From October 18 to 22, 2013, I had an opportunity to participate in an intensive series of meetings and site visits organized by the World Economic Forum’s network of “Young Global Leaders.” Special thanks to the program organizers Yana Peel and Yan Yanovskiy who graciously hosted the program. The program operated under Chatham House Rules and so the discussions conducted cannot be shared through quotations and ascriptions but the narrative below attempts to capture the essence of my observations during this visit in the spirit of “rapid assessment.”
Russia remains an enigmatic land to visitors who are usually able to only grasp fleeting vignettes of its vast national expanse. Arriving at one of Moscow’s two major airports, one is stunned by the size of the metropolis that has epitomized the power of Russia for nearly 900 years. The city sprawls from its riparian core in all directions with over 11 million inhabitants, mostly residing in austere utilitarian apartment buildings that have endured the fall of the Soviet empire and the rise of capitalism. These sombre suburbs are a melting pot of long-time pensioners and recent migrants. The week of my visit, major riots had erupted in one of the Southern suburbs of the city over the alleged murder of an ethnic Russian by a Muslim immigrant from the Southern region. Such clashes have become common in Moscow which by one estimate has around 2 million Muslim residents (20% of the population and more so than any other city in Europe), mostly from the Southern oblasts of the Russian Federation or from Central Asian republics.
Moving from these suburbs, closer to the central parts of the city, the infrastructure becomes newer. Some of the inner suburbs of the city have modern high-rises and an impressive array of entrepreneurial ventures. Government-led efforts to promote technological businesses are best embodied by the Skolkovo Foundation, named after an inner suburb where the Russian equivalent of Silicon Valley is being incubated. With over $15 billion injection of cash from the government projected between 2013 and 2020 and partnerships with MIT and other international organizations, Skolkovo has much potential. However, the human capital to fully develop the enterprise still appears lacking since many of Russia’s most gifted students continue to migrate abroad. A visit to the Skolkovo School of Management reveals the mismatch between infrastructure and human capital connectivity. The building is designed to focus on best approaches to promote investment in the BRICS countries with cavernous but colourful rooms designed by Tanzanian-British architect David Adjaye. Yet, the executive education programs are still very small and largely dominated by Russian males (our guide noted that 80% of participants in the executive education programs are from this demographic).
Corruption concerns and government interference in professional management of programs continues to be felt even at Skolokovo , as indicated by a police raid on the offices of the foundation earlier this year. Yet many of leading professionals and diplomats that we met during our visit indicated that the age of oligarchs is receding in Russia. Billionaires still dominate the economic landscape with estimates of 110 people controlling 35% of the country’s wealth. However, these tycoons no longer wield the same degree of political influence that they did in the Yeltsin period; indeed the locus of power has squarely moved to the government of President Vladmir Putin, as exemplified by arrests of oligarchs, most notably of Mikhail Khodorkovsky, who marks 10 years in prison this month on charges of tax evasion. It is also important to note that although Russia has one of the highest wealth inequalities in the world due to its contingent of billionaires, the overall income inequality as measured by the Gini coefficient is relatively low (the United States has a more unequal income distribution by this measure). This is because a Russian middle class has still managed to emerge in the last decade because of multiplier effects of the mineral boom and a pre-existing safety net of basic livelihoods and government support of social programs. Russia’s demographics are also highly differentiated by regions as are the economic development indicators and the ability to attract investment. The World Economic Forum’s research in Russia and the development of a series of scenarios this year noted the importance of a subnational approach to understanding Russia’s development trajectory.
As the world’s largest country by area and one of only 5 declared nuclear powers in the world, Russia remains a formidable presence on the international stage. Russians especially see themselves as a dominant Arctic power given their geography. Environmental activism around Arctic mineral development has been particularly galling to Russia which was exemplified by the recent arrest of Greenpeace activists who were protesting against an oil rig in the Arctic. At the same time Russia also sees itself as a leading player in Arctic conservation and has even supported a transboundary conservation zone in the Bering Straits between Alaska and Chukotka. The Russian government is also interested in visa-free travel for residents of those regions across the straits. Momentum is also building for further conservation zones in the Arctic Ocean, particularly around Franz Josef Land which is part of National Geographic’s Pristine Seas Initiative. However, a major challenge to Russian conservation and more broadly to scientific research in the country remains a paucity of funding. The government has diminished research funding to the Russian Academy of Sciences and instead is focusing largely on technology park projects such as the Skolkovo Foundation.
Although basic scientific research is suffering from a lack of funding, support for the Arts in Russia is booming through private philanthropy. The transformation of Gorky Park as an art precinct with a wide array of museums, including the tasteful Garage Centre for Contemporary Culture is one such notable example but similar art venues are thriving across the city. Private foundations are also arising to confront Russia’s abounding social challenges, particularly the plight of disabled children. Russian supermodel, Natalia Vodianova, who grew up in abject poverty and endured social indifference and government apathy towards her disabled sister, has established The Naked Heart Foundation which is building playgrounds for special-needs children nation-wide.
Social media campaigns around the needs of populations in remote parts of the country are spreading fast with the Russia’s vibrant media venues. Although the size and reach of media can often lead to greater constraints from the state on what is broadcast, there are still opportunities for voicing dissent in niche venues and publications. There is even an allowance for some notable foreigners to own and manage media houses as exemplified by Dutch entrepreneur Derk Sauer who started successful publications in Russia such as the Moscow Times and the leading business paper Vedomosti. There is no doubt that Russia is trying to be seen as “open for business” whether it is through further encouragement of business investment or encouraging tourists to visit the Sochi Olympics – the doors are opening, no matter how constraining the path forward may seem to outsiders.
Ambling through Red Square in Moscow provides a microcosmic view of the country’s trajectory. Lenin’s tomb still lingers in one part of the square and has become a tourist attraction, reminding us of the country’s ideological baggage. St. Basil’s Cathedral, built by Ivan “The Terrible” provides chromatic charm to visitors and is fancily asserts the country’s dominant theology which has been embraced as a symbol of national unity by President Putin, while disenchanting socially liberal segments of the population. Right opposite the cathedral is the State Historical Museum that contains precious archaeological relics from across the full expanse of Russia. Adjacent to the museum, a beautifully renovated nineteenth century building houses the famed department store “Gum” which has become a symbol of capitalist panache for Russia’s nouveau riche. Most memorably, the Red Square is flanked by the main entrance to the famed fortress that is synonymous with the cryptic power of Russia – The Moscow Kremlin. Originally built to keep out foreign invaders, the fortress remains the most enduring symbol of the country, which sums up the views many visitors from other lands have of Russia – mysterious, menacing but magnificent!