Russia in Global Affairs

Despite Western sanctions and oil-price volatility, Russia is currently on sturdier economic footing than most of its critics ever could have imagined just a few years ago. But while prudent fiscal and monetary policies have laid the groundwork for long-term sustainable growth, the government must resist the temptation of short-term stimulus.

Mutual sanctions are always extremely unpleasant, and the application of sanctions and the “hot” trade war between Russia, Europe and the United States can have no good result.

It has become popular in Russia to speak about the crash of the Western economic model and liberal capitalism and this talk may make some sense from the political point of view. All of economic history shows that however harsh a crisis may be and whatever stage of capitalism’s decomposition is attributed to it, market economies have always survived crises, and emerged from them stronger, tougher and more competitive.

Russia entered its postindustrial transformation much later than the West. In fact, we must choose an effective model of a postindustrial market and produce a set of state policy instruments that will ensure its proper functioning.

The full-scale revolution that Russia experienced while implementing the systemic post-Communist transformation is over, and the basic state institutions have been restored. At the same time, the elites have not consolidated much, and a stable national consensus on basic values has not been reached.

A reliance on natural resources in a country’s development causes grave economic problems and results in the government’s awkward decisions. The instances can be easily found in recent and distant history.

Debates about perestroika in Russia seem destined to remain “What if” controversies. Whatever aspects of this period are being discussed, an intriguing question always stands out, explicitly or implicitly: Could the events have taken a different course? Or was it spurred by an accidental concourse of circumstances, mistakes and spontaneous whims of certain leaders?

It could be persuasively argued that the goals of the post-Communist transformation have been successfully accomplished. The dominant socio-economic problems confronting Russia today are the crisis of the industrial system and the establishment of the socio-economic foundation of a post-industrial society.

If we were to make a brief summary of the year 2003 for Russia, here is what it would entail: an overall favorable economic situation; general economic growth; changes in the political atmosphere which were manifest in the campaign against the YUKOS oil company and parliamentary election results; preparations for the presidential election and debates over what political and economic policies Vladimir Putin may pursue during his second presidency. Last year’s results are worthy of an in-depth analysis, as many of those events will clearly mark out a course for the coming years.