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Putin and his Russia don't deserve the bad rap

In the right light, we see Russia and Putin have taken some undue heat. Here's a look at some of the most serious accusations leveled at Putin and his Russia.

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Vladimir Putin’s announcement that he will run for president in 2012 has evoked mass breast beating in the Western media. The indignant response has ranged from direct attacks on Mr. Putin himself to dire assessments of Russia’s future prospects under a renewed Putin presidency.

But let’s look at some of the most serious accusations leveled at Putin and his Russia. In the right light, we see Russia and Putin have taken some undue heat.

First, critics take aim at Putin for the state of the Russian economy. Many have noted that corruption in Russia is rife and wealth is concentrated in the hands of a privileged few. (True, but data show that income inequality has also risen in the United States and United Kingdom over the past 20 years). Corruption is indeed a problem in Russia, and may continue to inhibit broad economic growth. But let’s remember what Putin inherited on becoming president in 2000 – the disastrous legacy of the Yeltsin era.

Under Boris Yeltsin, Russia opened the door to Western economists and followed their “shock therapy” prescription for economic ills, an austerity program designed to control inflation by raising interest rates and taxes, and inflicting deep cuts on state social programs. As a result, Russia’s GDP fell by half, unemployment soared, and the measures failed to curb inflation. Indeed, hyperinflation wiped out the savings of millions of ordinary Russians.

Another view of the Russian economy is voiced by Donald Kendall, former CEO and cofounder of PepsiCo:

“I have been involved with business in the Soviet Union and Russia since 1959, and Putin has provided the best leadership the country has ever had. PepsiCo is very happy to have Russia as its biggest international market. It is planning to put $1 billion into Russia over the next two years, bringing a ten-year total to $10 billion.”

Mr. Kendall’s favorable account of international investment is echoed by that of GE, Cisco, Nokia, Unilever, and Siemens, among others.

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