August 18, 2011 8:34 pm
Former USSR: A democratic deficit
By Neil Buckley
Curtain no longer of iron: a soldier casts his vote in the presidential election in Belarus last December. But a violent crackdown on the opposition followed
Shortly after 6am on August 19 1991, Vytautas Landsbergis, Lithuania’s pro-independence leader, received a phone call. A colleague gave him news from Moscow. There had been a coup; Mikhail Gorbachev was under arrest.
Mr Landsbergis had feared something like this since Lithuania became the first Soviet state to declare independence, unrecognised by Moscow, a year earlier. He soon took a call from the Soviet army’s Baltic district. “We are the power now,” said the voice.
Yet little over 48 hours later, the coup collapsed; within months, so did the Soviet Union. Mr Landsbergis set Lithuania on the path to Nato and European Union membership. At 78, he now sits in the European parliament. His view of Lithuania’s transformation is hard-headed, however. “It could have happened even sooner,” says Mr Landsbergis, “if only Russia had succeeded in building a European democracy.”
His comment highlights a striking feature of the changes to the former eastern bloc. Two decades after the failed coup, its legacy is much more mixed than that of the revolutions that swept communist eastern Europe two years earlier.
Despite disasters such as the Yugoslav wars, most former socialist economies outside the Soviet Union are today functioning market democracies; seven are EU members.The 15 former Soviet republics have largely also swapped central planning for market economies. Yet beyond Lithuania and its Baltic neighbours, Latvia and Estonia, most former Soviet states still operate under authoritarian systems shot through with corruption. The iron curtain may have been cut up for scrap but today Europe has a new division – further east, less well-defined, more porous and shifting, but real nonetheless – between democracies and the countries that never quite made it.
All provide potentially important lessons for today’s fledgling democracies of north Africa – and for the international community, as it looks for ways to support them.
The Economist Intelligence Unit’s latest rankings of democracy class six former Soviet republics “authoritarian” regimes – with two, Uzbekistan and Turkmenistan, ranked among the world’s four most repressive regimes. Four more, including Russia, are considered “hybrid” regimes, with serious weaknesses in political culture and government functioning. Yet all the former socialist states from outside the Soviet Union are in the EIU’s top two categories of “full” or “flawed” democracies – except Albania, one of the poorest 20 years ago, and war-ravaged Bosnia-Herzegovina.
“Most of the post-Soviet states are corrupt states that have as their purpose to allow the elites to enrich themselves through corruption,” says Anders Aslund, a Swedish economist who advised the Russian and Ukrainian governments in the early 1990s. “Authoritarianism is the means of making sure that they can maintain this.”
Nikolay Petrov of the Carnegie Moscow Center think-tank says that with some exceptions the former Soviet republics outside the Baltics fall into two groups. First, in former Soviet central Asian states such as Kazakhstan and Uzbekistan, Soviet-era leaders have adapted old methods to remain in power. A second group held free elections until a leader emerged who “pushed out everyone else”.
This is true, says Mr Petrov, of Belarus under Alexander Lukashenko – called by the US “Europe’s last dictator”; and, in slightly less repressive fashion, of Russia under Vladimir Putin, former president and now prime minister.
Ukraine, too, after relative political openness following the 2004 Orange revolution, is moving in a similar direction under president Viktor Yanukovich, who defeated former premier and Orange revolution co-leader Yulia Tymoshenko in elections last year. Ms Tymoshenko is now on trial on questionable charges of signing a gas supply deal with Moscow that was economically damaging to Ukraine.
Some of the reasons the former Soviet states turned out this way stem from culture, history and geography; others from differences in the manner of post-communist transition. The most basic difference is the length of time spent under communism. In most USSR republics, this was seven decades after the 1917 revolution; east European countries came under Soviet sway only after the second world war. Most former Soviet republics, too, lacked a history as independent nation states, having been part of the tsarist Russian empire.
Central European socialist states such as Hungary and Poland retained elements of private business and ownership, and traces of independent civil society. Poland’s Catholic church provided an alternative power structure and moral compass.
“The influence of religion is underestimated,” says Radoslaw Sikorski, Polish foreign minister. “People assume you just have to put in the right institutions [for democracy to succeed], but institutions only work if there are ethical people to run them.”
It is no coincidence that the Baltic states, annexed by the Soviet Union only in 1940, have followed a path closer to the central European model. They considered themselves not “Soviet republics but European countries, striving to restore democracy, not to build it anew”, says Mr Landsbergis.
Thanks to these factors, the west always considered the non-Soviet states part of Europe. Not so with the Soviet Union, says Olexiy Haran, a political scientist in Kiev: “For Ukraine, it was left to us to prove that we are not Russia.” That resulted in the west providing lots of transition aid, and fast, to eastern Europe. But, says Mr Aslund, partly because of reluctance among senior officials in Washington, it “gave no help to Russian reform in the first year”.
The EU also quickly opened its markets to eastern neighbours, providing a destination for exports that helped kick-start their economies. By the mid-1990s, it was moving towards membership talks with many of them, providing a model, goal and incentive for reform ex-Soviet republics lacked.
“We just started to do surgery on ourselves – simultaneously on our brains, on our stomachs, everything,” jokes Alexander Rondeli of the Georgian Foundation for Strategic and International Studies. “And it is really difficult without generous support.”
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Complicating matters, adds Mr Aslund, many ex-Soviet states remained in the rouble zone until 1993. Beyond the control of young reformers running the economy, Russia’s central bank was churning out the currency and subsidising state companies. That helped fuel hyperinflation and made macroeconomic stabilisation impossible.
Reforms were also slower in former Soviet republics than in central Europe, often because of a weaker consensus in their favour. Private businesspeople and rent-seeking officials found ways to exploit the situation – and imperfectly designed privatisation programmes – to amass huge wealth. As a result, an emergent oligarchy of business-political clans was able to capture the state in Russia and other post-Soviet nations. Elections were increasingly manipulated to retain power for one group, or at best shift it from one to another.
Yaroslav Romanchuk, a dissident economist who stood in Belarus’ disputed presidential elections in December, says the effect was corrosive. “When people saw that under the banner of freedom we have moral degradation, huge inequality, outrageous examples of property being stolen by a few self-nominated politicians and bureaucrats, of course they said: ‘If this is democracy and capitalism, we don’t want it.’”
Despite the setbacks, however, the cause of post-Soviet democracy is not dead. The “colour” revolutions of Georgia, Ukraine and Kyrgyzstan between 2003 and 2005 helped inspire the Arab spring – which could yet reverberate in the former Soviet empire.
The country attracting most attention from the international community is Belarus. A violent crackdown on opposition after the elections has been followed by an economic crisis resulting from Mr Lukashenko lifting pensions and wages to unsustainable levels ahead of the polls. Peaceful demonstrations have been taking place. But Mr Romanchuk suggests Russia will provide a bail-out with strings – buying up state businesses to provide Minsk with cash, which could help Mr Lukashenko cling on.
The central Asian republics, with ageing leaders and youthful, mostly Muslim populations, present the strongest parallels with the Middle East. But in the most repressive, Uzbekistan, radical Islamism is stirring, notwithstanding heavy-handed attempts by autocrat Islam Karimov to suppress it. Now 73, he may be succeeded not by democracy but by instability or even an attempted Islamist takeover.
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The west is still pinning hopes on Ukraine and Georgia, despite the reversal of Ukraine’s revolution, and accusations that Georgian president Mikheil Saakashvili, despite pro-market and anti-corruption reforms, has used methods verging on authoritarian.
Attempts to put the two states on track to join Nato have faded since Georgia’s conflict with Russia in 2008. But efforts are under way to integrate both more closely with the EU. Poland is championing a programme that would offer half a dozen former Soviet countries, in return for reforms, the kind of co-operation from which it benefited two decades ago.
As holder of the union’s rotating presidency, Poland is pushing ahead with efforts to conclude an EU “association” agreement and free trade deal with Kiev. This is the subject of debate, however, following Mr Yanukovich’s rollback of democratic gains. Mr Sikorski, Polish foreign minister, says the trade deal would wrest Ukraine from Russia’s orbit. Georgia is to be offered the chance to start similar talks at a special summit of the EU and some ex-Soviet states in Warsaw next month. Should either country achieve lasting democracy, becoming the first post-Soviet republic outside the Baltics to do so, it could provide a powerful model for others.
Yet Russia will not abandon attempts to keep the other republics under its sway. With Belarus and Kazakhstan it has formed a customs union set from next year to deepen into a common market – and Mr Putin has attempted to entice Ukraine to join with offers of cheap gas.
Other ex-Soviet capitals are wary of US president Barack Obama’s “reset” of relations with Moscow, and of the US and Europe’s preoccupation with their own economic problems. The effect, says Mr Landsbergis of Lithuania, is that the west has, de facto, granted Russia’s leaders the “zone of privileged interest” they have demanded. Two decades after the Moscow coup, that could hinder moves to democracy for years to come.
“Russia is claiming openly that all these countries belong to the Russian zone. But the west should remember something,” says Mr Landsbergis. “In old Soviet slang, ‘zone’ meant prison.”
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Role of resources: How the balance tilted when energy-abundant Russia ‘became too rich’
Role of resources: How the balance tilted when energy-abundant Russia ‘became too rich’
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Among the biggest factors holding back the development of democracy in the former Soviet Union have been two three-letter words: oil and gas.
Of the six post-Soviet republics deemed authoritarian by the Economist Intelligence Unit, three – Kazakhstan, Turkmenistan and Azerbaijan – have big hydrocarbon reserves. Russia, with the largest reserves, is a “hybrid” state, showing authoritarian features.
All have to some extent suffered classic symptoms of the “oil curse”. Oil and gas revenues have enabled cronyist leaderships to establish or maintain firm rule, while buying off opposition by raising wages and pensions. Apart from Kazakhstan, which has carried out some market-friendly reforms, energy wealth has also stunted the growth of other sectors.
Russia is perhaps the starkest example. Throughout the 1990s, when oil prices were low, Russia was a democracy, albeit a highly imperfect one. For the first three years of the last decade, under president Vladimir Putin, liberal reforms continued. “But finally oil prices rose and Russia became too rich,” says Nikolay Petrov of the Moscow Carnegie Center, a think-tank, “and the leadership decided there was no longer a need to undertake new reforms, as they enjoyed huge revenues coming from nowhere.” Oil and gas have played an important role not just in countries that possess them, but also as leverage Russia has used to maintain influence over neighbours that lack them.
Ukraine, the biggest ex-Soviet republic by population after Russia, relies on cheap Russian natural gas to fuel its heavy industry. Twice since 2006, Russia has cut supplies in winter amid pricing disputes. In Belarus, smallest of the three Slavic republics, energy subsidies from Russia have sustained the autocratic Alexander Lukashenko in power. They have compelled him, too, despite a poor personal relationship with Mr Putin and Dmitry Medvedev, his successor as Russian president, to remain essentially a vassal of Moscow.
Belarusian industry, like Ukraine’s, benefits from cheap Russian gas. Belarus also receives cheap Russian oil, refines it in two Soviet-built refineries and sells the products to western Europe for a fat profit. “Who knows how Ukraine or Belarus might have developed if Russia had not exerted such an influence using oil and gas,” says Mr Petrov.
By the same token, however, the lack of energy revenues has prevented Ukraine’s leaders from establishing as heavy-handed rule as Moscow. Local analysts cite this as a key limiting factor on Ukrainian president Viktor Yanukovich’s attempts to create a Putin-style system.
In Russia, meanwhile, parts of the political and business elite have realised that without modernisation to nurture other sectors, it risks the kind of economic stagnation it suffered in Soviet times. Mr Medvedev portrays himself as a reformer who will try to help Russia escape the oil curse if granted a second term as president next year. But oil revenues may yet help propel Mr Putin, currently prime minister, back to the Kremlin.
Among the biggest factors holding back the development of democracy in the former Soviet Union have been two three-letter words: oil and gas.
Of the six post-Soviet republics deemed authoritarian by the Economist Intelligence Unit, three – Kazakhstan, Turkmenistan and Azerbaijan – have big hydrocarbon reserves. Russia, with the largest reserves, is a “hybrid” state, showing authoritarian features.
All have to some extent suffered classic symptoms of the “oil curse”. Oil and gas revenues have enabled cronyist leaderships to establish or maintain firm rule, while buying off opposition by raising wages and pensions. Apart from Kazakhstan, which has carried out some market-friendly reforms, energy wealth has also stunted the growth of other sectors.
Russia is perhaps the starkest example. Throughout the 1990s, when oil prices were low, Russia was a democracy, albeit a highly imperfect one. For the first three years of the last decade, under president Vladimir Putin, liberal reforms continued. “But finally oil prices rose and Russia became too rich,” says Nikolay Petrov of the Moscow Carnegie Center, a think-tank, “and the leadership decided there was no longer a need to undertake new reforms, as they enjoyed huge revenues coming from nowhere.” Oil and gas have played an important role not just in countries that possess them, but also as leverage Russia has used to maintain influence over neighbours that lack them.
Ukraine, the biggest ex-Soviet republic by population after Russia, relies on cheap Russian natural gas to fuel its heavy industry. Twice since 2006, Russia has cut supplies in winter amid pricing disputes. In Belarus, smallest of the three Slavic republics, energy subsidies from Russia have sustained the autocratic Alexander Lukashenko in power. They have compelled him, too, despite a poor personal relationship with Mr Putin and Dmitry Medvedev, his successor as Russian president, to remain essentially a vassal of Moscow.
Belarusian industry, like Ukraine’s, benefits from cheap Russian gas. Belarus also receives cheap Russian oil, refines it in two Soviet-built refineries and sells the products to western Europe for a fat profit. “Who knows how Ukraine or Belarus might have developed if Russia had not exerted such an influence using oil and gas,” says Mr Petrov.
By the same token, however, the lack of energy revenues has prevented Ukraine’s leaders from establishing as heavy-handed rule as Moscow. Local analysts cite this as a key limiting factor on Ukrainian president Viktor Yanukovich’s attempts to create a Putin-style system.
In Russia, meanwhile, parts of the political and business elite have realised that without modernisation to nurture other sectors, it risks the kind of economic stagnation it suffered in Soviet times. Mr Medvedev portrays himself as a reformer who will try to help Russia escape the oil curse if granted a second term as president next year. But oil revenues may yet help propel Mr Putin, currently prime minister, back to the Kremlin.
Copyright The Financial Times Limited 2011
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