HOW HE SEES IT Putin's repression carries a high price

By FRED HIATT
WASHINGTON POST
WASHINGTON -- Morality aside, President Vladimir Putin's gradual strangling of democracy in Russia provides a valuable case study in the relationship between freedom and competent governance. So far, as freedom dwindles, competence seems to be losing also. That may have implications for U.S. policy.
History does not suggest a one-for-one correlation between democracy and economic growth. Singapore has restricted political freedom yet built a world-class economy; democratic India is growing quickly now, but for many years it embraced self-defeating economic policies.
Yet it is not surprising that societies that tolerate criticism of the powerful generally self-correct more readily and advance more quickly -- a lesson that Russia seems ready to reteach the world. "It is becoming evident," says Yegor Gaidar, "that those who invented the system of checks and balances were not the stupidest in the world."
Gaidar is a Russian economist and former prime minister, and also one of the world's clearer thinkers. With respect to Putin, he has been at times cautiously supportive, at times moderately critical. But on a recent visit to Washington he was notably gloomy, not only about the decline of democracy but also about the practical consequences.
Though "he was never a very great believer in democracy," Putin came to power in 2000 with a sound economic policy and a pragmatic foreign policy, Gaidar said, and in his first term he accomplished some significant reforms. He did so in a Russia that still enjoyed some checks and balances: media and a business establishment not controlled by the Kremlin; regional authorities with their own bases of support; a parliament with a viable opposition.
Angry protests
These were "more or less entirely eliminated, step by step, through the end of 2003," Gaidar said. So when Putin recently proposed a reform of social programs, there was no one to raise questions: not in Duma committee, not on television, not in any chamber of commerce. The reforms, as it happens, were badly needed but stupidly designed, which became clear only when angry protests broke out across the country. Then Putin retreated.
Now the government is unlikely to try again, and other needed reforms also are on hold -- "a textbook example of how to misuse a window of opportunity," Gaidar said. Macroeconomic policy, well-managed in Putin's first term, is untethered. One foreign policy mistake has followed another. Senior advisers privately complain of drift and uncertainty.
As long as oil prices remain high, none of these problems is likely to threaten Putin's regime, Gaidar said. Russia is a major exporter of oil and gas, and the revenue is enough to paper over almost any mistake.
But those same soaring prices may ultimately be the undoing of the one-party state that Putin is re-creating. Economic development in other sectors is stunted, corruption increases, bureaucratic malfeasance is tolerated and then rewarded. Or, as Gaidar says, "oil prices are strongly negatively correlated to the IQ of the leadership."
If and when those prices do fall, Russians will find that the state can no longer fulfill its promises (to military officers, retirees, teachers and so on) and that independent businesses from other sectors are too weak to fill the gap. It is a familiar arc to Gaidar, who has studied the decline of the Soviet economy from the late 1970s, when the Communist cadres of the late Brezhnev era believed high oil prices would last forever, to Gorbachev's ignominious dissolution of a bankrupt state in 1991.
'Geopolitical catastrophe'
Putin last week called that collapse "the greatest geopolitical catastrophe of the century," and added: "The old ideals were destroyed." But it is perhaps less striking that the KGB veteran would mourn the ideals of the gulag state than that he would seemingly forget its hapless incompetence.
If Putin the can-do tough guy turns out to fulfill only half of that promise, there will be cause for the United States to worry -- about the security of Russia's vast nuclear arsenal, for example, or the reliability of the thousands of missiles that could still destroy this country and the world.
And there is reason to worry on behalf of Russia's neighbors, too, because in foreign policy one mistake can trigger the next. The nostalgia for empire that Putin expresses and stokes among his people triggers interventions (in Georgia, in Ukraine) that end in humiliation, deepening popular resentments, which then provoke the leadership into further disastrous interventions.
X Hiatt is editorial page editor of The Washington Post.