Vladimir Denisov

Two years have passed since the official inauguration of Vladimir Putin as head of State. The president still enjoys high popularity ratings and is trusted by the majority of Russia’s population. But at the same time he finds himself under constant fire from the opposition-minded intelligentsia and independent mass media. Communists and political parties, which are ideologically close to them, keep criticizing Putin for unwillingness to use «a strong hand» for establishing order in the country. By contrast, democracy-oriented circles are blaming him for authoritarianism. So, what really the new course of the Russian power has brought to Russia, to the country’s economy and its citizens? Let’s try on the basis of facts to sum up mid-term results of Vladimir Putin’s performance as president (In Russia, like in the U.S., presidential elections are held every four years and presidency is limited to two terms).

    Vladimir Putin’s accession to the top of State power started in a period, which was difficult for Russia. The default of August 1998 not only depreciated the country’s obligations and destroyed the banking system but also seriously undermined public confidence in the reformist policy of the previous government. As was usually the case in times of big failures, President Boris Yeltsin was politically paralyzed. The initiative was temporarily taken by the Russian Parliament’s deputies, who pushed forward Eugeny Primakov as their choice for the office of prime minister. Primakov was a compromise figure, who suited both the left and the right. It was a fortunate choice. Primakov’s government managed to stabilize the national currency and stop the avalanche of bankruptcies. By the spring of 1999 the economic situation clearly improved but unpredictable Yeltsin sent Primakov to retirement. For the next three months the government was headed by Sergei Stepashin, who attempted to continue the stabilization policy of his predecessor. In August Yeltsin once again made a surprise decision appointing little known Vladimir Putin to the post of prime minister. And then, on December 31 1999, declining to wait for the next elections Yeltsin handed his presidential powers over to Putin.
Yeltsin’s successor got a burdensome heritage. The economy was barely showing signs that the industrial production was getting stabilized. Russia’s credibility rating was rather low and the time to pay debts was coming closer. Social obligations were badly fulfilled: salaries of State employees (in Russia they include people of such public professions as teachers and medical doctors) and State pensions were being delayed by up to half a year. And, when comparing the recent past and the present, one should recognize that with Vladimir Putin’s takeover of the Kremlin a lot has changed for the better.
In this sense developments in the ferrous metallurgy, one of the leading sectors of the Russian economy, were quite indicative. In 2001 the volume of steel melting increased by 15 mln tn or by 34% as compared with 1998. During that time the nonferrous metallurgy was also achieving high rates of growth. But the important thing was that for the first time during reforms production volumes started to grow at the breath-taking speed in manufacturing industries, including machine-building, chemical and petrochemical, light and food ones. Enterprises’ financial and economic state was stabilized and wages of industrial workers began rising. The federal budget revenues were exceeding expenditures and, as a result, for the first time in the years of reforms the government got a chance to fully settle debts in the social sphere and began to steadily raise salaries of State employees as well as pensions and allowances.
All this helps to understand why 75 % of Russians approve the president’s performance. In March 2000, on the eve of the elections, voters, who then hardly knew Vladimir Putin, were impressed by his youthfulness, energy, his ability to easily get along with people. In short, Putin was different, not Yeltsin’s type at all. Nowadays the president’s high rating is being supported by real improvements in the life of Russia, which more and more people can feel on themselves.
In analysts’ opinion, the present head of State has done in two years what Yeltsin failed to do in six years, since December 1993, when the new Constitution of the Russian Federation was approved. It is stressed that Putin is not trying to make superficial changes. He has left most of high-ranking officials in place and has opted for a tactics of making gradual corrections in politics.
By the time Putin was elected president, he did not have his own team: never before did he show himself as being an independent and ambitious politician. When the need emerged to replace some ministers, heads of federal departments and of companies with the controlling stock belonging to the government, Putin was forced to rely on the only reserve accessible to him. And that is on people, who were well known to him by the work in St.Petersburg and in the State security organs. So, this was the way vice prime minister Ilya Klebanov, defense minister Sergei Ivanov, Gazprom’s boss Aleksei Miller and some others came to the scene. And that is so much for those, who might be called «Putin’s cronies».
But one thing is really impressive: Putin managed to win over on his side the majority of influential Russian politicians. Among them are Moscow’ mayor Yuri Luzhkov and president of autonomous Tatarstan Mintimer Shaymiev, who are leaders of the Otechestvo-Vsya Rossiya political movement. Together with Sergei Shoygu, the leader of Edinstvo movement, they created Edinaya Rossiya, a new party. Its representatives along with allies from small groups of deputies now have a majority of votes in the State Duma, the lower house of the Russian Parliament.
Substantial changes also took place in the Parliament’s upper house, which until recently was like an assembly of governors. Today there is a stable pro-president majority in the Federation Council. Therefore, Putin has secured in the Parliament a quick and almost unchallenged passage of legislations, which the country needs.

Although before quite a lot of voters regarded Putin as «a man with a strong hand», the president firmly avoids acting as an authoritarian reformer. He tries to work out decisions on principal issues of economy and domestic policy through open debates relying on local initiatives. During his trips across the country the head of State consults with experts from provinces, such as engineers, agronomists, lawyers, businessmen. In Moscow Putin has formed a special consultative body called the State Council, which includes governors of leading regions. The Council discusses various problems, such as reforming municipal economies, homeless children and others. Comprehensive assessments and recommendations help the president escape making serious mistakes. Besides, such meetings are also important for forming a public opinion. Putin proved not once that he could secure wide support of the society.
All approaches listed above helped Vladimir Putin put into effect many laws. The Budget, Tax, Land and Criminal Codes have been adopted. The single legal foundation is being formed: laws of the Federation’s subjects are being brought into line with all-Russian norms. There is a task to adopt in the nearest future a new law on bankruptcies, arbitrage legal procedure code, law on farmlands’ turnover.
Today Russia has the lowest, 13%, income tax rate in Europe. This may testify to Putin’s farsighted pragmatism. Two years ago there were differential tax rates. High income tax rates amounted to 35%-45% and many businessmen were attempting to avoid paying taxes. The president persuaded lawmakers to reduce these rates. Tax collecting noticeably increased and that proved the correctness of the policy directed at steady reduction of tax burden. Profit taxes were lowered. A draft law on privileges for small businesses was worked out.
Of course, not all innovations have an immediate impact on the everyday lives of 146 million of Russian citizens. But the majority of the able-bodied population sees the importance of reforms in making the country overcome at long last the period of discord, crisis and internal conflicts so as to start living peacefully, with confidence in the future.
Let me draw an analogy. In 1932 Franklin Roosevelt was elected president of the U.S.A. The Great Depression persisted for two more years and it seemed that it would destroy the country once and for all. But then Roosevelt’s New Deal showed its worth.

Putin has an advantage: just in two years after his election Russia’s changes for the better are tangible. There is a hope that the path to prosperity will be shorter as well.