Mark Urnov
Higher School of Economics
Modernization in Russia: clash of concepts
In the last months of 2010 the political struggle in the upper echelons of the Russian political
elite has become more acute. The reasons for this are quite clear: the upcoming parliamentary
and presidential elections, the beginning of the reform of law enforcement structures,
intensification of the fight against organized crime and corruption (at least at the local and
regional levels), etc.
Among other things, the intensification of this struggle has been reflected in the exacerbation
of differences in the assessments of various political events made by the members of ruling
tandem - Medvedev and Putin. The most recent and vivid example of these differences are the
positions of the president and the prime minister on the Khodorkovsky trial and on a role of
some representatives of liberal opposition in Russian political life. Both spoke in the second half
of December 2010, with an interval of eight days (first Putin, Medvedev later)
Putin: December 16, 20101
Medvedev: December 24, 20102
On Khodorkovsky trial (said before the official announcement of the verdict)
I [...] believe that the thief should be in prison. And in
accordance with the court decision Khodorovsky is
accused of quite solid embezzlement. It's about tax
evasion and fraud for billions of rubles. [...] And the new
accusation is about hundreds of billions of rubles: 900
billion rubles in one case, and 800 billion rubles in the
second case [...] We must presume that the crimes of
Mr. Khodorkovsky have been proved in the court.
[...] I remind that the head of Yukos security is in jail for
murder. [...] What, the head of security committed all
these crimes for himself, on its own initiative?
So there is our court, which, as we know, is one of the
most humane in the world. It's its job. I rely on the facts
proven in the court.
... neither the President nor any other officer working in
public service, has any right to express his or her
position on this case [Khodorkovsky trial], or on any
other case before the sentencing - verdict of guilty or
acquittal. It is quite obvious.
On liberal political opposition
[Question] "Nemtsov, Ryzhkov, Milov and so forth what
they really want ?"
Money and power, what else do they want? [...] In the
90's, they dragged a lot of billions along with
Berezovsky and those who are now in prison [...] They
have been pulled away from the manger, they had been
spending heavily, and now they want to go back and fill
their pockets. But I think that if we let them do it, they
will no longer confine themselves with some billions,
Russia as a whole will be sold out by them.
[Question]: Please tell us whether, in your view, do we
have some other [than Medvedev and Putin - MU]
promising politicians [...]?
Medvedev: [...] There are some politicians who are not
MPs but who are also quite known. Some call them
outstanding. Some, on the contrary, call them notoutstanding. But they are also known. Such well-known
public politicians as Mr. Kasyanov, Boris Nemtsov,
Limonov, Kasparov - they are also public politicians.
People treat them differently, but each of them has got
his own, so to speak, electoral base. And they are also
public politicians.
However, neither Russian public opinion, nor the country's expert community is unanimous in
the interpretations of these differences.
1
2
http://premier.gov.ru/events/news/13427/
http://www.kremlin.ru/transcripts/9888
Immediately after the publication of Medvedev and Putin speeches most (about 2/3) "ordinary
citizens" were inclined to believe that the views of the tandem members did not differ
substantially, that the differences exist only in words, and therefore are of little importance 3.
This view was supported by many politicians and experts (V. Ryzhkov, G. Kasparov, A. Makarkin,
N. Petrov and others)4.
Only a minority of citizens (about 1/3) and a minority of experts (e.g. me, perhaps
V. Pribylovsky5 and a few others) believe that there are serious contradictions between Putin
and Medvedev.
Then, once the indecent trial of Khodorkovsky and Lebedev was completed with the obscene
verdict, the idea of the "behavioral harmony" within the tandem became stronger – because, as
the supporters of this idea were saying, Medvedev did not want or could not influence
appreciably the verdict .
Without question, the picture of harmonious relations within the tandem is attractive for its
simplicity. But the question is, does it properly mirror the reality? In my view the situation is
more complicated.
First, the statements of Putin and Medvedev are not just an expression of their personal
positions. Of course, the personal positions of the two first figures in the state are important.
But it is much more important that their statements reflect the positions of different groups of
the Russian elite and the different and competing groups of interest oriented on these two
leaders. Second, the dissimilarities in positions of Putin and Medvedev as well as the
dissimilarities in positions of "their" groups are not confined to the attitudes to Khodorkovsky
and liberal opposition. These dissimilarities mirror a deep divergence in their approaches to the
development strategies of the country. So the above-mentioned statements can be regarded as
indicators of different political ideologies.
The differences between these ideologies can be reasonably well demonstrated by comparing
the two concepts of modernization - the conservative and liberal. On the basis of the public
statements of the tandem's members, Putin is clearly more inclined to the first one, and
Medvedev - to the second one.
The reason why the modernization is chosen as a basis for analysis of the differences in Russian
elite's ideologies is two-fold. First, modernization is a concept that embraces almost all
significant aspects of economic, social and political development. Second, today virtually all
principal discussions on Russia's future are taking place in the context of the modernization
paradigm.
In most cases the meaning of “modernization” used by discussants is the same - it is “a catching
up modernization”, i.e. a system of measures aimed at bridging the gap between Russia and the
most developed countries (or the process of bridging this gap)6.
3
http://www.echo.msk.ru/programs/razvorot-morning/archive/58.html (12/25/2010, Utrennii razvorot).
According to Levada-centre for public opinion polls, in November 2010, 71 percent of Russian respondents said
that “In the next 2-3 years, Medvedev and Putin will act in concert” (http://www.levada.ru/press/2010112200.html)
4
http://www.svobodanews.ru/content/article/2258268.html (12/24/2010, L. Gueniatulina «Chem Medvedev ne
Putin?”); Nezavisimaya gazeta, 12/28/2010.
5
http://www.svobodanews.ru/content/article/2258268.html (12/24/2010, L. Gueniatulina «Chem Medvedev ne
Putin?”)
2
However, since the late 90's in newspapers’ commentaries on current affairs this meaning has
been complemented by a broader sense – that of “a catching up and surpassing development”.
In the expert discussions this broader meaning of modernization came later (in 2007) – thanks
to well-known Marxists - A. Buzgalin and A. Kalganov7. In 2008 this understanding of
modernization was incorporated in the Government’ “Conception of long-term socio-economic
development of the Russian Federation until 2020” [Conception, 2008, p. 12], and received an
official status.
By “the most developed countries” almost all participants of these discussions mean the U.S.,
Western Europe, Japan or the West in general.
Approximately the same unanimity is observed in viewing modernization as a necessary
condition for Russia's survival in the contemporary political and economic environment.
Exceptions, of course, exist, but they are extremely rare.
Meanwhile there is no consensus in the conception of criteria of the catching up process and of
the tools to be used to achieve the objectives of modernization: here one faces a number of
different and sometimes conflicting approaches, or ideologies of modernization8.
Currently in Russia there exist three dominant types of such ideologies: communist, liberal and
conservative, which can be readily distinguished by the following four criteria:
- The scope of modernization – areas in which it must take place (from a purely technological
modernization to a modernization of all the spheres of social life);
- The major institutional actors of modernization – mostly the State versus mostly nongovernment actors with the support of the State;
- The balance of resources used - mostly national resources versus combination of national and
foreign resources;
- Priorities of state policy - primarily the supply side of innovation versus primarily the demand
side of innovation.
In this four-dimensional system of coordinates the communists’ doctrine looks "minimalist"
(the key institutional actor for them is the State, the resources they plan to use are exclusively
national)9, the liberal doctrine is a “maximalist” one and a conservative - an “intermediary” one,
located between communist and liberal poles.
6
It is impossible to give here a detailed list of publications confirming this statement – there exist too many of such
publications. I mention only few of them – those which seemed to me the most interesting: Auzan, Zolotov, 2008;
Dubinin, 2010; Grigoriev, Tambovtsev, 2008; Inozemtsev, 2009; Jasin, 2007; Polterovic, 2008.
7
[Buzgalin, Kalganov, 2007]. It is not surprising that the initiative to revitalize this term in expert discussions
belongs to the Marxists. The formula “dognat i perednat” (to catch up and surpass) is one of the basic construction
used by the Soviet leaders in their reasoning on relations between Russia (USSR) and “capitalist
world”/America/the West. For the first time, as I recall, it was launched by Lenin in 1917 (“The Impending
Catastrophe and How to Combat It”). After Lenin it was actively used by Stalin and Khrushchev. As I found out in
Wikipedia, in the Soviet Union in 1930’s there emerged a name Dognat-Peregnat (Catchup-Surpass) or optional
Dognaty-Peregnaty (Catchupius-Surpassius); for twins - Dognat and Peregnat. Wikipedia refers to Petrovsky (1996)
8
Under “ideology” I mean “any wide-ranging system of beliefs, ways of thought, and categories that provide the
foundation of programmes of political and social action” [The Oxford Dictionary of Philosophy. 2-d Ed. Oxford
University Press, 2005. P. 178]
9
A good example of a communist version of modernization can be found in the report of G. Zyuganov, the leader
of Russian communists, at the 5-th plenum of CPRF (April 3, 2010) named “Socialist modernization - the way to a
revival of Russia”. [http://kprf.ru/rus_soc/78111.html]
3
In this paper I will analyze only conservative and liberal doctrines. The communist project will
not be discussed. First, because it is not represented in the Russian political establishment.
Second, because, in my view, it is senseless to take seriously the proposals to nationalize
natural resources and strategic industries (electricity, transportation, military, oil and gas) and
to restore centralized government control over national economy - the devastating effects of
any attempts to implement these ideas are too obvious.
In Russian political and expert communities the “liberal” and “conservative” ideologies (or
doctrines) of modernization were crystallized just a few months ago - after and due to the
publication of Medvedev's article “Forward, Russia!” and subsequent publication of the
Institute of Contemporary Development (ICD)'s report “Russia in XXI century: images of a
desired future”. That is the second half of 2009 - beginning of 2010.
It would be wrong however to think that before this period of time there were no discussions
between future partisans of “liberal” and “conservative” approaches to modernization. Such
kind of discussions took place of course, but not in the paradigm “liberalism versus
conservatism”.
One of the most intensive discussions of that sort was deployed in 2003 due to the publication
of the report, prepared by the Council of National Strategy (non-government organization
headed that time by S. Belkovsky and I. Diskin). The Report “The State and the Oligarchy”
(appeared in press under the title “An oligarchic coup in preparation in Russia”) had been a part
of a huge PR campaign preparing the seizure of YUKOS Corporation by Rossneft and the
Khodorkovsky trial. It was dedicated to economic and political threats to Russia on the part of a
so-called "oligarchic modernization"10
The discussions of 2003-2009 identified almost all the key positions that liberal and
conservative ideologies of modernization would later be debating in 2010 (see above).
The majority of the discussions were oral debates in political clubs and at roundtables11 and
were quite weakly represented in scientific journals.
As for academic publications on modernization, more of them were written by the “revealed”
partisans of its liberal doctrine or by researchers more inclined to liberal than to conservative
concepts of modernization. Far from being polemical these papers mainly just called attention
to the importance of cultural (value-orientations) changes for the success of economic
modernization; to the interdependence of economic modernization and political
10
See the text of the Report: http://www.utro.ru/articles/2003/05/26/201631.shtml. In some publications,
including that one, I was mentioned as one of the authors of the Report. This was not true. I was a member of the
Council, but I did not participate in the preparation of this Report. Its publication was the reason for my
withdrawal from the Council. A few more people came out of the Council with me: A. Salmin, B. Makarenko,
L. Shevtsova. Salmin died in 2005. As for Makarenko and Shevtsova, they are now in a number of consistent
supporters of liberal modernization. For example, Makarenko is one of the authors of the ICD report, which will be
analyzed in this article.
11
See, for example, transcripts of some meetings of the “Open Forum club”:
- 8th meetings (July 10, 2003): Political coercing tools in Russian Economy: contexts and consequences
[http://www.open-forum.ru/meeting.php?fullsten&sten_id=23]
- 11th meeting (Sept. 30, 2003): Economic Growth and Politics in Russia today [http://www.openforum.ru/meeting.php?fullsten&sten_id=20]
- 13th meetings (Oct. 28, 2003): The Yukos' affair and scenarios of Russia's development for the next 10 years: a
situational analysis [http://www.open-forum.ru/meeting.php?fullsten&sten_id=18]
- 17th meetings (Feb. 03, 2004): Modernization of Russia: conflicts and dangers on the road to post-industrial
society [http://www.open-forum.ru/meeting.php?fullsten&sten_id=14]
4
democratization, and to the futility of attempts to realize a purely technological modernization
[see, e.g. Vishnevsky, 2004; Lapkin, Pantin, 2005; Jasin, 2007; Auzan, 2007; Auzan, Zolotov,
2008; Gadgiev, 2008].
Proponents of conservative modernization have been much more focused on distributing their
papers in the Government and Presidential Administration, and were appearing in the public
sphere almost only with strange ideas like "sovereign democracy" (e.g., Poliakov, 2007) or with
suggestions to prevent cultural modernization, seen as a factor destroying Russian national
identity [e.g. Dugin, 2009].
By now, the liberal and conservative doctrines of modernization have crystallized almost
completely.
A “classic” version of a conservative ideology of modernization is represented by the
Government “Conception of long-term socio-economic development of the Russian Federation
until 2020” – the document based on V. Putin’s speech at a meeting of the State Council “On
the development strategy of Russia until 2020” [Putin; Conception, 2008]. True, in these
documents the phrase "conservative modernization" was not yet present. Using here the word
"conservative", I just follow the preferences of "United Russia" party - a structure led by V.
Putin, which since November 2009 describes itself not as centrist but as a conservative force
aimed to conduct modernization and for obvious reasons supports the government program.
In turn the ideas of liberal-oriented scientists have been systematically incorporated into the
report of the Institute of Contemporary Development (ICD) “Russia in XXI century: images of a
desired future”. The first sketch of this project is contained in Medvedev's article “Forward,
Russia!” Part of the basic positions of the Report were later confirmed and strengthened in two
speeches by Medvedev in the summer of 2010 [Medvedev, 2009, 2010 а, 2010 b; ICD, 2010].
Thus this set of papers contains the most detailed version of Russian liberal doctrine of
modernization, formulated in the language of the documents that provide the basis for political
decision-making process.
Medvedev’s article "Forward, Russia!" has generated a surge of publications by the defenders
of conservative modernization [e.g., Ivanov, 2009; Orlov, Badovsky, Vinigradov, 2010; Surkov,
2010].
The content of these publications can be summarized in the following points:
1. Medvedev's article is but a development and refinement of positions formulated by Putin
and contained in the Government Conception 2020.
2. The key element of modernization is technological modernization. Social and socio-cultural
modernization play a role as its additional components.
3. The existing political regime should be maintained12.
The last statement means:
12
Different conservative authors talk about the need to preserve the existing political regime in different ways.
V. Ivanov, a supporter of the "consensual oligarchy", regards a democratization as a dismantling of the regime and
believes that it is unacceptable [Ivanov, 2009].
More flexible and much more intelligent V. Surkov speaks about the need to start political modernization
immediately “but not dramatically”, and adds that the United Russia has every chance to win the elections of 2011
[Surkov, 2010].
5
- Reliance on “the Putin majority” (the majority of the population with paternalistic valueorientations);
- Preventing the weakening of the political role of the United Russia (as “a framework of Putin's
majority and the skeleton of the national modernization coalition”);
- Avoiding a split of the ruling tandem with the maintenance of Putin's leadership (Putin - a
national leader, majority leader, Medvedev - a rational leader, the leader of the updating
process, leader of the national coalition of modernization - the creative minority of the
population).
In other words, supporters of conservative modernization have tried to incorporate
Medvedev’s concept into their own concept of how Russian political system should work.
The publication of ICD report provoked an incomparably harsher (even furious) negative
reaction. Conservatives have described it as a set of empty abstractions, which are out of touch
with reality [I. Diskin: http://www.politonline.ru/comments/2250.html] and do not reflect the
positions of Medvedev [D. Orlov, A. Chesnakov: http: // actualcomment.ru/done/456 /], as the
call
for
“the
day
before
yesterday”
[L. Polyakov,
A. Chesnakov:
http://actualcomment.ru/done/456/], and even as a state treason [A. Kuchin,
http://www.nakanune.ru/articles/14481].
For their part, the authors of the ICD report hinted that the Report represents an alternative to
Government's “Conception”. According to E. Gontmakher (one of its principal drafters and ICD
Board member), “everybody understands that such documents as the" Strategy 2020 "are out
of date and do not contain clear principles, they are conceived ‘for ours and for yours’ ( i
nashim, i vashim)” [http://www.gazeta.ru/politics/2010/02/02_a_3319216.shtml].
Let us now try to detach ourselves from the polemics and to analyze the extent to which
conservative and liberal doctrines of modernization are similar and divergent.
Let us start with the similarities.
Trivia aside, these similarities are as follows:

the idea of the necessity of modernization,

the set of objectives of modernization,

the areas in which it is necessary to act to achieve the main goals of modernization,

recognition of the ineffectiveness of the Russian economy,

emphasis on the importance of social and political stability,

negative evaluation of some key aspects of Russian public administration.
In both doctrines the idea of the necessity of modernization is defined in an extremely stark
way: a great power, member of club of the most advanced countries versus degradation, the
emergence of a real threat to the existence of the country etc.13
13
Conservative version: “the most attractive country for living”, “leader in the socio-economic development and in
national security” [Putin], “our level of economic and social development is in keeping with the status of Russia as
one of the world's leading powers of the XXI century” [Conception, p.7] versus “the loss of positions in the
economy, security, and ultimately the loss of sovereignty” [Putin].
Liberal version: “an attractive country where people from all over the world will strive to come in search of
realization of their dreams, in search of better opportunities for success and self-actualization” [Medvedev,
6
In the ICD report this dichotomy - all or nothing, intermediate options are not available - is
explained as follows: “It is possible that Russia is simply fated to struggle for the leadership and
the special position in the world because of its size, unique natural resources and human
capacities” [ICD, p. 15].
The presence of this dichotomy in both doctrines is not accidental. It reflects one of the key
elements of the Russian / Soviet identity – belonging to a great power, i.e. to a leading country
playing a decisive role in the global political processes.
In the 20 th century, there were only two relatively short periods of time (approximately one
decade each) in which this concept was not dominant:

from 1917 to the late 1920s

from the late 1980s to the late 1990s.
These two waves of “atypical” moods had their own specific causes and preconditions. In both
cases, however, the Russian political and intellectual elites tended to view the country as a
patient to be cured of this or that grave disease rather than as an example to be emulated by
other countries. In both cases, these waves were replaced by a mighty opposite trend: the
pathos of Great Power.
The main objectives of modernization which are presented in both doctrines can be
summarized in the following five positions.
1. A high living standard (Russia reaches the living standard close to / comparable with the
living standard of the most developed countries14)
2. Social justice, law and order (equal opportunities, social protection of vulnerable groups;
guarantee of constitutional rights, etc.).
3. Economic leadership (Russia - the world leader in energy and commodity sectors, one of
the industrial leaders with a high potential for innovation).
4. Significant improvement of ecological conditions.
5. The security of the country from external threats.
The key areas, which - according to both doctrines - should be involved in modernization, can
also be summarized in five positions.
 Social values and motivations (human capital).
 Economics.
 Political system.
 Public administration.
 Relations with the outside world.
2010 a], “a modern, prosperous and strong Russia”, “a co-founder of a new world economic order and a fullfledged member of the collective political leadership in post-crisis world” versus “the degradation of the Great
Power”, “final calming down at a back seat of the world civilization” [ICD, p. 4].
14
In the Conservative doctrine this goal is stated as follows: “In 2020 the income and quality of life in Russia will
reach a level typical of developed economies - in 2020 per capita GDP should be about 70% of the average of OECD
member countries against approximately 40% in 2007, and the share of middle class in the population should
exceed 50%” [Conception, p.8]. According to the Liberal doctrine, modernization is aimed at achieving a quality of
life in all respects comparable with the most advanced countries in the world [ICD, p. 21].
7
Both doctrines point to “economic inefficiency” [Putin; Medvedev, 2009] and to “unacceptably
low” [Putin], or “shamefully low” [Medvedev, 2009] labor productivity.
Both doctrines emphasize the importance of political and social stability: Putin said that the
major parties “must remember their immense responsibility for the unity of the nation” [Putin],
and Medvedev focuses on “maintaining the cross-party consensus on strategic issues of foreign
policy, social stability” and other aspects of social life [Medvedev, 2009].
Both doctrines similarly evaluate the existing system of public administration. The
Conservative doctrine notes that “today public administration apparatus is largely a
bureaucratic, corrupt system, not motivated for positive changes, much less for dynamic
development”, that public administration suffers from over-centralization [Putin] and low
efficiency [Conception, p. 9]. The Liberal doctrine refers to the “authoritarianism” of public
administration [ICD, p. 8]. Both doctrines highlight the need for profound reform of public
administration. The measures proposed by both doctrines are partly identical (e.g. egovernment), partly unidirectional.
And this is the end of the similarities. Turning to differences gives us reason to treat these
doctrines as alternatives to each other.
The differences are best seen in the approaches to modernization in the above- mentioned five
areas.
Values and motivation
In regard to the values and motivations, the Conservative doctrine is extremely cautious (as
indeed befits conservative doctrines).
It reduces “the problem of changing values and motivations” to “an increase of the work
motivation” and to the need for “civil education, the patriotic upbringing of youth, promotion
of legal, cultural and moral values among young people” [Conception, pp. 55, 73]. The latter
case refers to “the popularization” of the following set of “community values”: Health; Labor;
Family; Patriotism, Service to the motherland; Responsibility, an active civil position;
Environmental protection; Tolerance; Human rights.
This set of values differs from the standard set of values propagated by the communist regime
only by two positions: tolerance and human rights. And the appearance of this innovation is not
at all emphasized. New values are listed modestly in the framework of a traditional set of Soviet
values15.
Now I will try to explicate the Conservative doctrine’s logic of the human capital modernization.
 No radical transformation of the values currently dominant in Russian society is required
for starting the modernization process.
 What is really needed is a certain correction of these values with the help «of civil
associations’ programs and social advertising» [Conception, p. 74].
15
“The third task – a civic and patriotic education of youth, a fostering of elaboration of legal, cultural and moral
values among young people. The problem can be solved: … by a popularization / ... / of social values, such as
health; work; family; tolerance; human rights; patriotism, service to the motherland; responsibility, active civil
position; by a support of programs aiming to create a unified Russian civil nation, national-state identity; by
upbringing of tolerance to different ethnic groups; by an international cooperation, by stimulating the interest of
youth to historical and cultural heritage of Russia, to the environmental protection …”[Conception, pp. 73-74].
8
 Further changes will come along with changes in the institutional environment16.
In other words, the Conservative doctrine treats changes in the value orientations system as a
function of changes in formal institutions.
The Liberal doctrine proposes a much more radical version of human capital modernization
based on the assumption that changing institutions is a function of changing the culture
(values).
According to Medvedev, one the major diseases of Russian society is “the prevalence of
paternalistic attitudes”, generating “inertia, lack of new ideas” etc. [Medvedev, 2009].
The ICD report considers “a humanitarian component” as the main component of the
modernization process: “Modernization begins with the right mood. Of particular importance is
the humanitarian component: values and principles, morals and motivation, attitudes and
system of prohibitions” [ICD, p.8].
Creating “the right mood” means to destroy an authoritarian complex deep-rooted in the
Russian mass consciousness.
A “strategic objective of any modern government” is to “cultivate” in the society a classic set of
characteristics of homo liberalis (i.e. human-being fully adapted to a competitive economic and
political environment): rejection of paternalism; independence in opinions; ability for reflection
and rationality, autonomy in actions, dynamics and mobility, initiative and responsibility [ICD, p.
9].
Proliferation of these qualities is a necessary condition for the substitution (a) the set of
“creative-productive" values for the “parasitic-distributive set of values” and (b) the principle
“the State in the service of the citizens" for the model “citizens in the service of the State” [ICD,
p.8].
M. Fedotov, new chairman of the Human Rights Council under the President of RF and adviser
of the President, also talks about the need for modernization of consciousness (while stressing
that he uses the words of the president): "What we need is modernization of social relations
and stereotypes of social behavior. The modernization of consciousness. This is, if you want, an
ideological priority. After all, our thinking is archaic” [Fedotov,2010].
Economy
The differences between the two doctrines in this field is, first of all, the difference in the
relative importance of two policies aimed at promoting the innovative development of the
economy:
- A policy of creating the supply of innovations and their implementation into the economy.
- A policy of creating the demand for innovation from the part of the economy.
In the Conservative doctrine the first type of policy clearly dominates over the second. Here the
key problems of the Russian economy are reduced mainly to unsatisfactory technical and
technological characteristics and to obstacles to their improvement.
16
The project presupposes a lot of means to create an institutional environment “to ensure the development of
human capital” [Conception, p. 85]: improving education, expanding of opportunities for the realization of
individual initiatives, entrepreneurship, etc.
9
Putin talks about extreme economic inefficiency; unacceptably low productivity; inertia of the
“energy and raw materials” scenario of development and a "fragmented economic
modernization" [Putin]. The Government Conception draws attention to the underdeveloped
transport and energy infrastructure; the shortage of qualified engineers and skilled workers;
high levels of social inequality and regional differentiation; the poor development of selforganization and self-regulation of business and society; the low level of public confidence in
the state, coupled with the low efficiency of public administration; the low level of
development of the national innovation system, the poor coordination of education, science
and business; low level of competition in some markets, which blocks incentives to improve
productivity; the high risks of doing business, including those due to corruption, excessive
administrative barriers, poor protection of property rights ... [Conception, p. 7].
Throughout this list only the last two points (low level of competition in some markets and high
risks of doing business) have a direct bearing on the problem of the demand side for
modernization.
Such a skewed emphasis on the production / supply side of modernization indicates the
priorities of state policy.
Putin’s speech and the Government's Conception contain a quite detailed and concrete
description of structural and technical aspects of the issue of the development of innovative
production. And – by contrast - when it comes to the demand side for innovations, the
solutions of this problem do not go outside the realm of general “text-book style” declarations.
Putin says that “it is necessary to develop market institutions and competitive environment that
will motivate companies to cut costs, modernize production and respond flexibly to consumer
demand”; that “a competitive and comfortable environment should be established in Russia to
attract investment, especially in high-tech industries, and to do business” and that “it is necessary
to continue efforts [italics supplied – M.U.] to establish an independent and effective judiciary
that unquestionably guarantees entrepreneurs' rights protection, including protection from
bureaucrats’ arbitrary action” [Putin].17
Government Conception states that the transition from the “raw materials exports model of
economic growth to the innovation model requires creating a highly competitive institutional
environment that encourages entrepreneurial activity and attracts capital into the economy,
presupposes a creation and development of competitive markets, consistent de-monopolization
of the economy” [Conception, pp. 13-14].
But despite of these declarations the Conservative doctrine does not contain any plans to demonopolize the leading and most monopolized industries - at least until 2020. The Government
Conception devotes a particular section to the development of oil and gas industry, aviation,
17
Taking into account that the Yukos affaire in general, and the trial of Khodorkovsky and Lebedev in particular, led
to the degradation of the Russian judicial system, the appeal “to continue efforts to establish an independent and
effective judiciary” sounds a bit strange. According to the World Economic Forum, Russia - in terms of Judicial
independence - occupied 109th place out of 134 in 2008-2009, and– 116th place out of 133 in 2009-2010.
[http://www.weforum.org/documents/gcr0809/index.html; http://www.weforum.org/documents/GCR09/index.html]. “Judges remain
beholden to their superiors and are pressured to produce convictions. Security services are increasing their ability
to monitor private correspondence. Russia's penitentiaries remain unreformed with torture a common practice.
Russia's rating for judicial framework and independence remains unchanged at 5.50”. [Nations in Transit 2010].
10
shipbuilding and banking system, but says nothing about de-monopolization of these branches.
The only economic sectors, mentioned in the Conception as the objects of future demonopolization are “engineering infrastructure (roads, airfields, etc.), and the sphere of limited
natural resources, including aquatic biological and subsoil resources” [Conception, pp. 126,
143].
To be fair, I have to say that Surkov in his article "The Miracle is Possible" (on prospects for the
development of the innovative economy) highlights the key role of demand for innovation in
the modernization process. However, this demand for him is primarily a demand on the part of
government and large public and private corporations. The State for Surkov is a means of
compelling others to innovate. As for competition, its value, according to Surkov, should not be
exaggerated: “the liberal hope for the invisible hand of the market itself is not justified”, “the
excessive quantity of competing systems degrades the quality of competition” [Surkov, 2010].
The Liberal doctrine - as opposed to the Conservative one – stresses the importance of the
demand side of innovation policy. The ICD Report says that “the challenge is to create an
economy that generates innovation, and not to generate innovations to be painfully
implemented into economy” and that “the main change needed by the innovation economy is
to create an environment in which corporations are chasing bearers of knowledge and
intangible assets, rather than bearers of knowledge chasing corporations” [ICD, pp. 17, 18].
Political system
The differences between the doctrines' approaches towards the modernization of the political
system begin with the evaluations of its current state.
That is why before analyzing these differences, it will be of use to recall that, according to
Freedom House, Russia is now belongs to a group of “not free” countries:
“Russia has an authoritarian system of government that gives its citizens few tools to hold their
leaders accountable”. In 2001-2010 Russia's rating for national democratic governance rose
from 4,88 до 6.50; rating for electoral process – from 4,22 to 6.75; for electoral process - from
4.22 to 6.75; and for independent media – from 5,25 to 6.25 [Nations in Transit 2010].
The Conservative doctrine does not contain any assessment of the current state of political
system - either positive nor negative. Meanwhile, the Liberal doctrine assesses it negatively: in
the texts of the Medvedev - quite gently, in the ICD report - very sharply.
Medvedev: “Democratic institutions in general are formed and stabilized, but their quality is
far from being ideal” [Medvedev, 2009]; “We must make better use of our foreign policy tools
in solving domestic problems, for the purpose of modernization of our country, its economic,
social and – in some measures - political system [Medvedev, 2010 b].
ICD report: “The business and social activity of citizens has to be released from the
bureaucratic “vertical pressure,” otherwise a “technological” modernization simply will not
have any positive results [ICD, p. 10].
The impression that the existing political system is quite suitable for the Conservative doctrine,
but plays the role of barrier for the Liberal doctrine, is supported by the analysis of their
approaches to its modernization.
11
Changes proposed by the Conservative doctrine do not refer to such concepts as “political
competition”, “opposition”, “political pluralism” and “free media”. The Government's
conception contains only vague declarations that the “transition to an innovative socially
oriented type of development is impossible” without “developed democratic institutions”
[Conception, p. 81], that the country needs “an effectively operating democratic system” which
could provide it with “the efficient mechanisms for protecting the rights and freedoms of
citizens”, and with “the use of the procedures and rules ensuring the detecting and taking into
account the interests of each social group in decision making at all the levels / ... / of power”,
etc. [Conception, p. 18].
It is possible, however, that this vagueness is dictated by the genre of the document: the
government's programs are focused primarily on the socio-economic and not on political issues.
Putin speaks about the political system more concretely. Along with the general characteristic
of political modernization (which he defines as a transformation of the “democratic state” into
“an effective instrument of the self-organization of civil society”)18, Putin offers his vision of the
future (that is modernized) party system. For him it will consist of several big parties, which
«must remember their immense responsibility for / ... / national unity» and in any case must
not allow a splitting of society. “Attempts to split up the society” are equated to “irresponsible
demagogy”, and to “the use of foreign aid and intervention into domestic political struggle” and
are regarded as “immoral” and “illegal” [Putin].
Thus, the Conservative doctrine does not propose any significant liberalization of the political
system.
By contrast, the Liberal doctrine provides a comprehensive program of political reforms aimed
at creating a competitive political environment. In his article “Forward, Russia!” Medvedev
speaks about «political competition», which provides periodic changes in power of different
parties [Medvedev, 2009]. The ICD report’s section titled “The political future of the country:
back to the Constitution” says that political modernization of the country is “a necessary
component of modernization” and that the modernized State has to be “the referee and
manager of all conflicts among pluralistic interests”. “This arbitration necessarily implies
political pluralism: / ... / competition in politics, including a change in power of different
political forces, independent courts, a general willingness to resolve conflicts within the existing
institutions” [ICD, pp. 10, 11].
Public Administration
As was noted above, in some respects the positions of both doctrines on the modernization of
public administration are quite close.
Nevertheless, there exists a fundamental difference between the doctrines: the Liberal doctrine
contains a draft program of deep reform of power structures whereas the Conservative
doctrine says nothing about it.
The ICD report proposes, in particular, a transition to a professional army, the elimination of
the Ministry of Interior, which is to be replaced by the Federal Service of Criminal Police and
municipal police; the conversion of troops of the Ministry of Interior into the National Guard,
18
Putin sees this transformation as a process, that “takes years and is carried out” with the help of education and
formation of the civil culture, through enhancing the role of non-government organizations, ombudsmen, and civic
chambers and, of course, through the development of Russian multiparty system” [Putin].
12
the abolition of the FSB and restoration of the Federal Counter-Intelligence Service, etc. [ICD,
pp. 38-42, 63-64].
It is obvious that the implementation of this package of reforms will lead to basic changes of
the State system and to the complete rejection of key elements of the Soviet State legacy.
It is also clear that without these reforms, modernization of public administration will be only
partial and is unlikely to provide the level of flexibility required for the modernization of the
other aspects of social life.
Relations with the outside World
In my view, in this area the contrast between the two doctrines is most striking.
The doctrines differ in such a key areas as
- assessment of sources and levels of external threats;
- vision of the priority areas of cooperation;
- permissible depth of the economic and political co-operation with possible allies.
The Conservative doctrine is based on the assumption of a high level of military threat,
especially from the West, and of the worsening of the geopolitical struggle for control over
natural resources
Putin says that the world has entered a new arms race; that the most developed countries are
investing in defense tens of times more than Russia; that NATO countries require from Russia
unilateral enforcement of agreements; that NATO is drawing closer to Russia's borders; that
there is no constructive response from NATO over Russia's concerns; that Russia is forced to
take an appropriate response; and that “in the coming years, Russia will start to produce new
weapons, not inferior in quality to weapons possessed by other states, and in some cases exceeding those specifications…”[Putin]. The Government Conception notes that the
development of global economic competition is accompanied by increased geopolitical rivalry,
including struggle for control over raw materials, energy, water and food resources
[Conception, p. 5].
Based on such a vision of the world, the Conservative doctrine targets the CIS countries, China
and India as the first three priority areas of political and economic cooperation for Russia. EU
and the U.S. have been placed in fourth and fifth places respectively.
This structure of priorities replicates the structure of Soviet foreign policy priorities: (1) the
country of the Soviet bloc, (2) China, (3) India.
As for foreign investments, the Conservative doctrine remains extremely restrained and
cautious towards them.
In his speech «Strategy 2020» Putin said nothing about foreign investment in Russian economy.
According to the Government Conception, in 2007-2020 the share of direct foreign investment
in Russia's GDP remains almost unchanged (3.5 percent in 2020 against 3 percent in 2007). The
Conception does not presuppose any special measures to promote foreign investments in basic
industries (oil and gas, raw materials, etc.). The only things proposed by this document are:
clarifying the rules of the game; alignment of “conditions of competition of Russian and foreign
manufacturers in Russia” [Conception, p. 124], and “the establishment of clear and
understandable restrictions for foreign investors in respect of strategic areas” [ibid., p. 150].
13
Regarding high-tech industries, the Conception says that their modernization “is impossible
without the involvement of foreign strategic partners, foreign technology and skills”, but that in
these sectors “Russia wants to establish independent national companies, which could play an
active role not only in domestic but also in the world market” [ibid., p. 114].
In other words, the Conservative doctrine does not involve a significant increase in the
openness of the country to foreign capital – modernization is scheduled to take place primarily
through our own resources.
The Liberal doctrine offers a fundamentally different paradigm of relations with the outside
world.
Medvedev's speeches, as well as the ICD report, do not mention any threats for Russia from the
West. Moreover, EU and US are regarded as priority areas of cooperation.
The ICD report considers the European Union as a potential strategic ally, with the possibility of
a gradual acquisition by Russia a full membership in the EU. Relations with US are expected to
develop in the direction of strategic partnership [ICD, p. 44, 45].
In both cases “cooperation” means collaboration in economic and military-political spheres.
In the economic field the Liberal doctrine is focused not just on the broad involvement of
Western capital in Russian economy, including basic industries, but on the integration of
Russian economy with the economies of leading European countries. Thus, according to ICD
report, the framework of a strategic alliance between Russia and the EU can be created by a
“gradual formation of a united European energy sector, based on cross-ownership of business
entities and joint management of production and redistribution of gas and other energy
sources” [ICD, p.44].
In his speech before the Russian ambassadorial corps (July 2010), Medvedev reinforced the
idea of economic integration with the West outlined in the ICD report. He said that Russia
“does need special modernization alliances with international partners ... First of all, with
countries such as Germany, France, Italy, the European Union as a whole, with the United
States of America" [Medvedev, 2010 b].
In the military field the Liberal doctrine assumes close cooperation with the U.S. in a joint
missile defense program, in non-proliferation measures, particularly in Iran and North Korea
cases [ICD, p. 45], etc.
One more strategic objective is Russia's entry into NATO [ICD, p. 42].
As for China, it is rather seen as a potential danger. The ICD report regards “the rapid rise of
China” as one of the key arguments for building “a new model of relations with elements of
cooperation and competition, especially in the quadrangle U.S. - Japan - Russia – China” [ICD,
p.47].
These are the main differences between the two modernization doctrines.
Let us try now to assess to what extent they are realizable and what could be the consequences
of their implementation.
The Conservative doctrine
The implementation of the Conservative doctrine faces some substantial institutional and
resource constraints.
14
The most significant institutional constraint is a lack of demand for innovation in the economy
and in the government institutions.
Economy. As it has been shown above, the Conservative doctrine does not propose either the
de-monopolization of basic sectors of the economy, or reducing the Government presence in
key sectors of the economy, or destruction of "friendly" relations between the State and a few
number of big private corporations.
The lack of such proposals is particularly striking if one takes into account the growing
monopolization of the Russian economy in the past few years. In 2006-2009 there appeared
five big public companies enjoying monopolies in their sectors: United Aircraft-Engineering
Company (2006); United Ship-building Company (founded in 2007; in 2009 controls another 19
companies); ROSNANO - 2007; RosTechnologies - 2008; RosAuto – 2009.
According to the World Economic Forum, in 2010 Russia “slides by five places to obtain a very
low 114th position in this year’s ETI” (Enabling Trade Index), and “has fallen to the last place in
the entire sample on the market access subindex” [GETR 2010, p. 25]. The country holds now
101st place (out of 125) in quality of domestic competition (intensity of competition, the level
of monopolization, the height of entry barriers, etc.) and 115 th place in openness to foreign
participation [ibid., p. 233].
It is quite difficult to suggest that the economy, where the dominant positions are occupied by
non-transparent monopolies, supported by the State budget and protected from foreign
competition, will have a strong demand for innovations. For these corporations an innovative
process is hardly a way of survival - it is rather a source of troubles.
Government institutions. Putin’s evaluation of the current situation in Russian Public
administration was quoted above: “today the public administration apparatus is largely a
bureaucratic, corrupt system, not motivated for positive changes, much less for dynamic
development”.
However, general declarations aside, the Conservative doctrine does not contain any significant
measures to change this situation. This means that in the foreseeable future the State
apparatus will be approximately the same as now.
On the basis of the World Economic Forum's indexes for 2010, the Russian State apparatus may
be described as follows: Corruption Perceptions Index – 112th place out of 125; Ethics and
corruption (Diversion of public funds, Public trust of politicians) - 91th place; Undue influence
(Judicial independence, Favoritism in decisions of government officials) – 103rd place;
Government efficiency (Wastefulness of government spending, Burden of government
regulation, Efficiency of legal framework, Transparency of government policymaking) – 103rd
place [GETR 2010, p. 233].
It would be naïve to suggest that such a State will create demand for innovations in the field of
public administration.
Resource constrains are no less serious. According to various estimates, the share of outdated
and physically worn out equipment in Russian production assets currently ranges from about 45
to 75% [see e.g. Balatsky, Gusev, 2008; Inozemtsev, 2009, Issue 1; ROSSTAT, 2008, 2009;
Savelyev, 2004]..The average age of production equipment in Russian industry is approximately
13 years comparing to 7 years in the U.S. [IWEIR, 2010] Putin is right pointing out that for the
modernization of the country it is necessary “to change ... almost all technology used in Russia,
15
almost all machines and equipment» [Putin]. And such a change requires enormous financial
resources.
But the trouble is that technological modernization is not the only area requiring massive
investment. Much more money is needed to improve the situation with human capital – not
only to raise the quality of education, but also to alleviate a severe demographic crisis, i.e. to
slow down population decline and to make the health of the population a little bit better.
At present, Russia occupies one of the first places globally in population decline (about 750
thousand people annually). The main factor in the decreasing Russian population is the fall in
fertility. If the situation does not improve, the population of Russia to the middle of the XXI
century will decline by about a third to around 100 million people. According to leading Russian
demographers, it is impossible to stop the decrease of the population. But it is possible to make
this process a bit slower - not in the part that depends on the level of fertility (which is a
cultural factor), but in the part determined by the health of the population.
But in this area the situation is extremely bad. N. Rimashevskaya, one of the most authoritative
Russian demographers, says that in the past few decades, every succeeding generation was less
healthy than the previous one [Rimashevskaya’s speech at Nikitsky Club, March 16, 2005;
unpublished; my transcript – M.U.] And this means a mental and physical degradation of the
population.
The mortality rate in the working age population in Russia is 7 times higher than in developed
countries. In the last years Russia has never risen higher than the 172nd place out of 193 in
terms of prevalence of tuberculosis (the lower the place the worse) [Human Resource, 2004].
Alcoholism in Russia over the past century became a national catastrophe. In 1914 alcohol
consumption in the country was about 2.5-4 liters per capita per year. According to the World
Health Organization, alcohol consumption of more than 8 liters per capita per year is a threat to
the survival of a population. Meanwhile, today, the figure for Russia is 18 liters per capita per
year.
It is clear that without overcoming (or at least alleviating) the demographic crisis and
technological renovation, dreams about the successful modernization make no sense. The
question is: does Russia have enough resources for solving these problems? This question arises
not only because of the relatively small size of the Russian GDP, but also due to the fact that
there exist some other serious problems which have to be solved, i.e. to be financed.
One of these problems is defense. The vision of the situation in the world contained in the
Conservative doctrine dictates a need to spend a lot to meet the increasing geopolitical
competition over natural resources and to keep up with the arms race initiated by countries
that invest in defense of tens of times more than Russia.
Given the fact that the Conservative doctrine does not purport to increase the share of foreign
investment in Russian economy, the country will have to solve the “guns or butter” dilemma
solely on its own.
This means that the civilian and military spending - in accordance with old Soviet traditions will compete in a zero-sum game, and that - again, in accordance with the old Soviet tradition –
“the guns” will win.
The results of this game can be predicted by observing the structure of budgetary expenditures
planed for 2011: Defense, security, law enforcement – 16 percent; Medical Care – 4 percent;
16
Education – 3.7 percent; Science – 1.9 percent; Culture – 0.9 percent [See: Vedomosty, Sept.
24, 2010. http://www.vedomosti.ru/newspaper/print/2010/09/24/246414].
The scarcity of domestic resources for modernization will be exacerbated by corruption. The
size of this factor can be evaluated by the size of kickbacks, which, according to my research,
make up about 50 percent of the total sum of the contracts between the State and private
contractors.
All this leads me to doubt the feasibility of the Conservative doctrine of modernization. I think
that the most probable result of this strategy will be a waste of time and a devastation of
resources.
In my view this project will not allow neither to alleviate the demographic crisis, nor to
modernize civilian sectors of the economy, nor to create military forces comparable by the
effectiveness with the armed forces of countries that the Conservative doctrine project
considers as the main source of threats (NATO).
Given the fact that the Conservative doctrine project involves alienation from the West and is
oriented to cooperation with China (a country which has got territorial claims to Russia, actively
finances the emigration of its male population to the Russian Far East, and whose military
spending - according to Stockholm International Peace Research Institute - already exceed
those in Russia by 3 times), such a strategy is likely to lead to the spread of Chinese influence
through Russian Far East. In the longer run this scenario could make Russia a «younger
brother» of a Great China.
Liberal doctrine
It is much easier to talk about the feasibility of the Liberal doctrine.
The authors of ICD report clearly articulated their position on this issue:
“It is a dangerous illusion to think that Russia – as it is formed today – can be transformed into
an innovative country, associating on an equal footing with the leaders of the world's
innovative countries and competing for the opportunity to manage its future. A truly innovative
development (and by and large, even the start of such a development) requires another
country - with a different set of values and relations, with a different politics and social
environment, with a different public administration, with a different mood of business” [ICD, p.
20].
Being translated from Politcorrect to Unambiguous language, this statement would be read as
follows: in Russia today are lacking the necessary and sufficient conditions for achieving full
modernization. In other words, the transformation of Russia into a leading world power of XXI
century is impossible.
This conclusion made after a detailed study of the current situation in Russia, seems to me the
most profound and honest conclusion from all of the ICD report.
Let us now try to imagine what awaits Russia if it follows the route specified by the Liberal
doctrine.
I think that through this way the country may well become a part of the European, or better to
say Euro-Atlantic civilization - not as a great power, but as a just another country, with income
per capita below the average for Europe and the United States, but much higher than the world
average.
17
However, in some spheres Russia could be among the leading countries of the Euro-Atlantic
community: as one of the key elements of the collective security system; as a participant in
major research programs in space and ocean technology; as a supplier of energy and raw
materials (much more deeply processed than at present); as a source of scientific and
technological ideas (if the integration into West will slow or stop the brain drain); as a magnet
for tourism in the still existing clean “wild” areas.
I believe that the sooner Russia will start to implement the Liberal doctrine, i.e. the faster it will
open the borders to Western investors in key sectors of the economy and will launch deep
military cooperation with US and NATO, on the whole the less dangerous will be the “Chinese
factor” and the higher will be a probability for us to survive in our current borders.
I do not think that this scenario deserves to be called “catastrophic”.
If we are not fixed on neurotic unfeasible goals and look calmly at alternatives for the realizable
future, it turns out that between the “superpower” and “disintegration of the country” there is
a wide range of trajectories of development, providing the population of Russia with a
possibility of normal life with a quality of life higher than that of most part of the world's
population.
*
*
*
It seems unlikely to foresee now which of two described above concepts of modernization will
be the official doctrine of the Russian state after the presidential election of 2012. Of course,
the verdict handed down against Khodorkovsky and Lebedev indicates that today in Russian
political elite the supporters of "conservative" ideology have proven to be stronger than the
representatives of the "liberal" one. However, it is not clear (at least to me) what will be the
balance of power a year from now. Too many factors would have to be taken into account personal relationships within the narrow, opaque and small in number ruling group, conflicting
preferences of groups of interests connected with the different members of the ruling group,
the orientations of different factions of regional elites, moods in the law enforcement
structures, army and special services, public opinion etc. And under the current political regime
it is almost impossible to forecast the direction of changes and relative importance of these
factors.
The best thing an analyst can do in such a murky political atmosphere is to try to elaborate
some scenarios of the future - at least for to help colleagues to be prepared for any possible
situations. Let me consider my analysis of Russian modernization ideologies as a humble
personal input to the noble work of scenario-forecasting. Anyway, everyone is doing what
he/she can. As the French say, "faut de mieux le roi couches avec sa femme".
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