Posted 6 сентября 2022,, 12:16

Published 6 сентября 2022,, 12:16

Modified 25 декабря 2022,, 20:55

Updated 25 декабря 2022,, 20:55

Sanctions launched a mode of getting rid of the “resource curse” in the country

6 сентября 2022, 12:16
Дмитрий Милин
The reduction in raw material revenues knocks out the financial basis under the authoritarian system of state power in Russia.

Dmitry Milin, analyst

Russian electoral authoritarianism is a consequence of the “resource curse”. It is the "natural rent" that allows the regime to explicitly or implicitly buy votes and pay for the work of election falsifiers. The life of more than 50% of Russians in one form or another depends on the state and state-owned companies that live off "natural rent", which allows the Kremlin to use the administrative resource to obtain the desired results in the elections.

The current situation with sanctions against the energy sector in Russia gives us a unique opportunity to change the authoritarian dictatorship in favor of a real democracy. The reduction in raw material revenues knocks out the financial basis under authoritarianism, and dependence on private business in the field of mass import substitution (attempts by the authorities to organize import substitution by administrative-command methods are doomed to failure, as has already been demonstrated in the previous 8 years) will lead to the need to make not only economic concessions and tax cuts, but also on "unscrewing the nuts" in political and public life.

“There would be no happiness, but misfortune helped” the conflict in Ukraine, however paradoxical it may seem, gave us a chance to change towards democracy and to dismantle the entire system of an authoritarian class society. If the system paid for loyalty to the regime with income from “natural rent” for years, now these opportunities will sharply decrease and the system will have to “remove large groups of its supporters from allowances” layer by layer, creating pockets of discontent in previously loyal groups of the population.

Now, under the current conditions of sanctions, the value of loyalty, as well as the ability of the regime to pay for it, will begin to give way to the value of creative labor in the field of mass import substitution. The authorities will be forced to encourage those who are capable of at least something real, and not like officials “on paper” and “re-gluing labels” for imports, to do their own thing.

The “bolotnye protests” of 2012 were not killed by the leadership of the opposition, they were killed by oil that rose in price at the wrong time, when the extremely cynical Russians realized that they could continue to live at the expense of “natural rent” while maintaining an authoritarian regime.

But now, this will no longer be the case, and no matter how much the price of oil and gas rises in the short term, the reduction in the production and export of energy resources, the main source of funds for authoritarianism in Russia, has begun. According to the Ministry of Energy of the Russian Federation, Russia will reduce production in 2022: gas by 7%, coal by 6%, oil by 2%.

The sanctions launched a long and painful regime of getting rid of the "resource curse" and authoritarianism. We are at the very beginning of this path, but we still have to go through it. And "the one who walks will master the road".