By Neil Buckley
Published: August 16 2010 23:04
August has once more brought disaster to Russia. This same month has, over a dozen years, seen Russia’s sovereign default, two submarine accidents, terror bombings of airliners and the Georgian war. Now it has witnessed the deadly climax of the country’s worst heatwave.
Wildfires have directly killed at least 54 people and left thousands homeless. The heat and smog from blazing forests and smouldering peat bogs has caused the premature deaths of thousands more. Moscow’s mortality rate doubled to 700 a day. Yet, more starkly than ever, the fires have exposed – despite the flood of oil and gas revenues over the past decade – the degradation of Russia’s infrastructure and public administration.
The fires have been worsened by shortages of equipment such as fire engines, delays in transporting apparatus over Russia’s dreadful roads, and failures of co-ordination. Prime minister and former president Vladimir Putin himself has told of country-dwellers calling emergency services which simply hung up. In short, they have demonstrated once more how crucial is the modernisation of Russia that Mr Putin’s successor as president, Dmitry Medvedev, declared last autumn to be his goal.
The crisis may further reinforce another, less publicised, recent phenomenon: what domestic media have called a “sensational” shift in foreign policy. Diplomacy, according to this new thinking, must become a servant of Russia’s modernisation project. And that means rebuilding bridges with the west – the only source of both the investment and technology Russia needs.
The first concrete evidence of this fresh approach came in a leaked foreign ministry document in May. Mr Medvedev confirmed the themes last month in a speech to Russian ambassadors. The thoroughly modern Mr Medvedev even tweeted the main points on Twitter. In essence, the oil-fuelled hubris and breast-beating of Mr Putin’s second presidential term is out. In comes pragmatism. Russia should have “no friends, or enemies, only interests”. It should form modernising partnerships “above all with Germany, France, Italy, the European Union and the US”. (The UK gets no mention.)
Russia-watchers are abuzz. Anders Aslund, a Swedish economist who advised on Russia’s 1990s economic reforms, and a frequent critic of the Putin era, calls the shift “huge, and very underestimated”. That said, there had already been signals – and results – of the new approach: the rapprochement with Poland after the Smolensk air crash; a new Start treaty with the US; sudden resolution of a 40-year border dispute with Norway; Russia’s support for new sanctions against Iran.
There are also hefty caveats. Russia will not go from grizzly bear to teddy bear overnight. The logic is hard-nosed, even cynical, especially towards Russia’s former Soviet neighbours. The foreign ministry paper suggests now is a good time to scoop up cheap assets in the Baltic states and Ukraine, among the few economies hit harder by last year’s financial crisis than Russia. Even the cosying up to Poland was motivated by realisation that the previous chill blocked the path to broader co-operation with the EU.
People familiar with Kremlin thinking say the shift was facilitated in part by President Barack Obama’s “reset” of relations, which has eased Moscow’s Bush-era siege mentality. Moscow believes the US has tacitly acknowledged its sphere of interest in the former Soviet republics – something Washington denies.
More than anything the foreign policy rethink reflects the shock of Russia’s 8 per cent slump last year, which exposed the weaknesses of its resource-based economy. The pre-crisis flow of cheap foreign credit to Russian companies has also dried up.
There are echoes here of the last Kremlin-dweller who embraced pragmatic foreign relations as he tried to modernise a dysfunctional state: Mikhail Gorbachev. And Mr Medvedev will soon confront the same dilemma Mr Gorbachev did. Economic renewal of a country at Russia’s stage of development is impossible without political and social renewal. It is no good simply to decree that a high-tech industry should come into being – as the Kremlin has attempted by ordering construction of a “Russian silicon valley” outside Moscow.
An advanced economy requires competition in politics and ideas. It needs leadership exposed to public scrutiny. Barring one or two Gulf oil states, the global leaders in output per capita – which Russia aspires to join – are functioning democracies. Mr Putin and Mr Medvedev know this. But they also believe Mr Gorbachev went too far, too fast, and lost control of his reforms. The result, as they see it, was a decade of chaos and humiliation for Russia.
Progress on political loosening is therefore likely to be slow, whether Mr Putin or Mr Medvedev takes the presidency next in 2012. Yet the tandem faces a tricky balancing act in trying to deliver authoritarian modernisation, while renewing infrastructure across Russia’s vastness; in stimulating high-tech business while satisfying popular desires for more basic improvements.
Most of the population still cleaves to Putin-style stability. But, like the smoke seeping from its subterranean peat fires, signs of discontent are filtering up from Russia’s free-speaking blogosphere. As one blogger from rural Tver complained: “Why the hell do we need Skolkovo ... if we don’t have elementary fire engines.”
Copyright The Financial Times Limited 2010.
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