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BORIS KAGARLITSKY, MOSCOW
ADULT FAIRYTALES
Russian President Dmitry Medvedev visited Africa. Speaking to the local audience, he said that Europe was indebted to the black continent, which had been colonized in the XIX century. At the same time Dmitry Medvedev noted that Russia itself wouldn’t pay a debt, because it had never been a colonial power.
After that President Medvedev complained about oil pricing, and said, that the process was obscure and unsuitable to Russia’s interests. Strange, but such feelings appear among Russian officials every time when oil prices go down, and suddenly disappear with oil prices increase.
In fact Russian President is absolutely right: oil pricing is a typical example of the world market irrationality and inefficiency. Speculative trading destabilizes production, overpricing holds back the world economic development, and further price slump causes financial panic and financial disorganization in the states whose budgets are dependent on the gas and oil exports. Nevertheless, just this irrational and non-linked with the real demand for gas system satisfies market requirements. So, one way should be chosen: either declared by the Kremlin commitment to the free-trade principles, or demand for reforms, but definitely not both of them.
The Kremlin officials still believe that the structural reforms can be carried out without changing anything, that it’s possible to get rid of the dependence and the ups and downs of the market, functioning within its frames, to saddle the state with the responsibility for the efficiency of industry, without nationalization, to lower prices in supermarkets, without carrying out any reform in social and economic spheres.
The most amazing thing is that experience of those officials seems to confirm their rightness. Once Prime Minister Vladimir Putin visits any private supermarket and gives a stern glance to a manager, the price of pork reduces as if by magic. Once he takes a trip to Pikalevo bankrupt enterprises previously closed, start working again, factory owners start paying back wage arrears, though before there was no money for this.
This fairytale world goes beyond borders of Russia. Unlike Vladimir Putin, who spent the first years of his presidency mostly on travels abroad, Medvedev does not travel a lot, but rather hosts important guests in this country – the citizens of Yekaterinburg still can’t recover from shock, caused by the SCO summit, which turned into meeting of BRIC leaders – a virtual association of Brazil, Russia, India and China, cooked up by foreign journalists. By the rules of a fairytale genre this spell, that probably came form the English word “brick”, incarnated in political reality, because leaders of those states believed in its power themselves. Or pretended to believe, which doesn’t make difference in politics.
Presidents of Russia and Brazil discussed the taste of barbeque, with which Medvedev was regaled in Rio de Janeiro; with their counterparts from India and China indulged in reverie about establishment of the world currency. The only positive result of the Yekaterinburg summit was Russia’s decision to join the WTO as a member of the Customs Union with Belarus and Kazakhstan. But in that case the spell didn’t work, because the WTO entry procedures do not provide such fantastic possibility. Certainly, they can be drawn up. But the results will be quite unexpected. Confused WTO functionaries announced that this process will prolong Russia’s entry into the WTO by approximately ten years. But will the WTO still exist and what rules will be there is under the question.
Meanwhile, it’s obvious that a mistake during the spell casting was intentioned. Strange behavior of the Russian authorities, when entry into the WTO is at issue, is quite rational; it comes not from logic of common sense, but from logic of politics and ideology, that, unfortunately, is not the same. On the one side Moscow step by step starts realizing that entry into the WTO equals to the economic suicide; we just can’t do it, especially now during the crisis, when domestic industry can hardly survive. On the other side it’s impossible to admit that loads of time and efforts spent on negotiations with the WTO functionaries, in fact were wasted on deliberately senseless or even harmful affair. As to the ideology, public declaration of Russia’s reluctance to join the WTO equals to the uncertainty in the free trade principles. This is almost as hard to admit for nowadays Kremlin, as for Politburo to doubt the ideas of Marxism – Leninism.
In both cases not a single representative of the political elite believes in the proclaimed ideas, but they can’t admit this situation. The ruling circles can’t abandon their ideology, without affecting their authority.
So far as the political establishment in Russia consists of adult and reasoning people, it’s hard to imagine that they believe themselves in magic and fairytale decisions made to meet the crisis. However in the near-term outlook they don’t have other ways. The real effort to reduce the influence of the crisis eventually means the struggle against themselves, but we have to admit, that this is not in plans of any government or ruling class.
Meanwhile in the near-term perspective, the situation is not that bad. Like a character of the Russian fairytale named Yemelya, our heroes still can move sitting on the stove. What is the price of such movements in real life, not in the fairytale – is the other question. But anyway it’s obvious: no one can ride a long way on a stove.
But still a long-long way lies ahead.
Boris Kagarlitsky is a Director of the Institute of Globalization and Social Movements
July 3, 2009
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