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Putin at crossroads following Kursk sub disaster

By : Peggy Simpson

   So what to think about the performance of Russian President Vladimir Putin during the Kursk submarine catastrophe?

   There are lots of way to look at it, including what leadership really means. In terms of policy, there's also a lesson to be learned for emerging democracies. In a Western democracy, the elected chief executive is in charge of the military. That's by design. And if Putin stayed away partly because the naval commanders told him to – that's an unsettling example of how that works against a civilian top dog, when the people think you let them down by your absence.

   Andrzej Rychard, newly elevated chairman of the sociology department at Central European University in Warsaw, said Putin "did not behave as a president" but still lost very little public support, according to the polls.

   Most Russians "don't see any alternative" to Putin, and Russians are used to big dramas, including those with submarines, he said.

   This time, however, "all of the mismanagement was very clear" because of the presence of both Russian and foreign media on the ground in Murmansk.

   "This visibility is what distinguishes this drama from the former ones, not the substance of the event," Rychard said.

   A best-case scenario could be that Putin would see "the need for real glasnost, which was totally absent here," Rychard said. Now Putin has the chance to put meaning behind the word – "to learn something about the need for transparency in public life. In that sense, maybe this will affect the way he runs his presidency," he said.

   He's not banking on that happening, however. "He doesn't look like a very open person. His background and his experience could make it difficult for him to learn something from this," he said.

   Laura Klos Sokol, a former Fulbright scholar and now the owner of a workplace-consulting firm, didn't want to waste her breath badmouthing Putin.

   "But I'm kind of glad that it's out there for the whole world to see – this devious way of escaping responsibility, which is so well known in this part of the world," Klos Sokol said. She added that mass media exposure would surely affect the way Putin handles future crises.

   Some of her consulting has at least indirectly touched issues of taking responsibility. So does she see no trace of that "escaping responsibility" problem in Poland today? "I think it's dying out. Maybe it's still true for older bureaucrats," she said.

   Zdzislaw Wieckowski, a partner with Hogan & Hartson, a law firm that just finished spearheading an 18-month debt restructuring for one of Russia's banking oligarchs, was scathing about Putin's low profile.

   "If you want to be captain of the ship, and there's a problem, you'd better get on deck – even if only for the purposes of helping morale," Wieckowski said. "That's your job, if you're captain."

   He also said the crisis could force some unexpected changes.

   "Putin really has an opportunity to set a tone for Russia (through) an open and thorough, intellectually honest investigation into the Kursk tragedy, signaling that the government is willing to open itself to the electorate, and consequently that it respects the electorate," he said. He added that this way Putin could also "earn respect from the electorate."

   Rychard said it wasn't clear to him that this was uppermost in Putin's mind or his presidential game plan. "I'm not a specialist on Russia but it's not clear if they're thinking in more or less technical ways – to run the country as a complicated machine but still a machine – or if they will take into account some of the related social nature of a country," he said.

   That would mean recognizing "society as a living object. One where you have to take into account its (people's) aspirations and alternatives – all these things that make governing a country much more difficult," Rychard said. He said Putin faces a great tension right now "between the need for democracy and the fear of disintegration of Russia ... And we don't know the direction he'll go."

   Were there any clues about how Russia will go in the recent debt restructuring of Vladimir Potanin's Eximbank?

   Wieckowski said maybe yes and maybe no.

   Hogan & Hartson had a team of half a dozen experts from London, Brussels, Moscow, Denver, Warsaw and Washington working on what Wieckowski said was "an old-fashioned debt reorganization" with a bit of international tax planning thrown in.

   Was there a larger message that came out of this, the first massive debt deal after the ruble crash? As in – there may not be a principle of the rule of law in Russia, but with certain types of people the principle of "where there's a will, there's a way" can still lead to results?

   "Right," Wieckowski said. "This was a savvy group of people who recognized that an ongoing enterprise will provide more value than a liquidated one. That's not true in every case."

   And so the overriding message from the Eximbank deal could be, he said, "that one could do an international debt reorganization involving a Russian institution on what were substantially Western-style terms."

   The deal involved $1.4 billion in domestic and international claims from multinational institutions such as the European Bank for Reconstruction and Development, bondholders and depositors.

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