Post-Soviet Russia - Essay Example

Topic: After more than a decade of post-communist transition Russia is neither a liberal nor a democratic society. Introduction: From theOctober revaluation 1917 Union of Soviet Socialist Republic (USSR) established and struggled for classless society with Marxist ideology. Being a superpower USSR played a balanced role in words politics as a threat for USA. The global politics was defined by extreme competition between two superpowers from 1945 to 1991. The competition encompassed almost all areas of economic, political, social, and cultural patterns. Therefore, the Soviet Union unexpectedly collapsed in 1991. In the wake of its demise, its component republics broke apart, leaving the Russian Federation as the largest piece with a population cut in half that allowed it to remain the largest country in the world. The primordial president of the Russian Federation was Boris Yeltsin, a former member of the old Soviet Politburo who declared the moribund of the old Soviet-style regime. The reforms that he advocated pointed the country in the direction of democracy and a free-market economy. A small vested group and advisers took control from the debilitated president, and they ran the country as an oligarchy, granting themselves favors and inviting economic and political corruption. However, in spite of this development, a new constitution was put into place in 1993. The regular competitive elections have taken place since then. A new President, Vladimir Putin, was elected in 2000. Many observers believe that the influence of the oligarchy has declined since then. Modern Russia is a very changeable country. Russia has almost no empirical experience with democracy and a free market. In terms of administrative hierarchy, the Russian Federation is a constitutional democracy with three branches, executive, legislative, and judicial. In terms of procedure, however, the Russian Federation has a presidential form of government, which concentrates most authority in the president as the head of state. The head of state is Boris Nikolayevich Yeltsin was elected on June 16, 1996 for a four-year term. There is no vice-president. In the event of the incapability of the president to perform the constitutional mandate, the head of the government, the Premier, succeeds the president. The Premier and Chairman of the Russian Federation Government, Viktor Stepanovich Chernomyrdin was appointed in December 1992 by the president. A First Deputy Premier and First Deputy Chairman of the Government assist the Premier. Russian politics is pluralistic. There are myriad numbers of political parties in Russia. The democratic and market reform oriented parties include: "Our Home Is Russia", the Yabloko Bloc, Russia's Democratic Choice Party, and Forward Russia. Traditional parties include: Congress of Russian Communities and "Women of Russia". Revisionist parties include: Communist Party of the Russian Federation, Liberal Democratic Party of Russia, the Agrarian Party, Power To the People and the Russian Communist Workers' Party. During the past five years the Russian government has taken substantial measures in converting to a market economy. The government performed a market reform program in January 1992. In the following three years, the government freed nearly all prices, cut defense spending, eliminated the old centralised distribution system, adopted a convertible currency and completed an ambitious voucher privatisation program in 1994. The government established private financial institutions, and decentralizing foreign trade. Within 1997, the transition to a market economy was nearly complete despite having many problems of irregular regulatory policy. In some areas, there were inadequate regulatory activity leading to monopoly practices and corruption. In other areas, there is excessive state interference in the economy leading to inefficiencies and corruption. It would be disappointment if the post-communist Russia, where the political stakes and human costs are incomparably higher than that of any Western country, became laboratories for ideologies whose central beliefs already have been tested to destruction in Western societies. Professor Gray suggests, countries like Russia will have to find their own unique path to a non-communist future and not simply copy some abstract Western model of a free-market order. Russia would do better following the neo-mercantilist approach of Japan, in which guaranteed employment within corporations and communal goals and senses of identity are hallmarks of the social system. What these former Soviet countries need are social safety nets, trade protection against foreign competition, government-assisted reconstruction and reinvestment, and job security, he says. It is evident that each country has its own history, traditions and culture. Every political and economic institutional must be changed in the context of this societal forces. The tragedy of Russia is that force was applied with a vengeance. The capitalism, peace, and liberty were denied because the Marxist state declared war on all aspects of human freedom and all forms of private property. Russia must reconstitute the institutions of peace and liberty, i.e., the rule of law, legal recognition and enforcement of property rights, and democratic procedures for representative government. All three of these basic principles for peace and liberty, in terms of their specific institutional forms must bear the mark of the histories and traditions of the countries in which they are reestablished. Does it a liberalised Society The people peacefully and voluntarily arrange their social and market relationships on more communal or individualistic lines. It will be determined by the actions of the people themselves, based on their cultural preferences and the opportunities for mutual gains from trade. The individuals in society will spontaneously develop the societal arrangements and associations that best serve their ends, goals and needs. The free-market order is a universal model applicable to all men, in all countries and at all times, since, within the general preconditions of law, property, and liberty. It allows men free to arrange their personal affairs and interpersonal associations in any manner that serves their preferred and changing circumstances. If there were a setback in Western model that would be disastrous to implement in the post-communist countries. It would be the interventionist-welfare state that has dominated Western Europe and North America for more than half a century. This paper uses a macro-level comparison of the policies and electoral experiences of the post-Communist parties in Russia. The proposed answer is that the economic success pushes the distribution of mass preferences in a liberal direction. The pragmatic post-Communist parties will adopt more liberal platforms and are likely to receive increased electoral support. This outcome contrasts with ideological post-Communist parties in economically successful countries that are likely to continue to receive a relatively small proportion of the vote. In unsuccessful transitional countries, such as Russia, post transition Communist parties can both maintain their ideological positions and attract a large share of the vote. Economic Despondency: The Russian transition has not become successful in the post communist period. The GDP has remained below its pre-transition level despite high growth rates since 2000. The Unemployment has become high and many of the employed have not received regular wages in Russia. Brainerd (2001) has mentioned that the wage arrears may be lower than commonly thought; the income distribution has become far more skewed; and life expectancy among working age males declined substantially during the 1990's. Economic activity has been concentrated in a few large former state enterprises with comparatively less de novo firm and job creation than in the Central European countries. Jackson, et al (2005). The present data shows that 'de novo' job creation in Poland and the Czech Republic far exceeded than Russia. Berkowitz and Jackson (2005) also argue that the small business sector in Poland is larger and far more robust than in Russia. Kornai (2000) offers the same contrast between Russia and Hungary, which he offers along with Poland as paradigm of transition countries that succeeded by having a high rate of new firm creation. The lack of new firms in Russia, coupled with the evidence that managers in the former state-owned firms are not committed to economic and political reform (Frye, 2002 and 2005) Post-Communist Hierocracy: The prototypes of party competition discussed predict that two things will happen in Russia because of the absence of this constituency. The first is that liberal parties will remain small and marginal. The second is that the post transition Communist party has little incentive to adapt more liberal policies, and will maintain its largely orthodox positions, but it will remain an effective and electoral successful party. The two factors make it difficult to analyse the evolution of electoral competition in Russia within the framework applied above. Russian parties are making it harder to assess whether party platforms are or are not shifting as the transition proceeds. Secondly, Russian elections are less party centered and more candidates centered than in Poland, Hungary and the Czech Republic, making assessments of the party positions less relevant. With these limitations we think the Russian case provides a further illustration of our basic point about the electoral politics of transition. In this essay, we would like portray a comparative analysis of the employment and wage behavior of firms as they moved from the communist economic system of the late 1980s into the transition to a market economy in the early 1990s. In conducting this analysis, we use large panels of annual data on industrial enterprises in the Czech Republic, Slovakia, Poland, and Hungary, as well as a smaller (but best available) data set on industrial firms in Russia. We will be able to demonstrate how the employment and wage setting behavior of firms varied with the change in the economic system as well as specific changes in enterprise ownership and legal status before and during the transition. There is still only limited understanding of why all the former Soviet bloc Russian economies experiencing a depression-like fall in output and employment in the first few years of the transition. The Post-Communist Transition: Patterns and Prospects: The centrally planned economies have laid the foundations for a market economy. Their development potentially will depend on how they respond to the challenges of the next phase of transition in developing the public and private institutions. It needs a strong financial sector for a healthy market economy. The transition from a command to a market economy began in the late 1980s in the collapse of the Soviet Union two years later sharply accelerated this process. The transition has comprised two distinct phases. The first phase consisted of the liberalisation of markets and trade, privatisation of state enterprises, and withdrawal of government from many activities. In the second phase, the key challenges are to develop the public and private institutions that strengthen an effective market economy, to strengthen the state's capacity to raise revenues and provide the public services that are essential to a market economy. It will ensure that sound business practices become more firmly established. The reaction to these challenges will determine the extent of competition, quality of corporate governance, climate for investment, and prospects for longer-term growth. The process of economic reform and institutional transform will be accelerated by the prospect of accession to the Russia. In most of the post-communist world, political freedom was followed by economic liberalisation. The transition from central planning to the free market was uneven. With the passage of time, it is now evident that rapid reforms were on the whole better than gradual reforms. The Russia that adopted far-reaching reforms tended to experience higher growth rates and lower inflation and received more foreign investment. The effectiveness of large-scale privatisations was not dependent on the speed but on the transparency and honesty of the process. To gain maximum benefits from economic reforms, they need to ensure that the privatisation process is more transparent than it has been in the past. In countries where a small clique of oligarchs has captured the state, rapid reforms may be politically impossible in the short run. The liberalisation of the business environment, especially with regard to small and medium sized enterprises, could stimulate the economy without being seen as a threat by the ruling oligarchy. The ex-communist social democrats gained popularity when the transition to capitalism began to cause economic problems such as poverty and unemployment. All of them won national elections in their respective countries at least once in the past 15 years. However, the voters were certainly expecting left-wing policies. They were very disappointed: nearly all the ex-communist social democrats. They followed a highly capitalist, neo liberal policy while in power. As a result, many disillusioned left-wing voters have turned to the remaining Communist Parties in recent years. Some of the key flaw of post-communism Russia: The pre conditions of achieving a liberal democratic society in the post communist Russian faced a massive setback to bring its logical culmination. The criterions of liberal democratic are excellent performance, elimination of corruption, ensuring accountability and transparency. The privatisation is the incidence or process of transferring ownership of business from the public sector (government) to the private sector (business). In a broader sense, the privatisation refers to transfer of any government function to the private sector including hardcore governmental functions like revenue collection and law enforcement. Performance: A democratically elected government is accountable to the people through a legislature, Congress or Parliament, and is motivated to safeguarding the assets of the nation. The profit motive may be subordinated to social objectives. The electoral process in post communist regime of Russia is not transparent but remains obscure in application of electorate. Improvements: The government is motivated to performance improvements as well run businesses contribute to the State's revenues. There is a absence of motivational drive by awarding incentive and lead the organization to the path of degradation. The existence of state intervention is still visible in Russia and undue interference causes despondency among the entrepreneurs. Corruption: The government ministers and civil servants are bound to uphold the highest ethical standards, and standards of probity are guaranteed through codes of conduct and declarations of interest in a liberalised democratic society. This criterion is absence in the post communist Russia. However, in post communist Russia, the selling process could lack transparency, allowing the purchaser and civil servants controlling the sale to gain personal benefit. The unethical conducts of post Russia regime fail to fulfill the criteria of liberal democratic society. Accountability: The public does not have any control over private companies. These companies have either been administered or manipulated by a coterie who were have nexus with the former communist party members in the post communist regime of Russia. A democratically elected government is accountable to the people through a parliament, and can intervene when civil liberties are threatened. From that point of view, there has been absence of meaningful democracy in former Russia. Therefore, Russia is neither a liberalised nor a democratic society prevailed. Goals: The present administration of Russia has been administered to serve the parochial purpose of a coterie depriving the majority of the population. This coterie has become beneficiaries from the state companies. It could neither be a welfare state unless setting the goal in the post-communist period for the last two decades. The government may seek to use state companies as instruments to further social goals for the benefit of the nation as a whole. Cuts in essential services: Every welfare state is bound to provide basic amenities to its entire citizen. Russia is lagging far behind in the post communist period. The inertia of providing basic amenities to it's citizen lead the country to the path of pandemonium If a government-owned company providing an essential service (such as the water supply) to all citizens is privatized, its new owner(s) could lead to the abandoning of the social obligation to those who are less able to pay, or to regions where this service is unprofitable in the post communist regime. Could we doubt it is a welfare-oriented state Profit: There have been free competitions among the entrepreneurs in the liberalised democratic societies. The quality of products improves and the price decline in the liberalised democratic society where the entrepreneurs have the right of choice to invest their capital. The objective of entrepreneurs in liberalised democratic societies is to minimized profit improving the quality of products with the objective of coping competitions. Private companies do not have any goal other than to maximize profits in the post communist period of Russia. A private company will serve the needs of those who are most willing (and able) to pay, as opposed to the needs of the majority in Former Russia. Therefore, Former Russia is neither a liberalised nor a democratic society. Depression: There has been prolonging depression in the post communist Russia. The citizen has to face massive unemployment; acute food shortage and price hike of essential products leading the loves become miserable. There has been a lack of coordination in the market manipulation by the government in post Soviet Russia. The inflation in Russia reached 213%. In 1992, the first year of post-Soviet economic reform, inflation was 2,520%, the major cause being the decontrol of most prices in January. In 1993 the annual rate was 840%, and in 1994, 224%. The ruble devalued from about 100 r/$ in 1991 to about 30,000 r/$ in 1999. Conclusion: The economic liberalisation is connected with privatisation. The two can be quite separate processes The liberalised and privatized public services may be dominated by just a few big companies, particularly in sectors with high capital costs, or high sunk cost, such as water, gas and electricity. There is a distinct difference between liberalisation and democratization. The liberalisation can take place without democratization, and deals with a combination of policy and social change specialised to a certain issue such as the liberalisation of government-held property for private purchase. The democratization is more politically specialized that can arise from a liberalisation, but works in a broader level of government. The reforms and reshuffling in the post Soviet economy is bringing despondency among the people in absence of welfare. The exorbitant price hike of essential and low purchasing power fails to achieve the welfare state. The coteries who are belong to the former communist party getting maximum benefit from the state. This parochialism hurt the spirit of liberalised states. Therefore, the post-communist transition Russia is neither a liberal nor a democratic society from the perception of welfare states like that of U.S.A, U.K and EU Countries. Bibliography: Jackson, J. E. (2003), A Computational Political Economy Model of Transition in The Political Economy of Transition: Politics, Institutions and Policies, University of Michigan. Hellman, J., S. (1998), "Winners Take All: The Politics of Partial Reforms in Postcommunist, World Politics 50.2 (1998) 203-234 Frye, T. (2002), Markets, Democracy and New Private Business in Russia; The Ohio State University. Columbus, OH. Berkowitz, M. D. & Jackson, E. J. (2006), The Tale of Two Transitions: The Changing Income Distributions in Poland and Russia, Journal of Comparative Economics 34 no.2: 338-356. Allensworth, W. (1998), The Russian question: nationalism, modernization, and post-Communist Russia, 2nd Ed, Lanham, Md.: Rowman & Littlefield. White, S Russia's New Politics Robinson, N. (2002), Russia: A State of Uncertainty, Contemporary Review, Farmington Hills, Michigan. ISSBN: 0-415-27112-6. Kagarlitsky, B. (2002), Russia Under Yeltsin and Putin: Neo-Liberal Autocracy, Pluto Press, ISBN-10: 074531502X. Bjorkman, T. (2003), Russia's Road to Deeper Democracy, Brookings Inst. ISBN-10: 0815708998 Kopstein, J. (2001), Can Democracy Take Root in Post-Soviet Russia Explorations in State Society Relations, American Political Science Review Exeter, J. & Fries, S. (1998), The Post-Communist Transition: Patterns and Prospects, Finance & Development, IMF Publication Vol 35, No.-3, available at: < http://www.imf.org/external/pubs/ft/fandd/1998/09/exeter.htm > [accessed on 05-02-2008] Read More