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The future of reform in Russia

Will Russia bite the bullet and follow a path of real reform, or will the Putvedev government take the easy way out?

After elections we usually begin to think about future reforms. It’s high time to look back at the past and make some predictions for Russia’s future.

What we had in the past?

Kazakhstan flagFor example Kazakhstan (like many other countries of the former USSR) began its improvments of politics and economy in the 90s, just copying Russian reforms. Over time the two countries’ reforms diverged more and more, because of other priorities and local conditions. But it is necessary to recognize that many of Russia’s neighbours, despite having worse conditions than Russia had, managed to achieve progressive modernization. And Russia only talks about it.

During the last 15 years, Kazakstan undertook a lot of painful transformations (for the country and for its population), particularly reform of housing and public utilities. But, in contrast to Russia, these reforms provided (according to the sociological surveys’s data) the most low level of pupulation state anxiety (among all CIS).

In comparison with Kazakhstan what does Russia have to boast about? Unfortunately, not one of Russia’s reforms has been finished during the last 4 years and, moreover some of these reforms failed completely. It is enough to remember monetization of reduced payments. It hadn’t any sense and, as a result, it was a disaster, especially for pensioners, who were hit particularly hard. Or let’s remember reform of housing and public utilities which has been discussed endlessly. And the phrase “fighting with corruption” provokes just an ironic smile, or even cynical laughing – time and again, the Duma (Russia’s Parliament) declines to consider the law about eliminating corruption.

In fact, administration reform has failed too. Even current President and future Prime-minister Vladimir Putin frankly talked about its reconsideration. And the only result of pension reform was further wasting of budget money by the Pension Foundation, as it has been stated by the Department of Economic Security, Ministry of Interior.

The future government change has made discussion of these questions more intensive. Thus, Institute of Economis of Russian Academy of Sciences recently has reported about alternative economic programme for 2008-2016 years, titled “The future President’s tasks”. This report is concerned the current social-economical course of the country.

The report’s authors noted that Russia couldn’t achieve diversification of the economy, nor could it succeed in the development of high-tech resources. On the contrary, we are likely to see continuing social degradation and privitivization of the economy. Property relations are destructive, because they were formed with participation of forceful structures. Also the experts criticise ambitious government projects, such as the cloning of state corporations and nanotechnologies development. All this may lead only to waste of resources.

Ruslan Grinberg, Director of Institute of Economy came to the conclusion that:

“the only reasonable way of changing the economic course of Russia is the presence of an opposition political party. Its absence will lead Russia to another crisis (like default of 1998).”

According to Grinberg, the presence of an effective opposition in othe countries with a communist past “helps to correct many anterior mistakes”.

…and in the future?

Such semi-reforms of the Russian economy, in my point of view, could be easily explained by a few reasons: firstly, that oil money which came to the country, led to increased incomes for part of the population. But this increase in income didnt lead to an increase in production, or to any structure changes. This little money given by government during national projects campaign was nothing for population but this fact was lighted in mass media so much, that in the end allowed to create image of the country which takes care of its people.

Second reason the government’s need for public approval and high poll ratings. The wish for their growth made it impossible to conduct any painful reforms and unpopular measures for the population and the focus on polling figures has replaced the objective estimation of real efficiency of the government’s acts in political and economical spheres.

This fact, I think, is realized by the new President. That is why he has created the special analytic center, which is planned to be the personal fabric of future reforms.

By the way, the same thing was done by Putin in 1999. His Center in short time published the document titled “The strategy of economical development til 2010” and it was some kind of reform plan. But unfortunately this document wasn’t applied in practice.

It is very alike the destiny of russian reforms.

Will we deceive our destiny this time?

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