Mikhail Sokolov

In their novel "The Little Golden Calf," the classic Soviet satirists Ilya Ilf and Yevgeny Petrov formulated the "theory of two worlds," which remains relevant today.

"Parallel to the Grand World in which grand people are doing grand deeds, there is a Small World, with small people and small things," Ilf and Petrov wrote. "In the Grand World, the diesel motor is invented, 'Dead Souls' is written, the Dnepr Hydroelectric Station is built, and people fly around the world."

In the Small World, the novelists added, advertising jingles are developed, children's ditties are sung, and overnight fashion fads pop up. "In the Grand World, people are moved by a desire to benefit humanity. The Small World is far from such motivations. Its inhabitants have one desire -- to somehow survive without going hungry."

This theory was solidified in the Soviet mind-set during the period of the early Five-Year Plans. And the propagandists ably satisfied this need. High-profile polar "achievements," new rockets, blast furnaces, and the Trans-Siberian Railroad were intended to overshadow the "little shortcomings" of the Small World -- at first, hunger, then shortages of goods in the stores and bans on "bourgeois" phenomena like the foxtrot, jazz, and rock and roll.

In today's Russia, everything is completely turned around. The stores are groaning with goods, nothing is banned, and party officials aren't crawling into people's beds -- Moscow Mayor Yury Luzhkov's antipathy to gay-pride parades notwithstanding. But even when the inhabitants of this world saw -- finally -- abundance in the stores and all the joys of the world on their television screens, the old longing for miraculous national achievements could not be suppressed for long.

Today's successes seem limited to the Small World. The patriotically inclined millions thrill to achievements like pop star Dima Bilan winning the Eurovision song contest or St. Petersburg's Zenit soccer team winning the UEFA Cup or the Russian national hockey team taking the world championships. And new topics of conversation come up: in addition to soap operas, we have reality shows about domestic feuds and in addition to the Ice Capades, we have 1,001 new ways to consume constantly being presented on our television screens.

Potemkin Progress

State radio and television have succeeded in pushing the matter of the country's real standing in the Grand World out of the minds of Russians. And this work is being done just in time because the eight years of Vladimir Putin's leadership have not gone smoothly in this regard.

Of course, people are correct to boast of the 6 percent growth of the country's gross domestic product and the fact that, by some indicators, Russia's economy has already surpassed that of Portugal. But during this eight-year period, not a single high-speed railway has been built. Neither has a single European-class highway been constructed between major cities; to this day, the road between Moscow and St. Petersburg is in some places nothing less than a deathtrap. And Moscow itself is on the edge of total transport collapse. During Putin's eight years in power, Russia has not built a single complete automotive factory (plants that assemble parts made in other countries don't count).

The world's leading exporter of crude oil has not built a single refinery. Former Yukos head Mikhail Khodorkovsky was preparing to build a gas pipeline to Murmansk and an export terminal for liquefied natural gas in order to export to the United States and Canada. Now the former oligarch is sewing slippers in a labor camp in Krasnokamensk, and the bureaucrats who destroyed Yukos and who promised to build gas and oil pipelines under state control have done nothing.

On May 9, Putin and President Dmitry Medvedev watched a military parade that was simply a Potemkin village. Twenty-year-old technology was presented to television viewers as the latest achievements. And this isn't surprising since the system of state arms purchases is such that military-industrial enterprises sell laughable products with last century's electronics for inflated prices. Budget expenditures on weapons have grown many times over while the quantity of new equipment actually reaching the military is on the decline.

Grand World Failures

You don't have to be a communist like Gennady Zyuganov who touts the experience of China to admit that Putin's Russia arrived at Medvedev's coronation with a lot of heavy, old Soviet baggage.

The business climate in Russia is such that foreign companies won't risk major industrial and infrastructure projects, while Russian businesses aren't interested. The 19th-century historian Nikolai Karamzin gave a simple and still-correct answer when asked how Russia is ruled: "They steal, sir!"

State-controlled Gazprom, which has been unable to increase production or open new gas fields or begin operations on the Barents Sea shelf, is losing huge sums on unprofitable share deals. It purchased Sibneft from oligarch Roman Abramovich for an inflated price, while billion-ruble subsidiaries like Sogaz, Gazfond, and Sibur have been passed into the hands of private individuals who are close to the authorities. The state-controlled oil company Rosneft, which swallowed up the main production assets of Yukos, has managed them far less efficiently than Khodorkovsky did, experts say. The main state companies in Russia have already racked up debts nearly equivalent to the state debt that Putin's government was able to pay back to foreign creditors.

The labors of the new state corporations that Putin has created also look a lot like mechanisms for pumping budget resources into the pockets of lucky individuals. Their directors have placed budgetary funds in bank accounts and live off the interest, paying their managers incredible salaries.

These Grand World failures will certainly have an impact on the Small World as well. The things that were mentioned above are not discussed publicly on Russian television. But the inhabitant of the Small World is already noticing the first alarming symptom: prices are rising faster than any forecasts predicted.

So far, President Medvedev has busied himself with ritual duties, and the cabinet of Prime Minister Putin has continued to increase state spending -- sometimes because of poor thinking, sometimes because of poor working. Putin, in his new role, definitely wants to please the people and maintain his popularity.

But corrupt schemes coupled with populist diversions and strange deals carried out by the authorities under the distraction of Small World achievements might lead to unhappy consequences -- if the angels in the heaven of oil prices suddenly turn their backs on Russia.

(Mikhail Sokolov is a correspondent with RFE/RL's Russian Service. Translated by Robert Coalson)

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