Over the weekend Owen Matthews published a preemptive political obituary of President Dmitry Medvedev in Newsweek, pointing out that all of the problems that he has tried (and mostly failed) to confront in Russian society were specifically made by the hand of Vladimir Putin. It’s a pretty devastating and concise summary of the key issues.
During his two terms in office, Russia’s bureaucracy doubled in size, while according to Transparency International, the size of the “bribe economy” increased 10-fold. The bureaucracy became the business elite as the state–from the Kremlin to provincial governors and even local policemen–swallowed up private businesses.
Today business rivals regularly use state power to put opponents injail. They conjure up crippling tax raids and steal whole businesseswith the connivance of local authorities. This makes it almostimpossible for Russian businesses to compete internationally or attractoutside investment, since there’s no guarantee that your business won’tbe stolen. The only way to survive is to be big and connected–creatingbloated, inefficient business empires. (…)
Russia’s economy is like a leaky bucket–it seems full because of theamount of free money gushing in, mostly from oil and gas. In fact,Russia falls far behind the rest of the developed world on almost everycompetitiveness, productivity, and production index. At the beginningof Putin’s rule in 2000, Russia stood 55th on the World EconomicForum’s index of global competitiveness; by 2009, after a decade ofstability and prosperity and vast oil windfalls, it had dropped to63rd. On legal protection for investors and property rights, Russiaunder Putin slipped 20 places, to 116th. Small wonder that while Europeand the U.S. are now starting to post signs of GDP growth, Russia hashad to revise its forecasts down, and it now expects GDP to fall 8.5percent this year.