Carnegie Moscow Center

Political Modernization

• Demodernization: Russia’s political system is experiencing political de-modenization as a result of Prime Minister Vladimir Putin’s emphasis on centralization and unity, explained Carnegie’s Nikolay Petrov. As power shifts from the regions, the central management system is becoming increasingly overburdened and statist, characterized by a paralyzed decision-making mechanism, Petrov argued.
   
• Reforms: Political reforms are necessary, Petrov continued. However, as long as the current system can generally accommodate contemporary social, economic, and political demands, change is not inevitable. Any modernization is likely to be a reaction to systemic crises, rather than the result of progressive evolution, Petrov concluded. He elaborated that Putin is facing a Brezhnev/Gorbachev dilemma—he could attempt to sustain a personality-driven system or he could start reforms slowly without a clear understanding of the final outcome, respectively.

Economic Development and Diversification

• Economic Slowdown: Carnegie’s Sergey Aleksashenko listed a number of significant issues inherent in Russia’s economic situation that will significantly inhibit its future growth, including:
   
  • the decline in Russia’s growth rate; 
     
  • its increasing dependence on exports of oil, gas, and raw materials;
     
  • its deteriorating investment climate, characterized by privatized law enforcement agencies, serving only the interests of the elite, and creating an insecure and unattractive environment for investors.
     
• Potential Consequences: A lack of foreign and domestic investment is directly inhibiting the energy sector’s diversification and the exploration of untapped resources, Aleksashenko said. Furthermore, he argued, the economy is vulnerable to external market fluctuations through a budget balanced against a very high oil price (currently $105 per barrel).
   
• Political Change: Aleksashenko concluded that the economic reforms necessary to ameliorate this situation are only possible if coupled with political change, at which point European investment could become a key driver for Russian modernization.

Social and Grassroots Drivers of Change

• Russian Society: Carnegie’s Sam Greene explained that the Russian electorate views elections as mostly meaningless. This popular skepticism is demonstrated in the decline in the Putin/Medvedev tandem’s approval ratings, which are ten points below where they were several years ago. Greene said the situation is troublesome for any “one-party” political system, which is characterized by the lack of a political alternative and whose approval ratings are akin to a measure of loyalty.
   
• Grassroots Mobilization: Russians, Greene said, may not mobilize for elections, but they will mobilize for areas of individual interest. This type of social grassroots mobilization is not something that the current system of public institutions is designed to handle. There is no mechanism in place for constructive dialogue leading to a workable compromise, he said.