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Russia - will it be Putin's way?

By Saleem Khan - posted Wednesday, 21 May 2008

Which way is Russia going to go now that Dmitry Anatolyevich Medvedev has taken office as the President of the Russian Federation? Would it be Putin’s way or a new course friendly to the west? Pundits and the media in the west are engaged in a guessing game and are heavily involved in the art of misinformation. The Russian people are optimistic about their future and are anxious to demonstrate to the international community their capacity for teamwork in global affairs. Nevertheless, they are aware of the conflicts in the World and leadership deficit. This, I have concluded in more than a decade of contacts and conversations with the leading educators in the former Soviet Union. This desire for an optimistic future and a more peaceful world has emerged as the dominant theme.

I first went to Moscow and Tashkent in October 1992 on a World Bank mission to introduce market economics teaching and curricula development in the leading economic and finance institutions in the former Soviet Union. The Finance Academy in Moscow and Tashkent University of Economics in Tashkent offered me the opportunity for subsequent visits that continue to date. The Finance Academy in Moscow holds an annual international conference on education where educators and scholars from all over Europe and the CIS countries gather to present their ideas and research on economics/business education reforms. I have been participating in these conferences regularly for the past 15 years.

On my most recent visit to Moscow in March 2008, in meetings with the leading Russian educators, the major topics of interest were Russian self-confidence and the challenge of creating a friendly and hospitable global environment for peace and progress.


From my discussions with the academic community and observations of broad public opinion in Russia, I was impressed with the level of knowledge and degree of sophistication of this society. The regaining of self-confidence among Russians in the creation of a strong economy, a more democratic government, and a more assertive role in international affairs is a valuable global asset which the west must utilise. Statesmen and diplomats should tap this precious asset and create an orderly and equitable world order in the spirit of the 21st century.

Putin’s leadership, though much reviled in the western capitals and media, won the Russian people’s trust and admiration by making Russia strong again and asserting control over national assets.

The Russian people are ready to demonstrate their ability to make substantial contributions to global affairs, if only the global community has the patience and readiness to offer them the opportunity. The election of Medvedev as President of the Russian Federation, according to them, is a significant and logical step to continue economic and political gains made under Putin. They wish to strengthen their economy and show to the world their desire to be a responsible global power, especially in economic affairs. This, they believe, is essential for advancing national goals and the international agenda.

Russian academia’s view of tackling national and international challenges is both constructive and optimistic. People are excited about the post-cold war period prospects of peace and prosperity. The pace of change and its direction - market-oriented economy, democratic institutions and rule of law - to them is a welcome phenomenon. There is much apprehension about massive bureaucracy, corruption, collusion between the civil service and business, and post-election leadership arrangements between the offices of the Presidency and Prime Minister.

There are also concerns about the domination by oligarchical control over Russian strategic assets and its effects on the national economy and social balance in society. They are concerned about western posturing and rhetoric that seek to exploit Russian weaknesses. They wish to avoid such things as a cold-war scenario, an arms race, economic confrontation or geo-political zero sum games.

The academic community’s account of progress and optimism is confirmed by a recent report in The Financial Times. Neil Buckley, a respected columnist, writes that economic growth in Russia has averaged close to 7 per cent during the past ten years.


Strategic economic decisions after the financial crises of 1998, the ruble’s devaluation, and record energy and commodity prices have helped the economy. Economic growth is being sustained by a boom in consumer and investment spending. These factors, writes Buckley, have “produced an extraordinary six-fold increase in GDP in nominal dollar terms during Mr Putin’s two terms to US$1,270 last year.

A country that was almost bankrupt has amassed US$500 billion in gold and foreign exchange reserves - the world’s third largest after China and Japan. Average wages have jumped from $80 a month to about $640 now. A growing consumer class is driving Fords, sipping Starbucks, holidaying in Turkey and shopping at mega-malls loaded with goods undreamt of in soviet times.

More than 14,000 small and medium sized new Russian enterprises have added to the vibrancy of the economy. Academics give credit for this strong economic health and political stability to Putin. Economic activity and political participation are spreading across Russia, beyond the fringes of Moscow and Saint Petersburg, thanks to new investment and democratic reform. These events have, indeed, contributed to confidence building especially among concerned people after their shock-therapy experience of the 1990s.

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About the Author

Saleem M. Khan is chairman of the economics department at Bloomsburg University of Pennsylvania, and former senior advisor to Zulfikar Ali Bhutto, the first democratically-elected president of Pakistan. Dr Khan earned both BA and MA from Punjab University in Lahore, and a PhD from Gutenberg University in Mainz, Germany

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