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Friday, July 20, 2007

Annals of Neo-Soviet Failure: Sochi Lays Russia Bare

The Financial Express of India (see similar on RIA Novosti) exposes Russia as a third-rate nation utterly unfit to hold membership in the G-8 or host the Olympic Games. Of course, lack of substance has never stopped Russia before, which has always preferred instead to rely on lies and illusions.

President Putin has frequently complained that international reporting on Russia is biased and unfair, that the media focus is on the bad news rather than on positive developments. There is certainly some truth in this—western reporting on the Soviet Union and on Yeltsin and Putin’s Russia has varied between brilliant and insightful and downright incompetent. And as new reports by the World Bank and the Swedish Defence Research Agency make clear, it is hard to put a good spin on bad policies.

This week, Russia started getting down to the serious business of organising the 2014 Winter Olympics after Sochi’s successful bid to host the Games. President Putin’s injunctions to the prime minister, ministers, government officials and the Prosecutor General were symptomatic of Russia’s current stage of development.

Putin told officials recently to set up a special working group at the prosecutor general’s office to ensure that the billions of dollars the state will spend on building the necessary sport facilities and transport infrastructure will be used rationally and as intended.

He also told ministers and Yuri Chaika, the prosecutor general, that the working group should prevent the money from being siphoned off and embezzled and should include people from other law enforcement agencies to beef up monitoring. The Russian media highlighted Putin’s call for the working group, but Dmitry Chernyshenko, the head of the Sochi bidding committee, argued that the fears of fraud were exaggerated and rightly pointed out that in the last 15 years, Russia has made great progress in democracy, openness and transparency.

But it is hard to imagine that a western head of state would feel the need to set up an audit body with such a specific brief: the legal regimes and control mechanisms in developed countries are by no means perfect and cannot prevent corruption, but they are far superior to similar institutions in Russia.

Putin’s orders reflect his recognition of rampant corruption, but Transparency International claims that since 2001, graft in Russia has in fact jumped sevenfold. This week, the World Bank Institute published its sixth annual Worldwide Governance Indicators. The bank summarises six aggregate indicators to arrive at an assessment of how well countries are governed: voice & accountability; political stability and lack of violence/terrorism; government effectiveness; regulatory quality; rule of law and control of corruption.

Needless to say, the G7 and the OECD continue to boast the high values which indicate better governance—in other words, these are the advanced first-world countries, or those aspiring to become developed.

But no matter how you slice and dice the data, Russia almost invariably appears far below the advanced countries and falls in the ranks of the lower percentiles, which indicate the percentage of countries worldwide that rate below the selected country. Even more worrying to Moscow ought to be Russia’s poor performance in the much-vaunted BRIC group, with Russia often far behind Brazil and India, although China more often brings up the rear with a big lag. Indeed, Russia does not even perform particularly well among the group of countries from the former Soviet Union. Russia is still a long way off achieving anywhere near the levels of the developed West and Japan—and also of OECD members such as Mexico.

The Swedish Defence Research Agency published a report recently sponsored by the Swedish Ministry of Defence and entitled, “Russian Leverage on the CIS and Baltic States.” The study analyses Russia’s use of foreign policy levers, such as energy and culture, and concludes that Russia’s actions during the “oil and gas wars” and the recent crisis with Estonia have caused a backlash and go against Russia’s stated aim of joining the WTO and better relations with Europe and EU.

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