Thursday, January 13, 2011

Window on Eurasia: Russia Rapidly Running Out of Its ‘Soviet Reserve,’ Kagarlitsky Warns

Paul Goble

Vienna, January 13 – The “Soviet reserve” of infrastructure and technology on which Russian officials and the Russian economy have been relying for 20 years is rapidly running out, leaving the country with little choice but to launch a crash program to try to bring these sectors up to speed or face the prospect of further decline, according to Boris Kagarlitsky.
Some scholars, including Kagarlitsky, have been warning about this for more than a decade, but the recent series of technological disasters, including Moscow’s inability to keep the capital’s two major airports open during a snow storm, have attracted broader attention to the problem (
Indeed, as so often happens in Russia, this issue was captured in the form of a joke in which one Muscovite asks another: Where are you going for New Years? Domodedovo or Sheremetyevo, the two airports where so many were trapped for days by a snow storm when they were trying to get out of down.
Kagarlitsky, the outspoken director of the Moscow Institute of Globalization and Social Movements, says that because of the failure to invest in the upkeep and modernization of this infrastructure, “Russian capitalism cannot guarantee a more or less comfortable existence for even its numerically small ‘middle class.’”
At its end, the Soviet Union lagged far behind Western Europe as far as infrastructure was concerned, Kagarlitsky says. “But with the collapse of the USSR, things became much worse.” Roads, heating and water networks, and the production and distribution of electricity “all continued to exist as it were on their own and by inertia.”
Breakdowns became “the norm,” but “modernization of technology and the replacement of equipment took place only under extreme necessity when the old had produced its last kopeck” of profit and could do no more. Until that point, it and the system of which it was a part were allowed to limp along.
That shouldn’t have surprised anyone, Kagarlitsky suggests, because “market economies cope not too well with such problems.” Much of the infrastructure in other countries, roads in particular, was either built by non-democratic governments or by democratic regimes facing the kind of crisis they could overcome only with massive government investment.
The situation with regard to electricity generation and distribution, however, was handled rather better. Western countries continued to modernize this sector, Kagarlitsky says, and “only Russia, an energy superpower according to Chubais continues to live with the technology of the 1960s.”
And it shouldn’t surprise anyone that all this is now wearing out and breaking down. The last straw, he continues, turned out to be “the product of the general industrial decline,” a decline that “did not cease even during the period of economic growth of the first decade of the 21st century.”
It is true that many enterprises renewed their operation during that period, but they did so with “old equipment and technology.” And in the areas of transportation, electricity and heating, “the situation remained at full stop.” The government distributed money, but not enough and for those receiving it “it was easier to paint than to build.”
Things increasingly are breaking down, but “the powers that be continue to consider each new accident as a unique situation. They demand that the guilty be found and punished.” That happens, but “almost no one is able to say public that the system itself is guilty” and to force the powers that be to act on that reality.
Today, Kagarlitsky says, “Russian infrastructure and industry is working on the basis of the potential laid up already in Soviet times.” He notes that one of his colleagues had joked that “the Soviet Union was prepared to survive an atomic war because it had over-engineered everything by a factor of five or ten.”
Well, Kagarlitsky continues, “an atomic war did not happen; instead of it, liberal reforms attacked, the consequences of which turned out to be approximately the same as after a major military defeat.” The only difference, he says, is that “after a lost war, a country rebuilds, but with us, the reforms are called successful and continue to be carried out.”
“Sooner or later, the Soviet potential will be exhausted,” he says, suggesting that we have “already approached this end.” The situation with regard to science, education and culture is “just the same, [and] several years from now, we will cease to complain about the brain drain of scholars and artists” because “there won’t be anyone left to leave.”
There is only one good thing about all this, Kagarlitsky concludes: “in such a situation, radical changes are inevitable.” But “it is too bad that one can no longer live by spending one’s inheritance,” which is what Russia and Russians have been doing in effect since the Soviet Union collapsed.

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