There aren't many clubs harder to join than the G-8. You have to be at the top of the global heap: one of the very richest industrialized countries, potent enough to help steer the world's economy. And you're supposed to be a functioning democracy too. So when Vladimir Putin opens this year's G-8 summit next weekend at the sumptuous Palace of Congresses overlooking the sea 15 km from St. Petersburg, the famously stone-faced Russian President can be forgiven a brief flicker of a smile. The former kgb officer in East Germany will be in charge of a gathering to which, by any objective measure, he should not have been invited.
Even now a small army of diplomats is buttoning up the communiqués that will record a bland consensus on three topics Putin has chosen for the first G-8 Russia has ever hosted: energy security which Moscow itself made controversial in January by cutting off gas supplies to Ukraine after raising the price of the commodity by 400% and the less contentious areas of education and infectious disease. But the main focus of attention will be Russia itself: a Russia awash in oil money and emboldened by it, becoming less free at home and more assertive abroad, in ways that have increasingly disappointed and worried leaders who used to talk of a "strategic partnership" but now fear, as one scholar recently put it, that "Russia is leaving the West."
The George W. Bush who in 2001 said of Putin that "I looked the man in the eye … I was able to get a sense of his soul" and "found him to be very straightforward and trustworthy," sent Vice President Dick Cheney to Lithuania in May to declare that Russia should stop using its oil and gas supplies to keep customer countries
in line, and to complain that Putin's government "has unfairly and improperly restricted the rights of her people." Privately, the other G-8 leaders regret giving Russia the nod four years ago to host this year's gathering. Instead of a carrot to induce improved behavior, the venue has become a spectacular stage for Putin to proclaim his rather different message: Russia is back, and I'm in charge.
That's why the St. Petersburg summit may be more significant than most such gabfests. It will focus the world's attention on two crucial questions: What does Putin's Russia really want? And will that lead to more conflict with other countries, even another cold war?
Churchill's old saw about russia being a riddle, wrapped in a mystery, inside an enigma continues to have force now that the Iron Curtain has long since been pulled back. Moscow's more muscular approach to the world has roots in its domestic politics. And there, a contradictory welter of good and bad developments contend for dominance, giving the Kremlin cause for both expansive confidence and prickly insecurity. The economy is booming. Since 1999, growth averaging more than 6% a year has produced a cumulative expansion of 65%. High oil prices are the main reason. Still, says Roderic Lyne, a former British ambassador to Moscow, "the boom doesn't stem from oil alone. Genuine entrepreneurs have built good businesses in telecom, information technology, retail, brewing, food processing and consumer credit."
A government that was broke under President Boris Yeltsin has had six budget surpluses in a row, just agreed to speed repayment of its foreign debt, and has socked away over $70 billion in a rainy-day fund. More than 6 million Russians a year now take foreign holidays. There are more than 100,000 U.S.-dollar millionaires. It's also true, as Lyne argues, that Russians have rarely been so free. "They are vastly freer than the Chinese. They can live well and have fun. They can read, watch, say what they like and access the Internet." Perhaps unsurprisingly, in polls Putin's approval ratings are high, nearly 70%.
But these positive trends coexist with many signs that Russia is stumbling on the path toward free-market democracy so much so that some U.S. and European legislators and human-rights groups want to kick it out of the G-8. Russia's postcommunist transition was always going to be slow and erratic, but what worries many experts now is that the direction of travel in many areas is reverse. U.S. pro-democracy organization Freedom House's annual country ratings show a steady decline in Russia's adherence to fair elections, representative government and press freedom. State-controlled companies already run 40% of the economy, and the share is rising part of a wider pattern of centralizing power in the hands of the President and his closest associates. One result is that the World Economic Forum ranks Russia poorly on corruption: 106th out of 117 countries, for example, in "favoritism in decisions of government officials," and 108th in protection of property rights.
[an error occurred while processing this directive]If Putin has noticed such criticisms, he gives little sign of it. He has turned the Duma, political parties and regional governments into elaborate rubber stamps. "The separation of powers has been dismantled," says Vladimir Ryzhkov, one of the very few independent liberal deputies left in the Duma. "All power belongs to the President and his administration, and 1.3 million federal bureaucrats." People don't go to jail for expressing deviant views anymore (though a bill about to pass through the Duma will soon make that possible), but organized politics have been switched off in favor of direct rule. People can watch and read what they want, but the state apparatus controls all TV news and steers most newspapers. Many nongovernmental organizations (ngos) that might shine a light on official abuses have been curbed; George Soros' Open Society Institute was shut down. These restrictions, which Putin argues were necessary to halt a slide into anarchy, are a big reason why others in the G-8 are critical.
It's a problem that goes deeper than Putin: his approach has won substantial popular support, which means that any successor will likely continue along his path. Buoyed by stability and economic growth at home, Russia under Putin has been able to develop a foreign policy that seeks to re-establish its place as a key actor on the world stage, and which preserves what Russia thinks of as its traditional prerogatives in its immediate neighborhood. A senior Bush Administration official says the main message from the Kremlin is that "Russia's back, back like it hasn't been since the breakup of the Soviet Union." What does that mean for the rest of the world?