians,
---.
Soviet-Style
Secrecy Endures in Sub Crisis.
Wines, Michael. At Last, Signs of
Economic Revival in New
York Times 18 November 2001: A1.
---.
Putin
Grows in Job, Raising the Question: For Good or Ill? New
York Times 6 November 2001: A3.
---.
Putin
Narrowly Wins Russian Election in the First Round. New
York Times 27 March 2000: A1.
---.
Putin
Retains Soviet Discipline While Steering Toward Reform. New
York Times 20 February 2000: A1.
---.
---. Tying New
York Times 9 October 2001: B8.
Wines, Michael and Sabrina Tavernise. Russian Oil
Production Still Soars, for Better and Worse. New
York Times 21 November 2001: A3.
Yergin, Daniel and Thane Gustafson. Russia
2010.
Zolotov, Jr.,
Andrei. Polls Show People
Like Putin, Not His Policies.
/2002/11/29/012.html>.
---.
Putin
Seeks Place Under Economic Sun.
A New
2000-2003
History 8
Overview:
E.
In what ways has
F.
Why are there significant
concerns about democracy in
G.
What are the strengths and
weaknesses of the current Russian economy?
H.
Why is Putin so popular?
Specific Questions:
1.
Describe Vladimir Putins life and
career before he became president.
2.
Why did Yeltsin choose Putin as
prime minister?
3.
Why was Putins election as
president in 2000 criticized as anti-democratic?
4.
Why did the
5.
Describe Putins relationship
with the oligarchs.
6.
What actions were taken against
Berezovsky, Gusinsky, and Khodorkovsky?
7.
Describe the structural reforms
that have been passed by the Duma since 1999.
8.
What factors contribute to
9.
What is the current situation in
10. How
did Putin respond to the September 11 attacks?
In what ways has
11. What
issues still remain contentious between
A New
2002
The overall thesis of this article is that s
presidency, casting off many of the vestiges of its Soviet past and making both
economic and political progress. As you
read, note what evidence exists both to support and oppose this thesis. Pay special attention to each major example
and try assess its significance.
Also note the formatting of the article. It is in proper MLA style with the exception of spacing. Footnotes point out some of the subtleties that many students miss.
An outline of the article follows:
I. Introduction
II.Putins
Background
A. Pre-Presidency
B.
Relationship to The Family
C. Presidential Election and Popularity
III.II.
Kursk Tragedy
IV.III.
Efforts to Assert Greater
Control
A. Governors
B. Oligarchs
C. Television
D. Concerns about Autocracy
V.IV.
Key Reforms
A. Taxes
B. Labor Code
C. Legal Code
VI.V.
The Economy
A. Oil Revenue
B. GDP Growth
C. Inflation
D. Budget
E. Investment
F. Oil Production
G. Agriculture
H. Problems
1. Farm Investment
2. Small Businesses and Corruption
3. Personal Income
4. Demographics and Health
5.
VII.VI.
Foreign Policy
A.
Growing problems with the
B.
1.
Putins Support for
2. Ties to Chechnya
3. New Agreements and Areas of Cooperation
4. Domestic Political Concerns
C. Remaining Problems
1.
2.
D.
s
Energy Resources
VIII.VII.
Conclusion
[1] Note that you must always identify speakers.
[2] Sources of only one page do not require a page number. Citations should be punctuated identically to the Works Cited list.
[3] If all of the information in a paragraph comes from the same source, the citation should only be placed at the end of the paragraph.
[4] Quotations of over four lines should be blocked.
[5] Sources do not need to be cited if the source (Jensen) is identified in the narrative.
[6] This program, pioneered by Senators Richard Lugar (R-IN) and Sam Nunn (D-GA), has deactivated over 6,000 nuclear warheads and almost 500 ballistic missiles since 1991. The program has cost about $400 million a year.