JOANNE MYERS: I am Joanne Myers, Director of Public Affairs Programs, and on behalf of the Carnegie Council I would like to thank you all for joining us as we warmly welcome the representatives of Freedom House to our program today. Our illustrious panelists, Peter Ackerman, Jennifer Windsor, and Andrei Illarionov, will be sharing the results of their annual global survey of political rights and civil liberties, which this year is entitled Freedom in the World 2007: Is Freedom Under Threat?
Since its inception in 1972, this report of global political rights and civil liberties has provided policymakers, journalists, and the public with a comparative view of the global state of freedom. In essence, each country is rated according to a series of indicators basic to democracy and freedom and is given a numerical rating based on the level of political rights and civil liberties in each state. This report covers 193 countries and offers a unique global perspective on the world’s major political developments.
In 1941, when Americans such as Eleanor Roosevelt and Wendell Willkie became concerned with the mounting threats to peace and democracy, they founded this organization with a mandate to uphold democratic values and vigorously oppose dictatorships on both the right and left. Since then, standing as a clear voice for democracy and freedom, Freedom House has exposed tyranny around the world. They have confronted dictatorships in Latin America, apartheid in South Africa, Soviet communism and its domination of Eastern and Central Europe. They have also spoken out against religiously based totalitarian regimes, such as those in the Sudan, Iran, and Saudi Arabia.
Even though there have been numerous philosophical debates over the nature of freedom, the differences between various types of freedom, and the extent to which freedom is even desirable, Freedom House’s annual survey continues to be the standard bearer for evaluating trends for anyone in pursuing this topic. This year’s survey raises a very serious question in asking whether freedom is under threat. The conclusion reached is quite disheartening, as it finds that, unlike President Bush’s pronouncement that "freedom is on the march," it appears that this march is paced more like the Wilson tango—one step forward, two steps back—insomuch as the survey finds that the percentage of countries designated as Free has failed to increase for nearly a decade.
We will begin our discussion with the Chairman of the Board of Freedom House, Peter Ackerman. He will be followed by Jennifer Windsor, the Executive Director, and she will present the findings of this report. We will conclude with Andrei Illarionov, who is a Senior Fellow at the Center for Global Liberty and Prosperity of the Cato Institute, and he will discuss Russia, a country that today presents a worrisome trend and a potentially serious threat to the stability of democracy as it intensifies its own campaign to chip away at the civil liberties of its people. Last but not least, I want to thank Chris Walker, Director of Studies at Freedom House, who was so instrumental in bringing these panelists to us today. Thank you for joining us.
PETER ACKERMAN:I would like to maybe add a few points that are worth noting about Freedom House. When Freedom House was founded it was comprised of an extraordinarily diverse group, encompassing business leaders, labor, leading Democrats, Republicans, journalists, and members of the scholarly community. These individuals came from varied backgrounds and probably disagreed on a wide range of issues, as I assure you they do today. But they did agree, as we do today, on one important objective, and that is that the global expansion of freedom was then and is now a critical goal in the foreign policy of the United States, and for the value of promoting democracy and human rights in itself.
Today, Freedom House’s Board of Trustees continues to be composed of a diverse bipartisan group of distinguished individuals, one of whom I’d like to acknowledge today. Walter Schloss is one of our longstanding members and a critical supporter of Freedom House, and without him our organization would not be as strong as it is today. Freedom House, it is also worth noting, is not only unique because of the diversity on the Board and staff, but since its founding in 1941 we have prided ourselves in being an independent, nonpartisan voice for freedom. Freedom House is also unique in that we utilize three interrelated approaches—analysis, advocacy, and action—to support the expansion of freedom. Let me explain.
First, we analyze trends in the state of freedom and democracy throughout our various publications, which we are going to be talking about tonight.
Second, we advocate against repressive regimes and for a U.S. foreign policy that puts a priority on the expansion of freedom in the world. An example of that would be when, a year or so ago, Kofi Annan decided that the Human Rights Commission couldn’t do its job if it was comprised of human rights abusers, and proposed a set of reforms. We were very active in support of those proposals.
And finally, we also support the action of reformers on the ground. We are pushing for democracy through our programs in two dozen countries, and we provide funding and training to human rights defenders, journalists, and civil activists. We, I believe, are unique in that we do all three of these. There are many groups interested in freedom and human rights that may do one or two, but we are unique in that we do all three. We think that they are synergistic, each one supporting the effectiveness of the other.
Now, I'll turn the meeting over to our extraordinary Executive Director, Jennifer, and she will tell you about the findings of our most recent effort at describing freedom in the world.
JENNIFER WINDSOR: We are very privileged to be here to talk about Freedom in the World. You can’t summarize this entire book in ten minutes, and I am not going to try. I am going to try to hit some of the highlights.
I also want to recognize those people that actually produced Freedom in the World here with us tonight. Arch Puddington, the Director of Research; Chris Walker was already mentioned as the Director of Studies; Aili Piano, who has been the Senior Editor for Freedom in the World; and a number of other Freedom House staff here today. If you give me any questions I can't answer, I am going to feel free to call upon the real experts.
Let me say a word about our methodology. There is an enormous amount of interest in Freedom House’s survey of freedom, in particular. Whether because this current Administration has embraced the promotion of freedom and people want to track whether the policy is working—and we have numbers to show it—or whether there is now a linkage between large portions of the U.S. foreign assistance budget, and its allocation, with Freedom in the World findings—what I find is that people make sweeping generalizations about how we come up with this book. Usually, they think it’s a black box in which we’re behind a closed door, something like the Wizard of Oz, where we’re mixing things together, making things happen, and there’s some sort of nefarious political force which is guiding everything. I assure you actually it’s not anything that interesting.
The methodology is on our website. We put a short summary of it in the booklet we have given you today. We are trying to define freedom, as we define it and focus on it, which is political rights and civil liberties. We know there is a whole range of other freedoms that other organizations masterfully evaluate. Those political rights and civil liberties criteria are drawn from a document called the Universal Declaration of Human Rights, so it is not something that Freedom House concocted back in a closet somewhere. It includes the broadest aspects of freedom. Yes, we do evaluate elections, because we think it’s a very important part of ensuring accountability of the government to the governed. But we also look at essential freedoms of association, expression, rule of law, and belief. So it is quite a broad definition. For those statisticians in the audience, we can go into a lot of detail.
We have layers and layers of different levels of evaluation. The broadest are our categories of Free, Partly Free, and Not Free. Behind that is a seven-point scale, and behind that is a 100-point scale. How do we come up with these assessments? It’s an expert assessment. It’s a grading system. It’s one through seven—one being the best, seven being the worst—and we have a discussion and a debate about it. We have experts that write our country narratives and make the initial evaluations. We have layers and layers of regional reviews and global reviews. For at least three months, we are tied up with incredible wide-ranging debates on what is happening in the world and how to evaluate it. In the end, of course, no one will agree with every evaluation that we make of every country because, of course, no one agrees about what is happening politically in every country, anyway.
So what do we find in 2007? Again, this has a lot of data in it. In particular, I am just going to summarize the big picture.
The big picture is that, of 193 countries that we’ve evaluated, 90 are Free. Now, if you look at when Freedom in the World was started, over 30 years ago, we’ve come a long way. That number has basically doubled in terms of the total number of countries that are Free. The number of Not Free countries is now 45; and again, that, relative to 30 years ago, is an enormous reduction. So we have seen over a three-decade period an enormous expansion of freedom—into regions and countries, by the way, that were seen as culturally not capable of, or wanting freedom, that were not at the right level of economic development, that had too high economic development, or too low. So, every theory about countries that cannot become free has been exploded in the last 30 years. Now we are feeling quite positive.
If you look at it in terms of last year versus this year, you’re not seeing a huge increase or decrease in terms of overall global levels of freedom. You are seeing, if you go into the regional level—and we’ve shown some regional trends in this document—some disturbing regions of the world. For instance, Asia, which has been making remarkable gains in terms of freedom, has slipped back, led by the Thai coup; and there is backsliding in Sri Lanka, Fiji, and a continuing downward trend in the Philippines, particularly in the area of press freedom.
In the Middle East, which actually is the most repressive region in the history of the survey, we have seen some incremental gains, which we have heralded in recent years. However, what we are seeing this year is that, while some countries are moving forward very slowly, other countries have stepped backwards. We are worried that there’s not a transformation that is going to be rapid in terms of what we are seeing in the Middle East.
Africa continues to be one of the most volatile regions that we track. Every year countries go up and down. It shows a very complex picture. This year there are more downward trends, though not without some positive stories, including elections in Congo and real increases in Liberia that need to be noted.
Latin America is an interesting mixed picture. There were eleven elections in Latin America, and by all accounts they were some of the most free and fair and most competitive elections around. That being said, Latin America continues to stall in terms of its movement forward in democracy. Institutional change in the area of rule of law, in continuing corruption, and a new increased pressure on freedom of the press has been a problem for Latin America. The other issue, I think, is a breakdown in law and order. Basically, there is declining legitimacy and respect for police forces. You’ve got the influence of drug and other gangs that have eroded freedom.
I just want to note in this regard, that I’m talking not just about what governments are doing but also what nonstate actors are doing, because that affects how Freedom House measures individual freedom. The government can play a big role in determining whether an individual within a society believes that they are free, but there are nonstate actors that can play a positive or a negative role.
If there is any kind of violence in a country, that affects individual freedom; it doesn’t matter who is perpetrating it. There are also extremist forces that might act to try to restrict, for instance, certain areas such as women’s rights, that would affect the overall level of freedom. And there are positive trends in the nongovernmental area. Journalists taking risks, pushing the envelope—that makes people feel more free, even if the laws that the governments have on the books are still quite onerous.
Central and Eastern Europe and the former Soviet Union, again, is a region where we’ve seen remarkable breakthroughs. Essentially, the countries of the former Soviet Union, with the exception of Georgia and Ukraine, which were the "good news" stories a couple of years ago, have begun to grapple with the challenges of consolidating the democratic gains that they have made, while the other countries in the former Soviet Union have actually either stayed at Not Free, as has most of Central Asia, or in fact deteriorated. Russia has led that charge and we think that has played an important role in restraining further regional movement forward. We will talk some more about that.
Once we step back from this picture that has been going on, for instance, from last year to this year, what Freedom House can do is look at 30 years’ worth of data. We look to ask: What is happening? Can we see any patterns or trends?
What we see is that the last ten years, roughly since 1998, if you look at the decade of the 1980s and the 1990s, was an explosion of countries that moved forward, like a 10 percent gain in the number of countries that are Free. But, the percentage of countries that are Free, which is now roughly around 45 or 46 percent, has pretty much stayed the same since 1998.
We are not saying that there aren't countries that have made breakthroughs, but we are saying that, in terms of the global level of freedom—is it the end of history; is this an inevitable path that every country is going to move towards that has slowed down? There is a stagnation, and more than that, we feel. That is partly because certain aspects of democracy move faster than others, right? You can have elections, you can rewrite laws in terms of freedom of association and expression; but when it comes to real institutional reform, changing of behaviors, checks and balances, this is something that is really about redefining the social contract between people and their government, and that is taking longer, and it has been, we think, systematically blocked by a number of actors within different countries, even those that have made forward strides.
But what we have also seen—and this is why we say "freedom under threat;" we could have said "freedom stalled"—is in fact what we would call a backlash against the idea of freedom. It’s not just incomplete, stalled democracies; it's actually that there is a movement afoot against freedom and its promotion and its expansion. We think it is led and, in fact, probably best exemplified by Russia, which is the most strategically important country which has had the most dramatic backward slide in the last years.
But it is also exemplified by China, which has made, again, remarkable strides forward in terms of economic freedom and personal liberty, but has kept a very tight hold on anything to do with political rights and civil liberties that might threaten the stranglehold of the Chinese government on its population. These two countries have enormous resources, and they are using those resources to undermine those multilateral institutions or bilateral governments, like the United States, that are trying to use their leverage to promote further democratic change.
China is offering "no strings attached" aid to a lot of Africa. Russia is playing a very central role in offering resources to Central Asia and, in fact, I think, has effectively silenced a lot of Western Europe, which is heavily dependent on its gas and oil resources. But you can even see a smaller version of it in Venezuela or Azerbaijan or Kazakhstan. Again, these are countries that clearly have resources, have influence, and are choosing to exert that influence in a way that is countering the idea that the expansion of freedom is a goal. With that, I will turn it over to Andrei to talk in more detail about Russia.
ANDREI ILLARIONOV: I will start with a personal note, admitting that it would be the last thing I would dream of to be discussing the fall of freedom and the destruction of democracy in my own country. It was especially hard to foresee such an event just a few years ago, when I was in the government service as an advisor to the president of Russia.
As we all know, the government officials and bureaucrats do like to go public to claim their achievements, to demonstrate how smart and good they are in their business, and to collect pride for what they have done. It is not very usual for an official, even a former official, to go public to spread the word about what is wrong in his or her own own country. But I think it is absolutely necessary to do so. I believe the outside world should know what is going on in Russia now. The world has a right to know what kind of political regime is being created in Russia. The world has a right to understand what it still does not fully understand. The world should start to pay more serious attention to the phenomenon that is being established.
Freedom House plays an indispensable role in monitoring events in the area of political rights and civil freedoms in Russia, in detecting and reporting the facts of destruction of freedoms in this country in different areas for many years. Freedom House was doing it regardless of criticism and pressure that have been applied to it, making plain and clear the necessity to produce an objective picture regardless of the current day-to-day politics and regardless of personal views prevailing in this or that administrations.
The Situation in Russia Today
The year 2006 for Russia was an extraordinary one in a sense of destruction of all types and all elements of freedom. Whichever area we can look at—the political system, legal system, court system, civil society, rule of law, division of powers, freedom of expression, freedom of mass media, freedom of association—everywhere, in each area, we see tremendous backlash against the basic liberties of Russian people.
All of this allows me to talk about the appearance of a new political regime, non-free regime, with "corporatist state", monopolized economy, coercive markets, with ideology of "nashism" (from the Russian word "nash"—"our own") as its distinctive features.
This regime has underwent visible evolution—though it would be more correct to say "devolution"—of its attitude towards compressing islands of freedom in Russia—business people and opposition politicians. The regime started from a "relatively humane" approach in the year 2000, when Mr. Gusinsky had been kept in jail for only a few days while his property has been purchased at price close to the then market one. By 2005, the regime moved to putting people in jail already for years, as it happened with Mr. Khodorkovsky who has been sentenced to eight years in the camp as well as with dozens of his former colleagues in the Yukos company. The new charges in the winter 2007 could extend his and his partner's stay behind the bars for 15 years.
In 2003, liberal political parties could still participate in parliamentary elections though they have failed to win the seats in the Duma. By 2005 they could not be even registered with the Ministry of Justice and they have been declined their access to mass media. By 2007 they are already not allowed to have practically any public activity.
In spring, 2006 opposition political activists have been "only" harassed and beaten. By the autumn 2006, some of them have been killed.
Destruction of Institutions
Destruction of freedom is the destruction of the basic institutions of the civilized society and the civilized state.
The central pillar of civilization is the rule of law. Now it has ceased to exist in Russia in any reasonable sense of this term. Those of Russian citizens who are still eager to defend their rights are forced to apply not to the Russian courts, but to the Strasbourg Court (European Court of Human Rights). The Strasbourg Court became overwhelmed with cases from Russia.
With very few exceptions, a freedom of press in Russia ceased to exist. In some cases, like the poisoning of Mr. Litvinenko in London, the most respectable source of information for the Russian citizens became not the Russian media, but the British Scotland Yard.
The system of property rights protection in Russia has ceased to exist, too. It became clear for new government nomenklatura, the so-called "siloviki" oligarchs. And it seems well understood by them. That is why when they have confiscated the property of Yukos and have transferred its property into the so-called state-owned company Rosneft, they went for the protection of their property rights neither to Moscow, nor to St. Petersburg. They went to London, to the London Stock Exchange to undertake IPO there. They understood quite well that having destroyed the rule of law in their own country, they could not defend in future even their own property rights on the Russian territory.
From the point of view of political rights and civil liberties in international context, there is no country in Europe that has a lower score than Russia, except of Belarus. In the Americas, there is only country that has a lower score than Russia. It is Cuba. In Asia and Oceania, only nine countries out of 54 have a lower score than Russia. In the region of the former Soviet Union, there are only three countries that have scores in political rights and civil liberties lower than Russia: Turkmenistan, Uzbekistan, and Belarus. In Africa, out of 53 countries, only 11 have lower scores than Russia.
It is hard to believe, but it is true, that today the majority of the African countries, Middle Eastern countries, Asian countries have scores higher than Russia. Even such countries as Uganda, Afghanistan, Bahrain, Djibouti, Yemen, Fiji, Gabon—all of them today have higher scores in political freedom and civil liberties than today's Russia.
If we look at large regions of the world, like the Americas, Europe, Africa, Middle East, Asia and Oceania, the former Soviet Union, we would find that the most politically repressive region in the world today is not Africa anymore, is not Middle East anymore. It is the former Soviet Union. It is hard to underestimatethe impact of Russia—the largest country of the region, a very important country, a country with rising economy and more financial resources under command today than ever—on its immediate neighbors.
The new Russia has profound international impact not only on them. Over the last several years a new international network is being developed. It is not a Communist International. It is not a Fascist International. It is an International of repressive regimes and dictatorships around the world. It is the International where the new Russian regime plays an important role. It is developing ties with kindred regimes in Venezuela, Iran, Syria, Algeria, Uzbekistan, with Palestinian Hamas.
It has already been mentioned the fact of devolution and destruction of basic institutions of civilized society in Russia. The speed with which they have been destroyed can be compared with only other country in the world, namely Zimbabwe. Similarity in dynamics in the indices of political rights and civil liberties for Russia and Zimbabwe over the last fifteen years—down, again down, and further down—could surprise nobody. Still, there are two important differences are to be mentioned.
One difference is that over the last 15 years, Russia kept still a higher score than Zimbabwe. The other one is that the gap between Russia and Zimbabwe is falling and in 2006 it is narrower than it was in 1991. It means that in the moving in the same direction with the Zimbabwe government, the Russian authorities are destroying basic civil freedoms faster than even Robert Mugabe's regime. It worth also to notice that by 2006, the Russia's score fell lower than Zimbabwe's one in 1999.
My last point concerns the virtual absence of any coherent policy response from the outside world towards what is going on in Russia. The outside world is limited in its knowledge. The coherent policy response towards new Russian political and economic regime is virtually absent.
The other international issues attract more attention of general public and politicians here, in the United States, and around the world. The creation of this new Russian political regime, to my mind, is a no less important issue than those that occupy the front pages of the world newspapers nowadays.
When the leaders of the G7 nations attended the Club's summit in St. Petersburg last July, none of them has defended personal freedoms and democratic institutions in Russia, expressed disapproval of the Russian authorities' bullying behavior at the international arena, or objected expropriation of foreign private property in Russia.
One should admit that over last few years the Western countries waged de-facto a policy of appeasement—even a policy of encouragement—of the Russian authorities in their move of destruction of free markets, civil liberties and political rights.
I would like to hope that this discussion could contribute to better understanding of the current state of affairs in Russia and would play a role in starting debate on new political regime in Russia, and on what can and should be done about that.
Questions and Answers
QUESTION: Dr. Illarionov, in keeping with your last comments regarding the lack of a strategy, particularly in the economic sense, Russia has also been expanding its holdings in many countries around the world, buying out many big industries, the aluminum industry, and putting pressure on Europe and elsewhere with natural gas, and so on. How do you see the linkage between the increased restrictions on freedoms of both business and the private sector in Russia and Russia’s move outwards to control a lot of economic matters?
ANDREI ILLARIONOV: First of all, one needs to distinguish between behavior of the private business without any clear or detectable connection with the state, and behavior of the state, quasi-state and state-related businesses. It is up to the other countries' legal and political institutions to decide how to react to these quite distinct types of behavior.
As for me, it is okay, if a private business, including a Russian one, wants to acquire property in your country as long as private business is assumed to be working for its own profit according to the rules and laws of the host country. But it becomes quite a different matter if another state or state-owned business comes onto your territory. The state organizations do have custom to seek not so much business interests, but more government goals, as well as to behave in achieving them according to the rules of their own governments. Therefore, to allow the state-related business to acquire property in your country is to some extent similar to permission to the other government's secret police to acquire property in your own country. In some cases it cannot be excluded that you would want it.
Another aspect ought to be mentioned here is export of non-freedom. The economic expansion of state-related business from politically non-free countries is one of the most efficient ways of the exporting non-freedom. Some countries have claimed that they are exporting democracy and freedom around the world. It goes, as we know, with different levels of success. Some other countries do not state their goals publicly. But they do export non-freedom, and they do it not less efficiently than those who try to export freedom.
QUESTION: Based on civil society, to what extent, in your view, does the freedom to form associations factor into your assessment of a free society? I’m wondering if at the national level it has a value in terms of democracy. Would you extrapolate to the international level? I speak from experience at the UN, where resistance to the involvement of civil society appears not only from some of the more expected actors that you mentioned, be it Belarus or Zimbabwe, but also from nations such as the United States or France or the United Kingdom.
JENNIFER WINDSOR: Let me start. First of all, absolutely I think that formation and the right to form associations is absolutely critical to the state of freedom. In fact—Peter might mention this, too—Freedom House has done a study of the transitions over the last 30 years, and the most successful transitions that have led to enduring change in terms of the levels of freedom that have been obtained have been those that are actually driven by unified, organized civil society movements.
One of the things we find particularly in this pushback is that in older times there was more direct repression. That, of course, is still going on in terms of killing of people. But there is also a perhaps less alarming trend, but we think it is alarming if you add it up cumulatively, which is to gradually erode the regulations related to civil society’s ability to organize within countries, and the right and the ability of organizations outside of the country to lend a hand, to network with them, to share information, including basic information over the Internet, and the blocking of information.
So, in terms of the United Nations, I just want to say that, since Freedom House actually is accredited by the United Nations and has continued to maintain that accreditation despite the efforts of countries like Sudan, Russia, China, and Cuba, we believe that civil society has an important role to play at the international level.
PETER ACKERMAN: I think the story Andrei is talking about is a timeless old story of the few trying to dominate the many by using repression and military options which the civil society might not have. The thing that has changed today is that there are really no closed societies, even in North Korea, because of the ability to communicate one-on-one from outside the region, outside the country, and inside. This is a great fear that these repressors have.
Very recently, last year, Chavez visited, of all places, Minsk in Belarus. I don’t think there has ever been a case where a Venezuelan head of state visited Belarus. He basically brought good news to Lukashenko, saying, "I have great news for you. We don’t have to be afraid anymore about war’s madness or the color revolutions." The color revolutions, of course, talk about mass populations basically through elements of civic disruption, making it very difficult for the few to control the many.
But part of this doctrine that Chavez is advancing or that Putin is advancing is something called sovereign democracy, where they are trying to claim that there isn't a right on the part of people outside the country to communicate with people inside the country about their freedoms and their rights and giving them various kinds of educational ideas about how to advance their own rights. There is no international doctrine called sovereign democracy. It is an excuse by those who want to repress their own populations.
Today, what we are about in Freedom House, because there are so many different ways to communicate, is thinking about how to make this more valuable to people all over the world who are suffering increasingly under these repressive societies, to make them think about the nature of freedom in their own society. You can't become something you can't think about beforehand. So, we think this dialogue on freedom is critical to push back against those who are pushing back against freedom, and that’s what we are trying to do as we go forward.
QUESTION: Andrei, why in your opinion is Putin acting the way he is? It doesn’t make an awful lot of sense, unless you want to be another Stalin. It seemed to me he was in a wonderful position to expand the Russian society instead of doing what he's doing. I was wondering what your thoughts were on that subject.
ANDREI ILLARIONOV: I have to apologize, but I try not to comment on personal issues, and especially on that personal issue. I did work with president Putin for six years, and I don't think it would be ethical for me to comment on it. Whether I agree or don't agree with him on this or that issue, I don't think it would be appropriate to comment. I try to comment on policy issues, policy outcomes and policy consequences.
QUESTION: This is for Dr. Illarionov. So you don’t misunderstand the question, let me add my voice to the chorus of alarm about what is going on in Russia. Thanks to all of you for a very provocative presentation. Certainly, to the gentleman's question, I think a lot of us are concerned that Russia is part of this axis of oil-driven capacity to perpetuate global mischief. That having been said, my question—and this isn’t about your personal relationship with President Putin—is that there seems to be a perception that within Russian society itself there is a great deal of satisfaction with the current leadership. I wonder, in the scoring system that you apply, grading all the countries around the world, to what extent an internal domestic philosophic scale would carry any weight. So my question really is: Is that true? Is the perception that we see here a reflection of what is actually happening in Russia; and, if so, how would you explain that?
ANDREI ILLARIONOV: There is a high level of satisfaction in Russia right now. It is true. But we need to add the second question to it: High level satisfaction with what?
By any indicator, today Russian citizens do have the highest in the country's history level of living standards. The personal consumption of many goods is 60, 70, 100, even 400 percent (cars, for example) higher than it was 16 or 17 years ago. A significant portion of this growth has happened over the last seven years. The country has never had such a high level of spending, as it has today.
The third question that we have to raise is as follows: What are the reasons for that growth? Many people, not only in Russia, but in this country as well, relate the observable results with pursued policies. Certainly, day-to-day propaganda, from early morning until late night, helps to create an impression of the great policies implemented.
Though the issue of higher energy prices in the last seven years is debated heavily, it is not easy to recognize their impact on national prosperity. Oil prices today are five to six times higher than they were in late 1998 and early 1999. The enormous wealth these higher prices have brought to Russia, a kind of energy exporters' dividend, net windfall from the international economy, now accounts for up to 20 percent of GDP a year.
QUESTIONER: But it is being passed on to the population, unlike some other countries.
ANDREI ILLARIONOV: To some extent that is true. At the same time, it successfully mixes two factors of economic growth, namely quality of policy and windfall profit. Could anyone name the country where policy reform produced 20 percent increase in GDP annually on a permanent basis? As world history shows, there is no such a policy that could create such a present for the whole nation. There is no policy reform that could create such a wealth.
That is why some observers are quick to claim: "If we have such results, they are due to the efforts of these people at the top. It is due to them we have such a great time right now."
But if to take the quality of actual policies and the quality of destroyed institutions, net of the results of the international conjuncture, one would find that the Russian economy probably does not grow at all. Without windfall profit it would probably decline by nine to ten percent annually, similar to the rate of decline of Zimbabwe's, if not even worse.
But it is a fact of life that it is virtually impossible to explain, not only to ordinary people, but political and analytical elites as well, much less to convince them that the enormous rise in consumption during the last seven years has happened to a very high extent neither due to the efforts of the national administration, nor due to even own efforts of those people. It was due to a large amount to windfall profit flooding the country from the "international market." For many people it is next to impossible to understand it.
Some observers in Russia do not understand situation in the neighboring Ukraine. Today importing Russian oil, the Ukranians pay for the same ton of oil and the same 1,000 cubic meters of gas five times more than they have paid seven years ago. It means that to purchase the same ton of Russian oil they are forced to produce and sell to Russia five times more grain, or five times more sugar, or five times more metal pipes. Ukranians were forced to learn the lesson of terms of trade change. Russians so far were not.
Yet surprisingly enough, Ukraine's economy grows faster than Russia's, with all her resources and money. By rate of growth of real GDP Russia now is only 12th out of 15 countries of the former Soviet Union. It means that economies of ten countries without oil, gas, precious metals, diamonds, wood and so on—like Estonia, Latvia, Lithuania, Ukraine, Georgia—grow faster than Russia's. Why is it so? It is because free markets and free political systems are much more effective and much more solid contributors into economic growth than oil, gas, diamonds, gold an other resources taken altogether.
JENNIFER WINDSOR: Can I just address this? Freedom in the World is not, in fact, a perception-based survey. We think that there are very, very important pieces and insights into people’s perception of what freedom is and how they are experiencing that, and there is a whole series of barometers and other public opinion polls. But it is because of exactly this issue that Freedom House sent a delegation to Russia in the summer. We were intrigued by this issue: Do the Russian people not want freedom or not want democracy, as some of the polls show? I think that, partly, there is a sense that it's an abstract concept. You need to break it down further.
If freedom means chaos and your pensions are being removed and there’s no law and order and it’s arbitrary, they’re against that. But if you say, for instance, "Do you want a working system of rule of law in which you have a fair, predictable environment to take your claims?" Russians want that. If you say, "Do you want to have your information actually filtered for you and not get all the relevant sources of information?" they don’t want that. If you tell them, "Do you want your journalists murdered in broad daylight?" they don’t want that. I think that over the whole issue of the military discontent related to the regular Russian citizens—forget what the military is doing to the Chechans or the other people of the Northern Caucus, but what it is actually is doing to the Russians themselves—there is burgeoning discontent.
The question is: What’s going to happen if the oil bubble bursts? Is there enough real economic growth and institutions that actually could continue, or are we going to see a precipitous drop-off? It may not happen by 2008, and I’m not an economist, but some would say that this is spiking because of an oil bubble and not because of true economic transformation.
ANDREI ILLARIONOV: So far we were touching mostly on economic issues, in particular living standards. This is a very important issue. No less important matters, however, are other dimensions of life—its security, safety, and predictability. It is exactly the goals and slogans that have been proclaimed and extensively used by the current administration when it came to power in 2000. Then they said: "After the chaos and the destruction of the 1990s, after this horrible Yeltsin's period, we will give people what they need most—stability, security, and safety." Seven years have passed. It is time to check what has been delivered.
In Chechnya, arrival of the new concept of "security" meant that about 200,000 people have been killed, on both sides. The new concept of security has been learnt by Mr. Lukashenko, the dictator of Belarus. Recently he was calling to his compatriots: "If we unite with Russia, our boys will be sent to Chechnya to be killed. We'll never do it!"
In Russia itself, arrival of the new concept of "security" meant that thousands of people turned out to be hostages in the terrorist attacks and hundreds of them have been killed.
Arrival of the new concept of "safety" meant that the rate of violent crimes in Russia today is twice as high as it was in 1998 under Mr. Yeltsin, in the wake of the deepest economic crisis in recent history.
As for the "predictability," there is no more revealing and evolving story than the story of succession in leadership in 2008. The issue became especially peculiar after the sudden death of Mr. Turkmenbashi, dictator of neighboring Turkmenistan. The events after his death have clearly demonstrated that a dictatorship has no predictability whatsoever since it does not preserve the rules that people, and first of all the political elite, would follow. Regardless where such rules are fixated—whether among closest friends in the power or in the laws, or even in the Constitution—they matter not much the morning, or even the minute, after the death of the dictator.
What is the predictability of the power transition in authoritarian or dictatorial society? It is absent. The most predictable power transition exists in a democracy, where personal freedoms and institutions of democratic procedure are preserved and protected.
The most unpredictable transition of power can be seen in dictator-ruled regimes. In those cases are not only future leaders unknown. The very rules according to which the future leaders will be selected are unknown, too. They are unknown even to future dictators themselves.
QUESTION: This is a very important and useful analysis that you make for us. It is quite a tricky piece of work. The situation is quite fluid. You may advance this year and slip back next year. We have many examples of freely elected governments which then hang onto power. So I admire you for making this very important and serious analysis for us
Now, there is obviously no automatic relationship between the advancement of what you might call political and civil freedom and economic growth, as in China, as an outstanding example. At the other end of the scale, we know that maybe two billion of our six billion sisters and brothers around the world are living in absolute poverty. What kind of freedom do they have, and how do you take this fact into account in your analysis? What does conventional political/civil freedom mean if you are a prisoner of desperate poverty?
PETER ACKERMAN: I’d like to comment on that. I was a Board member for twelve years on CARE. You may know CARE as one of the great relief organizations around the world. I’ve been constantly asking myself the question: Can you have freedom in places of abject poverty? When you look closely at the causes of abject poverty and you pull them back, it is not an absence of capital; it’s an absence of freedom. If you have the ability to develop civil society, the ability to associate freely, the ability to own your own property, you are more likely to get rid of the problems that CARE is trying to address. It's not a perfect answer, but in general, in the overwhelming number of cases, that is what the truth is. It is very compelling to argue, "How can you ever have freedom if you are totally impoverished?" Your heart reaches out to the kind of poverty that we see at CARE.
On the other hand, when you actually recognize that there is capital poured into some of these countries and completely wasted or stolen, and there’s no mechanism to invest in yourself and bear the fruits of that investment, you come back to the more fundamental cause, which I think is freedom, that allows for the elimination of poverty because people are capable of doing for themselves what they need to do if they are allowed to keep the fruits of their own labor.
JENNIFER WINDSOR: I think that the idea of human development has been fundamentally transformed with the separation of economic and social development from political rights and civil liberties. Somehow a sequence is needed where you first get out of poverty and then you get to enjoy civil rights or civil liberties or political rights. That has been masterfully argued against by Amartya Sen. If you talk to people on the ground, even those with nothing, what they want more than anything is freedom from the arbitrary interference of government or other forces of power that prevent their ability to take care of their own families and to advance. When you talk about, again, fundamentals, the ability to actually demand responsiveness from a government, to actually hold them accountable, to try to have policies that reflect the needs of the people—these are all mechanisms that can be found in free and open political systems.
I’m not saying that some poor villager in Mali wants to go vote, but you’d be surprised. I’ve traveled around the world and seen people in some of the poorest countries in the world, and they are lining up to be able to vote because they think it will have an impact on their lives. The fact that it hasn't, in some cases, doesn't mean that the ability to elect one's leaders should be thrown away. It means that the kind of monopoly of the political and economic powers which conspire to leave people in abject poverty as well as basically devoid of any fundamental human rights, are the same forces. We have to actually address both. Poverty and the massive kind of denial of human rights are the issues of empowering the individual. I would say, don't let only social and economic go first. It’s got to be a total basket.
PETER ACKERMAN: There is ample evidence also that the loss of freedom impoverishes people. You only have to look at Zimbabwe as a case in point. This is a country that was rich; it was an exporter of food. Now it can’' feed itself and its population is impoverished because of one man and his clique trying to aggregate power to themselves. This is also a point of consideration. In fact, Zimbabwe is a poster child for what Andrei is saying, that without this big oil spike Russia can find itself in the same situation. It is not without precedent in history: The end of the Cold War occurred because Russia could not keep up with the United States in military power, and it didn't have the economic might to do it because it had a closed-loop society and nobody had property rights.
ANDREI ILLARIONOV: You are touching one of the most important issues, poverty. To find a solution to this problem, to solve this problem in reality, not just for a few minutes of polished propaganda to be demonstrated on the TV screens, there is only one long-term solution: it is economic growth. Therefore, your question could be reformulated slightly: what type of political regime is more conducive for economic growth—dictatorship or democracy, political freedom or political non-freedom?
Peter has already mentioned Zimbabwe as an example of how non-freedom destroyed well-being in that country. I have mentioned cases of differences in economic growth in the CIS countries over the last seven years. Politically free countries without oil and gas—Lithuania, Latvia, Estonia, Moldova, Georgia, Ukraine—all grow faster than politically non-free Russia with all her enormous richness in all kinds of natural resources.
You can also offer your own cases. But using such an approach we all could be easily criticized for picking up examples that are "comfortable for us". Therefore, the best way to avoid such a criticism is to pull all cases together and check the relation between political freedom and prosperity. It is exactly what we have done at the Institute of Economic Analysis. We used the database for political rights and civil freedom indices from the Freedom House for almost 200 countries, virtually all countries of the world, for the last third of the century, from 1972, when the Freedom House started to publish this report, to 2005. To see the results, you can visit the website of the Institute of Economic Analysis.
When we compared political regimes with growth in GDP per capita in all those countries, we found that economic growth rates differ visibly in three main groups of countries-Fully Free, Partly Free, and Non-Free. Over the last 33 years, the Fully Politically Free countries increased their GDP per capita on average by 100 percent; the Partly Politically Free countries increased their GDP per capita on average by 40 percent; the Politically Non-Free countries reduced their GDP per capita on average by 36 percent.
This comparison provides probably the best possible answer to your question. If one would like to keep people in poverty, the best way to do this is to create political non-freedom and political repression. If one would like to give people an opportunity to get out of poverty, the best way to do this is to secure political freedom. When people do have political freedom, they usually find the most efficient ways how to organize their own lives.
JOANNE MYERS: I thank you very much for this really very illuminating discussion. Thank you very much, Andrei, Jennifer, and Peter.