The Rule of Lawlessness

The speech placed Bush at loggerheads with Putin, who has dismantled many of Russia's democratic institutions and threatened private property rights. The U.S. and Russian leaders' differing approaches toward democracy reveal a profound values gap.

When they met in Santiago, Chile, last November, Putin lectured Bush about how Russia's history dictates that it adopt a limited form of democracy. In Bratislava, however, rather than debating various styles of democracy, Bush emphasized universal principles, including a free press, protection of minority rights, political opposition and, most importantly, the rule of law, which is a crucial guarantee of private property and individual liberty. In turn, Putin changed his tune and acknowledged that democracy should indeed follow certain fundamental principles.

Private ownership and property rights, two of the fundamental elements of democracy, have a short history in Russia. Without long-standing traditions to counterbalance it, Putin's authoritarian model enables officials to easily manipulate state institutions and laws, diminishing individual freedom from government interference. As a result, Russian citizens reportedly pay more than $30 billion per year in bribes to secure business licenses, avoid taxes, win court cases and gain access to medical treatment, education, housing and transportation. Official corruption has become a socially accepted norm that inhibits the growth of civil society.

To establish the rule of law in Russia would require the government to completely change its course. Yet it seems intent on doing just the opposite. The Kremlin used purportedly independent legal institutions to renationalize Russia's largest private oil company, Yukos. But Yukos is not an isolated incident. Nor is it the most important. From the beginning of Putin's presidency, the Kremlin has used government institutions in the name of vaguely defined state interests to take private property from Russian small businesses and foreign investors who are adding value to the economy. To disguise this creeping expropriation, the Putin administration has created a dependent judiciary. As a result, Russia lacks several fundamental building blocks of a market economy, the freedom to engage in commerce based on an enforceable contract and guarantees of private property.

Though U.S. and Russian values differ widely, the Bratislava summit reaffirmed the two nations' common interests. Such vital interests provide Bush and Putin the opportunity and incentive to reduce the values gap.

But this will be hard work. Russia's membership in the World Trade Organization, for example, should be predicated on a track record of enforcing laws that protect foreign capital and intellectual property. Not only is foreign capital unsafe in Russia, the Kremlin's dependent legal institutions allow it to expropriate foreign investors almost at will. In Bratislava, Putin suggested that narrow economic interests motivate his critics. In saying this, he has effectively left the door open for the Kremlin to continue interfering with fundamental property rights. Under these conditions, it is risky to conjecture that Russia will be more willing to subscribe to the rule of law after it has become a WTO member.

Ultimately, whether the United States and Russia can engage in broader and more practical cooperation on a range of issues will depend on whether a genuine convergence of values can occur. In essence, the issue is whether Russia will allow civil society to grow sufficiently strong to hold the government accountable and demand the rule of law. In order to create a dynamic civil society, it is essential to guarantee both the liberty of Russian citizens from official extortion and the freedom to protect their private property.

It will be difficult for Bush to gain Putin's acceptance of the supreme value of individual liberty and freedom. Nevertheless, Bush has a compelling case. Russia's economic growth depends on whether the state can guarantee contract law, protect private ownership and encourage an independent private sector where small business can develop and prosper. Russia's security depends on whether it can allow civil society to take root and begin to eradicate corruption. In short, Russia can build a stable democracy based on its own culture only if the state is willing to tolerate more individual freedom and limit economic and political interference.

Matthew H. Murray, the president of Sovereign Ventures Inc., a management consultancy that specializes in small business in emerging markets, contributed this comment to The Moscow Times.

Source: The Moscow Times