08/13/2022, 16.18
RUSSIAN WORLD
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Putinomics, infantile capitalism

by Stefano Caprio

In Russia, Western sanctions are starting to bite. Putin and his acolytes have de facto privatised the country, and consider it their property. The ongoing transformation is falling on the majority of the population, deprived of any say in the matter.

Milan (AsiaNews) – As many economists had predicted, this month Russia is starting to feel the economic effects of Western sanctions.

However, this is not biting into “Putin's economy", but rather that of ordinary people, i.e. what is little is left of Russia’s middle class who since the 1990s tried hard to reach a standard of living similar to that of Western societies.

The first five years under Boris Yeltsin, from 1992 to 1997, saw the first wave of liberalisations and "savage capitalism", ending with the financial crash of 1998, with the devaluation of the rouble and the transition under Putin towards a “vertical” management of political and economic power in the 2000s.

This brought about the expulsion of non-submissive oligarchs. One of them, Mikhail Khodorkovsky, spent a decade in a Siberian concentration camp, guilty of trying to defend liberal principles.

The owners of other big energy and natural resources companies, the only real players in the Russian economy, have “patriotically” aligned themselves with the Kremlin, enjoying the privileges that come with membership in the ruling caste, which includes Putin himself and his family.

Other players in the domestic economy have tried to organise themselves in the shadow of the "pax oligarchica", exploiting the limited access to international trade to provide consumer goods of all sorts to the 30-40 million citizens (less than a third of the population) living in a more modern and independent way, free from the traditional socialist passivity of the Soviet era.

Vladislav Inozemtsev, economist and director of the Moscow-based Centre for Research on Post-Industrial Societies, a non-profit think-tank, is one of the voices of the weak liberal opposition to the Putin regime.

“Putin and his associates have de facto privatised the whole country, and consider it in all respects their property,” he writes in the Moscow Times. “The financial system is based on state corporations, and limits to the rule of law, reflecting the views and interests of the leaders. Russia has now lost any chance of freeing itself from dependence on raw materials, and is bound to become a satellite of China.”

What is unfolding now does not represent the failure of “Putinomics”, but its final consecration.

Breaking ties with the outside world, dividing investors between enemies, unfriends, and a few friends, the refusal to fulfil most international obligations, and the confiscation of many foreign assets at home signal the triumph of “our way of doing business”, as a proud Putin boasts.

This is reinforced by state misappropriating copyrights and licences, organising illegal and “parallel” imports to circumvent sanctions and much more, to the benefit first and foremost of state corporations, above all the military.

However, this has been a severe blow to relations between Russian and foreign firms. The latter have struggled hard, starting with the joint ventures at the end of the Gorbachev period, but which, in one way or another, managed to transform Russia’s entrepreneurial culture, as well as the habits of Russian consumers.

In recent years, mass communication, advertising, and news media underpinned the manufacturing sector, including auto assembly, e-trade and digitisation, services, as well as fertiliser and metal industries. Now they are completely silenced, controlled, or reduced to putting out mere propaganda.

The most qualified people in information technology, freelance business, and private enterprise are leaving Russia in droves, treated as “fleeing traitors”, to quote Putin, a trend welcomed by the regime’s inner circle.

For the latter, such losses “will not affect the development of our economy", understood as infantile and paternalistic forms of governance, a mix of Soviet-style welfare and China’s neo-communist oligarchic dirigisme.

The regime’s plutocrats and connected bigwigs will not likely suffer much although a period of adjustment can be expected with the cake divided up differently, and some members victims of sudden accidents, suicides, or poisonings.

The burden of the transformations will fall on the majority of the population, now deprived of any voice in the matter, after the systematic repression of all forms of opposition in the last two years. It is now clear that the housecleaning of the recent past was not meant to prop up the system forever, but rather to prepare it for a definitive break, through a metaphysical war, with the whole world.

Putin will not be removed from the Kremlin because of economic sanctions, nor by military defeats or grassroots revolutions, neither of which are likely under present circumstances.

History is moving towards a new phase, and it will be necessary to imagine a new world, in both East and West, one that can start again after the wars and the erection of new barriers.

No prophet has yet appeared to describe the future, post-Ukrainian Apocalypse world. Only same tales of doom can be heard, like the dystopian vision of the Day of the Oprichnik, a 2006 novel by Vladimir Sorokin, who conjured up a Russia once again hermetically sealed from outside influences, which is something actually happening right now.

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