Russia is showing China how to break away from the past

Both have had their fling with communism but only Russia has moved on and is now setting an example that China must follow if it wants to play a central role in shaping the future of the world

The Taipei Times
Mon, Nov 25, 2002
By Cao Chang-Ching 曹长青

The Chinese Communist Party's (CCP) 16th National Congress is over. Although the rest of humanity has entered the 21st century, Chinese politics remain in the 1950s. Just as at all party representative congresses in the past, the representatives to this congress were obedient, read their documents at the same time, listened to reports and then raised their hands like robots, completely controlled by the supreme power, the general secretary on the podium.
Bordering China, however, Russia has over the past 12 years held two presidential elections, two national referendums, five elections to the Duma and at least three gubernatorial or legislative elections in each of its 89 regions.

On Dec. 12, 1993, the day Russia held a referendum regarding its constitution and also the day of its first elections to the Duma, I published an article in the US weekly World Journal (世界日报), entitled "Today, the people of Russia vote to decide the new constitution and the new Duma" (今天,俄罗斯人民用选票决定新宪法和新国会). In it, I compared the Russian and Chinese reform models, stressing that the Russian people voted and were about to leave the era of Animal Farm behind and enter the era of human life, which includes the right to choose. Once Russia had removed the communist tumor that had been spreading for 70 years, there was certain to be a short period of weakness, but Russia will enjoy a dignified future where no one will be able to bring the past back to life.

Nine years have passed. The CCP is still holding its National Congress, depriving the Chinese people if their right to choose. Russia has seen revolutionary change.

Russia now enjoys democratic elections and press freedom.

Democracy contains at least two important ingredients. One is regular and fair elections. The other is press freedom. Not only has Russia held all the above-mentioned elections, it has also allowed private newspapers, television, radio and other printed publications and people are beginning to enjoy unprecedented freedom of expression. During the recent hostage incident in Moscow, the media were allowed to freely criticize President Vladimir Putin. On the recent anniversary of the October Revolution, thousands of people (mostly elderly) holding pictures of Lenin, Stalin, Yasser Arafat and Saddam Hussein gathered in Moscow's squares to remember the revolution and the bloodshed. Russians are free to express their own political opinions.

It is exactly these regularly held elections and the freedom of the press that have brought realism to Russian foreign policy and purged it of ideology. Russia no longer sees the US and the West as enemies, it no longer opposes NATO's eastward expansion, it has established the historic US-Russia Council and is attempting to join the West. After the Sept. 11 attacks, Putin was the first person to call US President George W. Bush to express his strong support for anti-terrorist activities.

Russia has also given up military imperialism. Spending on education now exceeds military spending.

Military policy is another area in Russia that has seen significant change. Russia no longer attempts to play the role of an empire,and it has cut military spending and transferred these funds to the economy.

Leon Aron, director of the department for research about Russia and the former Soviet republics at the American Enterprise Institute for Public Policy Research, published an article entitled Russia's Revolution in this month's issue of Commentary. In it, he says that military spending, which during the Soviet era made up 30 percent of the nation's GDP, has fallen to 5 percent of GDP (the figure for the US is 3 percent). During the Soviet era, the army consisted of 4 million troops. This was first cut to 1.7 million troops in 1996, and then another cut this year brought the number down to 1 million. A further cut to 650,000 is slated for next year. (The PLA consists of 2.5 million troops and the US has 1.25 million). From 1992 to 1995, Russia repatriated 800,000 troops, 400,000 civilian personnel and 500,000 dependents from Eastern Europe. With the departure of the last Russian soldier from Estonia in September 1995, Russia returned, voluntarily, to its 17th-century borders.

The Soviet Union was in possession of 10,000 deployable strategic warheads. During his recent visit to the US, Putin agreed to cut the number of Russian missiles to 1,500 within 10 years (the US will cut its arsenal to 2,200).

A plan approved this year will abolish Russia's 300-year-old draft by 2010 in favor of a US-style system where service is voluntary. Russian spending on education exceeded military spending for the first time ever last year. Russia has also undergone full privatization.

The country has taken a path different from China, implementing political reform ahead of economic reform. Boris Yeltsin hired Jeffrey Sachs, an economist at Harvard University, as consultant for economic reform in order to carry out major changes in the Russian economy, something that has become known as shock therapy.

Chinese intellectuals did not look favorably on Russia's bold and resolute privatization and remained passionately loyal to China's traditionally conservative methods. Looking at the situation today, Russia's approach was successful and recovery has been quick.

At the moment, the rouble is stable and Russian foreign-exchange reserves have increased to US$38.5 billion. Not only have financial expenditures and revenues been balanced, but there is even a financial surplus. Over the past two years, Russia has repaid US$10 billion of the US$18 billion it owed the International Monetary Fund. While the global economy was in recession and with even the US economy stagnating, the Russian economy grew by 8 percent in 2000 -- the same figure as for China that year. Last year, Russia's economy grew 5.5 percent and growth of 5.2 percent is predicted for this year. On Nov. 12 last year, the Wall Street Journal praised Russia in an editorial, saying that the Russian situation may be the best since Peter the Great.

Chinese entrepreneur Yang Rong (仰融), who has been called China's third-richest man by Forbes magazine, was forced to escape to the US as the result of a dispute with the local government in Liaoning province over company ownership. As is the case with so many other so-called private or township enterprises, ownership of the company that Yang led is unclear. The "private" character of these companies is substantially false.

Russia's shock therapy led to true privatization. According to Aron's article, only 5 percent of Russia's GDP came from private enterprises in 1991. Today, this figure has grown to 70 percent. Using the book market as an example, 80 percent of books in Russian stores are now published by private companies. Books by Solzhenitsyn, Pasternak, Nabokov, Sakharov, Hayek and Keynes can be found in big bookstores.

Privatization has stimulated the economy, and over the past two years, Russian oil production has grown by 15 percent. In February, it reached 7.28 million barrels per day, for the first time exceeding that of Saudi Arabia, and it now amounts to 10 percent of the global oil market. Not only were Russian food supplies sufficient last year for the first time since the early 1960's, but the country also exported more than 5 million tonnes of grain.

The first thing Lenin did after coming to power in 1917 was to nationalize all land and establish agricultural collectives. In July this year, 548 million acres of agricultural land -- an area four times the size of France -- was denationalized and Russians can now own and freely sell their land. Foreigners can now lease land for up to 49 years (or buy it through Russian nationals). The next targets of privatization are the state monopolies in gas, utilities, railroads and state pension funds.

The Russian government is implementing large tax cuts. Early last year, the nation cut individual income tax from 30 percent to 13 percent and tax on corporate profits from 35 percent to 24 percent. Individual income tax in Russia is now among the lowest in Europe, second only to Ireland's 12 percent. Despite the cuts, tax revenue in Russia increased by 50 percent last year, due to the economic stimulus and increase in individual and corporate income they provided.

The country has also seen major improvements in living standards.

In the 1980s, Russians spent an average of 54 hours a month in queues. On a list of 221 essential food products, only 23 were regularly available in shops and many items were rationed and various coupons used. Today's free economy has filled store shelves.

In 1988, 43 million people in the Soviet Union -- one in six -- lived in families where per-capita monthly income was less than 75 rubles (US$7.50 at the underground exchange rate). World Bank figures show that average per-capita income had reached US$2,250 by 1999. In 2000, the figure for China was US$855, US$5,020 for the Czech Republic and US$4,070 for Poland.

In 1990, there were 18 cars per 100 Russian households. Last year, this figure had increased to 42, and it is predicted to rise to 52 this year, which means that over half of all Russian households will own a car. Two and a half million of the 9 million people living in Moscow own cellular phones. Over the past two years, the number of Russians connecting to the Internet grew by 40 percent (unlike China, Russia has never installed firewalls to restrict the flow of information).

During the communist era, there were no private charities in Russia. Last year, there were already 70,000. In 2000, the number of colleges had increased by 75 percent and the number of students had increased by 50 percent compared to 1992.

In 1991, only 500,000 of almost 300 million Soviet citizens had traveled. Last year, 5.25 million out of 145 million Russians had done so.

According to exit polls, 71 percent of 18 to 29-year-olds supported Boris Yeltsin in the presidential election in 1996, while the communist candidate only received 23 percent of their vote. When asked what the basic elements of a decent society were, 75 percent of those planning to vote for Yeltsin named equality of opportunity.

Grigoriy Chkhartishvili, Russia's most popular writer, said that "the most precious product of this evolution has been human dignity." People have been given the right and opportunity to freedom of choice.

Bordering China, Russia has become a mirror reflecting the ugliness of Chinese politics. At the same time, however, this mirror also brings light to China, letting the Chinese people, who have also experienced communism, see clearly what the basic components of a decent society really are and what the most precious product of reform should be.

Cao Chang-ching is a writer and journalist based in New York.
Translated by Perry Svensson


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