BUSINESSWEEK ONLINE : DECEMBER 25, 2000 ISSUE
INTERNATIONAL -- INT'L BUSINESS

Commentary: Will Putin's Split Personality Hurt Russia? (int'l edition)


Russian President Vladimir V. Putin seems to be operating at ideological cross purposes these days. On Dec. 11, he restored the melody of the old Soviet national anthem as Russia's new national song. Then, on Dec. 13, he headed to Cuba to revive lapsed ties between Moscow and Havana. Yet in this same period, Putin and his government also pressed forward with major economic reforms, including plans to deregulate Russia's electricity and gas monopolies. It sure looks odd: Putin is taking political steps back into the Soviet past, even as he moves forward toward a liberal market economy.

What's the key to this puzzle? You could call it Putin's ''split brain.'' In one half, there's a cultural attachment to certain old Soviet political values; in the other, a decidedly un-Soviet, pragmatic commitment to markets. Putin himself seems unaware of any contradiction in this approach. That's worrisome, because Russia cannot become prosperous and politically secure if its leader can't deliver a coherent message to his own people--not to mention foreign governments and investors. Moreover, centuries of Western experience suggest that it doesn't work over time to loosen economic screws while tightening political ones.

UNEXPLAINABLE. Putin's split personality is confusing not only to the outside world but to his own liberal advisers. ''I don't know what Putin was thinking of when he approved the Soviet anthem,'' confesses Oleg Vyugin, an architect of Putin's liberal economic plan who's now chief economist at Moscow brokerage Troika Dialog. ''It's an unexplainable mistake.'' Anatoly B. Chubais, head of the electricity monopoly Unified Energy System, also criticizes the decision on the national anthem as ''a historic mistake.'' Chubais thinks Putin should create new symbols to make a break with the Soviet past.

But Putin thinks old values must be honored to help a disoriented society regain its direction. ''If we agree that the symbols of the preceding epochs, including the Soviet epoch, must not be used at all, we have to admit then that our mothers' and fathers' lives were useless,'' he said in a national television address Dec. 4. ''Neither in my head nor in my heart can I agree with this.'' An uncomfortable truth about the President is that he also feels a sentimental tug to the authoritarianism that was a hallmark of the Soviet era.

An ex-KGB agent, Putin does not show the instincts of a democrat. Since his March election, he has increased state control over Russian television, revived the prestige of the security services, and prevented a regional governor who embarrassed him politically from standing for office. What about Putin's Dec. 9 promise to pardon Edmond Pope, the former U.S. naval intelligence officer convicted of espionage? That was a humanitarian gesture. But it came after a virtual show trial in which Pope's lawyers were not allowed to examine all of the charges.

Then there's the other side of the enigmatic President. A cool pragmatist, Putin understands that nuclear warheads--of which Russia still has plenty--don't alone make for power in today's world. Even more important is a robust economy: He knows Russia cannot achieve that without completing its transition to a market economy. That's why Putin has assembled a team of liberal economic policymakers, and given them license to pursue structural reforms.

All well and good. But the dual-track approach--cracking down on political freedoms while encouraging economic ones--won't be tenable in Russia for long. Russia isn't China. It's a nation in which Western political values are more firmly implanted, especially among the policymaking cadre. Putin needs the political elite behind him if he is to get anywhere on economic policy. Yet he is sapping their enthusiasm with his anachronistic political program.

BREATHING SPACE. Yes, there are many older Russians who welcome Putin's revival of Soviet traditions. But if market reforms achieve the goal of building a prosperous, self-confident middle class, the members of that class--especially its younger generation--can be expected to demand more political breathing space than Putin is now permitting.

So Putin must come to grips with his split brain. He must allow his pragmatism to get the better of his sentimental and authoritarian political instincts. Otherwise, he is doomed to fail.

By Paul Starobin
Starobin is Moscow bureau chief.

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