PARIS — Hugo Chavez’s Venezuela, on the verge of collapse, has ruined the hopes carried by the policies of the far left. Vladimir Putin’s Russia will make a similar demonstration of inanity with those across the political spectrum — those of the far-right, or if you prefer, of extreme nationalism.
The two elected dictators have the same central policy: get the state’s hands (read: their own) back on raw materials. With that gold, they can hand out aid, subsidies and thus satisfy the basic needs of their populations.
Chavez, let’s give him that, nurtured the hope that he could reduce Latin America’s endemic poverty. Putin instead has in mind to recruit the rebellious Slav masses. But in both cases, the statism and nationalism are the same, and brute force is the necessary solution.
“Chavism” failed because the fight against poverty must be done with the economic forces, not against them. This is what French socialists are also finding out: It is the companies that create wealth and jobs. A state, even one that sits on massive oil resources, will not be successful if it cannot encourage private enterprise, diversify it, open it, modernize it. Former Brazilian President Lula da Silva showed that this “social-democratic” way is the only one that works.
Vladimir Putin is also bound to trip over the same incapacity to diversify his country’s economy. Russia’s GDP varies with the price of oil. Half of the budget comes from oil. The banking, energy and transport sectors have remained state property, and inefficient. Corruption is endemic. Capital flight remains huge. Development and research are crippled. Education lacks adequate funding. In its January 2014 Economic Survey, the OECD halved the Russian Federation’s growth potential forecast to 2.5% per year.
But while Chavez threatened “interior” economic forces — storekeepers, businessmen and the small middle class, enemies of the working class — Putin lashes out at “exterior” forces. The two, interior and exterior, are linked of course. According to Caracas or Moscow, they are even combined against them, since they are being manipulated by the Americans.
That is the other similarity between these two extremes: The United States is evil, the Great Satan. Behind every conspiracy is a Yankee. Putin however adds provocation to his faulty analysis when he hits out at his clients. He accuses the Americans and their European lap dogs of feeding the Kiev uprising on Maidan Square, of having fomented the coup that ousted the Russophile President Viktor Yanukovych.
Weight of nostalgia
How can he insult the countries that buy two-thirds of his exports, and who will soon have at their disposal North-American shale gas in abundance? This is another mistake made by these dictators: They believe they can stand up to the whole world and impose their points of view.
Extremists from the left and from the right still live in the past century — before globalization and interdependence. Putin never rid himself of his nostalgia of Soviet power. He still believes that Russia is an empire and can behave as such by invading its neighbors.
Unfortunately for him, there are no more empires in the 21st century. Even the United States and China who, in some aspects, have retained some imperial characteristics, have become dependent economies. Russia, with its ageing population of 145 million, cannot hold such claim against the twice more numerous Americans, a three times more populated Europe, and nine times for China.
Incidentally, a group of economists put an end to the Soviet myth last year in an essay entitled Was Stalin necessary for Russia’s economic development? For a very long time, Stalin’s brutal industralization has attracted the admiration — avowed or not — of nationalists, since the USSR’s GDP per capita had risen from the equivalent of $500 in 1920 to $2,500 in 1940. This, it is thought, is what enabled the USSR to defeat Hitler. The authors not only remind us that the sovietization of agriculture led to the death by famine of 6 million people, but they also calculated that the Russians’ purchasing power would have been similar without the events of October 1917.
This detour in the 1920s and 1930s has other virtues than merely historical ones. Back then, a large number of countries were still mostly agrarian economies. The switch to an industrial model, successful in Britain and the United States, was as necessary in Tsarist Russia as it was in Japan. Today, we are living at a time of another transition of a similar scale: Each country must find its place in a globalized world, open itself, absorb the changes of technology, prepare its population for a variable and unpredictable world.
All countries are facing the same challenge, and it is not an easy one, as the situation in places like Italy or France illustrates. But the key is the same: adaptation, flexibility, pace.
There is still a place for an intelligent state, but backpedalling towards nationalism is an illusion. The fact that Google is more important for Russian households than the Kremlin certainly annoys Vladimir Putin. That said, there is not much he can do about it, except lock himself even more into a regime of Internet crackdown, NGO control and restrictions on the right to protest.
No, occupying Crimea or even half of Ukraine will not prevent the Russian population from finding in the near future that their dictator has been moving rapidly in the wrong direction.
