Russia Year Zero

Cat eating scraps from pizza box. May 24, 2016, Petersburg. Photo by the Russian Reader
Cat eating scraps from pizza box on May 24, 2016, in Petersburg. Photo by the Russian Reader

Zero Sum
When nothing is produced, all power belongs to the man who divides and distributes
Maxim Trudolyubov
Vedomosti
May 27, 2016

It is probably already clear to everyone that the implicit “social contract,” about whose existence it was customary to natter in the fat years, was a hoax. Rejecting political subjectivity, ordinary folks and not-so-ordinary folks, big business, and regional elites were able to enrich themselves and, in the consumerist sense, converge with Europe.

It was not, however, a one-off deal with a perpetually fixed rate of profit, but a protracted process. We voluntarily became political zeroes. We gave up free speech, the right to elect and be elected, and the right to demand accountability from our politicians, and part of the population gave up the right to funded pensions. But the unit of prosperity we got in return was given to us not as property but was lent to us. Now the government has collected the debt. The zeroes remain, but the unit will soon run out. The government has no other sources for funding projects, but unpredictable and expensive projects—military campaigns as in Syria, for example, and infrastructural projects like the Kerch Strait Bridge—are the whole point of Russian politics.

The authorities supported the population during the crisis of 2008, but by 2011, dissatisfaction with government policy and the Putin-Medvedev castling move had sparked protests. The Kremlin learned its lesson, and it is ordinary people who are now primarily bearing the burden of the crisis, not the state. Having surrendered their rights to the Kremlin, people will now have to surrender not only their pension savings but also their savings accounts and, so to speak, the fat they have saved up on their bodies if they do not decide to take back their political rights. People’s well-being is, in fact, the “source of growth” that President Putin has asked his economic advisers to find. Actually, he was kidding: the source has never been lost.

When the president, in May 2016, summons his economic council, having forgotten about its existence for two years or so, and says the country needs new sources of growth, how are we to understand this? How were we supposed to understand his proposal to reduce economic dependence on the oil price, which he voiced in the autumn of 2015? It is like offering to grow oneself a new liver after sixteen years of binge drinking.

The Kremlin has created the current situation by consistently rejecting any measures that could have, long ago, reduced dependence on oil and generated stable sources of growth beyond the extractive and defense industries. It is impossible to fix in a month what has been done over sixteen years. Moreover, the very same people have been summoned to do the fixing, people still divided by irreconcilable contradictions. What joint effort at seeking ways out of the crisis are Alexei Kudrin and Sergei Glazyev capable of mounting? The sum of their efforts will inevitably be zero.

It would appear this zero quite suits the Kremlin, as economist Konstantin Sonin argued in a recent interview with Slon.ru. Incidentally, efforts are also needed to maintain zero growth, and those efforts are being made. Certain malcontents might not like the “zero” economy, but the Kremlin really likes it, because it strengthens the power of the front office, where decisions about redistribution are made. When nothing is produced, all power belongs to the man who divides and distributes.

Translated by the Russian Reader

The 501st: Russian Death

russian death
“Russian Death”

‘Sociologist Denis Volkov from Moscow’s independent Levada Center pollster, on the other hand, says the bill is unlikely to make Russians more wary about what they post on the Internet. “Most people are not aware of these laws,” he says.’

Ha-ha. It’s good that reporters are forced to turn to “sociologists” and “pollsters” for quotable quotes, and that the Putinist state decided at some point long ago it would pollocratize everyone and their cousin into submission, because otherwise the “independent” Levada Center would have had to pull up stakes long ago and move to Nevada to start calling odds on the trifecta at Santa Anita racetrack.

I have already seen the chilling effect that the bill and the generally malignant, soul-destroying climate of the last year or so have had on what people talk about politically (or not) in daily life, much more dare to post on the Internet, e.g., Russia’s role in Syria, which absolutely no one I know has discussed, publicly or otherwise, under any circumstances for a very, very long time now. And that is just the top of the list.

A fair number of Russians, young and old, know very well how to read signals coming from on high and when to keep their mouths shut. Or how to substitute abstract, self-important chatter or furious trivial pursuits for meaningful conversations about what is happening in their country and what to do about it. Now is one of those times, and it is absolutely depressing.

All it will take is a few more “light touches,” and the country will essentially be dead, that is, waiting for its Supreme Leader to kick the bucket (when? twenty years from now?) so it can rejoin the rest of the world and resume building “democracy,” “capitalism” or whatever it has been pretending to do the last twenty-five years.

Photo courtesy of the Facebook page of Russkaia smert’ (Russian Death)

Nice Work If You Can Get It

Oleg Derispaska
Oleg Deripaska. Photo courtesy of deripaska.com

“I believe that it takes just 100 people to change a country for the better provided that these people are driven professionals capable of creating something new. I am sure that in Russia there are far more than 100 such people, so let’s join forces and work together.”
Oleg Deripaska

_________

Deripaska’s Company Releases Sales Figures for “Olympic” Apartments
Natalya Derbysheva
RBC
May 27, 2016

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Mockup of the Sochi Olympic Village’s Coastal Cluster. Photo: Andrei Golovanov and Sergei Kivrin/TASS

Oleg Deripaska’s company RogSibAl has sold 20% of the luxury apartments it built on the Black Sea coast in Sochi for the Winter Olympics. The company believes this is a good result. 

RogSibAl, a subsidiary of Oleg Deripaska’s Basic Element, built 2,700 luxury  apartments on the Black Sea coast for the 2014 Winter Olympics in Sochi. Athletes lived in the apartments during the competition. According to Vnesheconombank, the project’s budget was 25.3 billion rubles, 22.3 billion rubles of which RogSibAl borrowed from Vnesheconombank.

The coastal Olympic Village is now known as the Imereti Resort District. It consists of four quarters, the Coastal Quarter, the Maritime Quarter, the Park Quarter, and the Reserve Quarter. Apartments are available for purchase in all four quarters. The price per square meter ranges from 152,000 rubles to 195,00 rubles [approx. 2,070 euro to 2,650 euros per square meter—TRR].

Since the apartments went on sale in 2013, 20% of them have been sold, a Basic Element spokesman told RBC, meaning that over 500 apartments in all have been sold. Basic Element’s spokesman added that the company had sold 118 apartments from January to May 2016.  The company plans to have sold 350 apartments for a total area of 25,000 square meters on the year.

Basic Element has been renting out the unsold apartments. According to the company’s spokesperson, the rental demand for the 2016 summer season is 97–100%.

The sales figures are worse than what Basic Element had planned in 2011. Igor Yevtushevsky, RogSibAl’s general director, had then told Vedomosti that the company was planning to sell 50% of the apartments before the start of the Olympics, and the other half in 2014–2015.

Basic Element’s spokesman said it would be unfair to compare current sales figures with projections made in 2011.

“The project has undergone big changes,” he explained.

The company cites data from the MACON Realty Group, according to which 387 business- and luxury-class real estate transactions were concluded in Sochi from January to May 2016, meaning that the Imereti District’s share of this business was 23%.

The government has discussed the conditions of restructuring the loans issued by Vnesheconombank for building Olympic sites, RBC’s sources told it earlier this week. A federal official explained that Deripaska’s companies were in the most complicated circumstances in terms of loans, since the demand for apartments was not great.

Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov
Sochi Olympic Village. Photo courtesy of Nikita Kulachenkov

Basic Element has not disclosed the figures of the income from its sales of the properties. Its spokesman did say, however, that all the proceeds were being wholly turned over to Vnesheconombank in repayment of the loan and that RogSibAl had been fulfilling all its obligations to the bank.

Given that sales usually begin at the design and construction stage of a property, 20% sales in the second year after a property has been operation is hardly satisfactory, argues Marina Udachina, director of the Institute for Innovations, Infrastructure and Investments. According to her, the situation is partly due to a slowdown in economic growth and a reduction in the demand for luxury properties.

__________

Nikita Kulachenkov
Facebook
May 27, 2016

Only 20% of the apartments in the Olympic Village have been sold in two years.

Here is what we wrote about this a month before the Games:

“The site is being built by oligarch Oleg Deripaska, one of the few private investors in the Olympics. Only he is building with public money. Twenty-two of the twenty-five billion rubles in the project’s budget has been secured with a loan from state-owned Vnesheconombank. Derispaska’s company is planning to pay back this money by selling the village as a residential complex after the Games. It will be hard for them to find buyers. A single bed in the village costs as much as a two-room flat in Moscow.”

Of course, the crisis, sanctions, and being “surrounded by enemies” have inevitably led to a drop in demand for fairly pricey holiday apartments. On the other hand, this was offset by the fact that demand was supposed to shift to the domestic market from Greece, Cyprus, Turkey, and other countries where housing had become almost twice as expensive for Russians.

As a result, sales did not take off, which is a pity. I know that after the Games a good person, familiar to a lot of my people on my wall, worked on the project.

We can also add to this news the latest about Sberbank, which after agonizing for a long time has today finally sold the Mountain Carousel ski resort on the installment plan to the former governor and current minister Tkachyov* and his young but quite talented son-in-law. The joke there is that Sberbank invested 25 billion rubles into Mountain Carousel, while Vnesheconombank loaned it 55 billion rubles. Vnesheconombank fiercely resisted the sale, because it is one thing when Sberbank is in hock to you to the tune of 55 billion rubles, and quite another when it is Tkachyov and family. Apparently, Gref is tougher and stronger than the moribund Vnesheconombank, although it does not make our lives any easier.

Since for some reason business has not been booming at nearly all the former Olympic sites, the government has authorized the repayment of Olympic loans over a period of 25 years at a reduced 5% interest rate. And to keep Vnesheconombank from kicking the bucket altogether, the Finance Ministry will give it another 150 billion rubles straight from our pockets.

I probably do not need to remind you of the total amount that we, the taxpayers of the Russian Federation, paid for the construction of all these “great power” bells and whistles.

P.S. I’m going to do a little populism practice. Anyone in Russia want a twenty-five-year mortgage at five-percent interest? Ask Tkachyov, Potanin, Deripaska, and Vekselberg “how.” )))

Translated by the Russian Reader. Thanks to Alexei Navalny for the heads-up. This post should be read in tandem with my post for May 25, 2016, “The Decline Has Gone Uphill.”

* On August 2, 2012, Tkachyov announced plans to deploy a paramilitary force of Cossacks in Krasnodar Krai, beginning September 2012, as vigilantes to discourage internal immigration by Muslim Russians. In a speech to police, he stated, “What you can’t do, the Cossacks can. We have no other way—we shall stamp it out, instill order; we shall demand paperwork and enforce migration policies.”

Source: Wikipedia, New York Times

The Life of Eygeny

Evgeny Lebedev, publisher of The Independent
Evgeny Lebedev, publisher of The Independent

While having a gander this morning at how Novaya Gazeta, Russia’s premier liberal newspaper, has been covering the Syrian conflict in recent months, I stumbled across this op-ed piece, essentially an open letter to the British establishment, dated November 6, 2015. Published in the (mostly nonexistent) “English version” of the paper’s website and headlined “Britain must make Vladimir Putin an ally in the disaster that is Syria,” the piece is attributed to “Eygeny [sic] Lebedev, Publisher, The Independent, London.”

To cut to the chase, Evgeny Lebedev (his actual name) who has dual UK-Russian citizenship, it transpires in the piece, wants Britain to make common cause with Russia against the Islamic threat, to wit:

“There may be up to 7,000 Russian nationals who are in Syria as a result of being radicalized. Moscow, not a multicultural city in the way that London is, and run by an administration that is much more militarily decisive because it doesn’t put all big decisions to Parliament [sic], is clear: these terrorists must be killed, before they return to Russia to wreak havoc.

“On that point, Britain and Russia should be of like mind. We, too, know that there are many British citizens who have been radicalised and, for unfathomable reasons, decided to flee to this anarchic region and fight against all the things readers of this newspaper take for granted: democracy, peace, civilization.

“We have common cause with the Russians [sic], a common enemy. The biggest threat to humanity today is cancerous, Islamist ideology that is growing fast right across the world—one that claims, with what truth we don’t yet know, to be behind the weekend’s tragic plane crash in Egypt’s Sinai desert.

“Not for nothing did the head of our [sic] security services say last week that the terror threat in Britain is the highest it has been in his 32-year career.

“Destroying this cancer, or plague, at source could hardly be more worthwhile or urgent; and yet, rather than work with the Russians [sic] to do this, we seem intent on cutting ties instead.

“Britain should not be leaving it to the French to mediate between Russia and the West. For all the greatness of this island nation, for all its hard and soft power, there is a laxity in our [sic] approach to the Syrian crisis.”

If you want to find out more about the exciting life of the fine fellow who penned this, avail yourself of Wikipedia’s bio of the man.

I think your eyes should pop out of your head when you realize that the son of a KGB First Chief Directorate spy and Russian oligarch is nowadays a respectable man about town and media mogul in London, the exact same place where his wealthy dad used to do his spying back in the bad old days. But then again, neither you nor I are as worldly as publisher Lebedev and his dad, so what do we know?

Photo courtesy of Wikipedia

Darja Serenko’s Quiet Picket

Picketing the Everyday
Marina Simakova
OpenLeft.ru
May 7, 2016

Quiet Picket, a recent initiative by Darja Serenko, teeters on the verge of artistic intervention and protest action. Every day, Serenko boards public transport (often, the subway) bearing a new placard inscribed with an extensive message. Its purpose is to invite people to engage in a discussion. Serenko thus explores the space of communication itself: the distance between placard and recipient, and how potential interlocutors navigate the distance. So far she has produced fifty-four placards, gone through six markers, and directly communicated with ninety-three people. Marina Simakova spoke with Serenko about the background of the action and its effects.

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Darja Serenko: “I want to carry it myself.”

Tell us how and under what circumstances the idea for the action occurred to you. What was the occasion?

The action grows out of several occasions. On the one hand, the arrest of Ildar Dadin; on the other, the story with the itinerant exhibition {NE MIR}, when we artists were detained by police while carrying our artworks down the street. I had been contemplating a solo picket for quite a long time. I had a dream of doing an ordinary picket, holding a placard at chest level that would resemble the headings in children’s encyclopedias: “And did you know that…” But ultimately a kind of reformatting of the very principle happened in my head. My understanding of it changed.

And what defined its format?

I was riding the subway after the closing of a {NE MIR} exhibition. I had grabbed a small poster by the Lights of Eirene movement. It featured the famous photo of John Lennon and Yoko Ono during their Bed-In for Peace, and next to it, a current photograph in which similar looking people were lying in approximately the same poses. I was carrying the poster unfolded so it would not be crumpled, and I noticed that everyone in the subway car was looking at it. It dawned on me then and there this was the perfect form of communication. It was completely unobtrusive.

Why did you decide to do it alone, without friends? Did you ask anyone else to join you?

I said from the get-go that the format was open. Two young women joined me, but each has changed the format to suit her. One of them, Sasha, joined about ten days ago. She has attached a placard to her backpack (it comes out more static), and she has been traveling with the same placard for a week. On the other hand, she usually prints it out, and it contains references. The second young woman, Valeria, has also been doing a quiet picket on public transport. She wrote me to ask my permission, and of course I agreed. I have asked the young women to share photos of their placards and stories about what happened as they are able. In no way do I want my action to smack of a manifestation where “I, the performance artist, march forth and educate people.” That is not how it is. Although I do conceive of it as an educational project.

So your action could go viral?

It is difficult to talk about a virus when there are only three young women. But this format really is networked, simple, and palatable. It also functions without me.

How has it been documented?

On VKontakte and Facebook, and a bit on Instagram.  I have a small public page on Vkontakte, and I post a written report on my personal page on Facebook every afternoon or evening, when I have a free minute. I try and describe the situations, the conversations, and the behavior, both my own and that of the people with whom I interact. I also post photographs of the placards.

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“#quietpicket is when you feel discouraged and your arms fall.” In Russian, the expression “[one’s] arms fall” means to “feel discouraged.”

And is someone watching and photographing you?

Yes, constantly. Stealthily, very politely. If people photograph at close range, they always ask my  permission. Actually, I have got used to thinking of my action as a tape. Today, something like two hundred people wrote me asking what the action was all about. They had not been following it, and I already find it hard to conceive it any other way and explain it all in a jiffy, because some things were improvised and then they caught on. The format of the action has been changing.

How has it changed?

Initially, I had planned to make a placard early in the morning or the night before, ride around with it for a day, and make a new one the next day. I could not imagine subsequent interventions into the placard. But then I sensed the need to alter it depending on the reactions, to write and draw something extra, to explain something on the back. First, the placards were one-sided, then they became two-sided, and then I started doing several narratives within a placard.

After hearing why I was doing this, one of my accidental interlocutors said, “Oh, I get it. You are making a social alphabet.”

Yes, you could say that as well, and so the alphabet format emerged in my action. I want to put together an entire alphabet. Yesterday, I traveled with Г, for gomoseksual’nost’ [homosexuality], and today it was Ш, for shovinizm [chauvinism].

There is also a storyline involving poems I write on the placards. They can be connected with the topic of the placard, as stated on the other side, or they might not be connected. For example, I have been riding around with texts by the poets of the Lianozovo School, the poems of Vsevolod Nekrasov and Igor Holin, and I have been telling people about poetry. And when people ask me whether I think they are poems, I say that of course they are.

Sometimes, the text on a placard is arranged like a dialogue. There is an enquirer of sorts and a respondent.  There was a photo stand-in placard with holes for the eyes and mouth on which I wrote about the social status of women. The allegory in this case was simple: almost any face could be placed on the placard. But, actually, each placard turns out different from the others.

The last few days I have been stitching the sheets of paper together with thread, because I have run out of tape. (I use A3 sheets, which I combine into one big sheet.) It is an excellent means of representing a placard, because while I am stitching it together, I can turn it over and still remain focused on some task.

Sometimes, I also sew a new placard to an old one. This is a palimpsest placard, and the one is visible through the other. The placards thus form strange seams and montages.

I now always have a pile of posters in my bag.  If I see a person is reacting to the placard I am holding, and realize that I want to say something to them, I take another placard from my bag and sew it to the first. When I was riding around with the placard “Our government is fabricating [in Russian, “stitching up”] yet another case against yet another political prisoner,” I sewed it as well I could, in several rows, with rough stitches. By the way, I have been stitching the alphabet placards into a single notebook so later you can flip through it.

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Darja Serenko, Photo Stand-in Placard on Social Status of Women (Quiet Picket), 2016

How do you think up the texts for the placards? Do you take advantage of items in the news?

Everything is unstable when it comes to this, too. For May Day I made a topical placard, and after Pavlensky’s action [when the artist summoned sex workers to his court hearing as witnesses—OpenLeft] I made a placard about prostitution. But there are issues I simply have to cover, so I conceive of Quiet Picket as an educational project, albeit semi-ironically and semi-seriously.  Although it happens that I see my action as a kind of monstration. I ride in the subway, look at people, and think I would like to cheer them up.

Besides the fact that the project is educational, how do you define it for yourself? As a series of political art performances or as a civic initiative?

I see it as a continuation of my own work as a poet. In the poetry I have been doing, I spent a long time trying to achieve some kind of interaction: I took readymades and inserted them into poems. I think this know-how has influenced Quiet Picket. I am not saying that Picket is a purely poetic endeavor, but thanks to poetry the placard itself has greater opportunities for communicating. And the aspect I cannot keep track of in poetry, the aspect of reading [meaning the reader and her interaction with the poetic text—OpenLeft] is a process I can observe in this case. I see the person’s eyes running over the text, and at the same time she can address me, while I observe how her interpretative mechanisms function, and I can influence them. Quiet Picket takes place in this gap, in the distance between the person and the placard.

Have you thought about urban studies? After all, your action is nothing less than an intervention in one of the most important urban infrastructural spaces, an intervention that would let you get a feel for certain problems, study the behavior of passengers, do work on communications, and so on.

I might prove insufficiently competent as a researcher in this field. I have been trying to document everything I do, and perhaps the outcome will be an article or essay I write. I have not drawn any conclusions for the time being. My research involves collecting information and gaining the know-how of conversing with people on pointed topics that many of them find painful.

There is a rather glaring contradiction in your action. On the one hand, it lays claim to a certain intimacy. It summons a man in the crowd to have a private conversation; it invites him to a politicized discussion. On the other hand, it is very public and open to multiple counter-statements. Could you comment on this?

I don’t see a contradiction here. The fact is that the star of my action is the person who has brought herself to engage in reciprocal communication. She is the master of the situation, not me. She defines her own borders. She can approach me and whisper something in my ear, or she can holler at me from the other end of the subway car, aware that everyone will hear her and thus let other people get involved. It has also happened that a person has asked me to exit the car and have a chat. In that case, I obediently go with him and talk.

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Darja Serenko in the midst of Quiet Picket on the Moscow subway

If we shift the focus from the action itself to its subject, meaning you, we can detect yet another problem. At first glance, you appear as a naïve angel in this action. Eyes downcast, silently but persistently, you broadcast your appeal to people. Prepared for any reaction, you throw yourself at the mercy of angry, tired subway passengers. There is a certain victimhood about all this, almost evoking associations with the holy apostles. At the same time, we can look at you in a different way, as an artist working in the aftermath of Situationism and rationally exploiting the temporal distance. So you are protected from the man in the crowd by theory and your own stance, which have found their own places on your placards, while your potential interlocutor, the so-called man in the street, simply has nothing to oppose to you. You thus possess a certain power from the outset.

First, the image of me as meek silent angel is not true. It has been conjured from a photograph of me that has become quite popular. Usually, I don’t look that way. Second, yes, I have a background in culture, a knowledge of manipulative devices, and a set of readymade arguments. There is no getting away from it, but in the process of communicating I still feel unarmed and naked. The things people say, their experience, and the situations they reference have often stumped me. It has happened that I have nothing ready to say to them.

You assumed this experience would change you, pose new questions, and, perhaps, even force you to undergo a kind of metanoia.  Or am I wrong?

I haven’t had the time to keep track of what has been happening to me. But as a woman and feminist, I do think about my own feminine subjectivity (and objectivity). The placard is an amazing agent. When I use the placard to broadcast a feminist agenda, which I do quite often, I am simultaneously the subject and author of the placard and its object.  When I have to dialogue with someone on the topic, I have to act as a subject. So I balance between these points like a pendulum, and this affects me. Of course, I know about the experiments of artists whose bodies, including social bodies, have become sacrificial bodies. But I am faced primarily by the task of a cultural worker. I really wanted and still want to tell people about certain facts. It pains me these facts are hushed up, many people don’t have access to them, etc.

And why should people believe what you tell them? The legitimacy of your claim to know the facts is supported by what? Are you appealing to the status of cultural worker?

Since my format is encyclopedic, I appeal to sources. You will have noticed the references on my placards. People and I often google something: they verify the information on the Internet. I realize that the informational field is infinite, and for various reasons people often deal with only a fragment of this field. I offer them an alternative.

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Darja Serenko, “This is how our government has been fabricating yet another case against yet another political prisoner” (Quiet Picket, 2016)

The action has been running for five weeks, and you certainly have managed to collect the most incredible textured. Could you tell us about the most memorable, unexpected or personally important incidents during the picket? I will phrase my question even more openly. Tell us about whatever you would like.

For example, an elderly woman read my placard about political prisoners and thanked me. We were sitting opposite each other in the subway, and she told me about her life. She was a medical worker who helped athletes recover after injuries. On the back of my poster was an old poster, the May Day poster, on which the phrase “Thank you for your hard work” had been written.  She then asked me to exit the subway with her and offered to reward me for my work by having a look at my back and spine.

How long are you planning to continue the action?

For a year. I have a palpable dream that one day I will hit on the right phrasing, the right interactive possibility, and a person will want to make a placard in response right in front of me—as a creative act, as a statement, as an expression of contempt for me or, on the contrary, out of a desire to express agreement or disagreement.

Translated by the Russian Reader. Photos courtesy of OpenLeft.

Breaking Bad

The Vicious Circle of Bad Governance
Vladimir Gel’man
Vedomosti
May 17, 2016

Why is the quality of governance in Russia and some other post-Soviet countries much worse than we would expect based on their level of socio-economic development? According to numerous international assessments of governance, they are sometimes on a par with the poor and underdeveloped countries of the Third World, lagging behind similar countries in Eastern Europe. They are typified by bad governance, whose symptoms are perversion of the rule of law (the unrule of law), endemic corruption, the low quality of government regulation, and ineffective government policies.

Post-Soviet bad governance appears not as a grab bag of discrete, particular defects but as a consequence of the prevailing political and economic order in these countries. Its most vital feature is the fact that rent extraction is the principal purpose and main content of governance at all levels. So the mechanisms of power and governance tend towards a hierarchy (the “power vertical”) with a single decision-making center that seeks a monopoly position, while the autonomy of economic and political actors within the country vis-à-vis the center is relative and can be arbitrarily altered and/or restricted. In turn, formal institutions (constitutions, laws, etc.) are a byproduct of the allocation of resources within the power vertical. They are meaningful as rules only to the extent they contribute to rent extraction. As part of the power vertical, the government administration is divided into organizations competing for access to rent and informal cliques.

Bad governance is the most important means of maintaining this political and economic order. Since the state is governed merely in order to extract rent, corruption in its various shapes and manifestations is an essential device for achieving these goals, while the poor quality of regulation and perversion of the rule of law contribute to the stability of the power vertical. Bad governance acts as a stable but ineffective balance, which is restored even in instances of deep external shocks such as regime change (e.g., Ukraine and Kyrgyzstan), while the state apparatus proves less and less capable of implementing structural reforms for improving government efficiency.

What are the causes of this state of affairs? What the post-Soviet countries have in common has been a coup d’état from within on the part of rent seekers in the administrative apparatus and influential members of the business world personally associated with them. In an effort to privatize benefits and socialize costs in the process of governing, these players have deliberately and purposefully established and maintained inefficient rules of the game. But since their planning horizons are short-term due to the risks of the regime’s being overthrown and the questionable prospects of a smooth succession, they have behaved, in Mancur Olson’s terms, like “roving” and not “stationary” bandits. They plunder the resources of states at all levels of governance, and the term kleptocracy, previously used to describe African countries, comes across not only as an op-ed writer’s gimmick but also as a fair description of the rule of a number of post-Soviet leaders. (In particular, Karen Dawisha analyzes the Russian regime in these terms.) The end result is a vicious circle. The machinery of bad governance has been reproduced under different rulers, and attempts to overcome it (if such attempts are made) have run into strong resistance and with a few exceptions (such as Georgia during the presidency of Mikheil Saakashvili) have produced modest outcomes in terms of the quality of public administration.

In the work of researchers and the jargon of experts and consultants, bad governance (not only in the post-Soviet countries) has usually been associated with the “poor quality of institutions” and an “unfavorable institutional climate.” Although the poor quality of institutions is an attribute of bad governance, it is merely a consequence of the poor quality of regulation and the absence of the rule of law, and not the cause of the phenomenon. Institutions themselves are the outcome of the balance of forces and the interests of key players. Substituting the diagnosis of a disease with a description of one of its symptoms leads to incorrect courses of treatment. The desire to change only formal institutions by borrowing advanced foreign know-how or cultivating the best specimens on domestic soil without fundamentally rethinking the political and economic order as a whole either produces no improvements or even changes the situation from bad to worse.

The emergence and establishment of authoritarian regimes in the post-Soviet countries has generated an environment that promotes bad governance. The rare examples of high-quality public administration in autocracies may be briefly summarized by Dani Rodrick’s statement that for every Lee Kuan Yew in Singapore there are lots of Mobutus in the Congo. But electoral authoritarian regimes (such as Russia) are the worst option in terms of bad governance. They are typified by the politicization of public administration and economic management, which ranges from mobilizing voters at their workplaces to turning the state apparatus into a political machine for ensuring that voters vote for the ruling groups. As a consequence, a country is unable to develop decent incentives for improving the quality of public administration, in particular, regularly rotating senior personnel and making the upward career mobility of officials depend on achieved outcomes. On the contrary, the power vertical encourages officials to demonstrate political loyalty to the detriment of effective administration.

The paradox of post-Soviet countries is that even political regime change per se does not lead to a rejection of bad governance. On the contrary, it might even exacerbate the disease. Thus, although the fall of the Yanukovych regime in Ukraine in 2014 was followed by the emergence of a competitive democracy, the quality of public administration has not significantly improved since the days of Yanukovych. Often accompanied by a popular mobilization, the conflict among elites preserves the predatory nature of governance, involving rent extraction, even if it does lead to a change of ruling groups. The politicization of government and the economy and the incentivizing of loyalty at the cost of efficiency are inherent to post-Soviet competitive democracies almost to the same extent as electoral authoritarian regimes. However, given a favorable combination of other political conditions, democratization can open up a window of opportunity for the fundamental renewal not only of ruling groups but also the the entire state apparatus by breaking up previous hierarchies and effecting a series of structural transformations that can significantly reduce the detrimental effects of bad governance, if not vanquish it. Only in such cases does regime change not turn into a bad infinity that merely maintains the status quo in government. On the contrary, the entrenchment of ruling groups, limitation of vertical mobility, and restriction of channels for recruiting elites are means of maintaining bad governance: incentives for efficient management of the state and the economy are seriously undermined for the long term.

Although it is unrealistic to expect a rapid rejection of bad governance, numerous experts (e.g., Daniel Treisman) have suggested that as a result of long-term, stable economic growth and a generational change of leaders, the demand for rule of law and increase government efficiency would grow, thereby encouraging a clampdown on bad governance in the course of democratization, within a couple of decades. But how justified are these expectations when it comes to post-Soviet countries? There are no grounds for ruling out a different sequence of events. Governments can continue as before to handle the most serious challenges, avoiding disastrous failures, while maintaining the principles of bad governance unchanged. The emergence of a quasi-hereditary kleptocracy and a succession of corrupt and inefficient governments, focused on the extraction of rent, can put an end to any attempt to limit bad governance. Continuing the medical metaphor, it is worth noting that if a patient burdened by a serious illness not only ignores the advice of his doctors but also leads an unhealthy lifestyle, thus exacerbating his health problems, death is probably inevitable. Unlike individuals, however, states and societies do not die and disappear from the map of the world, however badly they are governed. Dominated by bad governance, they continue their existence, an existence that is often senseless, useless, and hopeless, complicating and worsening the lives of their citizens and increasing the risks for other states and societies.

The author is a professor at the European University at St. Petersburg (EUSP) and Helsinki University. The article is based on the report “The Political Basis of Bad Governance in Post-Soviet Eurasia: Outline for a Research Agenda,” published by EUSP Press. Translated by the Russian Reader. Photo by the Russian Reader

The Decline Has Gone Uphill

Silhouette figures trying to keep a ten-ruble in the air next to an inscription that reads, "Not everything is in our hands." Petersburg, May 23, 2016. Photo by the Russian Reader
Silhouette figures trying to keep a ten-ruble coin in the air next to a stenciled inscription (left) that reads, “Not everything is in our hands.” Petersburg, May 23, 2016. Photo by the Russian Reader

Russia Level with Kazakhstan in Wages
Maria Leiva
RBC
May 24, 2016

In 2015, the average Russian salary, in terms of US dollars, was equal to the level of wages in Kazahkstan, according to data from the Higher School of Economics (HSE). Compared to 2014, the salaries of Russians dropped by almost a third last year.

The observed decline in wages in Russia has led to their drawing level, late last year, with average wages in Belarus and Kazakhstan in previous years, experts at the HSE have calculated in their May monitoring of the populace’s socio-economic status and social well-being. Computed on the basis of exchange rates, the average wage in Russia last year was $558 a month, which is lower than the 2014 level by 34% or more than a third. By way of comparison, in Kazakhstan and Belarus, the average monthly wage, calculated using the same method, was $549 and $415, respectively.

From 2011 to 2015, Russia had the highest level of wages in the CIS, but in 2014, compared with 2013, it dropped by nearly 10%, from $936 to $847. The experts at the HSE note that the gap in economic performance indicators between Russia and certain CIS countries has been constantly contracting. For example, the average salary in Armenia in 2008 was around 52% of the 2015 Russian wage, but by the end of the period in question, it had grown to 60%. During the same period, Belarus has gone from 61% to 75%, and Tajikistan, from 17% to 26%. However, over the same period, the relative positions of Azerbaijan, Moldova, Ukraine, and Kazakhstan have declined.

If we compare the average wage in Russia and Central and Eastern Europe, the wage in those countries has exceeded the average in Russia for the past five years. Thus, last year, the average Russian wage came to 60% of the average wage in Hungary, and 50% of the average wage in the Czech Republic. However, in 2015, Russia came close to the level of wages in Bulgaria during 2013–2014.

Trends in the average monthly wage in Russia, Brazil, and China over the past five years show that wages in Brazil were higher than in Russia last year. Despite the fact that data on wages in China for 2015 have not yet been published, the figures for Russia in 2015 were lower than for China in 2012, 2013, and 2014, indicating the gradual reduction of the gap between the two countries in terms of this indicator.

Last week, Sberbank also reported a fall in the average monthly Russian wage below China’s average wage. The bank’s principal analyst, Mikhail Matovnikov, cited data that the average monthly wage of Russians had fallen below $450 a month, lower than that in China, Poland, Serbia, and Romania.

Translated by the Russian Reader. Thanks to Valentin Urusov for the heads-up.