Zubkov Stuck in Soviet Mentality

Statements made by Russia’s new Prime Minister, Viktor Zubkov, seem to indicate that he’s still living in the Soviet Union, at least in his mind. Zubkov was completely unknown to both Russia and the world before his recent nomination to the post. One of the few well-known highlights of his career is a tenure as manager of collective farms around St. Petersburg.

George Bovt reports in the Moscow Times (October 4, 2007):

Prime Minister Viktor Zubkov’s visit to Penza last week received extensive media coverage, especially when he issued a series of direct orders that were all delivered with that style so characteristic of former Soviet leaders. For example, having learned suddenly from discussions with local workers that kindergarten teachers earn just 3,500 rubles ($140) per month, he ordered the governor of Penza to raise salaries immediately. Whether Zubkov would be able to order salary increases for all of the teachers outside of Penza was not addressed.

Zubkov also listened closely to the complaints of managers of a local paper factory that VTB, the large state-controlled bank, did not follow through on its promise to extend credit at 14 percent interest rate. This left the factory no other choice but to borrow from a Czech bank at 4.5 percent. Several days later in a Cabinet meeting, Zubkov decried this phenomenon as a “disgrace,” and he issued an order to Russian banks to start providing “affordable credit” to Russian manufacturers.

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Of course, all of this lacks common sense. Even a schoolchild knows that any bank issuing credit at 4.5 percent would not be sustainable without government subsidies, given this country’s high inflation rate. Also, raising salaries for teachers in one region without addressing the salaries of all state employees is absurd. Equally absurd were the official orders to develop Russia’s nanotechnology industry – a sphere that is, by definition, requires innovation, which can blossom only when there are favorable economic conditions — and freedom! Orders from bureaucrats for these types of development projects are not only meaningless, they are counterproductive. In a market economy, investment flows naturally into sectors where profits can be made and not where directed by bureaucratic decree.

Putin has consistently chosen leaders based on loyalty, paying little attention to political capability and experience. Zubkov is just the latest example of the problems of cronyism.