But Russia Is a Special Case

The Russia Hand

But Russia Is a Special Case

The Russia Hand

But Russia Is a Special Case
New books dissected over email.
June 11 2002 5:14 PM

The Russia Hand

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Dear Anne,

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In the spirit of our exchange, I take strong (though, of course, polite) exception to your saying that our position on the need for good governance was cynical, or that we ignored the subject in our interaction with the Russians. Absolutely not true. It was a constant theme in our policy that Russia wasn't going to make it—or merit international assistance—unless it became an open society with a free press, a healthy civil society, an independent (and uncorrupt) judiciary, an equitable tax system, and laws that protected property and contracts, as well as individual and minority rights.

Not only did we talk about these imperatives at every level—including the presidential one—but we invested a lot of our bilateral aid program in trying to help Russian NGOs, independent media outlets, and local reformers change the bad habits of the past and put in place the institutions of a modern society, economy, and political culture.

Go back and take a look at the sections in the book (at the end of Chapter 2, for example) on what we did, through technical assistance and exchange programs, to promote civil society. This was also a major theme of the Gore-Chernomyrdin Commission—which I believe would have accomplished a lot more if Chernomyrdin had lasted longer (but that gets me into the tricky territory of counterfactual history, and we've got our work cut out for us on the solid ground of the factual). In short, we didn't "look on, smiling," while the oligarchs made out, literally, like bandits in the Great Fire Sale of Privatization (especially, as you say, in the loans-for-shares scheme of 1995-96, when they engaged in an orgy of government-sanctioned insider trading in exchange for their support for Yeltsin against Gennady Zyuganov, the Communist leader).

That said, we'll never know whether Yeltsin would have won without loans-for-shares (that's a counterfactual as well). But I'm confident that it mattered a lot that he did win—and that in the world of either/or choices, that one was crucial for Russia. And while we'll have to wait and see whether (as I'd predict) the oligarchs, as a phenomenon, will fade as Russia moves forward, the Communists are already a spent force.

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Let me turn to the economy more generally. You say that the issue of corruption is the one closest to the hearts of ordinary Russians. I suspect that actually what they most care about is their physical safety, the security of their jobs, their pensions. There too, of course, the end of the USSR was hard on a lot of them—and remains so. And there too, we—the U.S. and the West—didn't make anywhere near as much headway as we wanted to. But it wasn't because we were unaware of the challenge or didn't try to meet it.

I remember (and recall in the book) any number of conversations on all this with Larry Summers (then the undersecretary of treasury, later the secretary—and now president of Harvard) and his right-hand man (indeed, his Russia hand) David Lipton. They tried hard to come up with a strategy for U.S.-led international assistance to Russia (and the other "NIS," or newly independent states) that would not only encourage privatization of the Soviet-era behemoths but would underwrite a "social safety net" to take care of the workers. That aspect of our policy did not (as I acknowledge) work anywhere near as well as we'd hoped. Partly, that was because we couldn't generate as much support for it among our G7 partners as we wanted. Also, it was because the Russians' own approach to privatization left little room for taking care of the little guys; it tended much more—as you've stressed in your two letters—toward opportunities for the big guys. But let me step back and address a larger point here, Anne. A lot of the critics of our Russia policy—including a number of experts whom I respect and even, in a few cases, regard as mentors from earlier years—have either implicitly or explicitly argued that because of all the hardship and corruption associated with fast, one-fell-swoop privatization, Russia would have been better off to adopt a more gradualist or incrementalist approach to dismantling the old Soviet system. I just don't buy it. I think that if Russia had gone more slowly in taking down the old structure, the custodians and beneficiaries and bosses of that structure would have gotten a second wind, fought back, and succeeded in keeping it in place. In other words, it took Yeltsin-the-wrecking-ball to create the conditions for architects and master builders to have a chance to put in place a new system. But it'll take a long time for them to get that project solidly under way.

I made it a point, during the eight years I was in government, to listen carefully to critics, to use their criticism as a test for the premises and results of our policy. And whenever I heard what I thought was an idea coming from the outside that was an improvement on our own, I did my best to persuade colleagues that we should adopt it—or as much of it as we could.

By the same token, I applied a pretty simple test to the criticisms I heard: I'd ask myself, "If we were to do what so-and-so is suggesting—or what so-and-so's critique implies we should do instead of what we're doing—would we be closer or further away from our overall objective?" Applying that test to the go-slow advice with regard to privatization, I was pretty sure that we'd be worse off. Which is to say, Russia would be worse off—it would be more like the old Soviet Union.

On your point about whether Russia is a special case: Sorry, but I'm pretty stubborn on that subject. Of course it is. It's the largest country on the face of the earth—stretching across 11 time zones, across two continents. It's armed with thousands of nukes and, arguably more dangerously, it's leaking nuclear technology to countries like Iran. Moreover, it's undergone this sudden, mega- but incomplete and messy transformation that carries with it immense potential for disaster as well as for a better, safer world. That, in my book (in both senses of that phrase), makes it a special case, requiring special treatment.

That said, I agree with you totally that we shouldn't be making exceptions for Russia on matters like Chechnya (or free press). We've got a lot of leverage over Putin, and we should use it. While I think Bush has come a long way toward continuity with Clinton on some aspects of Russia policy, I think Bush has let Putin off far too easily on Chechnya (largely because Putin has wrapped his scorched-earth policy there in the banner of counterterrorism).

As for treating Putin as an "ally," it drives me nuts to hear commentators saying that's already happening as a result of the NATO-Russia cooperative agreements of recent weeks. Russia is, emphatically, not our ally; it's a partner of our alliance—and that's different. I leave it to you whether that's a matter we should take up in our next round.

Regards,
Strobe

Strobe Talbott was deputy secretary of state in the Clinton administration and will become the president of the Brookings Institution next month.