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Russia 2030 Based on Contracts Russia 2030 Based on Contracts Russia 2030 based on contracts Russia 2030 Based On Contracts EDITORS: Osmo Kuusi Hanna Smith Paula Tiihonen Chair of Steering Group: Päivi Lipponen, MP ISBN 978-951-53-3305-6 (paperback) • ISBN 978-951-53-3306-3 (PDF) Publication of the Committ ee for the Future 6/2010 Cover illustration: Wäinö Aaltonen, The Future, 1932/1969. Bronze. Parliament of Finland, Assembly Chamber Photo: Vesa Lindqvist/Parliament of Finland. The Committee for the Future Parliament of Finland Phone (09) 4321 Fax (09) 432 2140 [email protected] www.eduskunta.fi 1. edition ISBN 978-951-53-3305-6 (paperback) ISBN 978-951-53-3306-3 (PDF) RUSSIA 2030 BASED ON CONTRACTS Editors: Osmo Kuusi Hanna Smith Paula Tiihonen Chair of Steering Group: Päivi Lipponen, MP Publication of the Committee for the Future 6/2010 To the Reader The Committee for the Future found the Russia scenarios that it had drafted during the previ- ous parliamentary term valuable and decided that that they needed to be updated. The “Russia 2017: three scenarios” report published in 2007 served as background material and provided a source of stimuli for this work. Examined in the report are both the progress of modernisation in Russia and prospects for the economy all they way up to 2030. A new approach in this work of updating and forecasting has been to seek visions of and scenario themes for development in Russia through a “neighbourly relations in the future” assessment. To deepen its expertise on cross-border neighbourly relations, the Committee visited Imatra and Svetogorsk on 23.4.2010. Since up- dating of the three scenarios also a new fourth one has been produced under the title “A Rus- sia of Contracts 2030”. It was discussed in the 1st EU-Russia Innovation Forum, May 25-27, 2010 Lappeenranta, Finland. In the summer, on 6.7 2009, the Committee arranged an international seminar in which iden- tity-building was deliberated under the heading “Future Building”. The seminar was a part of the global-level “History and Future of Nation-Building” conference arranged by the Interna- tional Institute of Administrative Sciences, IIAS in Finland on 7-11.7-2009, The Committee arranged also a seminar "Together and Separate" 11.11.2009. The theme of Russian identity that came up at the Committee’s seminars is included in this report as well. Participating in the drafting of the report were, in addition to the Committee, members of other Eduskunta committees as well as in the steering group a considerable number of re- searchers and other experts in the field. Representative Päivi Lipponen has served meritori- ously as Chair and Representative Marjo Matikainen-Kallström as Deputy Chair. My deepest gratitude to them, the authors and all of you who contributed to the work! Marja Tiura Chair, Committee for the Future Contents To the Reader............................................................................................................................ III Foreword: Democracy in Russia ............................................................................................ VII Stances adopted by the Committee for the Future ................................................................. XIII Motto: As neighbours, every one of us is an expert on Russia ............................................. XXI PART I The definers of Russia: Russia's special features and economy 1. Cultural and historical obstacles to Russia's renewal ............................................................. 1 1.1. Introduction: Cultural and historical obstacles to change in Russia ............................ 1 1.2. Russia’s self- image ..................................................................................................... 3 1.3. International Observations on the subject ................................................................. 20 1.4. Modernisation in Russian History ............................................................................. 27 1.5. Institutions, corruption and “legal nihilism” ............................................................. 37 2. Future prospects for the Russian economy ........................................................................... 46 2.1. Assessments of economic development in Russia in the near future ........................ 46 2.2. The Russian state leadership's measures in handling the economic recession .......... 49 2.3. The Russian state leadership’s future-related policies and scenarios for the future of Russia ............................................................................................................................... 50 2.4. Two possible models for modernisation of the Russian economy ............................ 59 2.5. Three obstacles to modernisation of the Russian economy ....................................... 72 2.6. Rusnano and aircraft manufacturing as opportunities for Russian high-tech production ......................................................................................................................... 79 2.7. Russia as an energy and raw materials producer in the future .................................. 86 PART II A new Russia of contracts and neighbourly relations 1. New scenario 4: A Russia of Contracts ................................................................................ 95 1.1. The contract-based model and the starting points in making agreements ................. 95 1.2. Scenario 4: A Russia of contracts ............................................................................ 103 V 2. How neighbourly relations will develop? ........................................................................... 108 2.1 The Finns’ view of neighbourly relations is defined by uncertainty and reservations ........................................................................................... 108 2.2 Neighbourly relations in the general framework of building an identity and nation 117 2.3 Weak signals in practice ........................................................................................... 121 PART III Research, perception and experience Technology-innovative special economic zones and Russia’s future modernisation: Lessons from China ................................................................................................................ 125 Valtteri Kaartemo & Kari Liuhto Coexisting official and unofficial practices in Russian business life ..................................... 139 Riitta Kosonen & Sinikka Parviainen The Murmansk region’s growing importance in the energy economy and logistics creates opportunities also for Finnish companies .............................................. 170 Yrjö Myllylä Finland’s and Russia’s policies on adjacent areas and neighbourly relations ........................ 181 Tapio Välinoro What is Russian National Identity? ........................................................................................ 184 Jeremy Smith Cultural cooperation ............................................................................................................... 191 Maija Lummepuro Misperceptions about our neighbour ...................................................................................... 208 Susanna Niinivaara Reading in Russia: on the verge of abyss ............................................................................... 213 Natalia Baschmakoff VI Foreword: Democracy in Russia Democracy is built around a highly centralised state combined with a strong sense of national identity. Nikolai Gogol neatly depicts the state of 19th century tsarist Russia in his play “The Govern- ment Inspector”. Moscow sends an official on inspection duty to a small town. So the local mayor frantically tries to put things in order. Before the inspector’s arrival hospital patients are sent home, so that the quality of care can not be doubted. Graft is prohibited. The judge reassures the mayor that no one will be able to make any sense of legal decisions handed down by the court. And the mayor suggests blaming a fire in order to explain why a church has not been built, even though the money for the project was awarded five years be- fore. Furthermore, the mayor instructs the postmaster to open all outgoing letters so as to sti- fle any complaints to Moscow. The postmaster gleefully replies that he does just that all the time, “being of a naturally curi- ous ". When the satire first appeared it aroused the ire of Russian officialdom. It was not permitted to blaspheme against Holy Russia. Gogol had to go into voluntary exile. Much as it is today, back in the 19th century, there was no political opposition to the tsar and his government offi- cials. At that time, writers were very much the conscience of the nation. Only they, as mem- bers of the intelligentsia, had the courage to speak out and lament the lack of political rights under the regime. Clearly, out of this marriage of politics and culture arises the Russian mys- tique. Can we really demand that Russia adopt the so called western model of democracy? Russia has never been a democracy as we understand it in the West. Russian power structures have evolved and been developed down through the centuries. The Chronicle of Nestor records that in 862 Rurik was called on to rule over the Slavs. At that time in Europe, the Frankish Empire was being divided up and Vikings were trading along the coast of the Gulf of Finland. We do not have to accept everything that goes on in Russia but we Europeans must learn not to focus exclusively on its deficiencies. A one-sided perspective predominates
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