From the CIAO Atlas Map of Europe 

CIAO DATE: 03/04

International Affairs

International Affairs:
A Russian Journal

No. 6, 2003

 

Russia's Prospects in Global Competition

M. Deliagin *

Russia remains loyal to the tradition of proceeding in its planning from the "already achieved," of basing its economic forecasts on its domestic potential. The worldwide economic, political and information environment is rarely taken into account. This is an echo of non-market economic planning concentrated on the potentials (production potential in the classical case) of the planned object while the external milieu of its functioning (demand for its products) was completely ignored. Obviously, such analysis and its results are hardly reliable.

Traditional economic forecasting that ignores the international competitive environment is a hazardous instrument of self-delusion. Weakness is accepted because it never takes account of the country's declining competitive abilities.

There is another fault: the traditional approach makes it necessary to deal with the domestic problems. For objective and obvious reasons forecasting becomes an instrument of domestic political struggle while its scientific efficiency and credibility are undermined.

Obviously, the traditional approach should be complimented with forecasts of the development of the country's external environment. It is this environment that imposes certain demands and limitations and creates a "corridor of possibilities" in which the country will have to operate and which it will or will not realize.

This changes the very modality of forecasts in a radical way: something that seemed necessary for purely domestic political considerations is replaced with categorical national development imperatives found outside the country; they are objective and have nothing to do with social conditions. Without their realization, however, the country will never get itself an acceptable place in a competitive milieu.

This is especially important for Russia, the country that has still preserved its mobilization potential (despite appalling general degradation.) At the same time, it is demonstrating its absolute inability to carry out the highly needed modernization in very comfortable conditions created by consistently high oil prices. All this requires efforts, organization and time; this also requires special knowledge that our society has nearly lost. Here I offer an outline of certain obvious problems that will become even more prominent in the nearest ten years.

From Unity to Disunity

The key problem that mankind is facing today is its increasing disunity.

By the turn of the 20th century, the world had reached a very high integration level that the systems of social management found it hard to accept. Having removed domestic barriers that divided the markets this integration intensified rivalry among the most developed countries to the greatest extent (up to a world war) and divided mankind.

Post-World War II economic growth in the world was gradually eliminating this segmentation (the process constituted, in fact, the main content of postwar history). The victory of the West in the Cold War completed the process. The need to remove the barriers on the world markets created new complexes of insurmountable problems and a new wave of segmentation. (It is wrong, as is often done, to compare the current situation with the early 20th century integration: today integration in the services market, practically non-existent in the past, has come to the fore.)

The old model "growth through integration" that had ensured postwar development mainly exhausted itself by the early 1990s. Today one can expect neither high development rates of the past nor, even less, sustainable growth at least of the developed countries that account for 70 percent of the world's economies until we stumble across a new development model.

Today, segmentation of mankind is proceeding in various directions and according to several criteria.

The division between the successful and undeveloped countries (between "the rich and the poor," "the golden billion and so far two, and much more in future, billions sacrificed to Western prosperity") is obvious. Progress of the West and the most successful Asian countries is too glaring against the background of dying Africa, convulsive Latin America, Japan that has been stagnating for two decades, degrading Eastern, especially Southeastern Europe, and post-Soviet expanse.

Not later than the early 1990s the gap between the developed countries and the rest of the world became technological: high technologies are too complex and too expensive to be used, even less created, by the relatively undeveloped countries. As a result, they cannot work effectively and are deprived of any prospects.

The developed countries are looking at the problem through the "digital inequality" prism: it limits the markets for their complex and expensive high-tech products; by the same token their technological progress is checked.

The problem is rooted much deeper than that: greater efficiency of information technologies caused a classical "overproduction crisis" in the sphere of information (in the wide sense) services, that is, an "overproduction of expectations." Their volume is too high even for the global markets. This is the deepest-seated cause of structural crisis that has already enveloped the developed economies and the world economy as whole.

The global markets cannot extend not only because the people in the developing countries are too poor. There is a cultural barrier as well: technologies of information dissemination and processing developed for a definite civilizational paradigm are poorly absorbed by others or are distorted in the process of adjustment. This narrows down the markers and cuts down the flow of resources needed to further develop western information technologies.

Naturally enough, the developed countries will try hard to alleviate the crisis (created by inadequate financing of technological progress) that is depriving them of their future uncontestable world leadership and is creating domestic problems (part of the middle class is being pushed to the margins thus turning the "society of two-thirds" into a "society of a half").

Significantly, the social security systems of the developed countries (the United States in the first place) are oriented to the stock market. Its stagnation undermines the system and together with it the "welfare state," the main achievement of western civilization. High technologies require adequate education and creative potential from all resolved to succeed. Meanwhile, a considerable part of developed societies (their less affluent members, in the first place) is unable to profit from them - the situation is gradually worsens.

In the short-term perspective there will be attempts to overcome "digital inequality" of the poorest states by stimulating their development in the humanitarian-UN style. The effort is doomed: the task that contradicts the interests of nearly all developed countries is too strenuous to be accomplished.

In the middle-term perspective the efforts to stimulate the developed countries' cultural expansion to extend information markets beyond the "cultural barriers" will inevitably encroach on the civilizational identities of the developing societies, destroy the weak and enrage the strong.

This explains why a different middle-term method of crisis alleviation has been selected. Here I have in mind building up world tension to stimulate military (security) technologies. Regrettably, this still remains the most efficient method of state stimulation of technological progress.

These approaches cannot be described as sufficient for obvious reasons. We should wave away the apocalyptic predictions of a comparatively painless death of non-Western civilizations because, among other things, they do not offer a solution to the key problem of the world markets' capacity not matching high technologies' progress.

It seems that cheaper and simpler major technologies and a transfer to the wide-scale use of qualitatively new technologies designed to change man provides a solution to the "digital inequality" problem. The management and training technologies as well as biological (genetic engineering and the use of truncal cells) and social technologies together with information technologies will develop into social engineering of sorts.

So far the question of where these "closing down" technologies (they will "close down" industrial branches and even countries) will be used, how fast they will spread across the world and how they will affect global rivalry remains unanswered. It seems that they will be secretly, or at least not publicly, developed in the more advanced developing countries, their application betrayed by the sharply increased labor productivity. At first, their spread will be kept in check by transnational corporations until the worsening situation on the markets and increased competition forces one of them to apply these technologies on a wide scale. A new global technological revolution will become inevitable. Its social consequences will be awful - as it always happens in a revolution.

It should be said that "information overproduction" crisis created, besides "digital inequality" another factor, namely, the "cultural barrier" that has already become an important aspect of international rivalry. Obviously, mankind is being divided according to the civilizational features.

In the past, socialism and capitalism were competing within the same cultural civilizational paradigm. The West won, in particular, because the revolutionary messianic Stalinist society gradually developed into a Brezhnev society cherishing bourgeois values and motivations. Socialism's economic collapse and the market reforms were the result of this social transformation. The economic mechanism was inevitably and, in fact, automatically, adjusted to society.

The field of forces created by the confrontation kept the world within the single cultural-civilizational paradigm and adjusted the world to it. This field of forces disappeared together with the bipolar world and liberated two new civilizational initiatives (socially charged Islamic and Chinese) of global importance.

As a result, international rivalry is rapidly turning into a rivalry among civilizations, its frightening potential best illustrated by ethnic conflicts. Their escalation is considered a grave crime because their irrationality makes it hard to quench them: operating within different axiological systems the sides cannot come to an agreement.

An even deeper rift divides the sides involved in civilization rivalry; they are pursuing different aims, employ different methods and cannot understand the values, aims, and methods of the opponent. Financial expansion of the West, ethnic expansion of China, and religious expansion of Islam are not merely unfolding in different contexts; they reject one another as profoundly alien phenomena, as hostile ones not only because they treat the key issue of power differently but due to their different ways of life. A radical change of the latter alone may bring a compromise and will destroy the civilization as a civilization.

A more or less wide and prolonged compromise is, therefore, impossible. The rivalry is uncompromising and is accelerating even if there is a balance of forces and a lack of chance to succeed. The rivalry is irrational and therefore destructive. Each of the three great civilizations rather than enriching another by closer contacts corrodes and undermines it (the ethnic rift in the United States and the immanent weakness of pro-Western regimes in the Islamic states are two classical examples). Probably, Islam will play the role of an "icebreaker" for China in relation to the West in the same way as Hitler's Germany and, in the final analysis, Stalin's Soviet Union were for the U.S. under Roosevelt in relation to the old European colonial empires (France and Britain, in the first place).

At the same time, it is not enough to analyze the traditional "triangle of civilizational forces" (the West - the Islamic world - China) to grasp the meaning of global rivalry. It seems that we are watching the first act of a drama of the division of the West when Europe and America are drifting apart. Economy is of secondary importance here: aggression against Yugoslavia that did a lot of harm to European economy and the 09.11 events when the EU had to rescue the American financial system prove that Europeans prefer economic cooperation with the United States to an economic rivalry with it.

They have parted company on the Iraqi crisis that undoubtedly spurred on the process; this speaks not so much of political differences as of much deeper rooted and much subtler differences of the philosophical and axiological nature.

American society is rivalry-oriented - anything that interferes with succeeding in a rivalry is abandoned. The United States can be likened to a boxer who does not wield a knife on the ring not because of the rules but because this may end in a defeat through disqualification.

European society, on the other hand, wants to live according to a set of principles (reasonable and humane, on the whole) formulated throughout its history ensuring it comfortable existence. This has doomed it to passivity, dogmatism, and collaborationism - in the past, in the face of the "Soviet threat" and today, in the face of the expansionist minded Islamic world. This accounts for its relative weakness when it comes to rivalry. It would be wrong, however, to dismiss Europe even if it is internally inefficient and heterogeneous. Collaborationism and the desire to avoid conflicts may save it from an involvement in wide-scale and destructive conflicts.

Intensifying Rivalry

Rivalry intensifies as the situation worsens: in the periods of affluence the rivals are competing for extra profits while in crises they fight for survival. In the 1990s, the developed countries, the Cold War smug victors, were thriving on the resources of the defeated socialist system.

It is cardinally important to note that solvent demand is one of the resources, together with the capital, workforce and technologies. In the 1990s, the resources that the developed countries had previously used to ensure security (and that detracted resources from final demand) were channeled to consumption. This is one of the major causes behind the slowed down technological progress obvious in the 1990s: society concentrated on consuming the results of technological principles of the Cold War period. Technological progress nearly stalled.

At the same time, the 1990s can be described as an epoch of global rivalry.

Economic integration and removal of market barriers reached their logical summit during the globalization period; global competition reached all corners and affected all branches to the extent that it turned into its opposite: it was no longer an instrument of education, development and stimulation of inefficient economies but rather a weapon of their total destruction.

Global monopolies that started rotting at the earliest stages of their existence were a natural result of the global markets that lost the barriers between the regions and the commodities. The pernicious results were first pushed over to the weaker, developing countries in the course of the 1997-1999 financial crisis; the developed economies have been aware of certain problems since spring 2000.

There is another, no less clear, sign of the decay of global monopoly: the problems that have been plaguing the world (poverty, illiteracy, ailments, discrimination, and environmental pollution) no longer disappear all by themselves while the world grows richer. The 1990s were the first decade in recent history during which mankind's economic success went hand in hand with aggravating problems. The development paradigm should be changed.

It is important to note that the alarming symptoms described above manifested themselves in the "hot-house" conditions while world economy was thriving. Meanwhile, the worsened situation in the world makes global rivalry even fiercer and even more damaging for the weaker participants. In this light the forecasts of energy consumption doubling by 2020 (and, consequently, of the threat of a deficit of energy resources) speak of a possibility that the Southeastern Asian economies, consuming energy at a speedily increasing rate, may be ruined by their strategically more developed rivals. If the "containment strategy" of Southeastern Asia proved effective worldwide consumption of oil will go up by 17-20 percent by 2010 (the figure for the United States is one-third).

Fiercer rivalry narrows down the possibilities of the weaker countries: any less efficient production will be destroyed; unique or most efficient productions alone have a chance of survival. (Here I have in mind commercial efficiency that includes effective production, management and marketing technologies up to an including abuse of lobbying, monopoly, information and propaganda and even deception.)

On the global market rivalry of this sort would have spelt physical extermination of mankind's large part engaged in productions that fell short of the dominant criteria. A similar catastrophe looks hardly possible therefore a solution will present itself. Today, there is a hint of a solution: regionalization instead of globalization. The single world market will be divided into a system of regional markets within which less efficient societies will continue living and even developing due to lesser rivalry.

Early in the 20th century the process took a form of destructive world wars; there are signs that today the process will be much less painful while the borders between the regional markets, much less rigid.

The weaker the societies of any of the regions the more porous will be its economic borders and less efficient regionalization as a whole.

Global rivalry has become even harsher when competition on the market outlets was completed with harsher rivalry on the markets of resources - this was a fundamentally important development. Russia was confronted with it when it discovered that the ability to produce the world's best fighter planes was useless unless supported with adequate manpower, financial and material resources that were draining away to other industrial spheres. It turned out that without state support a good plane cannot be produced out of the best metal: this method of the use of metal is relatively less efficient than that used by the competing industries. This means that the competitors will get the metal, technologies, workforce, managers, brains, and money. In this way harsh global rivalry over financial resources will develop into pressure on the weaker countries with an aim of liberalizing their financial markets so that to attract money to the developed countries.

Russia still has two unique advantages: the territory that can offer a trans-Eurasian railway and mineral resources, the last still untapped natural treasury. Very soon, however, worldwide rivalry will force us to prove that we are able if not to use the resources at least to retain them.

Today, our right to the unique possibility of creating a trans-Eurasian railway has been questioned by the U.S. stronger influence in Central Asia made possible by a series of concessions of Russia's leaders. Today, America and China may in the nearest future agree on a transit railway bypassing Russia not because they want to offend Russia but because of a natural desire to avoid the bureaucratic paralysis that is becoming more and more obvious on the Russian territory. This will deprive Russian society of an integrating factor and will turn it from a potential bridge between Europe and Southeast Asia into an uninteresting margin of the key rivals: Europe, China, and the Islamic world.

Since 1996, the world has been actively discussing a possibility of developing the natural resources of Siberia and the Far East under international, rather than Russian, control. The ideas about an ideal world order offered by the key global rivals are approximately the same. The Russian state is limited to Russia's European part. 1 The state looks more or less European, a hybrid of Portugal and Poland, two countries most favored by the Russian liberal reformers of all times. The resources of Siberia and the Far East are controlled by outside forces and used by the authors of corresponding ideas. The transnational corporations are prepared to pay taxes through Moscow partly because they want Muscovy remain a civilized state and partly because of more favorable business conditions. Everybody knows that it is much easier for transnational corporations to obtain privileges in Russia than in any relatively democratic state (that takes into account public opinion) or a fairly developed country.

As a rule, large Russian corporations that have to adjust themselves to the interests described above orient themselves to the West as the civilizationally closest elements and as the only participant in global rivalry concerned with business development.

The future clash of interests of the West (in which the U.S. and the EU will probably act separately), China and the Islamic civilization on the Russian territory should be at least regulated and balanced by the Russian state. As one of the rivals it is well aware of the specifics of the developed territory.

Climatic changes seem to be important and underestimated factor of global rivalry over resources. Their scope, pace, and causes will for a long time remain a subject of discussions. Everybody who retained memory of the past amid the current changes can testify to these changes.

Climatic changes will endanger many flourishing societies with ample resources that will use them to extract "climatic rent" from weaker societies that may profit from climatic changes. The United States and many Islamic countries belong to the first group, Russia belongs to the second.

Significantly, the more remote is the obvious threat more time will be allotted to the first group to ready itself and to apply harsher pressure on the second group. The first evidence of this, still vague, is an unprecedented pressure the EU applies to Russia along several channels in an attempt to convince it to ratify the Kyoto Protocol. Everybody can see that the climatic changes are inevitable therefore the response of the first group will fully betray itself in the nearest 10 years or, at least, in the nearest 20 years.

Fragmenting Rivals

Global rivalry is spreading because the number of subjects involved is growing; there are hardly observable or totally unobservable subjects among them.

Long ago transnational corporations became a supra-state force to be reckoned with; as a rule, however, they are working in the interests of the "host country." Their position in the world economy is akin to the U.S. position among other countries - this explains why their interests, ideologists, and rivalry methods are very similar. The United States has created the best mechanism of a symbiosis of large corporations and the state, therefore their policies and interests if not identical are at least harmonious and complementary.

There are a significant number of transnational corporations operating within hardly formalized frameworks or within hardly detectable groups and alliances. Combined with the poorly organized system of supervision of the world economy and transnational business these groups and alliances remain invisible for national and international bureaucracies.

Individual regions of individual countries (richer in natural resources or better administered than the rest of the country) join in the world rivalry.

There are all sorts of structures using non-economic methods (some of them pursuing money, others power and influence) playing significant, thought not obvious, role in global rivalry. They are religious and criminal structures, as well as independent NGOs dealing with individual issues (such are the anti-globalist and ecological movements).

Special services of some countries (including the developed ones) that enjoy considerable independence also belong to the same category, their independence being rooted in "self-paid special operations." This is probably much wider practiced than it is recognized (it seems that it funds, to a certain extent, worldwide drug trafficking and illegal trade in arms and technologies). Sensitive interests of national and private nature (of corporations and top figures of states and special services) are also protected with methods that cannot be revealed to the public.

Easier communication methods that created network structures spread both geographically and legally (the latter decreasing the risk of legal persecution) boosted the influence of non-governmental global rivals.

For the first time in history this allowed individuals (unattached to any organization) to exert considerable influence on society - something that would have been impossible in the past.

The new structure of rivalry cannot be analyzed: standard approaches produce inadequate results. Global rivalry today (civilizational rivalry is a particular, even if important, case) involves varied subjects pursuing varied aims and using varied methods. Fundamentally different axiological systems and methods interfere with mutual understanding therefore no long-term (rather than tactical ad hoc) agreement can be achieved.

The rivals are pursuing the same aim, namely, influencing mankind development. In business profit is the final aim while in global rivalry (of a supra-economic nature) the final aim is to impose on the world one's own development model. Though welcome, material boons are a by-product of success. In this sense global rivalry is akin to biological rivalry: expansion is its only meaning. 2

When assessing those involved in global rivalry one should not concentrate on the scope of activities alone (even if it is important from the point of view of sustainability). One should pay attention to the scope of the easily realizable resources: organizational, intellectual, and communicational. Social management technologies and aggressiveness are absolutely indispensable: globalization has made strategic defense the surest road to a defeat.

Management Systems Transformed

The newly invented technologies of manipulating with people's minds have radically undermined the efficiency of the social and corporate management systems ill adapted to the innovation. They have become self-programming; they parted ways with realities and alienated themselves from society. The challenge of the new technologies that became obvious several decades ago caused a desire to restore internal integrity of the administered society, or at least its key parameters.

This desire, in turn, caused shifting of responsibility and greater attention to creating network structures rather than to transforming the traditional organizational pyramids. The former are managed not so much through direct impacts as through changing their environments (information and financial components in the first place).

One cannot exclude a possibility of a deliberate perfection of the systems of management of people unfolding simultaneously with their spontaneous evolution (in which they act as certain entities with managers, and not necessarily managed systems, being their elements).

Social Identity Preserved

In the nearest decade societies (that will manage to preserve their identities) and not efficient state administration will emerge as the primary condition of competitiveness. It will become signally important to improve and preserve a stable system of social values urging society to succeed in global rivalry.

Any society that fails to identify itself as an entity involved in an uncompromising rivalry as well as any society that fails to strive for a collective success is doomed to defeat and disintegration. The Soviet Union and the "failed states" that 25 years ago were if not highly developed at least stable and united territories with a future in front of them can be offered as an example.

Self-identification of the Soviet people rooted in the sacrifices of the Civil and Great Patriotic wars and the collective breakthroughs of the "thaw" period (Iury Gagarin was the symbol of the social, technological, and ideological achievements) were completely wiped out by Gorbachev's catastrophic perestroika. Today, Russia is facing a task of acquiring a new self-identity: the past has demonstrated that this can be done.

In fact, self-identity of American society was undermined by the Civil War of 1861-1865 and, more recently, in the late 1960s by the war in Vietnam. The call to unity formulated during Nixon's election campaign was no exaggeration.

Today Russian society badly needs restored self-identity and "subjectness." The road to them lies through the idea of a "constructive revanche" in the global rivalry and through profound re-ideologization of society. Ideology alone can tie together social and ethnic groups into a collective fighting for world markets and resources and, in the final analysis, for its own future. Ideology is the only generator of enthusiasm that adds society more physical, administrative, and intellectual power.

As distinct from religion and nationalism ideology is open, it is prepared to welcome all potential allies; having emerged as a instrument of class struggle it developed together with social relations. Today it means the "way of life" splendidly exploited in the United States and less splendidly, in the Soviet Union. "The way of life" understood as an ideology reduces to an absolute minimum the number of outcasts, those who cannot accept its aims and values. Ideology creates an entity and makes it possible to tap the human potential to the full.

American success is rooted in an exceptional ideologization of society. Back in 1837 a political novice Lincoln formulated the need for a "political religion" in which the Constitution and the laws would be respected as religious dogmas. Later, after the cruel and destructive Civil War in the course of which the "scorched land" tactics was widely used American society managed to formulate a "civilian religion" that introduced religious discipline and respect for religious norms in the sphere indispensable for society's continued existence. It united people of all religions on the platform of their loyalty to social interests and became the prototype of later social ideologies.

The current attempt at restoring social integrity in Russia has not yet borne fruit. Public self-awareness returned to the primary, ethnic level when the ideology of "new historical community of people-the Soviet people" collapsed while the new ideology, that of triumphant plunderers, was rejected. No multinational country can tolerate this hence an instinctive attempt at cementing the nation on a higher than the ethnic (religious) level. (The anecdotal attempts of the Yeltsin era are best forgotten. 3 )

Indeed, Russia survived feudal disunity and the Tartar-Mongol yoke, and developed until Peter the Great created bureaucracy thanks to religion. In the meantime it has become home of followers of all world religions and a great number of atheists therefore the road that five centuries ago led to survival today ends in an impasse. In fact, fragmentation into hundred-odd ethnic groups is less destructive than division into several confessions because:

So far, there is no cementing ideology in Russia yet there are indirect signs (here I have in mind a tremendous success of "Vladimir Putin" project of late 1999 and early 2000 underestimated by the intellectual observers) that a uniting and motivating ideology has acquired spontaneously developed outlines.

It has brought together, in a harmonious way, the inalienable rights of the individual and patriotism as the only instrument of ensuring these rights in global rivalry. There is a clear understanding that these components are badly needed: they have been inherited from Soviet society that was consistently and, on the whole, successfully realizing them. Today, this ideology is balancing on the level of intuitive realizations-it should be spelled out. This is what the social elite should do.

The state is society's brain and hands-in the same way the elite as a group of people involved in decision - making or setting the patterns to be emulated - can be described as society's central nervous system that selects motivations and transfers them to corresponding groups of social muscles.

The Russian elite is not coping with these duties not so much because it has been depraved by protracted plunder and destruction of its own country as by cynicism caused by this depravation. There are no ideals and no enthusiasm - it cannot inspire society to address the key tasks. The Russian elite is a group of people who want nothing (except personal prosperity) and can do nothing.

To get a chance of surviving in global rivalry, Russia, in the process of articulating the creative ideology it has stumbled across, should acquire a new elite. It is fundamentally important to note that the demand of "changing the elite" was one of the key demands of the Putin project. It was not fully realized because against the background of the newcomers the old Yeltsin elite looked efficient and responsible. The elite was not changed: the old elite remained in power as the only guarantor of relative social stability.

The change of elites is expected to inspire the new elite and make it more adequate than the old one. This trite requirement is normally underestimated even though it means considerable material losses for the Russian elite that has already grew accustomed to the level of comfort impossible merely a decade ago. It was acquired in exchange for the realized interests of stronger global rivals rather than for the realized national interests.

The elite should be fully aware that today, in the context of global rivalry, friendship is reserved for nations while states and societies remain rivals.

 


Endnotes

Note *:  Mikhail Deliagin, Presidium Chairman-Head of Research, Institute of Globalization Problems, Doctor of Sciences (Economics). Back

Note 1:   Different participants in global rivalry offer different ideas about the borders of Muscovy: some are prepared to let us have the Urals and the North Caucasian plains while others grudge us even the Volga basin. Back

Note 2:   It was Andrei Sakharov, the recognized hero and unrecognized victim of the dissident movement, who first mentioned this. Back

Note 3:   I shall never forget a report of one of the groups involved in creating the "national idea" that said: "In search of the national idea we have read a huge number of newspapers." Back