Forward, Mr President!

William Courtney Denis Corboy Kenneth Yalowitz
21 September 2009

Dear Mr. President,

Your September 10 article on Russia's challenges is laudably frank and incisive in its analysis and call for sweeping reform.  You voiced the belief of many in Russia, and among its friends abroad, that a better life requires more freedom, diversity, and dynamism.  Since you gave less emphasis to how Russia should achieve the lofty goals you set forth, we will offer a few suggestions in response to your gracious open invitation for ideas.

Denis Corboy is director of the Caucasus Policy Institute at Kings College London and was European Commission ambassador to Georgia and Armenia.  William Courtney was US ambassador to Kazakhstan and Georgia.  Kenneth Yalowitz is director of the Dickey Center for International Understanding at Dartmouth College in Hanover, N.H., and was US ambassador to Belarus and Georgia

Whatever path the country takes, Russia's history and traditions must be respected and built upon.  You are right to eschew "permanent revolution" and seek a considered, gradual reform process.  As you caution, and as Mikhail Gorbachev learned two decades ago, powerful internal forces will oppose change.  Building a broad and durable constituency for reform is essential.

Your overall direction is farsighted - Russia must modernize, and in doing so deepen its ties with the advanced democracies and in some areas emulate them.  Europe and America lack monopolies on ideas for reform but between their experiences and Russia's own, important lessons have been learned.  The most important is the value of open debate and competitive institutions.

You are right that Russia possesses enormous advantages, including "a huge territory, colossal natural wealth, substantial industrial potential, [and] an impressive list of brilliant achievements in the sphere of science, technology, education, and art."

These strengths will enhance productivity and the quality of life if they are invigorated by economic competition built on an open economic and political environment.  They will also require greater investments in health and education, a more equitable division of constitutional powers, and new ways to stimulate individual initiative.

Let us look at a few ideas as to how Russia can achieve these aims.

First, do not under-value "the habit of existing on raw materials exports, in effect exchanging these for finished products."  Russia will continue to accumulate wealth faster by developing its natural resources than by any other path.  But more competitive internal markets, diminished government control and subsidies, and sharply reduced corruption are vital enablers.

For example, breaking up Gazprom and Rosneft into smaller, competing units, and ending subsidized internal prices for energy, would lead to more efficient energy markets and higher productivity.  The new companies would generate far more savings and investment for growth than the two lumbering and wasteful giants ever could.

A challenge is to ensure that the returns from raw materials exports do not disappear into private foreign bank accounts, and that control of the new firms does not fall victim to Kremlin intrigues.  Depoliticizing the energy sector would also make Russia a more reliable energy supplier to Europe.

Second, you point to "age-old corruption that has drained Russia from time immemorial," because of "the excessive presence of the state in any remotely important sphere of economic or other social activity" and the chronic lack of initiative and technological innovation.

More "checks and balances" are the best way to reduce the heavy burden of corruption on Russian economic life.  Tools for doing this include effective legislative oversight of executive power, a free press which exposes corruption and governmental malfeasance, an independent judiciary which holds corrupt officials and business executives accountable, and independent non-governmental organizations (NGO's) which have specialized expertise and can educate and rally public opinion against corrupt practices.  These institutions and organizations "compete" against abuse of governmental power and against each other, lessening risks that watchdogs themselves could be corrupted.

Third, you called attention to demographic and health crises, including a declining population and virtual epidemics of cardiovascular disease, AIDS and TB.  These challenges may well prevent Russia from meeting your goals for labor supply and a healthy military corpus.

Solving these problems will require systemic changes in diet, lessening the scourges of alcohol and smoking, and improving primary medical care and prevention.  Demographics and disease are a greater threat to Russia than any external enemy.

Coercive, top-down approaches, as in the anti-alcohol campaign of the Gorbachev era, ought to be avoided.  Building wide public support will be critical.  Hence, the government should rely mainly on public education, open discussion, greater investment in the health sector, and reform in the delivery of medical care with a new emphasis on prevention.  

Greater openness to immigration from poorer neighboring countries is likely to be the only way a dynamic Russian economy can meet its labor needs.  It is time now to begin preparing your countrymen.  A continued pattern of overt, sometimes ugly, discrimination will only hurt Russia.

Fourth, you are right to call for legislation to "ensure comprehensive support for the spirit of innovation in all spheres of public life and the creation of a market in ideas, inventions, discoveries, and new technologies."  In Europe and America, generous government financing of research and development is paired with competitive, peer-reviewed mechanisms to allocate funding.  Keeping politics at bay in decision-making will help Russian science.

Equally important is an economy which can quickly apply the fruits of research and development in innovative ways.  For example, nanotechnology researchers probably never dreamed their labors would lead so quickly to a product with such world-wide market penetration as the iPod.

Fifth, your call for "competition among open political associations" is vitally important.  Independent political parties and free and fair elections would go a long way to enhance political stability, and lead to governments which expose and prosecute corruption irrespective of the political influence of perpetrators.  This is a great strength in the European and American political systems, buttressed by frequent alternations in political power.

Some in Russia equate competitive politics with the "chaos" of the 1990s, and even the "Time of Troubles" four centuries ago.  But history shows that political competition, as it develops, tends to marginalize extremist views.  This is sorely needed in Russia, as the wave of neo-Nazi criminal acts shows.  Competitive politics are what makes advanced democracies so stable.  Russians are well educated and more than ready for democracy.

Finally, you speak of doing "everything possible to normalize the life of people in the Russian Caucasus."  Calming tensions there will require a secure environment, political openness, and better economic opportunities.  Multi-candidate elections, security without abuses, and improved agriculture will help a lot.  Moscow city authorities should crack down on the harassment of people from the Caucasus and Central Asia who sell in farmers markets.

These are times of change in the world economy.  New creative and competitive energies will be released, and uneconomic activities will be punished by markets.  Economic and political reform can position Russia to take stronger advantage of the new opportunities.

America and Europe not only wish Russia well in its reform effort, but believe they have a stake in its success.  A secure and prosperous Russia will be less likely to have conflicts with its neighbors, and be a valued economic partner and source of innovation and ideas from which the whole world will benefit.  

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