An article in Kommersant by Andrei Illarionov.

A new model of the Russian state has been largely established. Its main feature is the use of force unconstrained by law, tradition or morality - a system, in other words, in which politics, business dealings and judicial decisions are all ruled by force, as is foreign policy. It is possible to draw early conclusions.

Destruction of current state institutions

In the performance of critical state institutions, Russia today lies near the bottom of world tables. In political rights and civil freedoms, it ranks 158th or 159th of 187 countries - alongside Pakistan, Swaziland and Togo. In freedom of the media, it comes 147th out of 179 countries listed - alongside Iraq, Venezuela and Chad. In corruption, Russia is rated 123rd out of 158 countries - along with Gambia, Afganistan and Ruanda. In protection of property rights, it occupies the 89th spot out of 110 countries - along with Mozambique, Nigeria and Guatemala. In the performance of its judicial system, it’s 170th out of 199 - on a par with Burundi, Ethiopia, Swaziland and Pakistan. The behaviour and level of its bureaucracy make it 155th out of 203 assessed - the same level as Niger, Saudi Arabia, Cameroon and Pakistan. At the same time, the coercive state model legalizes violence in society: Russia is in 7th place out of 112 countries in the number of murders per 1,000 citizens - between Ecuador and Guatemala, a little below the Republic of South Africa and a little above Mexico. The overall physical security of our citizens makes Russia 175th out of 185 countries - in the same group as Zimbabwe, Sudan, Haiti and Nepal. Law-enforcement officers have no regard at all for their fellow-citizens. So what can a massive increase of investment in the wages, equipment and personnel of law-enforcement bodies - the army, the police and special services - mean? Isn’t their recent strengthening clear evidence of the strengthening of the state. . ?

Where are we heading?

It’s been suggested that Russian state institutions’ poor performance is the result of the country’s oligarchic past, the ‘chaos’ and collapse of the 1990s, and that only now are law-enforcement bodies doing everything they can to reverse the situation. This is a myth. It’s only in recent years that a dramatic drop in the performance of state institutions has been seen. In 1998 (the year before the people who would advance the politics of coercion - the siloviki - entered power) the level of civil freedoms in Russia stood at 58% of the average level in the Organization of Economic Cooperation and Development. In 2002 (before the arrest of Messrs. Lebedev and Khodorkovsky and the the beginning of the destruction of Yukos), it dropped to 47%, and in 2006 to 37%. The media-freedom index fell over the same period from 55% to 47%, and then 33%, while the level of political rights dropped from 57% to 45% to 27%. . . This is where the real failure lies

The worsening of the foreign-policy situation is no less illustrative. After falling out with almost every foreign partner, the powers-that-be have created a situation unprecedented in Russian history. We seem today to have no allies at all. The army and the navy are still there. But as for foreign allies, there are apparently none at all. For all the guff about Russia’s diplomatic success, the country seems to be gradually plunging into isolation. . .Is this a plus for the economy?

Are you, at the least, impressed with the economic boom? You may well be. But these things are comparative. Between 2004 and 2006, the average annual rise in GDP was 6.8%, which in real terms is better than many European countries’. But it’s less than 8.2% - the Russian growth-rate in 1999-2000 - at the peak of the so-called oligarchic period and before the forceful model came into play. In addition, oil prices over the past three years - $52 per barrel - have been roughly three times higher than they were in 1999-2000 ($19), while export-earnings, virtually non-existent in 1999-2000, have skyrocketed to 15-18% of GDP. Over the past three years, the example of economic growth is manifested not by anaemic Europe but by dynamic China. Russia has lagged behind it for decades and it is still doing so. Between 2000 and 2006, Russia’s GDP grew by 58%, China’s by 88%. If seven years ago the volume of the Chinese economy was five times bigger than the Russian, today it’s six times Thanks to its coercive state model, our country has become an economic invalid, even when compared to other countries of the ex-USSR.

. . . Today it’s a disaster. . .

The countdown on this new historical experiment has already started. For a short time it has been becoming clear just how much the forceful model of state governance in Russia is losing out to freer models in Ukraine and Georgia. If the experiment continues, we will continue to see our freer next-door neighbors outdoing us. The conventional wisdom is that a crisis will occur because of energy prices. What if oil prices tumble? The truth, however, is that the problem stems not from external factors but from internal ones; and it’s not about tomorrow; it’s about today. The problem lies in the coercive hierarchical model of the contemporary Russian state. Its inventors promised to revive the Russian state, but their own model undermines this. Its inventors promised its citizens security, but the model undercuts this too. Its inventors promised to strengthen the sovereignty of Russia, but the model of force is a one-way ticket to its isolation. Its inventors promised to accelerate economic growth, but all the model does is to guarantee slow-down. Its inventors promised that the country would become stronger, but the forceful model means that it will inevitably get weaker. As things stand, Russia faces an absolutely crucial task, that of dismantling and replacing the current state model. . .

Andrei Illarinov is president of the Institute for Economic Analysis in Moscow and senior researcher of the Cato Institute in Washington. He was head of the analysis and planning group in Viktor Chernomyrdin’s government between 1993 and 1994, and between 2000 and 2005, economic adviser to President Vladimir Putin.

(Kommersant, 02.04.2007)