It’s been a very busy two weeks of travel.  First, Russia.

Politically, Russia has moved backwards.  During the last four years, the team of Vladimir Putin and Dmitry Medvedev offered hope for all.  The oligarchs and conservative siloviki (police and security and former KGB) who supported Putin were balanced by western leading liberals who supported Medvedev and looked toward a Russia that was more open, law-abiding, and democratic.  But the effective deposition of Medvedev (although he continues as Prime Minister) and Putin’s clearly arranged return to the Presidency seems to have soured the liberals.  It seems far less likely that democratic reforms will grow out of gradual institutional reform led from within the government.  Instead, liberals and regime opponents are taking to the streets, and protesting in the Duma (where opposition parties have a few representatives), and speaking increasingly freely in public, in the universities, and the media.

Where will this lead?  The regime is already reacting with a very heavy hand.  The female rock musicians of the band Pussy Riot were not only arrested for a performance marked by lyrics that were critical of the regime; they were sentenced to hard time in some of the worst prisons in Russia along with murders and rapists.  The aide to an opposition member of the Duma (Russia’s Parliament) was arrested and declared to have voluntarily signed a ten-page confession of his plans to disrupt Moscow with mass riots.  New laws were just passed that will make it a crime to report problems in Russia to any foreign government or international organization. (See this story).

At the same time, Russia is seeking to open up economically and intellectually.  Russian leaders at the local and national level want innovation, investment, more contact with foreign firms and capital.  Universities want visits and collaboration with western academics.  The new innovation center in Skolkovo is signing up foreign firms, scientists, and engineers.

Who will win this tug of war?

In my view, the authorities’ return to heavy-handed Soviet-style tactics will be counter-productive.  The more that liberals become convinced that the regime is hopelessly retrograde, dangerous, and irresponsible, the more that liberals and opponents will be motivated to act sooner rather than later to stop it.

Both Russia and China are in an interesting phase.  Russia’s economy remains dependent on exports of oil, gas, and minerals; China’s economy remains dependent on relatively cheap but disciplined and productive labor.  But both countries realize this dependence is becoming dangerous: Russia’s fossil fuel exports are threatened by new oil discoveries in Africa and the Mediterranean and expansion of oil output in Iraq, as well as by US fracking and rising gas output in Qatar and central Asia. China’s cheap exports are threatened by competitive labor in south Asia and rising wages in China itself.  So both are looking to move to higher-value, innovation-led production.  Yet they are trying to do so while still making every effort to control information and the spread of knowledge and ideas.

Supporting education and international business and scientific contacts to promote innovation makes people more impatient with central control of information.  Yet the protests and growing autonomy of thought makes the authorities ever more watchful and repressive.

Clearly something has to give.  The only question is when and where will it happen first.  Just as in the cold war Russia and China were the two largest countries serving as examples of communism, today they are the two largest examples of authoritarian, state-supervised capitalism.  If that system fails in one of these countries, I doubt it will survive for long in the other.