This article is based on a speech given by Yevgeny Primakov at the international conference “Russia in the 21st-Century World of Power” held to mark the twentieth anniversary of the Council on Foreign and Defense Policy and the tenth anniversary of Russia in Global Affairs.
The topic of our conference, “The Power of Ideas and Images,” is absolutely warranted. In the modern world, ideas and images of countries affect international relations to the same extent as the power of money or the power of weapons. However, before launching into a detailed discussion of the topic, I would like to make some general points.
First, it would be wrong to think that the influence of ideology on politics, on the balance of forces at the regional and global levels, and on international relations in general ended with the Cold War. The nature and form of such influence have changed, but it still persists. Moreover, one country’s ideological confrontation and conscience efforts to impose its own image – often embellished – of itself, while distorting the image of other countries, have become an integral part of foreign policy practices.
Second, liberalism, conservatism, and socialism are the most important ideologies today. However, they do not manifest themselves independently—through mutual affection and convergence these philosophies increasingly serve as parts of an ideological model used in many countries. In order to better understand modern Russia and other countries, one should not only proceed from an ideological content, but also remember that the correlation between different parts of the ideological model is a crucial factor for consideration.
Third, a policy pursued by individuals or a group of individuals who subscribe to a certain ideology is not always consistent with its essence.
FALSE LIBERALISM
Having made these general points, I would like to turn to ideas and perceptions that define today’s Russia.
In the Soviet Union, neither the government’s policy nor its practices corresponded to the essence of socialism. This is a widespread and fair opinion. But can those who took the helm after the disintegration of the Soviet Union be considered liberals? Boris Milner, science editor for the Russian translation of Institutions, Institutional Change and Economic Performance, a book written by Nobel Prize winner and founder of the theory of institutionalism Douglass C. North, recalled his meeting with the author in March 1996. According to Milner, North said the economic situation in Russia required the solution of three major tasks: adapting to the changes and mastering new mechanisms; overcoming the negative consequences of mistakes made in the past; and preserving the values of the Soviet legacy. But this triad was not used as a foundation for Russia’s transition to a market economy. Democratization in Russia after the collapse of the Soviet Union cannot be considered outside of the economic policy pursued by those who came to power. Many of those officials advocated “a socialism with a human face” during Gorbachev’s perestroika; in other words, they offered the possibility of democratizing socialism. But once they came to power, they destroyed everything associated with the image of Soviet Russia, not only things that had to be rejected. And in many instances – and I want to emphasize this – they destroyed the mechanisms which had been employed for making scientific, technical, and economic achievements and which had helped mobilize resources for tackling numerous modernization tasks.
In the early 1990s, pseudo-liberals urged that the state withdraw from economic activities altogether. A group of individuals emerged who seized Russia’s natural wealth and economic capabilities by carrying out an unpopular privatization and who sought to take power. As a result, Russia’s economic losses in the 1990s outweighed those sustained in World War II. I strongly believe this should not be forgotten by those people who are now praising the politicians who led Russia along the path of market economy and democracy.
The policy pursued by pseudo-liberals has proven a total failure. In fact, they are responsible for the financial default of 1998, which evolved into an economic crisis that nearly plunged Russia over the abyss. Pseudo-liberals also experienced a political fiasco when they ordered tanks to fire at the Russian parliament building in 1993. After they were ousted from power, Russia opted for a market economy with broad state participation. In the West this was perceived as Russia’s intention to push private enterprise into the back corner. But this perception is incorrect. Russia was and continues to be interested in the development of private entrepreneurship and the government’s policy is geared towards this goal. However, we admit that private entrepreneurs were not, and still are not, always ready to perform their functions. As a result, budget funding became increasingly important for implementing projects, but it was still insufficient for innovative industries and crucial education and healthcare projects that badly needed investment. These problems were exacerbated by the financial crisis of 2008-2009.
Another image of Russia created by those who are hostile to this country or who are not aware of what is really happening here concerns Russia’s allegedly authoritarian course. Russia is allegedly faced with a choice between liberalism and authoritarianism. In the first decade of the new century, Russia has seen a rebirth of liberal ideas. The ruling elite, general public, and political parties with differing views have supported demands for independent courts, for a decisive fight against the arbitrariness of bureaucracy, corruption, and vote rigging, and for equality of everyone before the law. The Russian leadership has emphasized liberal principles in their speeches and actions in a more pronounced manner than ever before. However, I do not think this signifies Russia’s transition to neoliberalism, the principles of which are incompatible with Russian reality.
Austrian economist Friedrich von Hayek, a prominent neoliberal, pointed out that freedom in economic activities created the main condition for rapid and balanced economic growth, and that free competition was designed to create new products and technologies. This is true. But is it possible to say that market mechanisms in modern Russia can generate growth and balance the economy, and that the present low level of competition is sufficient for technological progress? The point is that it is impossible to improve market mechanisms in Russia and increase competition to the level needed for progress in science and technology without government intervention in the economy.
One of the main principles of neoliberalism states that free play of economic forces, not government planning, ensures social justice. But reality has proven this conclusion wrong – not only in Russia, but also in other countries where governments introduced progressive taxation that redistributes income in favor of the poor. Russia cannot catch up with developed countries in terms of the quality of life without indicative state planning (not politically motivated, of course).
Nor it is possible to distance oneself from other contradictions of neoliberalism. Many in Russia call for a dramatic reduction in the state’s role in the economy as owner. These same people insist that sweeping privatization should include strategic assets like Rosneft, VTB, RusHydro, and Aeroflot, and they want limited privatization for such companies as Russian Railways, Transneft, and others. Naturally, some state-owned companies have problems that need to be resolved. There is no doubt that some major companies should be privatized, but this should be done gradually and, most importantly, without damage to the concentration and centralization of production. Calls to sell state-owned enterprises immediately and to forbid them from buying shares in private companies while they continue to operate will hurt the Russian economy. And yet such voices can be heard even in the government.
Neoliberals in Russia are calling for the privatization of healthcare, education, and science, including fundamental science. They consider denationalization to be the main course for development in Russia. In fact, neoliberals ignore the urgent need to improve the quality of life in the country and bridge the income gap. According to the Global Wealth Report, one percent of the wealthiest people in Russia held 71 percent of all personal assets in October 2012, double the rate in the United States, Europe, and China, and four times as much as in Japan. Ninety-six Russian billionaires own 30 percent of all personal assets in Russia. This is 15 times the world average. Instead of using Russia’s natural resources to provide for social needs, some people are suggesting keeping all excess federal budget revenue from oil exports in reserve; that is, in foreign securities. As a rule, they use two arguments to support their point: the need to set aside money for a rainy day (i.e. when the price of oil falls) and the need (which in their opinion is just as important) to cover the budget deficit as soon as possible, even if that means curbing social spending.
The government should naturally keep close watch on global oil prices and the budget deficit. In fact, there has been only a slight drop in crude oil prices on the global market. The budget deficit is quite small and many countries develop successfully with a much larger deficit.
Democratization is also completely at odds with attempts to equate political freedom with limiting federal power. The need to transfer some state functions to public agencies is obvious, but this process cannot and should not be associated with weakening the government. If this happens, democratization in Russia will break down and turn into uncontrolled chaos.
Notwithstanding tidal waves of Keynesian ideas and an array of various economic theories, government intervention in the economy has never been questioned in the West. The return of the idea of government non-interference in the economy exacerbated the economic crisis in 2008-2009. It is noteworthy that U.S. President Barack Obama made crucial amendments to the tax code and proposed measures aimed at dealing with the crisis in the banking sector and housing market, and reorganized the healthcare system in the interests of the middle class and the poor. “I will not go back to the days when Wall Street was allowed to play by its own set of rules,” Obama said.
UNSHAKEABLE SOVEREIGNTY
Now I would like to turn to some global ideas, which, as I see it, are stirring up international relations. Naturally, understanding between countries largely depends on the balance of two things: values and interests. The matter at hand is not an identical understanding of universal human values, but how to achieve such an understanding. The United States tends to impose democratic values upon other countries. Russia believes that democratization of public life and the state system are factors determining the internal evolution of different countries with account of their historical, civilizational, and socio-economic peculiarities. Experience has proven that bridging the gap in the positions of Russia and the United States on this issue is a challenging job that cannot be done hastily. At the same time, the two countries need to work together towards stronger international stability and security. This is an area where their interests converge. It is equally important to understand the degree to which globalization can affect state sovereignty.
Indeed, today one can see some members of integration alliances giving up some of their sovereignty and delegating it to supranational organizations. But does this allow for interference in the domestic affairs of nations?
I clearly remember a period of 18 months, starting in 2003, during which I worked, on appointment from UN Secretary-General Kofi Annan, as a member of an international group of experts drafting a report on changes to be made in UN activities in a new global environment. After long discussions within the group, we came to the conclusion that the UN should actively intervene and counter such occurrences as ethnic genocide, which affects millions of people across Africa.
However, even the term “a failed state” does not mean that one can interfere in the internal affairs of another country, let alone undertake military actions to this end, without a relevant decision from the UN Security Council. A correct understanding of democracy and sovereignty is not a tribute to theoretical exercises. Rather it is an imperative of present-day politics and an unquestionable indicator that largely determines global development.
When speaking of ideas and images in the modern world, one should not overlook the consolidation of Islamism in the Middle East and other parts of the world, or the struggle between Sunnites and Shiites, which underlies interstate relations that occasionally erupt into armed interference. I do not belong to those who think that this points to a significant rise of religious ideas in global policies. Interestingly, the Arab Spring, which has strengthened Islamists, did not go beyond the region to become a part of politics worldwide. And it would be all the more incorrect to reduce international relations in the modern world to a fight between different religions or even civilizations.
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The end of the Cold War did not put a stop to the confrontation between ideas and perceptions. The clash continues in various forms and in different situations across the board, but it has lost – and I would like to emphasize this – the mainstream nature of ideological clashes as a key factor determining global development.
