Polyconomics' Man of the Year: Vladimir Putin Polyconomics' Editors December 28, 2001

To: Website Fans, Browsers, Clients
From: Polyconomics' Editors
Re: Russia's President

For the past ten years, the senior Polyconomics staff has selected a "Man of the Year," with criteria heavily influenced by his contributions to the political economy.

Our choice for 2001 is Vladimir Vladimirovich Putin, President of Russia, not only for his positive contributions to Russia's national economy during the past year, but also for his leadership and creativity in the new global political economy.

Mr. Putin's remarkable accomplishments in Russia alone would have been enough to make our list of nominees for Man of the Year. Until he arrived at the helm, Russia was a shell of the once mighty nation that not long ago seriously challenged the United States for pre-eminence in world leadership – but which had been reduced to extreme poverty of social, economic and spiritual life, to despair, impotence and irrelevance. Russia inherited myriad problems from 70 years of Communism and the post-Communist decade of highly destructive "shock therapy" that essentially burned down the old structure of the state before a new one had been started.

With his election as president, Mr. Putin confidently embarked on a series of supply-side economic reforms that have enabled Russians for the first time in post-Communist history to see their living standards rise instead of decline -- even during the pronounced slowdown of much of the world's economy. Much of this flows from his confidence in undertaking dramatic policy measures that would have horrified the bureaucrats of the International Monetary Fund -- those who advised the governments of Mikhail Gorbachev and Boris Yeltsin into oppressive tax regimes and currency devaluations. Among his initiatives were the especially impressive range of supply-side tax reforms -- a 13% flat rate personal income tax and 23% corporate tax, and the most serious moves yet toward the private ownership of land. In 2001, Russia's economy grew a robust 5.5%, as much of the world languished in economic recession, and the Russian stock market, an indicator of forward growth, surged from a low this year of 131 to more 254 points in dollar terms (1437.50 to 2884.21 in ruble terms)! There are still a number of serious tasks remaining in this great transformation, Russia's reliance on a crawling peg as a guide to monetary policy an issue of worrisome concern. Yet a singularly important indication of the great turnaround underway now in Russia is that once again the people are proud to be Russian, with public opinion polls showing that a majority of the country now looks to the future with confidence.

These accomplishments by themselves might not have been sufficient as decisive criteria for being chosen as Man of the Year. What elevates President Putin to this singular status is that no other world political leader is doing more to shape a positive direction for the post-Cold War era than he. His ability to think outside the box, to redefine the conceptual framework of the so-called New World Order, to move the world's family of nations into new, positive relationships among one another has made Russia a critical and essential player in this regard. Under Putin's leadership, Russia is becoming a major force for global stability.

Perhaps his mastery of the art of judo plays a role in his approach to strategic questions, as President Putin displays an ability to take the most hostile, belligerent and threatening provocations thrown with great force against Russia and to turn them around to produce a result that lessens global instability and disarms the old Cold War-era strategists in the U.S. Those strategists -- ever convinced that Russia (with sometimes China and Islam included) remains the most dire threat to the "West" -- have devised one strategy after another to isolate Russia and to cast it as a permanent strategic adversary. Pres. Putin has taken on that offensive and effectively routed it. Rather than react with hostility and belligerence, Mr. Putin used diplomacy instead of force to turn around attempts to "contain" and isolate Moscow via extension of NATO right up to Russia's borders. Now some West European leaders are even raising the prospect of Russian entry into the Alliance.

Russia, once the great fear of Western Europe, is now increasingly welcome with open arms across the continent. Germany, for example, shows new appreciation of Russia as a moderating force for peace, as does more and more of Europe. His vision of a united, prosperous and peaceful Europe presented in his address to the German legislature -- delivered "in the language of Friedrich Schiller and Johann Goethe" as he put it -- received overwhelmingly positive responses. President George W. Bush of the U.S. very easily could be engaged now in an expansion of U.S. military power and might into Iraq, for example. The U.S. might take note of European -- and Indian, and Chinese, and Arab, and Muslim -- opposition to such an extension of the Superpower's hegemony. Cheered on by Prime Minister Tony Blair of the U.K. and the Cold Warrior strategists in and around the Bush administration, though, Washington might be tempted to dismiss their complaints and attempt to remake the world in its own image, without much thought to unintended consequences. By adding his quiet charm and diplomatic skills to those in the Bush Cabinet who counsel restraint, Putin has thus far channeled a globally destabilizing impulse into one that points toward peaceful solutions.

While differences on strategic issues remain, Russian views are given a serious hearing now with this U.S. administration. Rather than allowing U.S. abrogation of the ABM Treaty to worsen U.S./Russian relations, Putin registered his "disappointment" with the decision, but has gone on to persuade many West European leaders of the efficacy of the Russian proposals (cast as a European-wide perspective). This also has helped avert an adversarial reaction by China to the U.S. move. Pres. Putin has his equivalents in Russia of the U.S. bomber factions, yet he has managed very successfully to advance against their opposition toward closer relations with the West and the U.S. in particular. Russia's relations with China, Iran, Western Europe, the Confederation of Independent States and former Soviet satellites, as well as the U.S., range from excellent to very good. Just appreciate for a minute that U.S. (as well as French and British) armed forces are being stationed at military bases within the Confederation of Independent States with the approval and encouragement of Moscow. Revolutionary!!

The U.S. role as THE global superpower is unique, fraught with threatening pitfalls, the danger of reckless hubris, and potential for a new era of conflict. What a blessing that Vladimir Putin emerged particularly on the global stage at this time to help temper, guide and inform this development in a way that points toward an era of peace and prosperity. What an even greater blessing that Mr. Putin realizes what a world-historic role he is called upon to play in these times and does not shirk from it. We know he has read the works of Schiller and Goethe, and thus appreciates the fact that anything great or worthwhile in life – whether it be in the realm of art, love, or human vision – comes about only through willingness to take great risks. That certainly is the mark of leadership. President Vladimir Putin seems to have internalized the wisdom imparted by those great minds. He acts as Schiller advised in his work, Don Carlos:

Let each of your acts be your last battle on earth. Only under those conditions will your acts have their rightful power. Otherwise, they will be for as long as you live the acts of a timid man. I want to convince you that you must learn to make every act count, since you are going to be here only for a short while, in fact, too short for witnessing all the marvels of it.

As Goethe proclaimed:

"Knowing is not enough; we must apply. Willing is not enough; we must do."

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Remarkably, here is a national leader who recently went on live television to engage in a nationwide (across 11 time zones!) two-and-a-half hour phone-in, giving unprecedentedly frank and honest answers to callers. Total calls into the stations numbered in the hundreds of thousands, and in many cases he asked callers to leave numbers so that he could get back to them to help resolve problems. We provide here a link to the Russian text of the phone-in http://www.ortrtr.ru/. An English translation will be available some time next week through the Johnson CDI Russia Weekly http://www.cdi.org/russia/. We will post it in Recommended Reading when it appears.