HOW RUSSIA WAS LOST

By Tatiana Matsuk

The euphoria of the early years of perestroika and the beginning of the reforms in Russia has been replaced by a deep sense of disillusionment brought on by the collapse of hopes and dreams. Russia and the West are moving rapidly in different directions, and are practically on the brink of cold war. The West really is losing Russia. I think the most important things is to try and establish why this is happening rather than who is to blame.

There are very different ideas about this in Russia and the West, though it is quite clearly the collapse of Russia’s reforms that is at the root of anti-Western sentiment in Russia. If we gather the threads of the media reports that Russians are offered, a generalized version of the Western viewpoint, seen from a Russian perspective, might look like this:

“In Russia the West encountered a number of situations for which it had no recipes. The West backed President Yeltsin and his circle; it thought that democratic reforms were underway in Russia, and offered assistance to Russia’s leaders, but it turned out that this was not the case. By voting against the communists, Russians were hoping that the quality of life might be improved, but it transpired that the democrats did not know how to do this. Russians are accustomed to a one-party system, and do not want to join political parties, so parties are created from above. During the long years of serfdom, people grew accustomed to debasing themselves, and are prepared to pay for things they are entitled to by law. The West should not helped individual politicians, but instead should have assisted in forming social institutions–improving the constitution, strengthening parliament, raising the profile of judges. Due to the West’s support for Yeltsin, the Russian people have lost their respect for America. Another mistake was cutting Russia out of the process of resolving international problems, the diplomatic marginalization of a nuclear power. We must now monitor Russia’s use of Western credits very strictly, and, on the basis of the events in Chechnya, we must threaten to deny loans to Russia’s leaders, warn them that they risk entirely losing their reputation in Europe, and demonstrate our coolness towards Moscow, because Moscow can only understand pressure.”

A generalized Russian response might be:

“If the West had a poor understanding of the situation in Russia and didn’t really know how to deal with the problems, then why did it offer advice to Russia’s leaders and set such tough conditions for securing credits? Was it perhaps because all these experts and advisers were making a killing, with their 5000-dollar-a-month salaries plus US$2,000 for accommodation and their ‘hardship allowance,’ not to mention extra for business trips? Or perhaps because it was advantageous for many people to destroy any potential competition? Russians realized that Yeltsin was no democrat back in 1993, when he unleashed the tanks on the parliament building, and the last Chechen war underlined this. (There were never in fact any real democrats in power.) But for some reason the West has only just realized this, just as it has only just realized that there is outrageous corruption among Russian officials. This means that back then it was expedient not to notice these things, whereas now it is expedient to notice them. If that is the case, there can be no talk of ‘ideals.’ Who should Russia try to emulate and why? The West? Well, Russia’s generals are doing this in Chechnya: If the military operation in Kosovo had not taken place, there would have been no operation in Chechnya–at least not in the form it is taking now. And Boris Berezovsky says that the notorious Kremlin ‘family’ which basically rules Russia today is a perfectly normal phenomenon: The influence of money on the authorities is even greater in other countries. Do you think Clinton doesn’t consult leading companies on the Iraq question and so on? Nonsense. In the directory for 1993 there were already thirty-four parties listed, more than half of which were led by complete unknowns. And later nearly all active, thinking Russians, seeing their powerful nation going to the dogs, were ready to form their own party. But the only parties which had any chance of making a real breakthrough into big-time politics were those which were formed ‘from above,’ because the others did not have the money or other resources to do so. Or perhaps the West supported Yeltsin because Russia was useful merely as a source of raw materials and a market for its goods? Ordinary people bribe officials to avoid being humiliated by them, because the country’s legal system doesn’t work properly, laws are not enforced and the laws aren’t created for the sake of the people anyway. But the West gave these officials huge loans which went goodness knows where. And now there is US$1,000 worth of foreign debt for every Russian citizen. What is Russia’s reputation in the West worth to Russia now, when Russians themselves no longer respect the West? Isolation may be better for the country than the current position; we would stop accepting loans, we would begin developing our own industry and capital would stop fleeing the country. The more the West pressurizes Russia now, the less it will achieve in the long run. Especially since everyone here understands that buyers will always be found for our natural resources, arms and technology, and that nobody walks away voluntarily from such a huge market. And no one will risk threatening a huge nuclear power with force.”

There is a grain of truth to both sides of this argument. But I think that what is needed now is not mutual recrimination, threats and abuse, but a deeper examination of the reasons for the failure of Russia’s reforms. To my mind, they were doomed from the start, because they were carried through with the aim of maintaining the type of state which suited the ruling nomenklatura.

Many people are now saying that there is a nomenklatura state in Russia, but they use the concept to mean different things. I do not think that Russia’s nomenklatura is something specific which was created entirely in the bowels of the Soviet system or that is related only to the planned economy. When creating his empire, Stalin modeled the nomenklatura along the lines of the nobility. In different periods in Russia’s history, the role of the nomenklatura was played by different social groups, but its essential nature was always the same: At every level, power in Russia has always been wielded predominantly by people who could not have achieved what power gave them in any other way.

Such people exist in every country. They always aspire to power for the sake of the particular opportunities it offers, and they form a bureaucratic and often corrupt part of the civil service, the oligarchy and so on. But where there are not enough natural resources, and the social sphere is not particularly diverse or is not doing too badly, or, for example, in the United States, where professionals from all over the world go in search of the best way to fulfill their potential, society offers great resistance to this type of person. Society does not allow them to increase their numbers or to use power and the state predominantly for their own interests.

Russia and some Latin American countries (the comparison is appropriate) are a different matter. Russia is very rich in natural resources, but living in it, even if only due to the climate (unstable agricultural zone) and large uncultivated swathes of land, is difficult. Those professionals who want to fulfill their potential, and have the creative gifts to do so, do not usually have enough time and energy for anything beyond work and the daily round. A significant section of the population has always lived in poverty, marginalized because they could never see much difference in the relative standard of living of those who worked and those who didn’t, while the country’s riches always somehow supported a sizable army of spongers. But the more people there are who rely on the fruits of other people’s labor, and the greater the difference in standard of living and quality of life between various segments of the population and between different regions, the stronger the position of those who control the levers of government and hand out benefits.

So those people who set themselves the task of gaining as much benefit from power as possible usually achieved this aim. Aware that they would not be able to hold on to the positions they have gained without other people like themselves, they have always known how to close ranks at the right time. And when there were too many of them, and too many people at the margins on whom they depended, and the country’s economy began to burst at the seams, then wars or reforms would be arranged. There would be changes at the top–sometimes quite major ones–but the clan would hang on to its position overall. Even revolutions and countless victims could not shift Russia from this state of equilibrium, though there have always been vacillations, and some of them have been very significant. But after each period of upheaval, there has always been a return to a state ruled by a privileged clan of “animals that are more equal than others”.

Whatever words have been used to describe the Russian state over the last three hundred years–feudal, socialist, capitalist–it has at heart always been a nomenklatura state. And in such a state, power always adapts to the winds blowing from above, and values services rendered not to the people but to those who have more power, money and clout.

Gorbachev’s perestroika was nothing more than another attempt by the nomenklatura to introduce reforms as a way of preserving its precarious position. But after the failure of the 1991 putsch, the country had the opportunity to break out of the vicious cycle. This, however, would only be possible if the disorientated and unnerved nomenklatura could be removed from power, perhaps even by bequeathing it the property which to all intents and purposes it already owned. (This is, incidentally, exactly what the “young reformers” Yegor Gaidar and Anatoly Chubais now say was the intention–to swap property for power.) Without power, people of mediocre ability–who were accustomed to pretending to do useful work rather than to actually do it–would be incapable of holding on to their property in real market conditions. Given time, this property would be transferred to the professionals who were keen to get involved in small and medium business and who could have become effective managers and done a proper job of reforming the economy.

But the right people did not have enough money, experience, contacts or information, and the nomenklatura was very well aware of the danger threatening it. This is why they co-opted their own children, who had the reputation of being democrats and Westernizers, but who had never been on equal terms with everyone else. And it was through them–with the help of high taxes, financial pyramids (including GKOs, or short-term government bonds), western credits, voucher privatization, fraudulent auctions and all the other delights of the Russian “reforms”–that the nomenklatura practically destroyed its main rivals and potential grave-diggers–Russia’s real professionals. And the West helped–partly through a lack of understanding, partly because it was afraid to take risks, partly through a desire not to see their own profits disappear, and partly because it has its own parasites too. Bureaucrats of all countries always find a common language and common interests.

Now, Russia’s officials–who number twice as many as the USSR’s–and those people who have dubbed themselves the political and business elite, have both property and power, which they supposedly acquired legally and which they are not planning to relinquish to anyone. The numbers of people on the margins of society have risen tremendously. Crime and power are rapidly becoming intertwined. Meanwhile, those who have a realistic chance of getting the country off its knees are eking out a miserable existence while vigilant western officials refuse them visas to enter their countries. People are living in poverty, another war is raging and the specter of another revolution or dictatorship stalks a nuclear power.

On top of this, the West threatens Russia with isolation and complains that it is fed up with Russia’s problems. This is the equivalent of saying that you’re fed up with earthquakes and trying to isolate yourself from them when you live on a fault-line. This can only be done by moving house–but I don’t think that those living in the opulent West are ready to move to the Moon.

So what can realistically be done in this situation? Just one thing: Offer support, at long last, not to those who hold power in their hands–or will hold it after the upcoming elections (only very rarely do people unconnected with the nomenklatura or criminal circles break through into real power)–but to those who, given time, could create an alternative, true market economy, based on developing small and medium business, and a different type of national administration. These are the professional people, not very rich and not very well known, who have given up hoping for credits, investment, open markets and support for their ideas and undertakings from their rich neighbors on this planet. If they end up with nothing once again, then I fear that the West will lose Russia altogether, and will leave itself with a host of serious problems for many years to come.

Tatiana Matsuk is a senior researcher with the Institute of Employment Issues at the Russian Academy of Sciences.