Sunday, November 23, 2008

From Canadian Prospective: Presidency in Russia

CBC News
Prime Minister Vladimir Putin exiting the Dumas. Prime Minister Vladimir Putin exiting the Dumas. (Associated Press)

In Canada, this kind of change takes years, high-volume political fights, federal-provincial conferences and referendums. Even then, it can be a near thing.

In Russia, all it takes is a few weeks of talk and a few votes and, there you are, the constitution is amended — the presidential term is extended from four to six years. No fuss, no bother.

Well, a little fuss. A small knot of opposition supporters, led by former chess champion Gary Kasparov, demonstrated in the street as the lower house of the Russian parliament supported the plan by an overwhelming margin on first reading. The demonstrators called the proposed change a further hollowing out of Russia's paper-thin democracy.

By mid-December, the amendment will likely be entrenched in constitutional law, which raises the question: why the rush, why now?

Live and die by the barrel

On the campaign trail in the spring of 2008: Putin and his chosen presidential successor, Dmitry Medvedev.On the campaign trail in the spring of 2008: Putin and his chosen presidential successor, Dmitry Medvedev. (Associated Press)

It was only a few months ago, in May in fact, that outgoing president Vladimir Putin watched as his hand-picked successor, Dmitry Medvedev, took over.

Putin was obliged to step down, or rather sideways. He became prime minister. The Russian constitution, borrowing from the American model, limits presidents to two terms.

Since then, of course, things have changed. When Putin stepped sideways the price of oil, Russia's major export, was climbing. Russia was sitting on more than $600 billion in currency reserves.

Its leadership talked of making the country an energy superpower. It snarled at Russia's near neighbours. In the summer, the Kremlin directed a short, sharp war against Georgia, which left that small country prostrate and half-occupied by Russian troops. The Russian public loved it all.

Then came the credit crunch.

A big dose of credit fever

The economic contagion started in the U.S. and spread to Europe. When it hit Russia, it hit especially hard as it coincided with a sharp drop in the price of oil.

One of the reasons it hit hard was that Russian businesses and Russian banks, awash in oil revenues, had borrowed huge sums of money abroad in the boom years because money was cheaper there. But now money was scarce and Western banks wanted their loans back.

The Russian ruble started to weaken. The government spent $100 billion trying to prop it up. It still dropped 10 per cent in a month.

The Russian stock market lost 70 per cent of its value. Panic trading was so intense, the exchange was forced to close on half a dozen occasions.

Gazprom

Edward Lucas is a journalist at The Economist, an expert on Russia and its neighbours, and the author of The New Cold War, an analysis of the Russian political and economic system.

He says the massive borrowing abroad was strange, particularly on the part of Gazprom, the Kremlin-controlled energy giant.

"It's always been baffling to me why the Russian natural resources industry, with their colossal resources, should have to borrow abroad. If any company in the world should be able to finance research, exploration and development, it should have been Russian oil and gas companies.

"Next year, Gazprom has to roll over $120 billion in corporate debt. We don't quite know where that money was spent. Certain critics of the regime have identified $60 billion that was looted from Gazprom by the regime in past years. I wouldn't want to be a Western investor holding those debts because I wonder if they're going to get paid."

The credit crunch hit just as president Medvedev was intending to embark on election-inspired "national projects" — to build new roads, new hospitals and new schools. These have now been put aside. That money is now going to bail out banks.

A diminishing pie

"It's very bad news for the Russian economy," Lucas says. "The system only worked when it was lubricated by vast amounts of money and the cake was getting bigger every year.

"That way, people could tolerate the extraordinary corruption and, at least with high living standards, make up for the lamentable shortcomings of public service and infrastructure.

"What's happening now is that people are looking round and saying, 'hang on, where did all that money go?' We've got severe problems with the economy, inflation's going up, the supply chain is breaking down in some places, people aren't able to ship goods around the country, there've been runs on banks, it's all very bad.

"Then they say, 'well, you guys were in charge, didn't you do anything? Where are the new highways, the new hospitals, the new railways, the new universities, the new anything.' It's looking pretty bleak."

The next czar?

It could be bleaker, as it was a decade ago for example. Then the ruble crashed, banks closed and Russia effectively went bankrupt.

People took it out on their government. The sitting prime minister was dumped. The man who replaced him was Vladmir Putin. He quickly launched a war in Chechnya. It was a distraction and a highway to personal popularity. Eight months later he was elected president.

Now Putin is the prime minister again and he doesn't like it. He's too exposed. Lucas and other analysts inside Russia and beyond, believe the constitutional amendment will provide him with a quick path back to the president's chair.

"Medvedev will say he wants more time with his family. Putin will come back in a matter of months, saying, I've decided things are so difficult I really need to take the helm again," Lucas says.

"Then he can start sacking ministers, blaming people, acting like a czar. Of course in Russian history we see that even when czars ran things really badly, people said, 'oh, the czar's all right, it's just his advisers, the courtiers.'

"That's a historical lesson that's not been lost on the current regime."

The other historical lesson is that constitutions in Russia are just pieces of paper. In a little over 70 years the leaders of the former Soviet Union managed to write four of them.

Imperial Russia did without a written one until 1906, just 11 years before the czarist structure collapsed in war and revolution.

The 1906 version did contain a resounding clause: "The supreme autocratic power is vested in the czar of all the Russias. It is God's command that his authority should be obeyed not only through fear but for conscience' sake."

Perhaps the new czar of all the Russias is preparing to offer that as his next constitutional amendment.

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