The Russian Federation

1. Chapter 8 The Russian Federation

2. SECTION 1 THE MAKING OF THE MODERN RUSSIAN STATE

3. THE MAKING OF THE MODERN RUSSIAN STATE • Politics in Action • Town of Pikalyovo came to be known as a power symbol during the economic crisis of 2009. • Economic difficulties of BasEl Cement Pikalyovo sparked protests when city’s heating and hot water supply was interrupted and wages were not being paid. • Pikalyovo events exemplified the continuing interdependence of politics and economics in contemporary Russia. • Crisis required intervention of country’s top leaders.

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8. THE MAKING OF THE MODERN RUSSIAN STATE • Geographic Setting • Breakup of Soviet Union resulted in 15 newly independent states. • Russian Federation: largest successor state and largest European country, spanning 11 time zones • Underwent rapid industrialization and urbanization under Soviet rule • Rich in natural resources: gold, diamonds, timber, oil and natural gas • Ethnic diversity and scope make governing difficult. • Pockets of instability on borders • Regional sphere of influence disputed

9. THE MAKING OF THE MODERN RUSSIAN STATE • Critical Junctures • The Decline of the Russian Tsarist State and the Founding of the Soviet Union • Autocratic system headed by tsar until 1917 • Patrimonial state ruling country and land • Patrimonial state —A system of governance in which a single ruler treats the state as personal property (patrimony).

10. THE MAKING OF THE MODERN RUSSIAN STATE • The Bolshevik Revolution and the Establishment of Soviet Power (1917–1929) • Bolsheviks were Marxists. • Believed revolution reflected political interests of the working class (proletariat),although most leaders were intelligentsia. • Slogan: “Land, Peace, and Bread” • Strategy based on two key ideas: • Democratic centralism—hierarchical party structure with leaders elected from below and strict implementation of party policy. • Vanguard party—political party that claims to operate in the “true” interests of the group or class that it purports to represent, even if this understanding doesn’t correspond to the expressed interests of the group itself.

11. THE MAKING OF THE MODERN RUSSIAN STATE • The Bolshevik Revolution and the Establishment of Soviet Power (1917–1929) (Cont’d) • Extended civil war, (1918–1921) • Introduction of war communism—state control of key economic sectors • New Economic Policy (NEP) (1921) loosened state control over economy but not large-scale industry • Bolsheviks became more authoritarian through 1920s. • Lack of democratic tradition and vanguard ideology • Internal struggles after Lenin’s death, leading to rise of Stalin • Open opposition silenced by 1929 • Bolshevik revolution started international isolation. • Ceded chunks of territory to Germany under Brest-Litovsk Treaty (1918)

12. THE MAKING OF THE MODERN RUSSIAN STATE • The Stalin Revolution (1929–1953) • Josef Stalin brought changes to every aspect of Soviet life. • State control over all economic assets • Collectivization of farms to prevent emergence of capitalist class • Collectivization —Removal of agricultural land from private ownership and organized into large state and collective farms • Resulted in famine and death • People were uprooted from countryside to urban industrial life • Party subject to personal whims of Stalin and secret police • Resistance was evasive rather than active

13. THE MAKING OF THE MODERN RUSSIAN STATE • The Stalin Revolution (1929–1953) (Cont’d) • Citizen and economy were isolated from outside world. • Positive: Served as protection from effects of Great Depression • Negative: Failed to keep up with economic and technological transformation in the west. • Joined Allied Powers in 1941 in Great Patriotic War • Victory allowed absorption of new territories. • Replicated Soviet communism • Countries with historic links to Western Europe forced changes to Soviet model through domestic resistance • USSR emerges as superpower. • Policies to contain expansion were implemented: Truman Doctrine, North Atlantic Treaty Organization (NATO) and Warsaw Pact.

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15. THE MAKING OF THE MODERN RUSSIAN STATE • Attempts at De-Stalinization (1953–1985) • Stalin’s system of terror destroyed initiative and participation. • Unpredictability inhibited rational policy formulation • 1953-mid 1980s: Regularization and stabilization of Soviet politics • Terror abated but political controls remained. • Nikita Khrushchev (1956–1964) • Revitalized Communist party, secret police (KGB) subordinated to Communist Party of the Soviet Union (CPSU) • Internal structures centralized and elections uncontested

16. THE MAKING OF THE MODERN RUSSIAN STATE • Attempts at De-Stalinization (1953–1985) (Cont’d) • Leonid Brezhnev (1964–1982) • Partially reversed de-Stalinization • Tightened cultural controls • Predictable repression • Beginning in late 1970s, aging political leadership increasingly ineffective • Economic growth rates and opportunities for upward mobility declined. • Resources were diverted to military sector. • Liberalization in East Europe and telecommunications made shielding population from Western lifestyles and ideas difficult.

17. THE MAKING OF THE MODERN RUSSIAN STATE • Perestroika and Glasnost (1985–1991) • Mikhail Gorbachev (1985) • Reform program focused on economic growth and political renewal without undermining Communist party. • Perestroika (economic restructuring) • Decentralization and rationalization of economic structures • Glasnost (openness) • Easing of controls on public debate • Demokratizatsiia (limited democratization) • “New Thinking” • Received Nobel Peace Prize in 1991 • Halted Military buildup, ratification of arms control agreements, and lifting of many controls on international contacts

18. THE MAKING OF THE MODERN RUSSIAN STATE • Collapse of the USSR and the Emergence of the Russian Federation (1991 to the Present) • Boris Yeltsin added as nonvoting member of the Politburo in 1985 and became president in 1991 through direct popular vote. • August 1991 conservative coup d’état temporarily removed Gorbachev from leadership. • Yeltsin rallied opposition to coup and declared himself champion of democratic values and Russian national interest. • December 1991 Yeltsin joined Ukraine and Belorussia leaders. • Declared end of Soviet rule and formation of Commonwealth of Independent States

19. THE MAKING OF THE MODERN RUSSIAN STATE • Collapse of the USSR and the Emergence of the Russian Federation (1991 to the Present) (Cont’d) • Russian Federation became independent. • Yeltsin proclaimed commitment to Western-style democracy and market reform. • Controversial and hard to implement • October 1993 Yeltsin disbanded parliament and called new elections and constitutional referendum. • Yeltsin unable to stop corruption, crime, social decline. • Conflict to prevent Chechnya independence • Financial crisis 1998 • Yeltsin nominated Putin as prime minister. • Yeltsin resigned 1999 and Putin elected president.

20. THE MAKING OF THE MODERN RUSSIAN STATE • Collapse of the USSR and the Emergence of the Russian Federation (1991 to the Present) (Cont’d) • After September 11, 2001 • Putin benefited from high gas prices that poured revenue into Russia. • First economic growth in a decade in 1999 • High levels of popular support • Putin transitioned to hand-picked successor in 2008. • Since 2000, Russia drifting toward soft authoritarianism • Soft authoritarianism—a system of political control in which a combination of formal and informal mechanisms assure the dominance of a ruling group or dominant party, despite the existence of some forms of political competition and expression of political opposition.

21. THE MAKING OF THE MODERN RUSSIAN STATE • Collapse of the USSR and the Emergence of the Russian Federation (1991 to the Present) (Cont’d) • Putin expressed solidarity with the United States in the struggle against terrorism. • Reinforced by terrorist attacks in Russia • Withheld support of Iraq due to concerns about increasing American influence • Additional conflict points emerged • Hillary Clinton visits with Russia after Obama inauguration to call for a reset of international relations.

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23. THE MAKING OF THE MODERN RUSSIAN STATE • Themes and Implications • Historical Junctures and Political Themes • International support high following Soviet collapse • Russia’s status as world power undermined by Western organization expansion • Economic recovery and European dependence on Russian oil and gas renewed Russia’s international influence. • Russia had difficulty asserting itself as a respected regional leader. • Russian Federation mired in economic collapse and political paralysis • By late 1990s, public disillusioned and distrustful of leaders

24. THE MAKING OF THE MODERN RUSSIAN STATE • Historical Junctures and Political Themes (Cont’d) • Since 2000 economic growth has returned • Increased public confidence although still skeptical of market economy • Survived 2008 financial crisis through plans such as Reserve Fund and Prosperity Fund (generated from high oil and gas revenues) • Still facing major issues: inadequate levels of foreign investment, capital flight, continuing high levels of inequality, and decline in agriculture • Russians seek new forms of collective identity. • Russian identity uncertain because of loss of superpower status and widely accepted ideology • Differing collective identities due to internal divisions

25. THE MAKING OF THE MODERN RUSSIAN STATE • Implications for Comparative Politics • Transition from authoritarianism to democracy affected by: • Tradition of strong state control • Intertwined politics, economics, and ideology • Four transitions initiated simultaneously in early 1990s: democratization, market reform, redefinition of national identity, and integration into world economy • Difficult to separate political and economic power • No private wealth • Corruption and crime used to maintain former privileges • Citizens faced economic decline and ideological vacuum. • Susceptible to appeal for state control and nationalism • Current backsliding from democracy reflects pursuing so many transitions at once.

26. SECTION 2POLITICAL ECONOMY AND DEVELOPMENT • Introduction • Collapse of Soviet system 1991 • Radical reduction of state’s strong role in economic development • Opened Russian economy to foreign influence • Dramatic decline in economic performance and change in state-society relationships • Renewed economic growth built on energy and national resources • High levels of social inequality and corruption

27. POLITICAL ECONOMY AND DEVELOPMENT • State and Economy • Under Soviet command economy important economic assets belonged to state. • Economic plans defined production goals. • Prices controlled by state • Foreign relationships channeled through central economic bureaucracy • Successes under Soviet model: rapid industrialization, social welfare and mass education, low levels of inequality • Over time unable to maintain increased domestic prosperity and competitive products for export

28. POLITICAL ECONOMY AND DEVELOPMENT • State and Economy (Cont’d) • Yeltsin endorsed radical market reforms • Market reforms—A strategy of economic transformation that reduces the role of state in managing the economy and increases role of market forces. • Four pillars to program: • lifting price controls • encouraging small private businesses and entrepreneurs • privatizing most state-owned enterprises • opening the economy to international influences

29. POLITICAL ECONOMY AND DEVELOPMENT • State and Economy (Cont’d) • Privatization was rapid. • Privatizing state industries, known as insider privatization. • Insider privatization—transformation of formerly state-owned enterprises into joint-stock companies or private enterprises in which majority control is in the hands of employees and/or managers. • First stage of privatization created joint-stock companies. • Joint-stock companies—a business firm whose capital is divided into shares that can be led by individuals, groups of individuals, of governmental units. • Citizens were issued a privatization voucher. • Privatization voucher—certificate to be used to purchase shares in state enterprises undergoing privatization. • By 1990s Russia was in severe depression.

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31. POLITICAL ECONOMY AND DEVELOPMENT • State and Economy (Cont’d) • Second stage of privatization in 1995 allowed firms to sell shares. • Unattractive to investors as many firms would require large fusions of capital to update technology • Loan for shares helped secure position of elite. • Key obstacle to market reforms was weakness of state institutions, which fed corruption and crime.

32. POLITICAL ECONOMY AND DEVELOPMENT • State and Economy (Cont’d) • Central state in Moscow had difficulty exerting authority in relation to regional authorities and in the face of increasing power of business oligarchs. • Oligarchs—small group of powerful and wealthy individuals who gained ownership and control of important sectors of Russia’s economy in the context of privatization of state assets in the 1990s. • Rich foreigners, Russian bankers, and outspoken journalists became arts of the Russian mafia. • Mafia—A term borrowed from Italy and widely used in Russia to describe networks of organized criminal activity.

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34. POLITICAL ECONOMY AND DEVELOPMENT • State and Economy (Cont’d) • Financial crisis in August 1998 caused by government’s inability to pay creditors creating pyramid debt • Pyramid debt —a situation when a government or organization takes on debt obligations at progressively higher rates of interest in order to pay off existing debt. • Government forced radical devaluation of ruble. • Economic growth revived in 1999. • Vladimir Putin became president in 2000. • Legislative reforms to spur economic recovery • Simplification of tax system to increase compliance and enforcement • Budget deficit to budget surplus • Russia is a high “state capture economy.” • State capture economy—The ability of firms to systematically turn state regulations to their advantage through payoffs to officials.

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36. POLITICAL ECONOMY AND DEVELOPMENT • Society and Economy • Achievements in social reform: Free health care, low-cost access to essential goods and services, partially-paid maternity leave, child benefits, disability pensions, and mass education • System was plagued with shortages. • For example: housing and medical services • 2005: Monetarization of social benefits • Tried to replace free social services with modest monetary payment • Followed by mass demonstrations

37. POLITICAL ECONOMY AND DEVELOPMENT • Society and Economy (Cont’d) • New programs to address inadequacies in social sector and reduce population decline announced in 2005 • Four priority areas: health care, education, housing, agriculture • Doubling of monthly child support payments and large monetary bonus for women having a second child • Design of a program of free land allocation for house/dacha construction when a third and every subsequent child is born

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40. POLITICAL ECONOMY AND DEVELOPMENT • Russia in the Global Economy • Economy isolated during Soviet period • Ruble nonconvertible and foreign trade channeled through state organs • Western governments were committed to technical and humanitarian assistance during 1990s. • Government had difficulty meeting conditions. • Russia had problems attracting foreign investment due to continued uncertainty and instability of government policy. • Shift in geographic focus of foreign trade • Position in international political economy undetermined • Well positioned but limited by industrial capacity • Dependent on leader’s ability to respond to domestic challenges and differentiate export base

41. SECTION 3GOVERNANCE AND POLICY-MAKING • Organization of the State • Prior to Gorbachev’s reforms, the Communist Party of the Soviet Union, which dominated the state, was hierarchical. • Comprised of: • Politburo (top organ and decision maker), • Central Committee (broader political elite, regional party leaders and representatives of various economic sectors.) • Soviet state structures (with little decision-making authority), the Supreme Soviet (rubber-stamp body) • State positions were appointed through the nomenklatura system. • Nomenklatura—selection in Soviet Period under which the Communist Party maintained control over the appointment of important officials in all spheres of social, economic, and political life.

42. GOVERNANCE AND POLICY-MAKING • Organization of the State • Russian constitution of 1993 • Only symbolic; many principles were ignored • Provided for legislative, executive, and judicial, but no separation of powers • Courts had no authority to protect provisions. • Affirms principles of liberal democratic governance • President and executive branch have strong powers. • Executive dominant, but still dependent on the agreement of the legislative branch to realize its programs. • Powers of president were augmented with Putin’s presidency to address weakness of central state authority.

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44. GOVERNANCE AND POLICY-MAKING • The Executive • Semi-presidential system with strong president • President is head of state. • Responsible for foreign policy, relations with regions, security • Prime minister appointed by president; approved by lower house • Head of government (the state Duma); responsible for economy • President is directly elected every four years with two consecutive term limit. • President’s most important power—Power of decree • Allows bypass of uncooperative or divided parliament • Force of law until legislation is passed but less respect

45. GOVERNANCE AND POLICY-MAKING • The Executive (Continued) • President can also declare • state of emergency, • impose martial law, grant • pardons, call referendums, • and suspend actions if • they contradict the • constitution or federal laws.

46. GOVERNANCE AND POLICY-MAKING • The National Bureaucracy • 2004: Reform unsuccessful in improving efficiency • Ministries concerned with policy functions • Services and agencies monitor functions or implementation. • Ministries other than prime minister do not require parliamentary approval. • Prime minister recommends; president appoints. • Restructuring to induce political loyalty or signal priorities; referred to as siloviki. • Siloviki—derived from the Russian word “sil”, meaning “force”, Russian politicians and governmental officials drawn from the security and intelligence agencies, special forces, or the military, many of whom were recruited to important political posts under Vladimir Putin.

47. GOVERNANCE AND POLICY-MAKING • The National Bureaucracy (Cont’d) • Patron-client networks—clientelistic networks • Reflect importance of personal career ties • Merit-based civil service a goal • Bureaucracy has low level of respect and high levels of corruption.

48. GOVERNANCE AND POLICY-MAKING • Public and Semipublic Institutions • Limited sectors of economy remain under state ownership. • Direct state or municipal ownership of assets or majority control or shares • Economic sectors include telecommunications, public transport, electronic media, and energy. • Education and health-care services provided by tax-supported agencies • Public or semi-public agencies offer services at lower price but with lower quality. • Many parts of social infrastructures under public or semi-public control • Soviet-era social services administered through workplace • Officials are appointed by political authorities.

49. GOVERNANCE AND POLICY-MAKING • Other State Institutions • The Military and Security Organs • Since Sept. 11 attacks, Russian has shared information with its Western allies. • Crime rate and terrorist bombings have not elicited popular concern for civil liberties. • Citizens believe that crime is rampant and that police are corrupt. • Political power and prestige of the military have declined, in part as a result of its failure to implement successful strategy in Chechnya. • Concern over deteriorating conditions of nuclear arsenals and security

50. GOVERNANCE AND POLICY-MAKING • The Judiciary • Historically judicial independence and rule of law poorly understood • Constitutional Court formed 1991 • Decisions binding • Suspended by Yeltsin but 1993 constitution provided again • Judges nominated by president and approved by Federation Council • Resolves conflicts over individual rights and conformity of regional laws with constitution but cautious in confronting executive branch • Alongside the Constitutional Court is extensive lower and appellate courts with Supreme Court at pinnacle. • Commercial courts formed in 1995