DATE=8/11/2000
TYPE=ON THE LINE
TITLE=ON THE LINE: RUSSIA UNDER PUTIN
NUMBER=1-00873
EDITOR=OFFICE OF POLICY - 619-0037
CONTENT=
THEME: UP, HOLD UNDER AND FADE
Anncr: On the Line - a discussion of United
States policy and contemporary issues. This week,
"Russia Under Putin." Here is your host, Robert
Reilly.
Host: Hello and welcome to On the Line.
Since winning election in March, Russian President
Valdimir Putin has moved quickly to consolidate
power and reassert Russian influence abroad. At
home, he has reined in Russia's regional leaders
and vigorously prosecuted the war in Chechnya.
Earlier in the summer, the arrest of Vladimir
Gusinsky, the owner of Russia's only independent
television network, was taken as further evidence
of a crackdown on the press, even though Mr.
Gusinsky was subsequently released. Mr. Putin has
sought to reinvigorate Russian diplomacy with
trips to China and North Korea. Some observers
worry that Mr. Putin is showing authoritarian
tendencies. Others say that, without a basic
reorganization of the Russian government, further
reform would be impossible.
Joining me today to discuss Russia under President
Putin are three experts. Anders Aslund is a senior
associate at the Carnegie Endowment for
International Peace. Paul Goble is director of
Communications and Technology at Radio Free
Europe/Radio Liberty and a former State Department
specialist on the Soviet Union. And Ariel Cohen is
a senior policy analyst at the Heritage Foundation
and author of Russian Imperialism: Development and
Crisis. Welcome to the program.
Anders Aslund, this far into Mr. Putin's
presidency, how do you rate him in the area of
your specialty, which is Russian economic reform?
Aslund: I think it is quite incredible how much he
has done. He has shown an extraordinary political
ability to get everything through on the tax
reform.
Host: Everything being?
Aslund: In particular, the thirteen percent flat
tax, the income tax for next year, cutting the
payroll tax quite substantially, and getting the
second part of the tax code through the Duma and
the Federation Council, which means that the
Russian tax system will be cleaned up. This is the
big tax reform that we have been waiting for for
years that has now been done in no time.
Host: Paul Goble, from the political side, how do
you assess these changes in terms of the
Federation Council, the upper house of parliament,
the consolidation of power from the regional
governors, and other political changes?
Goble: In his first few months, President Putin
has certainly achieved a lot on paper. There have
been a lot of laws passed. There have been a lot
of decrees issued. Some of them point in a good
direction, some in a bad. But the problem is that
a lot of them have not been implemented yet, and
there is an awful lot of resistance.
Host: Isn't that the whole point of his reforms,
streamlining the government so these things can be
implemented?
Goble: If he wants to implement everything he
talks about, it could be very frightening. Just
greater efficiency, just greater order, by
themselves are not virtues. It is what purposes
you are going to put that greater efficiency and
greater order to. People make a very good case
that Russia has been in such disorder that some
reestablishment of order is a necessary
precondition. The question is: is this
reestablishment of order under Putin going to lead
to the foundation of a more open, civil society,
or is it going to be the basis for a return to a
more authoritarian political system as Russians
have known in the past.
Host: And what is the answer to that question?
Goble: My view right now is that there are too
many disturbing signs that he is prepared to go
back to much more authoritarian approaches than we
had had in the last few years.
Host: Let me take a quote, in which President
Putin said, "Russia was founded as a super-
centralized state from the very start. This is
inherent in its genetic code, traditions, and
mentality." Actually that was said before the
March elections. Does a statement like that worry
you, Ariel Cohen?
Cohen: Yes, of course. With what we have seen so
far, just building on what Paul Goble mentioned,
is a crackdown on the media, the forcing of the
sale of the only independent T-V channel [N-T-V]
and independently held media company to Gazprom,
on the board of which the representatives of the
Russian government are a majority. So it will be
indirectly state-owned.
Host: Do you mean Media Most?
Cohen: The Media Most sale.
Host: May I ask you, in addition to Mr. Vladimir
Gusinsky's arrest, who was then released,
President Putin is saying that a free press is
essential to the development of democracy.
Cohen: A free press is not achieved by apparently
forcing the owner to sell to the government.
Furthermore, we have news that an environmental
activist, Mr. [Alexander] Nikitin, may be retried
after the Supreme Court of Russia basically forced
his acquittal. We see statements by Putin's close
political allies and advisers that Russia is
moving to something they call a managed democracy.
It will be managed by the Kremlin. So both
internally and externally in the area of national
security, defense and foreign policy, we see
rapprochement with North Korea, a trip to Libya, a
visit from Iraqi officials, a visit from Serbian
officials who are under sanctions, and Putin's
incessant talking up of the navy as basically, of
the major military services, for power projection.
Host: Let me get Anders Aslund's response to that.
Are you disturbed by this recentralization of
power? Or do you see it as essential to implement
reform?
Aslund: Let me put it like this. I do not think
that Putin's instincts are very democratic. But I
think that Russian society is sufficiently
strongly pluralist to take this down. And I think
that the Gusinsky affair is a good case. It
generated an enormous outrage, and Gusinsky was
freed after three days. Gusinsky has financial
problems. In any case, this is a man who has
invested a lot and has got far too little revenue.
So I think that Gusinsky is a person who anyhow
would go bankrupt, after seeing his business
strategy.
Goble: Putting him in jail did not help.
Aslund: No, but what we heard then was that he is
going after Gusinsky because Gusinsky is against
him. And after that Putin has quickly moved
against all the oligarchs. And all these people
have made money in not very acceptable ways. And
Putin has done more against more of them than
anybody could have expected. So my sense is the
governors need to be reined in. They are being
reined in and they are becoming accountable. This
is fully democratic. There are quite a few
statements, as you say, Ariel, that are not
acceptable. Yes, it is unfortunate that the K-G-B
people are there. I think that they will be reined
in.
Host: Paul Goble?
Goble: Anders makes a very good point. Putin's
intentions, Putin's personal style, is not
democratic. This is a man whom we know more about
than any Russian leader in a very long time, when
he is just entering office. His impulses, his
statements, are very disturbing. The question is
whether he can implement those things. The
question is: where is Russian society? Some people
see the events of the last decade as having
created a countervailing power that no one can
resist. Other people don't. My own guess is that
it is sector by sector. I'm very disturbed by what
is happening in the electronic media. The moves
against the oligarchs who did use the media to
promote their own interests but also created some
balance within the press, is very frightening
because if there is no competitive media, there
will not be a competitive politics. The fact that
he chose to make a deal with the Communists early
on, with the Unity faction and the Communists,
who, in effect, froze out competitive fights at
the parliamentary level raised real problems with
where he is going. I don't think he can control
the governors.
Host: On the other hand, he now has a Duma that
has passed, as Anders Aslund said, this quite
extraordinary thirteen percent flat tax.
Cohen: Nobody is saying Putin is going back to the
Communist model of economy. I agree with Anders
Aslund fully that we are not going back to a 1985
economic model. There are these things in Russia
that are worrisome. And in terms of the governors
that have to be reined in - Anders, among other
things, what I do is the rule of law. And
unfortunately, the ability of the president
through the prosecutor general, whom he controls,
in a country that does not really have an
independent judiciary, to fire governors on the
pretense of either a criminal investigation or one
violation of the federal laws - this is not a rule
of law. This is vertical control and the Kremlin
is talking about reinstating vertical executive
power and that power is very quickly becoming
pretty much the dominant, the hegemonic political
power. There are no checks and balances, or these
checks and balances are being dismantled by Mr.
Putin.
Host: I just want to remind our audience that this
is "On the Line." And we are discussing today
Russia under president Putin with Anders Aslund
from the Carnegie Endowment, Paul Goble from R-F-
E/R-L, and Ariel Cohen from the Heritage
Foundation. Anders, do want to respond to that
remark from Ariel Cohen?
Aslund: Yes. What we are seeing in Russia is an
enormous reaction, which shows that there are
checks and balances. To me, Putin is pretty easy
to read. This is a man who looks upon the marginal
cost and the marginal utility of each action. And
he is very politically skillful. He won't do these
stupid things because they cost too much, because
you would have too good an argument against him if
he really did it. So therefore he won't give you
that pleasure. He will stop short of it.
Host: Paul Goble?
Goble: He is not living within the constitution,
not living within democratic principles, but in
terms of what one can get away with. Gusinsky was
released relatively quickly because there was an
international outcry about him. Had some other
oligarch gone down, people in the West would have
pointed to the corruption that they were involved
in. On the Chechen war, which was very popular
initially, it is a lot less popular right now. The
polls from Russia suggest that more people would
like to see negotiations than a continuation of
the fighting.
Host: On the other hand, President Putin's
popularity continues in the stratospheric realm.
Goble: I think that is largely, one, name
recognition and two, the fact that he has been on
the international stage. And I think many Russians
like the idea of a leader who looks vigorous and
is prepared to stand up for Russia. I think that
is a very popular thing in most countries. On the
other hand, if you go beyond this generic feeling
that here is a strong leader and start asking
about specific policies and specific approaches,
Putin's support is a whole lot less, not only in
Moscow, but elsewhere.
Host: But in terms of the rule of law, Ariel
Cohen, when you listen to President Putin speak
and he says, our strategic policy is the
following: Less administration, more free
enterprise, more freedom to produce, to trade, to
invest. And he recognizes quite clearly that "high
taxes, arbitrary actions of functionaries and
criminal elements" have been the things that have
undermined the Russian economy. So isn't his
theoretical grasp of the problem right on the
mark?
Cohen: Well, maybe theoretically, maybe in the
realm of words, but in the realm of deeds, it
looks like - actually while moving on all fronts
simultaneously, Putin manages to create more mess
and more political instability than a managed, a
more deliberate, slower reform that played up the
strengths of the emerging civil society, played up
the strengths of the judiciary -- that would be
much more helpful.
Host: But what about the economy, when you have
seven percent growth, inflation under twenty
percent and the tax reform?
Cohen: The Russian leadership recognized, starting
from Mr. Putin himself, Prime Minister [Mikhail]
Kasyanov, Deputy Prime Minister [Alexey] Kudrin,
that the so-called prosperity is driven by oil
revenues. It is a ripple effect of the 1998
devaluation. The Russians are very concerned that
there will be a slowdown. And once there is a
slowdown and the revenue to the government
declines, it's more difficult to prosecute the war
in Chechnya. It's difficult already. It's more
difficult to fuel the economy through military
orders. I don't think that policy is going to
work. So I think the instability in the regions
with the regional elite's being alienated, with
the media elite being alienated, the ongoing war
in Chechnya, this all builds up the potential of a
crashing failure for Putin maybe two or three
years from now.
Host: Is that true in the economy, Anders Aslund?
Aslund: I don't agree at all here. What we are
seeing is that the economy is really booming
ahead. The consensus forecast for this year is
that there would be growth of one to two percent.
So far, it has been over seven percent this year.
Clearly, it won't be less than six percent.
Host: What about Ariel Cohen's statement that this
is driven by higher oil prices?
Aslund: Of course, it helps and the devaluation
helps. But that is not all of it. Barter has
fallen by almost half. Arrears are totally under
control and have fallen in real terms by three-
quarters. Bankruptcies have risen. What we are
seeing now is a sharp real restructuring. The
industries that are moving ahead most - it's light
industry; it's metallurgy; it's pharmaceuticals.
This is not an oil and gas boom we are seeing in
the economy. It is something much more. And we are
seeing now that transportation, retail trade and
everything is growing at a pace with G-D-P [gross
domestic product]. And the government is talking
it down so that they don't create big
expectations.
Cohen: There is news coming out that the tax cut
is aimed at getting the economy out of the gray
and black sector into the light and then they are
going to raise the taxes. I hope this is just the
rumor mill in Moscow.
Aslund: Deputy Prime Minster [Victor] Christenko
said the other day that the thirteen percent flat
tax will stay constant for three years for
certain.
Host: I want to make sure we get to the subject of
how President Putin is going about reasserting
Russia's role in the world because of his
performance at the G-8 summit in Japan, his
appearance in North Korea, China, and, as Ariel
Cohen mentioned, an upcoming trip to Libya. What
does this all mean?
Goble: I think you have to look at two different
parts of what Putin is trying to do. On the one
hand, I think that most of the leaders of the G-7
countries were very impressed that finally we have
a Russian leader who does not just bluster, who is
well briefed, who is very disciplined, who is able
to interact with people at the highest levels and
do it quite capably. They may not agree with him,
but this is a much more effective leader than
Boris Yeltsin was at the end. And I think that the
evaluations that we've heard coming after Okinawa
is that this is an effective leader. Not that this
is necessarily a man who is going to do what we
want or what we would like to see. The other half
of the picture, which I think is very much more
disturbing, involves Putin's effort to make the
alliance of the aggrieved. All of the countries
that have been sort of on the outs with the West
have been the particular object of Mr. Putin's
attentions. He has received the Serbian
representatives, despite international sanctions
against them. The Iraqis have been in Moscow,
Tareq Aziz last week. You have a possible Putin
visit to Libya. You have Putin going to North
Korea. You have all the countries that have been
identified as rogue states, or now "states of
concern" in Washington, are where Putin is going
to. That isn't a very attractive view from the
point of view of the Western powers when you see
the Russian government not building alliances so
much with Germany or France or Britain, but
alliances with the people who are angry at the
international community. And that raises serious
problems.
Host: Why is he doing that, Ariel Cohen, when the
thing he needs the most is investment from the
West?
Cohen: I think Putin is trying to alleviate
Russian weakness by playing up Russian strengths
in the developing countries, especially in "states
of concern." We did not mention Iran yet. Russia
is building up the Iranian nuclear potential,
including the nuclear power stations, the Iranian
navy, supplying submarines and, allegedly,
according to some reliable publications, is
selling nuclear weapons technology to Iran. If
this is the case and Iran goes nuclear with
Russian help, it changes the prognosis for the oil
prices. It changes the ability of Iran to block
exports of oil from the Persian Gulf. It may
change the global economic situation. And Russia,
of course, benefits because Russia is a high price
oil exporter. Prices for oil from thirty to forty
dollars would benefit Russia.
Host: As Russia is also selling a lot of military
high technology to China, Anders Aslund, are they
doing this just because they need the hard
currency, or is there some strategy behind this
that they wish to complicate the world for the
only remaining superpower, the United States?
Aslund: If you are in Putin's position and you
want to utilize the cards you have, which are the
unused cards, there might be a more benign
interpretation of it. But I keep it open for the
time being. It looks very much like Putin is going
where he does not see any resistance. We can see
with regard to the Western countries that it was a
clear priority list. Who has said the least about
Chechnya - Japan - comes first. Who has made the
second least amount of trouble, Britain; third,
the U.S. And then, France misbehaved most; it came
last. So I think that it is very much going for
the least resistance and trying to exploit
potentials that have not been utilized, but the
question remains: is this malign or just
opportunism?
Host: And what is the answer to that, Paul Goble?
Goble: I think it is both. I think that, on the
one hand, Putin wants to use these attachments to
put pressure on the major Western countries to be
more agreeable. Clearly, there was a signal after
the G-7.
Host: What would be more agreeable?
Goble: For example, that you have something to
trade away. If you are doing something that people
don't like, you can offer to stop it in exchange
for considerations of various kinds. That's what a
weaker power has to do. This is the [Foreign
Minister Prince Alexander] Gorchakov strategy of
late-nineteenth century Russia revived at the
beginning of the twenty-first century. The problem
is, though, as governments always discover, you
find yourself often controlled by your client
states. The states that you are reaching out to
end up getting you involved in things far beyond
what you may want. And your ability to back away
from them in a particular case is a lot less than
you would like. So I think that, while Putin may
or may not have a malign intent - I tend to think
he does - the involvement with these kind of
countries, at least in the next five years or so,
is going to lead to a malign confrontation with
Western countries and especially the U.S.
Host: I'm afraid that's all the time we have
this week. I would like to thank our guests -
Anders Aslund from the Carnegie Endowment for
International Peace; Paul Goble from Radio Free
Europe/Radio Liberty; and Ariel Cohen from the
Heritage Foundation -- for joining me to discuss
Russia under President Putin. This is Robert
Reilly for On the Line.
11-Aug-2000 10:58 AM EDT (11-Aug-2000 1458 UTC)
NNNN
Source: Voice of America
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