Cruiseboat Debates on Russia’s Modernization

Ah, the Valdai Discussion Club – that wonderful time of year of ponderous navel-gazing over the future of Russia’s unfulfilled potential, a moment of generous ignorance over the country’s more serious systemic problems.  Neil Buckley at the Financial Times snags down some of the most basic ideas being exchanged so far … which may not be all that surprising.

Piotr Dutkiewicz, a professor at Ottawa’s Carleton University, notes that Russia’s traditional “coercive-intensive” model of modernisation may have had some successes under Tsar Peter the Great, for example, and under Stalin. But while it may be a good way of building smelters and steelworks, it is not suited to developing an economy based on innovative products and technologies. And the ex-Soviet scientific base has already deteriorated; Russia submitted about as many new patents last year as the US state of Georgia. (…)

Russia is not a democracy, but a country dominated by powerfulbureaucracy, where bribe-taking has reached epic proportions. Thebureaucrats have every incentive to resist change. (…)

The Valdai consensus is that tackling corruption and installing therule of law are overwhelming priorities. Sergei Aleksashenko, a formerRussian deputy central bank chairman now with Moscow’s Higher School ofEconomics, says corruption is like “rust” eating through the hull ofRussia’s economic “ship”. But instead of treating the rust, theleadership is approaching things the wrong way.

“They started to identify that the ship is going slower and slower,”he says. “But their answer is to try to put in a new and more powerfulengine.”