From: MSN NicknameEagle_wng  (Original Message)    Sent: 4/28/2005 5:14 AM

Mock Liberalism
By Kirill Rogov
Some people are still under the mistaken impression that President Vladimir Putin's state of the nation address was predominately liberal in tone. If we compare the president's words to what is actually going on in Russia, it becomes clear that he was talking about the end of one phase -- the establishment of bureaucratic capitalism -- and movement to the next phase.

By saying that stabilization had come to an end, Putin confirmed that the regime's political contours had already been drawn. The regional and oligarch elites that once seemed so threatening to the president have been deprived of their political rights and besieged by repressive economic measures. Private property rights have been discarded to a significant extent. The world of politics -- much like the world of the media -- is now fully under the Kremlin's control. The list of acceptable parties has practically been closed and can only be adjusted by the presidential administration. Bureaucratic authoritarianism is fed by natural resource monopolies.

After creating a non-liberal regime, Putin is now proposing to liberalize things from the inside. He repeated the word "democracy" over and over in his address. But he let his audience know that his notion of the concept was not the same as his critics', who accuse him of rolling back what they call democracy. Putin sees things differently and is willing to personally explain the aspects and qualities of this concept to the Russia's citizens and economic players.

In essence, the address contained two challenges. The first was addressed to the liberals in the state bureaucracy. Putin called for them to compete with their non-liberal colleagues. This kind of competition, the president believes, should stabilize the state system and make it run better. At the same time, "internal" democracy is designed to legitimize the political order. For example, the proposed media committee in the infamous Public Chamber would merely legitimize, not weaken, the political television censorship.

The second pseudo-liberal presidential message was addressed directly to the economic elite and the public. The president proposed that they accept the new rules of the game and learn to live with them.

On the surface, the initiatives in this part of the address seem to protect property rights and to amnesty capital yet underneath their content looks radically different in the current political context. Thus, reducing the statute of limitations for review of privatizations has little to do with the deals of the 1990s. Most of these have already passed the 10-year mark. As a rule, ownership of privatized property has been restructured several times already, which makes it hard to take away based on a privatization deal alone. The new rule would instead legalize the redivision of property that took place from 1998 to 2004.

There are some gifts that prove to be more trouble than they are worth. The biggest gift of this kind given by Putin's liberalism is his proposed capital amnesty. Owners move capital offshore to get it out of the jurisdiction of Putin, Prosecutor General Vladimir Ustinov and the Basmanny court. There is no reason to think that owners will voluntarily bring capital back within their reach. It is far more likely that the president's liberalization means that the way capital can be invested will be limited, and that capital will be forced to go Russian. The government already has more than enough means to make this happen. It is also more or less clear which Russian banks the president will recommend investors use. After all, the banking system is part of the economic infrastructure that the president would like to see under the state's control.

Kirill Rogov is a columnist for the online newspaper, Gazeta.ru. He contributed this comment to Vedomosti, where it first appeared.

http://www.moscowtimes.ru/stories/2005/04/28/006.html