On the seventh floor of a skyscraper that towers over southern Moscow, an entire wall is covered by screens of electronic data. At computer terminals, operators monitor the flow of Russia's most lucrative export product. This is mission control for Gazprom, Russia's state-owned energy conglomerate -- the place from which, if you are US Vice President Dick Cheney or a Russophobe of his ilk, the Kremlin intends to run Europe, if not the world.
Pressing a button here can bring a country to its knees, so the nightmare has it, or at least cause its citizens to shiver by cutting off their gas.
About 40 experts on Russia -- journalists, academics and policy analysts from Europe and the US -- were granted rare access to Gazprom's inner sanctum last week. It was the third year Russia has invited the so-called Valdai Discussion Club for meetings that culminate in a three-hour question-and-answer session with Russian President Vladimir Putin.
The message the Russians wanted to give us was that blackmail is not on the agenda. Energy producers need customers willing to sign long-term purchasing contracts just as much as energy consumers want a guaranteed supply. Putin even rejected the description of Russia as an "energy superpower," telling the group that the label was "deliberately fed to the media in order to bring about an association with the terrible Soviet Union."
Watching the screens in Gazprom's control room, you certainly have an impression of a Gulliver rather than a Goliath. While a web of pipelines ties Russia to Europe, almost none go east, making fears that Russia could dump Europe and switch gas sales to Asia absurd. Although Putin said Russia plans to increase energy exports to Asia by a factor of 10 by 2020, this would amount to only 30 percent; 70 percent will still go to Europe.
The second message to our group was that Russia's transition to western capitalism is a long way from complete. The current hybrid of state ownership and regulated prices for energy will not end soon, nor will the government's determination to keep control of strategic assets. Pipelines will not be sold to foreigners, which would only give them windfall profits, Putin says. Appointing Kremlin managers to the boards of gas and oil companies is a step towards good corporate governance, not away from it, since the oligarchs who seized control of former Soviet assets in the 1990s evaded paying taxes on a massive scale.
At the same time, the Kremlin wants to move as quickly as politically possible towards charging market prices for the energy it sells inside Russia and to the former Soviet republics. It finds it ironic that the West calls on Moscow to charge more, only to complain of Russian intimidation when Ukraine refused to sign a new contract last year and Russia stopped sending gas after the old contract had run out.
Within Russia, Gazprom is not yet raising prices for fear of a social explosion. Russian consumers have had to accept several shocks in the past 15 years, from the hyperinflation of the early 90s and the bank collapses of 1998 to sharp increases in housing costs and fares for domestic flights and urban transport.
Putin's restoration of a strong Russian state and his calm defense of national interests after the often demeaning pro-Westernism of the Yeltsin years are the key to his high poll ratings. The concerns stem from other trends.
He is continuing to re-exert central control over politics at all levels, apparently so that he can suppress protest rather than respond to it. The Russian parliament was emasculated in 2004 by "reforms" that created high hurdles to small parties and independents trying to enter the Duma. The largest opposition party, the Communists, lost much of its support after Putin stole its "national-patriotic" agenda six years ago. Now, with parliamentary elections due next year, the Kremlin is trying to manipulate the three smaller parties that raise social-protection issues.
It engineered leadership purges to put Putin supporters in charge of the Party of Life, the Pensioners' Party and the party known as Motherland, and encouraged the three to merge. The new creation has yet to choose a name, but the Moscow joke is that to call it "the life of pensioners in the motherland" would be too stark since everyone knows there is no feel-good factor there.
Equally worrying is the accelerating trend towards making Russia's education and health systems more market-oriented. Universal provision of these services, free at the point of delivery, has collapsed.
The health sector in particular has been severely affected. Imposing charges for consultations with doctors, operations and private hospital rooms has split the system in two.
The Soviet practice of giving small "presents" to doctors has become one of virtually mandatory payments. The WHO ranks Russia at 127th out of its 192 member nations and 75th according to the amount the government spends on health care.
Putin recognizes that he has a health crisis on his hands, particularly in the country's declining birth rate and the reduced life expectancy for adults. He has made education and health two of his four "national projects."
The problem lies with the stinginess of his response and the way that government money is spent.
Flush with energy revenue, Putin has set up a stabilization fund for the economy, but his advisers insist it will not be used for short-term injections of cash into social services.
A system of "childhood certificates" not only provides higher maternity allowances once a baby is born, but also earmarks money for pregnant women to pay delivery fees, thereby subsidizing the new market system for health care.
"Why do we need to break the old Soviet system instead of making it better?" asked Leonid Roshal, who chairs the president's newly formed commission on public health.
As Putin moves nearer to his final year in office, he deserves credit for restoring stability after the chaotic capitalism of the Yeltsin era. But he has done little to reduce the greedy culture that emerged in the early 1990s, in which the owners of every kind of asset -- whether natural resources, property, skills or a job in the police or other government sectors -- look to extract an unfair profit.
"In 1990, only three or four of my fellow economic graduates at Moscow University went into government. The rest wanted to make money in business," a banker told me last week.
"Now 70 percent go into government. You can make more money there," he said.
Putin's legacy needs to be better than that.
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