Russian Elites have Lost Sense of Self-Preservation, Making a Revolutionary Situation Likely in Four or Five Years, Inozemtsev Says

Paul Goble

            Staunton, June 10 – Over the last few years, Vladislav Inozemtsev says, Russian elites “have completely lost a sense of self-preservation” and not tried to reduce popular dissatisfaction but rather taken steps to provoke more of it, have failed to outline a new program for the future and have “demonstratively refused” to think about a change in the leadership of the country.

            “Such a course,” the Russian economist says, “over the next four to five years is capable of creating to a full extent a revolutionary situation which no manipulated poll numbers or imaginary economic growth figures the regime might come up with will be able to overcome” (theins.ru/opinions/160359).

            No one was surprised when the World Bank lowered its projections for Russian growth over the next three years, Inozemtsev says, and “few today believe in the possibility of some ‘breakthrough’ or even ‘leap’ about which the Kremlin talks so willingly.”  That is because there are so many obvious reasons why without systemic change, those things won’t happen.

            The most fundamental of these are “well known,” he continues. First of all, “the Russian economy has been transformed practically into a state economy … and the role of managers in it is being played by siloviki who long ago became its chief beneficiaries.” Second, capital flight is accelerating and this year may exceed 100 billion US dollars.

            And third, the Russian economy is not driven by consumer spending as are the economies of most other advance countries. Instead, “in Russia, with the return of Putin to the Kremlin,” the Russian system is based on taking money from consumers and small businesses and handing it over either to those major corporations exporting natural resources or the defense sector.

            Consequently, the economist says, “the economy cannot ‘fly’ and will not be able to even if suddenly bureaucrats ceased to take bribes and all moneys were used as intended.” While welcome, that would not be enough to cause the economy to jump forward.  

            But Inozemtsev continues, there is an even more fundamental cause for the continuing stagnation of the Russian economy: Russians are tired and getting more so.  This tiredness is very different from what was true in the 1990s.  Then, “part of the population experienced despair from the collapse of the preceding way of life” over a four-year period. But others saw and took advantage of new possibilities.

            “Today,” he suggests, “a situation has emerged in Russia” which is much worse. Incomes have been falling not four years but six, the pension age has gone up, and there are no possibilities for the display of private initiative or hopes for the future that existed among many in the 1990s. 

            This state of affairs is being “intensified by the fact that the powers that be consciously are crating in the population a sense that it is living ‘in a besieged fortress’ and thus is sending a signal that there is no reason to count on an improvement in the standard of living in the immediate future.”

            “In such a situation,” Inozemtsev says, “the authorities shouldn’t be surprised by the decline in their own popularity.” Such a situation, serious economic problems combined with “a decline in the popularity of an aging president should be used for ‘the promotion’ of a successor who will use the situation” to radically remodel the system.

            But, “judging from everything, there is no talk about ‘a changing of the guard. Putin apparently sincerely believes that the economy can shift to growth and his ‘close circle’ isn’t capable of sacrificing its current financial interests in the name of longer-term stability,” the economist concludes.

            The current stagnation in Russia “hardly should be viewed as dangerous in itself.” But three factors make it so. “First, the lack in the elites of a clear plan of transition from the Putin to the post-Putin era; second, internal disagreement among elite groups which makes extremely risky any moves on the branch and regional levels; and third, the inevitable approach of a crisis” for which Moscow no longer has enough reserves to deal with easily.

            After the shock of 2008, he points out, Moscow had vastly more reserves than it does today, and capital was coming into the country even more rapidly than it is leaving Russia now.  And that means that “today, the Russian economy is much less prepared for serious shocks than it was earlier.”

            The Putin regime can likely muddle on for the next two or three years, Inozemtsev says; but beyond that, in four or five, a full-blown revolutionary situation may arise, the direct result of the loss by Russian elites of what is a politician’s greatest asset, his sense of self-preservation and willingness to change to ensure it.