RUSSIAN ECONOMIC REFORMS OUTLINE

America: a Beacon, not a Policeman	RUSSIAN ECONOMIC REFORMS OUTLINE and RUSSIA FOREIGN POLICY DIRECTIONS	Americans Against World Empire Homepage

UPDATES

1/14/09 George Kennan's Prophetic Warning Against NATO Expansion Washington uncaring and unthinking of consequences

5/10/08 Russian military plagued by corruption --little reform of hazing (beating recruits), purchasing, training. http://ap.google.com/article/ALeqM5iMW_LrfPRg8284BJx5oejgxstnuQD90FISIG1

RUSSIAN ECONOMIC REFORMS OUTLINE

Courtesy of Jamestown Monitor, July 18, 2001 If you would like information on subscribing to "Russia's Week", or have anycomments, suggestions or questions, please contact by e-mail at
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ROLE MODEL.... Vladimir Putin is three months shy of age 50. Jiang Zemin is
about to turn 75. Jiang is to step down as president of China in 2002.
Vladimir Putin's presidency may last for many years more. When Jiang and
Putin met in Moscow to sign their twenty-year Treaty on Good Neighborly
Friendship and Cooperation, the younger man must have seen in the older much
to emulate and admire.

China's mix of vibrant economics and repressive politics is a model for
Russia, not in its details but in its grand design. What Putin hopes to
construct in Russia is something similar: a modern economy, capable of
efficiency and capital formation and innovation, in an autocracy in which
the state controls political expression and suppresses dissent.

Jiang, completing his legacy, has had a fine year: the 2008 Olympics, the
treaty with Russia and very soon membership in the World Trade
Organization--not to mention 8 percent growth in a difficult economic
environment. Putin, building his, has no such glitzy triumphs to point to.
But he has made good progress.

The State Duma, the lower house of parliament, has fallen under his control.
The merger of most of the noncommunist opposition into the pro-Putin Unity
party gave Putin a solid majority. And Putin's high ratings in the polls,
boosted by Kremlin control of the media, keep the majority in line.

Putin used his mastery of the legislature to advance a strongly reformist
program. In the session that ended last week with the Duma's summer recess,
130 Kremlin-backed bills moved toward enactment. These included:

* A new land code that allows the private sale and purchase of commercial
and residential plots in cities and villages. The government says the land
area covered is only 2 percent of country's territory. Even so, the bill
could allow the development of a mortgage industry that will generate very
substantial amounts of capital for investment. The Kremlin says it will ask
the Duma to legalize the sale of agricultural land in the fall session.

* A new labor code that restricts collective bargaining to unions
representing a majority of workers in an enterprise and that gives employers
more leeway to conclude fixed-price labor contracts. The code sets the
minimum wage at the subsistence level, now calculated at 1,400 rubles ($48)
a month.

* Anti-moneylaundering reforms that try to distinguish between moving really
dirty money (punishable) and moving money to avoid taxes or foreign-exchange
controls (exempt).

* Judicial reforms to limit the power of prosecutors to issue search and
arrest warrants, protect suspects from police brutality, introduce jury
trials throughout the country and strengthen the use of arbitration in
business disputes.

* Pro-business measures to cut the tax rate on corporate profits from 35 to
24 percent, reduce compulsory repatriation of export earnings from 75 to 50
percent and cut the number of business activities requiring government
licenses from over 500 to 102.

The construction of a new Russian autocracy has not been neglected. Within
the government, Putin's Kremlin--the office of the president--is assiduous
in ensuring that other centers of political power are part of the program.
The merger of parties in the Duma created a legislature that, in the words
of a leader of the unmerged liberal Yabloko faction, has become a
"transmission belt" for and "a department" of the presidential
administration. The same new Code of Criminal Procedure that strengthens
judges against prosecutors also makes judges more dependent on the
executive, which hires and fires the judiciary through a "qualifications
commission."

Wherever centers of power, official or civil, might present a challenge, the
Kremlin moves to co-opt or suppress. KGB veteran Putin has installed as
defense minister KGB veteran Sergei Ivanov, who has just placed KGB veteran
Nikolai Pankov in charge of the office of personnel. Hardliners like Colonel
General Valery Malinov and Colonel General Leonid Ivashov, potential
champions for officers unhappy with planned force reductions, were dismissed
last week. Last month, the Kremlin forced out Gazprom's chairman Rem
Vyakhirev, one of the gazoviks who created Russia's largest corporation, and
replaced him with Aleksei Miller, a young government professional. And of
course the blossoming of the Press Ministry, the launch of a Kremlin-backed
union for journalists, the seizure of independent television network NTV and
the systematic suppression of independent media have been well covered here
and in other reporting.

In the provinces, however, the Kremlin's reach has yet to turn to grasp. In
many of Russia's eighty-nine sub-federal regions and cities, the chief
executive is dug in for the long haul, with his own network of cronies, his
own captive media, his own local security, his own system of graft and
protection. Last year the Kremlin engineered legislation that will force
regional political leaders out of their seats in the Federation Council--the
federal parliament's Senate--at the end of 2001. It also placed the
eighty-nine regions into seven federal districts, each with its own deputy
prosecutor general and each headed by a presidential representative with the
power to recommend the dismissal of lawbreaking governors. Earlier this
month, at the Kremlin's bidding, the Duma voted a two-term limit for all but
ten regional chief executives--those who were not term limited by local law
when federal law on election of governors was adopted.

So far, the presidential representatives have not made much of a mark on
regional politics or administration. Only one governor--the notoriously
corrupt Yevgeny Nazdratenko of Primorye, on the Sea of Japan--has been
forced from office, and his clique apparently remains in control. The
term-limits movement has stalled, with the governors in their final days in
the Federation Council expected to vote the Duma's bill down. So confident
are the governors of their imminent victory that two of them, Federation
Council President Yegor Stroev (Orel) and Rostov's Governor Vladimir Chub,
filed last week to run for a third term. They would be denied that right if
the bill that passed the Duma becomes law.
Copyright (c) 1983-2001 The Jamestown Foundation

The National Post (Canada)

July 23, 2001

Behind Russia's Reconstruction (Courtesy of Johnson's Russia List)

By George Jonas

Vladimir Putin's recent remarks, both at the G7-plus-Russia meeting at

Genoa over the weekend, and upon the signing of the Sino-Russian Treaty of

Good Neighbourly and Friendly Co-operation in Moscow a week ago (aptly

described as a "tactical handshake" between a dragon and a bear in a Post

editorial), were reassuringly innocuous. Many 19th-century statesmen, from

Prince Metternich to Prince Bismarck, might have made similar

pronouncements about the balance of power ("multi-polarity" in current

lingo) or about the need to be firm with secessionists. It appeared that

Russia's President, despite his KGB past, is no longer moved by the spirit

of Marxism-Leninism.

What exactly is the spirit that moves Mr. Putin these days? There's reason

to believe that it's Gorchakovism.

Prince Alexander Gorchakov's name hadn't been mentioned too often in the

20th century, in Russia or elsewhere, until about 10 years ago. Yet he was

a pivotal figure in Russian diplomacy in the days of Czars Alexander I,

Nicholas I and Alexander II. As Russia's foreign minister for 25 years,

he's credited with rehabilitating his country's standing in the world in

the wake of the disastrous Crimean War of 1853-1856.

After Sevastopol fell to British and French expeditionary forces in 1855,

Russia's stock as a world power sank almost as low as it did following the

collapse of the Berlin Wall 135 years later. It took Prince Gorchakov 15

years of cool, unhurried diplomacy to rebuild it. Working under his master,

Alexander II -- the "reformist" czar who emancipated Russia's serfs --

Gorchakov took his country from the Peace of Paris, which closed the Black

Sea to Russia's warships, to the 1871 Convention of London, which

compensated Russia for its losses in the Crimean War.

This remarkable achievement was brought about by a realistic alignment of

power relationships, culminating in clever Russian treaties with Germany

and Persia. For his patient pursuit of realpolitik, Gorchakov has been

compared with Bismarck (or with Henry Kissinger). Be that as it may, he

became Mr. Putin's hero, as well as ex-prime minister Yevgeny Primakov's.

A laudatory piece by Mr. Primakov on Gorchakov appeared in a 1998 issue of

the Russian journal International Affairs. Years earlier, when Mr. Primakov

was still foreign minister, Itogi magazine's Alexander Golts asked him how

the Kremlin's struggles of the moment affected Russia's foreign policy

(just then Boris Yeltsin was fighting one of his periodic battles for his

political survival). As Mr. Golts reported it, Mr. Primakov replied:

"Russia pursues its foreign policy not according to some considerations of

the current moment, but on the basis of its historic role."

If this sounds familiar, there's a reason. Taking a long view and casting a

deliberately cold eye on the alliances of the day was one of the hallmarks

of 19th-century statecraft. It was Lord Palmerston, foreign secretary of

Britain, who remarked about 150 years earlier: "England has no eternal

friends, no eternal enemies, only eternal interests."

History appears to alternate between epochs of cold pragmatism and "hot,"

highly charged, ideological periods. The 20th century was deeply

ideological. Russia's view is that the 21st century will resemble the 19th

century rather than the 20th. Ideological divisions will count for less

than realpolitik, spheres of influence and balance of power.

Europe, specifically, may revert to a model even more distant in time. It

may depart from Westphalian ideals -- i.e., the ideal of the sovereign

nation-state that emerged from the Peace of Westphalia ending the Thirty

Years War in 1648 -- and reconstruct itself along the medieval lines of

Charlemagne's Holy Roman Empire.

The Russians aren't alone in this view. Territorially, the European Union

does resemble the 9th-century dominion of Charles the Great, incorporating

as it does France, Germany and the Netherlands. More importantly, Brussels'

budding pan-European empire recalls Charlemagne's universe in the ruling

eurocracy's imperious and supranational spirit.

As Lee A. Casey and David B. Rivkin Jr. point out in a recent issue of

Policy Review, "many of the European Project's supporters today look to the

Europe united under Charlemagne for precedent and inspiration. Indeed,

every year a Karls Preis or Charlemagne Prize is awarded to an individual

to recognize the "most meritorious contribution serving European

unification and the European community, serving humanity and world peace."

(Ironically, the 1999 winner was British Prime Minister Tony Blair.)

The Russian view is more oblique. Many Russians consider the EU a mere mask

for Germany. Leonyd Slutskiy, deputy head of Russia's international affairs

committee, writing in the influential Nezavisimaya Gazeta last year,

described the "spectre" of a coming U.S.-German conflict for world

domination being already "visible on the ruins of the Berlin Wall." Mr.

Slutskiy posited that Americans haven't yet recognized this "hidden but

unavoidable" conflict between the United States and the emerging Europe. As

soon as they do, they'll realize that restoring balance by facilitating

Russia's resumption of its role as a major power in a multi-polar world is

in the United States' own interest.

It would, presumably, also suit Mr. Slutskiy if the Germans were to realize

that Russia should be restored as a world power. A Moscow-Berlin axis would

balance just as well in Prince Gorchakov's scales. What Gorchakovism

opposes is "unipolarity," which today means the United States as the

world's only superpower -- especially the United States under a defensive

missile umbrella.

A revival of communism, or any messianic ideology, isn't on the Kremlin's

current agenda. Domestic reform is quite in tune with the Gorchakovian

tradition, as long as it's combined with building a Russia-China-India axis

in Eurasia, and persuading the West -- even the United States, if possible

-- that its true interest lies in encouraging the development of a

multi-polar world in which Russia takes her rightful place. This lies at

the centre of Mr. Putin's diplomacy. Though he makes few historical

allusions himself, in April this year his Foreign Minister, Igor Ivanov,

conferred the A. M. Gorchakov Commemorative Medal on Mr. Primakov.

Formidable a role model as Prince Gorchakov was, he made one mistake in

1867. That year, together with the Grand Duke Konstantin Nikolaevich, the

emperor's brother, he orchestrated the sale of Alaska to the United States

for US$7.2-million. This was a vast sum for a chunk of inaccessible

wasteland, and the Prince as well as the Grand Duke permitted themselves a

little sarcasm when they remarked that Alaska's loss "would not be too

painful." Today, especially when looking at potential sites of the

In-Flight Interceptor Communications System of the United States' national

missile defence, Messrs. Putin and Primakov would have to conclude that

their hero was painfully wrong.