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Sunday, AUGUST 6, 2000
Putin's Dilemma: Can Bureaucrats Be Trusted?

     STANFORD -- In 1953, after an anti-Stalinist uprising was brutally put down in East Berlin, Bertolt Brecht reportedly remarked that since the East German government was dissatisfied with the nation, it should dissolve the German people and call in a new nation. A joke making the rounds in Moscow these days echoes Brecht's humor. It goes like this:
     "What went wrong with Russia's last democratic election?"
     "Everything. It's not the people who should have been electing a new president, but the president electing a different people."
     President Vladimir V. Putin knows this sentiment well as he watches how government officials charged with strengthening the rule of law and creating a positive climate for foreign investment are instead reviving the specter of arbitrary repression, Soviet style. In the eyes of the country's opinion makers, the "dictatorship of law" that Putin promised to establish in place of former President Boris N. Yeltsin's era of permissiveness, influence-peddling and corruption seems to be succumbing to the law of dictatorship: questionable charges against the independent media empire of Vladimir A. Gusinsky and similar, if less spectacular, proceedings against other representatives of Russia's big business.
     What does Putin actually stand for: maximizing the power of the state or safeguarding the freedom of Russian society? In an Izvestia interview last month, when asked if he was worried that the heavy-handed tactics of government prosecutors squash what little Russia has of a civil society, Putin said: "We have the people that we have, we have the economy that we have and we have the state officials that we have." In other words, because reforms are implemented by officials burdened with the habits and the institutional memory of the old regime, the risk of failure of the entire reform effort is clear. It is here--in Putin's recognition of the inadequacies of the state and society for the radical reform agenda--that we should look for the key to the president's ambiguous political persona.
     Putin sees change toward a modern civil society and market economy as inevitable. He is convinced that reforms must be carried out if the Russian Federation is to stem confederate tendencies, if it is to create a positive climate for business and economic growth and if it is to replace the crooked bureaucracy with one that "defends the citizens' dignity, freedom, security, making it possible for people to earn a living." His legislative agenda for the Duma, some of it already enacted, shows that he means what he says. But his hesitation in criticizing overzealous prosecutors suggests he is reluctant to take sides for fear of alienating state officials without whom the reform process would surely grind to a halt.
     In this regard, Putin is radically different from his predecessor. Yeltsin treated the bureaucracy he inherited from communism with suspicion and disdain. Tolerating it as a necessary evil, he sought legitimacy by fomenting a "cold" civil war between holdovers from the past, who held the government strings, and reform forces, which had not yet had the opportunity to learn governance but were more than adequately represented in the new Russian press. To maintain his position as final arbiter, Yeltsin habitually transferred state assets into the hands of quick-witted and powerful businessmen while diminishing the federal power by ceding it to increasingly independent political elites in the regions. The newly empowered businessmen were then allowed to cut deals with the weakened bureaucracy.
     Putin's own game becomes less opaque when juxtaposed with the policies of Mikhail S. Gorbachev. Unlike Yeltsin, Gorbachev tried to use the levers of the Communist Party state both to bring about radical change and to hold together the Soviet empire. While diminishing the party's grip on power and loosening imperial bonds, Gorbachev's method created opportunities for more flexible and intelligent servants of the party-state to be the first to profit from change. With a few notable exceptions, the apparatchiks proved incapable of adapting to the new environment. In August 1991, as they realized they were digging their own graves under Gorbachev's stewardship, their leaders staged a putsch. The rebellion quickly fizzled, but it lasted long enough to demonstrate that Gorbachev's party-based mandate, based solely on his position in the party, had expired.
     Putin suffers from neither of Gorbachev's fatal flaws: He enjoys a popular mandate of a people no longer beholden to the communist past and understands modern economics enough to be committed to radical reform and to support it with all the authority of his office. But a popular mandate matters less now than it did in the heady days of 1991-92. After almost a decade of stop-and-go economics, a diminishing standard of living, continuing bloodshed in Chechnya and ceaseless fisticuffs between Yeltsin's reformers in government and unreconstructed communists in parliament, tacitly egged on by their cousins in the bureaucracy, reform fatigue has set in. The regions, furthermore, have come to appreciate their independence to an extent that threatens the integrity of the federal state.
     Under such circumstances, reformers need the cooperation of the bureaucracy more than ever. This is why Putin has taken steps to strengthen the presence of federal power in the regions, appointing seven presidential representatives to oversee federal matters and removing regional governors from the upper house of parliament. This is also why he has tacitly encouraged prosecutors and the tax police to contain the power of Russia's big business, even as he is pushing a simplified, super-liberal tax code (a 13% flat tax) that would diminish the role of the bureaucracy in the economy.
     Putin's message to officials of the new Russian state is that the virtual civil war of the Yeltsin era is over, the 10 years since the collapse of communism in Russia have made the return to the past impossible and the country has moved beyond the ideological divisions that tore it apart for more than a decade. There was no better symbolic gesture for conveying this message than to invite both Gorbachev and the mastermind of the '91 putsch, former KGB chief Vladimir A. Kryuchkov, to Putin's inauguration. "Forgetting remembering," however, has its hidden costs.
     Russia's civil society may prove too fragile, if not for the surgery Putin is prescribing, then for the surgeons wielding the state's knife. Should this be the case, it may be too late for Putin to help the patient. Worse still, a career bureaucrat and one who, in the words of one Moscow pundit, has been "pollinated by the KGB," Putin may beget a regime with a dominant KGB gene in its genetic code. The danger lies in some of Putin's advisors. If his former KGB associates form a critical mass around him, their worldview, shaped by the shadowy universe of the intelligence and security apparatus, can fatefully color Putin's take on the world.
     Former Deputy Prime Minister Boris Y. Nemtsov, now the leader of the reformist Union of the Right in the Duma, may have put it most succinctly. Speaking after a recent meeting with Putin to discuss the government's clumsy harassment of big business, Nemtsov sounded both encouraged ("Putin knows what is going on"). and cautious ("He is not sufficiently informed"). The round-table meeting with business leaders that Putin held on July 28 was supposed to clear the air and clarify the rules of impartiality governing the relationship between the tycoons and the state. Whether it did remains to be seen. Even the dropping of charges against Gusinsky does not mark the end of government pressure on his media empire and independent press. Gusinsky is feverishly looking for foreign investors to secure that independence.
     The struggle for Putin has now commenced in earnest. It is a struggle in which the United States and U.S. business interests may have a role to play. * 

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