Danger Signals In Russia

With the results of the presidential election a virtual certainty, how Russia proceeds to combat corruption will be vitally important. The promise is that Vladimir Putin will crush gangsterism on the local level and punish cronyism at the top end of the economy. The worry is that this ex-KGB agent will use the secret service to roll back personal liberties and recreate a police state that stymies civil society while making the economy safe for the tycoons who support him.

There are already many worrisome signs. Putin increasingly turns to secret service alumni to staff high positions in his government. He has publicly praised the KGB's once-infamous citizen-informer network as patriotic and necessary for national discipline. And he has supported the expansion of the KGB's successor, the Federal Security Service, to monitor all e-mail messages and demand the names of all subscribers to Internet service providers in the name of battling crime. Secret agents have already intimidated critics of the government on TV. Close Putin loyalists want to recombine all the parts of the old KGB that were split apart by Boris Yeltsin after a failed 1991 coup attempt.

There is no question that Russia needs better law and order, cleaner courts and police, and laws that are clear and just. But using the secret service to battle corruption runs the risk of turning Russia into an efficient authoritarian state, with powerful tycoons dominating the economy. It would be far better for Russia to become a vibrant democracy buttressed by millions of entrepreneurs operating within open markets.

Before it's here, it's on the Bloomberg Terminal.