June 6th, 2013

Who’s afraid of economists?

Sergei Guriev’s flight was the major news last week. The rector of New Economic School, the leading economic school in Russia, resigned from his office in response to the “experts’ plot”, a government led investigation against independent economists.

Sergei Guriev remains an optimist even in exile

In the narrow sense the experts’ plot involves six experts, who provided their independent opinion on the Mr. Khodorkovsky’s case to the Council for Civil Society and Human Rights, an advisory body appointed by President Medvedev. The experts almost unanimously concluded that there were no wrong doing in the YUKOS’ practices that were judged criminal by the Moscow court. Since then, five out of six academics faced with pressure from Investigative Committee, Russian FBI.

The raid against YUKOS’ case experts fits well to the broader context of the government attack on research institutions. Since most of them function as NGO’s they should declare themselves “foreign agents” if they receive any grants from abroad and pursue any “political” goals. Think tanks usually mention economic policy advising in their charters and typically have partner projects with foreign institutions. For officials, this is enough to qualify think tanks as “foreign agents”. The label “foreign agent”, also meaning “a spy”, was broadly used in the Stalin’s era, so no surprise not a single NGO wants to declare itself a “foreign agent” voluntarily. After prosecutors’ raids almost paralyzed the work of tens of think tanks, a dozen of prominent experts close to the government voiced their protest against the new regulation of NGOs. As of today, no official reaction to this declaration is known.

In Putin’s Russia businessmen and opposition leaders are often brutally punished for critic of Mr. Putin. Until recently, intellectuals had a privilege to publicly criticize the government while simultaneously advising it. Not anymore. Now experts are persecuted for their words. Kremlin prefers loyal experts, who are eager to praise Putin’s policies and say what he wants to hear. As a result, the quality of economic policy is likely to deteriorate dramatically. Experts, who are proposing printing money to rebuild Soviet industry, gain influence in the President’s administration. Intuitive, hands on approach of managing an economy of a huge country often leads to unforeseen results. 25 years ago the absence of unbiased economic analysis led to the collapse of the USSR and the whole Soviet bloc.

Liberal economists helped Putin to achieve remarkable results that were essential for his political dominance. During his last appearance on a special TV-show, he acknowledged achievements of his Finance Minister Alexei Kudrin and defended Anatoly Chubais, the manager of many liberal economic reforms, from accusations in corruption. However, the experts’ plot demonstrates his real attitude towards liberal intellectuals. Talking heads close to Kremlin explain that Guriev was in the center of conspiracy to replace Putin with more liberal Medvedev. True, some experts specualate that a coup inside political class remains the best and most probable scenario to oust Mr. Putin. He will do whatever it takes to avoid this fate.

The New York Times

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