Yeltsin, Putin, and Deng

In his retrospective on Boris Yeltsin in this week's international edition of Newsweek, Fareed Zakaria contrasts the divergent paths toward reform of China and Russia after their respective ideological houses of cards collapsed.

Boris Yeltsin ... will surely stand as a figure on the hinge of history—yet he pointed Russia in the wrong direction. Compare Russia with China. In the early 1990s, they were the two most important countries in the world that lay outside the sphere of democratic, capitalist states. Russia had by far the stronger hand. In those days it was still regarded as the second most important world power, whose blessings were needed for any big international endeavor—whether the first gulf war or Middle East peace negotiations. It had a GDP of $1 trillion (in purchasing-power parity), the world's second largest military and its second largest pool of technically trained personnel. Perhaps most significant, it had the most abundant endowment of natural resources on the face of the earth. And with Yeltsin as president, the country had a charismatic leader who could leverage this hard and soft power.

China by contrast was an international pariah. It had just gone through the shame of the Tiananmen Square massacres. Its per capita GDP was just one third that of Russia's, making it one of the poorest countries in the world. Its educational and technological system was still in shambles, having been shut down during the Cultural Revolution. Its leaders—a group of seemingly narrow-minded engineers—were cautiously introducing reforms to a country still limping after decades of Mao Zedong's mad gambits at home and abroad....

Look at the two countries today: though the Russian economy has surged because of high oil and commodity prices, China's is now six times larger. Even more interesting is the political trajectory. Russia, in almost every dimension, has become less free over the past decade....

China, by contrast, has seen greater economic, legal and social reform every year. This year, finally, the Communist Party adopted guarantees of private property and greater government transparency. (For those who dismiss China's reforms because they are "merely" economic, recall that for John Locke and Thomas Jefferson, the right to private property was at the heart of individual liberty.)

My point is not that China is freer than Russia. It is not. But for a decade, the arrow in Russia has been moving backward, while in China it is moving—slowly—forward.

This divergence between the Russian and Chinese models has had powerful implications around the world. Russia has become an example—but a negative example. The Chinese leadership has privately admitted to having watched Yeltsin's reforms and decided that they produced economic chaos, social instability and no growth. (Russia's GDP contracted by 20 percent during the 1990s.) Instead of similar shock therapy—which Bill Clinton's Russia hand Strobe Talbott accurately characterized as "too much shock, too little therapy"—China chose a cautious, incremental path. "We must cross the river by feeling the stones with our feet," said Deng Xiaoping. Rather than shutting down state-owned enterprises, Beijing chose to grow the economy around them, so that the state-owned portion kept shrinking and its problems became more manageable.

Look around the world, from Vietnam to Egypt, and you see officials studying China's economic reforms. I have not come across a single official anywhere who has ever claimed to be emulating Russia's path from communism.

Charles Krauthammer made a similar point last week.

Twenty years ago, Yeltsin made a strategic choice for democracy. Putin and his KGB regime have made a different strategic choice: the Chinese model. They watched two great powers take their exits from communism -- Maoist China and Soviet Russia -- and decided the Chinese got it right.

They saw Deng Xiaoping liberalize the economy while maintaining centralized power -- and achieve astonishing economic success. Then they saw Gorbachev do precisely the opposite -- loosening the political system while keeping an absurdly inefficient communist economy -- and cause the collapse of the regime and the state.

Yeltsin's uncertain, undisciplined and corruption-ridden attempt to deregulate both the economy and the political system caused such chaos that during his tenure gross domestic product fell by half. So Putin decided to become Deng. And while Deng destroyed democratic hopes in one fell swoop at Tiananmen Square, Putin did so methodically and gradually. By the time his goons beat up opposition demonstrators in Moscow and St. Petersburg earlier this month, so little was left of Russian democracy that the world merely yawned.

Of course, China also got a head start. Mao Zedong, the Great Ideologue who did more than anyone to discredit utopian ideologies and pave the way for brutally pragmatic realists like Deng, died in 1976.

via Peaktalk