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Jim Hoagland

Ukraine's Lesson for Putin

Does Russia's president face the same kind of upheaval?

By Jim Hoagland
Thursday, January 27, 2005; Page A19

A revolt of "the millionaires against the billionaires" helped fracture Ukraine's corrupt power structure and lift Viktor Yushchenko to the presidency there. A similar upheaval may be bubbling next door against Russian President Vladimir Putin.

That is the well-buttressed argument put forth by Anders Aslund, a Swedish economist and former diplomat whose past readings of failure in the Kremlin and its political consequences have earned my attention and respect.


(Viktor Yushchenko, Left, And Vladimir Putin/itar-tass Via AP)

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I first ran across Aslund in Moscow in the 1980s at the height of Gorbymania, as the West cheered Mikhail Gorbachev for pushing perestroika as a means of reforming and saving the Soviet Union. Aslund's predictions that Gorbachev would be unable to manage the forces he unleashed and would be destroyed by them were seen at first as provocative, then profound -- and ultimately prophetic.

Being right once is no sign of being right always, or even often. There is a human tendency to analogize from the past and to miss what has changed. The rough-and-tumble years of Russia's robber-baron politics and capitalism under Boris Yeltsin's government, which Aslund initially advised, must have changed something.

But in conversation the other day and in several recent articles he has written, Aslund persuasively illuminated domestic conflicts that he sees leading toward "an unraveling of the Putin regime." Parallels exist both with Gorbachev's failure and with the political success of the reformer Yushchenko, with whom Aslund worked at Ukraine's Central Bank.

Corruption and mismanagement have begun to sap the strong public support that Putin commanded in his first term, Aslund reports. And the campaign to line the pockets of Putin's former KGB associates by jailing, intimidating and/or dispossessing the "oligarchs" who assembled fortunes under Yeltsin has turned much of the business community against the Russian president -- as corruption did for Ukraine's former rulers.

Ukraine's "millionaires" -- the big, but not the biggest, businesspeople -- helped create and finance a political opposition that they hope will implement the rule of law and let them keep most of what they have already made, suggests Aslund, who directs the Carnegie Endowment's Russian and Central Asian projects from Washington.

"Putin could have won a democratic election last year, but he chose not to," says Aslund. "He used the power of the state to crush his opponents. He named a prime minister, Mikhail Fradkov, whose only virtue is that he will make no decision on his own. From a base of support that rested on public opinion, the business community and the security services, Putin is isolating himself to rely only on the security service."

Russia's finances still benefit from high world energy prices. But Putin's cronies "sit on the cash flow and take a slice for themselves. They do not do what the oligarchs did, which was to reinvest in retail and other sectors," says Aslund, who estimates that Russia lost $8 billion in capital flight in 2004 after several years of net inflows.

"The problem for Putin is that there is nothing there to hold him if he falls. That happened with Gorbachev, too," the Swede continues. But Aslund demurs when I ask him what will follow:

"I am better at decline than rise. What strikes me, though, is that former prime minister Mikhail Kasyanov is putting forward real alternatives in public. He is someone to watch."

So is George W. Bush, who will meet with Putin in Slovakia on Feb. 24. That will be the moment to shift gears in the U.S.-Russia relationship, which has been dominated since Sept. 11, 2001, by Putin's adroit response to American needs in the war against al Qaeda and other Salafi extremists.

President Bush is now in the stronger position of the two leaders. In Bratislava, he can ask for greater Russian cooperation in counterproliferation, particularly on Iran. Missile defense is another promising area of coordination in what could become a broad security zone linking Russia, Europe and the United States. And Bush cannot afford to neglect Putin's assault on democracy at home.

Bush will not need or want to flaunt demands in public. But in private, he will need and want to take into account Putin's failures of the past year and the Russian's still-falling stock. Bush needs in short to be more skeptical about a leader to whom he has given the benefit of the doubt for too long.

He could even offer Putin a useful Chinese adage: It is time to eat your bitterness rather than justify, nurse and pursue it. Consume it, before it consumes you.

jimhoagland@washpost.com


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