Editorial: G8 takes big gamble on Putin

One of the holiday activities on the Auckland waterfront has been for people to stand - while kept at a respectful distance by the security arrangements - and gaze at the private yacht Le Grand Bleu. This little number, for which the term yacht is something of a misnomer, is 108m long, carries a 22m sailing boat, has a permanent crew of 35 and cost an estimated $145 million.

It is owned, although apparently not much used, by Roman Abramovich. He is from Russia, a country in which the average male life expectancy has declined to 59 years, an outcome attributed to poor diet, a health care crisis and alcoholism. Russian rural communities are being depopulated; the most recent census shows no fewer than 13,000 villages deserted and a further 35,000 with fewer than 10 inhabitants.

The extraordinary gulf between the oil billionaire and the statistically average citizen is just one of the indications that Russia has structural problems of such a fundamental nature that it is difficult to imagine the long and unremittingly bleak chronicle of Russian history is going to change for the better.

And yet this is the country that has just been made president of the G8, the heavyweight in the world's international groupings. The decision to give Russia this role is a calculated political gesture by the other members. In terms of existing economic strength Russia is one of the lower-ranking G8 nations.

But the deliberate inclusion of Russia at the head of the top table is intended both to acknowledge that Russia has endured agonies of economic reform since the end of Soviet communism and to encourage Moscow to stick to liberal democratic principles.

So Russia's standing, and implicitly the regime of President Vladimir Putin, has been endorsed. Not for the first time, the richer nations are putting their bets on a proposition that is less than sound. Last week, one of Putin's advisers resigned for what he called the Government's back-tracking on freedoms. Andrei Illarionov said Government-controlled corporations had ignored the interests of the people.

"These quasi-state corporations are in fact driven by private interests while taking advantage of their state status and privileges," he said.

Putin's Government is significantly and increasingly authoritarian. State control of television has been reimposed by stealth with the closure of the last independent national network and coverage on the Kremlin- controlled stations being heavily biased. The election monitors' report on the 2003 elections said the Opposition had been refused fair coverage, and the situation has become worse.

Theoretically the apparatus of an electoral democracy is in place but in practice the tendency to centralised power is growing. Non-government organisations are put under heavy pressure if they raise awkward issues and a law just passed requires NGOs to be registered under threat of closure if they are a threat to national interests.

The legal system is clearly politicised with the selective prosecution on tax grounds of certain oligarchs such as Mikhail Khodorkovsky, who ended up in prison while his Yukos oil empire was effectively taken back into Kremlin hands.

And here, maybe, is the real reason President Putin is so politically acceptable. He now has in his hands a monopoly of some 90 per cent of his country's oil and gas production and the world is facing a critical shortage of energy resources.

Moreover, by fulfilling his threat to cut gas supplies to the Ukraine - with immediate knock-on effects in Eastern Europe in the middle of winter - he has shown how ruthless he can be, whether for political or commercial gain.

As the examples of other oil-rich nations' leaders demonstrate, it may not matter that his country is, as Illarionov said, not free or that the standard of living for most has declined while others have wealth beyond imagination.

Perhaps in selecting Russia for the presidency the G8 nations are merely showing the priorities that the rest of us might have expected of them.