The Parallax Brief

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Unrepentant Subjectivity on Economics, Politics, Defence, Foreign Policy, and Russia

Boris Nemtsov: The Gift to Putin that Keeps on Giving

When Vladimir Putin’s critics craft shrill op-eds about opposition parties being ruthlessly crushed in Russia, they often miss the salient point: really, the opposition in Russia is unsuccessful and unpopular because it isn’t very good and doesn’t have many popular policies.

Of course, it is true that the Russian media and society are not as free as in the West, but more often than not, Russia’s opposition simply does Putin’s job for him. The Parallax Brief is sure that even Robert Amsterdam would agree that Putin and Medvedev are preferable to Vladimir Zhirinovky’s comedy-fascist LDPR, Gennady Zyuganov’s communists, or the array of hapless or nasty nationalists, bolsheviks or white power groups raging at Russia’s political fringes.

But beyond this gallery of unelectable extremist halfwits, even the pro-west, pro-business, supposedly democratically minded group of former Yeltsin era Young Reformers that currently call themselves Solidarity offer little.

Of course, their biggest handicap isn’t an omnipotent and nefarious Kremlin, but that they were the architects of the system they now claim to oppose.

It was on their watch that the oligarchs stole Russia’s family silver, and it was they who created an environment in which the oligarch class was formed and permitted to flourish.

But most of all, it was they who were in power when the country lurched from one economic meltdown to another, plunging millions of Russians into poverty not seen since the early days of the Russian revolution. And what’s more, everybody knows it – and nobody (excluding, perhaps, Ed Lucas and Anne Applebaum) wants to forget.

However, even if they were not burdened by these political concrete boots, Solidarity would still be faced the handicaps that (1) they are still the puritanical libertarians they were in the 90s, (2) Russians in general are pretty skeptical of free markets these days, let alone completely unfettered capitalism and (3) they’re not very good politicians.

Here, for instance, is former deputy prime minister and current Solidarity member Boris Nemtsov, telling Russians in an article for Radio Free Europe this week that more bankruptcies would be good for them:

A crisis is an opportunity to rid an economy of ineffective owners and make enterprises more agile and innovative. At least, that’s the way it works in other countries.

The grotesque structure of the Russian economy, based on monopolies and close ties between the authorities and oligarchic groups, is the main reason for the profound financial-economic crisis in Russia.

This crisis is significantly deeper in Russia than it is in the West, including in the United States.

[…]

Against the background of millions of newly unemployed and a decline in real incomes exceeding 10 percent, Prime Minister Putin has signed a government order increasing the rates charged by the so-called natural monopolies: the price of natural gas will increase 27.5 percent this year; electricity will go up 25 percent; and the cost of rail transport will be hiked 20 percent.”

Obviously this is going be very popular with Ivan Public, who still remember the days when Nemtsov, chanting an almost identical mantra as deputy PM, watched Russia plunge into the 1998 default crisis, sending 40% of Russians below the poverty line.

But beyond the political hard sell of telling people “your factory going bankrupt is a part of the wonderful force of creative destruction”, Nemtsov’s article is riddled with inaccuracies and falsehoods.

First, while it is true that a libertarian like Nemtsov might wish that businesses in the west were allowed to go bankrupt, the current tsunami of bailouts in the US and Europe suggest otherwise.

Second, the crisis may well effect Russia more than, say, America, but a fairer comparison would be how Russia copes compared to its BRIC or Central and Eastern European contemporaries.

Most dumfounding, though, is Nemtsov’s criticism of gas price increases. Whether one agrees or disagrees with the policy, it is part of a price liberalization process which will eventually allow the gas producers to charge free market rates for their services. Interestingly, key beneficiaries of liberalization will be the smaller gas producers, because it will make the domestic market more lucrative.

This is exactly the kind of policy Nemtsov would champion if he was in power – albeit in one sudden lurch, rather than a gradual transition to cushion the blow.

Sadly, there is a much potential to criticize the distribution of bailout cash. In theory, politicians like Nemtsov, with their impeccable pro-business credentials, could add much to the publicdebate, which in a time of crisis might lead to some political traction.

But, presented with a golden opportunity, Nemtsov somehow manages to serve notice of just why he and his party are unelectable no-hopers.

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Filed under: Economics, Politics, Russia, , , , , , , , , , , , ,

One Response

  1. Alex says:

    Global crisis as russians see it

    The silent horror cut out words “normally and”perfectly” from our everyday conversations and pasted cautious
    “while” and “so far” instead.

    The former schoolmate whom I hadn’t seen for 15 years asked me not about my family and our pals but shouted the foolish request to write about “this son of a bitch, my boss, who stopped paying four months ago”. He thought that would matter. Sorry, lad, I will not write, that doesn’t makes sence. And he told me in a back – “fat bustard”. I ran away with no offence, and not being insulted, but ashamed. For what, for whom?
    http://ua-ru-news.blogspot.com/2009/02/global-crisis-as-russians-see-it.html

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