UPI: Is 2004 a benchmark year for Russia? During the course of the year, particularly after Vladimir Putin started his second term as president in May, Russia has stayed in the headlines. The Kremlin's strongman in Chechnya, Akhmad Kadyrov, was assassinated, followed by a string of lethal guerrilla attacks, most notably the horrific attack in Beslan. Immediately after the Beslan crisis, Putin announced political reforms that increased the Kremlin's powers over Russia's regions. Then Ukraine's political crisis came, putting Russia and the West at odds reminiscent to the bad old days of the Cold War. Finally, over the past weekend, we witnessed the destruction of Russia's largest privately owned oil company Yukos in an auction that anything but opaque. While not in the headlines, Russia's economic expansion has started to slow.

Is Russia a different place at the end of the year? Are we likely to see a tumultuous 2005?

--

Vlad Sobell, senior economist Daiwa Research, United Kingdom

2004 was an eventful year in Russia -- but so have been most other years. Much more than other countries, Russia is the work in progress and will, therefore, remain fundamentally unstable and unpredictable for a long time.

Russia has been moving into a wholly uncharted territory at several dimensions simultaneously. It is building a genuinely Russian democracy for the first time in its history, developing a modern market economy, rebuilding its federal system and readjusting its role as a great Euro-Asian power. At the same time, it is facing severe pressures such as Chechen terrorism and continued Western distrust.

A successful design -- whether in engineering, art or social institutions -- must proceed by protracted and painful process of trial-and-error. It cannot materialize suddenly, by speedy implementation of a clear-cut, detailed plan, miraculously conceived by divine intervention in an individual mind or a research institute. This process inevitably generates instability and uncertainty until the design reaches an optimum shape, takes sufficient root, and becomes well tested. Russia is still very far from this point.

It is imperative that we try and understand the country's predicament and aid, rather than sabotage, this historic project. Unfortunately, a large section of the analytical and journalistic community tends to think that instability is somehow inherent in the Russian soil and culture, and that Russia cannot be normal and civilized simply because it is Russian. This inverted mysticism is the spiritual mother of Russophobia -- the conscious or subconscious belief that, as long as it exists, Russia will represent a threat to our civilization.

We can aid Russia's progress -- and buttress our own security and prosperity -- by abandoning the irrational Russophobia and interpreting Russia's convulsions as having perfectly straightforward and rational explanations. They always become apparent if one is prepared to abandon preconceptions and look afresh.

Edward Lozansky, president, American University in Moscow

The year 2004 will certainly not be recorded in Russian history as the year of strong democratic development and furthering the integration with the West. The huge embarrassment in Ukraine and the inability to pacify Chechnya are obviously two major setbacks for these processes.

At the same time, there were also some positive developments for Moscow, ironically most of them coming from Washington. President George W. Bush's victory, the Republicans' enhanced majority in Congress, and the appointment of Condoleezza Rice, with her Russophile instincts, to secretary of state afford Moscow yet another chance to forge a strategic alliance with the United States. The White House continues to hold out for the Kremlin, refusing to succumb to intense pressure from the media and the powerful anti-Putin lobby. A Republican Congress most likely will not challenge the White House's foreign policy towards Russia. However, it's hard to say how long Bush will be able to fend off the attacks on his Kremlin friend.

Thus, if Putin truly desires to rectify the situation, he must move quickly to control damage by reassuring the White House about his continuing interest in the U.S.-Russian rapprochement and presenting a realistic long-term cooperation program on the most important security and economic matters. I wish American experts who advocate harsh rhetoric against Putin were helping him draft this program instead. After all, if you look around at the present Russian political scene, Putin -- with all his shortcomings and mistakes -- probably is the best man to point Russia to the West.

America should play a more constructive role if it wants to see the positive changes in Russia in the year 2005 and after. We should acknowledge Russia's legitimate geopolitical interests and offer attractive incentives for strategic cooperation and democratic development. So far, most of Russians, including even those who consider themselves to be pro-Western, see American policy as a one-way street where Russia makes one concession after another and gets very little in return.

Janusz Bugajski, director of the East Europe Project at the Center for Strategic and International Studies in Washington

They year 2004 has been important in Russia's evolution as a police state with imperial ambitions. 2005 will demonstrate whether such a state is viable. Since his managed re-election, Vladimir Putin has intensified the recentralization of the state and created a blend of loyalist capitalism and neo-Chekism. This strategy has sparked criticism from Western capitals and international organizations, which see Russia as moving backwards on democratization and human rights. This is evident in the recent downgrading of Russia's record by Freedom House from partially free to not free.

During the coming year, Putin will find it more difficult to convince Western governments that his managed democracy is either well managed or democratic. Disputes with the European Union are likely to intensify over domestic policies. Western business may be more reluctant to invest if the pressure on disloyal oligarchs continues. Public unrest resulting from an economic slowdown may provide an even more prominent role for the security services. And terrorist strikes will be exploited by the Kremlin to tighten its political and social controls.

On the external front, Putin has demonstrated an intention to rebuild Russia's zone of dominance in the former Soviet space as witnessed during the Ukrainian upheaval. But instead of consolidating the new dominion, Putin's policies propelled Ukraine more firmly westward, stiffened the EU's approach toward Moscow, awakened Washington policy makers who had misdiagnosed Putin's soul, and encouraged democratic activists elsewhere in the CIS. Therefore, 2005 will provide even more difficult tests for Putin's imperial dreams. With Kiev petitioning for NATO membership, Moldova holding elections that could spark confrontation with Transnistria, and Georgia intent on regaining its lost territories, Putin will be caught between ambition and capability. Unfortunately for him, Moscow can no longer use invasions, coups or gulags to cower its neighbors into submission.

Donald Jensen, director of communication at Radio Free Europe/Radio Liberty

Rather than call 2004 a benchmark, I would say it is the most significant year of Vladimir Putin's presidency so far. Russia's phenomenal economic growth, while still robust, began to slow. Freedom House's downgrading of the country this week to not free reflects the continued erosion of political rights and civil liberties. Violent crime is increasing and Russia's demographic crisis continues.

Beyond these, however, three developments in 2004 are especially crucial.

First, the so-called siloviki clearly emerged this year as the dominant center of power in the political elite. They strengthened themselves at all levels of government and tightened their grip on the most important money flows. Putin, meanwhile, tilted more clearly in their direction than ever before.

Second, and paradoxically, the limits on Putin's power became more visible. Despite the regime's tough line, the authorities could not prevent the Beslan tragedy. While Putin can crush someone like Khodorkovsky, in general the bureaucratic instruments at his disposal are so corrupt and working at cross purposes that they are beyond his efficient control. Some of the governors, moreover, clearly dislike the President's plan to appoint them. I would stress that what I am describing here is largely resistance to direction from the center, not organized opposition.

Third, marked strains emerged in relations between Russia and the West. The Kremlin's futile attempt to manipulate the Ukrainian presidential election was the major cause. (It would be difficult impossible to imagine, by the way, such a fiasco happening had the now-departed Aleksandr Voloshin -- not a silovik -- been in charge.) There is also widespread concern here over the way the Russian government is handling the Yukos affair and the Chechen quagmire.

These trends are likely to make 2005 even more important than this year. They will be shaped, moreover, by two issues: first, the effect of the Ukrainian popular unrest on Russia -- those events already seem to have emboldened Russian democrats; second, plans for the approaching Russian presidential succession. I have no idea what the Kremlin's political technologists are planning for 2008, but surely they must be re-examining their scenarios in light of what happened next door in 2004.

Dale Herspring, professor of political science at Kansas State University, former career diplomat, retired from the U.S. Navy

There has certainly been change during the past year, but I would argue that -- from Putin's perspective -- it has been orderly change. Yes, Chechnya and Beslan have been in the headlines, as have Yukos, his reining in of the governors, and his handling of events in Ukraine. What is important is that Putin has weathered all of these developments in relatively good style. One may like or not like Putin, but I think it is about time many Western pundits realized that he has turned out to be a rather deft political leader, both internally and externally. He is not the kind of individual one would expect the KGB to produce, which just goes to show that we tend over-emphasize the importance of an individual's background on occasion.

If I had to predict where Putin will take Russia in 2005, I would suggest that he will continue along the same bifurcated path he has since 2001. The Russian state will continue to be strengthened, while he will remain popular at home in spite of his authoritarian approach -- perhaps because he brings a degree of order without the repression of the past. Aside from the economy, the critical question will be how successful he will be in getting corruption under control.

Meanwhile, Putin will once again prove to be a better strategist and tactician in foreign policy than most in the West give him credit for. Despite gloomy predictions to the contrary, U.S.-Russian relations will continue in a positive direction as problems surrounding Ukraine fade into the background. Russian-Chinese and Russian-Indian relations will be important, and he will avoid a confrontation with the West over the Middle East.

In short, Putin will continue to prove that he does not have a grand strategy. Instead, he will remain flexible, non-dogmatic and pragmatic.

Gordon Hahn, scholar at large and author of Russia's Revolution for Above: Reform, Transition and Revolution in the Fall of the Soviet Communist Regime, 1985-2000

In 2004, Russia completed its turn away from democratization and the West, which in the Russian mind have always been inextricably linked. Moreover, Putin's presidency has proven to be a failure whether one looks at in terms of democratization or the restoration of an authoritarianism that is effective. Putin's tough policy in Chechnya and failure to reform the siloviki produced a summer of unprecedented terror. De-democratization and de-federalization are provoking ethno- and confessional-nationalism (Islamic and Islamist) which in turn are creating a still thin but nevertheless real support network for Chechen (as well as Ingush and Kabard) terrorists in the North Caucasus. A similar trend may be developing in Tatarstan and in other areas with Tatar communities. Witness the wave of arrests of alleged members of the Islamic revolutionary organization Hizb ut-Tahrir over the last two months in some eight regions from the Volga to central Siberia. The Russian state is again under threat of disintegration as a result of Putin's re-authoritarianism.

The effort to create a single-party hegemony and state capitalism puts Russia on the road to Taiwan and South Korea of the 1970s, even China circa 2000 minus economic dynamism, but plus neo-imperialist adventurism. There has been no meaningful economic restructuring, which will cost Russia dearly when oil prices drop. The question remains whether the crisis comes before or after the federal election cycle set for 2007-2008. If it occurs before and close to or during that cycle, a succession struggle and/or coup could bring to power dark forces.

Russia is on the eve of the 100th anniversary of the 1905 revolution that marked the first wave of real institutional democratization in Russian history. Like today's wave, it was aborted. Twelve years later Russia was in tatters and was beginning seven decades of death and destruction.

Nicolai Petro, professor of political science, University of Rhode Island

With Russia-bashing again in vogue, it would be useful to remember some of the other things that happened in Russia in 2004.

Salaries grew at an annual rate of 13 percent after inflation in the first three quarters of 2004. Consumer lending by Russian banks, which rose 17 times since 2000, doubled again in 2004. After years of stagnation, the number of small businesses in Russia rose 10 percent this year. Foreign direct investment in the first half of 2004 grew by 35 percent.

The management-consulting company A.T. Kearney rated Russia as the eighth-most attractive country for foreign investment this year, and cited Russia as the No. 1 destination for retail expansion, ahead of India and China. In November, Fitch joined Moody's in raising Russia's credit rating to investment grade.

This year the estimate of Russian oil reserves were revised upward three times. The Central Bank of Russia's foreign exchange reserves are at an all-time high, over $115 billion, and after five years of federal budget surpluses, even regional budgets have an overall 3 percent surplus.

Citizens are increasingly turning to the courts in dealing with government officials, and winning nearly 80 percent of the time. On debt collection cases, two-thirds of creditors ultimately succeed in getting all or part of the judgment, with foreign firms doing about as well as Russian firms. Meanwhile, Russian printed mass media reached a new record of 47,000 titles this year. Overall, newspaper circulation in Russia exceeded 8 billion, and magazine circulation reached almost 600 million. Advertising investment is expected to rise from $3 billion in 2003 to $5 billion in 2005.

In sum, looking beyond the headlines, we can see that Russia had both ups and downs in 2004, and can look forward to more of the same in 2005.

Ethan S. Burger, Esq., scholar-in-residence, School of International Service, Washington

When President Vladimir Putin first took office he declared a commitment to a dictatorship of law. Many thought that this meant the establishment of a society based on the rule of law, but with limits on political expression (including criticism of the system, though such limitations were to promote stability). The law was to be applied fairly to all. This view now seems to naïve.

The Russian government's campaign against Khodorkovsky and Yukos now appears to be a harbinger of the siloviki's attempt to gain control Russia's most significant natural resources. Most Russians regarded the re-election of Putin as a way to weaken the oligarchs. They now seem bothered that the recentralization of the state has resulted in the empowerment of unaccountable officials; that is, they don't live in a democracy. The courts are no longer independent.

Putin experienced significant setbacks in Chechnya (Russians regarded Beslan as evidence that their government could not protect them or tell them the truth) and Ukraine. The high price of oil prevents the Russian government from having to face economic and political reality.

Internationally, foreign governments became increasingly troubled by numerous factors: first, Putin's increasingly authoritarian and undemocratic method of governing; second, recognition that Putin's efforts to promote economic reform and combat corruption were not genuine; and third, the Kremlin does not respect the sovereignty of its neighbors. In the international arena, late 2004 may be remembered as when foreign governments decided that Russia should no longer received special treatment irrespective of performance.

Ira Straus, U.S. coordinator of the Committee on Eastern Europe and Russia on NATO

Russia ends 2004 as it ended 1999 -- at a fork in the road.

The one path -- as taken after 1999 -- is to calm down from the extreme anti-Western rhetoric and make up with the West. It leads to rebuilding relations on a higher level, and domestically, to renewal of a modernizing policy with some hopeful prospects given the improved functioning of the state.

The other fork leads to a new Cold War with the West. Anti-Western arguments keep feeding on one another without restraint. Russia reverts to a policy of bilateral balance of nuclear terror, but in more unstable conditions than previously; and to multipolarism in other respects, compensating for its weakness by building up various power centers against the West despite their potential future use against Russia itself. These include, building up Iranian nuclear potential; helping China, despite the expectations of Russians that this will lead to their losing the Far East, and attempting a Russia-India-China threesome -- or foursome including Brazil -- with its popular anti-imperialist president.

Putin has already spoken this language, whether out of settled intent or for scaring the West. Domestically it means tightening the screws (Yevgeny Primakov) or counter-revolutionary measures (Gleb Pavlovsky), and encouraging the same in all its CIS allies. This might succeed in some states, but destabilize others. In Russia itself, it would make the regime more brittle; a collapse in oil prices might bring it down, as might new conflicts in the Caucasus.

Perhaps fortunately, there are hybrids in between, for example, temporary continuation along the anti-Western vector, slowing it down and new moderation. This strategy has sparked criticism from Western capitals and international organizations, which see Russia as moving backwards on democratization and human rights. This is evident in the recent downgrading of Russia's record by Freedom House from partially free to not free.

During the coming year, Putin will find it more difficult to convince Western governments that his managed democracy is either well managed or democratic. Disputes with the EU are likely to intensify over domestic policies. Western business may be more reluctant to invest if the pressure on disloyal oligarchs continues. Public unrest resulting from an economic slowdown may provide an even more prominent role for the security services. And terrorist strikes will be exploited by the Kremlin to tighten its political and social controls.

On the external front, Putin has demonstrated an intention to rebuild Russia's zone of dominance in the former Soviet space as witnessed during the Ukrainian upheaval. But instead of consolidating the new dominion, Putin's policies propelled Ukraine more firmly westward, stiffened the EU's approach toward Moscow, awakened Washington policymakers who had misdiagnosed Putin's soul, and encouraged democratic activists elsewhere in the Commonwealth of Independent States.

The year 2005 will provide even more difficult tests for Putin's imperial dreams. With Kiev petitioning for NATO membership, Moldova holding elections that could spark confrontation with Transnistria, and Georgia intent on regaining its lost territories, Putin will be caught between ambition and capability. Unfortunately for him, Moscow can no longer use invasions, coups or gulags to cower its neighbors into submission.

All rights reserved. � 2004 United Press International. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by United Press International. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of United Press International.

Related Links
SpaceDaily
Search SpaceDaily
Subscribe To SpaceDaily Express

Thanks for being here; We need your help. The SpaceDaily news network continues to grow but revenues have never been harder to maintain. With the rise of Ad Blockers, and Facebook - our traditional revenue sources via quality network advertising continues to decline. And unlike so many other news sites, we don't have a paywall - with those annoying usernames and passwords. Our news coverage takes time and effort to publish 365 days a year. If you find our news sites informative and useful then please consider becoming a regular supporter or for now make a one off contribution.
SpaceDaily Contributor $5 Billed Once credit card or paypal		SpaceDaily Monthly Supporter $5 Billed Monthly paypal only