Proceedings of the Standing Senate Committee on
Foreign Affairs
Issue 11 - Evidence
OTTAWA, Tuesday, June 6, 2001
The Standing Senate Committee on Foreign Affairs met this day at 3:30 p.m. to examine and report on emerging political, social, economic and security developments in Russia and Ukraine; Canada's policy and interests in the region; and other related matters.
Senator A. Raynell Andreychuk (Deputy Chairman) in the Chair.
[English]
The Deputy Chairman: Today we will examine and report on the emerging political, social, economic and security developments in Russia and Ukraine and Canada's policy and interests in the region and other related matters.
Our witness is Professor Sergei Plekhanov from York University. Dr. Plekhanov's current positions are: Associate Professor, Department of Political Science; Coordinator, Post-communist Studies Program, York Centre for International and Security Studies; Senior Associate, Centre for Russian and East European Studies, University of Toronto; and Consultant, Canadian International Development Agency. Welcome.
Dr. Sergei M. Plekhanov, Professor, Centre for International and Security Studies, York University: It is an honour to appear before you to discuss the issues of Russia's continued transformation. I understand that you have devoted a tremendous amount of time to the complex issue of Russia and Ukraine's reforms, the changes taking place in society and the government policies, et cetera. I am sure that you must be a little perplexed. Many people trying to make sense of Russian developments have been reminded of what Winston Churchill said in a radio address back in October of 1939:
I cannot forecast to you the action of Russia. It is a riddle wrapped in mystery inside an enigma.
I do not think that our job is much easier now at a time when Russia is transforming and changing in so many ways.
Our task is even more difficult because, in the past several years, people have been noting the signs of restoration of the old ways. Whereas in the past ten years people have been emphasizing how much change has taken place in Russia, the more recent observation is that things have remained pretty much the same behind the facade of great changes.
Russia remains a tricky, complicated subject to discuss. I will focus on a few points and then I will answer your questions.
There are many signs that in the past two years Russia has entered a new stage in its post-communist development. I identify that stage as the "politics of order."
We can distinguish the period that started in the late 1980s and continued up until 1999 to 2000, as a period characterized by the emphasis on freedom and liberty; the dismantling of strong centralized authority; and the distribution of power in society. The epitome of this period of freedom was Boris Yeltsin's missive to power holders around Russia: "Take as much sovereignty as you can digest!".
In this new stage that started in August 1999 the thrust was toward order. They were trying to move toward rebuilding a centralized authority. They wanted to restore the power of the state to help Russia cope with its problems.
There were reasons why there was a shift from the politics of liberty to the politics of order.
The general cause has to do with the logic of post-revolutionary change. Every society that has gone through what Russia has gone through in the past decades inevitably comes to a period when the emphasis is to put things in order. There is a need in the post-revolutionary period to rebuild stability and provide stable conditions to allow people to use the freedoms gained in the previous period.
The dialectics of freedom and order is a notoriously difficult balance to achieve. Therefore, the current emphasis on order is entirely logical, given the logic of social change.
The second cause can be determined through observation of the 28 countries that have been making transitions from communism to some other form of system. There is an underestimation of the importance of the role of the state in effecting market reforms and in its ability to build a stronger civil society.
The emphasis has been on dismantling the state. The emphasis has been on enabling, empowering and facilitating market forces. If we look at the literature on transition, including studies done by the World Bank and the International Monetary Fund, we see that there is a recognition that to create a stable, viable, strong market economy, and for democracy to emerge, the role of the state has to be increased.
Russia presents a case of post-communist transition. Indeed, we have not paid enough attention to the importance of the role of the state. The sign of the times in the past 25 years has been to look at the government as the source of the problems and to look at markets as the mechanisms for solutions. Russia, in that sense, has gone with the flow, and now, she is rediscovering the state as a vital, societal instrument.
The third cause has to do with Russia's tradition and political culture. In Russia the political tradition and the political culture have always prioritized the role of the state in effecting social change.
We need to look at the Russian state as both a solution and a problem. The question of the role of the state has been central to debates about how to make Russia work, how to make Russia strong and how to help Russia develop.
The historic pattern of Russian history has been that of high costs of security and development for the country that spans 11 time zones. Usually, a society has a better chance to arrange to organize itself in an efficient and productive way when there is a trade-off between security and development. Your security costs may be higher than in other places, but then you may have a rich soil and access to the trade routes. In that way, you are able to pay for the higher costs of security by paying less for the cost of development. Or it could be the other way around. Your situation could be that your development costs are higher than in other places, but you are in a secure place so you are able to economize on security costs. In that situation society would have more funds and resources to develop and would be able to build a strong market economy. This would lead to a strong civil society and hence a state that works.
In Russia both the costs of security and the costs of development have historically been extraordinarily high. That made it absolutely inevitable that the state that emerged in that territory had to be extraordinarily strong and strong at the expense of society.
The central issue of the balance of power between state and society was solved in Russia centuries ago and an extraordinarily strong state emerged. That resulted in a society that has been forced to follow the orders of the state and those who run it.
This was a solution because Russia not only regained its independence in the late 15th century, but it was able to rebuild itself as a strong country. It was able to withstand repeated challenges and invasions. In terms of providing for basic security and viability as a state, this overly strong state was certainly a functional arrangement.
The problem was that this emphasis on security left too little to enable society to develop economic, political and social institutions that would allow for the modernization of Russia. It needed to modernize to keep it on a par with the societies of Europe and North America. Those other societies had adopted a different political pattern.
Russia was stuck over a long period of time with militarized, autocratic regimes that ordered society about. This arrangement was justified, and it was possible only because there was a widespread sense in society that that was the only way to run Russia. It was believed that Russia could only be run with a strong, centralized authority that focuses its attention on the needs of defence and security.
It can be called an "insecurity complex." That complex has characterized Russian thinking and psychology for many centuries. There has been a sense that Russia is an endangered society. There is the belief that it has many enemies and that in order to keep itself strong and secure power has to be concentrated in the hands of the state. The belief is also that the top ruler has to be strong and able to order everyone about.
In the words of one of Russia's greatest historians, Vassili Kliuchevsky, writing in the late 19th century during another period of liberal reform in Russia, the state which emerged around Moscow in the 15th and 16th centuries had one characteristic feature, and that was the "battle order" of that state. In that state there were no citizens, there were only commanders, soldiers and workers, and the workers worked to feed the soldiers.
Part of the surrendering of civil liberties to strong authority had to do with this voluntary acceptance by Russians to line up in battle order. Yet, periodically this battle order would collapse. Some examples are the Russian defeat in the early 20th century in the war with Japan, and then the defeat in the First World War with the stalemate between Russia and Germany.
The battle order would also collapse as a result of the peaceful evolution of society where people demanded more from society. Their demands were often higher living standards, better quality goods, better access to market economics, and better political rights.
Whenever the battle order collapsed and the traditional imbalance in society was challenged Russia would have a chance to move forward with liberal reforms.
The latest chance occurred when Mikhail Gorbachev tried to rationalize the communist system. The communist system was characterized by an inordinate reliance on the bureaucratic methods of social control. That was the core of the system. That allowed Russia to modernize rapidly from the 1930s to the 1950s. It allowed Russia, in its Soviet incarnation, to defeat Hitler. However, it was also seen, at the end of the 20th century, as the core of Russia's problem.
Thus, Russian reformers viewed this centralized bureaucratic state as a problem, rather than a solution. They moved forward first with moderate reforms under Gorbachev and then, with increasing radicalization as the 1980s progressed. This ultimately gave way to the total dismantlement of the Soviet state that saw the overthrow of the Communist Party and the shift to radical reforms under Boris Yeltsin.
Russia embraced Western liberalism with a fervour that stunned many observers. It embraced Western liberalism without being quite ready to adopt the principles in a way that would allow the Russian economy to rebound.
Many people have observed that the Russians have tried to do too much too soon. Indeed, it may be a characteristic feature of the Russian psychology, epitomized in many Russian fairy tales, where the powerful great knight who has been asleep his Russian house for a long period of time suddenly wakens and does great things. This proclivity for trying to do too many things too quickly is indeed reflected in the way that Russia has proceeded with reforms.
However, it was not just a question of speed; it also had to do with application of certain policies to the real problem that Russia faced in the 1990s.
This conclusion was reached by both critics of Yeltsin's reforms and also by many people who participated in the reform process itself. Certainly, this is the observation that has been made by many Russian citizens. The general observation was that there was something wrong in the way liberal reforms were implemented and that there was a mismatch between the realities of Russia and the prescriptions that Russians had adopted from the West.
It is quite easy to make a case today against liberal reforms in Russia, because they have not been sustainable. They have created a situation where the power of the few has become more concentrated. The inequality between the richest 10 per cent and the poorest 10 per cent in Russian society has grown tremendously.
There are different estimates of the measure of that inequality, but a responsible estimate puts the difference between the amount of wealth held by the top 10 per cent and the bottom 10 per cent as one to five or six. I am referring to the period before the beginning of the post-communist reforms. Those same measurements put the difference at one to 20 or one to 25 or one to thirty, in more recent time.
This rise of inequality has created a situation where, as Natalia Rimashevskaya, one of the leading Russian sociologists, Director of the Institute for the Socio-Economic Studies of Population in Moscow, recently testified, it is only for 20 per cent of the Russian society that the future looks promising. For the 80 per cent there is little hope. They do not see how they can make it, and they do not see how they can improve the situation.
This is a real indictment of the way reforms were conducted in Russia. The fact remains that the reforms have been conducive to the emergence of a new oligarchy. Most of the people who held the greater share of power before the collapse of communism have not only retained that power but have actually increased it, modified it and made it a more efficient power set-up than before.
At the same time, when you look at the situation of Russia as a country in the international system, you see that many people can make a case that Russia has increasingly been marginalized. It is only in its nuclear dimension and in the numbers of the nuclear warheads that Russia has, that Russia can be considered a major power.
Of course it is a major power in terms of its physical dimensions, its strategic position in Eurasia and the size of its territory. However, as far as the size of its economy; its ability to compete in the world markets; the conditions of its social policies; the life expectancy and the population trends; Russia increasingly looks like a country that has been falling. It has been almost a free-fall in so many ways.
That has generated a sense of weakness and a sense that the liberal reforms made life more difficult for many Russians, because they empowered and enriched a small minority of society. There is also a sense that for Russia, liberal reforms have made Russia less secure and less strong in the world.
Naturally, when society develops this kind of a mindset, some changes are necessary. That has motivated this shift from the politics of freedom to the politics of order. "Politics of order" is a general description. There are many kinds of order that we can imagine in Russia today. The "restoration of a strong state" is another general statement; it has to be filled with specific content. What kind of strength are we talking about - military, economic or political? Whose interests will that strong state be expressing?
All of these questions are currently being decided in the course of a new round of political struggles in Russia. We see the new government in Russia as being quite committed to the idea of continued market reforms. Also, we see a government that emphasizes, as was stated by President Vladimir Putin, that Russia is a European country and that it remains committed to Westernization.
At the same time, Russian leaders are now emphasizing that Russia will be modernizing, reforming and westernizing while it remains true to its traditions. That actually raises interesting questions. What kinds of traditions are we talking about? Are we talking about the restoration of a pattern of state society-relations that have traditionally been a source of problems in Russia? Are we talking about the restoration of a pattern where the state was too strong; where the elites were not constrained by the pressure from below; where there was a lack of rights; and where the state spent too much on the needs of security, at the expense of the needs for development? Are we likely to see a restoration of that kind of a pattern in Russian politics?
It is one of the possible scenarios, but I think it would be too soon to say that Russia is reeling back into the authoritarianism of the past.
Much depends on the ability of the Russian citizens to organize and engage with their own state and their own government. They must use all the tools that they have to ensure that the state, as it becomes stronger, reflects not only the interests of the elites and the new rich but that it also reflects the interests of the vast majority of the Russian people.
I see two problems. I would like to complete my introductory remarks with two observations. First we should be concerned that there is continued adherence, at least in some segments of the Russian government, to the same economic policy set-up that, throughout the 1990s, has contributed to the demise of the Russian economy and the tremendous growth of inequality in Russian society. Of course market economic reforms are painful, but in some post-communist countries they have been less painful than in others. In some post-communist countries they have led to better results and they have allowed the economy to rebound. Unfortunately, in Russia that has not yet happened.
There is a problem with the basic policy set-up for Russian economic reforms. Rather than cheering the fact that Russians remain true to the basic economic policy directives followed under Yeltsin, we should be concerned about the possibility that, if those reforms created so many problems in the 1990s, they may continue to create problems in the years to come.
Some modification of economic policy pattern might be in order. In fact, that is one of the issues of acute debate in the Russian Parliament among Russian economic reformers.
Second, Russia may develop an increased sense of insecurity in a world that is viewed as increasingly hostile. We have observed a growth of anti-Western, anti-American sentiment in Russian society. We have seen the emergence of politicians who have been demagogically making appeals to and cultivating this type of sentiment. This is where the danger of Russia falling into its old and unhelpful pattern of state society relations becomes especially acute. Russian citizens have allowed their rulers to be authoritarian and the Russian state to be too strong at the expense of society. They have done this because they believe that Russia is an endangered place surrounded by enemies. They people believe that they are pressured by other powers that are stronger than Russia.
When the Western leaders debate what kind of relationships to build with Russia they should be careful to avoid taking steps that would increase the Russian sense of insecurity. The West must be mindful not to regenerate the traditional insecurity complex that is deeply set in the thinking and the political tradition of Russians.
I will be happy to try to answer your questions.
The Deputy Chairman: Thank you. That was most interesting.
Senator Graham: In what way would Canada potentially increase Russia's feeling of insecurity? Would it be, for example, because there is support for the Nuclear Missile Defence system, which has been talked about?
Dr. Plekhanov: The sense of insecurity that exists in Russia has to do with a sense that Russia has become weaker while the West has become stronger. That sense of weakness stems from many events. The defeat of the Russian army in Chechnya in 1995-96 made the Russians feel weak. The inability of the Russian government to solve "the Chechen problem" by military means made it apparent to the Russians that they did not have the military power to overcome the Chechens. The situation in Chechyna brought home the reality that the Russian military was in a sorry state. The condition of the Russian economy, where the only significant exports are oil, gas and weapons has been floundering and as a result, has made Russia aware of its serious internal crisis. There is an overriding sense that, whereas the West has been forging ahead and participating in the globalization processes, Russia has not.
If you look at where the money is being spent and where it has come from, you see that there is a continued bleeding of capital from Russia. Capital is not coming to Russia; capital is leaving Russia. It remains an open question: How will Russia be able to reverse that process?
This sense of insecurity, the sense of weakness in the face of the West, is exacerbated by moves that the United States and NATO sometimes make in regards to security and international relations.
For instance, one of the events that contributed to the sense of insecurity in Russia was the war in Kosovo. It produced a tremendously unhelpful resonance in Russia. I served to strengthen the position of those forces in Russian society and politics that believe the whole ideal partnership with the West is wrong. They believe that Russia should be afraid of the challenges of the West.
There are many arguments that can be made in favour of the Russians being threatened by the West.
The National Missile Defence Program is viewed in Russia as a challenge because it threatens to nullify the one element of Russian strength that still exists and that is nuclear weapons. Of course, if we look at the reality of the situation, if we count the number of Russian warheads and if we look at the technical difficulties involved in creating a viable missile defence system, it is easy to palm off the Russian concern as exaggerated. In the foreseeable future Russia will have a guaranteed number of warheads for a second strike, and the Americans will have to face many difficulties in developing an effective missile defence system.
Thus, this confluence of trends, which would make Russia insecure, is not likely to happen soon, especially since the Russians will not sit on their hands. They will do things that are necessary to respond to the threat.
The real danger in the way the NMD has challenged Russian security has come from the way it has fostered a mindset in Russia that is different from the one that existed in the 1990s. In the 1990s the Russian mindset was that it had not enemies and did not have to think of external security. Russia felt it only had to focus on its economic and political development. The mindset was that Western countries, the United States in particular, were friendly partners.
The situation is very different now. The NMD is very important and the Bush handling of this issue regarding Russia was telling. Russia was dealt with in a very dismissive way. It was treated not as a partner but as a third-rate power that has almost been thrown into the dustbin of history. The American attitude seemed to be that they did not care what the Russians thought about the NMD. That was the initial approach as the Bush Administration was still putting its act together. However, now we hear a different tone and words from the Bush Administration.
The Russians have serious problems when it comes to accepting the proposals of the United States modification of the ABM Treaty. If we look at it from the point of view of continued partnership between Russia and the United States we need not be despondent.
The issue of low-level missile threats from rogue states is an issue. We hope that the United States is prepared to accept a set-up for its NMD system that would allow significant input from countries that have expressed their concern with the implications of the NMD for international security. This would achieve the goal of maintaining the basic framework of arms control that we have inherited from the previous period.
Senator Graham: With respect to NMD, the Americans would argue that it is not just Russia that they are concerned with, but the rogue states of North Korea, Iran, Iraq and China. Would Canada, as a moderate middle power that is close to the United States, have a role to play in brokering a proper solution to this problem?
Dr. Plekhanov: Canada can play a very important role. Canada is stuck between Russia and the United States. If relations between Russia and the United States deteriorate, if tensions grow and if a sense of partnership gives way to a renewed military competition and the exchange of threats, Canada is right smack in the middle.
Canada has a profile in international affairs with its strong and sincere commitment to arms control, disarmament, a continued progress toward a nuclear free world and the peaceful resolution of disputes.
We are witnessing the emergence of a coalition of states that urge us to think in terms other than the Cold War. During the Cold War, the world was split between the Communist states and the West. That split no longer exists. There are, of course, attempts to rebuild the familiar Cold War mindset by treating China as the main threat but it is not a credible attempt.
It is important that most states in the world system today are on the same wavelength in terms of their global aspirations and the kinds of systems that they would like to build. This makes it possible for a multi-polar approach to the world and to the solution of international issues.
Canada, which has a healthy and progressive perspective on the role of force in international affairs, can operate not only on its own behalf as an important middle power but also as a leader of a large block of nations.
Senator Graham: Would you say that Canada has the crucial, or key, role? Could Canada play the most important role in this respect?
Dr. Plekhanov: It is hard for me to say because we are keenly aware of the limitations on Canadian foreign policy and aware of the difficulties of creating a like-minded circle of nations. That like-mindedness could make a case for a different approach to arms control other than the one that is being proposed by the United States government. I am unable to say whether Canada can play a leading role but, Canada can do more than it has done thus far. It is a challenge to Canadian foreign policy. We have to recognize that this is a new situation.
In the past ten years, we have had an extremely productive time in respect of arms control, disarmament and the peaceful means of resolution of international disputes. Unfortunately the winds have now changed, and we are faced with the possibility of collapse of some of the existing, and very important, arms control arrangements and institutions in the world today.
This new period calls for new approaches. There must be vigilance and activism on the parts of those governments that are as strongly and sincerely committed to a peaceful world as the Canadian government is committed.
Senator Bolduc: We have had many witnesses talking about various aspects of Russia. We have had, over the last six months, many views expressed about economics, demographics, the social factors and the political debate in Russia. We are trying to focus on what Canada can do to ease the situation or to make possible the transition to a market economy in Russia that would be workable.
We have looked at the mess that has developed over the last ten years. Now, we see Mr. Putin leading a more stable political situation. I refer to the stability in the Duma. He is taking control of the oligarchs. Recently he attempted control of Gazprom. He no doubt believes that if he is able to gain control, then he will be able to promote economic reform.
Mr. Putin has developed fiscal policy in some other aspects, and he has made efforts to develop good relations with Europe the United States. He is making some progress with Europe.
We have had some first hand experiences with the situation in Russia. One of our senators who is also a farmer has spent a great deal of time in Russia. He has reported to us on the state of Russian agriculture. He has offered us some very constructive suggestions as to how we can help the Russian agricultural sector.
We have also had individuals tell us about some cooperative arrangements that have been made between our federal and the political institutions in Russia. People from both Ottawa and Toronto have attempted to help the Russians in the implementation of a democratic parliamentary system.
Dr. Plekhanov, you told us that we could act as mediator, in some aspects, between Russia and the United States. Would you be kind enough to give us some other aspects where Canada could really help Russia? In terms of commercial undertakings, I do not think that Canadian investors are ready to go there, except for gas or oil, perhaps. In general Western corporations have failed in Russia, so they are not ready to return. I do not expect that we will develop extensive commercial relations in the near future.
We have to look at what we can do over the next five years. What do you suggest that we do? Should we change our present direction?
Dr. Plekhanov: That is a tough question. I am somewhat familiar with the work of the Canadian International Development Agency, and I am quite impressed with the breadth of the scope of the programs that they have in Russia and the kinds of projects that they finance. They cover a wide range of issues, including efforts to help build a strong civil society and a responsible civil service in Russia.
Senator Bolduc: I did not speak about CIDA, but you came to that point. My point of view is that CIDA, sometimes, does not focus enough. It is not as effective as it could be.
Dr. Plekhanov: When you look at the balance between different areas of Canadian assistance to Russia, perhaps one could offer a different set of emphases. We have to look at what kind of state is being built in Russia. A strong state is not such a bad idea, if that strength comes from the rule of law. A strong democratic institution with the ability to govern and make effective decisions, and to see those decisions implemented, is not disagreeable.
We have not seen such a state in Russia in the past ten years. Russia has had a "virtual" state. One of the worst things that has happened to the Russian state since the collapse of communism, has been the privatization of offices by office holders. Many bureaucrats and elected officials have used their access to political power and administrative authority as sources for their own free enterprise. They entered into many private deals with the entrepreneurial class, the Mafia and whomever they found to be useful in such an arrangement.
Canada has much to offer to the Russians at this stage of rebuilding the state, because the Canadian state contains many useful experiences and practices in which the Russians should be interested.
An example of Canada's experience is in the organization of a sensible, division of power between the federal and regional governments. I will not state that Canada has achieved Nirvana in this area. However, there is much that the Russian politicians can learn from the way Canadian federalism has worked.
In Russia, federalism is a new and untested project. Remember Mr. Yeltsin in the 1990's: grab as much sovereignty as you can. That is how the Russian federalism was built in the 1990s. You might believe that it is not such a bad idea; perhaps that is the way to achieve a rational balance between the different levels of government.
The Russian experiment with chaotic federalism that emerged in the 1990s, has created a set-up that is akin to feudal Europe after the collapse of the Roman Empire. The new set-up created under Mr. Putin threatens to restore some of the elements of the unitary state that existed in Russia before. That would not be helpful.
A few years ago I participated in the development of Russian legislation on federal-regional relations. I remember how important it was to describe and to explain to Russian lawmakers that the whole essence of a rational division of government authority should be functional. Once you take this technocratic approach, you have grounds on which to stand. Suddenly, you can begin to talk business and then build a sensible government set-up.
The practice, theory and experience of federalism is one area where Canada could be more active and helpful in preventing the Russian leaders from going too far down the path of re-centralization of power. Re-centralization would not be good for Russia. It would re-empower the central bureaucracy at the expense of regional bureaucracy. The people would not benefit from re-centralization.
It is important to avoid excessive centralization and, at the same time, avoid the other extreme of this feudal set-up, which has emerged under Mr. Yeltsin.
It is also important to make sense of the Russian privatization. Privatization in Russia in the 1990s was heralded as one of the great successes of Russian economic reform. In the process of dismantling the system of state ownership, very quickly became a success.
However, it certainly has been a dismal failure in terms of building productive enterprises in the private sector. We have very few cases where, as a result of privatization of state enterprises, efficient, viable private enterprises have emerged.
How then, can we help the Russians build effective systems of economic management in the private sector? There is one area that is interesting and few people are aware of it. In the privatized sector of the Russian industry, including some large enterprises, there are large amounts of stock that are owned by the employees within those enterprises. Unfortunately, the attitude of the World Bank, the IMF and many Western advisers to this fact, has been negative. It has been viewed as something transitory that reflects the difficulties of transition. The general view is that the sooner the employees divest themselves of that stock and float it to allow the real owners to come through the mechanisms of the stock market the better it would be. That is a mistake.
We have accumulated interesting, important and instructive international experience with employee ownership. There are growing numbers of viable, strong, employee-owned companies in the United States, and there are some in Canada as well. It is interesting that employee ownership usually becomes a reality when things go bad in a particular company. It is not something that a company would normally adopt.
Senator Bolduc: They did not pay for it.
Dr. Plekhanov: That is not important.
Senator Bolduc: You are saying that we could have some industrial cooperative, but I have never seen an industrial cooperative that works.
Dr. Plekhanov: I have seen many ESOPs, Employee Share Ownership Plans, work in the American economy. We have seen it in Spain in the form of the Mondragon plant. In Italy, some of the most prosperous provinces have been able to create viable enterprises by encouraging cooperative style ownership structures. In the Canadian steel industry we have had some important successes.
It is not a guarantee of success. Every other form of employee ownership may work or may fail; it depends on many factors. It strikes me as interesting that in the United States the emergence of a viable ESOP sector in the committee has relied on no less than 20 pieces of federal legislation and on a great deal of state legislation to be successful.
In Russia, absolutely nothing has been done to help the EOSP employees in the newly privatized enterprises to make that ownership a reality.
This is a crucial battleground for economic reform. If we want a market economy to work as many people as possible should believe that they have an important stakes in its success. Millions of Russians have a formal stake in the market economy. They can show you those dog-eared pieces of script that entitle them to ownership of stock. They have been laughing at it, but most of them have kept those scripts. There is a belief that maybe, somehow, this EOSP system can work. That is one area where, perhaps, Canadians can help.
Senator Bolduc: I would not like to leave you with the impression that I am against cooperatives. I know that in consumption and savings we have done great things. However, in the industrial sector it has not been very successful. Could a third aspect be about the strengthening of civil society?
Dr. Plekhanov: This is, of course, the most important issue. Russian civil society has made tremendous progress in the past ten years, but the government has not been very helpful. In fact, it is an interesting theoretical question: Under which conditions does civil society grow more rapidly? Is it under conditions of adversity or conditions of friendliness?
Participating in the affairs of society is an additional demand on citizens' time. People would not be particularly active in politics and civil affairs unless there is a pressing need to do so. When a government challenges them it is then that they becomes stimulated to take a more active part. Russia has a growing NGO sector. There are many arenas for struggle in which the state and the Russian citizens, who have gained freedoms in the past ten years, have not yet tested the extent to which those freedoms actually bring results. There are many arenas for the contests between the state and the citizens and the state and the institutions of civil society.
Canada and other Western countries have been committed, throughout the 1990s, to projects designed to help strengthen and develop civil society in Russia. However, we have a problem now that Russia has gone into a new phase where it is rebuilding a strong state and has a heightened sense of suspicion of foreign countries and organizations.
It is somewhat problematic, and it is increasingly more difficult for Canadians to access Russian NGOs in order to work with them productively. That is especially true concerning such sensitive issues as human rights and the ability to defend oneself against the abuse of power by the bureaucrats. It is an unhelpful situation at a time when Russians need more civil society help than in the past decade. That help is more difficult to receive precisely because the state has become stronger and more suspicious of any foreign initiatives.
Senator Di Nino: I would like to ask our witness about his opinion on two issues. First, I will ask about the obvious irritant of NATO expansion. As you are undoubtedly aware, a number of former Soviet Bloc countries would like to see further expansion of NATO. I am specifically referring to the Baltic states. Second, I will ask about Russia's relationship, or changing relationship, if that is the right term, with Ukraine.
Dr. Plekhanov: The expansion of NATO has been one of the factors that has contributed to the emergence of this new mindset in Russia. A mindset more wary of the goals and actions of the West. I do not think it is helpful that the Russians are aware that they do not belong to NATO; whereas everyone else does belong. Russians are ambivalent about being accepted in NATO. Some of them would not like to be there, and others see membership in NATO as proof of the being part of the Western world.
NATO was created as an instrument of the Cold War. It was created as an organization to defend Europe against the Soviet Union. To the Soviet Union NATO looked like an aggressive organization preparing for war against them. That was the situation during the Cold War.
It is not helpful that Russia remains distanced from NATO. In fact, since the Kosovo war, relations between Russia and NATO have become more difficult. We may see a negative cycle develop. If Russia becomes more authoritarian, and if fears of an authoritarian Russia grows among Russian neighbours, especially in the Baltics, the arguments in favour of admitting those countries into NATO may become stronger. Early membership of the Baltic states might become a reality. We must understand that when it does become a reality, that will inevitably produce a backlash in Russia.
There is the sense of a vicious cycle, where everyone concerned, the Baltic states, Russia and NATO members, would have strong arguments in favour of the status quo. However, collectively their actions would produce an increase of tensions and a growing estrangement between Russia and the West.
It is a difficult situation. We have to consider the plight of the little country of Estonia. In the past, Estonia has had severe problems with its powerful neighbour. Their need for security and their sense of threat are real.
How can we prevent this vicious circle of hostility and tension from developing?
One way to do that would be to initiate a dialogue on Russian membership in NATO. That dialogue has never been conducted. Whenever this issue of Russia becoming a full-fledged member of NATO emerges, it is usually considered a highly unlikely hypothesis. Perhaps it is something that we should discuss more seriously.
I do not know from which side the initiative for such a dialogue should emerge, but I think it should happen. Even treating it as a hypothesis, one should, at the very least, begin a dialogue. So much about international relations depends on the existence of a serious dialogue. Political leaders need to be talking about an agenda, about cooperation and about new approaches to issues of security. Perhaps the idea of Russian membership in NATO is so radical, or highly hypothetical, we should start discussing it more seriously.
In respect of relations between Russia and Ukraine, there is a definite drift in Ukrainian politics toward a closer relationship with Russia. I would not necessarily see it as a dangerous development, but it does have potential dangers. If Russia and Ukraine become closer on the basis of authoritarian politics, it will not be a good situation. The two great Slavic nations should be friends as democratic countries. Whether closer relations between Russia and Ukraine will be conducive to the development of democracy and a stronger market economy remains to be seen. It is possible.
It is clear that the winds in Ukrainian politics have shifted in favour of a more cooperative relationship with Russia. This trend will have important consequences. Much remains, of course, of the democratic component of the political life in both countries. It is not good that the Ukrainian President, beleaguered as he was in recent months, has found salvation in the Kremlin's embrace. Many democratic forces in Ukraine did not like to see Russia coming to the aid of a leader who has apparently made significant errors. This type of development should be a cause for concern.
The Deputy Chairman: You quite rightly pointed out the repeating cycle of insecurity that has developed throughout the centuries in Russia. You have identified the consequences of that inside the country, and you noted that insecurity led to imperialistic tendencies. It was a way for Russia to solidify and stabilize itself by improving its position in the world. Usually it is a veneer sphere of influence.
I have been part of a number of discussions that noted this dilemma: If we do anything in and around Russia, we could destabilize and increase the level of insecurity, resulting in a move in negative directions.
On the other hand, if we sit by and simply hope that those negative trends do not occur, some imperialistic tendencies may surface and the sphere will then sacrifice countries and their peoples around them, or minorities within them. How can we judge this?
In other words, do we look at President Putin's move to centralization as an imperialistic advance, but rather an economic advance? Should we believe that the lessons learned from the past will not be repeated? Should we be worried about that? How do we weigh the two competing forces? How do we assist Russia without making it feel vulnerable and, at the same time, not sacrifice others while we wait to see which way Russia is headed?
Dr. Plekhanov: That is a very good question. I would beg to differ with such an influential authority on Russia as Zbigniew Brzezinski who seems to believe that whenever Russia is influential in Eurasia it is bad. Mr. Brzezinski believes that it is bad for the world, for the neighbours and for Russian democracy. Indeed, traditionally there has been this problem of maintaining the Russian empire at the expense of the development of civil society, democratic institutions and accountable systems of government.
If we examine the unfolding reality of relations between Russia and its neighbours, it comes to mind that many Russian neighbours would like to see closer relations with Russia, for economic reasons among others. Not many states around Russia have succeeded in transforming themselves into market democracies. Many of them are stuck at mid-passage and some of them have not even begun the transition.
In terms of real options that may be available to those countries, the idea of a normal, close, cooperative relationship with Russia, not necessarily as a colony, would be as a relationship with a colonial power. However, having a useful, mutually advantageous relationship is a real option.
In fact, to quote one of the opposition politicians in the Ukraine, Yulia Timoshenko: "Ukraine has had an affair with the West and it has been rejected, so it is now returning to Russia as its only option." It may not be happy about it, but it is an option because good things will follow from that.
Quite a few post-Soviet states have undergone a similar transformation. Some states in central Asia, for instance, looked to Turkey for inspiration and economic assistance, because Turkey is a secular, Muslim country. It is also part of Europe, part of NATO and it is a modern state. Those countries were disappointed because, as it turned out, Turkey had very little to offer. It offered something, but my point is that we should not treat every sign of reintegration between Russia and other post-Soviet states as necessarily a bad sign. There are good, solid reasons for some degree of reintegration.
However, we should be wary of any signs of attempts by the Russian government to impose its will on its neighbours. The difference between mutually advantageous and voluntary arrangements and the abuse of power and the imposition, becomes obvious each time we observe a particular situation.
We should watch carefully, because the danger of re-emergence of Russian imperialism needs to be considered as real. It does not have to happen, but it may happen, under some circumstances, as a result of some developments within or around Russia.
My final point is that as far as the West's own and Canada's own relations with Russia's neighbours are concerned, why would the Russians be opposed to an active engagement of Western states - NATO members, the United States or Canada - with other post-Soviet states? Out of this sense of insecurity, if the overall context of relations between Russia and the West is such that the Russians feel that they are in this unequal battle with a much stronger adversary - NATO or the United States, rather than in a partnership relationship where they expect to gain a lot, then of course, everything that is done in the other post-Soviet states by NATO members would be viewed with great suspicion.
If, however, the overall framework is positive and the Russians feel that they are on the same side on most issues with the Western governments, then, of course, there would be much less concern. That would be aside from the fact that there is the reality of international competition in every part of the world, and governments will be suspicious of each other, to some degree. They would be jealous of economic competition and they would try to increase their own assets in a particular area at the expense of others. These are the rules of the game and there are certain norms in international politics today, under which such competition can be effected without creating threats to peace.
Senator De Bané: Professor, I will play the devil's advocate in respect of some of the ideas that you included in the conclusion of your document, "Some Ideas for Canadian Policy." To what extent are those ideas, which are imaginative, not unrealistic? For instance, paragraph 5 states:
Even though the US and Russia remain the two major actors in this sphere and are likely to resist Canada's intrusions into their privileged bilateral exchanges, Canada should insist, as a matter of principle, on the right of other nations to be properly informed about the developments and to play a role in decision-making by the two countries...
I cannot dispute how the world should evolve, of course. On the other hand, from my limited knowledge of foreign policy, I think that to imagine that Canada can play a role as a mediator between our Northern neighbour and our Southern neighbour, Mr. Trudeau tried to play that role, as you know, with limited results.
Paragraphs 1 and 2 concern Canada's pressure on the Americans to change their policy. I have serious reservations that Canada cannot afford to do that. As you know, one of the expressions that was coined by external affairs was that our foreign policy should be in harmony with, but distinct from, the United States, but as much as possible be in harmony with it. Paragraphs one and two state that we should raise our concerns with the Bush Administration about the deterioration of U.S.-Russia relations and the dangerous implications of this trend. I do not dispute your analysis. However, from my limited knowledge, I believe that Canada is wary of irritating the United States and of meddling in their policies. We have a good example of that with the reaction to the NMD recently, where Canada has attempted to play in an extremely narrow corridor.
Paragraph 3 suggests that Canada should approach the Europeans as partners to develop and define a policy together. Again, my limited knowledge tells me that usually, we are looked upon by the Europeans as the Trojan horse for the United States. They will be sceptical about Canada if we tell them that we want to develop policy with them.
I remember several years ago, when I was with Senator Grafstein in Europe, that it became clear to me in the meetings with leaders of foreign policy in Europe that they viewed us as a Trojan horse to the United States. They did not believe us when we told them that we wished to work in partnership with them. They were very polite on the economic front, but to develop closer relations with Canada, there were many words, but that was all.
There are ideas about Canadian policy that we can be the intermediary between the U.S. and Russia. You said that they will resist Canada's intervention, that we should convey our concerns to the Bush Administration, or that we should ask the Europeans to allow us to develop a joint policy. Perhaps I am too defeatist or negative, but to what extent are those ideas realistic?
Dr. Plekhanov: The bottom line of the question is whether it is realistic. It is an uphill fight for Canada to define its role in world affairs on somewhat other terms than as the Trojan horse for the Americans. In fact, in both cases that you cited, they are closely connected. If Canada behaves as a country that has interests of its own, without necessarily becoming unfriendly to the United States, then the Europeans could be more inclined to view Canada as an independent country with its own interests, rather than as the Trojan horse for the United States.
As to the NMD question, Canadian policy, as well as the policy of the European allies, has already had an impact on the policy of the United States, because we have seen an evolution of the approach of the Bush Administration.
The United States, today, is in a position unequalled in world affairs by anybody else. This is tremendous power, and it is also tremendous responsibility. The United States, responsible for so many things in the world today, is also much more sensitive to the many signals sent by other players in the international system.
Samuel Huntington, one of the most influential political scientists of our time in the United States, published an article in the journal Foreign Affairs two years ago. He sees a problem in the gap between American perceptions of the real power that the United States has in the world today, and the reality of that power. He says that there is a tendency, in Washington, to assume that this is a uni-polar world, but in reality it is not. Mr. Huntington foresees a period when the U.S. leaders will be humbled by the actions of others into accepting a more limited view of what the American government can do in world affairs, and how much power the United States has, as a single player in the world.
We are going through such a period now, with the NMD initially proposed as "take it or leave it." The American solution is to believe that if they do it, then others would have to follow. A transition from that approach, as a result of feedback from Canada, Europe, Russia, China and, in fact, the majority of the world, was a plea for a dialogue, a negotiation, a concerted approach and a more democratic approach, if you will. That has had an impact, because American leadership in the world could be undermined by a series of ill-designed, unilateral steps.
It is not futile for countries that do not belong to the rank of super powers, to stand for a foreign policy perspective on specific issues, as well as on the general issues, of international politics that would be at variance with the United States.
We can compare the realism of the situation to the situation of minorities in any democratic legislature or Parliament. If you are in the minority, you know that you will not have a direct impact on what the government does. However, that does not prevent you from standing up and speaking on behalf of your constituency. That does not prevent you from making proposals that may not be realized today. So much of politics is a matter of trying hard, coming back at the same thing and finally getting your way, maybe 10 years later. It is important to keep trying and to make those inputs. The world today can be compared to such a legislative chamber where some nations have more power than others, but the important thing is to have them all in the same legislature.
Senator Bolduc: If you permit me, it can be a problem for us if we try to "shake up the elephant" south of the border. Often, as much as $5 billion in public contracts can be at stake in those discussions; they could close out our options to bid.
Dr. Plekhanov: I am keenly aware of that. That is why, in my reply to the first question from Senator Graham, I emphasized that it is a sensitive issue. That sensitivity and sense of dependence on the United States, and vulnerability to counter-reaction from the U.S, should not necessarily be seen as a reason for doing nothing.
Senator Graham: Amen to that.
Senator Grafstein: Last week I was in Helsinki where I spent the better part of the day with General Vorobyov, who is now Deputy Chair of the Defence Committee of the Duma. We were there to try to solve, on behalf of the OSC, a severe but unknown border problem and the relationship between the supreme Soviet Republic of Transdniestria and Moldavia and the Russians supporting that against the Moldavians, who want to keep their country in one piece. We have the Russians, the Moldavians, the Transdniestrians and the Ukrainians all there to see if we could bring all parties into the room for the first time.
Russians utilized troops in Transdniestria. You know the area of which I speak. They had 40,000 troops there. That figure is down to 17,000 now. They are undertaking to remove all the troops next year.
That is one problem. The other problem is that 50 billion tonnes of armaments are stashed there. How do they deal with that?
The complexity of the Russian situation became clear to me when I was thinking about this situation. Russia feels insecure and as a consequence is trying to set up surrogate states around itself through different means to maintain influence. They are doing the same with Ukraine.
What is Canada's vital interest in this? We are here to solve this problem. It will not affect Canada much. Where is Canada's vital interest in our relationship with Russia?
The ambassador said an interesting thing to me. The problem of the Taliban is a result of American action there to establish an armed force against Iran. Ultimately, these same people have become fundamentalist in their approach and also essentially anti-Western and anti-American. That is one problem.
The other problem that now seeps through that entire central region is the question of financing. The majority of financing is done with drug money. The "narcostate" is no longer Columbia. Tajikistan and the other "stans" adjacent to Tajikistan are becoming the new narcostates. Those narcotics are flooding Europe and will eventually flood North America. There is a strategic vital interest that I believe we have in trying to curb that flow of drugs. How do you do that?
I raise this question thinking that perhaps we must look more carefully to determine our vital interests as to what really are the nature of some of the problems that Russia is facing as a prototype Western country. They are seeking to relate themselves to Western countries. They have this horrendous drug problem that is sapping their strength.
Have you any advice to us about how we can sort out our vital interest and align ourselves with Russia in a way that makes some sense from a strategic standpoint?
What are our vital interests? In theory, our vital interest is to have someone shield us from aberrant missiles, yet we cannot join up because of ABM and stuff like that. We separate our vital interests from the ability to be independent of the United States.
Could you give us some advice on how we should define our vital and strategic interests so that we can align ourselves with some of the problems that Russia is facing?
Dr. Plekhanov: The start of a new stage in Russia's post-communist evolution is an important consideration which we should keep when we look at Canada's priority. Security in Eurasia should not be taken for granted. You have cited the Taliban. You have cited the problem of the drug trade, terrorism, et cetera. Many governments in the post-Soviet space are not stable. Many of them are sitting on a powder keg. There is, for instance, a high likelihood that Uzbekistan, which is a pivotal state and the most populated state in central Asia, might find itself in a situation of a very acute conflict having to do with discontent and Islamic fundamentalists in some of the most heavily populated areas of the Fergana Valley.
The government response to that was increased authoritarianism, but that only made the problem worse. The government of Uzbekistan cannot back out of this conflict. And it does not know what to do.
The possibility of bad, unmanageable conflict around Russia is quite high. Those conflicts should not be seen as too distant from Canada. In this increasingly interdependent world, trouble in Eurasia may mean trouble for the world as a whole, and not only in the sense of the drug trafficking, but in the sense of the growing number of conflicts that spread and may actually lead to a big war.
We can imagine a situation where large scale, unmanageable conflict in central Asia might draw the Russian army into that conflict to a degree where we would see Russia fighting in central Asia. This fighting could be on a large scale and employ the use of nuclear weapons. God forbid that this scenario should happen. However, I can imagine it happening.
Some people might say that it is a Russian problem and that we should not worry. In fact, that might take Russian attention away from Eastern Europe and allow the Eastern Europeans to do what they would like to do. That would not be sensible thinking.
Russian security has an intrinsic value. The Russian Federation is too big to feel secure in the neighbourhood in which it is located. Russia needs to be strengthened. It needs to be made more secure.
I think that there is a global interest in helping stabilize Russia, but not by authoritarian means. There is always the temptation to use authoritarian shortcuts. Those shortcuts rely on the power of the order rather than on the rule of law.
I have been emphasizing the importance of continuing to counsel the Russians. We need to be engaged with them. We need to counsel them in order that it is seen that their best solutions are in democracy and the rule of law, rather than rule by decree, secret police and reliance on military power.
The uppermost concern and interest for Canada is security in Eurasia. That means helping Russia become a stable state that cooperates closely with its neighbours. Russia has close historical and traditional ties with its neighbours. There are many economic arguments in favour of those countries trading with each other more and undertaking joint projects.
Does Russian business investing in those countries lead to greater Russian influence? Yes.
Does the arrival of Chernomyrdin in Kiev as a Russian ambassador mean less independence for Ukraine? We will see. It certainly is conducive to the solution of some of the short-term economic problems that existed in Russian-Ukrainian relations.
We must take one step at a time. It would be very dangerous to focus on the issue of Russia trying to stabilize itself and also trying to develop closer relations with its neighbours. We should not see this as a threat. This is a trend that is natural, and it should not be viewed as dangerous.
Aside from that, the building of a viable economy in Russia is certainly important for Canadian investors. Russia is a huge market. It is an underdeveloped market. Canadians in Russia could do many things as the Russian economy gets off the ground and becomes institutionalized. Many opportunities will exist when rights of investors are guaranteed and conditions for investment improve. In fact, Canadian business has been cultivating conditions, exploring possibilities, and keeping a presence waiting for the time when they will be able to invest productively.
Finally, Canadian commitment to human rights and good governance on a global scale is important in relations with Russia. The very expression "Russian democracy" would have sounded like a contradiction in terms a few years ago. This is because Russia has had little experience with democracy. Now we are talking about gains of Russian democracy, the dangers to Russian democracy, and what can be done to strengthen Russian democracy.
Democracy in Russia is a very important undertaking. This is a fragile plant that must be cultivated and helped to grow because so much in the stability of Eurasia and the world depends on it. I repeatedly return to the notion that whatever actions are taken with regard to Russia, the consideration of helping Russian democracy survive and grow should be among the most important.
Senator Graham: I have enjoyed the interesting questions posed by my colleagues and the responses given by our witness. I wish to return to your last point about democracy in Russia. How fragile is democracy in Russia at the moment?
Dr. Plekhanov: This is one of the most difficult questions. In recent months we have seen steps that have not been helpful to the development of Russian democracy. For instance, increased government control over the media is a step backward. The government wants to be more fully in control of the mass media in Russia. They especially want to control television. I am reminded that when Mikhail Gorbachev began his crusade to turn the Soviet Union into a more modern and democratic state, the first and most important thing with which he started was to allow the journalists to work as real journalists should. He encouraged them to report on what they saw; to investigate the problems in society; to highlight the wrong doings of powers that be; and to serve this vital function in society of informing people and helping solve the problems. The Russian media have come a long way from the time when they were all controlled from one department from the Central Committee of the Communist Party of the Soviet Union.
That brings me to the question of the degree to which Russian democracy is endangered. We have not yet seen a test of strength between the Russian government and Russian citizens. In Russia, the historical memory, which is almost in your genes if you are a Russian citizen, is to expect trouble from the government. You do not expect good things from the government. Seldom do they do good things for you.
Senator Graham: The old saying, "I am from the government and I am here to help you." It immediately raises suspicions.
Dr. Plekhanov: I would say that in Russia this problem is a little bigger than in other places, such as Canada.
There are numerous survival techniques that Russians have to cope with the times when the government authority becomes too harsh. A famous description belonging to one of Russia's brightest social critics of the late 19th century notes that the severity of laws in the Russian empire is usually softened by the fact that they are very seldom implemented.
The government may issue very strict edicts, only to see them sink in the thicket of Russian society. In fact, the reality of the rule of law in Russia is notoriously weak. It gives much leeway to people in society to avoid being controlled by the state.
A stable legal system binds the government, but it also binds the citizens. It is very difficult to violate a law in a strong legal culture. It is very easy to do things that are plainly illegal in a society that has, historically, not been based on the rule of law. Russia is a great example.
We have already seen interesting examples of resistance of Russian citizens to actions of their government that are seen as injuring their rights. For instance, in a recent statistic provided by one of the leading human rights defenders in Russia, human rights advocates win about 50 per cent of the cases involving defence of human rights in Russian courts. I thought that was a tremendously encouraging statistic. Frankly, as a Russian and as a specialist in Russia, I was surprised. I thought that the percentage would be somewhere in single digits. However, this is the report from the battlefield.
Many Russians have taken the freedoms that they gained in the past decade for granted. The new generation is growing up thinking of themselves as free people. They have elected a strong president and given him more authority than Yeltsin had. They want Mr. Putin to be a strong leader. That does not mean, however, that they are prepared to return to a position of voiceless cogs in the bureaucratic machine that they were in the old days.
The contest between state and society in Russia is likely to be very intensive. There are factors that could help Russian democracy grow and survive. In fact, the history of democracy everywhere is a history of struggle. It is only through struggle that the democratic institutions grow and become robust.
We should be concerned with helping create external conditions and internal conditions that would be conducive to the growth of democracy in Russia. We should avoid steps that might not be helpful to the maintenance of democratic institutions.
Mr. Putin has certainly concentrated more effective authority in his hands than Mr. Yeltsin ever had. However, that does not mean that he has come anywhere close to the position of Mikhail Gorbachev, the great liberal reformer. When Mr. Gorbachev was elected the General Secretary of the Russian Soviet Communist Party in 1985, he inherited the most powerful single state institution in the world.
Russia has come a long way since 1985. I do not think that we are going to go all the way back to 1985. We should not be despondent about the development of Russian democracy, when the Russian government behaves in a more authoritarian way.
Senator Graham: In talking about the causes of the problems in Russia today, you suggested, that since 1990, there has been too much too soon. I think that you said that there was a mismatch between the reality and the prescription. In your written presentation you said:
Putin and his supporters seek to enforce unity, order and efficiency without a redistribution of power and property between the elite's and society. What is emerging is an authoritarian market system, regarded by its architects as a workable alternative to the liberal experiment of the 1990s. The dangers this system poses to the fragile structures of Russian democracy are obvious. Yet, it is a fact that so far, Putin's policies have enjoyed wide, if not active, support both among elites and in society at large.
Why would that be so in view of the many failures? It is granted that Putin has only been there for several years. Is it because he is the only game in town at the moment? Is it a combination of the elite seeing the proposals of Putin as the only way in which they can retain control, or is there a real sense of apathy among Russians at large?
Dr. Plekhanov: It is actually a combination of the things that you have mentioned.
In 1999, when the new Chechen war began, there was great fear, frustration, and fatigue in Russian society over the results of the Yeltsin presidency. Yeltsin was very ill. He was unwilling to yield power. Yeltsin was seen as an utter failure as the president of the Russian state. He was challenged in the Caucasus.
The emergence of someone who was young, vigorous, intelligent, and prepared to accept responsibility for everything in the state was viewed by many Russians as a very good, effective alternative to what they saw under Yeltsin. If a nation's political culture has traditionally incorporated the idea of a very strong ruler at the top of the system, the expectation and the idea of having such a ruler would reappear in the public mind in times of crisis.
Unfortunately, pluralism in Russia became associated with disorder and chaos. Indeed that is how the Russian state has evolved since the collapse of communism. "Grab as much power as you can," said Yeltsin. Who grabbed more power than others did? It was the people who were in the elite before; those who had access to administrative power; those who had money; and those who had guns grabbed power. At the expense of the vast majority in society those more powerful people have grabbed even more power.
Those people have not been lined up in hierarchical order. That endangered both them and the state as a whole. The big change that took place in Russia was the mobilization of many elites around the idea of a strong ruler who would protect their interests and who would also project a sense of order throughout society. The ruler would build a state that would be the state of the elites.
If this new strong state does not move to do something significant about the vast inequality in terms of power and property that has emerged as a result of the reforms of the 1990s, it will be a very fragile state. It would not be a democratic state because you could not have a viable political democracy resting on the basis of this wide gap between a majority of powerless and poor people and a minority of rich and powerful people.
The question of redistribution of power and property in Russia is one of the central questions that must be faced by Russian society. Mr. Putin is someone who was thrust into the Kremlin, not only by the elites who rallied around him, but also by the millions who expected him to be a different ruler than Mr. Yeltsin. Mr. Putin will be to do something about the power of the oligarchs and the inequality that exists because of them.
Whether Mr. Putin is prepared to be this kind of a leader, and responds to the society's demand for greater social justice and less inequality, remains to be seen. So far we have not seen any signs of such a commitment.
Senator Grafstein: We accede our question time to Senator Graham. You have tapped a rich vein here.
The Deputy Chairman: Democracy works here very well. Senator Graham will continue with a short question.
Senator Graham: Senator Bolduc's referred to Senator Tunney, who is a Holstein dairy farmer in Ontario. Senator Tunney has been going to Russian and the Ukraine, on his own, since 1993. He takes antibiotics for cattle and so. He does this on a voluntary basis and with the approval of all the authorities. He gave us one of the most fascinating statistics with respect to the yield of the milk of one co. He said that a cow in Russia produces four pounds, five pounds or six pounds of milk on average per day while the cows on his farm produce 75 pounds to 80 pounds per day.
Senator Bolduc: It could go up to 130 pounds per cow in Canada.
Senator Graham: We are trying to find out what Canada can do to put a number of demonstration farms in Russia.
I will ask a quick question. When we were in Washington, the last witness we had was a Russian journalist. I asked him, if he had one wish what would it be? I asked what his advice would be. He thought for a moment and then he came up with two words. He said "strategic patience." I recall someone else saying "patient engagement."
Perhaps you would like to comment on that?
Dr. Plekhanov: Strategic patience is a term that was coined and used by the Clinton administration in the last year of that presidency to describe the desired policy toward Russia. Certainly, you must be patient with Russia. Patience is one of those qualities for which Russians are famous.
Engagement is certainly in order. The worst thing that could happen to Russia would be for it to slide back into isolation or semi-isolation, especially from the West. It would be terrible for Russia to see itself as a country that does not belong to the West while at the same time being seen by others as a pariah that is looking for its own specific path in the world. Russia is different from the West in a number of important ways, but it has always modernized itself on the basis of adopting Western ways.
Other countries have done the same thing. Japan has shown an interesting example of modernizing by grafting Western ways on to their own traditions. Sometimes the Russians have been more successful in producing such grafts. There is no reason why they would not be able to do so in the future.
The thing that really makes me optimistic about Russia is that there are so many people in that country who have had a hard time in the past decades but who have gained freedoms. Those freedoms are challenged and sometimes circumscribed, but they are there. There is the sense in the country that people need to try to improve their lot, defend their rights and try new ways.
Russia is at a new stage now. Many things are possible. There are dangers, but there are possibilities. In your first question you mentioned how Canada could be perhaps helpful in improving the efficiency of Russian agriculture. This brings me back to my original point about the inordinate costs of both security and development in Russia. This heartland of Eurasia, which Russia occupies as a state, is an area where there is very little good land. This is an area that is open to the cold winds of the Arctic Ocean but closed to the warm winds of the other oceans. The harsh weather conditions have always made production in Russia more expensive. The massive state has always put tremendous burden on the producer.
It is now in the interests of the producer and the ability of people on the farm, in the industrial sector and in the services, to learn to produce in the market economy that Russia has for the first time. For the first time in its history, Russia has this degree of development of a market economy. We should help the Russians learn the tools of a market economy. I am not talking about stockbrokers; there are more than enough artists of this type in the Russian economy today. I am talking about the producers, the people who milk the cows and make cars.
I emphasize employee ownership because I think that it is a very important form of private ownership. It is also collective ownership, but it is also private ownership. The ESOP experience in the United States and in Canada serves as good example. This is one way in which the producer can be empowered and taught to use the market economy constructively and productively.
Senator Grafstein: Senator Graham put his finger on something. What is our first strategic interest? What is our first vital interest? Senator Graham answered that by saying that the first interest we have in Canada is to maintain and ensure that the fragile democracy survives. That obviously must be at the top of our list.
How do we bring that about? You said something that I thought was interesting from a historic standpoint. The struggle for democracy in every location has never been an easy one. It has been a struggle. The Americans had a year's struggle after the revolution for the form of government that they would take. They have this unbelievable contest between a strong presidency and an independent government that is based on checks and balances.
Is there, as there was amongst the founding fathers of the United States and the founding fathers of Canada, a commonality of viewpoints in Russia about the importance of democracy and checks and balances in a democracy?
John Adams wrote five volumes on the defence of the Constitution and checks and balances. Jefferson took an opposite view. There is literature by Madison and Monroe. If you read all of those works and the works of our founding fathers you will see that the idea of checks and balances is very important to all of the authors..
Do you find in the literature that you are reading about modern Russia that there is some convergence of viewpoints about a strong central government and checks and balances or are they still too much embodied in the communist ethos? What are the Russian theorists saying to their political leaders?
Dr. Plekhanov: In the past 15 years there has been a tremendous outpouring of literature advocating rational separation of power; the creation of a viable legislature; the creation of a federalist set-up for Russia, and the creation of a balance between state and society that would be more like a balance with which Western countries are familiar. All those arguments were brought forth quite resonantly.
It is that set of ideas that was the foundation of the new Russian state. Theoretically, the Russian state is pluralistic and democratic. In reality, of course, it is a far cry from that.
How to make it a reality? Even in the past two years or three years, aside from the marginal totalitarian forces that do exist in Russia today with representatives in Parliament, we have not seen an ideological challenge to the basic notions of democratic government that the Russians adopted since the reforms began.
Let me put it this way. Historically, the Russians have been prepared, in various times in their history, to give to the top leader and the government a tremendous amount of authority and even sacrifice their rights for only one reason. That reason has been to help defend the country. At times of peace there would always be pressure from society to reduce the power of central authority, reduce the power of bureaucracy, and to give more rights and more power to the people.
Senator Grafstein: How is that different from Canada and the United States? In time of war, we centralize.
Dr. Plekhanov: Exactly. The problem is the Russians live in a tough neighbourhood. The Russian state has emerged from a process of endless wars.
It emerged as an independent state from the Mongol Empire. It needed to fight for 100 years, from 1380 to 1480, before it could proclaim its own independence as a state run from Moscow. It then needed to fight for every inch of the territory. Russia expanded by fighting for access to the seas, which they had had before but lost due to the Mongol invasion. Russia was shaped by fighting off the nomads, the Steppe people who kept raiding Russian towns and villages.
It is important to understand this Russian insecurity complex to understand how the Russians feel about their government. That is why I quoted Kliuchevsky and his idea of the "battle order" as an important feature of the Moscow state.
Let's try to prevent a situation where the Russians would be lining up in another "battle order."
The Deputy Chairman: Thank you, professor. As you can tell from all the questions that you have generated, there is much interest in your points of view. You have helped us place many of the concepts that were put forward previously into some Russian context.
I thank you very much for coming. I think that the interest is well identified by all of the senators in their questions.
The committee adjourned.