Russia - Retreat from Reform?



It seems apparent to many observers of Russia that it is not moving forwards with much needed economic and political reforms. In fact, Russia needs a complete economic renovation if it is to escape economic third world status in the future. With real disposable incomes in decline and international debt obligations it is having trouble meeting, the Russian Republic is faced with some dire choices. First it must reform its economy in a way that will not agitate its international creditors. In Short, Russia, in late 1999, is at a crossroads. While many speculate weather this crossroads is one of further ‘reform’ or a visible retreat from it. The more realistic question is the degree that Russia repents of her economic reforms and with it possibly political reform. The Idea of reform to many Russians is a picture of endless corruption and a decline in already meager living standards. Russians, once so hopeful that reform would mean western style abundance and prosperity have seen just the opposite. This means that Russia’s political leadership must react to the growing discontent in some effective way. This can take on many forms. The thethreats are readily apparent and are briefly described below.


Nationalism - Russia is a proud nation. It has a rich history and its people deeply regret the loss of international prestige lost when the old Soviet Union collapsed. This has been tragic for the Russian psyche. While Russians may have been ableto stomach such a loss of prestige if some promised economic benefits had materialized, regrettably this has not been the case and the Russian politicians know this. Here opportunist politicians of every stripe have attempted to step in and fill the void. This could spell disaster for Russia if the wrong man is entrusted with the reigns of power. Men like Zhirinovsy and Lebed, exude a xenophobic nationalism that plays well in the polls but poorly in the international arena. This could be a case of real friction with the West if the upcoming election in Russia produces such man. This is a very real danger for those in the West and future relations with NATO and to a lesser degree the OSCE. The Russians are not a superpower anymore, even their military is only a hollow shell compared to the days at the height of the cold war, nevertheless with a still substantial nuclear arsenal, a demagogue could rattle the foundations of Global security.

Crininality - The Russian Republic has had a spate of corruption scandals perpetrated by its riches and most influential figures. These criminal enterprises are often associated very closely with high level political figures. Individuals ranging from the Yeltsin family to former Prime minister Chenormirdin, no one seems to be exempt from the ‘dirty money’ allegations other former prime ministers have been implicated in criminal activities, such as Gaidar. This is not surprising to Russian analysts as wealthy individuals are seeking to use the power of the state to enrich themselves. Either via prime free market monopolies such as oil and gas conglomerates, which used to be state owned and are not privately held through complicated money laundering schemes aimed at defrauding western investors and or lenders. These people have enormous power in Russia and will be the real ‘king makers’ in the upcoming Federal elections. While the Russian people do understand many of these more harsh political realities, they are more concerned with someone who will bring the economic slide to an end the political chaos and help to restore Russia’s international image. The Recent Bank of New York money laundering scandal has done much to demonstrate to scope of the entire problem. If some of the more pessimistic estimates are correct, many western banks may have been tainted by this and other Russian criminal activities.

Fragmentation -  Russia’s third risk is that of fragmentation along ethnic and or religious lines. The conflict in Chechnya is an indication as to how string some secessionist tendencies are. While the Chechen rebels are not generally speaking for the Chechen people at large. Russia has scores of ethnic groups that live within its borders, many have semi-autonomous republics. Come of these regions are beginning to question their current political arrangements with Moscow and may take the Chechen example of violent rebellion to accomplish these aims. While any immediate threat, other that Chechenya is unlikely, popular support for these types of movements could spread if economic conditions continue to deteriorate and Moscow appears to be politically and militarily weakened to a degree that would invite succession.

Expansionism.-  Far less likely is a desire by many of the more reactionary elements in Russia to expand the old Soviet empire Russia is not capable militarily or politically for this move and it is unlikely the proper circumstances for such expansionism will occur within the next 10 years.


Russia is still very much a concern for western policy makers because of its size, military, including a still credible nucleardeterrent, and its geography. Russia cannot be ignored. Russia will continue to plague the west with its independent policies that will be used to secure its interests and extract concessions, including hard currency, from the west. Russian Reform will continue to stagnate until the west ceases giving in to Russian political blackmail and allows the economic conditions to deteriorate to the degree that either a ‘strong man’ with a realistic political approach comes to power or a the Russian Republic disintegrates, in effect if not in reality. Either approach would make Russia less of ‘thorn in the side’ of the West and more malleable to western security concerns. Provide the Strong man is in complete possession of his faculties. Copyright © 2000 Mark S. Watson



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