The Finish Of Globalization For Russia And Russians: What It Means
People line up at the entrance to IKEA Rostokino in Moscow on March 3, 2022, after the Swedish … [+]
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The invasion of Ukraine has brought sanctions and economic isolation to Russia, holding the era of globalization Russians enjoyed after the end of the Soviet Union. Countries have gone from little integration with the global economy to becoming closely integrated. However, this might be the first time a country’s inhabitants have experienced an abrupt end to globalization after enjoying it for many years. To better understand the impact of this monumental change, I interviewed Brian D. Taylor, a professor of political science at Syracuse University and the author of the highly acclaimed book The Code of Putinism.
Stuart Anderson: Can you explain what Russia’s participation in the global economy looked like prior to the breakup of the Soviet Union?
Brian D Taylor: During the Soviet period the country’s economy was peripheral to the global capitalist economy, despite being one of the two superpowers. Soviet-style centralized planning was premised more on autarky, or economic self-sufficiency, than on participation in global trade and financial flows. Most Soviet exports to the outside world were natural resources, and they used the proceeds to buy food and industrial equipment.
Anderson: After the fall of communism, particularly in the past 10 years, what did globalization look like for many Russians and Russian companies (ie, travel, access to Western luxury goods)?
Taylor: The collapse of the Soviet Union marked the return of Russia to the global economy. The early Russian economic reformers understood that only through exposure to international competition and opening up to international trade could Russia make the transition to a modern capitalist economy. For average middle-class Russians, this meant the opportunity to buy foreign clothing brands, consumer electronics, foodstuffs, and so on. Russian companies became much more integrated into international trade and capital markets. And tens of millions of Russians could travel overseas.
Anderson: How do you think Russians are going to feel being cut off from globalization after experiencing those benefits for so many years?
Taylor: Being cut off will be easier for some and devastating for others. Only around 30% of Russians have international passports. Poorer Russians in rural areas and small towns already are largely cut off from globalization and its benefits. For younger and better off urbanites, the ability to renovate their apartments at IKEA, stream Netflix on their iPads, and easily hop on a plane to Europe or Asia is fundamental to their identities. All of this will become much harder now given the massive economic shock that Russia will experience.
Anderson: In your book, you define Putinism. What is Putinism, how did it influence the invasion of Ukraine and how will it potentially decide the course of future events?
Taylor: I argue that Putinism is a mentality shared by Putin and his close associates, what I call Team Putin. This mentality includes ideas such as anti-Americanism and Russia as a strong state and great power, habits of order, control, and loyalty, and feelings of Russia being humiliated and disrespected by the West and being vulnerable to destabilization.
I believe it influenced the invasion of Ukraine in a couple of crucial ways. First of all, in Putin’s mind Russia can only be a strong state and great power if it dominates the new states along its periphery, and Ukraine is particularly important for his vision of “historic Russia.” Second, Putin has long maintained that the United States is determined to weaken Russia and even undermine it from within. Putin feels that he is fighting for Russia’s historic destiny against more powerful enemies, which is why he is not inclined to back down. Indeed, the strong military resistance of Ukraine and the unprecedented sanctions imposed by the United States and its allies just reinforce his view that there is a determined and long-standing campaign to destroy Russia. In that respect we are in a very dangerous moment.
Anderson: A key pillar of Vladimir Putin’s support at least through 2008 was the improvement in living standards after the country’s relative economic chaos during the immediate years after the end of the Soviet Union. How does the current economic situation in Russia change that for people in Russia?
Taylor: The first thing to note is that Russia’ economic performance has been stagnant for a while. After growing at around 6.5% between 1999-2008, its growth has slowed considerably since then. From 2014-2020 annual growth was under half a percent per year, and living standards declined by 10%. For many Russians, times were already hard and the pandemic made this worse. This is all before the war and sanctions.
Now, due to sanctions imposed over Putin’s war, Russians are facing high inflation, the collapse of the ruble, and the departure of many Western businesses from the Russian market. Living standards will decline further. Putin has totally undermined whatever remained of his image as the man who brought relative prosperity and stability to Russia.
Anderson: Dmitri Alperovitch recently said because of sanctions and the closing of airspace, the ability of people to visit Russia or for Russians leave is going to “harken back to the Stalin era” while former top Russian economic official Sergey Aleksashenko said, “If Putin stays in power another 10 or 15 years . . . Russia will be more isolated from the global economy than it was in the time of the Soviet Union.” What do you think of those assessments?
Taylor: The situation is indeed dire. Experts are simply debating how far the clock is being turned back: 20 years, 30 years, 50 years—I’ve even heard invoked in terms of the consequences for Russian economy, when it was in the midst of a civil war after the 1918 Russian Revolution. Some of that is probably hyperbole, but multiple expert agencies are predicting a looming Russian default. Some Russian officials are seriously talking about nationalizing the property of companies that are leaving, as if the Russian state is capable of running McDonald’s or IKEA inside the country. The stock market has been closed for two weeks and capital controls are being introduced.
A big question that people are asking is: Will Russians stand for it? Many of them have gotten used to living in a modern, twenty-first century economy. People under the age of 45 have no adult memories of living under Soviet socialism. The wealthy, the middle class, and the poor will all suffer.
Other regimes have survived under harsh sanctions for quite a while, such as Venezuela and Iran. However, sanctions like this have not been imposed on an economy as big as Russia’s. Russians have endured a lot of suffering in their history, but those were different people living in a different time. Many Russians today have gotten used to being part of the global economic and information space over the last 30 years. I don’t think they are ready to go back to the USSR in terms of being economically and culturally cut off from the world.