Russian President Vladimir Putin strides the world as the master tactician.
In Crimea, eastern Ukraine and Syria, he seized the initiative and left his
adversaries flatfooted and guessing as to his ultimate intentions.
Putin
displays similar decisiveness against his domestic opponents, as the recent dismantling of the
editorial staff at the independent newspaper RBC attests. Yet, blinkered
decision-making processes can lead to bad policy choices. Having gutted
the domestic media and created a puppet legislature, Putin is no exception to
this rule.
The
Kremlin is transfixed by the implementation of a series of decrees that Putin
issued in May 2012, in the first flush of his successful return to the
presidency. He remains focused on these executive orders -- and their
assigned metrics -- as signs of his domestic success.
The
decrees, which cover foreign, social, economic, housing and health-care policy,
set out a road map for Putin’s third term. His 200-plus bureaucratic
instructions included bold declarations: Life expectancy would increase from
age 70 in 2012 to age 74 by 2018 (though the average Russian male still only
lives to 65); the cost of housing a square meter would decrease by 20 percent;
25 million high-productivity jobs would be created by 2020, more than doubling
the estimated number in 2012, and Russia would move from 120th to 20th place in
the World Banks’s “Doing Business” rankings by 2018.
Putin’s
resolute adherence to now questionable priorities, especially in regard to
social policy, is emblematic of what has gone wrong with his national agenda.
Because the
facts on the ground -- and the state of the Russian economy and the lives of
everyday Russians -- have changed dramatically since the 2012 decrees. Putin
just met with his Presidential Economic Council for the first time in three
years to discuss alternative plans, which range from a targeted stimulus to
major structural reforms, to spur economic growth. Meanwhile, spending on his
proclamations continues unabated.
When first
issued, no price tag accompanied this agenda. Current estimates range from
$10.8 billion to $43 billion. The head of Russia’s audit chamber recently
announced that before evaluating the effectiveness of Putin’s orders, the
agency needed to know their cost.
Putin is
not the first candidate to make lofty promises while campaigning. Yet he
raised the political stakes by elevating these promises to official government
directives, and has single-mindedly been following their progress.
He has,
for example, criticized proposed federal budgets, and fired ministers and
government officials for not fulfilling the demands set forth in his decrees.
Fast-forward
four years, and the debate over implementation of the decrees has only
intensified. Significant government and academic resources have been
expended to analyze their progress. The government proudly proclaims it
has fulfilled 82 percent of the demands in the decrees. Outside monitors put
the rate far lower.
No matter
what the overall percentage, however, the optimism that inspired these
decisions -- oil was selling at $113 a barrel in 2012; it is now $49 -- has
long since been overtaken by events, including the introduction of
economic sanctions against Moscow, the collapse of oil prices, high inflation
and a weakened ruble.
Despite
the hoopla surrounding the implementation rate, the underlying reality is far
less encouraging. The decrees, for example, call for significant salary
increases. Yet, the purchasing power of many professions, including doctors and
teachers, remains at 2012 levels.
Moreover,
regional governments have accumulated significant debts while striving to meet
the increased social spending requirements. The regions, according to one
source, still lack 15 percent of the revenues needed to implement the decrees.
Meanwhile,
the big-ticket items -- increased productivity, cheaper housing -- now seem far
beyond the reach of the government.
What does
this continued preoccupation with the decrees say about Russia
today? First, it illuminates why the Russian government has not been able
to implement a sound anti-crisis plan for the past two years. Money and
attention urgently needed to stimulate economic growth are regularly diverted
to pad the success rate of fulfilling the orders rather than tackling fresh
problems.
Second,
Putin remains obsessed with meeting certain prestige goals instead of reforming
institutions and addressing the underlying problems of ordinary
Russians. He appealed to popular opinion, for example, when he promised to
lower housing costs and provide better jobs. Today, however, fewer
Russians than ever can dream of purchasing a home. Indeed, by not defending the
ruble, the Kremlin ensured that Russian people would have to bear the brunt of
the current recession.
Such
realities, however, are unlikely to impinge on Putin’s world. As he
contemplates his re-election campaign in 2018, the Russian president will
likely just declare his policies a success by pointing to the final percentage
of decrees implemented. Such a strategy would allow him to avoid running on his
actual economic record.
All these
references to rates of performance have a Soviet ring to them. Russia would
have fulfilled the plan even though the nation’s standard of living and global
competitiveness have declined precipitously.
Moreover,
Putin would be continuing a Russian pattern set centuries ago. Russia has been
governed by decree -- meaning personal rule -- since Peter the Great. This
does not mean Putin is totally inflexible. He has, for example, let market
forces determine the ruble’s value, and watched the currency tumble as a
result.
Nonetheless,
Putin is demanding that priorities he set in 2012 must be realized -- even
though the positive economic conditions at that time have long since
disappeared. The Russian political class feels compelled to follow Putin’s
orders because that is how an autocratic system works.
The
Russian leader’s policy decisions are unlikely to lead to immediate
collapse. The price of oil has crept up and stabilized. In addition,
Putin now has his own personal national guard that would respond without
question to any political challenge from Putin’s opponents.
Yet,
instead of pursuing a true modernization effort, Putin has fallen back on the
May 2012 decrees as an alternative measurement of success. One that he can make
look good on paper. The price of complacency, however, is blindness to
constructive feedback.
Russia
will wake up one day and discover that its public institutions and economy have
yet again fallen behind parts of the developing world. The fixation on the May
2012 decrees helps explain why.
(William
E. Pomeranz is deputy director of the Kennan Institute at the Woodrow Wilson
Center for Scholars in Washington. Kathleen Smith is a teaching professor at
the Center for Eurasian, Russian and East European Studies at Georgetown
University.)
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