NOTE: This is the fifth part of a serialized translation of Boris Nemtsov's white paper critiquing the Putin years. It includes the seventh and eighth chapters of the work. Part 1 (introduction and chapter one) appeared on Monday, Part 2 (chapter two) on Wednesday, Part 3 (chapters three and four) appeared on Friday and Part 4 (chapters five and six) appeared on Sunday. look for Part 6, which may be the final installment, on Wednesday. You can display all the parts in reverse sequence on a single web page by simply clicking the "nemtsov white paper" link at the bottom of this post.

Putin: the Bottom Line

by Boris Nemtsov

First Deputy Prime Minister of the Russian Federation, 1997-1998

and

Vladimir Milov

Deputy Minister of Energy, 2002

Translated from the Russian by Dave Essel

Chapter 7

Flouting the Constitution

By refraining from putting himself up for a third term as president, Putin is pretending that he is keen to observe the Russian Constitution. In reality, however, its main provisions were all trampled into the dust long ago. The Russian Constitution has to all intents and purposes ceased to mean anything.

First and foremost, Russia is no longer either a democratic, or a federative, or a law-governed state as per Article 1 of the document.

Russia is no longer a democracy. Putin has deprived Russians of freedom of speech and free access to information. We are talking here of the imposition of censorship on practically all politically significant media – federal television channels, wide circulation newspapers, and the most visited internet sites. Article 29 of the Constitution guarantees every citizen freedom of thought and speech, the right freely to seek, get, transfer, produce and disseminate information by any lawful means. However, the state has seized control of the influential mass media, closed down the independent television channels, introduced shameful blacklists of people who are not deemed suitable and thus not allowed to appear on television, and made it impossible for citizens to get hold of truthful information about what is happening in the country and in the world. People are engulfed from morning until night by a wave of lying propaganda and panegyrics to the authorities that has already caused a gross warping of public opinion. Many seriously believe that without “our dear master Putin” the country will come to an end, even though just nine years ago no one had ever heard of the man. People support “Putin’s plan” although they have no idea what it consists of. Confrontational thinking and hatred of heterodoxy and of “enemies” are being promoted.

Throughout all this, no one is telling the people that their real enemies are those who, during what could have been prosperous years for the country, have made social and economic reforms fail and not used the shower of gold deriving from oil to create a workable army and build roads, have spoilt relations with the rest of the world, and handed over Russian territory to China. Censorship thrives in all the main media although Article 29 of the Constitution totally unambiguously states that censorship shall be prohibited.

Most frightening of all is that the murder of journalists in Russia ( and not one of these crimes has been resolved), first and foremost that of Anna Politkovskaya, has led to self-censorship among journalists as they fear to write about serious problems or to criticise the authorities. It could get them killed. Notwithstanding the upsurge in spending on security and law enforcement between 2000 and 2007 not a single major murder case, of which there were no fewer than in the 1990s, has been resolved.

These are all things that the opposition would have talked about. Putin, however, has put it under a tight political lid. Although Article 13 of the Constitution guaranties ideological and political plurality and a multi-party system and Article 30 promises freedom of to form and participate in opposition unions, such unions are to all intents and purposes forbidden. It is made impossible for independent parties that do not agree with the Kremlin’s policies to register themselves and take part in elections. Anyone who criticises the government can, thanks to a new police law on extremism, be declared an extremist and find himself behind bars.

Article 30 of the Constitution guarantees citizens the right to hold gatherings, meetings, and demonstrations and to march and picket. However, this right is practically impossible to implement in practice. Opposition meetings are banned and violently dispersed by the OMON armed riot police. It has become the norm for people at peaceful demonstrations to be beaten and arrested.

The abolition of the election of governors and also to the State Duma from single-mandate districts struck a decisive blow against the right of Russians to elect and be elected. Previously, Russian could directly elect civil servants at all levels of government – governors, State Duma representatives, and regional Legislatures. Now, practically the only election left is the presidential election. The lists for State Duma representatives and regional parliaments are drawn up in the Kremlin and there is a new fashion for the “locomotives” – well-known people who are put at the top of the party lists – to decline to take up their mandates, allowing others, people who were not known to or voted for by the electorate, to become representatives.

The people, who according to Chapter 1 of the Constitution are the vehicle of sovereignty and the only source of power in the Russian Federation, have been shoved aside and stopped from electing their government by direct vote.

Russia is no longer a federation. The exclusion of governors from the Federation Council, the abolition of elections for governors so that they are appointed instead from amongst candidates proposed by the president, the redistribution of budget income in favour of the centre – these are all innovations introduced during Putin’s rule in order by design to destroy the foundations of federalism in the country. As a result, the regions have been left lacking adequate financial resources for resolving their pressing development problems.

The abolition of the election of governors is a direct flouting of the Constitution. By a decree of 16 January 1996 regarding the organs of power in the Altai Republic, Russia’s Constitutional Court recognised that governors must be elected by direct popular vote. This decree has force of law. Putin, however, has broken this principle, basely using the opportunity afforded by the Russian public’s state of depression following the Beslan tragedy. But what, you may ask, is the link between Chechen terrorists and the election of leaders in Yakutia or Penza District?

By a decision dated 21 December 2005, the Constitutional Court ruled that Putin’s actions, with reference to the “developing socio-historical context”, were lawful. Can it be that “context” is of greater import than legal norms and that the Constitution in Russia is to be interpreted each time anew, depending on the “context”?

That the Constitutional Court should bend over for the executive comes as no surprise. During Putin’s rule, the central principle of the Constitution, that of the separation of powers, has been totally done away with. The principle of independence from each other of the legislature, the executive, and the judiciary enshrined in Article 10 of the Constitution is there because it is vital that no one branch of government should be able to usurp power in the country.

But this principle has been trampled upon. Parliament has been turned into the “legislative department of the Presidential Administration”; its members are appointed by the Kremlin and vote according to the Kremlin’s wishes. The courts are totally dependent on the executive even though Article 120 states that judges shall be independent and shall obey only the Constitution of the Russian Federation and the federal law. Basman justice is dispensed throughout the land. Russia is no longer a law-governed state.

Although point 4 of the Constitution's third article states that no one may arrogate to himself power in the Russian Federation, Putin’s inner circle has to all intents and purposes seized it. Putin has twice broken his presidential oath to obey the Russian Constitution. The Constitution is still formally in place but in fact its main points have been broken. It is precisely because the Constitution has been turned into a worthless scrap of paper that Putin has kept his word that he would not make changes to it.

We need to restore the power of the Constitution in Russia. Restore freedom of speech, of the press, of assembly, of political parties and of an opposition to operate. Restore the right of the people to elect their government, to elect governors, and to elect representatives to the State Duma in single-mandate districts. Restore the independence of justice.

Chapter 8

The Collapse of the "National Projects"

“National Projects” were invented by the government to counterbalance the failure of their reforms in the social sphere. Compulsory health insurance, social security, and education reforms were all discussed back in 2000. They failed to materialise and it was decided to camouflage this failure with noise about “national projects”.

In and of themselves, these national projects are quite sensible. It’s good that the government should allocate at least some money to developing medicine, education, housing, and agriculture. But if one looks at what could really have been done by the government, the pittance allocated is mere crumbs off the table. In 2006, just $6 billion were made available. This rose to $10 billion in 2007 with $12 billion planned for 2008. Sibneft was bought from Abramovich for more than the yearly allocation to all the “national projects”.

Despite all the noise made about the “national projects”, the proportion of the budget going to health, education, and the social services has actually been falling in recent years. In 2007, expenditure planned for public health and education amounted to 9% of the federal budget. For 2008, the three-year budget for 2008-2010 is allocating 8% of the federal budget and this will go down to just 7.5% in 2009.

On the other hand, the government is planning to direct 16% of the federal budget to state management and security. Under Putin, we have seen an explosive growth in the money spent on the bureaucracy and the special services: in 2000, these cost the country $4 billion but $39 billion will go to them in 2008 – 3 times more than will be spent on all the “national projects”!

The special services and Abramovich are Putin’s real “national projects”.

In essence the “national projects” represent the replacement of systematic reform by random, one-off, modest injections of cash which do not really solve anything. For example, only a quarter of the funds allocated to the “Health” national project will be used to purchase diagnostic equipment for municipal polyclinics and the building of new high-tech medical centres (of which only 15 are planned for the whole country); the rest is to be spent on general expenses. It is good that doctors should get salary increases and that new equipment be bought for medical institutions. But it was only the salaries of general practitioners and junior medical personnel that were raised, not those of the specialists who actually do the most when it comes to curing people. The purchasing of medical equipment is being carried out in a random and selective manner. Instead of creating a working medical insurance system and defining the compulsory minimum levels of medical care that citizens can expect, the government wants to fob the people off with quick little cash injections.

It will come as no surprise that the “national projects” have disappointed.

The “Health” national project

Despite the fact that the lion’s share of the money allocated to all the “national projects’ has been to this one ($5 billion of the $10 billion total for 2007), the quality of health care in Russia has not improved. Data collected by the Levada-Centre shows that only 14% of Russians are satisfied with the health care they receive while 72% think that the quality of health care in Russia has either remained static or deteriorated. There are figures to confirm this: according to data from Rosstat, sickness rates per 1000 of population have been on the increase since the year 2000. This predicates the persisting high death rate (see the chapter on Russia dying out). The system for financing cheap prescriptions is bankrupt and medicine prices continue to rise. Medical care in Russia is a choice between atrociously low quality or extremely expensive.

The “Affordable Housing” national project

Housing has become less and less affordable during the runtime of this project. Back in summer 2005, the cost of a standard 54m2 flat equivalated to 4.3 years’ average income of a family of three . Now it’s 5.3 years. The project should be renamed the “unaffordable housing project”. According to Rosstat data, the average price of a square metre of housing on the resale market has more than doubled during the existence of this national project, from 21 thousand to 45 thousand rubles from summer of 2005 to today!

The reason for rising house prices is not because the government has allocated too little money to construction or that the president did not give the civil servants a needed shove at the right time. It is simply that the government has not been able to implement an effective strategy to combat the Dutch disease of money flowing into the country. The avalanche of petrodollars has led to a bubble in the real estate and share markets Flats are being bought by investors and prices are being driven up. The monopoly of the civil service mafia in the construction and land markets prevent new investors from entering it, slows construction, and artificially drives prices in an upward spiral. The lack of clear rules for the allocation of building plots and the fact that this area is dominated by municipal mafia clans acts as an important restraining factor in the house-building industry. Even though the rate of new housing construction has, according to Rosstat data, reached 10-14% per year, this is in fact a very modest result: were the housing market more open, decriminalised, and competitive, the rate of new housing construction could have reached 25-30%.

Another area in which monopolies dominate is that of building materials production, in particular of cement. The monopolisation of the building materials market has led to a price explosion: Rosstat figures show that the price of cement rose by 35% a year between 2003 and 2007 and in 2007 alone by 67%. This situation is yet another result of the government’s lack of any competition policies.

The situation in public housing is particularly bad. The reform of public housing management failed: competition was to have been introduced but instead became another civil service mafia monopoly. As a result, utilities and services prices continue to rise and no improvements have been made to tired and worn-out buildings, not to mention services. Between 2000 and 2007, utilities and services prices were raised by a total of 850%, over 33% per year. The proportion of their income spent by those who live in public housing has risen from 4.6% in 2000 to nearly 9% (Rosstat’s figures).

The “Education” national project

Education reform has consisted of a series of failures. The introduction of the Single State Exam needed to eradicate corruption in the form of “supplementary private tuition” when applying to enter prestigious institutions of higher education has been to all intents and purposes a failure. Corruption in higher education is flourishing: the average bribe to get into into a Moscow college is now anywhere between $5 and $10 thousand. UNESCO has estimated that the total amount paid in bribes for entry into Russian higher education exceeds $500 million per year. Our colleges and universities have still not managed to find an effective system for producing the specialists needed by the labour market to replace the old Soviet system whereby one was assigned to a job on graduation. Graduates are now frequently unable to find employment.

Education policy has all these years devoted too much attention to the problems of higher education while the troubles of pre-school, primary, and secondary education have been all but forgotten. Our kindergartens are nothing to boast about either: there is a shortage of about 1 million kindergarten places. This leads to corruption: the bribe for a place in a municipal kindergarten in, say, Moscow, can reach several thousand dollars! The quality of school education has dropped sharply. Recent specialist studies have concluded that the real average mark of school leavers in such subjects as Russian language, maths, and history should not be more than a mere “Pass” and certainly not “Good” or “Excellent”. Secondary polytechnic education is in a state of near total prostration.

The “Agro-Industrial” national project

Not much was allocated to the development of the agro-industrial complex, just $1 billion per year, and most of this has been frittered away in subsidising credit interest for agricultural producers.

This particular measure was a good one, but only needed the once. It would have been far better for the government to devote its efforts to improving the infrastructure in the countryside, building roads and improving energy supplies (and not at Gazprom’s usurious prices – rural consumers are forced to pay 100-200 thousand rubles to have gas pipes run to them – but for an affordable price). Monopolism needs to be combated and a competitive market for agricultural produce created. There should be support for developing exports. Our agrarian sector, including processing, should be made attractive to foreign investors. Access to finance should be made easier for agricultural producers by means of a special infrastructure for farm credits. Help should be available for leasing equipment and for going over to more modern means of agricultural production.

The vital task of creating a competitive environment for the sale of agricultural produce has not even been broached. As a result small-scale producers and farmers cannot influence prices paid to them and do not have proper information on the market situation: big traders and agroproduce processors have a buyers’ monopoly and are able to trade unfairly.

Because the agro-industrial complex has been accorded no systematic attention, the growth rates for Russia’s agriculture are the lowest in the CIS at just 2%. Forty-five percent of Russia’s food is imported although even as recently as 2004 the volume of imports stood at 20%. The situation is still worse in larger cities where up to 70% of foodstuff is imported.

Putin’s “national projects” have resulted in no miracles

A sad fate awaits the “national projects” once the oil money has all gone. What Russia really needed instead of “national projects” was to concentrate on real social reforms, to start spending money on public health, education, the army, and the infrastructure – instead of on the special services and Abramovich. And instead of producing some weird “successor” out of a hat – to elect as leaders responsible politicians unsullied by corruption, ready to take action against the monopolies, and prepared to carry out properly thought out policies instead of indulging in slapdash monetary handouts.