Wednesday, May 6, 2009

Window on Eurasia: Putin’s Own Words Show Russia Does Not Have a State, Analyst Says

Paul Goble

Vienna, May 6 – Many people are now accustomed to hearing that Russia was a failed state until Boris Yeltsin, and few are startled anymore to hear suggestions that it is a criminal state. But according to one analyst, a recent remark by Prime Minister Vladimir Putin raises the question as to whether there is any state as such in the Russian Federation.
“How can there not be a state in Russia if the building of the state is our chief and general pride?” Yury Magarshak asks in an article in today’s “Vremya.” “How can there not be a state in Russia if state-thinking people form a large fraction of the citizens of the country? [And] how can there not be a state if many Russians remain convinced that the Motherland is a state?”
“Until very recently,” the New York-based Russian specialist on high technology and a frequent writer on Russia’s social and political problems, continues, he “also thought that a state existed in Russia.” But there are reasons to suppose that unfortunately a state does not exist” there (
Of course, Magarshak writes, “Russia is a state in the sense that it occupies a large part of the globe and is a member of the United Nations. But it seems” – and according to Magarshak, Putin has unintentionally acknowledged as much – “that there is no state in Russia which fulfills the basic functions which a state is obligated to carry out.”
During his recent meeting with the Duma, Putin was asked whether it was time to end the flat tax on incomes in order to be in a better position to finance state programs. The prime minister responded by saying that such a step must not be taken because if it were, employers would pay people off the books, “in envelopes,” so as to escape taxation
“Judging by the news programs,” Magarshak says, “this answer satisfied the parliamentarians. But it does not satisfy me.” Indeed, the specialist, who was trained at Leningrad State University says, “it shocked” him because of what it said about the government of the country in which he was born and about which he cares so much.
Throughout human history, he writes, “one of the basic functions of a state alongside providing justice and security for its citizens has been the collection of taxes.” Indeed, for a functioning state, tax collection is “one of the easiest obligations” of central institutions. And if Russia today can’t do what other states have always done, “is it in fact a state at all?”
“But the situation is still worse,” Magarshak says. What Putin said means that “if Moscow were to end the current formal equality of citizens on income taxes, money would circulate in society via the shadow economy, that is criminally and illegally,” and thus be beyond the reach of the authorities.
“In other words,” the “Vremya” commentator says, “the prime minister was not only acknowledging to the entire world that the state cannot collect taxes … but also that it is not even capable of providing for the legal circulation of money in the country,” a situation other officials have conceded by noting that corruption in Russia is comparable in size to the national budget.
In making that remark, Magarshak says, Putin was certainly being “sincere. More than that, it is clear to every thoughtful Russian that in essence [the prime minister] is right: at the present time, the powers that be [in the Russian Federation] are powerless before the criminal world,” a situation that means that “there is in general no ‘vlast.’”
To the extent that is true, how is Russia going to get out of the current crisis? The situation is not encouraging, Magarshak says. Russians did well under Putin only because of high oil and gas prices, a situation that is unlikely to return anytime soon. And the country “does not produce any products which are competitive on the world market.”
Unfortunately, Magarshak notes, “there is no tradition of technology firms of a competitive level that are sending their goods to that market, and there are no corresponding specialists.” Moreover, even if they should “by a miracle” appear, “the presence of the shadow economy” seriously reduces the chance that they will be able to compete with foreign firms.
Magarshak ends his article by acknowledging that “no one in the world for a long time has been surprised by books about Russia with titles like ‘The Creation of a Criminal State.’ And no one is surprised in Russia. But a report that Russia does not have a state at all whether it be criminal, bandit, or thieving – nonetheless is unexpected and sad.”
But he says one “would like to think” that there is a cure for the “disease” Russia suffers from. Unfortunately, given the “seriousness” of the diagnosis, the course of treatment is likely going to require radical steps, including quite possibly the wholesale replacement of elites, even though that too may prove “insufficient.”
What is clear, however, is that both this situation and possible cures “must be discussed, especially during the crisis as the highest priority at all levels from television to the Duma.” That is because, Magarshak concludes, while Russia may not have a state just now, no one, including its citizens, has another Russia to turn to.

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