Russia’s Disparate Economic and Political Approaches

Francisco A. Laguna & Jennie Linder Cunningham

Last week, we looked at Russia’s economic activity in the developing world.  Today we examine the country’s internal and global political stances. Although Russia has increasingly liberalized and privatized its economy over the past few decades – moving toward a more capitalist economic format – the state has retained a great deal of control over not only the political sector, but over economic actors, such as individual entrepreneurs, firms and companies. This development remains disconcerting to observers who predicted that a more open economy would, by necessity, give way to moderate trends in the political sphere as well.

Red Square at Night Photo Credit: Tal.smart  via Wikimedia Commons

Red Square at Night Photo Credit: Tal.smart via Wikimedia Commons

Recent news details a number of increasingly authoritarian Russian policies both at home and abroad. Russia’s draconian measures include the arrests of dissidents (a phrase that is being used interchangeably with “terrorists” by other authoritarian regimes) and restrictions on rights for gay citizens. The 2006 murder of journalist Anna Politkovskaya, an influential critic of the Russian government and defender of victims of the state, brought to light on the world stage the dangers of dissension in 21st Century Russia. In the years since, a pattern of government intimidation toward critics has emerged, and the number of incidents and totalitarian measures designed to suppress freedom of expression have compiled. Some key examples:

Russian Protest Photo Credit: Ilya Voyager via Wikimedia Commons

Russian Protest
Photo Credit: Ilya Voyager via Wikimedia Commons

●          2009: Suits against Russia account for over 25% of all cases filed in the European Court of Human Rights.

●          October 2010 and April 2011: The European Court of Human Rights fines Russia for violating European Convention articles by over 150 bans on gay pride events. The Court also fines Russia for the disappearance of two Chechens by the Russian military.

●          December 2011: Legislative election results are disputed by domestic and foreign press, observers and political activists. Protests follow.

●          December 2011: President Putin announces that he intends to run for president again in 2012. This means he will have served as PM or President for 12 years. Massive protests follow, and a number of protesters are detained.

●          May 2012: Protests held before and on Putin’s inauguration. Violent clashes occur between protesters and riot gear-attired police with about 520 arrested and 80 injured.

Protest against Russia's Banning of Moscow's Gay Pride Photo Credit: Peter Gray via Wikimedia Commons

Protest against Russia’s Banning of Moscow’s Gay Pride Photo Credit: Peter Gray via Wikimedia Commons

●          June 2012: Putin passes a bill ahead of rally planned in protest of his continued rule. The bill imposes fines of 300,000-1 million rubles (~ US$ 90,000-300,000) for protest organizers and participants.  The average annual salary in Russia is estimated at 511,000 rubles (US$ 15,286).

●          August 2012: Members of female Russian punk band Pussy Riot are sentenced to two years in prison for “hooliganism”: performing a song critical of then-PM Putin.

●          June 2013: Putin signs a bill banning the “propaganda of non-traditional sexual relations to minors” following a number of violations by the government of the rights of gay citizens. Measures include bans on pride parades and fines on gay rights groups, and preventing NGOs from registering.

●          September 2013: “Individual” protests held during G20 Summit in St. Petersburg, ostensibly in order to avoid police crackdowns on mass protests.

Patterns indicate that Russia is moving in a direction toward establishing resource security and an authoritarian state apparatus.  Until its recent emergence as the on-going broker of the Syrian chemical weapons crisis, Russia seemed far less concerned with its international reputation. Perhaps international standing will matter less if resource security is established for the foreseeable (or even short-term) future. The situation certainly bears continued monitoring, and it appears that Russia is once again at a critical juncture in terms of regime direction: whether the Russian democratic state will regress, continuing to become repressive and hostile towards dissention; or whether popular protest will be able to influence the state. However, with consistent state control over firms, especially those investing in resource and materials projects in the developing world, the potential for markets and the economy to promote regime change becomes unlikely.

TransLegal works in Russia to understand local laws and regulations governing how to do business in the Russian Federation.  Call us with your questions concerning Russia.

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