Transcript - Russia Resurgent

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__: President Putin’s speech at Munich in February of 2007 was declaration of Russian independence.

__: We have to recognize that Russians are a very proud people. They regard themselves as one of the great countries, the nations, peoples, and civilizations of world history.

MASHA LIPMAN: Getting over past humiliations is never pretty. And this is how Russia is today.

FRASER CAMERON: They suffered horrendously over the last couple of hundred years. And for many, this is the first chance they’ve had to experience some elements of freedom, to travel, to enjoy the good life.

MARK SOMMER: Moscow today could hardly be more different from the bleak, lockdown capital of conformity I visited in 1990, just a year before the collapse of Communism. Following a precipitous plunge into near bankruptcy in the now discredited era of Boris Yeltsin’s quasi-democratic experiment, Russia’s on the rise again, maybe even as never before.

Propelled into newfound prosperity on the crest of quintupled prices for its plentiful oil and natural gas, Moscow’s now the capital of conspicuous consumption.

Today on A World of Possibilities, Russia Resurgent: The Once and Future Superpower. I’m Mark Sommer. Join us as we cross into the Russian empire. Despite its sudden embrace of all conquering capitalism, Russia remains a world apart. It’s economic fortunes rise as those of its erstwhile adversary shudder with uncertainty. The ironies of history. Yet beneath this newfound wealth, like seismic faults under the Russian earth’s oft frozen crust, lie continuing contradictions, persistent poverty, and backwardness, rutted back roads and crumbling housing blocks at the margins of Moscow and St. Petersburg’s gleaming boutiques, broad boulevards, and sleek Mercedes.

Will Russia use its windfall profits to lift all votes? Or will these contradictions ultimately undermine the effort to move the country into the mainstream of global commerce and culture? To help us better understand Russia’s sudden and astonishing reversal of fortune, we turn first to Clifford Gaddy, an economist at the Brookings Institution in Washington who specializes in Russian studies. Coâ€‘author of the book, Russia’s Virtual Economy, he recalls the barrenness of life under the old regime.

CLIFFORD GADDY: In May, when I was in Moscow, 1991, the shelves were completely empty. There was virtually nothing in department stores. The children’s toys or clothing, all of this was completely empty. And even the food stores were bare. People at that point, from Moscow, they were eager to travel out to the countryside if they had relatives that lived out in the rural areas. They invited those relatives to come in and bring food with them that they were growing out there on the farms or on their private plots. If they themselves were able to get outside of Moscow, they would go out there and try to buy up what they could.

Fact, when I then left Moscow, and traveled out to Kustadoma(?) of course it was a big shock to my Moscow friends, very elite-- Moscowvites are quite elitist and really think that there is no other place in Russia than Moscow. So they were first of all shocked that I would, as an American, want to go outside of Moscow. But when I came there, I myself was very surprised, because first of all, not only was there abundant food, because that was where the food was being grown, but there were even items in some of the stores. To the extent that these were manufactured items, simple manufactured items, the pots, the pans, the spoons or whatever, that had been produced in a local factory, they were also staying there in the towns. And that was quite different than what had been happening during the Soviet period where products were produced outside of Moscow, both agricultural and industrial products. But they were shipped in, almost requisitioned to come into the large cities.

So the fortunes, of Moscow in particular, St. Petersburg and a couple of other big cities, in 1990/1991, the very last days of the Soviet Union, were dire indeed. And to some extent, this remained the case for several years after the collapse of the Soviet Union in 1991. But by the mid-1990s, and in particular, when the big oil boom begins in Russia, as around the world for oil-producing countries after 2000/2001, Moscow becomes the real beneficiary, the recipient of so much of the wealth.

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And today, Moscow-- and this has been the case for several years now-- Moscow is on a par in terms of the wealth of the rest-- The fine restaurants, the number of high-end automobiles, the number of classy chic clothing stores and boutiques, it’s on a par with Paris or London or any of the other leading capitals of the world. And the amount of wealth that is concentrated in Moscow is staggering indeed. The number of billionaires that live there, not to mention the number of millionaires, all of this is-- it’s night and day. It is not just a ten or fifteen years difference, but it seems like centuries difference.

MARK SOMMER: Are there still destitute old women in the subways and elsewhere selling their last belongings? Or is that something that only happened in the ‘90s, and they have now been taken care of?

CLIFFORD GADDY: Well, they have not been taken care of. You don’t see as many of them as you did during the 1990s. But this is probably not so much due to the fact that they don’t exist, that is, that the poverty is not there. But that with a new regime, if you like, of law and order, with putting police on the streets and enforcing the laws, they simply aren’t allowed to be there. They’re not encouraged to be there.

During the 1990s, in an era of, to some extent, lawlessness, but certainly not very lax enforcement of laws, phenomena were observable. They were on the surface that previously had been repressed. The reality might not have changed that much, but the appearance changed. And to some extent, you can say that’s true right now in Moscow, and in the rest of Russia. There is a great deal of poverty still in the country, even in the city of Moscow. But it’s better concealed.

MARK SOMMER: Now, what’s not concealed apparently is the extravagant display of wealth. Time Magazine in its Man of the Year issue, where it featured Vladimir Putin, had a special article on when he went inside a nightclub. There were people inside who were spending $20,000 dollars a night, just throwing money around to show their wealth and influence.

CLIFFORD GADDY: People have so much money and have acquired it so quickly. And coming on the heels of, not just years, but decades-- because not just the 1990s, but go back into the Soviet period of a real shortage of consumer goods, decent consumer goods to purchase-- there’s still a-- kind of a pent-up demand. There’s a sense of the nouveau riche, not just a single individual or a small number of individuals, but whole class of individuals who feel like they’ve suffered long enough, and now is time to spend money in a big way.

Maybe some of that is actually tapering off now, this ostentatious spending of wealth. I think it may have peaked towards the end of the 1990s and the beginning of the 2000s. But I do know that Russian friends of mine, of all ages but particularly young people, saving money for the future is really not something they’re very interested in. They want to spend it as-- much of it and as quickly as possible. It’s sort of a, live for today and we’ll worry about tomorrow when it comes.

And that’s typical of other countries that have undergone these big resourceâ€‘based oil-based booms where it’s a windfall, the money just seems to come from nowhere. Not to say that people don’t work to earn their incomes, but it’s-- They were working yesterday and they’re working today. But yesterday, they were not receiving very much for what they-- for the work they were doing. And then suddenly because of this massive increase in oil prices and oil wealth coming into the country, you just have so much more there, for not everyone-- I was about to say for everyone, but for more than just a handful of people, it does trickle down or flow down (it’s not exactly a trickle) to quite a large number of consumers in Russia.

MARK SOMMER: Russia used to be known in Soviet times, even before Soviet times as a place of almost congenital depression or pessimism, even nihilism. I wonder if today the ostentatious consumption and the not living for tomorrow or for a sense of stability is in some respects an extension of that nihilism, rather than a healthy expression of confidence in the future.

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CLIFFORD GADDY: The polls-- and there have been numerous polls trying to find out how Russians really think-- are a bit unclear about this. You may well be right, that this is a different sort of reflection of the same mentality. I think it is clear. One thing that all the polls show is that Russians really long for some certainty about the future. And they are quite reluctant to trust the future, if you like. It’s almost as if history has shown them all too many times that periods of stability, of peace, of prosperity, just don’t seem to last. There’s always some misfortune lying ahead for Russia.

And I think it’s going to take a long time for people after the experience in particular of the 1990s and the chaos and the uncertainty that was there to really trust the future. You know, there’s an interesting statistic I like to use that I think says something about the mentality of Russians and their trust and how much they can rely on this new system they have, a new market economy. And that’s how-- What percentage of potatoes in that country are grown by people privately, as opposed to the percentage that are sold in stores, in the supermarkets?

Potatoes, throughout Russian history, the potato has been called Russia’s second bread. It’s a staple starch product that, in lieu of buying a loaf of bread, you can eat potatoes to get your calories and sustenance. And these potatoes are grown typically by private families, not just rural families, but even urban families that may have a summer cottage outside the city limits where they grow some vegetables, grow some fruits. And they grow potatoes.

And here’s the statistic. It is that even today, over 90% of all the potatoes grown, produced in Russia are produced by private families in these backyard plots. And when you ask people about this, you know, they say, “Well, you never know. You never know. We continue to grow these potatoes. We put them in big burlap sacks and we lug them back home to the city. And we put them down in the cellar. And we keep them there just in case, just in case. Who knows what might happen?”

MARK SOMMER: Quite the symbolism. What about what is often referred to as the Russian mafia? There is a lot of talk about how-- not only that there is a very powerful Russian mafia, it may not refer to a particular set of families the way it did originally in Italy. And how does it relate to the Kremlin and the government itself?

CLIFFORD GADDY: Organized crime is a complicated story in Russia, as it was in the Soviet Union. We know now better even than we knew during the time of the Soviet Union that organized crime exists, that these criminal networks existed, even under Communism. And in fact what happened really in the postâ€‘Communist years, beginning 1991 and ’92 in particular, was that many of these networks then were able to surface. They were able to operate much more openly and actively than they had.

One could say that there was a great deal of attention given to the phenomenon of so-called organized crime in the 1990s as it is maybe to a lesser extent today, the mafia. But in one sense, perhaps we paid so much attention to this form of mafiaâ€‘like crime in the 1990s, not because it was so well organized, but because it was unorganized or disorganized. There were a lot of battles between rival clans and rival groups. And that produced a lot of violence, not directed at the ordinary citizen, unless they happened to be sort of caught in the crossfire so to speak. But there were a large number of crime ordered killings and assassinations and so forth as they competed for turf.

I think you can see the situation. If you think about-- I mean, people-- I never lived in Chicago, but people tell me that, you know, back in the days of strong mafia presence in some of the big cities, even in The United States, as an ordinary citizen, it was actually quite safe to live in an area that was controlled by the mafia because there was one mafia group that ran that part of the city. And they tolerated no rivals and no influence. They kept things under control. It was only when mafia wars, when family rival groupings began to fight with each other over turf battles that you saw the violence emerge.

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And today in Russia, the violence is probably less than it was in the 1990s, less than it was ten years ago. It’s more directed. The one phenomenon that seems to be present still is that legitimate businesspeople, legitimate, especially smaller or medium-sized entrepreneurs are continually subject to pressure from protect-- essentially protection rackets, or sometimes worse, sometimes criminal groupings that don’t just want to have the businessman pay a regular protection fee, but are looking to take over the business entirely. That was something that happened in the ‘90s and it continues to happen today. And it’s the plague of small businesspeople in Russia today.

MARK SOMMER: Clifford Gaddy of the Brookings Institution. After a short break, we’ll turn to an insider’s view of Russia’s still inscrutable heart through a conversation with independent Russian journalist, Masha Lipman in Moscow.

MASHA LIPMAN: The sophistication and wisdom of a government is inversely proportionate to the price of oil.

MARK SOMMER: This is A World of Possibilities. Stay with us.

ANNOUNCER: This is A World of Possibilities. We invite you to visit our website and explore the audio archives, read about our guests and subscribe to the podcast. Find us at AWorldOfPossibilities.com.

MARK SOMMER: Welcome back to A World of Possibilities. I’m Mark Sommer. After Gorbachev era glasnost and the early explosion of openness in the Yeltsin years, the Putin era has seen a steady tightening of restrictions on press freedoms. It’s not yet the green eyeshade censors of the bad old days, wielding the hammer and sickle against the slightest divergence from Party orthodoxy. Nowadays a sophisticated Kremlin leadership, confident of its hold on power, permits carping at the margins, but makes certain to control the commanding heights of national broadcasting and print media.

Masha Lipman speaks from her office in Moscow, with an independence of mind that would never have been tolerated under the old regime. Joining us by phone from the Carnegie Moscow Center, she says that Russian president Vladimir Putin’s success in consolidating power and gaining the authentic support of most Russians is due in large part to an extraordinary stroke of luck and timing.

MASHA LIPMAN: And during Putin’s time in office, oil prices have grown five times. Just imagine how state revenues are growing without actually increasing the productivity of industrial production. The same amount of oil produced is worth five times more without any additional effort. And the same, though not in that proportion...(inaudible) gas.

So this is a tremendous piece of luck that, to Putin’s credit, he used, for the Russian benefit, in a most-- in a very effective way. He also used it to his own benefit as a ruler, capitalizing on these increased budget revenues in order to sort of offer the nation non-participation compact: “We do politics. And we push you, the people, as far away from policymaking as possible. And in exchange, we deliver and we make your lives better.” And that non-participation compact was accepted.

MARK SOMMER: In his good fortune of finding his revenues quintupling, where did he put the largest share of those revenues?

MASHA LIPMAN: To Putin’s credit, he shared with the public. He spent part of this money to make people’s salaries and pensions higher, even though of course not in the same proportion, not five times. And the public is grateful to him for that. He also used Russia’s grown(?) wealth in order to project Russian power in the world. And of course Russia, as a result, is much more influential in the world scene today.

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Critics argue that this tremendous increase in budget revenues was, by far not used in the most effective way. However it seems-- this seems to be true of almost any nation that depends on oil as a curse and as a blessing. When there’s suddenly this tremendous wealth being poured upon you without much after it, it is very unlikely for a government to become very effective and to become very sophisticated in its policies.

MARK SOMMER: Now, we’ve heard that Moscow now has about as many billionaires as New York, and that there is a nouveau riche class in Russia today like nothing ever seen before, very ostentatious, very open about its opulence. How does that fit with Putin’s policy of distributing at least some of the wealth?

MASHA LIPMAN: The disparity of income in Russia is enormous. And we are talking about very rich and very poor. And we’re talking about a country that in fact was very poor at the time when the Soviet Union collapsed, even though this was not widely publicized. But people lived-- many people lived in poverty. The economic reforms, early liberal economic reforms of early ‘90s of course led further to impoverishment because of inflation, because of all those negative effects that are ...(inaudible) to liberalization of an economy.

And when Russia began to get richer, of course the poor remained poor for a long time. And the entrepreneurial people who could grab at the opportunity, grew richer. So this is one way to explain where a lot of the money went. The number of billionaires has grown very fast. And they are-- the Russian richest people are notorious for their conspicuous spending, for throwing money out at lush resorts in Europe and elsewhere. It is a very big question to which of course we don’t have an answer, how much of this wealth is actually stashed away abroad?

MARK SOMMER: Looking back on the 1990s and the experiment under Yeltsin with democracy, do most people now see it as synonymous with economic mismanagement, ineptitude, corruption, and chaos?

MASHA LIPMAN: Well the chaos of the ‘90s is a catchphrase that was disseminated by the controlled Russian media. In Russia, we have national television channels which actually reach out to almost 100% of the Russian people. And this is, by far, the most influential medium, most influential outlet in Russia. And through using this as a tool, the Russian government had disseminated this notion of the chaos of the ‘90s. Not that the people regarded it differently, but this attitude, this public attitude has been reinforced. This catchphrase has taken root. And this is how the vast, vast, overwhelming majority of Russians regard the ‘90s. It is a period when Boris Yeltsin was president.

Talking about corruption, actually corruption today is much bigger than it was in those days. It may be argued that this is because there is a lot more money in Russia. So the corruption is of bigger scope, at least because of that. But this is not the only thing. The close entanglement between power and property in today’s Russia has grown even tighter. Even the two have grown even more entangled. If you are just simply rich and are not loyal, if you’re not closely connected with the powers that be, you can never feel secure. And the example, for instance, of Mikhail Khodorkovsky, once the richest man in Russia, who’s currently in jail, sentenced to eight years and facing a new trial, is a good example how, no matter how rich you may be, this does not make you feel secure, vis-à-vis the Russian government.

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So a person can only be rich if it is okay with the Kremlin. Power is closely associated with wealth, and wealth is closely associated with power. This is one way to explain Russian corruption.

But again, even though people may be aware or vaguely aware of how it is, they may grumble. They may talk about it amongst themselves. But this in no way leads them to protest and leads them to do something, to get together and do something, to hold the government to account.

MARK SOMMER: Let’s say the oil prices actually go down at some point again, maybe not down to one-fifth what they are now, but let’s say they go down. Has Russia put enough aside? And is it diversifying enough that it would not be devastated? And if they did go down and its revenues were substantially less, would that compact, that non-participation compact with the public, begin to deteriorate, and as a result, the repression increase?

MASHA LIPMAN: Of course this is the question. I mean, the fluctuations are very hard to predict. However, should oil prices drop dramatically, like down to $20 dollars a barrel the way the were early in Putin’s tenure, this will very, very deeply, very seriously affect the Russian economy.

The chance of such a dramatic drop it seems is very low. The Russian government has been more economically savvy than their Soviet predecessors. The Soviet economy in the last decade of the existence of the USSR also developed a very strong dependence on oil prices. And the Russian Communist rulers were very lucky at some point with very high energy prices.

But the moment when those oil prices dropped, affected the Russian economy so badly that actually it led to meltdown of the USSR. There were several factors involved. But one of the most important ones were that the Soviet government just simply went broke. However, again, as one very insightful observer once said, the sophisticated and wisdom of a government is inversely proportionate to the price of oil. When this money is like a shower, pouring over you, the temptation is too hard to just use the money and not take the risks and not make the investments that are not very lucrative, not make serious strategic investments in the future. So this is-- And this is one reason why Russia lagged behind in diversification.

MARK SOMMER: Masha Lipman, an independent Russian journalist and regular contributor to The Washington Post. We’ll return to our conversation with Masha after a short break. We invite you to delve deeper into this and other conversations with today’s guests by visiting our website, AWorldOfPossibilities.com where you’ll find a rich trove of additional insights from each guest, more than two hours of intriguing conversations from Moscow, Brussels, and Washington about the implications of Russia’s resurgence.

__: We have to recognize that Russians are a very proud people. They regard themselves as one of the great countries, the nations, the peoples, and civilizations of world history, and think that they, the country, is destined to great things.

MARK SOMMER: Come visit us at AWorldOfPossibilities.com. This program is distributed by the WFMT Radio Network. I’m Mark Sommer. We’ll be right back.

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ANNOUNCER: This is A World of Possibilities. If you wish to purchase a CD of this program, please write to info@aworldofpossibilities.com. This is the WFMT Radio Network.

MARK SOMMER: I’m Mark Sommer. Welcome back to A World of Possibilities. This program, Russia Resurgent: The Once and Future Superpower, is underwritten by the Ploughshares Fund. Russia’s sudden and unforeseen reversal of fortunes has produced a crop of Moscow-based billionaires equal to New York’s, and more brazen in the display of their newfound wealth. But as independent journalist Masha Lipman notes, for a people with a harrowing history of poverty, repression, and war, the future can never be quite trusted and the past never fully forgotten or forgiven.

MASHA LIPMAN: The Russian people at large almost universally regard the period that followed the collapse of the USSR and more broadly the Soviet system as a period of utter humiliation. And in this, Putin is not different from his nation. And getting over past humiliations is never pretty. And this is how Russia is today. Acting as a bully, acting in an unceremonious fashion, not caring about your image, not caring about what they, the West, would think about you, I think is all natural given this development.

This does not make Russia an easy partner. In fact, the opposite is true. Russia is becoming an increasingly difficult partner for the West. And sometimes Russian foreign policy leaves you wonder whether this may be one of the motives. Rather than having strategic ...(inaudible) political interests pursued, Russia just revels in being a difficult partner, just admires the way it can say no and make things difficult, in how no longer the West can just simply defy and dismiss Russia’s will.

MARK SOMMER: Masha Lipman, independent Russian journalist. Now that the Cold War is over, or so we hope, some 60% of Russia’s trade is with the EU. And for its part, the EU depends on Russia for a quarter of its oil and gas supplies. That dependence is a source of concern for the EU and occasional friction between the two giants.

Fraser Cameron knows a great deal about these frictions. He tells us that there’s a much more mutually dependent relationship between the EU and Russia than between Russia and the U.S. And a large part of that relationship has to do with energy.

FRASER CAMERON: Some countries are almost 100% dependent on Russia for oil and gas, the Baltic states and Poland, Finland, for example. Overall, Russia delivers about one-third of the EU’s energy needs, and the rest comes from Norway, North Africa, the Gulf, and West Africa.

MARK SOMMER: I see. Has that already proven to be challenging in some situations?

FRASER CAMERON: It has. It’s quite a divisive issue in the European Union. And the problem essentially is that the European Union doesn’t have a common energy policy, which makes it quite difficult for the EU as a whole to negotiate with Russia. And hence, Russia makes bilateral deals with EU member states. And sometimes this causes concerns. For example, when Russia and Germany signed a deal to build them a new pipeline under the Baltic Sea, this raised concerns in Poland and the Baltic States, for example.

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MARK SOMMER: There’s also tradeoff it would seem in Russia’s internal policies, what they do with this newfound wealth, as to whether they invest it in becoming essentially a middle-class nation like a European country, or whether they try to return in some sense to superpower-dom by rebuilding their armed forces and posturing themselves as the other superpower again.

FRASER CAMERON: Now don’t forget, it’s one of the most corrupt societies on Earth. And this is also an impediment to economic stability and growth. You find that they have a very large stabilization fund, but they’ve not actually invested in it yet. So they had grandiose plans for infrastructure, for modernizing the armed forces, but they haven’t actually done anything about it yet.

MARK SOMMER: Russia will-- is and will remain a nuclear superpower for-- as far as possible as we can see in the future. How does that affect Russia being, in some ways, no more than a regional economic power and political power?

FRASER CAMERON: That’s difficult to separate. I mean, Russia is a permanent member of the U.N. Security Council. And this gives them a global outlook. It’s a very confident and experienced diplomatic service. They’re still able to launch various initiatives, for example. At the Geneva conference in disarmament, they’re coming up with new proposals on banning weapons in space.

So I think that they see themselves still as a great power, and increasing their power. And they know fundamentally that their economy is quite weak. There are several speeches by Putin and others over the last two or three years which recognize that if they want to really be a great power again, they have to certainly improve their economy. And this means diversifying the economy. This means rooting out corruption. This means some semblance of the rule of law which doesn’t exist in Russia today, and producing goods that the rest of the world want to buy, because who actually want to buy a Russian computer or television or car?

MARK SOMMER: I know that under Communism, the quality of consumer goods, for that matter, the quality of preserved foodstuffs was very low. And so they couldn’t compete on the world market. That remains a major problem?

FRASER CAMERON: Yeah, most of it is imported now. And hence, their trade balance is beginning to suffer and inflation is beginning to rise. So, you know, these are serious problems. They’re simply not in a position to compete across a whole range of consumer goods. And the quality still in Russia is very poor. Hence, everybody wants to buy imports, you know, whether it’s German cars or French wine or whatever.

MARK SOMMER: Now it’s very obvious, from what I’m told, in(?) Moscow, it’s(?) the most conspicuously consumptive--

FRASER CAMERON: Absolutely.

MARK SOMMER: --capital in the world. How does that affect Russians who were raised under the notion that we’re all in this together and solidarity and--

FRASER CAMERON: You’re absolutely right. You walk around the streets of downtown Moscow and it’s Sodom and Gomorrah. Conspicuous consumption gone mad there. People are competing to spend, you know, vast amounts of money in clubs and bars and so on. So that must be a shock for the old Communists.

MARK SOMMER: Does it have the feeling of Las Vegas or something?

FRASER CAMERON: Yeah, it does. It’s capitalism on speed, in a big way. I mean, it’s almost the same in China. There’s a lot of similarities. I’ve just been in China recently, and it’s like Adam Smith on speed. No semblance of Communism there. You know, there’s no support mechanisms. There’s no sign of egalitarianism. It’s every man for himself.

MARK SOMMER: There have long been rumors that there’s a great deal of corruption in the Kremlin, and that Putin himself and others around him have enriched themselves enormously with these oil revenues. What do you see?

FRASER CAMERON: ...(inaudible) obviously clear evidence for this. But most of the senior officials in the Kremlin double up as a member of the board of some company, and obviously are cashing in great fees for this. It’s this kind of connection between politics and business that, you know, ensures that everyone is getting very well paid indeed.

MARK SOMMER: That raises the question of whether this is indeed a corporate state, the state as a corporation, but a corporation with no accountability to its shareholders.

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FRASER CAMERON: Yeah, exactly. Because there is, as I said, no rule of law in Russia. So the ruling elite can essentially do what they like. They set the rules and disobey them if they want. They make sure that the balance of power between the various clans is roughly kept in equilibrium. And that was essentially why Medvedev was chosen as Putin’s successor, that he wouldn’t upset the present system, which suits everyone very nice, thank you.

MARK SOMMER: At the moment, with all the petrol dollars flowing in, a certain amount of openness can remain in place because there’s little unrest. Who would rock the boat when their pockets are full? But if somehow the petrol dollars stop flowing, if the price goes down for all the or many of the sources of revenue they are benefiting from now, is there likely to be more unrest and more repression?

FRASER CAMERON: That’s a difficult question to answer. I mean, this is not the Stalinist period. I mean, Russians are still free to travel. There’s some semblance of an independent media, not much. They can mostly read what’s going on, on the Internet and so on. And they can make money.

What they can’t do is challenge the Kremlin politically, as we’ve seen with various cases. So you can make money. You can do your own thing. But, you know, don’t challenge Putin’s team.

MARK SOMMER: Well, let’s look at what happened in Britain with-- I believe there was a poisoning of a Russian journalist. Are we seeing here kind of a pattern of essentially the Putin regime laying down a marker essentially?

FRASER CAMERON: Well the murder of Litivenko I think was certainly organized by some forces related to the Kremlin and special forces in Russia. They don’t seem to even make much doubt about that. They’re obviously upset by the fact that the U.K. hosts a number of Russian citizens that they themselves would like to extradite. And there is no extradition treaty between Britain and Russia, which is a problem.

But there’s been many other instances in Russia of harassment and murder of opponents. I mean, the drastic murder of Anna Politkovskaya was perhaps the most renowned. But, you know, there’s been dozens of journalists, investigative journalists and others murdered over the last two or three years in Russia, which is very bad sign.

MARK SOMMER: Gene Kirkpatrick, the former conservative U.S. ambassador to the U.N. once made a distinction between authoritarianism and totalitarianism. Russia was-- under the Soviet Union, was clearly a totalitarian system. Every aspect of life, even the way you were supposed to think was managed by the state and the Party. Do we today have something that is essentially authoritarian, but is not likely to return to totalitarianism?

FRASER CAMERON: Yes. I think that would be my judgment. I mean, it’s quasi-authoritarianism in the state still, and the very intrusive role in public life. If you look even at the latest school textbooks, for example, they basically gloss over Stalinist horrors. And the state controls the mass media, essentially. So it’s a quasi-authoritarian system here. But I don't think you could possibly put the genie back in the bottle and move back to the Stalinist type era.

MARK SOMMER: You know Fraser, it almost sounds like you are painting a picture that is-- in which there has been a kind of non-utopian progress.

FRASER CAMERON: Yeah, I’m trying to be fair here. I mean, I think that the Russians are a great people. They’re very much European. They’ve suffered horrendously over the last couple of hundred years. And for many, this is the first chance they’ve had to experience some elements of freedom, to travel, to enjoy the good life. And some, many perhaps would say this is more important than human rights and democracy. Now, this is not how we see it in Western Europe. But it’s a question of how you can influence Russia to understand that these rights are universal and it really is in the interest of Russia to move towards the rule of law. Because without the rule of law, society doesn’t have a firm anchor.

MARK SOMMER: Fraser Cameron, director of the EU Russia Center in Brussels. I’m Mark Sommer. Our conversation about resurgent Russia continues.

ROSE GOTTEMOELLER: The old Cold War army has really weakened and dissipated significantly.

MARK SOMMER: Stay with us.

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ANNOUNCER: You’re listening to A World of Possibilities. Learn more about insurgent (sic) Russia by exploring a wealth of bonus materials online at AWorldOfPossibilities.com.

MARK SOMMER: Emboldened by its oil revenues, Russia is no longer obliged to passively endure the humiliation of watching the West exploit its weakness by expanding NATO and the EU into its former sphere of influence. But what vision if any do Russian policymakers see for a smaller, but more economically viable nation on the world stage? What plans, if any, does the Kremlin have to reassert its influence in world affairs as a counterpoint to the West?

Rose Gottemoeller, a long-time Russia watcher and former senior advisor to President Bill Clinton, says Russia has so far failed to articulate a clear vision for itself and its international partners. She directs the Carnegie Moscow Center and joins us now from her home in Moscow.

ROSE GOTTEMOELLER: I don’t believe the Russians have an aspiration to reclaim superpower status as they had during the Cold War. Essentially what we see is I think a practical-minded view that they are a major regional power, a regional superpower, so to say, in that they are dominant in Eurasia, but they are dominant, not alone, but with another major power, China and with a third major power, India. And I think they have a realistic view of their possibilities in that regard. And they also have a realistic view of what their economic potential can buy them right now.

They really don’t, I think, want to put the investment into restoring their superpower status, which would require an enormous buildup in the military capacity that has been lost over the past 15 years as the old Cold War army has really weakened and dissipated significantly.

MARK SOMMER: It’s very interesting. I was in Moscow in 1990. And I remember vividly a conversation with someone who said-- a Russian man who said, “You don’t understand the Russian psyche. We would rather be poor and a superpower than rich and Switzerland.”

ROSE GOTTEMOELLER: That’s a very telling statement, because that is precisely what has changed in the 15 years since the Soviet Union collapsed. That is, the aspirations of the man and woman on the street have shifted, I think, significantly. They no longer are willing to put up with a very poor economic status that they did put up with during the Cold War for individuals and families. And their aspirations are exactly where they are in other economically prosperous countries in Europe, and, for that matter, in The United States.

The middle class is developing fast. And they want to buy a house. They want to buy a car. They want their children to have good educations. And they don’t want the riches of the state, the largesse of the state really to be flowing into the military-industrial complex, and that’s it. They want those resources to be shared. So that’s really what you see now with Dmitry Medvedev running for president. The emphasis is on social programs, on maintaining the pension system and developing it further, reforming education, providing for the services that a prosperous middle class demands.

MARK SOMMER: So a final question — I know this is very difficult to do. It’s highly speculative. But I would just ask you to go forward, say, ten years. What do you see?

ROSE GOTTEMOELLER: Well, there is definitely more than one possibility. But what I would say is-- Let me give you my hope for Russia. And my hope for Russia is that in ten years time, the middle class has continued to flourish, that small business and medium-sized business has developed apace. There are big billboards now all over Moscow saying, “If you’ve got an idea for a small or medium business, go for it. We’re ready to help you.” And so they’re offering a loan program to build up small and medium business.

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I would-- So I’d like to see the economy diversified in that way, beyond the large state corporations, and a lot more people with their fingers in the pie, that middle class continuing to grow and beginning to express now an aspiration for participation in government. And for that reason, I take seriously the comments I hear from senior Russians when they say, “Give us some time to correct our mistakes.” Well, I think ten or fifteen years is about enough time to start correcting the mistakes that have been made in the last few years by the current policy of having all power invested in the president or the Russian federation. So that’s my positive vision.

MARK SOMMER: And your negative vision?

ROSE GOTTEMOELLER: My negative vision is that the way in which they have been moving now, and that is, away from economic and democratic reform, and in the direction of more state ownership of corporations and accompanying corruption, that this could in fact lead to a very severely corrupt petro-state which has lost its ability to run an efficient government that can in fact provide goods and services to its people, the institutions of governance, being so weakened or in fact destroyed, that people are no longer able to receive their pensions, the education system is no longer delivering good education to the mass of Russian children.

And the healthcare system, even now is still in severe crisis after the collapse of the Soviet Union. And not being able to recover, the normal Russian citizen would simply not be able to expect anything from the government in terms of healthcare, education, pension, or any other social services. So that would be my bad vision of what the future might hold.

MARK SOMMER: One last quick question — is it more fun to live in Moscow now than it was 15 years ago?

ROSE GOTTEMOELLER: Well, I didn’t live in Moscow 15 years ago. So I can’t tell you exactly, although I was a frequent visitor. I have to say, Moscow is one of the most exciting cities on Earth, constantly moving, incredibly interesting, and the theatre, music, ballet world is fantastic here. Art and just the intellectual environment is absolutely terrific.

But it’s also exciting from the point of view of what’s going on in the government. I joke about it being, not a roller coaster ride; it’s more like a yo-yo. It’s bouncing up and down all the time. And you don’t know who’s on top at any one time. But endlessly interesting.

MARK SOMMER: Rose Gottemoeller, director of the Carnegie Moscow Center.

In the early post-Cold War years, a triumphal American empire trumpeted its victory while a seemingly vanquished Russian empire licked its wounds. Their positions today are not precisely reversed. But in the past eight years of petrol prosperity, Russia has altogether erased its debts, and is now buying major American assets, while U.S. debts grow increasingly insupportable and American armed forces are lashed to the rack in Iraq and Afghanistan.

Russia is still a nuclear heavyweight, but it no longer seems interested in toting the burdens of superpower status that so exhausted the old Soviet empire. In an increasingly multi-polar world, The United States and Russia will be obliged to share power and influence with the rising titans of China, India, and the European Union. But Russia will always be a key player in global politics, and safer inside than outside the circles of great power decision making.

Still facing enormous challenges of its own, Russia’s future depends in large part on how wisely it uses the windfall wealth that is now, at long last, blowing its way.

I’m Mark Sommer, and this has been A World of Possibilities. Thanks for listening.

ANNOUNCER: You’ve been listening to A World of Possibilities with host Mark Sommer. The production engineers are ‘Tofu’ Mike Schwartz and Matt Fiddler. Associate producer, Naima Didi. Senior producer, Greg McVicker. Music courtesy of CBS Masterworks, Kingring/Groove Attack, Deutsche Grammophon, MSI Music, and Putumayo World Music. Support for this program was provided by the Ploughshares Fund. Find us online at AWorldOfPossibilities.com. This is the WFMT Radio Network.

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