Putin's address: expectations and risks

11.05.06

MOSCOW. (Alexei Makarkin for RIA Novosti)

Vladimir Putin's state of the nation address fully coincides with the public
expectations. What does an ordinary Russian want? A Russian, whose world is
far from politics and debates on Putin's successor or his third term? He
wants his family to live a decent life and his country to be a strong power.
In effect, these ideas formed the gist of the address.

Russian people are loyal to the government (and actively support the
president, as his high rating shows), but the growing economy and
skyrocketing oil prices are generating higher expectations. The
cash-for-benefits protests of pensioners in the beginning of the past year
have made it clear that people no longer want to live "as they did before."
They demand a tangible rise in their living standards before too long.

Last year, the president responded to these expectations with his initiative
on national projects (about which he spoke at length in his address). This
time he has announced a family support program. An oil-and-gas nation,
Russia can easily afford to drastically increase childcare allowances. It
can go for much more ambitious projects, such as large-scale second child
benefit payments.

As for the defense policy, it is important both per se and as a symbol.
Russia needs a strong army and an advanced defense industry to position
itself as a key player in the world arena, which is able to resist pressure
from the U.S. and other sources. In a way, the address is a response to the
recent Vilnius speech by Dick Cheney, who lodged many claims with Russia,
mostly on the issue of democracy.

If the president wanted to respond in kind, he would have either made
excuses for Russia ("we are democrats, after all") or gone conflict ("we
don't need your advice"), but he chose neither. His response was
asymmetrical. In his address he outlined his vision of Russia's future,
which was a diplomatically correct warning to the U.S.

On the other hand, the army and defense industry have traditionally been
viewed in Russia as a symbol of a strong power, which is a source of pride.
This sentiment was gone from public mentality in the late 1980s, but its
revival began several years later and even lead to an idealistic revision of
the Soviet years. In his address the president relinquished the Soviet
tradition of sacrificing social policy to the defense effort. This is
consonant with the attitudes of the public, which does not want a repetition
of the guns-before-butter saga.

Understandably, this defense and social programs address is not wholly based
on the public demand for a particular socio-economic policy. It was also
affected by a serious disappointment in dialog with the West on energy
carriers and other issues. The energy dialog will continue, but is not
likely to override other aspects of economic policy. Importantly, the
government has a considerable flow of money from the oil and gas sector,
which enables it to implement large-scale social and economic projects.

Needless to say, the ideas expressed in the address have no failsafe
guarantees of success. The role of the West in modern Russian policy is not
great, but there are three much more important factors which harbor the main
risks.

The first factor is linked with the rampant corruption of Russian
bureaucrats and their ability to obstruct any initiative of the supreme
authority. Russia has never had a universalist bureaucracy, capable of
implementing major projects at the government's initiative or with its
active participation, like in post-war France.

The second factor is rooted in clan and group interests, which are very
important in Russia today and which can frustrate the conduct of any
meaningful economic policy. Under the circumstances, the government's
partnership with business in following a "new course" may create better
opportunities for "friendly" economic structures.

The third factor depends on world prices on energy carriers. Let's recall
that a drop in oil prices upset Gorbachev's equally ambitious plans of
"accelerated growth." Russia has just started diversifying its economy. Will
it have enough time to complete this process? So far, experts are
optimistic, and predicting booming oil prices for another several years. If
there is enough time, Russia should make good use of it.

Alexei Makarkin is deputy general director of the Center for Political
Technologies. -0-