Russian Economy Failing to Modernize

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Baev, Pavel K. (2010) Russian Economy Failing to Modernize, Eurasia Daily Monitor. 13 April.

In his first comment on the sudden explosion of violent conflict in Kyrgyzstan, President Dmitry Medvedev tersely observed that “the protests reflect an extreme disaffection with the incumbent authorities among ordinary people.”

Russian exports in the first quarter of this year were 60 percent up on the same period in 2009, but real income has remained flat and reserves have not increased. The “gas-first” course gains an edge over wishful thinking about “modernization” with every increase in oil prices, but this return to familiar patterns sinks Russia deeper into economic stagnation. Medvedev is eager to postpone recognizing this reality, as he prepares for lengthy foreign trips to the US and Latin America, but he should reflect on Putin’s casual point about the violent mess in Bishkek: “Personally, I was totally taken by surprise.” This may or may not be true, but it illustrates the vast distance between the Kremlin micro-universe, in which the two supremos direct the intrigues of their minions, and the real world where anger about corrupt self-serving autocracy is growing. Surprises for the “dear leaders” might indeed be on the cards.

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