The laserlike focus on Vladimir Putin and Kremlin maneuverings from most Western commentators on Russia has overlooked a critical fact: the lives of ordinary Russians today are far better than ever before. The economy has grown at an average of 6.5 percent annually for the past seven years, giving Russians occupational mobility, higher earnings and an improved standard of living reflected in housing, cars, telephones and travel. The poverty rate has declined from 30 percent in the early '90s to nearly 10 percent now. Russian households now deposit rubles, not dollars, in their bank accounts and hold them at home.
Despite these positive indicators, the West consistently underestimates the prospects for the gradual emergence of a democratic system in the land of Lenin and Stalin. A backward glance at the Moscow scene in the late 1980s under Mikhail Gorbachev, and in the 1990s under Boris Yeltsin, provides a clue as to why. Gorbachev's perestroika, aimed at loosening the straitjacket of the planned economy, and glasnost, directed at introducing limited electoral politics, conformed to American values. These winds of change contributed to the end of the cold war and the dissolution of the Soviet Union in late 1991 and thus also coincided with American interests. The reformist earthquakes under Yeltsin, whose kamikaze crew of reformers demolished the communist system, reinforced the harmony between Russian and American values and interests.
But while the West approved of the political advances, Yeltsin's policies yielded economic disorder and public discontent. Rapid inflation essentially wiped out any savings accumulated during the Soviet days. On a corporate level, price decontrols destabilized balance sheets, forcing companies to withhold salaries, as well as tax payments. Shortfalls in budget revenues created government defaults of wage payments to state-sector employees and pensions to retirees. Moreover, the public believed Yeltsin's privatization program handed over Russia's prized assets—chiefly its natural resources—to a group of preferred oligarchs. This economic and political turbulence reduced a former superpower into a conciliatory "superbeggar," forcing it to forgo its geopolitical ambitions. By the time Yeltsin resigned in December 1999, his approval rating had plummeted below 5 percent.
Enter Putin, Yeltsin's handpicked successor, a former KGB operative and a current judo master, elected president in early 2000. Given the Sturm und Drang of the Yeltsin era, Putin's systematic extension of federal authority under his two terms was almost predictable. He abolished direct gubernatorial elections, restricted electronic media, consolidated parliamentary election rules and imposed restrictions on the activities of foreign NGOs. On the economic front, he brought Russia's energy sector, its principal source of foreign-exchange earnings, under Kremlin monitoring. Foreign companies, British Petroleum and Royal Dutch Shell among them, were largely muscled out.
To the West, these policies were undemocratic signals that Russia had veered off in the wrong direction. Yet the economic revival, based on high and escalating oil prices, brought in sumptuous tax revenues. The strong ruble continued attracting foreign investment in the economy. Politically, these moves stabilized Russia and sent a clear message to Russians and foreigners alike: the Russian state, endowed with a resurgent economy, political stability and a popular leader, will pursue Russia's national interests and its geopolitical role as defined by Russians—not as defined by the West. Russians, these policies said, will sort out among themselves the pace of democratic change in their own country.
Now, as Putin leaves office, one question remains: can the nation evolve into a democracy? Superficially, it appears it will not, at least in the short term. There is effectively just one candidate in the March 2 presidential election—Dmitry Medvedev, the young, personable Putin protégé. Russians have already given him the thumbs-up. But the improvement in the lives of ordinary Russians from Yeltsin to Putin can set the stage for their active participation in political decision making in the days ahead. Millions of Russians—urban, educated and feeling European—now earn their living as citizens rather than as employees of a communist state. Close to 70 percent of Russian youth go to colleges and universities. It may go largely unnoticed by Western observers, but there is a rising middle class in Russia that will ask for more choices and greater freedoms.