Friday, March 05, 2010

Lucas on ReSovietization of Russia

I'm still taking pleasure and profit from Edward Lucas' absorbing (if depressing) The New Russia (cf. link). I dabbled in Russia issues a bit in the decade of anarcho-capitalism around 1995 and I guess I hadn't really focused on how far Russia had retrenched into a phase of reSovietization (or should it be reTsarification, or are they the same?). Some numbers:
Since reform ground to an almost complete halt in 2003, the private sector has been eclipsed by the growth in the state's political and economic power. ...[T]he share of GDP created by private companies actually fell from 70 percent to 65 percent in 2006. .... Private ownership tends to bring more efficient management. .... Since the attack on the oil company Yukos, modernization has almost halted; annual growth in oil extraction has fallen from 13 percent to 2 percent. State-run giants like Rosnfelt spend their money on more interesting things: politics and acquisitions. ... Stealth renationalization has been one of the sharpest economic trends in Putin's second term. In 2004 the state controlled 11 percent of the voting shares in Russia's 20 largest companies; it now controls 39 percent. ....In 1999 In 2000, 1,200 companies produced 80 percent of Russian GDP. In 2006 fewer than 500 companies were producing that share. In America, 60 percent of GDP comes from smazll and medium-sized businesses. In Japan, 74 percent does. In Russia, the figure is only 17 percent.
Luce, 90-2. This is great, although we may wonder exactly how to relate these numbers with the evidence that per capita income in Russia has grown by a factor of perhaps six since the Yeltsin years (surely a dominant reason why Putin remains big-nation leader most popular with the home folks). A large part of the story surely can be found in the great river of resource wealth that flowed into Russia during the early 2000s, yet we know that resource wealth often does not transfer into per capita wealth.

Perhaps even more important: what does the growth in state-sponsored inefficiency augur for the future? Surely Russia cannot expect to remain strong if Soviet-style ownership generates Soviet-style exhaustion. Surely indeed. But then, the Soviet government (as, come to think of it, the Austro-Hungarian and the Ottoman and countless others before it) was inefficient for a long time before it finally collapsed.

Afterthought--what I really meant was:
Seems to me that what I am writing about here is "the ReBrezhnevikation of Russiaz."

1 comment:

vanzare apartamente cluj said...

The transition from one political system to another is done slowly ... but I think the world needs a strong Russia.