The End of Soviet Rule and the Emergence of Post-Communist Russia

Mikhail Gorbachev

Communist true believer

Last General Secretary of the Communist Party of the Soviet Union

What motivated Gorbachev to initiate reform of the communist system?

Mikhail Gorbachev

The End of Soviet Rule and the Emergence of Post-Communist Russia

What motivated Gorbachev to initiate reform of the communist system?

weak incentives lack of efficiency lack of innovation (graph)

The End of Soviet Rule and the Emergence of Post-Communist Russia

Key elements in Gorbachev’s reform program

Economic restructuring (Perestroika)

Political openness (Glasnost )

Limited democracy (Demokratizatsiia)

ultimately led to collapse of Soviet Union

The End of Soviet Rule and the Emergence of Post-Communist Russia

Gorbachev’s reforms Provoked attempted coup

By party apparatchik (hacks) (August 1991)

Gennady Yanayev

The End of Soviet Rule and the Emergence of Post-Communist Russia

Radical reformers inside the Communist Party resisted the coup Boris Yeltsin

Party official President of the rubber-

stamp legislature of Russian part of Soviet hierarchy Boris Yeltsin

The End of Soviet Rule and the Emergence of Post-Communist Russia

Yeltsin declares independence of Russian Republic (December 1991)

Republics withdrawal from Soviet Union

Gorbachev resigns

Boris Yeltsin

Introducing post-Soviet Russia

New Russia (Russian Federation) Elections, but

“Not Free” (Freedom House)

HDI rank—65th

2004 GDP < 1989 GDP

Now, Putin’s Russia

Post-Soviet Russia: Neo-liberal reforms

Yeltsin as a radical reformer Influence of neo-liberal theory,

US economists, International Monetary Fund 1992: “shock therapy”/ “big bang”Destroy the state planning/regulatory

apparatus

Post-Soviet Russia: Neo-liberal reforms

“Shock therapy” 1992Dismantle planned economy

End state-set prices on January 2, 1992

Post-Soviet Russia: Neo-liberal reforms

Year 1990 1991 1992 1993 1994 1995

Real GDP -2.1 -12.9 -18.5 -12.0 -15.0 -4.0

Industrial Output

-0.1 -8.0 -18.9 -16.2 -20.9 -3.0

Agricultural Output

-3.5 -4.5 -9.0 -4.0 -9.0 -8.0

Consumer Price Inflation

5 93 1,354 880 320 →

Post-Soviet Russia: Neo-liberal reforms

“Shock therapy” 1992Dismantle planned economy

Privatize state-owned industry Initial privatization of state-owned enterprises

under Yeltsin

vouchers to citizens (w/ little information)

“nomenklatura privatization”

future oligarchs also buy up vouchers

Post-Soviet Russia: Neo-liberal reforms

Year 1990 1991 1992 1993 1994 1995

Real GDP -2.1 -12.9 -18.5 -12.0 -15.0 -4.0

Industrial Output

-0.1 -8.0 -18.9 -16.2 -20.9 -3.0

Agricultural Output

-3.5 -4.5 -9.0 -4.0 -9.0 -8.0

Consumer Price Inflation

5 93 1,354 880 320

→

Privatization

Who benefits from privatization?1. Former factory directors2. Nomenklatura ministers of gas industry turned

ministry into private company Gazprom (oil and gas)3. Upstarts (former black marketeers) turned oligarchs

1996 “loans for shares” auctions of state assets Well-connected businessmen like Khodorkovsky got

key state assets -- including major parts of the energy sector -- at bargain basement prices in exchange for financial support for Yeltsin’s government in lead up to 1996 elections.

The End of Soviet Rule and the Emergence of Post-Communist Russia “It was simply too much to expect that a

market system would suddenly materialize out of nothing. After all, for 70 years the state and the Communist Party had done everything they could to stamp out any remnant of market behavior…”

(Marshall Goldman)

The End of Soviet Rule and the Emergence of Post-Communist Russia Incomes decline by 50% from 1991-93 Inequality explodes

Gini coefficient 1988 = 24; 1998 = 45 Sex (HIV/AIDS), alcohol (ism), and drugs Population declines by 5 million in a decade

(1992-2002) Highest mortality rate in Europe Lowest birth rate in Europe

Putin’s Russia: creeping authoritarianism Bureaucrats take charge of the economy

Attacking oligarchs who had amassed incredible wealth and power

Asserting control over Energy sector

Ex: Yukos—Russia’s largest oil company Headed by Khodokovsky (oligarch) arrested State took over his shares in company

Putin’s Russia: creeping authoritarianism Bureaucrats in charge of the economy

Attacking oligarchs who had amassed incredible wealth and power

Asserting control over Media sector

2000 Gusinsky Media Most—arrested on fraud, embezzlement

2003 Press Ministry closed independent tv station (TVS) for “financial crisis”

Example: state authorities can shut down news organizations for campaign coverage deemed to be biased

Murders of journalists

Anna Politkovskaya

A book by the famous Russian journalist Anna Politkovskaya, entitled Putin’s Russia, was published in the United Kingdom on Thursday.

The book describes the Russian president,  Vladimir Putin, in a devastating light, The Independent newspaper wrote on Friday. It has not been published in Russia.

The journalist, who works at Novaya Gazeta, calls him “a KGB snoop” and warns that he is moving the country back to a Soviet-style dictatorship, the paper wrote. Politkovskaya compares Putin to Joseph Stalin, to an over-promoted spy and to a miserable humiliated functionary from a Nikolai Gogol story.

“Under President Putin we won’t be able to forge democracy in Russia and will only turn back to the past.

Journalist Politkovskaya’s Anti-Putin Book Published in UKOctober 15, 2004Moscow News

“JOURNALIST, GOVERNMENT CRITIC MURDERED: The murder of Anna Politkovskaya, possibly the strongest journalistic voice in opposition to the government of President Vladimir V. Putin and Russia's war in Chechnya led all the major newspapers today. Ms. Politkovskaya, a contributor to the independent Novaya Gazeta newspaper, was shot three or four times in the stairwell of her apartment in Moscow on Saturday afternoon.

“One of Ms. Politkovskaya's colleagues at Novaya Gazeta [said] that anyone could have been behind the murder: members of Russia's intelligence services, Chechens associated with Mr. Kadyrov, the police, or pseudo-patriots and fascists.

Reporter's Murder Leads to Wide SpeculationOctober 9, 2006

Russia’s Evolving Political System

The Impact of the Economy on Political Attitudes See also O’Neil, Cases, p. 274 and 277.

World Values SurveyRussian Federation, 1999

A165.- Generally speaking, would you say that most people can be trusted or that you need to be very careful in dealing

with people?

1 Most people can be trusted

2 Can´t be too careful

World Values SurveyRussian Federation, 1999

A170.- All things considered, how satisfied are you with your life as a whole these days?

1 Dissatisfied 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9

10 Satisfied

World Values SurveyRussian Federation, 1999

E119.- If you had to choose, which would you say is the most important responsibility of government?

A. To maintain order in society, or

B. to respect freedom of the individual.

Russia’s Political Institutions

New constitution adopted 1993 Strong president

Directly elected by popular voteStrong executive powers

Prime ministerAppointed by the president

Bicameral legislature

Russia’s Political Institutions

Electoral System for Duma (lower house of parliament) through 2003 elections

Duma elections (450 seats)225 seats: single member districts by first-

past-the post/winner-take-all ballot225 seats: nationwide by proportional

representation (party-list) ballot

1995 Duma Elections—Major Parties

Party Leader % PR Vote

PR Seats

SMDSeats

TotalSeats

Communist Party

Zyuganov 22.3 99 58 157

“Russia is Our Home”

Chernomyrdin 10.1 45 10 55

Liberal-Democratic Party (neo-facist)

Zhirinovsky 11.2 50 1 51

Yabloko(reformist)

Yavlinksy 6.9 31 14 45

Party % PR Vote

PR Seats

SMDSeats

TotalSeats %

United Russia 37.57 120 102 49.3

Communist Party 12.61 40 12 11.6

Liberal-Democratic Party (neo-facist)

11.45 36 0 8.0

Motherland 9.02 29 8 8.2

Yabloko(reformist)

4.3 0 4 0.9

Independent and Others

0 0 99 22.0

2003 Duma Elections—Major Parties

Electoral System Changes

In September 2004, President Putin proposed the abolition of the two ballot system, so that all candidates would be elected on party lists through proportional representation.

The 225 single-member districts were abolished. In 2003 100 of these seats were won by independents or minor party candidates. Ex: Yabloko

2005 put into law 2007 in effect for 2007 Duma election

2007 Duma Elections—Major Parties

Votes % Seats %

United Russia 44,714,241 64.3 315 70.0

Communist Party 8,046,886 11.6 57 12.7

Liberal Democrats 5,660,823 8.2 40 8.9

Fair Russia 5,383,639 7.8 38 8.4

Parties and coalitions Votes % Seats

United Russia 44,714,241 64.30 315

Communist Party of the Russian Federation 8,046,886 11.57 57

Liberal Democratic Party of Russia 5,660,823 8.14 40

Fair Russia 5,383,639 7.74 38

Agrarian Party of Russia 1,600,234 2.30 —

Russian Democratic Party "Yabloko" 1,108,985 1.59 —

Civilian Power 733,604 1.05 —

Union of Right Forces 669,444 0.96 —

Patriots of Russia 615,417 0.89 —

Russian Social Justice Party 154,083 0.22 —

Democratic Party of Russia 89,780 0.13 —

Valid ballot papers 68,777,136 98.91

Invalid ballot papers 759,929 1.09

Presidential Elections in Russia’s “Strong President” System

Yeltsin 1991: first elected under Soviet election law

Won 57% of the vote

1996: elected in run-off against Communist Party candidate Zyuganov

Won 35.2% of the vote in the first round

1999: resigned early to appoint Putin

Presidential Elections in Russia’s “Strong President” System Putin

2000: elected with 52.5% of the vote platform:

Strong military actions against Chechen “terrorists” Anti-corruption New nationalism—regain Russia’s international

stature

2004: elected with 71.3% of the vote NY Times: January 9, 2004

Medvedev2008: elected w/ Putin as PM platform

Russia's presidency “The pseudoelection”

THE Russian presidential election on March 2nd was never going to be a thriller.

Its outcome was clear from the moment Vladimir Putin announced his chosen successor: Dmitry Medvedev.

Perhaps decorum might still have been observed by letting one [viable] opposition candidate stand.

But the Kremlin has no time for niceties; it has refused to register Mikhail Kasyanov, once Mr Putin's prime minister, and has also kept out most foreign election observers.

The only two serious candidates besides Mr Medvedev will now be an extreme nationalist, Vladimir Zhirinovsky, and Gennady Zyuganov, perennial leader of the Communist Party.

2004 Presidential Election

 NUMBER OF VOTES

PERCENTAGE

Putin,Vladimir 49,565,238 71.31

Kharitonov,Nikolai

9,513,313 13.69

Glazev,Sergei 2,850,063 4.10

Khakamada,Irina 2,671,313 3.84

Malyshkin,Oleg 1,405,315 2.02

Mironov,Sergei 524,324 0.75

Against all candidates

2,396,219 3.45

Putin’s Russia 1998 economic crisis (Yeltsin legacy) Since 1998, economy buoyed by

Oil prices From $11/barrel to $30/barrel By 2007-08 $90-100/barrel Note vulnerabilities, however

Putin’s Russia 1998 economic crisis (Yeltsin legacy) Since 1998, economy buoyed by

Devaluation of ruble Makes imports more expensive

Opportunity for local manufacturers

From 6 rubles to the dollar

To 24 rubles to the dollar Imports dropped ~50%