Don't Fool With Mother Nature

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Have the "Roaring 2000s" as we knew it come to an end in Russia -- forever?

Of course, nobody in Russia wants to say farewell to that glorious and prosperous decade (or at least the first eight years of it anyway). Bureaucrats, politicians, businesses and the overwhelming majority of Russians all benefited to one degree or another from the boom. That is why few in government will admit even the possibility that those years will never return. Instead, we hear the direct opposite from our leaders: The crisis will pass in one or two years, and once oil prices climb again to their previous level, everything will be just like they were in the Roaring 2000s.

According to this argument, the government need not change its fundamental political and economic models. The Kremlin believes that its political institutions, its state-capitalism formula and the power-vertical construction are as solid as Magnitigorsk steel and need not be changed. The only thing that Russia has to wait for is a return of high oil prices, which will certainly happen once the leading economies pull themselves -- and the rest of the world -- out of the crisis and start showing positive growth. Even if Russia will see some modest level of growth in terms of gross domestic product if oil prices rise, as long as its economy remains so heavily based on natural resources exports and as long as its political system remains as closed as it is, the country will never be able to join the group of developed countries that are marked by their high degrees of economic  diversity and development in science, high tech, education, health care and infrastructure.

Our leaders are so attached to the nostalgia of the Roaring 2000s that they have lost all sense of reality. They get on television and tell Russians that spending on the four national projects will continue and that the Strategy 2020 objectives, which were developed before the crisis, will be achieved. This, however, flies in the face of the harsh realities of the country's crisis and its severe impact on the people's welfare. Russians are becoming increasingly angry at the state as a result of their rapidly decreasing standards of living amid job losses, pay cuts and runaway inflation. And the government's anti-crisis measures have been uncoordinated, shortsighted and largely ineffective.

Most top bureaucrats are suffering from a case of mass self-delusion. They want to relive the past eight years over and over again and have convinced themselves that all the talk of fundamentally changing Russia's political and economic models is nothing more than malicious provocation by political opportunists or intellectuals subsidized by the West.

Nonetheless, there are several leading public figures who are more in step with reality. For example, presidential economic adviser Arkady Dvorkovich and analysts such as Igor Yurgens and Yevgeny Gontmakher from the Institute of Modern Development think tank -- which advises President Dmitry Medvedev, who is also the organization's chairman of the board of trustees -- are beginning to openly recognize that the Roaring 2000s are gone for good and that new models have to replace the old ones.

The main problem is that even if the global economic rebound translates into oil prices exceeding $100 per barrel again, Russia still won't see a return to the Roaring 2000s. The country must search for new ways to develop the economy beyond exporting natural resources. It must base its next economic boom on new technological innovations, and no less important, it must improve the mechanisms for increasing public debate and dialogue between the government and society. Medvedev's famous statement that "freedom is better than a lack of freedom" can be put in the same category as his call for greater diversification of the economy and for investing in human capital from the bottom up. These are key components of Medvedev's "Four I's" model -- institutions, infrastructure, innovations and investment -- which are crucial to modernizing the country. Russia has to put these lofty slogans into practice if it wants to repeat the economic success it enjoyed in the 2000s; high oil prices alone won't do it anymore.

Many of our leaders naively think that instead of hitting the "reset" button for modernizing Russia's political and economic institutions, they can hit the "rewind" button and take Russia back to the pre-crisis 2000s. This reminds me of Mikhail Suslov, chief Communist Party ideologist during the 1970s. He also tried to hit the "rewind" button -- or perhaps more accurately, the "pause" button -- as he fought to keep the terminally ill, comatose Soviet Union alive on artificial respiration.

Our leaders should remember the U.S. jingle from the 1970s Chiffon margarine advertisement: "It is not nice to fool Mother Nature!" History, like Mother Nature, is a formidable lady, and she does not take kindly to being manipulated.

Andrei Kortunov is president of the New Eurasia Foundation in Moscow.