contributor perspectives

Sep 21, 2016 | 08:00 GMT

9 mins read

Color Commentary on Russia

There may be a new brand of autocratic capitalism emerging in Russia that could rival China's.
Contributor Perspectives offer insight, analysis and commentary from Stratfor’s Board of Contributors and guest contributors who are distinguished leaders in their fields of expertise.

You can't have "color commentary" on a football game unless at least one of the sportscasters is calling the plays accurately as they unfold — the right names, the right numbers, and with precision. Likewise, the opinions expressed by those of us writing for Global Affairs both contrast with and rely on the unbiased, objective geopolitical analysis our readers have come to expect from the rest of Stratfor.

As outlined in a recent piece by Stratfor Editor-in-Chief David Judson, we're going to be expanding Global Affairs in the coming months, seeking to add diversity and texture to our cast of outside contributors. I would add that while most of our subject matter in this space is not contoured along the liberal-conservative spectrum, the worldviews of authors do matter and we will be seeking balance. Our definition of balance will not be to head straight down the middle between left and right (an aspiration to objectivity that many doubt possible), but instead to put our weight first on one foot, then the other, right, left, right, left — to walk toward balance and fairness, if you will.

So in this column I want to offer a set of impressions from my recent trip to Russia, and I warn you: What I've seen runs contrary to much of what you may have read in the press.

I'm no Russia expert. I neither speak nor read Russian. But ever since 1980 I've been part of a small group of people practicing what we call "citizen diplomacy." One of our members who worked at the U.S. State Department at the time coined the term "two track diplomacy." When the first track of high-level diplomacy gets stuck, as it often does, it takes bankers meeting bankers, teachers meeting teachers, psychologists meeting psychologists, to break through presumptions of hostility and projections onto the face of the Other. Ordinary citizens talking shop with their counterparts in the country of the presumptive enemy can then discover that we all put our pants on one leg at a time, and nuclear weapons are not the best medium of exchange.

Track Two: An Institute for Citizen Diplomacy

So we formed Track Two: An Institute for Citizen Diplomacy, and spawned initiatives such as a psychology library in Moscow, an art competition with shows in San Francisco and Vladivostok, and the International Society of Space Explorers, where Russian cosmonauts and American astronauts first met and began a fruitful collaboration that extends to this day.

Our tiny group also sponsored Boris Yeltsin's first visit to the United States, during which, in front of a shelf full of many brands of mustard in a Houston supermarket, he had an epiphany about how much 70 years of communism had denied his people. "All my life I've been lied to," he wept. Yeltsin returned to Russia, quit the Communist Party, stood on a tank during the August 1991 failed coup, and the rest, as they say, is history. Because of these events, six of us were invited to return to Russia to visit the Boris Yeltsin Presidential Center and Museum, a trip from which I returned just last week.

Early Visits to Russia

I first went to Russia in 1983, well before the end of the Cold War. I went back in 1986, again in 1991 just a week before the failed coup, and a fourth time in 2005 when, on behalf of the U.S. government, I conducted 28 high-level interviews in 10 days.

On my first trip, to both Moscow and Tbilisi, my dominant impressions were those of the hospitality that shone through the shabbiness. Deep beneath the squalor on much of the surface, I was impressed by the sheer beauty of many of the stations on Moscow's underground metro. "Now I understand the difference between communism and capitalism," I mused to my hosts. "In capitalist countries, we put the marble in the banks. Here in Moscow you put the marble in the people's subways."

Despite what I'd heard about the godlessness of communists, I was deeply moved by the music of the Russian Orthodox liturgy as high tenors soared over the deep bass rumbling from the corners of an incense-filled cathedral in Tbilisi. It was not what I'd expected. As people milled about in street clothes with an informality that contrasted with the stiff composure of Episcopalians in straight pews, I couldn't help noticing the verticality of this supposedly classless society: not just the soaring tenors, but also the screeching sirens on big Ladas as they roared through Moscow's then-empty streets chauffeuring members of the Politburo. "Our congressmen and senators can't get such royal treatment," I observed with wrinkled brow.

On my second trip in 1986, I heard the first rumblings of glasnost (openness) and perestroika (restructuring). I wanted to write a column titled, "From Russia With Hope," but I was dissuaded by the late Paul Posner, brother of Vladimir Posner, who later became half of an American TV team with Phil Donahue and is now a leading commentator on Russia's Chanel One. As Paul and I sat together on a flight to Paris, he convinced me that hope was premature. But he was wrong.

The Berlin Wall came down in 1989, and on my third trip to Russia in 1991, I was impressed by the new supermarkets. Gone were the long lines of people waiting for whatever food was available that day. Gone was some, but not all, of the squalor. Privatization was bringing consumer goods onto formerly empty shelves. But, let's face it, privatization Jeffrey Sachs style — namely, the abrupt "cold turkey" model that seemed to have worked in Poland — was a disaster in Russia. A select few who soon came to be known as the oligarchs amassed fabulous wealth while peasants saw their pensions disappear in gales of inflation.

On my fourth trip in 2005, the overwhelming message I got from the 28 interviews I conducted was this: "We're never going to go back to the old ways. We now know better than to embrace a system in which we pretend to work and they pretend to pay us; in which everyone is equal — equally poor. We embrace freedom, capitalism and democracy. But we want to do it our way. You Americans are arrogant. Back off!"

But did we? No. Despite verbal guarantees given during Ronald Reagan's negotiations with Mikhail Gorbachev at Reykjavik that NATO would not push right up against Russia's borders, the bloc did just that under American leadership, not least via Victoria Nuland's leaked urgings prior to the 2014 coup in Ukraine.

A second message I heard in 2005 was that the Russian economy was split into two sectors. The first is the extractive industries, mostly oil exported for vast revenues that enrich the government and military but not many of the people. The second sector, consumer goods, remains tragically undercapitalized. Despite my interviewees' wishes that revenues from the first sector subsidize the second, they were pessimistic. Entrenched interests in the government and military cared too little about developing Russia's consumer economy.

Latest Impressions

So what are the dominant impressions derived from my recent trip? Of a country suffering under sanctions? A little, but not much. Of a country poised to conquer the West? Absolutely not. To the contrary, I've seen festivities. I've seen wealth. I've seen people on the streets who are free and highly self-expressive. The postures, the gaits, the eyes, the clothing!

"Oh, but you were just in Moscow, where the wealth is concentrated. The rest of Russia is still in the 12th century," you might object.

But we spent a week in Yekaterinburg, Russia's fourth-largest city, two time zones east of Moscow on the edge of Siberia, and I've rarely seen so many building cranes. The Boris Yeltsin Presidential Center and Museum in Yekaterinburg is an architectural wonder. The mayor is a lanky 6-foot-5, 54-year-old runner straight out of central casting, vibrant and impressive, who began his career as a poet.

Aside from all of the particulars, all of the little gems of joy, all of the glimpses of beauty in architecture old and new, the exotica that is unlike home . . . it didn't take long for two generalizations to dawn. The first has to do with the two sectors of the economy I had heard so much about in 2005. Sanctions are forcing the Russians to capitalize their consumer economy with import substitution, precisely as they needed to but were having such difficulty doing prior to the sanctions. Less able to import many consumer goods, they are learning to make their own. And with their vast stores of natural resources, well-educated workforce and extreme ingenuity, they are succeeding.

The second has to do with the comparison often made between China's and Russia's paths toward modernization, economic reform prior to political reform for China, political reform prior to economic reform for Russia. Until now, especially during the chaos of an American-guided, bungled privatization during the 1990s, it has looked as though the Chinese path was vastly superior. But now that tensions with the West over the annexation of Crimea have strengthened the hand of Russian strongman Vladimir Putin, we may see a new brand of autocratic capitalism in Russia that rivals autocratic capitalism in China. The Russians are doing it their way and, to this observer, it's working quite remarkably.

To be balanced and fair, not all is rosy in Russia. In addition to the doping scandal that kept Russian competitors out of the Rio Olympics and stoked the standard Hollywood image of those nefarious Russian villains, one can't deny Putin's restrictions on the freedom of the press. The government recently labeled the last free polling organization, the Levada Center, an enemy of the state. Its place on "the list" will probably lead to its demise.

Some businessmen and intellectuals are not happy with Moscow's beautification. Crony capitalism and the lack of a free press are, in their view, too high a price to pay to pacify the people with "bread and circuses." That said, there was almost universal disappointment among Russians with the anti-Russia slant of the American press.

One final thing: Did I or my traveling companions experience a shred of anti-Americanism? No. Not one shred.

Jay Ogilvy joined Stratfor's board of contributors in January 2015. In 1979, he left a post as a professor of philosophy at Yale to join SRI, the former Stanford Research Institute, as director of research. Dr. Ogilvy co-founded the Global Business Network of scenario planners in 1987. He is the former dean and chief academic officer of San Francisco’s Presidio Graduate School. Dr. Ogilvy has published nine books, including Many Dimensional Man, Creating Better Futures and Living Without a Goal.

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