Is Putin an Anti-Globalization Hero?

ST. PETERSBURG: Russian President Vladimir Putin's policies have sought to wrestle power from multinational corporations, multilateral institutions, and the global economic system they promote. Opponents of globalization in Russia and elsewhere should be applauding his initiatives. And yet, they remain silent. The reason: They suspect that his agenda is different from theirs.

In recent years, Russian officials have consistently implemented policies that seem to correspond with the philosophies of anti- or alter-globalization. But their rationale has less to do with an ideological opposition to globalization than with the desire to consolidate federal power. One merely must analyze Putin's response to three common critiques of globalization to recognize that more self-aggrandizing motivations are in play.

Take Putin's tough action in closing down tax havens on Russian soil and his attack on the oil giant Yukos. The Russian federal government began investigating the company for tax and economic frauds after it announced a merger with another large Russian oil company, Sibneft, and preliminarily agreed on serious investments from a US-based oil corporation in April 2003. Had government investigations and the subsequent arrest of Yukos chief, Mikhail Kodorkovsky, not ended the deal, the merger would have created the sixth largest oil company in the world, according to internet news agency Lenta.Ru. The Yukos affair sent a clear message that it is unacceptable to minimize tax payments, even using legal means.

Anti-globalization activists, who criticize multinational corporations of unfairly influencing policy and abusing loopholes to avoid paying taxes, would typically salute such punitive actions. They also condemn multinationals for avoiding taxes by registering their headquarters in foreign tax havens where tax rates are kept low in order to attract foreign investment. The reason these critics did not shower Putin with praise is their knowledge that Yukos chief Mikhail Kodorkovsky, a staunch critic of Putin's policy, was planning to oppose him in the election. It is widely believed that the attack on Yukos was Putin's effort to silence a vocal political opponent. Further, many suspect that Kodorkovsky's imprisonment – which barred him from running in the election – involved more than simply collecting back taxes. Activists do not support the use of excessive force over a political opponent.

Moreover, the Yukos debacle resulted in sizable losses for Russian companies' stocks on national and foreign stock exchanges, as well as certain downsizing of foreign direct investments due to high political risks. According to an article in the Kommersant Newspaper, net outflow of private capital from Russia in the third quarter of 2004 totaled US$2.9 billion.

The claim that Putin's attack on Yukos was a campaign for the rights of the Russian people did not hold up, making it difficult for anti-globalization activists to lend their support. Several Russian civil society and human rights activists stood up in support of the oligarch. Alexander Auzan, president of the one of the most powerful Moscow-based umbrella organizations, Societal Agreement, told the Moscow News that his coalition tried to get involved in the Yukos crisis on the company's behalf, advocating for property rights and social interests of the population. Despite initial governmental support, the proposed measures were not implemented.

Putin's crossing of swords with the international financial institutions like the World Bank and the International Monetary Fund, favorite targets of the anti-globalization critics, also failed to earn him much credit. Putin has ostensibly stood against the institutions' imposing heavy restrictions and conditions on countries with developing and transition economies. Between 2000 and 2004, he has persistently refused to borrow from these institutions. Putin's tough stand was made possible by high oil prices in international markets, allowing him to adopt an ambitious plan for re-payment of Russian debt. These institutions are now reconsidering the extent of their presence in Russia.

Thanks to cutbacks on borrowing and other policies, Russian currency reserves have grown from slightly above US$88 billion to over US$95 billion between late July and early October of this year. Such success would normally be hailed by opponents of global financial institutions. However, the critics put forward yet another accusation: Skeptical of Putin's underlying motives, opponents of globalization are reluctant to align themselves with him. Indeed, though Russia is not borrowing, it is clearly pursuing a neo-liberal policy of its own. The Russian federal Government recently cut a wide range of social entitlements, such as healthcare, and distributed cash payments for poor and socially vulnerable groups as compensation. This measure was widely unpopular among poor and marginalized groups of Russians.

Anti-globalists are, to put it mildly, unenthusiastic about these cuts in fundamental programs. In fact, a group of 72 Russian civil society activists made a declaration, which was published in the Novaja Gazeta in October. They maintained that the government reforms were responsible for the "liquidation of civic liberties" and the "destruction of the system of health care and education" in Russia.

Another of Putin's initiatives, his striving to strengthen the state, failed to win support from critics. Many oppose globalization because they believe it decreases the power and self-sufficiency of nation-states, including G7 members, in formulating domestic and foreign policy priorities. Indeed, many European and developing countries, who favor the globalization of national power through institutions like the UN, criticize US foreign policy as demonstrating the only modern super-power acting in its own self-interests.

To challenge the declining role of nation-states worldwide, President Putin has been working hard to build "vertical of power" and on "strengthening" the country. Though seemingly altruistic, these policies impose strict limitations – particularly heavy taxation – on civil society groups. According to recently introduced tax code amendments, Russian and foreign NGOs based in Russia will face taxation equal to that of commercial companies.

Two deceptively counter-balancing presidential initiatives were also announced: a Civic Chamber providing civil society groups with direct access to federal policymakers, and an order advising regional governors to allocate office spaces and assist with other administrative costs to local human rights groups. However, these measures cannot compensate for stricter regulations and projected official registration of all grant money disbursed by foreign private foundations and bilateral donors in one federal commission.

On these restrictions, the global civil society would never support the Russian President. In fact, the leading NGO formed a coalition advocating in favor of fair NGO taxation. Serious limitations on civil activities and citizen's peaceful activism simply cannot be understood by any local or global social organization, especially not anti-globalists.

Another reverse side is the absence of checks and balances at the federal, and soon at the regional, political arena. With the adoption of a law that essentially gives way to presidential appointments of regional governors, there will be much less political debate in the country. The bill currently being discussed suggests discontinuing federal states' direct elections of regional governors. Instead, regional legislative assemblies will have to approve the candidates suggested by Kremlin. If a regional parliament does not approve the suggested candidate twice, it will be suspended.

The Russian President had chances to earn global civil society support at the World Social Forum for roughly following the tenets of alternative globalization policy. However, Russia's current course of political reform is just not that simple: It's a mixture of centrist unification of the country, anti-globalist policy line, and neo-liberal measures.

The shortcomings of the seemingly inconsistent policies reveal a lack of respect for fundamental philosophy of civil liberties and social welfare shared by supporters of alternative development. Despite their deceptive surfaces, the policies pursued by the Russian executive authorities do not represent true anti-globalization. When viewed in a broader context, the commonality among government initiatives is the attempt to bolster the government's power in an inefficient manner.