Russia After May 8, 2008
By Saleem Khan
Which way Russia is going to go after May 8, 2008, when Medvedev takes office as the President of the Russian
Federation? Would it be Putin’s way or a new course friendly to the west? Pundits and the media in the west are engaged
in guessing game and heavily involved in the art of misinformation. Russian people are optimistic about their future and
are anxious to demonstrate to the international community their capacity of teamwork in global affairs. Nevertheless,
they are aware of the conflicts in the World and leadership deficit. This, I have concluded in over a decade of contacts
and conversations with the leading educators in the former Soviet Union. This desire for an optimistic future and a more
peaceful world has emerged as the dominant theme.
I first went to Moscow and Tashkent in October 1992 on a World Bank mission to introduce market economics teaching and
curricula development in the leading economic and finance institutions in the former Soviet Union. The Finance Academy
in Moscow and Tashkent University of Economics in Tashkent offered me the opportunity for subsequent visits that
continue to date. The Finance Academy in Moscow holds an annual international conference on education where educators
and scholars from all over Europe and the CIS countries gather to present their ideas and research on economics/business
education reforms. I have been participating in these conferences regularly for the past fifteen years.
In my most recent visit to Moscow in March 2008 and meetings with the leading Russian educators in March 2008, the major
topics of interest were Russian self-confidence and challenge of creating a friendly and hospitable global environment
for peace and progress. From my discussions with the academic community and observations of broad public opinion in
Russia, I was impressed with the level of knowledge and degree of sophistication of this society. The regaining of
self-confidence among Russians in the creation of a strong economy, a more democratic government, and a more assertive
role in international affairs is a valuable global asset which the west must utilize. Statesmen and diplomats should tap
this precious asset and create an orderly and equitable world order in the spirit of the 21st century.
Putin’s leadership, though much reviled in the western capitals and media, has won the Russian people’s trust and
admiration by making Russia strong again and asserting control over national assets. The Russian people are ready to
demonstrate their ability to make substantial contributions to global affairs, if only the global community has the
patience and readiness to offer them the opportunity. The election of Medvedev as President of the Russian Federation,
according to them, is a significant and logical step to continue economic and political gains made under Putin. They
wish to strengthen their economy and show to the world their desire to be a responsible global power, especially in
economic affairs. This, they believe, is essential for advancing national goals and international agenda.
Russian academia’s’ view of tackling national and international challenges is both constructive and optimistic. People
are excited about the post-cold war period prospects of peace and prosperity. The pace of change and its direction --
market-oriented economy, democratic institutions and rule of law -- to them is a welcome phenomenon. There is much
apprehension about massive bureaucracy, corruption, collusion between civil service and business, and post-election
leadership arrangements between the offices of the Presidency and Prime Minister. There are also concerns about the
domination by oligarchical control over Russian strategic assets and its effects on the national economy and social
balance in society. They are concerned about western posture and rhetoric that seek to exploit Russian weaknesses. They
wish to avoid such things as: a cold-war scenario, an arms race, economic confrontation or geo-political zero sum games.
The academic community’s account of progress and optimism is confirmed by a recent report in The Financial Times. Neil
Buckley, a respected columnist, writes that economic growth in Russia has averaged close to 7% during the past ten
years. Strategic economic decisions after the financial crises of 1998, of the ruble’s devaluation, and record energy
and commodity prices have helped the economy. Economic growth is being sustained by a boom in consumer and investment
spending. These factors, writes Buckley, have “produced an extraordinary six-fold increase in GDP in nominal dollar
terms during Mr. Putin’s two terms $1,270 last year. A country almost bankrupt has amassed five hundred billion in gold
and foreign exchange reserves – the world’s third largest after China and Japan. Average wages have jumped from $80 a
month to about $640 now. A growing consumer class is driving Fords, sipping Starbucks, holidaying in Turkey and shopping
at mega-malls loaded with goods undreamt of in soviet times.” Over 14,000 small and medium size new Russian enterprises
have added to the vibrancy of the economy. Academicians give credit for this strong economic health and political
stability to Putin. Consequently, economic activity and political participation are spreading across Russia beyond the
fringes of Moscow and Saint Petersburg, thanks to new investment and democratic reform. These events have, indeed,
contributed to confidence building especially among concerned people after their shock-therapy experience during the
1990s.
The bureaucratic machine was strong during the Soviet era, and it remains the same but now it contributes to both
economic inefficiency and corruption. The market-oriented system to which the country has switched was supposed to be
progressive. People’s expectations of open opportunities, healthy competition, and buyer-friendly markets have received
a rude shock. They are still shell-shocked by how national assets, under western patronage, were transferred to a few
communist youth league members (Cosmosol). The oligarchic capitalism they now experience is a far cry from the European
style of democratic capitalism. The current economic system displays the characteristics of political, economic, media
control and oligarchic exploitation. Where is the system of open opportunities, market-oriented democratic system with
general prosperity that they were seeking? Moscow alone has over 84 oligarchs, and the metropolis has become a captive
market for western goods. Many oligarchs, owners of ill-gotten national assets, have transferred their wealth to safe
havens abroad, fearing accountability.
The current leadership arrangements are enigmatic at best. The dual system of governance will face many difficult
problems. Academicians are waiting with their fingers crossed for May 8, 2008 when Medvedev will be inaugurated
president and Putin will assume the responsibilities of premiership. Nonetheless, people are generally optimistic about
the future. The leadership initiatives from Medvedev seem favorable. This youthful leader, according to many, is highly
intelligent, flexible, western-oriented, and more democratic. Putin will support him in order to preserve his lasting
legacy of remarkable political and economic achievement.
The general public is weary and disappointed by the western response to Gorbachev’s historic decision to dismantle the
Soviet empire, the communist economic system and relinquish control over Eastern Europe and the Baltic states.
Academicians accuse the west of engaging in a new cold war posture by starting an arms race, an eastward expansion of
NATO, and the U.S. plans for a missile defense shield in Eastern Europe – without offering Russia anything in return.
One Russian colleague bitterly spoke of poor trade-offs. He while pointing at the Gorbachev Foundation building on Lenin
Ave in the central district of Moscow said “this is what we got in return for giving away East Germany.”
In conclusion, the Russians dismiss any notion of a changed Russia after May 8, 2008. One must respect the Russian
academic’s sentiment of a more prosperous Russia and creating a peaceful and progressive world order. Dealing with the
tough and complicated issues of today a bold and visionary leadership is essential. Mustering political will and
commitment on the part of leadership to advance the agenda of peace and progress is needed now more than ever before.
The wages of inaction and business as usual mean the whole world will keep suffering.
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The author is chairman of the economics department at Bloomsburg University of Pennsylvania, and former senior advisor
to Zulfikar Ali Bhutto, the first democratically-elected prime minister of Pakistan. Dr. Khan earned both a B.A. and
M.A. from Punjab University in Lahore, and a Ph.D. from Gutenberg University in Mainz, Germany.