Russia Faces 20 Years of Stagnation and Then Disaster, Navalny Says

Paul Goble

            Staunton, October 21 – The prediction by the Russian economic development ministry that Russia will not be able to overcome stagnation has sparked predictions that at the end of that period, Russia will face something even worse, with the optimists thinking this possibility will force the regime to change and the pessimists concluding Russia has been "left without a future."

            Underlying both, however, is the unspoken but profound sense that Russia already has had a period of stagnation under Brezhnev and that the failure of officials during and after period, however attractive life during that time may now be for many Russians given their current problems, led to the disintegration of the Soviet Union in 1991.

            Not surprisingly, both given the continuing impact of the trauma from that event and popular attitudes now about the Brezhnev period despite that outcome, most commentators both optimistic and pessimistic have focused on comparisons with other countries rather than the USSR that have experienced stagnation and then been forced to cope with its consequences.

            Opposition leader Aleksey Navalny, for example, draws a comparison between Russia and Argentina of the 1930s, arguing that this comparison shows that with “20 years of stagnation ahead,” the situation after that time will be even “worse” unless actions are taken in the near term to help Russia escape (echo.msk.ru/blog/corruption/1859112.html).

            Navalny quotes extensively from the report of the Ministry for Economic Development      (vedomosti.ru/economics/articles/2016/10/20/661689-20-let-stagnatsii) but then notes that the ministry “for diplomatic reasons did not point out that the cause behind the dawning 20 years of stagnation is the political leadership of the country and its decisions.”

            Given that leadership and its desire not to do anything that might threaten its hold on power, Russia faces a situation in which other countries are going to grow more rapidly and Russia is going to find itself ever further behind.  That will have serious negative consequences for both the Russian people and the Russian regime, including for its foreign policy efforts.

            That can be seen easily if one considers what happened in Argentina. During the first half of the 20^th century, it was a flourishing country “no worse than any European one,” with a future which “looked remarkable.  But in the 1950s, it became attracted by ‘geopolitics,’ just as is the case with Russia now.

            It entered a period of stagnation, one in which it grew far less rapidly than those with whom it had been compared.  And its “lagging behind became the cause of greater lagging behind and its poverty gave rise to still more poverty.” As a result, one would consider “laughable” any comparison of Argentina with Europe.

            “What is especially interesting,” Navalny continues, is that “the phrase, ‘geopolitical ambitions of Argentina’” after this period of stagnation elicits only snickers.’”  In racing after international status, Argentina lost any chance of achieving it.  And the new report suggests that unless things change radically, Russia is about to suffer the same fate and for the same reason.

            Many analysts share Navalny’s view and may be even more pessimistic than he about the possibility the current Russian leadership is capable of recognizing the dangers ahead and then of doing something about them.  On the Svobodnaya pressa portal, Mariya Beschastnaya surveys some of them (svpressa.ru/economy/article/158942/).

                She picks up on comments by Andrey Klepach, a former deputy minister for economic development who was one of the authors of the report. He told “Vedomosti” “the recipes for getting gout of stagnation are well known: structural change in the real sector (investment in infrastructure and technology) and budget one (boosting spending on health and education).”

            But Klepach points out that these tasks are “not yet on the agenda” of the country’s political leadership.

            That prompts the question, Beschastnaya says, “if the prospects of the Russian economy depend not on the prices of energy but on structural reforms and the transition to innovative programs … why are such ‘conservative’ prognostications’ being considered?”  People should see the need for change before it is too late and take action.

            Nikita Maslennikov, an economist at the Moscow Institute for Contemporary Development, says the ministry’s prediction is entirely justified and should be a guide to action.  But there is no political will to take the actions needed, in part because such actions would have negative short-term political consequences however necessary they are over the longer term.

            Andrey Kobyakov, a senior official at the Moscow Institute of Dynamic Conservatism, is even more negative in his assessments about the future.  He says that these predictions should have been accompanied by specific proposals on what must be done. The absence of that suggests that the senior leadership will continue to react to events and thus fall further behind.

            Only a short time ago, he points out, political leaders [including Putin, although Kobyakov doesn’t name him] were talking about doubling GDP in a decade. “Now, the ministry … is predicting that 20 years from now there will be almost no change in the pay Russians will receive.”

            In his opinion, Kobyakov says, “this is a catastrophe. Our central government agencies have shown themselves incapable of occupying themselves with economic policy. If South Korea or Singapore at one time operated on such inertial scenarios as the selling of rice, today, we would have heard of any ‘economic miracle’” in either.

            “I do not see any strategy in this prognosis,” he concludes. Consequently, this is all meaningless talk and the future for Russia is bleak indeed.

            In his article about the report, Sergey Lvov of “Novyye izvestiya” points out that Russian officials, including Putin’s press secretary Dmitry Peskov are not taking the report seriously and instead suggesting that it contains reasons for optimism at least in some sectors (newizv.ru/politics/2016-10-20/248175-20-let-bez-prava-na-budushee.html).

                Lvov’s own judgment about what that means is that the current leadership is leaving Russia in the position of a country which the next 20 years, “will not have the right to a future.”