29th March 2017
Article by Paul Goncharoff
The media has distorted Putin and Russia beyond recognition
Editor’s Note: This is a truly insightful and entertaining firsthand account of Russia through the eyes of someone who, like so many of us, was brought up to loathe the “Russkies”. Find a comfortable chair, pour yourself a drink, and enjoy!
As a native New Yorker, brought up in the 1950s and 60s, I damn well knew what those Russkies were; pinkos, spies, commissars and worse! At public school I regularly had to squat under my desk while the nuclear attack alarms went off, all the while our homeroom teacher barked at us to make sure our eyes were closed and our faces turned away from the windows. All that bother because the communists were especially intent on turning our school into a thermonuclear barbeque.
Although born in Manhattan, my relatives all emigrated from a war torn Europe in the last years of the 1940s. Many of their friends shared similar experiences, some escaping the Nazis, some running from the reds, all running from poverty and post-war chaos. It was also the time of McCarthy, and the stamp this left on American perceptions was the ‘them against us’ view of the world. Being a fan of the Lone Ranger, Superman, Gumby and Bonanza, I teethed on us good guys always being right.
My friends were a mix of the immigrant inflow to the lower east side, Russians, Chinese, Greek, Italian, East European, you name it… we were all born in America, citizens, while many of our parents were still in the process of becoming. I noticed at an early age that many who immigrated to America became ‘Super Americans’. McCarthy and his ilk were pansies compared to these ideological commie fighters from Czechoslovakia, Poland, and Russia. It was a worldview of absolutes, no middle ground, no compromise, just the good and bad. Much of America’s expertise on Russia and Eastern Europe was heavily composed of such immigrants who left during or just after the chaos of war. These became our Soviet experts, our cold warriors. Theirs was a mindset largely fixed at a point in time, carried forward by their children and those they mentored with worldviews still influencing perceptions and positions in our foreign policy today.
In 1976, I was called into the office of the Chairman of our firm, a leader in the world of Platinum and Palladium. He seemed immensely pleased that my parents were from Russia. I corrected him, my mother was from Yugoslavia and my father from Russia, and they met in NYC — hence me. He made me an offer I could not refuse; “Young man, you are to fly to Moscow, obtain a supply contract, and do not dare return until you have done so.” He was smiling when he said that, but this was the time of Brezhnev/Nixon détente and anything was supposedly possible with the cash-strapped Soviets. Priorities in my life then were girls, study and work, preferably in New York and not some Bolshevik heaven. Nevertheless, not thrilled at losing a good job by declining this weird opportunity, I agreed.
I arrived to a place and time which was hugely different from my understanding of the usual. The Soviet Union in many ways challenged perception as the structures and priorities were so differently aligned and emphasized than anywhere else. Being a foreigner then in the USSR was unique. We could only stay at Intourist-run hotels which were set up to accept us and our hard currencies, all at official rates. These hotels were the best that were available at that time; they were the peak of local luxury. This in a Union that focused on basic staples, with little that was frivolous, flashy or non-essential. It was a conservative society distilled to basics and lubricated with spirits. To an outsider from the States this was a cold, grey, strangely alien world cocooned with an undercurrent of anxiety. This was a society with a well-educated, well-read citizenry that was politely curious yet in the main disinterested in global matters that did not directly involve them. Nothing was easy; there were procedures and laurels went to the stubbornly persistent and those who knew how to operate the warp and weft of the system well enough to avoid snags.
As it happened, and it was not my prime desire, my trips to and from the USSR became regular quarterly or biannual events from 1979 through 1990, a period when quite a bit changed in the Soviet Union. Brezhnev died, Andropov appeared, then Chernenko and finally Gorbachev as the last leader of the Soviet Union. Witnessing this period through quarterly snapshots it seemed I was looking at an old moving picture flipbook, where the changes move stutteringly forward. The wall came down in 1989, the Comecon dissolved, the Warsaw Pact disappeared, interconnecting economic ties severed, and the currency was debauched. Standards of living were akin to a postwar nation where the raw basics for survival was the main concern. The collateral damage of perestroika was the total collapse of the social net, food, jobs, security, pensions, and healthcare. People had to learn and master entirely new ways to fend for themselves; however they could, as best they could. This ‘fending for oneself’ was a clear introduction to individualism, which was not considered a positive trait in the Russian culture even before the Communist revolution. This was the era of humiliation, where surviving tested the bonds of family, friends, position, expectations and hope…many failed; it was stark existence.
Just after Yeltsin became the first president of Russia, I moved to Moscow working full time. Advising and consulting various interests in the country, including the new government, and running my business that was located in Europe and USA. Having already conducted business from Vladivostok to Murmansk my past and present business contacts were a telling litmus test of regional change. The management of this new Russia in many ways was the equivalent of America’s Ivy League/Goldman Sachs circles — these were the remnants of the Party, the Nomenclatura, the Comsomol, and their friends and families. Whom did anyone trust in those disruptive days? Hence, nepotism and loyal old buddy networks, a practical and understandable path. America was largely accepted as the only lighthouse which could guide Russia out of this storm, therefore any advice from America was implemented.
As for the majority of Russians — they stoically picked themselves up and steadily rose from the dust of the dead and collapsed Soviet Union. It was during this time that I truly became a Russia fan. There was no roadmap to a democratic free market economy for anyone to follow. Experts who arrived to Russia to advise were theoreticians insofar as they had little appreciation for the actualities of life, or state of structures that remained from Soviet times, or the day-to-day realities on the ground, or the abysmal depth of the collapse throughout the far-flung regions.
As the US and Europe were advising the Yeltsin government on how to build a Democratic Russia modeled on an idealized version of themselves, it seemed that every NGO on the planet descended on Russia. Good intentions were all the rage, inculcating trappings and nuances that every ‘democracy’ must have; independent judiciary, good governance, human rights, transparency, no corruption, women’s rights, LBGT rights, minority rights, the list went on. All ‘good’ things, but presented and made conditional at a rather awkward time. Russians by nature tend to the conservative and pragmatic. They like to act on what has a chance to work given the tools, resources, attitudes and perspective realistically available. Then on New Year’s day 2000, amid this tempest of dissonance and stresses a new President came on the scene which ushered in a new era — it was Putin’s time.
With Boris Yeltsin’s New Year’s surprise in naming Vladimir Putin as acting president on January 1, 2000, a distinctly different management style steadily gained traction. Corruption, which always existed in one form or another, was for almost a decade one of the few smoothly working tools enabling many decisions, both necessary and unnecessary. The common element was that all business decisions according the laws had to go through a governmental approval/disapproval process, federal, regional or local.
Decisions and permissions required by private business were an entirely new concept. They needed immediate resolution while at the same time the rules were either still unwritten or if written, not fully understood. Yet decisions had to be made, risking the lives and careers of those held accountable whilst the rulebook of responsible accountability was still being dreamed up. The country was yearning for stability, predictability, and an understanding of what the lay of the political land would allow.
There was tremendous wealth in the hands of those who were able to position themselves in the oil and gas sectors, and the holdings, while dated, were largely functional. The same held true for mining and forestry. These were real assets, and the world’s bankers were more than eager to lend into them. So it went; improve what you can, manage what is possible, and in many ways trust and hope that sanity and innate conservatism in Russia will keep the ship afloat.
The privatization and voucher schemes, while roundly criticized did serve to get 15,000 state firms off the government’s back, for better or worse. The downside was the strengthening of what came to be known as the ‘oligarchs’, or closed circles of power and influence backed by funds. These were essentially extra-political action committees or lobbies without the legal guise of respectability. These were powerhouses similar to America’s Super PACS and largely above the law.
Taxing the citizenry was a further issue. The rates initially brought to bear were patterned on the US and Europe; they were too complex, too high, and few were willing to pay into what was essentially a path to assured bankruptcy. The wealth of the country was offshore, largely off-the-books and cash was king.
The time for a ‘great national housecleaning’ was at hand, with all the additional anxieties that such sweeping change entails. The priorities both then and today are straightforward, but to achieve them has been an immensely difficult time consuming, complex task.
The advantages Putin and Russia had from the outset was the absence of an airy institutionalized ideology which makes change not just a practical challenge but also adds the baggage of ‘political correctness’ to the problem.
Many believe Russia is by its DNA an autocratic slam-dunk. To this day, I am surprised at the lack of understanding of how Russia is in fact governed. A unique form of consensus does play a key role.
Misinterpretation may be because it is not like the American brand of democratic process, or the UK’s, nor is there an over-riding desire to wholly emulate either. Nonetheless, from every town in every region there is a trickle up and trickle down flow of social, economic, and opinion information-sharing directed to the regional offices of the governors.
This is also duplicated to the federal ministries concerned at the regional level (checks & balances), municipal and local. Feedback flows are collected and reviewed at the federal level in Moscow. The president does not make policy decisions unilaterally; practically speaking he cannot, not without key consensus, and in coordination with several political/economic power blocks. Admittedly, this is a byzantine and to outsiders an insufficiently transparent process wherein not every political view is warmly embraced or accepted. Nevertheless, the process works in this place and time, and has resulted in significant improvements and stabilization of Russian society and economy. The steady evolution of the legal code, the evolution of an equitable judiciary, upgrading the military, social welfare, have all been steadily building up from the foundation of Russia’s new society.
When Putin came to be President, Russia was essentially bankrupt. It owed more money to the IMF than it had in foreign currency reserves. Funds were being siphoned offshore; oligarchic groups were ‘Teflon’ and pleased as punch. But over the ensuing years, a virtual ‘good housekeeping’ revolution took place.
Starting in 2003, serious and even draconian steps were taken to try to break the influence that non-government interests (Oligarchs) held in various areas of the body politic. Imagine the challenge if the task was in the USA, and the goal was limiting influence exerted by the interests of beltway political action committees (PAC’s) or other myriad Lobbies. Not so easy, perhaps even unimaginable. The necessary steps were roundly criticized by the global media, yet they clearly had to be taken if Russia was to have an independently determined future.
The speed and trajectory of Russia’s continued recovery was dependent on the willingness of policymakers to diversify revenue streams and maintain ongoing internal economic and monetary reforms. As it happens, the sanctions imposed on Russia, and the responding quid pro quo sanctions achieved what political and management structures of Russia were still only considering phasing in due to risks of potential social unrest. This was enhancing diversification from oil, gas and other natural resources to the many other insufficiently prioritized directions such as agriculture, commercialized high technologies, machine building, and consumer goods. Phasing in diversification was kick started by the sanctions imposed in 2014 forcing the issue of import replacement and substitution. The sanctions will eventually pass, and the oil price will find equilibrium, meanwhile the process of putting the Russian house into diversified order continues.
From the point of view of most Russian citizens, not just Muscovites, the processes and structures that the government has introduced under Putin have been welcome. The internal life of Russia has improved on most every front relative to what was pre-2000. I believe the polls are correct, that the current administration has a better than 75% approval rating, any politician anywhere in the world would be a happy camper with such percentages.
Today the GDP value of Russia represents 2.14 percent of the world economy. GDP in Russia averaged 876.86 USD Billion from 1989 until 2015, reaching an all-time high of US$2230.63 billion in 2013 and then the combined influence of the drop in oil prices combined with imposed sanctions had its effect on growth during 2014, 2015 and to a lesser degree in 2016. It is worth recalling that the total GDP in 1999 was US$ 195.91 billion. This sort of improvement roughly equals a greater than tenfold increase in as many years.
So this is nasty Russia?
To try to sum it all up and include every dissonance, caricature and myth would take a hefty tome. Much of today’s unproductive accusatory game playing and demonizing might have been avoided if Russia’s 2008 proposal for western security was not dismissed out of hand. The red lines were stated clearly to the United States and the world by Russia as far back as 2006. Among them was the unacceptability and danger posed by potential inclusion of Ukraine and Georgia into NATO. The danger to Russia’s national security would only increase by having a potentially hostile military alliance on its Western borders. This has been repeatedly confirmed by years of consistent actions, speeches, statements and interviews with Vladimir Putin, Medvedev, Lavrov, and members of the federation council where Russia’s positions have been consistent and open. Perhaps this is an advantage of longer time lines at the helm of the country. The vast majority of Russians feel strongly that they now have the leadership and stability that is the best the country has ever enjoyed.
The media in the EU and the US seem to be fixated on continuing to portray Putin as some odious goblin wallowing in the juices of some corrupted cornucopia. Such a characterization and lampooning insults the truth.
Russia may well be an authoritarian leaning democracy; it may not be in keeping with populist views; yet despite all that it works well for Russia. It is also worth appreciating that Russia is not pushing views, values or otherwise “evangelizing” to anyone. Perhaps we should be more outraged in this new millennium that our values of responsible, educated, objective, journalism should be thriving but are not.
It seems the finest ideals of a free press and international justice have indeed died in a world recently turned dangerously upside down. A world where nations are accused, vilified, prejudged and sanctioned without evidence and which would be thrown out of the lowliest municipal courts, yet here we are. Let us hope that objective assessments plus rational reasoning will guide us in 2017 and beyond, for all our sakes.
Source : http://russia-insider.com/en/putins-time/ri19351?utm_source=Russia+Insider+Daily+Headlines&utm_campaign=a0cba6ba6c-Russia_Insider_Daily_Headlines11_21_2014&utm_medium=email&utm_term=0_c626db089c-a0cba6ba6c-227243105&ct=t%28Russia_Insider_Daily_Headlines11_21_2014%29&mc_cid=a0cba6ba6c&mc_eid=03586fbd1f