Fire Hydrant of Freedom
Politics, Religion, Science, Culture and Humanities => Politics & Religion => Topic started by: Crafty_Dog on December 13, 2006, 06:29:40 AM
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All:
Herewith we begin a thread dedicated to Russia with a piece from today's WSJ:
Marc
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BUSINESS WORLD
By HOLMAN W. JENKINS, JR.
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ABOUT THE AUTHOR
Holman W. Jenkins Jr. is a member of the editorial board of The Wall Street Journal and writes editorials and the weekly Business World column.
Mr. Jenkins joined the Journal in May 1992 as a writer for the editorial page in New York. In February 1994, he moved to Hong Kong as editor of The Asian Wall Street Journal's editorial page. He returned to the domestic Journal in December 1995 as a member of the paper's editorial board and was based in San Francisco. In April 1997, he returned to the Journal's New York office. Mr. Jenkins won a 1997 Gerald Loeb Award for distinguished business and financial coverage.
Born in Philadelphia, Mr. Jenkins received a bachelor's degree from Hobart and William Smith Colleges in Geneva, N.Y. He received a master's degree in journalism from Northwestern University in Evanston, Ill., and studied at the University of Michigan on a journalism fellowship.
Mr. Jenkins invites comments to holman.jenkins@wsj.com.
Putin Puzzle Revisited
December 13, 2006; Page A19
You have to admire the perseverance of Western energy investors in Russia, whom no amount of homicide, arbitrary contract abrogation or naked shakedowns can discourage.
Though Shell is being muscled out of a $20 billion deal to develop a Far East oil and gas field, and though American minority shareholders got wiped out along with Mikhail Khodorkovsky in the seizure of Yukos, Western money continues to take its chances on Russia out of desperation more than anything else. The world may be rich in hydrocarbons but opportunities for Western corporations are vanishing behind closed nationalist doors in country after country, where governments increasingly monopolize the development and production of oil.
Western investors have gotten accustomed to overlooking a lot in Russia, but they may be unwise to overlook the sensational polonium murder of Alexander Litvinenko, a critic of Vladimir Putin.
Mr. Putin's presidency is constitutionally mandated to end in 2008 when new elections will be held. But who is Putin's Putin? Mr. Putin succeeded Boris Yeltsin by promising that, whatever purges Mr. Putin might carry out, Mr. Yeltsin and his family would be shielded. Mr. Yeltsin was old, ill, alcoholic and Mr. Putin's offer must have seemed one he couldn't refuse. Mr. Putin is young and vigorous, and has no reason to put his fate in the hands of a successor or successors who wouldn't be able to guarantee his lifelong immunity even if they wanted to.
In turn, if Mr. Putin amends the constitution to keep himself in power, it could provoke international repercussions that could undermine the assumptions on which much international investment is based.
To wit: For a lot of reasons, investors have been able to assume that, whatever happened in Russia, their home governments would at least be supportive of their investment efforts. President Bush pronounced Mr. Putin a friend, and needs Russian support for U.S. forces fighting in Afghanistan. German politicians have pushed and cajoled energy firms to increase ties to Russia. Former Chancellor Gerhard Schröder even sits on the supervisory board of a Gazprom affiliate. All this reflects a Western calculation that Russia has nuclear weapons; Russia is a potential nightmare; Russia has energy the world needs. We must cling to Mr. Putin as an acceptable partner and hope for the best.
The Litvinenko murder, rightly described as the first case of nuclear terrorism, opens up a can of worms. The world media is enthralled with the story. Several British and German bystanders show traces of polonium poisoning. The heat will be on investigators to get to the bottom of the matter, and such investigations have a way of running beyond the power of governments to keep the lid down.
More threatening to Mr. Putin, Litvinenko wrote a book linking him to the original sin of modern Russian politics, a string of apartment bombings in 1999 in Moscow and other cities that killed hundreds. The bombings were blamed on Chechen terrorists, letting acting President Putin launch the second Chechen war and helping him win election in his own right. There soon followed a series of homicides and arrests and constitutional moves that shut down prospects of journalistic and legislative investigation into whether the bombings had actually been a government provocation.
Now, there was some eye-rolling when this column two years ago noted parallels between Mr. Putin's career and Saddam Hussein's. Saddam came to power after the early retirement of his mentor, who (like Mr. Yeltsin) promptly became invisible. Saddam's first act was to start a war. Etc.
But the real point was that Saddam became a hostage of his miscalculations, especially overestimating the power Iraq's oil gave him to manipulate other governments. Mr. Putin's best option, perhaps his only option, is to play out his hand, putting his chips on Western governments to cover up for him. Last week the Duma gave preliminary approval to a law that would directly grant the president power to impose economic sanctions on foreign nationals. The Jamestown Foundation, which monitors Russian politics, reports: "The proposed legislation, 'On Special Economic Measures in Case of an International Emergency Situation,' would let the president freeze trade contracts, stop financial transactions, prohibit tourism, and impose other economic sanctions."
Sen. Richard Lugar, who sees which way events are moving, late last month gave a speech in Latvia warning NATO urgently to adopt the position that energy sanctions imposed on a member state are an act of war against NATO itself.
Put yourself in Mr. Putin's shoes. It's hard to see how, except by holding onto power and trying to use it to control his circling enemies, he could hope to avoid becoming a target of political or legal retribution sooner or later. He's riding high in domestic polls, thanks to a recovering economy, no small thing. But the Litvinenko murder may have been the thread that begins the unknitting. The real threat has always been Ryazan. That's the Russian city where, on Sept. 22, 1999, a resident noticed men unloading bags of "sugar" into the basement of a large apartment block. The sugar was the explosive RDX; the men were Russian federal security agents. Moscow claimed the incident was a training exercise, but the apartment bombings, which had killed 300 of Mr. Putin's subjects, suddenly stopped.
Western governments have been nothing if not resolute in turning away from Ryazan and the evidence of the crime that allegedly underwrote Mr. Putin's rise to power. Western leaders might prefer, all things considered, to see him remain in power rather than deal with the consequences of Ryazan. But it is not in the nature of the world that such a mystery can be concealed forever, or its consequences ducked.
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stratfor.com
Geopolitical Diary: Russia's Vulnerable Strategic Position
Russian Deputy Prime Minster and Defense Minister Sergei Ivanov addressed the Duma on Wednesday. During his speech, he called the 1987 Intermediate-Range Nuclear Forces (INF) Treaty between the United States and the Soviet Union -- which banned short-, medium- and intermediate-range ballistic and ground-launched cruise missiles -- a mistake. Ivanov first raised the midrange missile issue in August 2006 when he visited Alaska with then-U.S. Defense Secretary Donald Rumsfeld. During the trip, Ivanov reminded Rumsfeld that a Russian withdrawal from the INF would not be unprecedented since the United States withdrew from the Anti-Ballistic Missile Treaty in 2002.
Another such treaty, the 1991 Strategic Arms Reduction Treaty (known as START 1) is set to expire in 2009. The Russians have been calling for a replacement for some time. Realizing that they are not going to get one -- given the shift from the Cold War dynamic and the atrophy of Russian forces, the United States has no interest in a new treaty limiting its nuclear forces -- Moscow has attempted to paint Washington as the bad guy.
START 1 placed specific limitations on the size and type of nuclear forces the two nations were allowed to possess. These limitations have helped Russia hold onto the hope of obtaining numerical parity with the United States for years. Its nuclear forces have nevertheless crumbled and are only now beginning to recover: The fielding of Russia's newest intercontinental ballistic missile (ICBM), the SS-27 Topol-M, is proceeding, but at an excruciatingly slow pace. The development of the new sub-launched Bulava also is extremely behind schedule, and Russia no longer is able to maintain a constantly patrolling sea-based deterrent. In the midst of this deterioration, START 1 has helped Moscow keep its dreams of parity alive. Therefore, from the Russian perspective, a new START agreement that further reduces the number of deployable weapons would be ideal.
But from the U.S. perspective, the reduction in Russia's deployable weapons was effectively carried out by the Soviet Union's demise. Despite Moscow's sincerest efforts, Washington has watched it repeatedly fail to rebuild its strategic forces into something that could compete with the U.S. strategic deterrent. The United States is no longer threatened by Russia in the way it once was. As such, it does not feel at all compelled to enter into a new treaty that would limit its future strategic options. And it is greatly looking forward to 2009, when the United States will be able to grow or shrink its nuclear arsenal as it sees fit -- with no treaty constraints.
Furthermore, if Russia were ever again to realistically attempt parity, the U.S. could expand its forces faster and essentially out-spend the Russians, just as it did to the Soviet Union. Or, if it ever appeared that Russia was getting too close to its goal, the U.S. could propose a new treaty while it still had the upper hand.
Russia has had to come to terms with the fact that it cannot achieve parity with the United States. Its one real strategic option is to threaten nuclear war with its neighbors and enemies. Re-embracing midrange weapons, while it would not achieve parity, would drastically expand Russia's strategic options.
Midrange missiles have always made more sense for Russia than for the United States. Russia is literally surrounded by them -- in Iran, Pakistan, India, China and North Korea. With Russia's massive, indefensible land border, they are useful. Whereas, with no one but Canada and Central America in range, the United States slowly has abandoned such systems.
But given START 1's looming expiration date, Ivanov's statements make sense. A new generation of intermediate-range ballistic missiles (IRBM) is well within the grasp of Russian engineers and industry. While the Russians have a long and storied history of trouble with -- and often complete failure of -- solid-fueled submarine-launched ballistic missiles, they mastered solid-propellant land-based systems some time ago. The SS-18 was the last great liquid-fueled ICBM. The SS-24, -25 and -27 have all used solid fuel. It would not be a stretch for Russia to re-develop and re-deploy road-mobile IRBMs. (Of course, the country really only needs to crank out new copies of older proven systems that are perfectly useable but prohibited under the INF.) They also are much cheaper and could serve as a new tool with which to directly threaten Europe.
The Russian grand strategy has always been to divide and conquer. With this new ability to threaten the Europeans in a much more tangible way, Moscow could re-assert a certain degree of influence over its crumbling periphery and potentially drive a wedge between the United States and the Europeans. This is an especially relevant consideration as Russia watches the talks about a potential U.S. ballistic missile defense base in the Czech Republic and Poland progress at an uncomfortable rate.
A limited U.S. missile shield is not a real threat to Russia. A Russian barrage of intercontinental missiles would travel over the North Pole and would completely overwhelm the current defenses. But this is not to say it makes Russia particularly comfortable.
A Europe-based U.S. ballistic missile defense base might ultimately be the last straw for Russia and the INF. Ivanov believes it is a capability Russia should never have agreed to go without, and now he seems set on correcting this "mistake."
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Geopolitical Diary: A Russian Charm Offensive
Russian President Vladimir Putin delivered what some have been calling the boldest condemnation of the United States -- by a Russian leader -- since the Cold War. Speaking over the weekend at the 43rd Munich Conference on Security Policy, Putin said the United States had "overstepped its national borders in every way" and that Washington was engaging in "an almost uncontained hyper use of force in international relations." Among other remarks, he also said that Washington's frequent, unilateral use of force encourages smaller states to develop nuclear weapons, and that U.S. plans to deploy a missile defense system in Central Europe could trigger a new arms race.
Though there is nothing intrinsically new in Putin's criticisms, the bluntness and the venue in which they were delivered clearly signal the end of the relative quiescence that has characterized Moscow's relations with the United States since the Gorbachev era. With his speech, Putin was asserting Russia's claim to "great power" status and challenging what he called the "unipolar" world of American power.
The challenge, it appears, did not go unnoticed: U.S. Secretary of Defense Robert Gates, speaking on Sunday at the same conference, remarked that one Cold War "was quite enough."
Significantly, while Putin was challenging the United States in Munich, Moscow also was mounting a charm offensive with some of Washington's most important allies elsewhere.
For instance, speaking at an informal gathering of NATO defense ministers in Seville, Spain, on Feb. 9, Russian Defense Minister Sergei Ivanov said Moscow would be happy to provide assistance to help ensure the success of NATO's mission in Afghanistan. Ivanov noted that Russia allows German and French troops and equipment to cross its territory en route to Afghanistan, and would allow Spain the same access. He also offered Russian assistance with reconstruction and intelligence work, but understandably stopped short of contributing troops to the combat effort.
Ivanov's remarks were well-timed. NATO forces currently are experiencing some of the most severe fighting in Afghanistan since 2001, and bracing for what promises to be a violent spring and summer. His words may have resonated with some countries, as the alliance considers deploying still more troops to Afghanistan.
Gates, who was making his first official trip to Europe as the U.S. defense secretary, was left trying to water down Putin's remarks in Munich. Though diplomatically couched, his "Cold War" remark was a reminder to listeners that it was Moscow that was to blame for the last arms race. Gates also acknowledged, however, that some U.S. policies had been misguided and said Washington should do a better job of explaining its foreign policy decisions. He also made a veiled reference to his predecessor, Donald Rumsfeld -- who had alienated some European countries by categorizing them as the "old Europe" and "new Europe" -- in saying that, "All of these characterizations belong to the past."
As Gates was doing damage control on Sunday, however, Putin was already picking up the next leg of the Russian charm offensive -- kicking off a tour of the Middle East that, again, will bring him into direct contact with several traditional allies of the United States.
On Sunday, Putin flew to Saudi Arabia -- becoming the first-ever Russian head of state to visit the kingdom -- and was received at the Riyadh airport by King Abdullah. During the visit, Putin -- who brought dozens of Russian businessmen along on the trip -- will discuss increased political and economic cooperation as well as military assistance to the Saudis. The issues of Iraq, Iran's nuclear program, the Lebanese political crisis and the Israeli-Palestinian conflict were also high on the agenda.
Other stops on the regional tour will include visits with Jordanian King Abdullah II and Palestinian National Authority President Mahmoud Abbas in Amman, as well as a trip to Qatar. Though Russia long has had strong ties to Middle Eastern states like Syria, Iraq and Yemen, Putin's current tour is notable in that he will be visiting countries that historically have been well within Washington's sphere of influence -- rather than Moscow's. Such a move, particularly following the remarks in Europe, can be viewed as a direct Russian challenge to the United States in yet another region that Washington considers vital.
stratfor.com
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Geopolitical Diary: Russia's Ambitions in the Middle East
Russian President Vladimir Putin said on Monday during a visit to Saudi Arabia that Moscow is willing to help Riyadh develop a nuclear program. Though Russian-Saudi nuclear cooperation is unlikely to happen any time soon, Putin's visit to the kingdom is significant. Putin's remarks at a major international security conference in Germany on Sunday serve to clarify Moscow's motives.
In his speech at the Munich conference, Putin said the United States is responsible for growing instability and insecurity in the international system. By lashing out at the United States, Russia hoped to appeal to a latent perception among the United States' Arab allies that Washington is playing with fire in their region.
Moscow hopes to exploit these concerns to infiltrate the region, which has been firmly in the U.S. sphere of influence. The Russians hope to counter U.S. moves in its own neighborhood and contain U.S. power overall; the Kremlin has already started this process with Iran. But the Kremlin knows it must position itself among the Arabs to really use the Middle East as a lever in its struggle with the United States. This explains Putin's recent visits to Saudi Arabia, Qatar and Jordan, all major U.S. allies.
Russia has correctly realized the potential for an opening in the Middle East. The Russians know that the Arabs, despite their continued close relations with Washington, are unhappy with U.S. policies in the region and are looking for leverage in dealing with the United States.
Jordan, since it relies financially on Washington, might not be willing to warm up to Russia. That said, Putin's trip to Amman includes a meeting with Palestinian National Authority President Mahmoud Abbas. Russia wants to use its membership in the Middle East Quartet to create problems for the U.S. calculus on the Israeli-Palestinian conflict; Putin's meeting with Abbas could therefore prove instrumental. As for Qatar, good relations with Russia are in keeping with its goal to enhance its role as a regional player. Moscow hopes to capitalize on this in order to get close to Doha, where U.S. Central Command is headquartered.
But the most significant relationship that the Russians are looking to develop in the Middle East is that with the Saudis, especially given Riyadh's close relations with the United States. The Russians are aware the Saudis think the U.S. position in the region is weakening, and that Riyadh has grown wary of U.S. policies there, which have empowered rival Iran. In fact, Putin's visit to Saudi Arabia is in part the result of Riyadh's assistance to Moscow to help quell the jihadist insurgency in the Caucasus.
Under King Abdullah, the Saudis are trying to diversify their foreign policy options. They see the decline of the U.S. position in the region and want to have other choices for security. Moreover, Riyadh is concerned about U.S.-Israeli ties upsetting its calculus regarding the Palestinian situation, especially since the Saudis have assumed a more direct role in mediating the conflict. The Saudis also want to counter Iran and Syria, which they hope will be possible by engaging the Russians, who have backed both Tehran and Damascus.
Though the Russians and Saudis hope to benefit from their relationship, energy and the sale of military hardware limit the extent to which they can cooperate. Russia and Saudi Arabia do not see eye to eye on oil production -- Saudi moves to increase production lead to a drop in oil prices, financially hurting Russia. And though Moscow wants to sell Riyadh military hardware, it is unlikely since Riyadh can purchase superior U.S. weapons.
Despite Moscow's ambitions in Saudi Arabia, Putin's visit there has not gone quite as well as it might seem. Mintimer Shaimiev, president of the constituent republic of Tatarstan, is a member of Putin's delegation. Shaimiev is the leader of the only republic in which Putin has not been able to install his choice of governor; Shaimiev's influence does not end in Tatarstan -- he is the most influential of Russia's 30 million Muslims. On Monday Putin had to sit through a ceremony in which the Saudis awarded Shaimiev a cash award for his service to Islam -- a religion and ideology that is seen in Russia as weakening Moscow's hold. Furthermore, ethnic Tatars and Russia's other Muslim minorities have among the world's highest birth rate, and Russians among the lowest, making the end of Putin's visit perhaps not as pleasant as the media suggest.
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http://www.dailymail.co.uk/pages/live/articles/news/wor...d=1811#StartComments
Russia lays claim to the North Pole - and all its gas, oil, and diamonds
Last updated at 17:15pm on 28th June 2007
Russian leader Vladimir Putin has made an astonishing bid to grab a vast chunk of the Arctic, giving himself claim to its vast potential oil, gas and mineral wealth.
His audacious argument that an underwater Russian ridge is linked to the North Pole is likely to lead to an international outcry.
Some commentators have already observed it is further evidence of growing Russian assertiveness under its authoritarian president.
The Russian media trumpeted the findings of a Moscow scientific mission to the region which boasts "sensational" geological discoveries enabling the Kremlin to make the territorial claim.
Populist newspaper Komsomolskaya Pravda - a cheerleader for Putin - printed a map of the North Pole showing a "new addition" to Russia, a triangle five times the size of Britain with twice as much oil as Saudi Arabia.
The six-week mission on a nuclear ice-breaker claimed that the underwater Lomonsov ridge is geologically linked to the Siberian continental platform - and similar in structure.
The detailed findings are likely to be put to the United Nations in a bid to bring it under the Kremlin noose, and provide the bonanza of an estimated 10 billion tonnes of gas and oil deposits as well as significant sources of diamonds, gold, tin, manganese, nickel, lead and platinum.
Under current international law, the countries ringing the Arctic - Russia, Canada, the US, Norway, Denmark (Greenland) - are limited to a 200 mile economic zone around their coastlines.
Currently, a UN convention stipulates that none of these countries can claim jurisdiction of the Arctic seabed because the geological structure does not match that of the surrounding continental shelves.
The region is administered by the International Seabed Authority - the authority now being challenged by Moscow.
A previous attempt to claim the oil and gas resources beyond its 200 miles zone five years ago was rejected - but this time Moscow intends to make a far more serious submission to the U.N. Commission on the Limits of the Continental Shelf.
The head of the government-funded expedition Valery Kaminsky, director of the All-Russian Oceanic Scientific Research Institute, said he has key photographic evidence to prove the geological claims. "These are very interesting facts for the world community," he said.
Yuri Deryabin, head of the Institute of North European Countries, said: "I estimate Russia's chances to gets its piece of the Arctic pie highly enough - but the main battle is just starting." He acknowledged the negotiations would be "complicated".
The claim is likely to provoke an outcry from green groups but there is also Russian opposition.
Sergei Priamikov, of Russia's Arctic and Antarctic Research Institute, said the notion was "strange" and warned other countries could make counter claims.
Canada "could say that the Lomonosov ridge is part of the Canadian shelf, which means Russia should in fact belong to Canada, together with the whole of Eurasia", he observed drily.
A diplomatic source said that Russia was "seeking to secure its grip on oil and gas supplies for decades to come. Putin wants a strong Russia, and Western dependence for oil and gas supplies is a key part of his strategy. He no longer cares if his strategy upsets the West".
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NY Times
By JIM RUTENBERG
Published: July 3, 2007
KENNEBUNKPORT, Me., July 2 — Announcing that he was “here to play,” President Vladimir V. Putin of Russia said Monday that after two days of meetings with President Bush, he was ready to expand on his proposal for a shared missile-defense system with the United States, a step he said would take American-Russian relations to “an entirely new level” of cooperation.
Video: News Conference With Bush and PutinBut the system he described would be mostly under Russian control and built on Russian terms. And, even as Mr. Putin portrayed the proposal as a compromise, it represented a continued rejection of an American plan to base a missile-defense system in the Czech Republic and Poland, which Mr. Bush says is necessary to combat potential new threats from nations seeking nuclear weapons, like Iran.
Mr. Putin sees that system as a potential threat to Russia, and he proposed that his alternative system be developed jointly by the NATO-Russia Council, a cooperative formed in 2002.
The proposal surprised the Americans and seemed likely to lead to still more haggling after a set of meetings here that had been portrayed mostly as an attempt to smooth over differences both sides consider to be the most daunting since Mr. Bush took office.
Mr. Putin’s new plan would continue to include a site in Azerbaijan that he proposed last month as an alternative to the American system and that the Americans have described as insufficient. But Mr. Putin said he was prepared to modernize the Azerbaijan radar and include another early-detection system in southern Russia, along with information-sharing sites in Moscow and Brussels.
“In this case, there would be no need to place any more facilities in Europe — I mean, these facilities in Czech Republic and the missile base in Poland,” Mr. Putin said as he and Mr. Bush fielded questions after their meetings.
American and NATO officials have said that the Azerbaijan site is less useful than those selected for Poland and the Czech Republic because it is too close to Iran to intercept missiles fired from there.
Mr. Bush indicated that Mr. Putin’s new plan did not at first glance satisfy his concerns. “I think it’s innovative, I think it’s strategic,” Mr. Bush said. “But as I told Vladimir, I think that the Czech Republic and Poland need to be an integral part of the system.”
Speaking later, Stephen J. Hadley, the national security adviser, said Mr. Putin’s new proposal was a good sign that he was willing to work with the United States and NATO to create a missile-defense system.
Mr. Bush had never before met as president with a foreign leader here at Walker’s Point, the serene seaside vacation property of his parents.
The location was a reminder of the presidency of Mr. Bush’s father, during which the cold war ended and Russia and the United States heralded a new era of cooperation. Mr. Putin’s discussion of a strategic defense partnership would have been unimaginable at the start of the senior Bush’s term.
But the subtext of disagreement about the system was a reminder of the new complications between the United States and Russia as they continue to jockey for global position. So, too, were jabs by Mr. Putin at Mr. Bush for questions about the intelligence leading up to the Iraq war, and the issue of torture, raised recently by the CNN host Larry King, among others, while interviewing George J. Tenet, the former C.I.A. director.
“If you remember how Larry King tortured the former C.I.A. director, you would also understand that there are some other problems and issues, as well, in this world,” Mr. Putin said in a reflection of his reported frustration with what he views as American lecturing on democracy. “We have common problems.”
Mr. Bush and Mr. Putin initially approached reporters with an air of stiff determination that dissipated when they discussed their morning fishing trip, during which Mr. Putin caught a striped bass — Mr. Bush and his father caught no fish in three outings this visit.
The leaders did not announce any breakthroughs on independence for Kosovo, though Mr. Hadley said the United States and Russia would announce this week that they had finalized the details of a pact on sharing nuclear materials that they agreed on last year.
They also did not announce any agreement on new sanctions against Iran for its uranium enrichment program, with Mr. Bush saying he and Mr. Putin agreed that they needed to send a forceful message together, but with Mr. Putin pointing to possible new signs of Iranian cooperation with international inspectors.
But neither side expected Mr. Bush and Mr. Putin to announce any big breakthroughs. The radar proposal, however, did come as a surprise to the Americans, who were caught off guard last month when Mr. Putin first announced his Azerbaijan plan.
Late Sunday night, Mr. Putin’s spokesman, Dmitri Peskov, said there would be no surprise announcements from Kennebunkport.
Daryl G. Kimball, executive director of the Arms Control Association, a private research group in Washington, called the new proposal “a minor modification” of that earlier plan, saying it appeared to have similar shortcomings.
But other experts said it was still a positive sign that Mr. Putin was engaged and looking for alternatives. “We’re beyond the point where Putin shows up and says, ‘Over my dead body,’ ” said Julianne Smith, a Europe expert at the Center for Strategic and International Studies in Washington.
The Americans said the whole point of inviting Mr. Putin here was to bring the leaders together in a way that would discourage that sort of loggerheads from either side. And in that respect both sides said the trip went well.
Chatting with reporters, the first President Bush said Mr. Putin rode around on a Segway standing vehicle — which Mr. Bush once famously fell off here — and that the Bushes gave it to him as a gift.
Then there was the fishing. Though Mr. Putin showed up his hosts, he was gracious: “That was a team effort, and we let it go to the captain,” he said, later correcting himself to say they threw the fish back.
Nicholas Kulish contributed reporting from New York.
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'For the Sake of One Man'
Getting the facts straight about the old-new Russia.
BY BRET STEPHENS
Tuesday, July 17, 2007 12:01 a.m. EDT
In the six or seven years in which they interacted on a regular basis, Vladimir Putin's police state and journalist Fatima Tlisova had a mostly one-way relationship. Ms. Tlisova's food was poisoned (causing a nearly fatal case of kidney failure), her ribs were broken by assailants unknown, her teenage son was detained by drunken policemen for the crime of not being an ethnic Russian, and agents of the Federal Security Services (FSB) forced her into a car, took her to a forest outside the city of Nalchik and extinguished cigarettes on every finger of her right hand, "so that you can write better," as one of her tormentors informed her. Last year, the 41-year-old journalist decided she'd had enough. Along with her colleague Yuri Bagrov, she applied for, and was granted, asylum in the United States.
Ms. Tlisova and Mr. Bagrov are, as the wedding refrain has it, something old, something new: characters from an era that supposedly vanished with the collapse of the Soviet Union 16 years ago. Now that era, or something that looks increasingly like it, seems to be upon us again. What can we do?
The most important task is to get some facts straight. Fact No. 1: The Bush administration is not provoking a new Cold War with Russia.
That it is seems to be the view of Beltway pundits such as Anatol Lieven, whose indignation at alleged U.S. hostility to Russia is inversely correlated with his concerns about mounting Russian hostility to the U.S., its allies and the likes of Ms. Tlisova. In an article in the March issue of the American Conservative, the leftish Mr. Lieven made the case against the administration for its "bitterly anti-Russian statements," the plan to bring Ukraine into NATO and other supposed encroachments on Russia's self-declared sphere of influence. In this reading, Mr. Putin's increasingly strident anti-Western rhetoric is merely a response to a deliberate and needless U.S. policy of provocation.
Yet talk to actual Russians and you'll find that one of their chief gripes with this administration has been its over-the-top overtures to Mr. Putin: President Bush's "insight" into the Russian's soul on their first meeting in 2001; Condoleezza Rice's reported advice to "forgive Russia" for its anti-American shenanigans in 2003; the administration's decision to permit Russian membership in the World Trade Organization in 2006; the Lobster Summit earlier this month at the Bush family compound in Kennebunkport (which Mr. Putin graciously followed up by announcing the "suspension" of Russia's obligations under the 1990 Conventional Forces in Europe Treaty).
This isn't a study in appeasement, quite. But it stands in striking contrast to the British government's decision yesterday to expel four Russian diplomats over Mr. Putin's refusal to extradite Andrei Lugovoi, the former FSB man suspected of murdering Alexander Litvinenko in London last November with a massive dose of polonium. "The heinous crime of murder does require justice," British Foreign Secretary David Miliband said yesterday. "This response is proportional and it is clear at whom it is aimed." Would that Dick Cheney walked that talk.
Now turn to Fact No. 2. Russia is acting with increasingly unrestrained rhetorical, diplomatic, economic and political hostility to whoever stands in the way of Mr. Putin's ambitions.
The enemies' list begins with Mr. Putin's domestic critics and the vocations they represent: imprisoned Yukos CEO Mikhail Khodorkovsky; murdered journalist Anna Politkovskaya; harassed opposition leader Garry Kasparov. It continues with foreign companies which have had to forfeit multibillion-dollar investments when Kremlin-favored companies decided they wanted a piece of the action. It goes on to small neighboring democracies such as Estonia, victim of a recent Russian cyberwar when it decided to remove a monument to its Soviet subjugators from downtown Tallinn. It culminates with direct rhetorical assaults on the U.S., as when Mr. Putin suggested in a recent speech that the threat posed by the U.S., "as during the time of the Third Reich," include "the same claims of exceptionality and diktat in the world."
None of these Kremlin assaults can seriously be laid at the White House's feet, unless one believes the lurid anti-Western conspiracy theories spun out by senior Russian officials. And that brings us to Fact No. 3. Russia has become, in the precise sense of the word, a fascist state.
It does not matter here, as the Kremlin's apologists are so fond of pointing out, that Mr. Putin is wildly popular in Russia: Popularity is what competent despots get when they destroy independent media, stoke nationalistic fervor with military buildups and the cunning exploitation of the Church, and ride a wave of petrodollars to pay off the civil service and balance their budgets. Nor does it matter that Mr. Putin hasn't re-nationalized the "means of production" outright; corporatism was at the heart of Hitler's economic policy, too.
What matters, rather, is nicely captured in a remark by Russian foreign ministry spokesman Mikhail Kamynin regarding Britain's decision to expel the four diplomats. "I don't understand the position of the British government," Mr. Kamynin said. "It is prepared to sacrifice our relations in trade and education for the sake of one man."
That's a telling remark, both in its substance and in the apparent insouciance with which it was made: The whole architecture of liberal democracy is designed primarily "for the sake of one man." Not only does Mr. Kamynin seem unaware of it, he seems to think we are unaware of it. Perhaps the indulgence which the West has extended to Mr. Putin's regime over the past seven years gives him a reason to think so.
Last night, Ms. Tlisova was in Washington, D.C., to accept an award from the National Press Club on behalf of Anna Politkovskaya. "She knew she was condemned. She knew she would be killed. She just didn't know when, so she tried to achieve as much as she could in the time she had," Ms. Tlisova said in her prepared statement. "Maybe Anna Politkovskaya was indeed very damaging to the Russia that President Putin has created. But for us, the people of the Caucasus, she was a symbol of hope and faith in another Russia--a country with a conscience, honor and compassion for all its citizens."
How do we deal with the old-new Russia? By getting the facts straight. That was Politkovskaya's calling, as it is Ms. Tlisova's, as it should be ours.
Mr. Stephens is a member of The Wall Street Journal's editorial board. His column appears in the Journal Tuesdays.
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stratfor.com
Geopolitical Diary: Russia Tries to Re-Treaty the Present
In the grand tradition of the Cold War, Russia staged a press conference on Wednesday to lambaste Western security structures. The star of the show was Yevgeny Buzhinsky, head of the Russian Defense Ministry's international legal department. Buzhinsky's tongue practically danced in response to journalists' questions. Honestly, we've seen Broadway productions that are less scripted than this "press conference."
During the presentation, Buzhinsky proposed a number of possibilities to replace the current strategic formats between Russia and NATO. The three documents that make up the bulk of Russian-Western security understandings are the Strategic Arms Reduction Treaty (START), the Intermediate-Range Nuclear Forces Treaty (INF) and the Conventional Forces in Europe Treaty (CFE).
START places an absolute limit on the number of intercontinental nuclear weapons both Russia and the United States can field, and the INF does the same for intermediate-range missiles, while the CFE restricts how many troops individual NATO states and Russia can maintain -- as well as where Russia can station them. Taken together, the three treaties form the framework for Western-Russian relations, and it is that very framework that a strengthening Russia is now challenging. To a certain degree, this is understandable.
The three treaties locked into place the military realities of November 1990. Since then, not only has the Soviet Union collapsed, but the entire Soviet bloc (sans Russia of course), plus the three Baltic states and Slovenia, also has jumped the fence, taking its militaries with it. Add in more than a decade of Russian military decline and the result is a treaty-mandated system that puts the Russians at a grave disadvantage. It is this that the Kremlin seeks to change.
Such logic -- colored by the rhetoric and minutiae of the day -- is the core rationale for Russia's recent decision to halt its implementation of the CFE Treaty, by far the treaty with which Moscow is most dissatisfied. In addition to justifying this action, Buzhinsky also noted during Wednesday's press conference that the INF should be expanded and a successor to START determined.
Russia is not simply trying to amend the security structures that govern its relationship with the West; it is trying to convince the West to help it lock in a new system that is more representative of Russian fears and strengths. The INF currently applies only to the United States and Russia, but because it was signed during the Reagan administration, other states on Russia's borders have since developed respectable missile programs.
However, it will be START that really gets Russian engines revving in the near future. START is the only treaty that seriously limits Washington's defense spending on the U.S. nuclear deterrent. Since the Russian deterrent is one of the very few assets that guarantee Russia an international voice, Moscow desperately wants to preserve it at a level equal to that of the American program. With Washington looking over the Russian horizon toward a possible arms race with the more financially capable Chinese, there is no way any U.S. administration would agree to renew START in order to make the Russians feel better about themselves. The Russians know this, and it is pushing them to threaten to leave the INF altogether in order to maintain at least a semblance of parity: Intermediate-range missiles, while they cannot reach the United States, are much cheaper to produce.
During the Cold War, the Soviets regularly bandied about similar proposals in attempts to use treaties and Western opinion to lock U.S. force structures into untenable positions. As during the Buzhinsky conference, concepts of fairness and partnership were used liberally in an effort to make Moscow's position seem reasonable. This resulted in peace movements across Europe that greatly complicated alliance management for the Americans. After all, the last thing NATO needed -- and precisely what Moscow was after -- was splits in the alliance that could be exploited.
This time around, that does not seem to be happening. Europe is perhaps more awash than ever in anti-American sentiment due to the Bush administration and the war in Iraq, but there have been no mass rallies against U.S. weapons systems or Western parliamentary spectacles against U.S. policy. Most Central European states, such as Poland and Romania, are not buying the Russian line at all, and recent government changes in France and Germany have largely killed the idea of any broad Russian-European rapprochement.
There are structural limitations as well. Disarmament treaties typically only work when there is parity -- and very expensive parity at that -- that forces the two sides to talk. Despite Russia's resurgence, that parity does not exist, so the Americans see no reason to be particularly worried. And, to be perfectly honest, while Europeans -- at a minimum -- remain as nervous about Russia's rhetoric as its hardware, Russia's military degradation is perceived to have been so catastrophic that the Europeans are not breaking ranks. Then again, maybe it is simply that it is hard to play the victim when you are the one who walked away from the CFE Treaty in the first place.
The alliance might be wobbling somewhat, but it has held -- and done so with a much more diverse member list than it boasted in the 1980s. If Russia is going to split NATO and push through a new treaty regime, it will need to do more than simply dust off some old rhetoric.
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Geopolitical Diary: The Return of Russia
Russian President Vladimir Putin broke out an old supply of bile on Wednesday when he called for permanent increases in the capabilities of both the military and the FSB -- the Russian successor to the Soviet KGB.
Stratfor never takes such statements from people who possess nuclear capabilities lightly. But, in this case, the apparent militancy behind the comment is sadly funny. Russia has had a hard run since the end of the Cold War, facing military, social, economic, medical and political declines. But all of these pale in comparison to -- and feed into -- the worst disaster of all: Russia's demographic collapse.
Low birth rates, combined with soaring death rates -- particularly among men between the ages of 30 and 55 -- have saddled the country with the worst demographic picture in centuries of any nation that is not at war. Even Russian government demographers admit the population is dropping by about 750,000 people per year, just as the average Russian grows older and, therefore, less productive. Most independent demographers estimate that by 2050 Russia's population will have decreased by one-third of its current total, approximately 140 million. The only reason Russia lacks a pension crisis like those many other developed states are experiencing is that, a few years back, Moscow moved the retirement age past the (falling) average age of death. As a country, Russia is -- quite literally -- dying.
So why the chest beating and saber rattling? What does Russia have to worry about? Is the Cold War not over? Well, yes and no.
While it is certainly true that NATO lacks the military force even to contemplate an invasion of Russia, this does not mean NATO is not perceived as aggressive. In the Russian mind, NATO and the European Union have willfully expanded to absorb all of the former Soviet satellites, as well as the Baltic countries and Slovenia. Now the West is perceived by the Russians to be in the process of tossing away or creatively reinterpreting agreements such as the Strategic Arms Reduction Treaty, the Conventional Armed Forces in Europe Treaty and the Anti-Ballistic Missile Treaty, slowly but irrevocably reshaping the European landscape to suit its needs.
For the Europeans, it is about reknitting the European fabric after two generations of separation. For the Americans, it is about leaving the Cold War behind and preparing for the conflicts of tomorrow. The ever-expanding U.S. nuclear missile defense network -- which made headlines Wednesday when the British offered up the Royal Air Force base at Menwith Hill -- is only one part of the U.S. effort to fashion a world in which Russia is an afterthought.
For the Russians, it is about being told in a rather absentminded and oblique way that they and their interests no longer matter.
But matter they do, and while the Russians are indeed dying, they are not dead yet. Acting as if they were is tantamount to discussing a grandmother's past marital infidelities before she finalizes her will, and expecting her to be oblivious to it.
On the same day Putin demanded better military and FSB capabilities, the military made it clear that the president's call is not just talk, installing in Moscow one of the few new pieces of military hardware the Russians have perfected since the end of the Cold War: the S-400 air defense missile battery. Russia's other new technologies include the Topol and Bulava intercontinental ballistic missiles (ICBMs); the former is land-launched and already entering service, while the latter is sub-launched and in the final stages of development. Between them, these ICBM designs will make up the backbone of Russia's nuclear deterrent in a decade's time.
While it has not exactly turned a corner, the Russian defense industry is undergoing a massive overhaul that can only make things better. On Wednesday, Defense Minister Anatoly Serdyukov -- a bean counter who the army hates -- was named to the seemingly obvious position of board chairman of Russia's military shipbuilding operations. And much of the rest of the military-industrial complex is being taken over by Sergei Chemezov, Putin's point man for defense reforms and the one in charge of Rosoboronexport, the government's weapons export arm.
Beyond defense, high energy prices have allowed the country to claw its way back from the destitution of the 1998 ruble collapse and helped it accrue one of the world's largest foreign reserves accounts. Russia is actually so cash-rich that has a budget surplus, despite having increased defense spending by double-digit percentages for seven years in a row. Moscow's energy and resources exports give it direct influence throughout Europe and Turkey. Its people feel more secure than they have in a generation, and they have a leader who most are willing to follow, despite his merely passing fancy with democratic institutions.
No state with Russia's capabilities has ever gone down easily. (Honestly, the real surprise is that Moscow has been so quiescent for so long.) Why should anyone expect that the Russians -- in spite of all their problems -- will "go gentle into that good night?"
While it might not last, Russia is coming back. It has a mark yet to make on this world.
stratfor.com
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Second post of the morning- another long one:
Don Putin
By GARRY KASPAROV
July 26, 2007; Page A13
When Vladimir Putin took power in Russia in 2000, the burning question was: "Who is Putin?" It has now changed to: "What is the nature of Putin's Russia?" This regime has been remarkably consistent in its behavior, yet foreign leaders and the Western press still act surprised at Mr. Putin's total disregard for their opinions.
Again and again we hear cries of: "Doesn't Putin know how bad this looks?" When another prominent Russian journalist is murdered, when a businessman not friendly to the Kremlin is jailed, when a foreign company is pushed out of its Russian investment, when pro-democracy marchers are beaten by police, when gas and oil supplies are used as weapons, or when Russian weapons and missile technology are sold to terrorist sponsor states like Iran and Syria, what needs to be asked is what sort of government would continue such behavior. This Kremlin regime operates within a value system entirely different from that of the Western nations struggling to understand what is happening behind the medieval red walls.
Mr. Putin's government is unique in history. This Kremlin is part oligarchy, with a small, tightly connected gang of wealthy rulers. It is partly a feudal system, broken down into semi-autonomous fiefdoms in which payments are collected from the serfs, who have no rights. Over this there is a democratic coat of paint, just thick enough to gain entry into the G-8 and keep the oligarchy's money safe in Western banks.
But if you really wish to understand the Putin regime in depth, I can recommend some reading. No Karl Marx or Adam Smith. Nothing by Montesquieu or Machiavelli, although the author you are looking for is of Italian descent. But skip Mussolini's "The Doctrine of Fascism," for now, and the entire political science section. Instead, go directly to the fiction department and take home everything you can find by Mario Puzo. If you are in a real hurry to become an expert on the Russian government, you may prefer the DVD section, where you can find Mr. Puzo's works on film. "The Godfather" trilogy is a good place to start, but do not leave out "The Last Don," "Omerta" and "The Sicilian."
The web of betrayals, the secrecy, the blurred lines between what is business, what is government, and what is criminal -- it's all there in Mr. Puzo's books. A historian looks at the Kremlin today and sees elements of Mussolini's "corporate state," Latin American juntas and Mexico's pseudo-democratic PRI machine. A Puzo fan sees the Putin government more accurately: the strict hierarchy, the extortion, the intimidation, the code of secrecy and, above all, the mandate to keep the revenue flowing. In other words, a mafia.
If a member of the inner circle goes against the Capo, his life is forfeit. Once Russia's richest man, Mikhail Khodorkovsky wanted to go straight and run his Yukos oil company as a legitimate corporation and not as another cog in Mr. Putin's KGB, Inc. He quickly found himself in a Siberian prison, his company dismantled and looted, and its pieces absorbed by the state mafia apparatus of Rosneft and Gazprom.
The Yukos case has become a model. Private companies are absorbed into the state while at the same time the assets of the state companies move into private accounts.
Alexander Litvinenko was a KGB agent who broke the loyalty code by fleeing to Britain. Worse, he violated the law of omertà by going to the press and even publishing books about the dirty deeds of Mr. Putin and his foot soldiers. Instead of being taken fishing in the old-fashioned Godfather style, he was killed in London in the first recorded case of nuclear terrorism. Now the Kremlin is refusing to hand over the main suspect in the murder.
Mr. Putin can't understand Britain doing potential harm to its business interests over one human life. That's an alien concept. In his world, everything is negotiable. Morals and principles are just chips on the table in the Kremlin's game. There is no mere misunderstanding in the Litvinenko case; there are two different languages being spoken.
In the civilized world, certain things are sacrosanct. Human life is not traded at the same table where business and diplomacy are discussed. But for Mr. Putin, it's a true no-limits game. Kosovo, the missile shield, pipeline deals, the Iranian nuclear program and democratic rights are all just cards to be played.
After years of showing no respect for the law in Russia, with no resulting consequences from abroad, it should not come as a surprise that Mr. Putin's attitude extends to international relations as well. The man accused of the Litvinenko murder, Andrei Lugovoi, signs autographs and enjoys the support of the Russian media, which says and does nothing without Kremlin approval. For seven years the West has tried to change the Kremlin with kind words and compliance. It apparently believed that it would be able to integrate Mr. Putin and his gang into the Western system of trade and diplomacy.
Instead, the opposite has happened -- the mafia corrupts everything it touches. Bartering in human rights begins to appear acceptable. The Kremlin is not changing its standards: It is imposing them on the outside world. It receives the stamp of legitimacy from Western leaders and businesses but makes those same leaders and businesses complicit in its crimes.
With energy prices so high, the temptation to sell out to the Kremlin is an offer you almost can't refuse. Gerhard Schröder could not resist doing business with Mr. Putin on his terms and, after pushing through a Baltic Sea pipeline deal while in office, he had a nice Gazprom job waiting for him when he left the chancellorship. Silvio Berlusconi also became a Putin business partner. He even answered for Mr. Putin at an EU meeting, vigorously defending Russian abuses in Chechnya and the jailing of Mr. Khodorkovsky and then joking to Mr. Putin, "I should be your lawyer!" Now we see Nicolas Sarkozy boosting the interests of French energy company Total in the Shtokman gas field.
Can Mr. Sarkozy possibly speak out strongly in support of Britain after making big deals on the phone with Mr. Putin? He should know that if Gordon Brown gets Mr. Putin on the line and offers to drop the case against Mr. Lugovoi, perhaps Total will find itself pushed out to make room for BP.
We in the Russian opposition have been saying for a long time that our problem would soon be the world's problem. The mafia knows no borders. Nuclear terror is not out of the question if it fits in with the Kremlin business agenda. Expelling diplomats and limiting official visits is not going to have an impact.
How about limiting the Russian ruling elite's visits to their properties in the West? Ironically, they like to keep their money where they can trust in the rule of law, and so far Mr. Putin and his wealthy supporters have every reason to believe their money is safe. They've been spending so much on ski trips to the Alps that they recently decided to bring the skiing to Russia by snapping up the Olympic Winter Games.
There is no reason to cease doing business with Russia. The delusion is that it can ever be more than that. The mafia takes, it does not give. Mr. Putin has discovered that when dealing with Europe and America he can always exchange worthless promises of reform for cold, hard cash. Mr. Lugovoi may yet find himself up for sale.
Mr. Kasparov, former world chess champion, is a contributing editor to The Wall Street Journal and chairman of the United Civil Front of Russia, a pro-democracy opposition organization.
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Young Russia's Enemy No. 1
Anti-Americanism Grows
Vladimir Putin's belligerent rhetoric and actions toward the United States and its allies have begun prompting pundits to debate whether a new Cold War is afoot. But how has the Russian president's message played to his home audience? A survey we commissioned by the Levada Analytic Center of 1,802 Russians ages 16 to 29 offers some insight. We focused on this "Putin generation" because it is Russia's political and economic future. In the days after the Soviet collapse, it seemed reasonable to hope, even expect, that this generation, as the collective beneficiaries of a putative post-Soviet transition to economic prosperity and political freedom, would embrace the United States as a friend of Russia. Yet our survey, conducted in April and May, found that a majority of young Russians view the United States as enemy No. 1. And while Putin's rhetoric is driving this development, human rights violations associated with U.S. counterterrorism policies have played a role.
Putin has become increasingly vocal in his accusations that the United States seeks to impose its ideas and interests on the rest of the world, going so far as to liken American policies to those of the Third Reich. He frequently cites the "dangers" of foreign influence, suggesting that Russia is encircled by enemies and that foreign governments finance Russian organizations to meddle in Russia's affairs. Putin virulently rejects any foreign criticism of episodes from Russia's Soviet past or of such current policies as media restrictions, brutality in the North Caucasus and the persecution of Kremlin opponents. This campaign seems motivated by domestic political considerations; the creation of foreign "enemies" is a tactic long used to distract people from the shortcomings of their own government, rally support for authoritarian measures, or both.
But these themes resonate with young Russians. Nearly 80 percent agreed that "the United States tries to impose its norms and way of life on the rest of the world," we found. Nearly 70 percent disagreed that the United States "does more good than harm." Three-quarters agreed that the "United States gives aid in order to influence the internal politics of countries."
When asked which of five words best described the United States in relation to Russia, 64 percent chose either "enemy" or "rival." We asked the same question in regard to six other countries. Georgia, another target of Putin's, ranked second in terms of the percentage who chose these words -- but that was only at 44 percent. The other countries were less likely to be viewed as enemies or rivals, even though some represent an arguably equal or greater threat: China (27 percent), Iran (21 percent), Ukraine (21 percent), Germany (13 percent) and Belarus (12 percent). Substantially more than the 18 percent who described America as a "partner" or "ally" used these positive terms to characterize the other countries. Putin's rhetoric is an influence on these and two other findings: 54 percent agreed that Stalin "did more good than bad" and 63 percent agreed that the Soviet collapse was the "greatest geopolitical catastrophe of the 20th Century."
We also found that Bush administration counterterrorism policies have helped the Kremlin cultivate this hostility toward America. Critics of certain U.S. policies assert that practices departing from long-standing international law -- such as indefinite detention and extraordinary rendition -- are linked to the worldwide decline of America's reputation and moral sway, key elements of "soft" power. Our data support these claims. Respondents tended to believe that the United States tortures terrorism suspects (52 percent), renders them to countries that practice torture (44 percent) and detains them without due process or legal representation (46 percent). Very few respondents -- 9 to 13 percent -- believed these allegations to be false; the rest found it "hard to say."
Generally, respondents condemned these practices (42 to 57 percent, with only 15 to 29 percent approving). Moreover, our statistical modeling demonstrates that perceptions of American human rights violations relate directly to anti-American sentiment: Young Russians who believed that the United States tortures or unlawfully detains terrorist suspects had considerably more negative views of the U.S. government than those who did not.
The legacy of a new generation of Russians who are nostalgic for the Soviet Union, ambivalent about Stalin and hostile toward the United States may jeopardize U.S.-Russian relations long after Putin is gone. Thus, in addition to countering Putin's aggressive stance in the short term, this U.S. administration and the next needs to develop longer-term strategies to reverse the tide of growing anti-American sentiment among young Russians. Changing U.S. counterterrorism policies is a good place to start. The goal should be to restore the vision of America expressed by Andrei Sakharov: "In fact, we don't idealize America and see a lot that is bad or foolish in it, but America is a vital force, a positive factor in our chaotic world."
Sarah E. Mendelson directs the Human Rights and Security Initiative at the Center for Strategic and International Studies. Theodore P. Gerber is a professor of sociology at the University of Wisconsin at Madison.
http://www.washingtonpost.com/wp-dyn...080202148.html
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Second post of the morning:
Geopolitical Diary: Russian 'Smiles'
The commander of Russia's strategic bomber force, Maj. Gen. Pavel Androsov, announced with a bit of flair Thursday that two of his Tu-95 bombers had ventured down to the U.S. military base at Guam during the Valiant Shield 2007 exercises involving nearly 100 U.S. aircraft in the Western Pacific, and had "exchanged smiles" with U.S. fighter pilots before turning back toward home. The incident actually happened Wednesday; the U.S. military only rarely comments on Russian forces buzzing U.S. assets, in order to minimize Russian public relations buzz. True to form, the U.S. Department of Defense issued a two-sentence statement downplaying the entire incident.
Wednesday's flight came amid an annual training exercise for the Russian 37th Air Army, and in the wake of several similar incidents this summer north of Fife, Scotland. Post-Cold War Russian military posturing and testing of foreign airspace is nothing new. But the flight to Guam is noteworthy nonetheless.
The incident is only the most recent in a long line of aggressive Russian actions. In the summer to date, similar intrusions have occurred off Alaska, Norway, the United Kingdom, Iceland and Japan. Russian "youth movements" have sparked riots in Estonia, the Russian Strategic Rocket Forces has threatened to put nuclear weapons back in the Baltic enclave of Kaliningrad, the navy has mused about a permanent base in Syria, and Russian jets stand accused of firing a missile on Georgia. Taken together, all of this is simply normal Russian behavior.
For 1985, that is.
Since 1989, Russian military assets have on occasion challenged a maritime border or buzzed an aircraft carrier, but such developments have not been weekly events since the Cold War. This sort of activity is a new -- or perhaps we should say, "old" -- chapter in Russian strategic thinking.
The story of Russia in the 17 years since the Cold War ended has been one of precipitous decline economically, politically, militarily and demographically. However, during President Vladimir Putin's two terms, Russia has arrested -- and haltingly reversed -- the first three declines. This does not mean the Russians have truly turned the corner -- the economy is more addicted to commodity exports than ever before, the Kremlin is closer to political ossification than the "efficiency" of a true autocracy, and new or well-maintained military equipment is certainly not the norm -- but a floor has definitely been inserted under the country, halting the fall.
Military reform has been under way for some time. That the Russian army has professionalized itself down below 200,000 conscripts is, in and of itself, an amazing achievement. But while deliberate, the task remains daunting, and the pace slow. Yet even if Russia had stopped its military research and development programs -- which it did not -- even late-Soviet military technology would leave Russia in a unique military position. And as the recent military adventurism vividly demonstrates, there is a pattern in Russian actions: the incidents are not isolated, and there is no direction in which the Russians are not pushing out. This is a strategy that has an excitingly (and disturbingly) familiar feel to it.
The American Cold War strategy of "containment" was not something dreamed up on some idle Tuesday. The geography of the former Soviet Union is hostile not just to economic and political development, but also to military expansion. Vast interior distances make the transport of armies as difficult as that of goods, while natural maritime choke points like the Japanese Islands, the Turkish straits and "The Sound" between Sweden and Denmark naturally limit Moscow's naval reach -- and have for centuries. The bottom line for the United States was that by aligning with all of Russia's neighbors, it could force the Soviet Union to focus on building tanks to defend is mass -- because Moscow never knew from which direction an attack (or multiple attacks) would come.
Yet just as Eurasia's geography dictated the containment strategy, that same geography predetermined the Russian counterstrategy. Russia's one advantage in fact mirrors its greatest disadvantage: its huge expanse is difficult to defend -- the source of the paranoia that most associate with all things Russian -- but it also grants whoever rules Russia a wealth of options in terms of where to strike out. Russia's counterstrategy was simple: push out everywhere until a weak spot appears in the containment cordon.
Though the Cold War ended, containment never really did, and it has been nearly a generation since the Russians tested their cage. Russia -- and the world -- has changed in fundamental ways. But ultimately the biggest difference between now and 1991 is not so much Russia's relative weakness or America's relative preoccupation with Iraq, but Washington's list of allies. It is longer -- and less militarily capable -- than ever.
And therein lies the rub. The real key to containment was not the belt of Russian border states, but the American commitment to guarantee their security. What ultimately made containment work was the belief that the United States would be willing to meet Russia on the field of battle wherever and whenever Moscow pushed. Washington utterly lacked the freedom to decline any fight for fear that the entire alliance structure of containment would unravel. The most famous examples of these tests of American resolve are the wars in Korea and Vietnam.
Weak spots aplenty can be found on the Russian periphery these days. Georgia is a failed state even on the brightest of days; the Baltic states are no less defensible against the Red Army now than they were when they broke away from the Soviet Union in 1991; the entire Russian-Kazakh border is more of a joke than the U.S.-Canadian border in terms of security; Washington's once-solid relations with Russian borderlands such as Turkey and Korea are not what they once were; and Germany, France and the United Kingdom are, if anything, even less interested in going to bat for Lithuania than Washington is.
Ultimately, the disparity between Androsov's announcement and the Pentagon's bureaucratic reply is symptomatic of the way each nation sees its old Cold War adversary. Pentagon planners do not talk about Russia like they used to. They do -- and not without some cause -- crack jokes, something that is actually rather easy to do when one considers that the propeller-driven Tu-95s, designed in the early 1950s, were "intruding" on the newest fighter jets in the world, zipping supersonically around Guam.
But the simple truth of the matter is that Russia is one of only two countries in the world that can casually move strategic offensive weapons like the air-launched AS-15 cruise missiles across the face of the planet. The Tu-95 is certainly not a top-shelf plane these days -- but when it's carrying a highly accurate cruise missile with an 1,800-mile range and a nuclear warhead, it doesn't have to be.
The credibility of containment comes down to perception as much as the hard and fast details of competing military hardware. And managing perception -- as the "exchanged smiles" over Guam indicate -- remains a Russian skill second to none.
stratfor.com
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Geopolitical Diary: The Limits of the Shanghai Cooperation Organization
The annual summit of the Shanghai Cooperation Organization (SCO) broke in Bishkek, Kyrgyzstan, on Thursday after several hours of photo-ops and grandstanding. On Friday, Russian President Vladimir Putin and Chinese President Hu Jintao will attend military exercises in the Chelyabinsk region in Russia's Ural Mountains. Some 6,000 Russian and Chinese troops, dozens of aircraft and hundreds of armored vehicles and other heavy weapons will participate -- the first such joint drills on Russian soil.
Moscow is most certainly on the move. In the past few months, Russia has pushed against the Baltics and the Caucasus, and it is spinning up for a major effort to bring Ukraine firmly back into its orbit. The United States is distracted by Iraq and unable to act as a check on Russian ambition. The political battle lines along Russia's western frontier are hardening; the question there is, will the United States will be too distracted to push back? And will anyone in Europe dare move against Russia without the Americans at their back?
But looking eastward, as the cities of Europe give way to the steppes of Asia, the grand geopolitic of the Russian resurgence becomes less clearly defined. Unlike Europe, Russia's other border regions are not made up of relatively hostile alliances and economic groupings. The players are more opaque and resistance to Russia's whims is mushy.
Enter the SCO. The grouping was originally formed between China, Russia and a handful of former-Soviet Central Asian autocracies in order to manage the tangle of new borders resulting from the Soviet Union's demise. That the SCO achieved peacefully and successfully. Since then, the organization has groped about for a reason to exist. At times it seems a step away from becoming a framework for a Central Asian alliance; at other times it seems doomed to be reduced to a talk shop.
Thursday's summit -- at which bland promises about law enforcement cooperation and forming a common university were the main takeaways -- seems to fall into the latter category. About the only thing that the SCO can reliably agree on -- and this has become the SCO's perennial anchor point -- is that it does not want the United States mucking around in Central Asia.
Russia's problem in harnessing organizations such as the SCO to its needs are simple: There is another major power poking around in the region. That power, of course, is China. And as Moscow and Washington settle into dangerously familiar patterns, the question inevitably will be: which side is China on?
Russia and China are hardly hostile to one another, but there is certainly an inbuilt tension. The Chinese consider part of the Russian Far East to be their territory, and many of the native Central Asian and Siberian cultures are far more closely tied to Beijing than to Moscow. China needs masses of resources in order to continue developing -- resources that lie just across the border with Russia.
It is in Central Asia -- specifically under the aegis of the SCO -- where these two Asian giants meet and compete. While Russia is clearly the more aggressive power, it has been coasting on its imperial and Soviet links to maintain influence in the region, while the Chinese have been steadily and unobtrusively asserting their influence in subtle but effective ways. Nearly all of the Central Asian road, rail and energy infrastructure built before 1991 accesses the outside world via Russia -- nearly all built since then accesses the world via China.
The Russia-China disconnect is more than "simple" competition, and is both geopolitical and strategic in nature. Russia wants to push out and re-establish its empire; China wants to keep its head down and deal with its internal problems quietly.
But ultimately, the two cannot form a functional alliance because of a fundamental difference in mindset: Russia feels it is destined for a conflict with the United States, while China wants to avoid one at all costs. So long as that remains the case, the United States maintains the freedom to play the two powers against each other as the politics of the day demand -- just as it did for the last generation of the Cold War -- and the SCO will remain a place where Russian and Chinese differences are peaceably compared, but never really resolved.
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stratfor.com
Window of Opportunity; Window of Vulnerability
August 21, 2007 18 54 GMT
All U.S. presidents eventually become lame ducks, though the lameness of any particular duck depends on the amount of power he has left to wield. It not only is an issue of the president's popularity, but also of the opposition's unity and clarity. In the international context, the power of a lame duck president depends on the options he has militarily. Foreign powers do not mess with American presidents, no matter how lame one might be, as long as the president retains military options.
The core of the American presidency is in its role as commander in chief. With all of the other presidential powers deeply intersecting with those of Congress and the courts, the president has the greatest autonomous power when he is acting as supreme commander of the armed forces. There is a remarkable lot he can do if he wishes to, and relatively little Congress can do to stop him -- unless it is uniquely united. Therefore, foreign nations remain wary of the American president's military power long after they have stopped taking him seriously in other aspects of foreign relations.
There is a school of thought that argues that President George W. Bush is likely to strike at Iran before he leaves office. The sense is that Bush is uniquely indifferent to either Congress or public opinion and that he therefore is likely to use his military powers in some decisive fashion, under the expectation and hope that history will vindicate him. In that sense, Bush is very much not a lame duck, because if he wanted to strike, there is nothing legally preventing him from doing so. The endless debates over presidential powers -- which have roiled both Republican and Democratic administrations -- have left one thing clear: The courts will not intervene against an American president's use of his power as commander in chief. Congress may cut off money after the fact, but as we have seen, that is not a power that is normally put to use.
The problem for Bush, of course, is that he is fighting two simultaneous wars, one in Iraq and one in Afghanistan. These wars have sucked up the resources of the U.S. Army to a remarkable degree. Units are either engaged in these theaters of operation, recovering from deployment or preparing for deployment. To an extraordinary degree, the United States does not have a real strategic reserve in its ground forces, the Army and the Marines. A force could probably be scraped up to deal with a limited crisis, but U.S. forces are committed and there are no more troops to scatter around.
The United States faces another potential theater of operations in Iran. Fighting there might not necessarily be something initiated by the United States. The Iranians might choose to create a crisis the United States couldn’t avoid. That would suck up not only what little ground reserves are available, but also a good part of U.S. air and naval forces. The United States would be throwing all of its chips on the table, with few reserves left. With all U.S. forces engaged in a line from the Euphrates to the Hindu Kush, the rest of the world would be wide open to second-tier powers.
This is Bush's strategic problem -- the one that shapes his role as commander in chief. He has committed virtually all of his land forces to two wars. His only reserves are the Air Force and Navy. If they were sucked into a war in Iran, it would limit U.S. reserves for other contingencies. The United States alone does not get to choose whether there is a crisis with Iran. Iran gets to vote too. We don’t believe there will be a military confrontation with Iran, but the United States must do its contingency planning as if there will be.
Thus, Bush is a lame-duck commander in chief as well. Even if he completely disregards the politics of his position, which he can do, he still lacks the sheer military resources to achieve any meaningful goal without the use of nuclear weapons. But his problem goes beyond the Iran scenario. Lacking ground forces, the president's ability to influence events throughout the world is severely impaired. Moreover, if he were to throw his air forces into a non-Iranian crisis, all pressure on Iran would be lifted. The United States is strategically tapped out. There is no land force available and the use of air and naval forces without land forces, while able to achieve some important goals, would not be decisive.
The United States has entered a place where it has almost no room to maneuver. The president is becoming a lame duck in the fullest sense of the term. This opens a window of opportunity for powers, particularly second-tier powers, that would not be prepared to challenge the United States while its forces had flexibility. One power in particular has begun to use this window of opportunity -- Russia.
Russia is not the country it was 10 years ago. Its economy, fueled by rising energy and mineral prices, is financially solvent. The state has moved from being a smashed relic of the Soviet era to becoming a more traditional Russian state: authoritarian, repressive, accepting private property but only under terms it finds acceptable. It also is redefining its sphere of influence in the former Soviet Union and reviving its military.
For example, a Russian aircraft recently fired a missile at a Georgian village. Intentionally or not, the missile was a dud, though it clearly was meant to signal to the Georgians -- close allies of the United States and unfriendly to Russian interests in the region -- that not only is Russia unhappy, it is prepared to take military action if it chooses. It also clearly told the Georgians that the Russians are unconcerned about the United States and its possible response. It must have given the Georgians a chill.
The Russians planted their flag under the sea at the North Pole after the Canadians announced plans to construct armed icebreakers and establish a deepwater port from which to operate in the Far North. The Russians announced the construction of a new air defense system by 2015 -- not a very long time as these things go. They also announced plans to create a new command and control system in the same time frame. Russian long-range aircraft flew east in the Pacific to the region of Guam, an important U.S. air base, causing the United States to scramble fighter planes. They also flew into what used to be the GIUK gap (Greenland-Iceland-United Kingdom) probing air defenses along the Norwegian coast and in Scotland.
Most interestingly, they announced the resumption of patrols in the Atlantic, along the U.S. coast, using Blackjack strategic bombers and the old workhorse of the Russian fleet, the Bear. (The balance does remain in U.S. favor along the East Coast). During the Cold War, patrols such as these were designed to carry out electronic and signal intelligence. They were designed to map out U.S. facilities along the Eastern seaboard and observe response time and procedures. During the Cold War they would land in Cuba for refueling before retracing their steps. It will be interesting to see whether Russia will ask Cuba for landing privileges and whether the Cubans will permit it. As interesting, Russian and Chinese troops conducted military exercises recently in the context of regional talks. It is not something to take too seriously, but then they are not trivial.
Many of these are older planes. The Bear, for example, dates back to the 1950s -- but so does the B-52, which remains important to the U.S. strategic bomber fleet. The age of the airframe doesn't matter nearly as much as maintenance, refits, upgrades to weapons and avionics and so on. Nothing can be assumed from the mere age of the aircraft.
The rather remarkable flurry of Russian air operations -- as well as plans for naval development -- is partly a political gesture. The Russians are tired of the United States pressing into their sphere of influence, and they see a real window of opportunity to press back with limited risk of American response. But the Russians appear to be doing more than making a gesture.
The Russians are trying to redefine the global balance. They are absolutely under no illusion that they can match American military power in any sphere. But they are clearly asserting their right to operate as a second-tier global power and are systematically demonstrating their global reach. They may be old and they may be slow, but when American aircraft on the East Coast start to scramble routinely to intercept and escort Russian aircraft, two things happen. First, U.S. military planning has to shift to take Russia into account. Second, the United States loses even more flexibility. It can't just ignore the Russians. It now needs to devote scarce dollars to upgrading systems along the East Coast -- systems that have been quite neglected since the end of the Cold War.
There is a core assumption in the U.S. government that Russia no longer is a significant power. It is true that its vast army has disintegrated. But the Russians do not need a vast army modeled on World War II. They need, and have begun to develop, a fairly effective military built around special forces and airborne troops. They also have appeared to pursue their research and development, particularly in the area of air defense and air-launched missiles -- areas in which they have traditionally been strong. The tendency to underestimate the Russian military -- something even Russians do -- is misplaced. Russia's military is capable and improving.
The increased Russian tempo of operations in areas that the United States has been able to ignore for many years further pins the United States. It can be assumed that the Russians mean no harm -- but assumption is not a luxury national security planners can permit themselves, at least not good ones. It takes years to develop and deploy new systems. If the Russians are probing the Atlantic, Pacific and Arctic again, it is not the current threat that matters, but the threat that might evolve. That diverts budget dollars from heavily armored trucks that can survive improvised explosive device attacks, and cuts into the Air Force and Navy.
The Russians are using the window of opportunity to redefine, in a modest way, the global balance and gain some room to maneuver in their region. As a result of their more assertive posture, American thoughts of unilateral interventions must decline. For example, getting involved in Georgia once was a low-risk activity. The risk just went up. Taking that risk while U.S. ground forces are completely absorbed in Iraq and Afghanistan is hard for the Americans to justify -- but rather easy for the Russians.
This brings us back to the discussion of the commander in chief's options in the Middle East. The United States already has limited options against Iran. The more the Russians maneuver, the more the United States must hold what forces it has left -- Air Force and Navy -- in reserve. Launching an Iranian adventure becomes that much more risky. If it is launched, Russia has an even greater window of opportunity. Every further involvement in the region makes the United States that much less of a factor in the immediate global equation.
All wars end, and these will too. The Russians are trying to rearrange the furniture a bit before anyone comes home and forces them out. They are dealing with a lame duck president with fewer options than most lame ducks. Before there is a new president and before the war in Iraq ends, the Russians want to redefine the situation a bit.
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Geopolitical Diary: Russia Rewrites the Post-Cold War Rule Book
Georgia has accused Russia of violating its airspace again. According to Georgia, its radar recently tracked a Russian aircraft penetrating Georgian airspace near Abkhazia -- a pro-Russian breakaway region and an area of substantial Georgian-Russian tension. The first incursion allegedly took place Aug. 6 and involved a missile fired at a Georgian village. Whether intentional or not, the missile didn't explode. That incursion occurred near another Georgian breakaway region, South Ossetia.
The Russians have denied both incidents, claiming the first was a Georgian provocation. Ignoring the fact that parts of the missile could be identified, Georgia has little reason to create a crisis. It is fully aware that U.S. intervention against Russia is unlikely at this point, and that anything more than rhetorical support from European countries is equally unlikely. At least for now, a crisis would leave Georgia alone. Therefore, antagonizing the Russians at this point really doesn't make a great deal of sense.
But increasing Georgian insecurity does make sense for Russia. With the collapse of the Soviet Union, Moscow withdrew from most of the Caucasus region, leaving behind Armenia, Georgia and Azerbaijan -- all former Soviet republics that are now independent states. It also left behind a series of dispute fragments in a region where ethnic and religious strife is endemic. Russia lost its secure frontier with Turkey, replacing it with an unstable and frequently violent border.
The direct threat to Russia was the part of the Northern Caucasus that it continued to control, which included Chechnya. If Russia had abandoned Chechnya, it would have lost its foothold in the Caucasus and, along with it, any natural defensive position. But the Russians decided disintegration stopped there and fought to hold their position.
The Russians believed, with substantial reason, that arms were reaching the Chechen guerrillas via Georgia through the Pankisi Gorge. The minimal Russian charge was that the Georgians, closely aligned with the United States, were not doing enough to stop the flow of weapons. The maximum Russian claim was that the Georgian government was facilitating arms smuggling, supported by the United States, which wanted to see the Russian Federation disintegrate.
The Russians therefore have historically viewed Georgia, allied as it is with Washington, as a direct threat to their national security. First, there was the Chechen issue. Second -- and far more important in the long run -- was the entire matter of the Russian frontier in the Caucasus. The old Soviet-Turkish frontier allowed Russia to secure the Caucasus and limit insurgencies among ethnic groups. The current frontier is an invitation to insurgency and constantly threatens to draw Russia into conflicts in the region.
Russia is aligned with Armenia, which is afraid of the Turks. It has good relations with Azerbaijan, having military facilities there, as well as trade relations. Georgia is Moscow's problem. It destabilizes Russia's southern frontier and is seen as facilitating instability in Russia itself. Georgia's close relationship with the United States has in the past made it immune to Russian pressure, but close relationships with the United States are not worth what they used to be, or what they might be in the future.
We have spoken before of Russia's current window of opportunity. The two incursions into Georgia -- both of which we believe were intended to be noticed -- put the Georgians on notice that, in Russia's mind, Georgian autonomy is no longer a settled matter. Russia might not be planning to occupy Georgia, but it is letting the Georgians know that it believes they have freedom of action. The moves were designed to make the Georgians extremely concerned -- and it is working.
The Russians want to see an evolution in Georgia in which Tbilisi acknowledges that it is within the Russian sphere of influence and, as such, retains its independence to the extent that it is prepared to accommodate Russian interests. Those obviously include collaboration on the issue of Chechen weapons -- now a bit of a dated subject. But this specifically means Georgia should shift its relationship with the United States. The Russians do not want to see Washington using Georgia as a foothold in the Caucasus.
Russia is rewriting the post-Cold War rule book. Georgia is one of the places that matter to Russia, and Russia is signaling the Georgians to reconsider their national security interests. It will be interesting to see what the Georgians do, and -- assuming they maintain their current stance -- what the Russians do next. Moscow did not carry out these incursions without a plan. The Russians have started small. We would be surprised if they restrained themselves in the face of a continuation of Georgian policies toward the United States and the region.
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FSU: Georgia on Moscow's Mind
Summary
Georgia's recent accusations that Russia has violated its airspace are symptomatic of deteriorating relations between the two countries. Whether or not Georgia's accusations are true, Russia sees the subjugation of Georgia as a vital part of a Russian resurgence in the region.
Analysis
On Aug. 7 Georgian authorities accused Russia of violating Georgian airspace and dropping a bomb near the village of Tsitelubani, a charge Georgia has repeated vehemently and Russia has denied. On Aug. 22, Georgia claimed to have suffered another airspace violation, this one in the vicinity of the Upper Abkhazia region. On Aug. 24, Georgian authorities first said they had fired on the jet, and then later claimed to have actually shot it down. At the time of this writing no hard evidence to substantiate the latest claim has been brought forward.
Relations between Russia and Georgia -- never better than frigid -- have plummeted to a level not seen since Russia quietly assisted anti-Georgian forces in the 1993 Abkhaz and South Ossetian secessionist wars.
The logic of the two sides is simple. Russia sees Georgia as a wayward province of the worst sort. Not only has it stubbornly refused to yield to a resurgence of Russian power, but its attempts at a close alliance with NATO and the United States have, in Moscow's view, unnecessarily complicated Russia's efforts to control its southern border. Russia blames Georgia for supporting the Chechen insurrection and feels that if Georgia is folded back into Russia proper, the instability in the Northern Caucasus could finally be quelled. Put another way, the subjugation of Georgia is a key early step for Russia not just to secure its borders, but to stage a general resurgence throughout the region. But Russia would rather do this without provoking a larger confrontation with the West. If there has to be a war, Russia would rather fight over a more important country.
On the flip side, the Georgians have lived in fear of a Russian invasion since 1993. Tbilisi is unwilling to sue for peace due to a mixture of nationalism, stubbornness and hope. The hope springs primarily from seeing the Chechens bloody Russia's nose so badly, yet the Georgians know that should Russia begin reasserting its strength, Georgia is doomed without outside help. Thus, Georgia's entire military and foreign policy strategy is predicated upon gaining that outside help. So Georgia's strategy is to appear the victim whenever possible, even if -- particularly in Russia's mind -- that involves embellishing (or even fabricating) the truth.
The truth of the current developments, therefore, is murky. Obviously, Russia has an interest in intimidating Georgia, but would prefer for it to remain unseen by others. Conversely, Georgia has an interest in being intimidated and wants to share such actions with the wider world in an attempt to build up support. Russia's refusal to certify whether the bomb dropped Aug. 6 (Georgia's initial accusation occurred the day after the bombing) came from its stockpiles is of course suspicious, but no more so than Georgia's inability to produce wreckage from a crash that supposedly happened two days ago.
What is clear, however, is this: Russia is resurging and Georgia is in its way. Russia also has more levers to deal with Georgia -- allies in Abkhazia, South Ossetia and Armenia, corruption at every level in Georgia, and a Georgian military that is charitably described as slapdash -- than it does with nearly any other state. This will be the site of a major confrontation as Russian power grows. The only question is whether the events of the past month are the spark that lights the flame.
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WSJ:
Georgia on His Mind
The former Soviet republic is becoming a shining star. But will Russia drag it back into darkness?
BY MELIK KAYLAN
Saturday, August 25, 2007 12:01 a.m. EDT
TBILISI, Georgia--On Aug. 8, a missile the size of a bus struck near a village some 50 miles north of this Eurasian country's capital city, Tbilisi. It failed to explode. In all likelihood the missile came from Russian jet fighters violating Georgian airspace, as Georgians quickly claimed--the incident was eerily similar to one in March, when Russian attack helicopters flew at night and, without provocation, fired missiles into Georgian territory.
In both cases, Georgian authorities showed the world radar flight path data as proof. The world did nothing the first time, and will likely do nothing again. Meanwhile, unexplained incursions continue daily. This is the kind of near-lethal brinkmanship which Georgian President Mikheil Saakashvili believes will only encourage more belligerence from Russia.
Mr. Saakashvili has spent his first 3 1/2 years in office impelling his country forward economically, courting NATO and European Union membership, eradicating corruption and trying to woo Russian-supported secessionists back into the fold. Above all, he strives daily to keep his country, with a population of four million, on the mind of Western nations so its security and success will seem synonymous with theirs--and keep the Russians at bay. The Russians still seem to perceive post-Soviet Georgian independence as a kind of betrayal, responding with an array of destabilizing policies, such as the imposition of embargoes on Georgian goods.
Earlier this summer, I spent some time with Georgia's president, checking on his progress. He has quite a story to tell, particularly about the economy. According to Mr. Saakashvili, Georgia's GDP was less than $3 billion five years ago. It's now $8 billion and will double in three years, and he is straightforward about his inspiration.
"I finally met Margaret Thatcher in London this year," he shouts over the noise of helicopter engines as we fly adjacent to the snow-peaked Caucasus mountains. "I always admired her, and I always thought, if I could do in Georgia a fraction of what she did in the U.K., I would be very happy. . . . And she said to me, 'You are doing all the things in Georgia that I wanted to do in the U.K. and more . . .' "
It's a strange place for an interview, but Mr. Saakashvili keeps a merciless schedule. On this day, after a speech in the main square of Tbilisi, he is presiding over five separate ribbon-cutting ceremonies around the country.
We begin the tour with a three-kilometer visit down a coal mine that has sat unused for 15 years, with the mining community above it going to ruin. It is now being revitalized with German money and machinery. We end the tour past midnight, at a new Turkish-built airport at the resurgent Black Sea resort of Batoumi.
Just four years ago, before the nonviolent Rose Revolution disposed of the Shevardnadze regime and soon voted in Mr. Saakashvili, Georgia was widely considered a failed state on a par with Zimbabwe--with corruption rampant, a stagnant economy and several civil wars smoldering.
That's changing. Three years ago, Mr. Saakashvili famously fired 15,000 traffic policemen and dissolved the pervasive bribery ethos in one stroke. The country is booming: Everywhere new hotels, factories and well-lit roads proclaim the changes. Even the old Soviet tower blocks look festive and newly painted. Foreign investment flows in from every quarter: Kazakhstan to the east, Turkey to the south, Europe and the U.S., the Gulf States, even from Russia, despite all of Mr. Putin's embargoes--and despite the shadow of two secessionist "black holes" inside Georgia backed by Russian arms and money: Abkhazia and South Ossetia.
Mr. Saakashvili points out a little town in the distance, Tskhinvali, the disputed heart of South Ossetia, nothing more than a sprinkling of houses on a rise of farmland deep inside Georgian territory. "We've offered them everything they want . . . language rights, their own political structures, cross-border rights to their fellow Ossetians. . . . They probably would agree if they were free to do so."
I point down to the terrain beneath us and comment that if the well-regulated squares of green fields down below are any indication, Georgia's agriculture is doing well. "In Soviet times," he says, "all this was a chaotic mess. In contrast, you'd fly over Western Europe and see miles of perfectly cultivated land. . . . Now Georgia is the same. It's beautiful to look at. That's the aesthetic look of the free market."
A day or two later, at a dinner for Georgian businessmen, the president delivers a speech hammering home his well-honed message of self-help. "The government is going to help you in the best way possible, by doing nothing for you, by getting out of your way. Well, I exaggerate but you understand. Of course we will provide you with infrastructure, and help by getting rid of corruption, but you have all succeeded by your own initiative and enterprise, so you should congratulate yourselves."
Mr. Saakashvili's style of leadership feels like a permanent political campaign--which it is, in a way. He seems determined to show citizens how it's being done, visibly to demonstrate accountability, transparency and political process, so they grow accustomed to the sight of politicians answering to them--in short, to Western political habits. All the while, he's exhorting and explaining, striving to change attitudes ingrained through decades of Soviet rule and 15 years of stagnation, strife and corruption. "I keep telling people that this is not a process like some silver-backed gorilla leading them to new pastures. They must do it themselves, and they are."
Mr. Saakashvili famously gets very little sleep, calling his aides at 2 a.m. to remind them of neglected tasks. During the day, he never stops moving.
On one occasion, a sudden onset of severe bad weather forces down both his helicopter--and the one behind it that is full of his security--in farmland beside a small town. No matter. His aides borrow what conveyances they can, and we end up with the president driving a 1956 Volga modeled on a postwar American Dodge. As the sleet and hail hammer down, the car lurches along and we all double up in helpless laughter because the windshield wipers don't work. Mr. Saakashvili sticks one free arm out the driver's-side window to wipe the windshield manually while he drives.
At one point I ask him if security and dealing with Russian threats are a top priority. "We have two limbs of Georgia which are currently detached," he says, careful not to sound provocative, "and we have a hostile, powerful northern neighbor, even more powerful every day with oil money. But we can't be living in a state of gloom and paranoia. . . . When the Russians imposed the embargo on our wines, we simply found new markets. Like-minded countries such as Poland and the Baltic states actively sought out our products.
"When Russia cut off gas supplies, we had to work on developing new sources. So we're developing hydro-power and coal and nuclear energy. Next year, we'll be fully supplied by Azerbaijani power. . . . Everyone said we'd never survive but our success gives confidence to everyone else."
Mr. Saakashvili notes that his country had to diversify its markets anyway. "Georgia's natural strength is its role as a crossroads both culturally and geographically. It was always a kind of bridge on the old Silk Road. So we're building up our highway system; we're completing our rail link from Batoumi to Istanbul through to Europe; we've got the new international airport there.
"Eastwards we're connecting all the way to China via a ferry across the Caspian. It will offer an alternative to the trans-Siberian railway. And of course, the same goes for pipelines such as the Baku-Ceyhan oil pipeline which goes through Georgia."
I ask him if the Russians are making a big push now with maximum pressure while they can, realizing that before long, consumer countries will develop alternate supply routes to avoid Russian strategic pressure. "No, I don't think the Russians are calculating logically or strategically," he says. "I think it's an emotional and volatile process for them. Logically, they should realize that stable relations all around will pay off for them more in the long run. Instead they're driving countries to find alternative partners . . ."
He also speaks about Russia's domestic anti-Georgian campaign. "It wasn't working very effectively until they actually went to all the schools and asked for a list of all the children with Georgian names. Suddenly, the parents realized this was serious. That and the endless corruption of the Russian system became unbearable for them--so now we have tens of thousands of qualified Georgians . . . coming back and repatriating their money to Georgia."
There is a general sense in Georgia that the U.S. could be more supportive but badly needs Russian help over such critical areas as Iran, North Korea and the fight against terror. Does Mr. Saakashvili think that the U.S. could do more? "All we ask for is moral support," he answers. "It's all about shared values. You can see that the U.S. has a lot of moral authority here. We have a historic sympathy for the U.S. and the West. America should know how strong it still is and keep up the pressure at the highest levels. It should help enhance stability and serve as a deterrent to Russian adventurism."
Mr. Saakashvili also says that "Europe is waking up. After the French election, I was invited on a full state visit. That did not happen in the time of [former President Jacques] Chirac--he had other priorities. Europe is becoming aware that it must engage with the 'near abroad' region between itself and Russia. Europe is ending its false pragmatism.
"In return," he continues, "we are doing our utmost to stay engaged in the international community and to fulfill our obligations. Georgia has 2,000 troops in Iraq now deploying to the Iran border . . . to interdict arms smuggling across the border and we have told them not to be passive--[instead] to be active and get results. Before now they were in the Green Zone but now they will be acting as part of the surge, going wherever US troops can go. . . . failure in Iraq will be a disaster for everyone.
"For us it's also a matter of national pride. Georgian soldiers have always been famous for their courage but they've never fought as Georgians--they've always fought in others' armies. We've had generals in Mameluke, Russian and Soviet armies--even top U.S. generals. Now they will be serving in our name and for our country. In the 1920s Georgian officers fought for Polish independence to keep out the Bolsheviks (Retired U.S. Gen. John Shalikashvili's father was one.) Poland has just put up a monument to those officers (to the chagrin of Mr. Putin)."
Nearing the end of our time together, I ask Mr. Saakashvili, whose administration will surely be remembered for the number and pace of its reforms, if he feels he can let up. Is he on schedule, and what's left undone?
Mr. Saakashvili responds by stressing the importance of integrating Georgia's ethnic minorities. "There used to be areas where only Russian was spoken and the central government had no influence. Now they are all voluntarily learning Georgian. It's important that we show an example to secessionist zones, that they have nothing to fear, that in fact their identity will be better protected by us than Russia."
He also speaks about the vital importance of "ridding ourselves of corruption," of reaching "the point of irreversibility. That's why we are in a hurry. If you relax on corruption it will come back in two months."
Mr. Saakashvili notes of his own country as well as many others emerging from the shadows of communism: "These are not societies with much experience in democratic processes. In parts of Eastern Europe they keep electing useless populists who are corrupt. So far the people here have made the right choices but we must govern in a way that's instructional and symbolic so it settles in the public's consciousness, and they learn to evaluate you by achievement. Democracy means constantly outperforming yourself or you are out on your backside. That's as it should be."
As night falls, back in the sky, we fly close enough to the Abkhazia border to see the contrast between well-lit Georgia and Russian darkness over the secessionist zone. From up above, and on the ground, the symbolism is clear enough.
But to Mr. Saakashvili, the more important issue might be: Is this distinction clear to his friends in the West--and how far will they go to stop the darkness from spilling over into Georgia?
Mr. Kaylan is a writer living in New York.
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stratfor.com
GEORGIA: The Georgian Defense Ministry's budget is being increased, continuing reforms meant to bring the armed forces to NATO standards, Georgian Prime Minister Zurab Nogaideli said. Media reports vary about the actual amount of the increase, but most say the current defense budget of around $193 million will increase to between $600 million and $783 million. With the increase, Georgia's defense spending is expected to reach between 4 percent and 4.5 percent of gross domestic product. Nogaideli said he expects parliament to approve the budget increase in defense as well as other sectors by late September.
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Geopolitical Diary: Russia's Attempt to Redefine Regional Relationships
Russian Ambassador to Belarus Alexander Surikov said Aug. 27 that Russia might consider basing nuclear weapons in Belarus if the United States deployed its missile defense system in Poland. A day later, Surikov backed away from the statement and Konstantin Kosachyov, head of the Russian Duma's Foreign Affairs Committee, said Surikov's comment was purely "theoretical." He went on to say that, from a legal standpoint, there is nothing to prevent the deployment of nuclear weapons in any country that agrees to have them.
Russia is engaged in a systematic campaign to both reassert its sphere of influence in the former Soviet Union and take advantage of U.S. preoccupation in the Middle East in order to redefine regional relationships. The Russians have objected to the U.S. anti-missile shield and are demonstrating that they have options in response to the missiles. These statements were designed to rattle Washington's nerves without actually committing Russia to any course.
As a practical matter, the Russians don't really care about the anti-missile system the United States is building; Moscow retains more than enough nuclear-armed missiles to saturate the missile shield. Nor is the transfer of nuclear weapons to Belarus a particularly frightening idea to Washington; whether these missiles are in Russia proper or in Belarus really makes very little difference. This conversation is not about missile defense or nuclear missiles.
It is, rather, about the status of Poland and the Baltic countries -- Lithuania, Latvia and Estonia -- which are all part of NATO. The Russians see the extension of NATO to within 80 miles of St. Petersburg as a direct threat to their national interest and security. They see the placement of an anti-missile system in Poland as important because it is a military commitment by Washington to Poland that goes beyond mere formal membership in NATO. If there is a missile defense system there, it must be defended. The more confident Poland is about Washington's commitment to its security against the Russians, the more confident the Baltic countries will be. Russia does not see a confident Poland as in its national interest.
The threat to place missiles in Belarus is of little consequence. However, if missiles are placed there, then other military force can be based there as well. Where missiles go, so do troops. It is the same principle as is at work in Poland. The return of Russian troops to Belarus and the integration of the Belarusian military with that of Russia in some alliance framework is of very great importance. Belarus is a buffer between Russian forces and NATO. If Belarus were prepared to accept Russian troops, then the balance of power in northern Europe would shift a bit. Poland doesn't have to worry about the Russian army right now, and Poland is fairly assertive about its interests. With Russian troops on the Belarusian-Polish border and all along the Baltic frontiers, the real and psychological dynamics would start to shift.
There is little doubt that Belarus would accept the troops. In spite of recent friction over trade and other issues, Belarus is the least reformed country in the former Soviet Union, and it is probably most in favor of recreating some sort of alliance system -- or even something closer. If Russia wanted to position troops there, Belarus would allow it.
In our view, Russia intends to do precisely that. Given President Vladimir Putin's unfolding strategy, the forward deployment of the Russian army in western Belarus makes a great deal of sense. But the Russians want to be very careful about how those forces are deployed. By warning the United States and Poland that there will be consequences for constructing a missile defense system, the Russians can portray their re-entry into Belarus as a response to Polish recklessness.
The Russians are not planning to invade anyone. But they want to make the region very nervous and aware that Russian power is near, while American power is far away and busy with other things. By configuring this move as a response to missile defense systems, they want to create movements in Poland and in the Baltic states that will constrain some of the more self-confident and assertive leaders in the region. In other words, they want to scare the dickens out of the Poles and the Balts, hoping they will become much less confident in the United States and less likely to give Washington a meaningful foothold -- and undermine the national leaders who got these countries into such a mess.
The strategy makes sense, and it might even work. In any event, all this talk about nuclear weapons and missile defenses has much more conventional geopolitical meanings.
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Ukraine: The Viktors' Parliamentary Struggle
Summary
Ukrainian President Viktor Yushchenko warned some 300 members of parliament Sept. 4 that any decisions they adopted would lack legal force. While technically true, that does not necessarily mean the representatives will not get their way.
Analysis
Some 300 representatives of the Ukrainian parliament loyal to Prime Minister Viktor Yanukovich met Sept. 4 and passed a document barring the scheduled Sept. 30 national parliamentary elections.
The events of Sept. 4 are simply the latest in a now three-year power struggle between Yanukovich and President Viktor Yushchenko, who are themselves the local representatives of a wider conflict between Russia and the West over the future of Ukraine.
The reason for the sudden meeting of Ukraine's parliament, known as the Rada, is simple: Yanukovich fears public opinion has turned against him and that his party will lose in the Sept. 30 elections. Such an electoral defeat would be crippling not just for him, but for Moscow, which sees Yanukovich as Russia's point man in Ukraine. With Russia gunning to restore its influence throughout the former Soviet space, Ukraine is critical. Ergo, Yanukovich -- almost certainly with extensive Russian backing -- struck deals with enough opposition parliamentarians to get a two-thirds majority to suspend the elections.
Yanukovich's problem is that his Rada lacks a legal standing. In April, the pro-Western Yushchenko dissolved the parliament and ordered new elections. Legally and technically, Yushchenko is in the right, as dissolving the Rada is something well within his powers as president.
Technically, the Rada is not even the Rada right now -- it is merely around 300 former parliamentarians meeting to discuss opinion. The reality of the situation, however, is somewhat different from what is legally correct. Yushchenko is not confident in his legal authority. Such insecurity is what prompted him to dissolve the Rada in the first place.
Ukraine has a split government -- and not split in the U.S. sense of executive vs. judiciary vs. legislative -- but rather split between personalities and loyalties to other countries. Put another way, Ukraine's institutions are so weak that even its constitution has very little impact on how the country's political life is led. Instead, charisma is the currency of the nation, and the country's power brokers negotiate among themselves to determine the country's path. Right now, the three most critical are Yanukovich, Yushchenko and Yulia Timoshenko, who is looking to play the kingmaker in the current round of instability.
So will there be elections on Sept. 30? Probably. But not certainly. The next step in the Ukrainian drama will be another meeting of the three to hash out what to do now that the Rada and the presidency have spoken on the issue.
Just as in the Orange Revolution of 2004, the same three people are dominating the country's political life. And just as in 2004, outside powers are destined to play a critical role. But unlike in 2004, the United States is distracted and locked into a bitter internal feud over the future of Iraq
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Reports: Putin Dissolves Government
Wednesday, September 12, 2007
DEVELOPING STORY: Russian news agencies cite the Kremlin as saying that President Vladimir Putin dissolved the government Wednesday.
Russian Prime Minister Mikhail Fradkov asked the Kremlin to dissolve his government, Russian news agencies reported, with less than three months remaining before parliamentary elections.
• FOX Facts: Russia's Government
Fradkov made the decision based on "the approaching major political events in the country and a desire to give the president full freedom in making decisions, including personnel," Fradkov was quoted by ITAR-Tass as saying. A Kremlin spokesman could not immediately comment on the report.
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In electoral maneuver, Putin appoints a new prime minister
By C.J. Chivers
Wednesday, September 12, 2007
MOSCOW: President Vladimir Putin accepted the resignation of the Russian prime minister Wednesday, and nominated Viktor Zubkov, a low-profile head of a financial crimes agency and confidante of Putin's, to assume the post.
The moves signaled the beginning of an internal Kremlin rearrangement before Parliamentary elections in the late autumn and Putin's expected transfer of presidential power next year.
But an aura of Kremlin mystery filled the day. Analysts and diplomats said they were perplexed by what Putin's pick meant for the pressing and intriguing question of who might succeed him if he steps down next spring at the end of his second term, as he has repeatedly said he would.
And the instant rise to prominence of Zubkov, a previously unheralded insider, added a new element of suspense that had unclear implications for the two Russian officials long regarded as the principal presidential contenders: First Deputy Prime Minister Sergei Ivanov and First Deputy Prime Minister Dmitry Medvedev.
Neither of the men was elevated by the shifts, nor were they pushed aside.
Although in principal Russia holds elections by popular vote, including for president, in practice they are carefully managed by the Kremlin, and are won handily by sanctioned candidates who receive support from the government and state-controlled news media.
Analysts and the Kremlin's own spokesman have said a public endorsement from Putin, who has had durably high public-approval ratings in Russia, will be a prerequisite for a candidate to win the presidency next year. But Putin did not make any signals about whom he might support.
Instead, there was choreographed stagecraft that introduced a new name to the top of Russia's government. And while Putin, in televised remarks, made clear that the shifts were related to the elections, he spoke cryptically about what they would ultimately mean.
"We all together have to think about how to build the structure of power and management so that they would better correspond to the pre-election period and prepare the country for the period after the March presidential election," he said.
The prime minister, Mikhail Fradkov, offered his resignation on national television, using the scripted format to say that Putin could now build "a power structure in light of the upcoming political events."
The move had not been unexpected. Fradkov, a technocrat who had managed government affairs for more than three years without showing ambition for higher office, had been expected to step aside to make way for a presidential contender at some point this autumn.
He had also quarreled publicly with other ministers, which had been regarded by analysts as an unwelcome sign in a government that seeks to show unity as elections draw near. The Wednesday edition of the daily Vedomosti newspaper here had said his resignation was imminent, and that Ivanov would likely succeed him.
But a series of finely timed moves followed the resignation that surprised analysts, diplomats and even political commentators who have close connections to the Kremlin.
Putin gave Fradkov a prestigious government award and directed him to remain at his post until a successor was confirmed. He then promptly nominated Zubkov.
Under the Constitution, the Duma, Russia's lower house of Parliament, has one week to consider his choice. Parliament is firmly under Putin's control, and Boris Gryzlov, the Duma's speaker, expressed support for Zubkov within 20 minutes of his nomination.
Gryzlov said a date for debate on the appointment would be set on Thursday. A senior legislator from the Duma's United Russia faction, a party unequivocally loyal to Putin, quickly announced that Zubkov could be confirmed as soon as Friday afternoon.
Putin is barred by the Constitution from seeking reelection when his second term expires next year, and speculation has swirled through much of his term about whether - and how - he would step down, and who might replace him.
Whether Zubkov had been nominated to serve strictly as a prime minister, as Fradkov had, or was now a presidential contender himself, was an open question. There were signs, however, that at least Ivanov remained confident.
In the evening, he appeared before reporters, looking upbeat and at ease, and said that he expected the nominee would be confirmed. "I think the Duma will review favorably the candidacy of Zubkov," he said.
Zubkov, 65, is relatively unknown; a survey of political experts in 2006 of Russia's 100 most influential politicians, conducted by the Center for Public Opinion Research, ranked him 84th.
But he is a long-time associate of Putin's and has roots in the same political circles in St. Petersburg that Putin and many of his confidantes share.
In 1992 and 1993 he was Putin's deputy at the External Relations Committee of the St. Petersburg mayor's office, and since 1993 he was worked as a supervisor of tax inspectors and financial crimes, first in St. Petersburg, and since 2001 in Putin's federal government.
It was not clear whether his résumé fully matched those of the officials in Putin's inner circle, which is dominated by former officers of the KGB.
Olga Kryshtanovskaya, a sociologist at the Russian Academy of Sciences who studies the current Russian elite and the KGB backgrounds of politicians, said by telephone that she knew of no clear evidence suggesting Zubkov had been in the Soviet Union's intelligence services. She added that that did not mean that he did not have a KGB affiliation.
Zubkov made no public announcement immediately after his nomination.
Andrew Kramer, Serge Schmemann and Michael Schwirtz contributed reporting.
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Geopolitical Diary: Putin's Most Recent Surprise Move
Russian President Vladimir Putin nominated Viktor Zubkov as prime minister on Wednesday, catching many off guard following leaks that First Deputy Prime Minister Sergei Ivanov would replace acting Prime Minister Mikhail Fradkov. Ivanov -- widely seen as a front-runner to replace Putin as president in March 2008 -- was expected to take the post as a stepping stone to the top of the Russian leadership, just as former President Boris Yeltsin anointed Putin his successor by naming him prime minister in January 2000.
But Putin, always a master at keeping people off balance, instead promoted Zubkov, chairman of the Finance Ministry's financial monitoring committee, Rosfinmonitoring. Zubkov and Putin have worked together since the president's days in St. Petersburg in the early 1990s, and after he was called to Moscow, Zubkov was instrumental in Putin's early assault on Russia's oligarchs.
Perhaps not coincidentally, there is a close connection between Zubkov -- who apparently supplanted Ivanov -- and Anatoly Serdyukov, the civilian tax official who replaced Ivanov as defense minister in the February Cabinet reshuffle. It was Serdyukov who took over Zubkov's position in St. Petersburg when the latter was initially called to Moscow, and Serdyukov is also married to Zubkov's daughter.
The surprise appointment of Zubkov as prime minister, like Ivanov's unexpected replacement with Serdyukov, reflects a key principle of Putin's leadership style: Always keep people guessing. Suddenly, the rising star of Ivanov seems somewhat dimmer, and it is anybody's guess who will succeed Putin. The Kremlinologists are going crazy. But the frothing waves on the surface of the Russian political sea distract from the deeper current.
The story of Russia in the near two decades since the Cold War ended is one of precipitous and disastrous economic, political, military and demographic decline. This led to the perception by most (including some in Russia) that the country could be ignored and was no longer an influential global power. Putin's own rise to power was unexpected and created a certain amount of confusion and chaos -- leaving those at home and abroad scrambling to discover just who this new Russian leader was. This uncertainty gave Putin some room to maneuver, since no one was quite sure what he would do.
Putin's goal since taking power has been to reverse the crisis of confidence in Russia and restore the country to the status and "respect" that he (and many Russians) feels it deserves. As Putin settled into his new role, he began taking on the very legs of Russian power that had helped bring him to power and maintain the old system. He attacked the oligarchs, picking them off one by one. He reasserted Russia's power inside its own borders, launching a major offensive against the Chechens. And he began tampering with the energy industry, then the defense industry and the military.
Each time Putin moved, it shook the system, creating uncertainties and insecurities among the entrenched interests and overseas observers. This element of surprise worked to Putin's advantage, keeping opponents and allies alike off balance and leaving the president with the initiative, rather than the response.
Underneath this froth and noise, Putin has relentlessly pursued his core goal -- restoring Russia's "Great Power" status. This has required a significant reshuffling of the domestic deck, and we can now clearly see Russia's efforts in the international arena -- from resumed long-range bomber flights along the European and Pacific coastlines to the very public testing of the "father of all bombs," a much larger version of the United States' Massive Ordnance Air Blast (the "mother of all bombs" meant to inspire shock and awe in the Afghan battlefields and beyond).
These efforts were all designed to obfuscate and distract international observers. All the while, Putin is acting on what he sees as Russia's geopolitical imperatives. As Kremlinologists scramble to decipher the meaning of Zubkov's appointment, they are missing the more significant reality: Russia is back, and it no longer accepts its decline into obscurity. If Zubkov was a surprise, there are many more -- and much more significant ones -- yet in store.
stratfor.com
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Geopolitical Diary: Belarus' Problem with Polish Priests
Belarusian Deputy Prime Minister Aleksandr Kosinets said on Thursday that all foreign Catholic priests would be banned from the country, with the ban taking effect over the next few years. Of the roughly 350 Catholic priests in the country -- it is predominantly Russian Orthodox -- the majority are foreign and almost all of those are Polish. Belarus has been targeting foreign Catholics since last year, deporting all those without papers. Now the campaign is extended to all foreign Catholic priests, regardless of their legal status. Kosinets said "foreign priests cannot conduct religious activities in Belarus because they do not understand the mentality and traditions of the Belarusian people."
What makes this interesting is the strategic position of Belarus. Belarus is the buffer between Russia and Poland. Buffer overstates it. Though there recently have been some tensions between Russia and Belarus, Belarus is as close to an unreformed Soviet republic as still exists. More than any of the former Soviet republics, it would appear eager to welcome back the Soviet Union. In general Russia has, until recently, kept Belarus at arm's length precisely for this reason. Russian President Vladimir Putin had his own problems with Russians nostalgic for the "good old days" and did not need the addition of an unreconstructed Belarus added to the mix.
However, as we already have discussed, the Russians have recently become much more assertive, and the internal disposition of Belarus is less of a barrier to good relations. Indeed, in order for Russia to regain its sphere of influence, Belarus plays a critical strategic role. Russia must have Belarus in its camp if it is to use the window of opportunity available to it to redefine its relations with the Baltics. In particular, Russia has no border with Lithuania. For that, it needs Belarus.
Russia sees Poland as a critical problem. The Poles have been deeply involved in Ukraine before and after the Orange Revolution, and have been particularly vocal in their support of the Baltics against Russian pressure. In addition, the Poles have been eager to host the U.S. anti-missile shield.
Belarus and Russia both remember the role of the Catholic Church, working with the labor union Solidarity, in overthrowing the Polish communist government. For both countries, the disintegration of the Soviet empire started in Poland and was driven by the Catholic Church. The Vatican and Russia have had relatively good relations since the fall of the Soviet Union, but that does not mean much in this climate. Neither Minsk nor Moscow trusts the Catholic Church, or in particular, Polish priests.
Therefore, the decision to begin their expulsion -- even if only over the course of a few years -- is designed not only to get rid of what might be troublesome priests, but also to make certain the Polish population of Belarus, small though it might be, does not become a center of Polish nationalism in Belarus. Perhaps more important, it is a signal to Poland that it will be blocked if it tries to engage Belarus in any way. In addition, it plays to mutual Russian Orthodox sentiment, which ties together nationalists in both Belarus and Russia.
In and of itself, this is a small matter. But in the current context of relations in the region, small matters point to more serious issues. There is increasing tension between Poland and Russia. If Russia wants to regain its sphere of influence in the former Soviet Union, it will have to deal with the Baltics, which are now part of NATO. It cannot do that without aligning with Belarus or without blocking Polish influence. Russia must intimidate Poland as well. The Poles have an element of comfort so long as Belarus is genuinely separate from Russia. It is their buffer zone on the northern European plain.
Therefore, any sign of tension between Poland and Belarus -- particularly coupled with closer alignment between Belarus and Russia -- matters. Normally, the expulsion of foreigners, priests or not, would not register. But now, the expulsion of Polish priests from Belarus does matter, particularly when the Russian Orthodox Church is involved. It points to closer collaboration with Russia and growing tension with Poland. And that can matter a great deal over the coming months.
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There has been extensive speculation about what will happen in Russia after next spring's presidential elections. It has long been assumed that Vladimir Putin, although constitutionally prevented from running for re-election, will somehow find a way to continue running Russia. Finding such a way would not be unpopular. Putin has a great deal of support in Russia, and there is serious concern about what would happen if he transferred power to someone else. This is a case in which an extra-constitutional solution would calm public fears rather than excite them.
Putin on Monday gave the first direct indication of how he is planning to cope with the problem. Rather than trying to hold power without having a formal position in the government, Putin suggested that he would become prime minister after leaving office. Putin said the idea "is quite a realistic proposal," though he added that it is too early to think about this option. Since it is but half a year from election time, it is hardly too early to think about these things -- and Putin is not a man given to idle speculation in public -- so it is reasonable to assume that Putin is letting the country know that he will be changing jobs but neither leaving government nor abandoning power.
The Russian Constitution has, like all constitutions, ambiguities; and being quite new, it has few legal precedents. There is minimal constitutional reason why effective power couldn't rest with the prime minister's office while the president serves as the head of state and ceremonial figurehead. The way this would work is relatively simple. United Russia, a leading Russian political party, nominated Putin for one of its leading positions. Until now Putin has not formally belonged to any party (although he is clearly part of United Russia), saying the president should be beyond politics.
At a party congress, party member Sergey Borisov pleaded with Putin to take a leadership position and lead the party, saying, "So long as the state is outside a party, our party system is bulky and, to be honest, a somewhat decorative institution with little influence. I believe that by participating in one of the parties, you, Vladimir Putin, would make a large contribution to a stronger democracy and a multiparty system." Putin replied, saying, "I thankfully accept your proposal that I should head the United Russia ticket." And so it was done.
In our opinion, Putin had both the authority and the informal levers to dominate Russian politics without holding any formal office, simply working in the background. However, this maneuver makes things simple. Whoever replaces Putin as president will be head of state; Putin will be head of government. Putin moves his desk, or he might not even bother, keeping it right where it is.
We would say this is the end of democracy in Russia, except for the fact that it is going to be a very popular move and it doesn't clearly violate the constitution in any way. What it does do is promise Russia long-term continuity in leadership by a popular leader. It also means that there will not be an extended period of uncertainty in Russia about the political future, and it will cut off speculation outside of Russia about whether a post-Putin Russia would be less assertive, or at least whether a transition would provide some breathing room.
The answer is now in, although it is not surprising. There will be no post-Putin Russia, at least for the foreseeable future. There will be no transitional period. There will be no breathing space. Russia will continue to assert itself without interruption.
stratfor
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Geopolitical Diary: Georgia and Ukraine's Russian Problem
The former Soviet states of Georgia and Ukraine appear to be slipping further away from Russian control, but a closer look reveals that the opposite may well be occurring.
Georgia is in the midst of a fresh bout of political instability, this time due to dissatisfaction with President Mikhail Saakashvili, who rose to power in the 2003 Rose Revolution, a regime change that has greatly vexed Moscow. Saakashvili's popularity has plummeted to numbers that would elicit a policy change out of George Bush, and the opposition is beginning to organize. Just as the Rose Revolution ousted an anti-Russian, President Edward Shevardnadze, in favor of an even more anti-Russian, Saakashvili, the new opposition is yet more anti-Russian.
Ukraine seems to be emerging from instability for the first time since the primordial ooze retreated. Final results from the Sept. 30 parliamentary elections gave the two parties that spawned the 2004 Orange Revolution -- President Viktor Yushchenko's Our Ukraine and the eponymous Bloc Yulia Timoshenko -- the seats they need to eject pro-Russian forces from government again.
Yet all is not as it seems.
In Georgia, the Secretary-General of NATO, Jaap de Hoop Scheffer himself, visited on Thursday, and while warning unnamed countries not to interfere in NATO's expansion efforts, flatly stated that Georgia was not going to be on the alliance's candidate list any time soon. De Hoop Scheffer went on to indirectly criticize some of Saakashvili's policies, implying that not only were they slowing Georgia's accession efforts, but also unnecessarily souring relations with Russia.
Back in Ukraine, Yushchenko landed his own surprise by opining that once he and Timoshenko hammer out a coalition deal, several key posts should be reserved for his pro-Russian archrival, Party of Regions' Viktor Yanukovich. The (unspoken) logic was that Timoshenko is an overbearing, vindictive harpy who uses government office to enrich her allies and punish her enemies, and Yushchenko would rather have his enemies right where he can see them.
So NATO is giving Georgia the cold shoulder even as Yushchenko -- albeit for his own reasons -- is offering the Russians a say in how the Ukrainian government is run. Added together, two of the most critical states to the Russian effort to reassert its influence seem to be shifting to a more neutral stance, despite public developments to the contrary.
Russia now has an interesting decision to make. Both states are ameliorating the pain they have regularly caused the Kremlin in the past four years, and Moscow could well sit on its laurels. But the Russians have more fish to fry. With the United States military obsessed with Iraq, Moscow will never have a better opportunity to retake influence in its near abroad, so quiet realignments may not quite be enough for opportunity-rich Russia. The Kremlin may well insist on more public capitulations.
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1146 GMT -- GEORGIA, RUSSIA -- The former chief of the Georgian Defense Ministry's procurement unit, an official with access to top secret information, has fled to Russia from Turkey, Georgia's interior minister told President Mikhail Saakashvili during a televised government session Oct. 4, online magazine Civil Georgia reported Oct. 5. The official, Iason Chikhladze, is wanted for misuse of power and embezzlement in a case that also involves charges against former Defense Minister Irakli Okruashvili, according to the General Prosecutor's Office.
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1123 GMT -- RUSSIA -- The presidents of Russia's breakaway republics of Abkhazia and South Ossetia planned to meet in Moscow on Oct. 5 to discuss the situations in Georgia and their regions, Abkhaz President Sergei Bagapsh told Interfax. Bagapsh and Georgian President Eduard Kokoity will meet to coordinate their moves, "given the growing tensions in Georgia and the latest attempts to further stoke the Georgian-Abkhaz and Georgian-Ossetian conflicts," Bagapsh was quoted as saying.
stratfor
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Russia urges US missile 'freeze'
Russia has called on the US to "freeze" plans to employ missile defense facilities in eastern Europe.
After high-level talks in Moscow, Foreign Minister Sergei Lavrov said Russia saw the shield as a "potential threat" and wanted to "neutralize" it.
US Secretary of State Condoleezza Rice denied any threat to Russia, saying she wanted both countries to work together.
Earlier, however, Russian President Vladimir Putin signaled he would not support American plans.
He urged Washington "not to force" a planned deployment - of a radar in the Czech Republic and interceptors in Poland - on Russia.
Mr Putin also threatened to abandon a key nuclear missile treaty which he said was outdated.
Map of US missile defense systems
After meeting President Putin Ms Rice went into a "2+2" meeting with her counterpart, Mr Lavrov, and the two countries' defense secretaries, Robert Gates and Anatoly Serdyukov.
The atmosphere afterwards was glum, says the BBC's Richard Galpin in Moscow. It was clear the two sides had made little progress in tackling the increasing number of problems dogging their relationship.
Mr Gates said he and Ms Rice had put several new ideas to the Russians, but indicated that they had not yet been accepted.
"Our talks reflected the complex, multi-faceted relationship the US and Russia have," he said.
"We remain eager to be open and full partners with Russia in missile defense... we discussed a range of proposals we hope they will accept."
The US says it needs a missile defense system to counteract "rogue states" like Iran and North Korea.
The Kremlin has asked the US why it cannot instead use Russian-operated early warning radar in Azerbaijan.
Mr Gates said while that radar might be used, it was not capable of guiding interceptor missiles.
President Putin said at the start of the talks that it would be difficult to remain part of the Intermediate Range Nuclear Forces (INF) treaty unless it was expanded to include more countries than just the US and Russia.
The reason, he said, was that other countries were developing these kinds of weapons systems - including those close to Russia's borders.
Analysts say President Putin's threat to withdraw from the treaty is yet another diplomatic move to pressurize the Americans.
The treaty, which limits US and Russian short and medium range missiles, was signed 20 years ago and led to the elimination of almost 3,000 Russian and American missiles.
Split on Iran
Russia has also threatened to leave the Treaty on Conventional Armed Forces in Europe if it is not ratified by all Nato nations.
Russian defense analyst Alexander Goltz said this military agenda for the talks suited Mr Putin as it distracts his Western critics from the subjects of democracy and human rights.
Mr Putin does not want any Western interference into his plans for continued political involvement when he has to stand down as president next March, Mr Goltz said.
The US-Russian talks also covered the Iranian nuclear issue, after which Mr Lavrov criticized US sanctions and US hints about using military force against Iran, which he said "contradict our collective efforts" to negotiate a solution.
Ms Rice and Mr Gates were in Moscow for two days of talks, which were also expected to cover Kosovo and a nuclear weapons treaty to succeed START, which expires in 2009.
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Putin's visit to Iran to go ahead
Russian President Vladimir Putin has confirmed that he will visit Iran on Monday as planned, despite reports of a possible plot to kill him there.
"Of course I'm going," Mr Putin told a news conference, ending earlier uncertainty about the visit.
The Interfax news agency on Sunday cited unnamed Russian security service sources as saying suicide bombers were plotting to kill Mr Putin in Tehran.
Iran's foreign ministry dismissed the reports as "completely baseless".
Foreign ministry spokesman Mohammad Ali Hosseini said Mr Putin was due to arrive in Tehran on Monday evening, before attending a summit of Caspian Sea heads of state on Tuesday.
Mr Putin would be the first Russian leader to visit Iran since Soviet dictator Joseph Stalin went there in 1943.
Nuclear concerns
Mr Putin said he would discuss Iran's controversial nuclear programme with Iranian leaders. "It is futile to frighten Iran and its people. They are not scared," Mr Putin said.
He called for a peaceful resolution of the dispute over Iran's nuclear research and urged the international community to show patience in the matter.
He was speaking at a news conference in Wiesbaden, Germany, following talks with German Chancellor Angela Merkel.
The US accuses Iran of seeking to develop nuclear weapons - but Iran insists its programme is entirely peaceful.
Mrs Merkel said Iran must show "greater transparency" on the nuclear issue and abide by UN resolutions. "In our view it's also clear that if the Iranian leadership does not do this, then there must be a round of new sanctions," she said.
'Erroneous reports'
Mr Putin's spokesman Dmitry Peskov confirmed that the earlier uncertainty about the president's visit to Iran was linked to the alleged assassination plot.
"These reports were very serious but I can't give you any detail on the nature of what our security services found out because it's all very sensitive", he told the BBC.
Interfax said that according to Russian security service sources, several groups of suicide bombers had been preparing for an attack in Tehran.
The services had relied on information received from several unnamed sources outside the country, the agency said.
Meanwhile, Mr Hosseini said the reports were "part of a psychological war waged by enemies to disrupt relations between Iran and Russia".
"Such erroneous reports will have no effect on the programme already decided upon for Mr Putin's visit to Tehran," he said.
Correspondents say Moscow and Tehran have good relations. Russia is helping to build the controversial Bushehr nuclear power plant in southern Iran.
'Radical organisations'
A member of the Russian parliament's security committee, Gennady Gudkov, said the assassination plot reports were likely to have a "fairly high level of reliability".
"There are enough radical organisations, forces and movements of an extremist nature, oriented against Russia, which would like to settle a score with the Russian president," he told the state-owned Russian news channel, Vesti TV.
"There are certainly organisations of this kind in Tehran," he said.
Russian officials have said several plots to assassinate Mr Putin on foreign trips have been uncovered since he became president in December 1999.
Shortly after his election, Ukrainian security services said they had foiled an attempt to kill Mr Putin at an informal summit of former Soviet republics in the Black Sea resort of Yalta.
In 2003, police in London said they had arrested two men in connection with another plot to assassinate him.
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Russia: How Iran Figures in Talks with the West
Russian President Vladimir Putin said Oct. 11 that not only is a nuclear-armed Iran not in Russia's interest, but it would pose a greater threat to Russian national security than to European or U.S. security. This is not just meant to serve as fodder in Moscow's upcoming negotiations with the West; it also happens to be true.
The Russian government is engaging the United States in a series of high-level summits this week and this coming weekend involving officials from the countries' respective Foreign and Defense ministries. Among the many personalities involved are U.S. Secretary of State Condoleezza Rice and Russian First Deputy Prime Minister Sergei Ivanov. The nature of these talks is as broad as it is central to the states' grand strategies for dealing with the size and disposition of both countries' military forces, as regulated by the Conventional Forces in Europe and the Strategic Arms Reduction treaties. Considering the Americans' preoccupation with Iraq and the rising prominence of anti-missile defenses in Russian-American talks, the status of the Iranian military and of its nuclear program are sure to play a central role.
Putin's public statement that Russia is concerned about a potential Iranian nuclear weapon is an excellent way to steer the talks in a direction favorable to Moscow's interests.
Putin knows full well that a nuclear-armed Iran would greatly complicate everything the United States is attempting to accomplish in the Middle East, and it is always useful to remind the Americans that the Russians are in the position to either grant or deny the Iranians that capability on the eve of grand strategic talks. After all, it is Russia that is building a nuclear power plant for the Iranians at Bushehr.
But this is not all just posturing before a major round of talks.
Putin is perfectly capable of looking at a map. Russia -- not the United States or Europe -- is Iran's neighbor, and the demonstrated 900-mile range of Iran's Shahab-3 missile brings a great many of Russia's industrial and population centers into potential striking distance. Should the Iranian missile actually reach the 1,500 miles that Tehran claims, it could even hit Moscow. Of the Western states, only those in the eastern Balkans are potentially at risk (and only if the 1,500-mile figure proves true). It is not so much that Russia believes an Iranian attack is imminent -- this would be suicidal for Iran, to say the least -- but rather that the shifts in the balance of power that a nuclear-armed Iran would cause would be far more detrimental to Moscow than to Washington.
There are very good reasons why the Russians have been dragging their feet at Bushehr, a project that was supposed to become operational nearly a decade ago. Putin is perfectly happy to take Iran's money, but if he can get a better deal from Washington on the broader dispensation of U.S. forces in the Eurasian theater, he is perfectly willing to throw Tehran under the American bus. Beep beep.
strafor
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Second post of the morning
Geopolitical Diary: The Price of Russian Cooperation
U.S. Secretary of State Condoleezza Rice is scheduled to travel to Moscow on Friday for three days of talks with Russian First Deputy Prime Minster Sergei Ivanov on the minor topic of the future of the post-Cold War treaty structure. We say "minor" because all the talk of conventional forces placement and nuclear weapons limitations is but the tip of the iceberg. The two and their respective negotiating teams will in fact be hashing out the deepest Eurasian security realignments since the end of the Cold War in 1989.
Formally, three independently large topics are on the agenda. The first is the status of the Conventional Armed Forces in Europe Treaty (CFE), which governs the size and disposition of non-nuclear nuclear hardware in the NATO and former Warsaw Pact states and their successors. The second is the future of the Strategic Arms Reduction Treaty (START I), which caps the number of long-range nuclear weapons the United States and Russia can field. The final is what will or will not be done about rising U.S. interest in building an anti-ballistic missile system, which would have much of its hardware in Central Europe.
All of these issues are obviously of critical interest to both Moscow and Washington, but in reality they are not what the crux of the discussions will be. The United States has decided to dedicate all of its spare military resources to Iraq, largely stripping it of its ability to ride to the assistance of any of its allies. The Russians -- having been the target of U.S. political, economic and military pressure for the better part of the past two generations -- have obviously noticed this. (They can breathe, for a change.) This is a situation that they greatly wish to take advantage of.
Russia certainly can make the U.S. experience in Iraq even more unpleasant. Both Syria and Iran would dearly love to enjoy full access to Russia's top defense hardware, and the political cover of the Russian U.N. Security Council veto is not something to be scoffed at.
But Russia's interests in the long run are not in the Middle East -- they are in the former Soviet Union. Russian interests involve amendments to the CFE to prevent that treaty from being used as a basis for the expansion of U.S. military deployments in Eurasia. Those interests require an extended START treaty that locks the United States out of launching another nuclear arms race in which Moscow cannot afford to compete. Those interests include undoing any U.S. missile defense program in which Russia is not inseparably involved.
Simply put, the price of Russian cooperation in the Middle East is the United States granting Russia much of what it needs in the former Soviet space to reformulate the foundations of the Soviet Union. That might sound like a very tall order -- and it is -- but it is no less dramatic than what the United States is attempting to do in Iraq: fundamentally alter the balance of power in the Persian Gulf. If Washington is to fundamentally rewire one part of the world to serve its interests, it might just have to let Moscow rewire another part of the world.
Situation Reports
1131 GMT -- RUSSIA -- Russian President Vladimir Putin has said that unless the treaty becomes global, it will be hard for Moscow to remain in the Intermediate-Range Nuclear Forces Treaty, media reported Oct. 12. Putin cited neighboring countries' development of missiles banned by the treaty as a factor in Russia's viewing the treaty's restrictions as difficult.
strafor
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Third post of the morning:
The Russia Problem
By Peter Zeihan
For the past several days, high-level Russian and American policymakers, including U.S. Secretary of State Condoleezza Rice, Secretary of Defense Robert Gates and Russian President Vladimir Putin's right-hand man, Sergei Ivanov, have been meeting in Moscow to discuss the grand scope of U.S.-Russian relations. These talks would be of critical importance to both countries under any circumstances, as they center on the network of treaties that have governed Europe since the closing days of the Cold War.
Against the backdrop of the Iraq war, however, they have taken on far greater significance. Both Russia and the United States are attempting to rewire the security paradigms of key regions, with Washington taking aim at the Middle East and Russia more concerned about its former imperial territory. The two countries' visions are mutually incompatible, and American preoccupation with Iraq is allowing Moscow to overturn the geopolitics of its backyard.
The Iraqi Preoccupation
After years of organizational chaos, the United States has simplified its plan for Iraq: Prevent Iran from becoming a regional hegemon. Once-lofty thoughts of forging a democracy in general or supporting a particular government were abandoned in Washington well before the congressional testimony of Gen. David Petraeus. Reconstruction is on the back burner and even oil is now an afterthought at best. The entirety of American policy has been stripped down to a single thought: Iran.
That thought is now broadly held throughout not only the Bush administration but also the American intelligence and defense communities. It is not an unreasonable position. An American exodus from Iraq would allow Iran to leverage its allies in Iraq's Shiite South to eventually gain control of most of Iraq. Iran's influence also extends to significant Shiite communities on the Persian Gulf's western oil-rich shore. Without U.S. forces blocking the Iranians, the military incompetence of Saudi Arabia, Kuwait and Qatar could be perceived by the Iranians as an invitation to conquer that shore. That would land roughly 20 million barrels per day of global oil output -- about one-quarter of the global total -- under Tehran's control. Rhetoric aside, an outcome such as this would push any U.S. president into a broad regional war to prevent a hostile power from shutting off the global economic pulse.
So the United States, for better or worse, is in Iraq for the long haul. This requires some strategy for dealing with the other power with the most influence in the country, Iran. This, in turn, leaves the United States with two options: It can simply attempt to run Iraq as a protectorate forever, a singularly unappealing option, or it can attempt to strike a deal with Iran on the issue of Iraq -- and find some way to share influence.
Since the release of the Petraeus report in September, seeking terms with Iran has become the Bush administration's unofficial goal, but the White House does not want substantive negotiations until the stage is appropriately set. This requires that Washington build a diplomatic cordon around Iran -- intensifying Tehran's sense of isolation -- and steadily ratchet up the financial pressure. Increasing bellicose rhetoric from European capitals and the lengthening list of major banks that are refusing to deal with Iran are the nuts and bolts of this strategy.
Not surprisingly, Iran views all this from a starkly different angle. Persia has historically been faced with a threat of invasion from its western border -- with the most recent threat manifesting in a devastating 1980-1988 war that resulted in a million deaths. The primary goal of Persia's foreign policy stretching back a millennium has been far simpler than anything the United States has cooked up: Destroy Mesopotamia. In 2003, the United States was courteous enough to handle that for Iran.
Now, Iran's goals have expanded and it seeks to leverage the destruction of its only meaningful regional foe to become a regional hegemon. This requires leveraging its Iraqi assets to bleed the Americans to the point that they leave. But Iran is not immune to pressure. Tehran realizes that it might have overplayed its hand internationally, and it certainly recognizes that U.S. efforts to put it in a noose are bearing some fruit. What Iran needs is its own sponsor -- and that brings to the Middle East a power that has not been present there for quite some time: Russia.
Option One: Parity
The Russian geography is problematic. It lacks oceans to give Russia strategic distance from its foes and it boasts no geographic barriers separating it from Europe, the Middle East or East Asia. Russian history is a chronicle of Russia's steps to establish buffers -- and of those buffers being overwhelmed. The end of the Cold War marked the transition from Russia's largest-ever buffer to its smallest in centuries. Put simply, Russia is terrified of being overwhelmed -- militarily, economically, politically and culturally -- and its policies are geared toward re-establishing as large a buffer as possible.
As such, Russia needs to do one of two things. The first is to re-establish parity. As long as the United States thinks of Russia as an inferior power, American power will continue to erode Russian security. Maintain parity and that erosion will at least be reduced. Putin does not see this parity coming from a conflict, however. While Russia is far stronger now -- and still rising -- than it was following the 1998 ruble crash, Putin knows full well that the Soviet Union fell in part to an arms race. Attaining parity via the resources of a much weaker Russia simply is not an option.
So parity would need to come via the pen, not the sword. A series of three treaties ended the Cold War and created a status of legal parity between the United States and Russia. The first, the Conventional Armed Forces in Europe Treaty (CFE), restricts how much conventional defense equipment each state in NATO and the former Warsaw Pact, and their successors, can deploy. The second, the Strategic Arms Reduction Treaty (START I), places a ceiling on the number of intercontinental ballistic missiles that the United States and Russia can possess. The third, the Intermediate-Range Nuclear Forces Treaty (INF), eliminates entirely land-based short-, medium- and intermediate-range ballistic missiles with ranges of 300 to 3,400 miles, as well as all ground-launched cruise missiles from NATO and Russian arsenals.
The constellation of forces these treaties allow do not provide what Russia now perceives its security needs to be. The CFE was all fine and dandy in the world in which it was first negotiated, but since then every Warsaw Pact state -- once on the Russian side of the balance sheet -- has joined NATO. The "parity" that was hardwired into the European system in 1990 is now lopsided against the Russians.
START I is by far the Russians' favorite treaty, since it clearly treats the Americans and Russians as bona fide equals. But in the Russian mind, it has a fateful flaw: It expires in 2009, and there is about zero support in the United States for renewing it. The thinking in Washington is that treaties were a conflict management tool of the 20th century, and as American power -- constrained by Iraq as it is -- continues to expand globally, there is no reason to enter into a treaty that limits American options. This philosophical change is reflected on both sides of the American political aisle: Neither the Bush nor Clinton administrations have negotiated a new full disarmament treaty.
Finally, the INF is the worst of all worlds for Russia. Intermediate-range missiles are far cheaper than intercontinental ones. If it does come down to an arms race, Russia will be forced to turn to such systems if it is not to be left far behind an American buildup.
Russia needs all three treaties to be revamped. It wants the CFE altered to reflect an expanded NATO. It wants START I extended (and preferably deepened) to limit long-term American options. It wants the INF explicitly linked to the other two treaties so that Russian options can expand in a pinch -- or simply discarded in favor of a more robust START I.
The problem with the first option is that it assumes the Americans are somewhat sympathetic to Russian concerns. They are not.
Recall that the dominant concern in the post-Cold War Kremlin is that the United States will nibble along the Russian periphery until Moscow itself falls. The fear is as deeply held as it is accurate. Only three states have ever threatened the United States: The first, the United Kingdom, was lashed into U.S. global defense policy; the second, Mexico, was conquered outright; and the third was defeated in the Cold War. The addition of the Warsaw Pact and the Baltic states to NATO, the basing of operations in Central Asia and, most important, the Orange Revolution in Ukraine have made it clear to Moscow that the United States plays for keeps.
The Americans see it as in their best interest to slowly grind Russia into dust. Those among our readers who can identify with "duck and cover" can probably relate to the logic of that stance. So, for option one to work, Russia needs to have leverage elsewhere. That elsewhere is in Iran.
Via the U.N. Security Council, Russian cooperation can ensure Iran's diplomatic isolation. Russia's past cooperation on Iran's Bushehr nuclear power facility holds the possibility of a Kremlin condemnation of Iran's nuclear ambitions. A denial of Russian weapons transfers to Iran would hugely empower ongoing U.S. efforts to militarily curtail Iranian ambitions. Put simply, Russia has the ability to throw Iran under the American bus -- but it will not do it for free. In exchange, it wants those treaties amended in its favor, and it wants American deference on security questions in the former Soviet Union.
The Moscow talks of the past week were about addressing all of Russian concerns about the European security structure, both within and beyond the context of the treaties, with the offer of cooperation on Iran as the trade-off. After days of talks, the Americans refused to budge on any meaningful point.
Option Two: Imposition
Russia has no horse in the Iraq war. Moscow had feared that its inability to leverage France and Germany to block the war in the first place would allow the United States to springboard to other geopolitical victories. Instead, the Russians are quite pleased to see the American nose bloodied. They also are happy to see Iran engrossed in events to its west. When Iran and Russia strengthen -- as both are currently -- they inevitably begin to clash as their growing spheres of influence overlap in the Caucasus and Central Asia. In many ways, Russia is now enjoying the best of all worlds: Its Cold War archrival is deeply occupied in a conflict with one of Moscow's own regional competitors.
In the long run, however, the Russians have little doubt that the Americans will eventually prevail. Iran lacks the ability to project meaningful power beyond the Persian Gulf, while the Russians know from personal experience how good the Americans are at using political, economic, military and alliance policy to grind down opponents. The only question in the Russian mind pertains to time frame.
If the United States is not willing to rejigger the European-Russian security framework, then Moscow intends to take advantage of a distracted United States to impose a new reality upon NATO. The United States has dedicated all of its military ground strength to Iraq, leaving no wiggle room should a crisis erupt anywhere else in the world. Should Russia create a crisis, there is nothing the United States can do to stop it.
So crisis-making is about to become Russia's newest growth industry. The Kremlin has a very long list of possibilities, which includes:
Destabilizing the government of Ukraine: The Sept. 30 elections threaten to result in the re-creation of the Orange Revolution that so terrifies Moscow. With the United States largely out of the picture, the Russians will spare no effort to ensure that Ukraine remains as dysfunctional as possible.
Azerbaijan is emerging as a critical energy transit state for Central Asian petroleum, as well as an energy producer in its own right. But those exports are wholly dependent upon Moscow's willingness not to cause problems for Baku.
The extremely anti-Russian policies of the former Soviet state of Georgia continue to be a thorn in Russia's side. Russia has the ability to force a territorial breakup or to outright overturn the Georgian government using anything from a hit squad to an armored division.
EU states obviously have mixed feelings about Russia's newfound aggression and confidence, but the three Baltic states in league with Poland have successfully hijacked EU foreign policy with regard to Russia, effectively turning a broadly cooperative relationship hostile. A small military crisis with the Balts would not only do much to consolidate popular support for the Kremlin but also would demonstrate U.S. impotence in riding to the aid of American allies.
Such actions not only would push Russian influence back to the former borders of the Soviet Union but also could overturn the belief within the U.S. alliance structure that the Americans are reliable -- that they will rush to their allies' aid at any time and any place. That belief ultimately was the heart of the U.S. containment strategy during the Cold War. Damage that belief and the global security picture changes dramatically. Barring a Russian-American deal on treaties, inflicting that damage is once again a full-fledged goal of the Kremlin. The only question is whether the American preoccupation in Iraq will last long enough for the Russians to do what they think they need to do.
Luckily for the Russians, they can impact the time frame of American preoccupation with Iraq. Just as the Russians have the ability to throw the Iranians under the bus, they also have the ability to empower the Iranians to stand firm.
On Oct. 16, Putin became the first Russian leader since Leonid Brezhnev to visit Iran, and in negotiations with the Iranian leadership he laid out just how his country could help. Formally, the summit was a meeting of the five leaders of the Caspian Sea states, but in reality the meeting was a Russian-Iranian effort to demonstrate to the Americans that Iran does not stand alone.
A good part of the summit involved clearly identifying differences with American policy. The right of states to nuclear energy was affirmed, the existence of energy infrastructure that undermines U.S. geopolitical goals was supported and a joint statement pledged the five states to refuse to allow "third parties" from using their territory to attack "the Caspian Five." The last is a clear bullying of Azerbaijan to maintain distance from American security plans.
But the real meat is in bilateral talks between Putin and his Iranian counterpart, Mahmoud Ahmadinejad, and the two sides are sussing out how Russia's ample military experience can be applied to Iran's U.S. problem. Some of the many, many possibilities include:
Kilo-class submarines: The Iranians already have two and the acoustics in the Persian Gulf are notoriously bad for tracking submarines. Any U.S. military effort against Iran would necessitate carrier battle groups in the Persian Gulf.
Russia fields the Bal-E, a ground-launched Russian version of the Harpoon anti-ship missile. Such batteries could threaten any U.S. surface ship in the Gulf. A cheaper option could simply involve the installation of Russian coastal artillery systems.
Russia and India have developed the BrahMos anti-ship cruise missile, which has the uniquely deadly feature of being able to be launched from land, ship, submarine or air. While primarily designed to target surface vessels, it also can act as a more traditional -- and versatile -- cruise missile and target land targets.
Flanker fighters are a Russian design (Su-27/Su-30) that compares very favorably to frontline U.S. fighter jets. Much to the U.S. Defense Department's chagrin, Indian pilots in Flankers have knocked down some U.S. pilots in training scenarios.
The S-300 anti-aircraft system is still among the best in the world, and despite eviscerated budgets, the Russians have managed to operationalize several upgrades since the end of the Cold War. It boasts both a far longer range and far more accuracy than the Tor-M1 and Pantsyr systems on which Iran currently depends.
Such options only scratch the surface of what the Russians have on order, and the above only discusses items of use in a direct Iranian-U.S. military conflict. Russia also could provide Iran with an endless supply of less flashy equipment to contribute to intensifying Iranian efforts to destabilize Iraq itself.
For now, the specifics of Russian transfers to Iran are tightly held, but they will not be for long. Russia has as much of an interest in getting free advertising for its weapons systems as Iran has in demonstrating just how high a price it will charge the United States for any attack.
But there is one additional reason this will not be a stealth relationship.
The Kremlin wants Washington to be fully aware of every detail of how Russian sales are making the U.S. Army's job harder, so that the Americans have all the information they need to make appropriate decisions as regards Russia's role. Moscow is not doing this because it is vindictive; this is simply how the Russians do business, and they are open to a new deal.
Russia has neither love for the Iranians nor a preference as to whether Moscow reforges its empire or has that empire handed back. So should the United States change its mind and seek an accommodation, Putin stands perfect ready to betray the Iranians' confidence.
For a price.
stratfor
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Fourth post of the morning. In my opinion, all of them are quite important.
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Geopolitical Diary: Russia Warns Against U.S. Military Action in Iran
Russian President Vladimir Putin on Tuesday finally arrived in Tehran for meetings with Iranian leaders, including Ayatollah Ali Khamenei. He also met with leaders from Russia, Azerbaijan, Kazakhstan and Turkmenistan. Putin's meetings with Khamenei and Iranian President Mahmoud Ahmadinejad made his visit to Iran the center of discussion rather than the Caspian summit that was taking place. Leaks of assassination threats had already called attention to the visit. In order to thwart such threats and showcase his bravery, Putin arrived late from Germany and his time of arrival was not announced; this helped bring global attention to the meeting.
What came out of the meeting was not surprising but it was very important. Putin made it known that Russia would oppose any U.S. military action against Iran. More significant, he reached an agreement with the leaders of Caspian states that none of them would permit their soil to be used by the United States for such an attack. Putin was quoted as saying, "We should not even think of using force in this region. We need to agree that using the territory of one Caspian Sea [state] in the event of aggression against another is impossible."
The immediate target of the comments was Azerbaijan, where there has been discussion of U.S. use of airfields in the event of war against Iran. Putin made it clear -- and there did not seem to be much dissent -- that general cooperation by former Soviet Union nations with the United States in a war against Iran would place them on a collision course with Russia. This was not Russia's position in Afghanistan or Iraq. Moscow is taking a different tack on Iran.
Two themes have now merged. Until this point, the Russians have used U.S. preoccupation with Iraq to increase their influence in the former Soviet Union. Now Putin has upped the ante, making it clear that Russia can dictate the parameters of acceptable behavior to at least the countries around the Caspian and, by logical extension, in the former Soviet Union. It is certainly important that Putin does not want a U.S. attack against Iran. It is extremely important that Putin is now openly limiting the freedom of action of former Soviet republics. He is making Iran a test case.
Putin has a range of levers to use against these countries, the most important being the fact that their ministries, police and military forces are deeply penetrated by the Russian FSB, the successor to the KGB. Put differently, as Soviet states, these countries' regimes were intimately tied to the KGB. Following independence, that relationship did not atrophy. Apart from economic and military options, the Russians know what is happening in these countries, and can influence their affairs with relative ease. In Tehran Putin read the riot act to Azerbaijan, and we expect that it heard it.
The Russians did not give Tehran everything it wanted. No apparent breakthrough was reached on the question of Russian support for construction of an Iranian nuclear reactor in Bushehr. Putin refused to give guarantees on resumption of fuel deliveries, but did agree to discuss it with the Iranians during a planned visit by Ahmadinejad to Moscow. But Putin did give two important things: he said Russia would oppose military intervention and that it would work to prevent any Caspian state from participating in such intervention.
This of course leaves the question of what Russia might do. Its ability to protect Iran is negligible. However, during the Cold War the Soviets practiced linkage. During the Cuban missile crisis, the United States expected Russia to do nothing in Cuba, but to act against Berlin in response to an invasion. Russia will not do anything directly to help Iran. But Moscow is interested in countries in the former Soviet Union, where Russia wants to redefine its status and the United States has few military options. Georgia in the Caucasus and the Baltic countries are of interest to the United States and very vulnerable to Russian response.
Putin did two things at the meeting. First, he opposed a U.S. attack against Iran. He then implicitly claimed primacy within the former Soviet Union, imposing solidarity among Caspian states. It is the second thing that is the most striking. In doing this, Putin implicitly broadened the range of responses possible if the United States does attack Iran.
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And a fifth post-- also important!
ISRAEL, RUSSIA: Israeli Prime Minister Ehud Olmert will travel to Russia on Oct. 18 for surprise talks with Russian President Vladimir Putin and will return to Israel the same day, Olmert's office said. The discussions reportedly will focus on the Palestinian peace process and Iran's nuclear program and regional ambitions.
RUSSIA, IRAN: Russian President Vladimir Putin said Russia is serious about finishing Iran's Bushehr nuclear power plant, IranMania reported. Putin said there are some minor issues that need to be resolved before the plant's completion and asserted that delays have been because of technical and legal issues and are not politically motivated. Putin said Russia and Iran have signed an agreement that the nuclear fuel from Bushehr must be returned to Russia, an issue "on top of the agenda in meeting between experts from the two sides."
stratfor.com
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To me this reads like we just caved in big time, and then got sodomized by Putin in his statements while in Iran:
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1149 GMT -- RUSSIA, UNITED STATES -- U.S. Defense Secretary Robert Gates and Secretary of State Condoleezza Rice told Russian President Vladimir Putin during their recent meeting that the United States would be willing to delay operationalizing a missile defense system in Europe until Washington and Moscow have jointly validated that Iranian ballistic missiles posed a threat, the Financial Times reported Oct. 17, citing a Pentagon spokesman.
stratfor
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"...reads like we just caved in big time"
Here's another look and excerpt:
http://www.euro2day.gr/articlesfna/45451397/
"A senior US defense official said Washington would continue negotiating with Poland and the Czech Republic towards building the missile defense installations. But he said the US was willing to leave the system switched off until the US and Russia had jointly validated that Iranian ballistic missiles posed a threat. "It is our intention to proceed with the construction of missile defense in Europe," said Geoff Morrell, Pentagon spokesman. "But the pace at which it becomes operational could be adjusted to meet the threat."
Who snowed whom? a) Putin is adamant about no bases in those locations. America is apparently going to begin construction. This looks like a wink of face saving - we won't flip on the switch - while we go right ahead and build. b) The delay could fit with our process of perfecting the technology. c) It puts an incentive on Putin to keep Iran unready and non-nuclear. d) Ahmadinejad has a big-mouth. He isn't going to achieve full nuclear readiness without shouting it from the rooftops. It will be meaningless to wait for 'validation' from Moscow after Iran declares itself ready, willing and able. Switch it on.
Meanwhile, most of what those meetings in Russia should have been about was the restraint we need right now from them. We'll see in time if we received any.
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To make them operational reqjuires Moscow's agreement though , , WTF?
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Russia: Stepping into the Ukrainian-Tatar Energy Scuffle
Summary
The battle between Ukraine and Tatarstan over some important energy assets has put Russia in the peculiar position of having to choose which of the two strategic regions it is more interested in controlling.
Analysis
Ukraine and the government of Russia's Tatarstan region have been battling for control of an unusual company called UkrTatNafta for more than a year. The company, created in 1994, controls Ukraine's largest refinery -- Kremenchug -- and accounts for one-third of Ukraine's oil production. Ownership of the company is split; Ukrainian state energy company Naftogaz Ukrainy holds 43 percent, Tatarstan holds 38 percent and a handful of small companies have miniscule shares.
Kiev's -- and Moscow's -- problem was that the Tatars controlled UkrTatNafta's operations. Tatarstan is Russia's largest autonomous region, with a population of 1 million Muslim Tatars. It also is fiercely independent and oil-rich. The region is somewhat contained because the Kremlin leaves it alone and it is geographically surrounded by Russia proper. But Russia loathes Tatarstan's receiving funds from projects outside Russia.
In May, Ukraine's then-prime minister, Viktor Yanukovich, attempted to usurp the Tatar government's influence and placed Naftogaz Ukrainy's 43 percent of UkrTatNafta directly under the premiership's control. Afterward, he banned all Ukrainian administrators from meetings and began "reorganizing" UkrTatNafta to favor the pro-Russian premier and his faction's interests. He named a Russian, Vladimir Fedotov, as UkrTatNafta's director. Naturally, Yanukovich's moves incensed the Tatar shareholders, who have also faced fraud cases that started popping up in recent months.
But things have changed in Ukraine; Yanukovich and his faction lost the Sept. 30 elections and the pro-Western Orange Coalition returned to power -- and control over UkrTatNafta now is up in the air. It is not known whether ownership of the crucial company falls to the outgoing Yanukovich, the incoming premier Yulia Timoshenko or the original consortium of Naftogaz Ukrainy and Tatarstan. Moreover, on Oct. 19, armed men seized the refinery -- though it is unclear whether they belong to Timoshenko or Yanukovich.
What is clear is that Yanukovich's changes mean that the office of Ukraine's prime minister will have the most say, and the anti-Russian Timoshenko will almost certainly hold that office.
Though this seems like a mere property squabble, it has put Russia in a unique position. Russia has geopolitically significant interest in making sure that neither Tatarstan nor Ukraine under Timoshenko holds UkrTatNafta and its assets.
Yanukovich's moves against Tatarstan most likely were spurred by the Russians, who have a strategic interest in denying Tatarstan access to money -- especially from energy -- from outside Russia. Moscow planned on preventing the situation by using the pro-Russian Ukrainian government to usurp control of UkrTatNafta.
However, Russia now has a strategic interest in not allowing Ukraine's pro-Western Orange Coalition to control large energy assets that also give Ukraine more independence from Russian energy.
In the midst of Russia's internal consolidation and international resurgence, it must choose whether to aid Ukraine or Tatarstan in the squabble. Moscow will have to choose between allowing one of its most self-determining regions (and a Muslim one at that) access to funds from outside Russia and allowing its most vital periphery states access to further energy independence.
stratfor
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October 25, 2007, 7:45 a.m.
Red Army Dreams
You’re getting colder.
By Michael Ledeen
If you were Vladimir Putin, what would you think of Iran? You’d worry a lot about it, that’s what. Your own Russia is losing Russians, due to the usual grim demography that characterizes most of Europe. And, like the others, you’ve got a Muslim problem, with surging birthrates both within Russia and all along its borders, from Chechnya to the ‘stans. Lots of those Muslims are under Iranian sway. You know that well, having been trained in, and elevated by, the KGB, which was horrified to see radical mullahs and imams receiving money, Korans, and even weapons from the Islamic Republic. When Osama bin Laden claims that the defeat of the Soviet Empire was an Islamic victory, there’s a certain element of truth to his words, and you know that the Iranians want to build on that foundation to extend their power deeper into your domain.
You therefore want to see this regime destroyed. The last thing in the world that you want is a gigantic Chechnya, armed with nuclear weapons, launching waves of fanatical terrorists against infidels like you.
But you don’t have much of an army any more, and anyway you don’t want a war with the mullahs. Direct attack is not your way; you prefer cunning. You’d rather have someone else do your dirty work for you. Someone like Israel, or better yet, the United States. And best of all would be to get the Americans to do it in such a way that the whole world condemns them for it.
The first step is to convince the Iranians that you’re their most reliable ally and their smartest friend. So you stand up for them in the big assemblies of global public opinion, you decry the sanctions aimed against them, and you — whose country after all has provided the Iranians with nuclear technology ever since Clinton and Gore approved it — swear up and down that there is no evidence of a nuclear weapons program in Iran. You organize regional conferences to flatter the mullahs, you even fly to Tehran to meet with the Supreme Leader, thereby elevating his status. And all the while, you whisper to them that they are strong while the Americans are weak, that they can do anything they wish to the West, for the West has no stomach for further confrontation. You famously sell them an advanced air defense system with which they can protect their nuclear facilities in the event the Israelis or the Americans lash out.
You assure them of your unqualified support, and urge them on to intensify their war against the Americans. This is not just a matter of diplomatic tactics. Unlike the Americans, your people have long operated inside Persian borders. Some of those bearded and beturbaned fanatics depend on you for money and opium, and for the blonde haired women in your embassy and consulates. You have real influence, and you use it to advance the careers of the most fanatical zealots, people like Mahmoud Ahmadinejad, people who do not want to charm the Americans, but antagonize them. Ali Larijani was too charming, and you managed to move him out to be replaced by the monotonous Jalili, renowned for his lack of elegance and his aggressive strategy of enlisting Latin American leftists to encircle the Americans.
Since you want the mullahs destroyed, you take care to sell them defensive systems that will not really defend them against either the greater or the lesser Satan. Since you do not want them to have a workable atomic weapon, you manage to have your Tehran-based nuclear physicists repeatedly find new problems. You know that the Iranians will eventually build the accursed thing, but there, too, you have a stratagem. You will find a way to provide your great admirer, Condoleezza Rice, with the hard evidence so that she and her president will do your dirty work for you before they head back to California and Texas, leaving you with new challenges in Washington.
To be sure, life being what it is, there are problems. The Persians are clever; they have been practicing deceit far longer than your people, and their long memories include centuries of Russian exploitation and trickery. They do not trust you, and they are constantly alert to signs of your treachery. The Israeli attack on Syria in September was therefore a serious blow to you, because it exposed the hollowness of your vaunted anti-aircraft defense system, the same one deployed across Iran. The mullahs were alarmed, and not entirely assuaged by your assurances that their system was far better than the outmoded stuff you dumped on the Arabs. Your remonstrance to the supreme leader — “if you’d only told us about this secret plan of yours, we’d of course have made sure it was invulnerable to the Israelis” — had good effect, but many of the ruthless men around Khamenei and Ahmadinejad may suspect the truth. Not that they have anywhere to go, as you happily chuckle to yourself.
Your complicated stratagem can easily derail. You want the sanctions to fail, because you want the Americans to face the choice so elegantly stated by Sarkozy and Kouchner: Iran with the bomb, or bomb Iran. Sanctions deflect the momentum driving Washington and Paris toward that fateful choice, thus delaying the day of reckoning. But many good things may well happen en route to decision day. The mullahs are licking their wounds from the turnaround in Iraq, and may try something melodramatic to show that their vaunted “insurgency” is still a potent force. On the other hand, even if that happens they may well have preserved credible deniability, in keeping with their mastery of deception. Perhaps they will instead strike in Afghanistan, but there too they would have to show themselves, and even so the Americans have shown amazing restraint. What does it take to galvanize the Americans? A nuke in Las Vegas?
At such times, you wryly remind yourself of something a KGB station chief once told you: “We’re supposed to tell the Kremlin what the Americans are going to do next. But it’s impossible to know that, since the Americans don’t know themselves.”
It’s not easy to manipulate the world. All in all it was easier when there was a Red Army.
National Review Online - http://article.nationalreview.com/?q=ZTM4OWJmYWRiZThmMmM4MDZlZDNlMTRjZWEyNDVhMTE=
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Garry Kasparov, Dissident
Running for president in Russia is a dangerous enterprise.
BY DANIEL HENNINGER
Thursday, November 1, 2007 12:01 a.m. EDT
One of the current truisms of the news business is that the Internet has shrunk the world, and that everyone knows everything from the Web the moment it happens. Yet sometimes, we know nothing. Last month, the former world chess champion Garry Kasparov announced his candidacy for the presidency of Russia, to be decided in March. The world shrugged at the Kasparov candidacy, and went back to surfing the Web.
Is this because we in the wired world already know all there is to know about what's up in 21st century Russia? Or in fact are we clueless about the place Churchill described as the deepest enigma? Garry Kasparov believes the latter, and so as leader of a grab-bag coalition called Other Russia, he has undertaken his doomed effort to succeed Vladimir Putin. He works hard to get his message out in the West, but he is given relatively short shrift by the professional skeptics among the Western media and its intellectuals. Yes, he has no chance, but the inattention is a mistake.
I believe Garry Kasparov should be regarded as Russia's first post-Soviet dissident. Starting in the 1960s, deep in the Cold War, the world essentially put under its protective custody a generation of anti-Soviet dissidents. Their names became household names--Sakharov, Sharansky, Bukovsky, Medvedev, Sinyavsky, Kopelev, others. Solzhenitsyn, too hot to handle, was exiled in 1974.
The primary reason for analogizing Mr. Kasparov to these dissidents is not for his opposition to the Putin government and his views on Mr. Putin, though these are worth listening to. The more relevant reason is that he believes his life is in danger.
In an interview this past weekend for "The Journal Editorial Report" on Fox cable news, Mr. Kasparov spoke with his characteristic force and animation about what he believes are the underlying weaknesses of a Russia that looks to be thriving under Mr. Putin. Mr. Kasparov was scheduled to fly back to Russia a few days after the interview, and at the end he was asked if he feared for his safety. One could not help but notice that his answer came after a brief but obvious hesitation.
"Yes," he said, "I am. I'm afraid, my family's afraid. It's our greatest concern."
Why? Logic argues against killing Mr. Kasparov. The street demonstrations in Moscow by his group number in the low thousands (though they attract truncheon attacks by a small army of police agents). A murder would make him a martyr in Russia, where he is still revered as a Soviet and Russian hero. As a political threat, he is a fly on the back of the Putin rhinoceros.
But this is Russia. For all the same reasons one could have said the same of the Russian journalists killed or mysteriously dead there in recent years. Their names are also a "dissident" list: Ivan Safronov of Kommersant, Iskandar Khatloni of Radio Free Europe, Paul Klebnikov of Forbes Russia, Anna Politkovskaya of Novaya Gazeta. Freedom House estimates some two dozen journalists have been killed since Mr. Putin came to power. Earlier this month, in Prague and Washington, Radio Free Europe/Radio Liberty held symposiums on the status of Russian media, tied to the first anniversary of Ms. Politkovskaya's murder. Mr. Kasparov was there. Other than the Washington Times, the symposiums received virtually no press coverage in the West.
Mr. Kasparov is no political dilettante. His first article on the status of democracy in Russia appeared on this page in August 1991. He was 28 years old. He came to our offices near the World Trade Center for lunch, and one has to say that at first it was hard to set aside that the fellow discoursing over Chinese food on the West's unseemly affection for Mikhail Gorbachev possessed the most mammoth chess brain in history.
We made him a contributing editor to the Journal editorial page, and in the years since he has written often for these pages on Russia's wild ride to its current state. Across 16 years, Mr. Kasparov's commitment to democratic liberty in Russia and in its former republics has been unstinting. At that September 1991 lunch, Mr. Kasparov proposed an idea then anathema to elite thinking in Washington and the capitals of Western Europe: The West should announce support for the independence of the former Soviet republics--the Baltics, Ukraine, Armenia, Georgia, Moldova and the rest.
One suspects that Vladimir Putin noticed what the young chess champion was saying in 1991 about the old Soviet empire. The Russian president has famously said, "The demise of the Soviet Union was the greatest geopolitical catastrophe of the century."
Russia today is not what it was. Mr. Kasparov, however, has not stopped analyzing what it has become. Briefly, he argues that Mr. Putin's internal and external politics should be seen almost wholly as a function of oil prices, the primary source of revenue for the Russian state and the prop beneath the extended Putin political family. Mr. Putin's "unhelpful" policies on Iran and the like, Mr. Kasparov argues, keep the oil markets boiling--but not boiling over. Money in the bank, at $94 a barrel. He says Mr. Putin is the glue that binds this fabulously wealthy family, and if he left politics in any real sense they would start killing each other.
As to Secretary of State Condoleezza Rice's argument that the West needed Mr. Putin inside the G-7 structure so it could "influence" him, the former chess champion replies: "Occasionally you have to look at the results of your brilliant theories." Bringing Mr. Putin in as G No. 8, he says, "jeopardized the whole concept of this club, seven great industrial democracies."
Arguably these views make Mr. Kasparov a dissident even in the increasingly cynical, "pragmatic" West. To their credit, the West's political elites in the 1970s protected the Soviet Union's dreamers. Today Mr. Putin wants Russia to be seen again as dangerous. It is that. Garry Kasparov deserves protection. He stands for something important. A word from 1600 Pennsylvania Avenue would be a start.
Mr. Henninger is deputy editor of The Wall Street Journal's editorial page. His column appears Thursdays in the Journal and on OpinionJournal.com.
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The Holodomor
By VIKTOR YUSHCHENKO
November 26, 2007
Kiev
Seventy-five years ago the Ukrainian people fell victim to a crime of unimaginable horror. Usually referred to in the West as the Great Famine or the Terror Famine, it is known to Ukrainians as the Holodomor. It was a state-organized program of mass starvation that in 1932-33 killed an estimated seven million to 10 million Ukrainians, including up to a third of the nation's children. With grotesque understatement the Soviet authorities dismissed this event as a "bad harvest." Their intention was to exonerate themselves of responsibility and suppress knowledge of both the human causes and human consequences of this tragedy. That is reason enough for us to pause and remember.
During the long decades of Soviet rule it was dangerous for Ukrainians to discuss their greatest national trauma. To talk of the Holodomor was a crime against the state, while the memoirs of eyewitnesses and the accounts of historians like Robert Conquest and the late James Mace were banned as anti-Soviet propaganda. Yet each Ukrainian family knew from bitter personal memory the enormity of what had happened. They also knew that it had been inflicted on them deliberately to punish Ukraine and destroy the basis of its nationhood. It is to honor the victims and serve the cause of historical truth that independent Ukraine is today working to promote greater understanding and recognition of the Holodomor, both at home and abroad.
We are not doing so out of a desire for revenge or to make a partisan political point. We know that the Russian people were among Stalin's foremost victims. Apportioning blame to their living descendents is the last thing on our minds. Our only wish is for this crime to be understood for what it truly was. That is why the Ukrainian Parliament last year passed a law recognizing the Holodomor as an act of genocide and why I am asking our friends and allies to endorse that position. A world that indulges historical amnesia or falsification is condemned to repeat its worst mistakes.
Genocide is a highly charged term, and there are those who still dispute its applicability in the case of Ukraine. It is therefore worth looking at how the 1948 United Nations Genocide Convention legally defines the issue. It describes genocide as "acts committed with intent to destroy, in whole or in part, a national, ethnical, racial or religious group" including "deliberately inflicting on the group conditions of life, calculated to bring about its physical destruction in whole or in part." The Holodomor falls squarely within the terms of this definition. Significantly, that was also the opinion of Raphael Lemkin, the legal scholar who conceived the Genocide Convention.
There is now a wealth of historical material detailing the specific features of Stalin's forced collectivization and terror famine policies against Ukraine. Other parts of the Soviet Union suffered terribly as well. But in the minds of the Soviet leadership there was a dual purpose in persecuting and starving the Ukrainian peasantry. It was part of a campaign to crush Ukraine's national identity and its desire for self-determination. As Stalin put it a few years earlier: "There is no powerful national movement without the peasant army...in essence, the national question is a peasant question." In seeking to reverse the policy of "Ukrainianization" that promoted limited cultural and political autonomy during the 1920s, Stalin decided to target the peasantry, representing as it did 80% of the population. His solution to the national question in Ukraine was mass murder through starvation.
Stalin's cruel methods included the allocation of astronomic grain requisition quotas that were impossible to meet and which left nothing for the local population to eat. When the quotas were missed, armed units were sent in. Toward the end of 1932, entire villages and regions were turned into a system of isolated starvation ghettos called "black boards." Throughout this period, the Soviet Union continued to export grain to the West and even used grain to produce alcohol. By early 1933, the Soviet leadership decided to radically reinforce the blockade of Ukrainian villages. Eventually, the whole territory of Ukraine was surrounded by armed forces, turning the entire country into a vast death camp.
The specifically national motive behind Stalin's treatment of Ukraine was also evident in the terror campaign that targeted the institutions and individuals that sustained the cultural and public life of the Ukrainian nation. Waves of purges engulfed academic institutions, literary journals, publishing houses and theaters. Victims included the Ukrainian Academy of Science, the editorial board of the Soviet Ukrainian Encyclopedia, the Ukrainian Orthodox Church and ultimately the Ukrainian Communist Party. This was a systematic campaign against the Ukrainian nation, its history, culture, language and way of life.
The Holodomor was an act of genocide designed to suppress the Ukrainian nation. The fact that it failed and Ukraine today exists as a proud and independent nation does nothing to lessen the gravity of this crime. Nor does it acquit us of the moral responsibility to acknowledge what was done. On the 75th anniversary, we owe it to the victims of the Holodomor and other genocides to be truthful in facing up to the past.
Mr. Yushchenko is Ukraine's president.
WSJ
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Russian Justice
November 27, 2007; Page A18
Vladimir Putin's not-so-secret political weapon is the courts. The Kremlin's control over the judiciary keeps Russia an illiberal state and comes in handy against Mr. Putin's enemies.
Two new cases again show the Putin legal method at work. A Moscow court on Saturday sentenced Garry Kasparov, the former world chess champion who leads a coalition of opposition parties, to five days in prison for leading an "unauthorized" demonstration in the capital the same day. If forced to serve out the term this week, Mr. Kasparov, who was arrested Saturday and remains in jail, would be out of the picture in the lead-up to Sunday's parliamentary elections.
A day earlier, prosecutors indicted one of the last liberal government ministers, Sergei Storchak, on embezzlement and fraud charges. His arrest the previous week fueled speculation about the government's motives -- none of which concerned the merits of the case against the deputy finance minister and chief debt negotiator.
Mr. Storchak, who also helps manage Russia's $148 billion oil windfall fund, seems to be caught in Kremlin crossfire. A prosecutor close to Mr. Putin went after him, suggesting to some that the security services wanted to pressure Mr. Storchak's boss, Deputy Prime Minister Alexei Kudrin. Mr. Kudrin had sparred with this important Kremlin faction over the best way to spend the energy billions and was also mentioned among possible successors to Mr. Putin, should the president honor the Constitution and step down next year. In an unusual move, Mr. Kudrin vouched for Mr. Storchak's innocence.
Russia made halting progress in establishing rule of law and an independent judiciary in the years after the Soviet Union's collapse. But Mr. Putin has reversed course. The pivotal event was the Yukos prosecution, when the Kremlin used a tax evasion charge to destroy Russia's richest man, Mikhail Khodorkovsky, and its biggest oil company.
Yukos's choicest bits were sold to a state-owned oil company for a song, as part of the Kremlin effort to control Russian energy assets. Mr. Khodorkovsky, a Putin rival, is serving a 10-year sentence in Siberia. In subsequent years, the courts were instrumental in forcing Royal Dutch Shell out of a multibillion dollar energy exploration project and to pressure other international majors.
Russia's beleaguered democratic politicians, denied access to the media and prevented from freely campaigning, are finding no relief from the judiciary. Mr. Kasparov, a contributing editor to these pages, isn't surprised, calling his conviction Saturday "a symbol of what has happened to justice and the rule of law under Putin."
With the decks stacked in favor of the Putin-backed United Russia party, the opposition's only recourse is to take to the streets. Another pro-democracy rally was violently broken up in St. Petersburg on Sunday. About 200 were arrested, including former deputy prime minister and reformist, Boris Nemtsov, who plans to contest the March presidential election. He was later released.
Pliant courts and crooked bureaucrats are almost as old as Russia itself. In its early years, post-Soviet Russia had a chance to build a legal system that could one day become a healthy check on the state. But this promise of liberal society, as so many others, has been torpedoed by Mr. Putin.
WSJ
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Post by C-Bad Dog moved from another thread:
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Heavy Metal Fanatic To Succeed PUTIN As Russian Leader
Russia's RIA Novosti reports: The man backed by Vladimir Putin for next year's presidential election is a heavy-metal-loving 42-year-old whose surname comes from the Russian word for 'bear'.
First Deputy Prime Minister Dmitry Medvedev was nominated by the ruling United Russia party and three other smaller pro-Kremlin parties on Monday afternoon. President Putin later said on national television: "I have known Dmitry Medvedev well for over 17 years, and I completely and fully support his candidature."
The man who may well become leader of the largest nation on Earth said he had spent much of his youth compiling cassettes of popular Western groups, "Endlessly making copies of BLACK SABBATH, LED ZEPPELIN and DEEP PURPLE."
All these groups were on state-issued blacklists during Medvedev's Soviet-era schooldays.
"The quality was awful, but my interest colossal," he said.
Medvedev went on to boast of his collection of DEEP PURPLE LPs, saying that he had searched for the albums for many years.
"Not reissues, but the original albums," he added, concluding that, "If you set yourself a goal you can achieve it."
Read more RIA Novosti.
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Woof Russ:
That is some fascinating personal data on the new man, who may not be his own man.
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Geopolitical Diary: The Course of Russia
Russian President Vladimir Putin on Monday ended the mystery by formally endorsing First Deputy Prime Minister Dmitri Medvedev as his successor. Given Putin's genuine popularity with a majority of the population, along with his hammerlock to the levers of power, his endorsement is tantamount to Medvedev's election. Now the speculation has turned to precisely whether Putin will continue to pull the strings, and if so how he will do it.
We suspect that Putin will continue to pull the strings and that he is smart enough to figure out how he will do it. These are interesting but ultimately not important questions. The reason is that the process Putin initiated when he replaced Boris Yeltsin was inevitable. If Putin had not done it, someone else would have. And given the dynamics of Russia during that period, the only place that person would have come from was the intelligence community. To take control of the catastrophic reality of Russia, you had to be closely linked to at least some of the oligarchs, have control of the only institution that was really functioning in Russia at the time -- the security and intelligence apparatus -- and have the proper mix of ruthlessness and patience that it took to consolidate power within the state and then use state power to bring the rest of Russia under control.
The Soviet Union was a disaster. The only thing worse was Russia in the 1990s. The situation in Russia was untenable. Workers were not being paid, social services had collapsed, poverty was endemic. The countryside was in shambles. By the end of the 1990s Russia was either going to disintegrate or the state would reassert itself. The functional heart of the Soviet system, the KGB, now called the FSB, did reassert itself, not in a straight line. Much of the FSB was deeply involved in the criminality and corruption that was Russia in the 1990s. But just as the KGB had recognized first that the Soviet system was in danger of collapse, so the heirs of the KGB had recognized that Russia itself was in danger of collapse. Putin acted and succeeded. But it was the system reacting to chaos, not simply one man.
Which means that while the personal fate of Putin is an interesting question, it is not an important one. The course has been set and Medvedev, with or without Putin, will not change it. First, the state is again in the hands of the apparatus. Second, the state is in control of Russia. Third, Russia is seeking to regain control of its sphere of influence. Medvedev, or any Russian leader who could emerge, is not going to change this, because it has become institutionalized; it became institutionalized because there was no alternative course for Russia, the fantasies of the 1990s notwithstanding.
It is important to remember one of the major factors that propelled Putin to power -- the Kosovo war. The United States went to war with Serbia against Russian wishes. Russia was ignored. Then at the end, the Russians helped negotiate the Serb capitulation. Under the agreement the occupation of Kosovo was not supposed to take place only under NATO aegis. The Serbs had agreed to withdraw from Kosovo under the understanding that the Russians would participate in the occupation. From the beginning that did not happen. Yeltsin's credibility, already in tatters, was shattered by the contemptuous attitude toward Russia shown by NATO members.
It is interesting to note that on the same day Putin picked Medvedev, the situation in Kosovo is again heating up. NATO is trying to create an independent Kosovo with the agreement of Serbia. The Serbs are not agreeing and neither is their Russian ally. Putin, who still holds power, is not going to compromise on this issue. For him, Kosovo is a minor matter, except that it is a test of whether Russia will be treated as a great power.
Whether Putin is there, Medvedev is there, or it is a player to be named later, the Russians are not kidding on Kosovo. They do not plan to be rolled over as they were in 1999. Nor are they kidding about a sphere of influence in the former Soviet Union. They are certainly not kidding about state domination of the economy or of the need for a strong leader to control the state.
The point is that the situation in Russia, down to a detail like Kosovo, is very much part of a single, coherent fabric that goes well beyond personalities. The response that Russia made to its near-death experience was pretty much its only option, and having chosen that option, the rest unfolds regardless of personalities. Putin has played his role well. He could continue to play it. But the focus should be on Russia as a great power seeking to resume its role, and not on the personalities, not even one as powerful as Putin, and certainly not Medvedev.
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Looks like the new boss is , , , the old boss. This just in from the NY Times:
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Russia's Dmitri Medvedev Says Putin Should Become Prime Minister
MOSCOW, Dec 11 (Reuters) - Dmitri A. Medvedev, named by
President Vladimir V. Putin as his preferred successor, said
on Tuesday that he would propose that Mr. Putin become prime
minister in a future government.
Mr. Medvedev also made clear in a brief televised statement
that his nomination was linked to the need for continuity of
Putin's policies.
Read More:
http://www.nytimes.com/?emc=na
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You have to admit.... any post grouping BLACK SABBATH, LED ZEPPELIN and DEEP PURPLE together deserves its own thread, but I digress.
Stratfor is good, but considered "alarmist" in professional intel circles.
Which indicates two things:
1) Medvedev's musical "obsessions" indicate that he has good taste and that he is discernibly human from most politicians... which is much more than we learn from the "expert" analysts.
and
2) We think we know much more than we do, which is indicated by our constant categorizing that tries to place the "unknown" into a neat pile, when in reality we have no way of predicting what will, or might take place.
I submit that Medvedev's musical tastes are equally as pertinent to getting to know what he might do, and whom he is, as anything else we may read. And, fortunately for us, they are good! :mrgreen:
As for Medvedev being his own man.... many times, a U.S. President has picked a Supreme Court Justice precisely because of the way he felt the Justice would vote on matters, and has been sadly mistaken by the impartiality of the Justice once a member of the Court.
I am excited to have a fellow music lover potentially in a position of great world power. As my Father wrote: "At least its not Wagner!"
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Woof C-Bad Dog:
Allow me to clarify-- I too think it worthy of notice and find it good news that Medvedev likes these bands.
Trivia: I saw LZ at at the Anderson theater ( a block south of what was later to be the Fillmore East) in 1966 or '67. I had snuck out of the house and got down to the East Village around 0200. The guy at the door simply let me walk in because the show had already been on for quite a while and he dug that I was out and about at 14 years of age, and I walked right down the aisle and kneeled in front of the stage. There, about 6 feet away from me, was Jimmy Page playing his guitar with a violin bow and making sounds like I had never heard.
Trivia2: I saw DP around 1971 with a 9 man band that I was in at the time (piano and rhythm guitar). I was the only white guy in the band, but they were all heavily into it. We did interpretations of the Funkadelics (George Clinton), Santana, Jimi Hendrix and original tunes (I contributed two to the band's repertoire.)
So yes it will be interesting to see what kind of man Medvedev is and what kind of actions he takes.
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A Friend Writes:
'A young man trudges along the frozen streets of Moscow, wrapping his scarf and coat tighter about himself. Looking around, he sees the homeless and the poor - people swilling home-made potato vodka and standing in long lines for toilet paper, and he vows to himself: "As god as my witness, I WILL own Machine Head."'
(http://panther1.last.fm/coverart/300x300/2031238.jpg)
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WSJ
Putin's Cold War
Confrontation with America satisfies a domestic agenda.
BY LEON ARON
Wednesday, December 26, 2007 12:01 a.m. EST
Last Saturday Gen. Yury Baluyevsky, chief of Russia's General Staff, issued an ominous warning. Were the U.S. to launch a rocket from the missile defense system it plans to deploy in Poland to intercept Iranian rockets, it might accidentally trigger a retaliatory attack by Russian nuclear ballistic missiles.
This was only the most recent of a series of provocative and disturbing messages from Moscow. In fact, at no time since the end of the Soviet Union in 1991 has the direction of Russian policy been as troubling as it is today.
What accounts for this change? And where will it lead?
Let's first discard simplistic clichés. The most common of them postulates that when the post-Soviet, proto-democratic, anti-communist, revolutionary Russia of the 1990s was poor, it was also meek and peaceable and willing to be a friend of the West. Now that the accursed "period of weakness" and "chaos" of the 1990s is behind it, the same explanation goes, Russia has "recovered," is "off its knees," and is "back." Back, that is, to spar and bicker with the West because . . . well, because this is what a prosperous and strong Russia does.
Nonsense. A country's behavior in the world, its choice of truculence or accommodation, is not decided by accountants who calculate what the country can or cannot afford. Rather it is determined by the regime's fears and hopes, and by the leaders' notions of what their countries should strive for.
As Germany and Japan recovered from the devastation of World War II and became many times richer than they were in 1945, they grew more, not less, peaceful. They also devoted puny shares of their national income to the military--and only after intense debate. Western Europe's equally spectacular economic resurgence has not brought back squabbling, jingoism and militarism--and neither did South Korea's, after communist aggression and decades of authoritarianism.
In the past seven years, the trajectory of Russian foreign policy under Vladimir Putin mirrored, and changed with, the domestic ideological and political order. It has morphed from the Gorbachev-Yeltsin search for the "path to the common European home" and integration into the world economy, to declaring that the end of the Soviet Union was "the greatest geopolitical catastrophe of the 20th century."
Soon the Kremlin's paid and unpaid propagandists were extolling "sovereign democracy"--a still rather "soft" authoritarianism, increasingly with nationalistic and isolationist overtones. Such exegeses, an independent Russian analyst noted, "would have been labeled as fascist, chauvinistic, anti-democratic or anti-Western during Yeltsin's term. Now such texts have become mainstream."
As the Kremlin's pronouncements grew darker and more fanciful--including warnings that foreign evildoers are plotting to break up Russia--Moscow's foreign policy, too, evolved: first to a cynical and omnivorous pragmatism, and then an assertive and pointedly anti-Western, especially anti-American, posture.
The formerly diverse bilateral U.S.-Russian agenda--energy security, nuclear nonproliferation, the global war on terrorism, the containment of a resurgent, authoritarian China, Russia's integration in the global economy--has been systematically whittled down by Moscow to where it was in the Soviet days and where the Kremlin now wants it: arms control. Suddenly pulled out of mothballs and imbued with the gravest concern for Russia's safety are all manner of the Cold War detritus.
Some of Moscow's concerns (for instance, NATO deployments increasingly close to Russia's borders) are legitimate. But the alarmist and uncompromising rhetoric, and the mode of its delivery--shrill, public and from the very top of the Russian power structure--have been utterly disproportionate to the rather trivial and easily resolved military essence of the issues.
The evolution of Moscow's Iran policy is particularly troubling. Until about a year ago, the Moscow-Tehran quid pro quo was straightforward. Russia defended Iran in the U.N.'s Security Council, while Iran refrained from fomenting fundamentalism and terrorism in Central Asia and the Russian North Caucasus, and spent billions of dollars on Russian nuclear energy technology and military hardware, including mobile air defense missiles, fighter jets and tanks. (At the request of the U.S., Boris Yeltsin suspended arms sales to Tehran in 1995.)
Then Russia's strategy changed from money-making, influence-peddling and diplomatic arbitrage to a far riskier brinksmanship in pursuit of a potentially enormous prize. The longer Moscow resists effective sanctions against an Iran that continues to enrich uranium--and thus to keep the bomb option open and available at the time of its choosing--the greater the likelihood of the situation's deteriorating, through a series of very probable miscalculations by both the U.S. and Iran, toward a full-blown crisis with a likely military solution.
As Iran's patron, Moscow would be indispensable to any settlement of such a conflict, as was the Soviet Union when it sponsored Egypt in the 1993 Yom Kippur war. And through that settlement it would get its prize.
In one fell swoop, Russia could fulfill major strategic goals: to reoccupy the Soviet Union's position as a key player in the Middle East and the only viable counterbalance to the U.S in the region; to keep oil prices at today's astronomic levels for as long as possible by feeding the fears of a military strike against Iran (and see them go as far as $120-$130 a barrel and likely higher if Iran blocks the Strait of Hormuz and disrupts the flow of oil from the Persian Gulf); and to use the West to prevent the emergence of a nuclear-armed Iran a few hundred miles from Russia's borders.
Especially frustrating for the White House is Russian foreign policy's intimate connection to the Kremlin's all-out effort to ensure a smooth transition of power, which, Dimitry Medvedev's appointment to the presidency notwithstanding, looks more and more like it will be from a presidency to a kind of Putin regency.
Creating a sense of a besieged fortress at a time of domestic political uncertainty or economic downturn to rally the people around the Kremlin and, more importantly, its current occupant, is part and parcel of the Soviet ideological tradition, which this regime seems increasingly to admire.
So between now and at least next spring, Russian foreign policy is likely to be almost entirely subservient to the Putin's regime's authoritarian, ambitious and dicey agenda. This will likely result in more nasty rhetoric from the Kremlin and further damage relations with the West, and the U.S. in particular.
Until the succession crisis is resolved (meaning, until Mr. Putin's effective leadership of the country is renewed and secured) no amount of importuning, begging or kowtowing--or emergency trips by Condoleezza Rice to Moscow and heart-to-heart chats in Kennebunkport--are likely to produce an ounce of good.
Let us, therefore, refrain from the ritual, silly hand-wringing and accusations on the subject of "losing" Russia. Russia is not (and never has been) ours to lose.
Back on "the never altered circuit of its fate," to borrow from one of Robert Graves's finest poems, Russia under Mr. Putin has been doing a fine job of losing itself on its own. Resuming the Gorbachev-Yeltsin heroic labor of dismantling this circuit, and thus altering Russia's relations with the West, could be Mr. Medvedev's job--if he wants it and is allowed to proceed.
Mr. Aron is resident scholar and director of Russian studies at the American Enterprise Institute, and author of "Russia's Revolution: Essays 1989-2006" (AEI Press, 2007).
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British-Russian Tension Escalates
By C.J. CHIVERS
MOSCOW — A British cultural organization on Monday defied a Russian government order to close offices in two cities, creating a fresh strain in the already tense relations between Russia and Britain.
Russia’s Foreign Ministry summoned the British ambassador to Russia to its offices and threatened a series of punitive measures, including refusing to renew the visas of the organization’s staff and opening tax proceedings against the group.
The ambassador, Anthony Brenton, remained publicly defiant after the meeting, saying that the organization planned to continue operating all of its offices. Mr. Brenton also said that Russia’s demands violated international law on consular activities.
The two governments have been at odds over a series of espionage and extradition disputes.
The latest disagreement centers on the operations of the British Council, an organization that is operated and financed by the British government to encourage cultural exchange between the two countries.
The council has offices in Moscow, St. Petersburg and Yekaterinburg, the three Russian cities where Britain maintains diplomatic missions.
Late last year, as part of a continuing tension between Russia and Britain since the poisoning death in 2006 of former K.G.B. officer Alexander V. Litvinenko in London, Russia demanded that the British Council offices in St. Petersburg and Yekaterinburg close by Jan. 1.
Russia contends that the offices operate illegally and that the council has permission to maintain offices only in Moscow.
Russia celebrates New Year’s and Orthodox Christmas in an extended holiday. The dispute flared again on the first Monday after the holiday, when both offices reopened.
The Foreign Ministry immediately released an angry statement, saying it had told Mr. Brenton to comply with Russian demands or risk straining relations further.
“The ambassador was informed that the Russian side considered the action a deliberate provocation, directed at complicating the relationship between Russia and Britain,” the statement said.
Britain has denounced the order to close the offices, saying that the council’s activities comply with the Vienna Convention on Consular Relations and that it should be immune from political disputes.
James Barbour, a spokesman for the British Embassy, said that Mr. Brenton had been handed a letter by the Russian Foreign Ministry and was reviewing its contents. But the council, he said, would continue to operate.
“My understanding, and the understanding of the British government, is that the offices of the British Council will remain open,” he said.
Russia has also threatened to close the British Council’s main office, in Moscow, as one of its retaliatory measures.
http://www.nytimes.com/2008/01/15/wo...russia.html?hp
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Putin's Torture Colonies
February 12, 2008; Page A16
WSJ
"The protest began after OMON [riot police] had been brought to correctional colony No. 5 (Amur Oblast, Skovorodino Rayon, village Takhtamygda) and started massive beatings of the prisoners. People in camouflage and masks were beating with batons inmates taken outside undressed in the freezing cold. . . . As a protest, 39 prisoners immediately cut their veins open.
"Next day, on 17 January, the 'special operation' was repeated in an even more humiliating and massive form. At that time, about 700 inmates cut their veins open. . . ."
The description here comes from a report received by the Moscow-based Foundation for Defense of Rights of Prisoners. The time reference is to 2008 -- that is, last month. This is not Alexander Solzhenitsyn's Russia. It's Vladimir Putin's. And correctional colony No. 5, located not far from the Manchurian border, does not even make the list of the worst penal colonies in the country.
That distinction belongs to the newly revived institution of Pytochnye kolonii, or torture colonies. After all but disappearing in the 1990s under the liberal regime of Boris Yeltsin, there are now about 50 pytochnye kolonii among the roughly 700 colonies that house the bulk of Russia's convict population, according to FDRP cofounder Lev Ponomarev. And while they cannot be compared to the Soviet Gulag in terms of scope or the percentage of prisoners who are innocent of any real crime, they are fast approaching it in terms of sheer cruelty.
The cruelty to prisoners often begins prior to their actual sentencing. "When people are transported from prisons to courts to attend their hearings, they are jammed in a tiny room where they can barely stand. There's no toilet; if they have to relieve themselves, it has to be right there," says Mr. Ponomarev. "Then they are put on trucks. It's extremely cold in winter, extremely hot in summer, no ventilation, no heating. These are basically metal containers. They have to be there for hours. Healthy people are held together with people with tuberculosis, creating a breeding ground for the disease."
INSIDE THE TORTURE COLONY
To see footage taken from inside a pytochnye kolonii, click here.
And for a list of known torture colonies in Russia, click here.Once sentenced, prisoners are transported in packed train wagons to distant correctional colonies that, under Russian law, range from relatively lax "general regime" colonies to "strict," "special," and (most terrifying of all) "medical" colonies. Arrival in the camps is particularly harrowing. According to prisoner testimonies collected by Mr. Ponomarev, in the winter of 2005 convicts from one torture colony in Karelia, near the Finnish border, were shipped to the IK-1 torture colony near the village of Yagul, in the Udmurt Republic, about 500 miles east of Moscow.
"The receipt of convicts 'through the corridor' takes place in the following manner," Mr. Ponomarev reports. "From the [truck] in which a newly arrived stage [of prisoners] is brought... employees of the colony line up, equipped with special means -- rubber truncheons and dog handlers with work dogs. . . . During the time of the run, each employee hits the prisoner running by with a truncheon. . . . The convicts run with luggage, which significantly complicates the run. At those [places] where employees with dogs are found, the run of the convict is slowed by a dog lunging from the leash."
The prison gantlet is just the welcome mat. At IK-1, a prisoner with a broken leg named Zurab Baroyan made the mistake of testifying to conditions at the colony to a staff representative of the Human Rights Ombudsman of the Russian Federation. "After this," Mr. Baroyan reported, the commandant of the colony "threatened to rot me in the dungeon. They did not complete treating me in the hospital. The leg festers [and] pus runs from the bandage. . . The festering has crossed over to the second leg."
Not surprisingly, suicide attempts at these colonies are common. One convict, named Mishchikin, sought to commit suicide by swallowing "a wire and nails tied together crosswise." As punishment, he was denied medical assistance for 12 days. Another convict, named Fargiyev, was held in handcuffs for 52 days after stabbing himself; he never fully recovered motor function in his hands.
Even the smallest of prisoner infractions can be met with savage reprisals. In one case, authorities noticed the smell of cigarette smoke in a so-called "penalty isolator" cell where seven convicts were being held. "A fire engine was called in. . . . The entire cell, including the convicts and their personal things, was flooded with cold water." The convicts were left in wet clothes in 50 degree Fahrenheit temperatures for a week.
As a legal matter, the torture colonies don't even exist, and Mr. Ponomarev doubts there has ever been an explicit directive from Mr. Putin ordering the kind of treatment they mete. Rather, for the most part the standards of punishment are determined at the whim of colony commandants, often in areas where the traditions of the Gulag never went away.
That doesn't excuse the Kremlin, however. Under Yeltsin, the prison system had operated under a sunshine policy, as part of a larger effort to distance Russia from its Soviet past. "But when Putin came to power, a new tone was set," Mr. Ponomarev says. "The sadists who had previously been 'behaving' simply stopped behaving."
Now reports of torture are systematically ignored or suppressed while regional governments refuse to act on evidence of abuse. Commandants at "general regime" colonies can always threaten misbehaving convicts with transfer to a torture colony -- a useful way of keeping them in line. The Kremlin, too, benefits from the implied threat. "The correct word for this is Gulag, even if it's on a smaller scale," warns Mr. Ponomarev. "This is the reappearance of totalitarianism in the state. Unless we eradicate it, it will spread throughout the entire country."
Readers interested in a closer look at what is described above may do a YouTube search for "Yekaterinaburg Prison Camp." The short video, apparently filmed by a prison guard and delivered anonymously to Mr. Ponomarev's organization, is a modern-day version of "One Day in the Life of Ivan Denisovich." It isn't easy to watch. But it is an invaluable window on what Russia has become in the Age of Putin, Person of the Year.
Write to bstephens@wsj.com.
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This might be what the previous post is talking about:
http://www.nothingtoxic.com/media/1203048215/Why_You_Never_Want_to_be_in_a_Russian_Jail
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Stratfor has had its eye on the Kosovo situation for some time now (see the Balkans thread, closely related to this post here) and regards it as having some serious implications for Russian behavior e.g. note my post regarding Georgia in the Balkan thread today.
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George Friedman
Kosovo declared independence from Serbia on Sunday. The United States and many, but not all, European countries recognized it. The Serbian government did not impose an economic blockade on — or take any military action against — Kosovo, although it declared the Albanian leadership of Kosovo traitors to Serbia. The Russians vehemently repeated their objection to an independent Kosovo but did not take any overt action. An informal summit of the Commonwealth of Independent States (CIS) was announced last week; it will take place in Moscow on Feb. 21. With Kosovo’s declaration, a river was crossed. We will now see whether that river was the Rubicon.
Kosovo’s independence declaration is an important event for two main reasons. First, it potentially creates a precedent that could lead to redrawn borders in Europe and around the world. Second, it puts the United States, the United Kingdom, France and Germany in the position of challenging what Russia has defined as a fundamental national interest — and this at a time when the Russians have been seeking to assert their power and authority. Taken together, each of these makes this a geopolitically significant event.
Begin with the precedent. Kosovo historically has been part of Serbia; indeed, Serbs consider it the cradle of their country. Over the course of the 20th century, it has become predominantly Albanian and Muslim (though the Albanian version of Islam is about as secular as one can get). The Serbian Orthodox Christian community has become a minority. During the 1990s, Serbia — then the heart of the now-defunct Yugoslavia — carried out a program of repression against the Albanians. Whether the repression rose to the level of genocide has been debated. In any case, the United States and other members of NATO conducted an air campaign against Yugoslavia in 1999 until the Yugoslavians capitulated, allowing the entry of NATO troops into the province of Kosovo. Since then, Kosovo, for all practical purposes, has been a protectorate of a consortium of NATO countries but has formally remained a province of Serbia. After the Kosovo war, wartime Yugoslavian leader Slobodan Milosevic died in The Hague in the course of his trial for war crimes; a new leadership took over; and the Federal Republic of Yugoslavia itself ultimately dissolved, giving way to a new Republic of Serbia.
The United Nations did not sanction the war in Kosovo. Russian opposition in the U.N. Security Council prevented any U.N. diplomatic cover for the Western military action. Following the war — in a similar process to what happened with regard to Iraq — the Security Council authorized the administration of Kosovo by the occupying powers, but it never clearly authorized independence for Kosovo. The powers administering Kosovo included the United States, United Kingdom, France, Germany and other European states, organized as the Kosovo Force (KFOR).
While the logic of the situation pointed toward an independent Kosovo, the mechanism envisioned for the province’s independence was a negotiated agreement with Serbia. The general view was that the new government and personalities in Belgrade would be far more interested in the benefits of EU membership than they would be in retaining control of Kosovo. Over nearly a decade, the expectation therefore was that the Serbian government would accede to an independent Kosovo in exchange for being put on a course for EU membership. As frequently happens — and amazes people for reasons we have never understood — nationalism trumped economic interests. The majority of Serbs never accepted secession. The United States and the Europeans, therefore, decided to create an independent Kosovo without Serbian acquiescence. The military and ethnic reality thus was converted into a political reality.
Those recognizing Kosovo’s independence have gone out of their way specifically to argue that this decision in no way constitutes a precedent. They argue that the Serbian oppression of the late 1990s, which necessitated intervention by outside military forces to protect the Kosovars, made returning Kosovo to Serbian rule impossible. The argument therefore goes that Kosovo’s independence must be viewed as an idiosyncratic event related to the behavior of the Serbs, not as a model for the future.
Other European countries, including Spain, Romania, Slovakia and Cyprus, have expressly rejected this reasoning. So have Russia and China. Each of these countries has a specific, well-defined area dominated by a specific ethnic minority group. In these countries and others like them, these ethnic groups have demanded, are demanding or potentially will demand autonomy, secession or integration with a neighboring country. Such ethnic groups could claim, and have claimed, oppression by the majority group. And each country facing this scenario fears that if Kosovo can be taken from Serbia, a precedent for secession will be created.
The Spanish have Basque separatists. Romania and Slovakia each contain large numbers of Hungarians concentrated in certain areas. The Cypriots — backed by the Greeks — are worried that the Turkish region of Cyprus, which already is under a separate government, might proclaim formal independence. The Chinese are concerned about potential separatist movements in Muslim Xinjiang and, above all, fear potential Taiwanese independence. And the Russians are concerned about independence movements in Chechnya and elsewhere. All of these countries see the Kosovo decision as setting a precedent, and they therefore oppose it.
Europe is a case in point. Prior to World War II, Europe’s borders constantly remained in violent flux. One of the principles of a stable Europe has been the inviolability of borders from outside interference, as well as the principle that borders cannot be redefined except with mutual agreement. This principle repeatedly was reinforced by international consensus, most notably at Yalta in 1945 and Helsinki in 1973.
Thus, the Czech Republic and Slovakia could agree to separate, and the Soviet Union could dissolve itself into its component republics, but the Germans cannot demand the return of Silesia from Poland; outsiders cannot demand a British withdrawal from Northern Ireland; and the Russians cannot be forced to give up Chechnya. The principle that outside powers can’t redefine boundaries, and that secessionist movements can’t create new nations unilaterally, has been a pillar of European stability.
The critics of Kosovo’s independence believe that larger powers can’t redraw the boundaries of smaller ones without recourse to the United Nations. They view the claim that Yugoslavia’s crimes in Kosovo justify doing so as unreasonable; Yugoslavia has dissolved, and the Serbian state is run by different people. The Russians view the major European powers and the Americans as arrogating rights that international law does not grant them, and they see the West as setting itself up as judge and jury without right of appeal.
This debate is not trivial. But there is a more immediate geopolitical issue that we have discussed before: the Russian response. The Russians have turned Kosovo into a significant issue. Moscow has objected to Kosovo’s independence on all of the diplomatic and legal grounds discussed. But behind that is a significant challenge to Russia’s strategic position. Russia wants to be seen as a great power and the dominant power in the former Soviet Union (FSU). Serbia is a Russian ally. Russia is trying to convince countries in the FSU, such as Ukraine, that looking to the West for help is futile because Russian power can block Western power. It wants to make the Russian return to great power status seem irresistible.
The decision to recognize Kosovo’s independence in the face of Russian opposition undermines Russian credibility. That is doubly the case because Russia can make a credible argument that the Western decision flies in the face of international law — and certainly of the conventions that have governed Europe for decades. Moscow also is asking for something that would not be difficult for the Americans and Europeans to give. The resources being devoted to Kosovo are not going to decline dramatically because of independence. Putting off independence until the last possible moment — which is to say forever, considering the utter inability of Kosovo to care for itself — thus certainly would have been something the West could have done with little effort.
But it didn’t. The reason for this is unclear. It does not appear that anyone was intent on challenging the Russians. The Kosovo situation was embedded in a process in which the endgame was going to be independence, and all of the military force and the bureaucratic inertia of the European Union was committed to this process. Russian displeasure was noted, but in the end, it was not taken seriously. This was simply because no one believed the Russians could or would do anything about Kosovar independence beyond issuing impotent protestations. Simply put, the nations that decided to recognize Kosovo were aware of Russian objections but viewed Moscow as they did in 1999: a weak power whose wishes are heard but discarded as irrelevant. Serbia was an ally of Russia. Russia intervened diplomatically on its behalf. Russia was ignored.
If Russia simply walks away from this, its growing reputation as a great power will be badly hurt in the one arena that matters to Moscow the most: the FSU. A Europe that dismisses Russian power is one that has little compunction about working with the Americans to whittle away at Russian power in Russia’s own backyard. Belarusian President Aleksandr Lukashenko — who, in many ways, is more anti-Western than Russian President Vladimir Putin and is highly critical of Putin as well — has said it is too late to “sing songs” about Kosovo. He maintains that the time to stop the partition of Kosovo was in 1999, in effect arguing that Putin’s attempts to stop it were ineffective because it was a lost cause. Translation: Putin and Russia are not the powers they pretend to be.
That is not something that Putin in particular can easily tolerate. Russian grand strategy calls for Russia to base its economy on the export of primary commodities. To succeed at this, Russia must align its production and exports with those of other FSU countries. For reasons of both national security and economics, being the regional hegemon in the FSU is crucial to Russia’s strategy and to Putin’s personal credibility. He is giving up the presidency on the assumption that his personal power will remain intact. That assumption is based on his effectiveness and decisiveness. The way he deals with the West — and the way the West deals with him — is a measure of his personal power. Being completely disregarded by the West will cost him. He needs to react.
The Russians are therefore hosting an “informal” CIS summit in Moscow on Friday. This is not the first such summit, by any means, and one was supposed to be held before this but was postponed. On Feb. 11, however, after it became clear that Kosovo would declare independence, the decision to hold the summit was announced. If Putin has a response to the West on Kosovo, it should reveal itself at the summit.
There are three basic strategies the Russians can pursue. One is to try to create a coalition of CIS countries to aid Serbia. This is complex in that Serbia may have no appetite for this move, and the other CIS countries may not even symbolically want to play.
The second option is opening the wider issue of altering borders. This could be aimed at sticking it to the Europeans by backing Serbian secessionist efforts in bifurcated Bosnia-Herzegovina. It also could involve announcing Russia’s plans to annex Russian-friendly separatist regions on its borders — most notably the Georgian regions of Abkhazia and South Ossetia, and perhaps even eastern Ukraine and the Crimea. (Annexation would be preferred over recognizing independence, since it would reduce the chances of Russia’s own separatist regions agitating for secession.) Russia thus would argue that Kosovo’s independence opens the door for Russia to shift its borders, too. That would make the summit exciting, particularly with regard to the Georgians, who are allied with the United States and at odds with Russia on Abkhazia and other issues.
The third option involves creating problems for the West elsewhere. An Iranian delegation will be attending the summit as “observers.” That creates the option for Russia to signal to Washington that the price it will pay for Kosovo will be extracted elsewhere. Apart from increased Russian support for Iran — which would complicate matters in Iraq for Washington — there are issues concerning Azerbaijan, which is sandwiched between Russia and Iran. In the course of discussions with Iranians, the Russians could create problems for Azerbaijan. The Russians also could increase pressure on the Baltic states, which recognized Kosovo and whose NATO membership is a challenge to the Russians. During the Cold War, the Russians were masters of linkage. They responded not where they were weak but where the West was weak. There are many venues for that.
What is the hardest to believe — but is, of course, possible — is that Putin simply will allow the Kosovo issue to pass. He clearly knew this was coming. He maintained vocal opposition to it beforehand and reiterated his opposition afterward. The more he talks and the less he does, the weaker he appears to be. He personally can’t afford that, and neither can Russia. He had opportunities to cut his losses before Kosovo’s independence was declared. He didn’t. That means either he has blundered badly or he has something on his mind. Our experience with Putin is that the latter is more likely, and this suddenly called summit may be where we see his plans play out.
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Russian Retribution
February 27, 2008; Page A16
Lev Ponomarev is a well-known Russian human-rights activist. So you can guess where this story is going.
On Friday, Mr. Ponomarev, a former aide to Soviet dissident Andrei Sakharov and a colleague of opposition leader Garry Kasparov, was charged with criminally "slandering" General Yuri Kalinin, who runs Russia's Federal Penitentiary Service. Mr. Ponomarev has been calling attention to the often brutish treatment of prisoners in Russia's roughly 700 penal colonies, some 50 of which have acquired reputations as "torture colonies." He now is required to get government permission to leave Moscow. If convicted, he could face up to three years in a penal colony.
Officially, the charge concerns statements by Mr. Ponomarev about Mr. Kalinin from November 2006. But this looks to be a case of retribution for comments Mr. Ponomarev made during a two-week tour of the U.S. this month, particularly to this newspaper. In a February 12 column "Putin's Torture Colonies," our Bret Stephens quoted extensively from his interview with Mr. Ponomarev; the column also referred readers to a YouTube video showing what appears to be Russian guards violently abusing their prisoners. Mr. Stephens's column was translated and reprinted in the Russian media, while the video has disappeared from YouTube.
Whether there is a link among our reporting, the vanishing video and Mr. Ponomarev's legal jeopardy is a matter of speculation. But it says something about the way Russia is governed today that it is now all too easy to believe that political retribution is afoot. That bodes ill for Mr. Ponomarev, and for the causes of human rights and democracy that he courageously represents.
WSJ
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Dmitri Medvedev started out with a bang on his first day on the job as Russian president-elect, with European leaders waking up on Monday to the news that Russia had cut natural gas supplies to Ukraine by 25 percent.
Of course, state-controlled gas monopoly Gazprom — which Medvedev chairs — said the move had absolutely nothing to do with Europe, and that it was just part and parcel of the insufferable energy issues Gazprom has with Ukraine. But that explanation is unlikely to assuage the Europeans; they heard the same story from Moscow when a Russian natural gas cutoff turned out their lights in January 2006.
Related Special Topic Pages
Russian Energy and Foreign Policy
Gazprom’s Ascent
The Russian Resurgence
In Stratfor’s eyes, though this Russian power play was a long time coming, Russia’s timing could not have been more perfect. In Moscow’s eyes, European recognition of Kosovar independence despite vehement Russian objections represented both a threat to Russia’s regional prowess and an opportunity to reassert Moscow’s authority in the Russian periphery. From the Russian point of view, Europe had to be taught a hard lesson that would be felt where Russia holds the most leverage — namely, in the Balkans, the Caucasus, Ukraine and the Baltic states.
We already are seeing the Russian strategy take effect. Immediately following Kosovo’s declaration of independence, we saw flames in the Balkans as Serbs in Kosovo and Bosnia began indicating they might follow the Kosovar precedent and secede to join a Greater Serbia. To the east, the Russian-sponsored Georgian separatist region of Abkhazia began mobilizing troops late last week, spelling trouble for the powder keg that is the Caucasus. On Monday, we saw the Ukrainians get a kick in the pants with Gazprom’s natural gas cutoff. And the Balkans, aware of what is likely heading their way, are simply trying to stay under the Russian radar. All these moves gradually are giving Medvedev the prestige he needs in his symbolic takeover of the Russian presidency.
The country to watch now is Germany. When the Russians turn the screws on Ukraine, the Germans feel the pain. In addition to having 30 percent of its natural gas supplies from Russia transit Ukraine, Germany must fulfill its role as the regional heavyweight capable of standing up to an aggressive Russia hovering to the east. But before Germany can deal with the Russians, it needs to get the European house in order — and that means dealing with the other European heavyweight, France.
France and Germany’s clashing views on Europe are coming to a head for the first time in decades. With France making preparations to take the EU presidency in four months, contentious issues ranging from French debt to immigration to a major French push for a Mediterranean Union now are rearing their heads, threatening the Franco-German harmony that binds the European Union. Fortunately for Moscow, this historic Paris-Berlin fault line has re-emerged just in time for the Russians to exploit.
With the Russians getting ready to rumble, the Germans don’t have time to quarrel with the French. The German priority now is to rally a united European front before it heads into negotiations with Russia, and this is exactly what German Chancellor Angela Merkel had on her mind when she sat down for a hastily arranged dinner with French President Nicolas Sarkozy on Monday night. For now, it appears as if the Germans and the French have made up. Sarkozy and Merkel came out of their meeting with an ambiguous message that they had compromised on the Mediterranean Union project, probably shelving their issues for another day.
Right now, Merkel has bigger fish to fry in Moscow, where she will be traveling this weekend to meet with Medvedev (and though officially not on the agenda, with the real power player, Putin). The message she would like to deliver in Moscow is that Europe is rallying behind her to counter Russia’s payback plan over Kosovo. But the Russians aren’t easily fooled. There is more time for this game to play out, and the Russians appear to be pacing themselves carefully.
stratfor
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Geopolitical Diary: Ukraine's NATO About-face
March 7, 2008
Ukraine made a radical policy adjustment on Thursday by essentially ending its bid for NATO membership. The move, which would have been unthinkable as recently as a month ago, probably resulted from external forces, namely Russia. Ukraine’s abrupt departure from its long-standing bid indicates the ominous involvement of Moscow. In its effort to maintain its security buffer, Russia probably employed its FSB security services.
Related Special Topic Pages
The Russian Resurgence
Russian Energy and Foreign Policy
States possess numerous tools to cause another state to change tack. These include economic leverage, political influence and/or military pressure.
Economic tools can include fostering closer integration, raising or lowering barriers to trade, embargoing another country, threatening to undermine a country’s financial stability by mass sales of its currency, or by simply shelling out cash. In the case of Ukraine –- and by extension, Western Europe –- Russia frequently has employed natural gas cutoffs.
Political tools are varied, and focus on finding political weak spots for later manipulation. The options include promoting closer integration among citizens with a common heritage found in both of the countries in question. These ties can then be manipulated later. For example, one country can threaten to intervene in the other to protect an allied ethnic group from alleged discrimination. Russia could employ this tactic in relation to ethnic Russians living in Ukraine.
Military tools to influence another state’s behavior include the threat of invasion, conspicuously aiming weapons — anything from artillery to intercontinental ballistic missiles (ICBMs)— at the other country, or providing military assistance to the government or the opposition groups in the other country. Russia’s Feb. 12 threat to aim ICBMs at foreign forces that might deploy in Ukraine falls in this category.
The 1989 collapse of the Soviet Union and Russia’s subsequent loss of influence in its near abroad and in the West laid the foundation for Russia’s current geopolitical trajectory. Russia’s resurgence under President Vladimir Putin has involved a strong effort to regain the influence, respect and national security it believes it is due. Moscow’s desire is especially keen given previous Russian humiliations — particularly those suffered by the government of the late Boris Yeltsin, when the West encroached on what Russia perceives as its prerogatives. Russia, however, lacks many of the tools the Soviet Union had at its disposal for compelling other countries’ behavior. This complicates Putin’s effort to satisfy the Russian geopolitical imperative of establishing hegemony in its near abroad.
The Russian resurgence took a potentially fatal hit over Kosovo’s Feb. 18 secession from Serbia. This was an issue of minor importance to the United States and most Western European countries, but a major threat to Russia’s effort to demonstrate its return to major power status. For Russia and Putin to survive the Kosovo insult, retribution elsewhere in the Russian near abroad was expected — namely in the Caucasus, Ukraine, Belarus and the Baltic states.
Ukraine’s dramatic about-face on NATO comes in the context of Kosovar independence. Ukraine’s pro-Western president, Viktor Yushchenko — who came to power in his country’s 2004 Orange Revolution — was clamoring as recently as a month ago for NATO membership, despite a lukewarm reception from the alliance. Rumor has it that Yushchenko’s sudden change at the NATO foreign ministers’ meeting in Brussels occurred after the Russian president literally ordered him to withdraw Ukraine’s NATO bid, probably reminding him of the aforementioned Russian economic leverage over Ukraine.
Putin likely did not rely on economic coercion alone, however, and we can assume the FSB helped change Ukraine’s mind on NATO. The FSB is quite good at pressuring individuals using threats, intimidation, enticements and even sophisticated assassinations. Yushchenko knows the capabilities of the secret service underworld well, having barely survived a poisoning while seeking office in 2004.
Russia and the FSB probably decided that bringing the existing Ukrainian leadership in line would be easier than introducing a new leadership, allowing Moscow to avoid the pitfalls of Ukrainian politics. Given the lukewarm reception to Ukraine’s membership bid, Kiev could simply have let its application fall by the wayside. Instead, it made an active policy reversal. Compelling Yushenko’s U-turn on Ukraine’s NATO bid thus represents a significant Russian achievement, one that others — particularly Georgia — will observe closely.
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It appears that the blowback from Kosovo continues.
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stratfor
Russian Ambassador to NATO Dmitry Rogozin said March 11 that Georgia’s South Ossetia and Abkhazia regions will secede if Georgia becomes a member of NATO, Reuters reported. Rogozin said that Abkhazia and South Ossetia “do not intend to join NATO.”
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Stratfor I think has had good insight in its assessment of what Russia is up to geopolitically, and continues to have it here. That said, I would quibble with the final sentence. The Russians have been fcuking with us by helping Iran and now we are showing them that there are costs to that. That certainly does not make us the confrontational one in my book.
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Geopolitical Diary: U.S. Puts Russia On Notice
March 20, 2008
U.S. President George W. Bush, fresh from meetings with Georgian President Mikhail Saakashvili on Wednesday, announced American support for Georgia’s NATO bid. Specifically, Bush announced that he would lobby the NATO allies to grant Georgia a Membership Action Plan (MAP), the first step toward joining the alliance. Bush’s statement contained sufficient equivocation that MAP is hardly a foregone conclusion and formal membership is anything but imminent, but Russia has nonetheless been put on notice. NATO is preparing to march east yet again.
For the past month the West and Russia have been at a crossroads. After 10 years of heavy investment of political capital by the Kremlin into supporting its Balkan ally, Serbia, the West ran roughshod over Russian concerns by recognizing the independence of Kosovo, a renegade Serbian province. That decision blew a hole through the image of Russian power. In the midst of an internal transition of power and reeling from the Kosovo defeat, Moscow needs a means of striking back at the West to demonstrate its potency. To flex its muscles, Russia can encourage separatism in U.S. allies, complicate the United States’ Middle East policy with selective weapons sales and technology transfers, and manipulate European energy supplies.
But Russia also knows that if it makes any missteps, Western influence could threaten its position on more fronts than the country can defend. Even with high energy prices bolstering its bottom line and a strong president holding the system together, the Kremlin knows Russia is but a shadow of its Cold War self. Meanwhile, it is not that the West is without vulnerabilities — weaknesses are available for exploitation from Finland to Turkey — but that during the last 18 years, Western institutions have only strengthened in absolute terms.
The West has the advantage of political, economic and military superiority, along with the flexibility to dabble anywhere along the Russian periphery, and with a little elbow grease and luck, even within the Russian Federation itself. Remember, it is Russia — not the United States — that is riddled with potential secessionist regions. And it is the United States — not Russia — that sits safely on the other side of an ocean from its potential competitors.
In short, there is no doubt in either Moscow or Washington that the two share the ability to swap blows in areas of critical importance. Efforts undertaken March 17 and March 18 saw a final attempt to head off a post-Kosovo confrontation when U.S. Secretary of State Condoleezza Rice and Secretary of Defense Robert Gates traveled to Moscow to determine whether the Russians and Americans could agree to disagree.
In the American mind, a Russia that agrees to sit on its hands while the United States sews up Iraq is preferable. And yes, we realize that “sew up” is a gross simplification even in the best of circumstances. Moscow’s position in the talks was more nuanced than Washington’s: Moscow offered to hold off on seeking retaliation for its defeat in Kosovo should the United States agree to hold off on pushing its NATO agenda deeper into the former Soviet Union. Ultimately, the two sides proved unable to hammer out a deal, and Bush’s statement is the proof that, for the Americans at least, confrontation is the order of the day.
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Stratfor, as usual, seeks the deep view:
Geopolitical Diary: The Start of Cold War II?
March 21, 2008
Legislators in the Georgian breakaway republic of Abkhazia signed a statement on Thursday accusing Georgia of aggression and warning of the possibility of war in the Caucasus. In Moscow, the Russian parliament urged the government to send additional peacekeepers to both Abkhazia and Georgia’s other breakaway republic, South Ossetia. Elsewhere, the Kremlin’s NATO envoy said Russia wants an emergency meeting with the Western military alliance to discuss the March 19 move by U.S. President George W. Bush to establish Kosovar eligibility for military assistance from the United States.
These developments follow a series of similar events in the past few weeks, underscoring an escalation of tensions between the United States and Russia in the wake of Kosovo’s Feb. 17 declaration of independence. The flurry of activity includes moves to expand NATO, violent reactions from Kosovar Serbs, the U.S. attempt to construct ballistic missile defense installations in Eastern Europe, and Russia’s apprehension of Western spies in Moscow. All these events clearly underscore that the Cold War is back.
Cold War II is different than the original Cold War, which was a Soviet-U.S. confrontation that lasted from the end of World War II to the collapse of the Soviet Union in 1991. Nuclear-armed ideological rivals Washington and Moscow competed for global influence, and a divided Europe was a key theater in which this war played out. Cold War II is being waged by a far more powerful United States and a vastly weakened Russia — an emasculated successor to the Soviet Union.
Another key difference between the new and old Cold War is that Europe no longer is just a theater in which the Americans and Russians are playing geopolitical chess. The Europeans are playing major roles as independent actors in this new Cold War. This time around, Europe as a continent is not exactly occupied and has recovered from both World War II and the first Cold War. But the European Union is an increasingly incoherent entity, with the three principal state actors –- Germany, France and the United Kingdom –- not interested in confronting Russia.
Berlin made this very clear when it expressed a lack of interest in NATO expansion, the independence of Kosovo and the Ukraine gas issue. This is not surprising, given that the Germans are dependent upon Moscow for energy. Beyond energy, Germany’s wider economic relationship with and its proximity to Russia inform its lack of appetite for confrontation with the Kremlin. But this does not mean that Berlin won’t take on Moscow when it deems necessary. Germany is re-emerging on its own to again become an international power player.
France is even further removed from the new Cold War dynamics. Paris has its own ideas about how it wishes to advance itself as an international player, which has very little to do with West vs. Russia competition. Geographically far more insulated, it wants no part in this new Cold War.
As for the British, they have enough domestic political issues to sort out, which is why they also are out of the game. That said, given London’s historic role as a major U.S. ally, the United Kingdom cannot avoid the issues that the United States is dealing with. Therefore, at best the British will maintain a low-key role in the U.S. moves to continue its geopolitical push against Russia.
The United States — considering that it has the luxury of waging a geopolitical assault against Russia from afar — is not bothered by the lack of European involvement. But the European position is not tenable in the long run. Europe’s geography — and the fact that, unlike during the original Cold War, there isn’t an iron curtain in place — will force the Europeans to jump in or at least choose sides.
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stratfor
Summary
Turkmen President Gurbanguly Berdimukhammedov will become the first Turkmen leader to attend a NATO summit when he goes to the alliance’s upcoming heads-of-state meeting in Bucharest, Romania, on April 2-4. The move indicates that Berdimukhammedov is looking to balance his country between the West and Russia while both sides try to pull Turkmenistan off the fence.
Analysis
Turkmen President Gurbanguly Berdimukhammedov will attend NATO’s April 2-4 heads-of-state summit in Bucharest, Romania. This will be the first time a Turkmen leader has attended a NATO summit and it indicates that Berdimukhammedov is not as afraid of the West as his predecessor was. Moreover, it shows that Berdimukhammedov is looking to balance his country between Russia and the West, even as both sides are tugging at Ashgabat.
In December 2006, the Turkmenbashi (Turkmen President Saparmurat Niyazov) died, leaving the country’s path unclear. Turkmenistan’s entire existence had hinged on the Turkmenbashi and his quirky but highly repressive means of running the country. Since his death, there has been a large battle among five forces — the United States, Europe, Russia, China and Iran — over who will dominate Turkmenistan’s wealth of energy supplies. Though each player has made small deals, none has really solidified an alliance with Ashgabat or Berdimukhammedov, who acts as if he is open to any of the powers’ investments.
Turkmenistan has remained neutral since the end of the Soviet Union. It is an unofficial observer of the Shanghai Cooperation Organization (SCO), and Niyazov signed a Partnership for Peace agreement with NATO in 1994.
Though Turkmenistan is an unofficial observer of the SCO, it has routinely attended almost all of the organization’s meetings, since most of Turkmenistan’s economic partners and regional countries are in the SCO. Ashgabat’s relationship with NATO, on the other hand, has been very precarious. Niyazov only signed the agreement with NATO to try to control the Mary Clan, the most powerful clan in Turkmenistan and the group that controls drug trafficking in the country.
Niyazov was also a supporter of the 2001 war in Afghanistan launched chiefly by the United States, though that support stemmed from his fear that Afghanistan’s instability would spill over into his controlled country. But the Iraq war deeply affected Niyazov and the rest of the Turkmen government, especially regarding their view of the United States. The 2003 Iraq war was, in Niyazov’s mind, about the United States going in to overthrow a very familiar-looking government. After Saddam Hussein was removed from power — and particularly after Libya’s Moammar Gadhafi reached a rapprochement with the United States — Niyazov became convinced that he was the next target on Washington’s to-smite list.
In addition, there was a wave of “color” and “velvet” revolutions that began in Serbia in 2000, swept Georgia in 2003 and Ukraine in 2004, and finally reached the Central Asian countries Kyrgyzstan and Uzbekistan in 2005. Not only was the Turkmenbashi terrified that the West — which was accused of sparking the revolutions — would attempt one in his country, but he knew that his country would be more vulnerable to such a revolution because it had a far more brittle power structure and weaker security services than the other countries.
This all led Niyazov to sign a rather comprehensive defense agreement with Moscow that abandoned Ashgabat’s previous policy of utter neutrality and placed Turkmenistan back under Moscow’s security umbrella.
However, Berdimukhammedov is a more level-headed leader and is making his own decisions.
The new leader has opened his country up to proposals from all sides over developing Turkmenistan’s large energy reserves. However, Berdimukhammedov has been very cautious and conservative in deciding which deals to take, with proposals from Europe, Russia and China all on the table. Berdimukhammedov has also been asserting his country’s place as a global energy supplier by confronting the countries to which it sends supplies. In December 2007, Turkmenistan announced that it was doubling the price of natural gas to Russia, and in January it cut natural gas supplies to Iran.
In security and military matters, Berdimukhammedov had been pushing his country toward Moscow. At the last SCO meeting, Berdimukhammedov discussed the possibility of becoming a recognized observer or even a member. Also, the leader has made a military upgrade one of his country’s top priorities. Turkmenistan currently has a slew of unused military bases left over from the Soviet era, and because Turkmenistan is next to Iran and Afghanistan, Moscow and Washington are fighting over those bases. But Ashgabat wants more than either side is currently offering and recently asked Moscow to help it carry out a military upgrade, primarily for its air force.
But Moscow has yet to decide whether it will arm a country that has been growing closer to the West, especially if Ashgabat is only going to give Moscow a harder time over energy prices while entertaining Western and Asian alternative proposals. And now Berdimukhammedov has raised the stakes by becoming the first leader of Turkmenistan to formally attend a NATO summit. The president is feeling out his options for security outside of Moscow — a break with the behavior typical of Turkmenistan during the past century.
Moscow will certainly take notice and make some sort of move, since the upcoming NATO summit is a pivotal benchmark for Russia’s geopolitical position as an international leader. NATO will be considering extending membership offers to several countries that are crucially important to Russia, including the former Soviet states of Georgia and Ukraine. The last thing Moscow needs is for Turkmenistan also to be cozying up to the rival alliance — and Ashgabat knows it
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Summary
Although a clash between Georgia and Russia over the secessionist region of Abkhazia seemed very possible last week as both players positioned troops, a trigger is still necessary before this long-standing feud erupts.
Analysis
An escalation between Georgia and Russia made it look as if the two countries’ simmering conflict over Abkhazia had reached a breaking point. But the escalation fizzled shortly thereafter given that Tbilisi knows it remains solo in its attempts to fight its larger neighbor — especially after a meeting between Georgian officials and a European envoy May 12.
Related Link
Intelligence Guidance: Week of May 11, 2008
While the clash between Russia and Georgia has subsided somewhat into its typical stagnation, that does not mean the chatter will stop entirely. Stratfor assumed that a large escalation was occurring that could turn this crisis into a war because both players have moved large numbers of troops into positions on the border of Georgia’s secessionist region of Abkhazia.
For Russia, the troop movement was an easy maneuver. In fact, Russia’s military is nearly 75 percent bigger than the entire population of Georgia. But for Georgia, positioning troops to total a force of 7,500 along Abkhazia’s border was a big deal — or so Stratfor assumed since it knows that Tbilisi understands that a military confrontation with Russia would be suicidal. This is what has kept Tbilisi from acting in the past.
This awareness is what prompted the Georgian government to court Western players for support, especially among the United States, NATO and the European Union. But the United States and NATO have turned a cold shoulder to Georgia. They have no appetite for a Russian confrontation when they have Iraq and Afghanistan still on their plates. While initially the European Union seemed to pay attention, European heavyweights such as Germany and France have continually cautioned against tangling with Russia. They know how easily Moscow can turn off the switch supplying energy to Europe, which is dependent on Russia for 40 percent of its energy intake.
However, this reservation has not stopped European countries from at least reaching out to Georgia on the diplomatic front. On May 12, an envoy from Europe consisting of the foreign ministers from EU president Slovenia and anti-Russian hardliners like Poland, Sweden and Lithuania met in Tbilisi with Georgian President Mikhail Saakashvili. The delegation, though including the Slovene foreign minister, was not EU-sanctioned since most EU members would not support a move on Georgia’s behalf. In fact, Stratfor sources in Georgia report that none of the countries will be sending military or technical support to Georgia, though each plans to extend diplomatic support – a weak substitute for what Tbilisi hoped to garner.
One form of support these European countries can offer Georgia is their ability to veto a resumption of Russian-EU talks. Poland, Lithuania and Sweden all have their own reasons to veto the talks. Russian missile threats against Poland, a prolonged break in oil supplies from Russia to Lithuania and a timber supply crisis from Russia to Sweden are all reasons why European countries might veto the talks.
The European Union says it has been talking with Lithuania to resume the Russian-EU partnership despite the oil crisis. However, with Lithuania saying it will continue its veto policy until both the oil and Georgia situations are resolved, those EU-Lithuanian negotiations do not look promising. Moreover, countries such a Poland or Sweden could also take up the helm of vetoing EU-Russian relations.
Regardless, at least for now, the drama between Georgia and Russia seems at a standstill. Both actors know that outsiders are not going to push the situation. Tbilisi knows it cannot proceed alone and Moscow does not seem eager to invade. Even with troops in place, Stratfor is still waiting for a trigger that could finally break this long-standing feud.
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:-o
http://www.filecabi.net/video/Pod_RussiaSkinheads.html
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Geopolitical Diary: Russia Takes A Double Hit
July 9, 2008
Tuesday was not the best of days for the Russians. Not only did the Serbian parliament usher in a new government — the most stable and pro-Western alignment the country has had since World War I — but also the United States and the Czech Republic signed a deal to install an X-band radar on Czech soil as part of an American ballistic missile defense (BMD) system.
Serbia, as a Slavic state surrounded by foes, has been a bastion of Russian influence for years. All of Serbia’s neighbors are now EU members, applicants or protectorates. And the change in Belgrade makes it likely that Serbia will firmly fall into the West and Russia will lose its last willing ally in Europe.
Serbia is surrounded by Europe, so the only means Moscow can use to seriously draw the country back into the Russian fold is to use lots of cold hard cash. The Russians may not even be too concerned about Serbia’s new government. In fact, the political shift could translate into good business for Russian investors if, through a western-oriented Serbia, they have access to the European Union. But business is hardly a substitute for the geopolitical influence that Russia previously enjoyed.
The BMD issue is a double hit. While the immediate reason for the project is to deter against a potential Iranian nuclear missile, it also sets up a scenario in which a BMD could be expanded, deepened and reconfigured to hold off a Russian deterrent 20 years from now. The Czech Republic is also now included in a lineup of European countries that stretches from Iceland to Turkey that host American military facilities. Poland will also join that lineup once its domestic politics facilitates the signing of a deal to house a U.S. BMD installation.
While the Russians have (loudly) promised reprisals for the U.S. expansion into Central Europe — specifically Poland and Czech Republic — they have little influence over this development. There is nothing that Russia can do to deter the distrust of Central Europeans. Steps such as, for example, returning offensive ballistic missiles to Kaliningrad or retargeting portions of its nuclear arsenal at BMD sites, would only solidify the Europeans’ willingness to collaborate with the Americans on security issues.
While Russia does not really have any options that constitute an obvious retaliatory step, what it will do can be broken into two categories.
First, Russia is making the Europeans — and especially Central Europeans — pay a price for their geopolitical alignment. Since 2000, Russia has steadily jacked up the price of natural gas sold to Europe fourfold, with another 25 percent hike slated for the next 12 months. In addition, alternate energy shipment routes starting to come online (specifically for oil) have been expressly intended to bypass Central European transit states. In the case of Poland this will leave several Cold War-era refineries without a source of crude.
Second, Russia is hardening its outer shell. Russia has no clear geographic barriers separating it from most of its neighbors. This is one of the reasons why Russians tend to be so distrustful of outsiders. From Napoleon to Wilhelm II to Hitler, outsiders tend to invade Russia. Therefore, the Kremlin is using its energy income, energy supply routes, weapons sales and intelligence services to subtly (and not so subtly) reshape the Russian near abroad rather than merely rage against things it cannot change in Belgrade, Prague and Warsaw.
Ultimately, Russia’s vital interest lies is in its borderlands. In recent months the Russians have adjusted the expectations of Ukraine, Belarus, Kazakhstan, Turkmenistan Azerbaijan and Georgia, forcing them to see the world from a slightly more Russian point of view. This strategy is hardly foolproof. For every two steps it takes forward, Russia takes another step back. But what Russia really needs to feel secure are buffers. From the Russian point of view, it is better to tussle in the borderlands than on the home front. And while the U.S./Czech deal announced Tuesday and the move by Serbia to adopt a more pro-Western government do not advance Russia’s influence, the geopolitical giant is not without options.
stratfor
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Geopolitical Diary: The Multiple Messages Of Military Movement In Georgia
July 16, 2008
The United States has begun joint military maneuvers with Georgia. About 1,000 U.S. troops have been deployed to Georgia to train with Georgian troops. They will be based near Tbilisi, the capital. There will also be small contingents from other regional countries participating. Russia has also launched military exercises involving 8,000 troops in the North Caucasus region bordering on Georgia. The Americans have said that these maneuvers were scheduled months ago and the Russians said that their own exercises have nothing to do with what is going on in Georgia. The Georgians also announced Tuesday that they have approved a 5,000-troop increase in their military as well as a 27 percent increase in their defense budget.
It is certainly true that the American exercises were planned a while ago. But that does not change the fact that the decision to conduct the exercises was going to be seen by the Russians as a challenge, and that the Americans knew that and intended it as such. The Russians have been busy trying to re-assert their sphere of influence in the region, and have seen Georgia as particularly troublesome, in part because it is seeking membership in NATO and in part because the Russians have viewed them in the past as supporting anti-Russian groups in the region. Moreover, the Russians have viewed the United States as deliberately encouraging Georgian aspirations for NATO, and therefore deliberately challenging Russian interests. Whatever their claims, the Americans knew that the Russians would be upset at the maneuvers and that is clearly why the Americans did what they did.
The United States has a credibility problem in the former Soviet Union — Washington is not seen as being particularly effective in protecting its interests or the interests of its allies in the region. The Russians appear to be on the ascendancy and the Americans seem content to let them ascend. This is affecting the behavior of nations around Russia, who seeing U.S. inattentiveness or weakness, find themselves with few options in the face of Russian assertiveness.
The reason, of course, is that the United States is indeed, for the moment, weak. It is absorbed in Iraq and Afghanistan, and has no meaningful reserves. It cannot promise military support to allies like Georgia, because it in fact has very few assets with which to support them. The decision to hold this maneuver with 1,000 troops is a symbolic gesture of commitment to an ally. But the Russians deliberately deployed a much larger number to make several points. They wanted to show the Georgians that they have many more troops available than the Americans, are much nearer, and are more able to mobilize that force quickly while the Americans took months to schedule their undertaking.
The Russian lesson to the Georgians is clear. The Americans can make a symbolic gesture, but symbols are not very important. What matters is, as the Russians say, the correlation of forces. The United States might well be a global power, but at this place and at this time, the Russians are much stronger — and they don’t have to travel very far to get there.
During a period of time when the Russians are in Abkhazia and South Ossetia, breakaway regions of Georgia, they are trying to demonstrate that the American maneuvers should be read as a sign of weakness, rather than demonstration of commitment. The troops the United States committed to this exercise were far too few and came from too far away to make much of a difference.
That is why the Georgian decision to increase its own defense budget and army is more significant than the exercise. But even that isn’t significant. No matter how much the Georgians do, they cannot counter-balance the Russians. Russia is not looking to invade Georgia, but it is trying to show that invasion is its decision to make, and not one that will be influenced by U.S. troops or Georgian budgets. The lesson is intended to be read not only by the Georgians, but other countries in the former Soviet Union.
Russia is saying that the United States is going to have to do a lot better than this if it is to be considered a credible player in the region and that the Americans can’t do much better than what they have already done. Ultimately, the Russians are working to reshape perceptions of American power in the former Soviet Union in order to dispel what they claim is the illusion that Americans are a shield to nations acting in opposition to Russian interests.
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Former Cuban leader Fidel Castro has said there is no need for explanations or apologies over reports that Russia might send nuclear bombers to Cuba, Bloomberg reported July 24, citing a statement from Castro posted to the Internet on July 23. Cuba has the “nerves of steel” needed in current “times of genocide,” and the United States knows it, the statement says.
stratfor
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Geopolitical Diary: Cuba and a Return to the Russian-U.S. Tug-of-War
July 25, 2008
For the past week, a series of stories and denials have been published in the Russian media surrounding a possible plan for Russia to relocate a refueling base in Cuba and resume flights of Russia’s Tu-160 “Blackjack” and Tu-95 “Bear” nuclear-capable strategic bombers back into the Western Hemisphere. All the noise reached a crescendo when another piece of information — true or not — was leaked to the Russian press that a crew of the Russian bombers had gone to Cuba on Thursday to conduct preliminary surveys.
Thus far, there is no confirmation that Russia is indeed returning militarily to Cuba. It is, however, a signal of what could happen if the United Stated does not heed Russian demands for Washington to back off from Moscow’s turf. This would be, in Moscow’s eyes, an equal response to the United States’ signing ballistic missile defense system treaties with the Czech Republic and Poland — right on Russia’s doorstep — as well as discussing NATO membership with the former Soviet states of Ukraine and Georgia.
Russia did, in fact, respond to the West’s encroachment: cutting energy supplies to Europe and sending more military into Georgia’s secessionist regions. But the problem was that Moscow simply hadn’t gotten Washington’s attention.
Washington has been too wrapped up in other issues — such as the upcoming presidential election, wars in Afghanistan and Iraq, negotiations with Iran and simply not believing Russia had any real tools with which to threaten it –- that it airily dismissed all of Moscow’s provocations. This has made Russia’s reprisals Europe’s problem at a time when Moscow wants to prove it once again is a global power and can stand up against its traditional foe: the United States. So Russia sent a signal of something that the United States simply cannot ignore — the moving of the Russian-U.S. tug-of-war from Russia’s doorstep to the U.S. doorstep. This is a serious threat and one with which Washington is quite familiar.
The Cuba option would be a powerful move against the United States — just as it was during the 1950s and 1960s — because it directly penetrates the United States’ immediate periphery. Combine the Cuba rumors with Venezuelan President Hugo Chavez’s trip to Moscow this past week — which held its own flurry of rumored deals over Russian bases and defense deals — and Moscow is reminding the Americans of a prior miscalculation. In the 1950s, Washington assumed that it could threaten the Soviet Union along its borders in Europe, South Asia and East Asia. And the United States believed it could not be threatened in its homeland, in the Western Hemisphere — America assumed no foreign power would dare violate the Monroe Doctrine. Washington bet that Moscow did not have an equivalent threat, and it was wrong.
The Soviet Union’s move into Cuba back then changed the entire dynamic of the Cold War. The Soviet presence threatened the sea lanes out of the Gulf of Mexico, major facilities in Florida, all of the Caribbean airspace and some of the Eastern Seaboard. It forced the U.S. Navy and Air Force to shift resources and account for Soviet units there. It diverted the CIA into Latin America, forcing the conflicts in Central American and Grenada. Despite its inherent military vulnerability, Cuba was one of the most strategic Soviet assets. Nothing was the same after Cuba.
The Russians are reminding the Americans of their prior miscalculations on how Russians respond to perceived threats. The United States has shifted its focus from its periphery and once again moved to responding to threats that could never truly physically hit the homeland — such as an Iranian missile threat. In the nearly 20 years since the collapse of the Soviet Union, the United States has returned to and enjoyed a world where any potential military threat is an ocean and half a world away.
For now, this is just a signal and no real movement on the ground has been made. Russia is serious, however, about its ability to follow through if the United States does not release the pressure elsewhere. The moves over Cuba are not an indicator of the Russians’ global intentions, but are meant to signal an increase in Moscow’s assertiveness. It is a gutsy and interesting move by the Russians. We have yet to see whether the Americans have really noticed (or want to admit that they noticed) and can divert attention from the Middle East and domestic politics to address the Russian threat — either by backing down or by escalating the situation, which would bring back a Cold War standoff.
Of course, if Washington and Moscow do get serious about things such as Cuba, then the U.S. escalation would go far beyond what Russia currently feels threatened over.
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Russia: The Challenges of Global Reach
Stratfor Today » July 29, 2008 | 1556 GMT
ALEXEY PANOV/AFP/Getty Images
The Russian aircraft carrier Admiral KuznetsovSummary
Russia plans to upgrade its Borei-class nuclear-powered ballistic missile submarines and eventually build a small fleet of new aircraft carriers, the chief of the Russian navy said July 27. Russia has slowly been turning its military fortunes around from the decay and decline of the 1990s, and it could be close to having the foundation for reaching some of its goals.
Analysis
Editor’s Note: This is the second in a two-part series on the Russian navy.
During the celebration of Russia’s Navy Day on July 27, the country’s senior naval officer, Adm. Vladimir Vysotsky, articulated two points and echoed a third made July 25 about the future of the Russian fleet. Though his claims remain just that, they warrant further analysis, given that they will go to the heart of Russia’s global military reach.
Back on July 25, Vysotsky insisted that new nuclear-powered ballistic missile submarines (SSBNs) and attack submarines (SSNs) are top priorities for the Russian navy. Two days later, he further explained that the new Borei (Project 955) SSBN design will be upgraded starting with the fourth hull of the class — the next to be laid down — while preliminary research is under way on a new architecture for future aircraft carrier groups, including coordination and contact with a “space group.” Vysotsky hopes to one day have five or six such carrier groups, though design work has not yet begun.
The SSBN
The lead boat of the Borei class, the Yuri Dolgoruky, was only just launched last year, more than a decade after its keel was laid. It underwent a dramatic redesign when the initial submarine-launched ballistic missile (SLBM) with which it was to be outfitted failed repeatedly in testing and was scrapped. Though the Yuri Dolgoruky is now being fitted out and two sister ships are already under construction, the replacement Bulava SLBM (known to NATO as the SS-NX-30) also has yet to mature. The Bulava fared poorly in testing, with three consecutive failures toward the end of 2006 and another in 2007. (There are rumors that testing will resume soon.)
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Related Links
Russia: The Future of the Fleet
Russia: Future Naval Prospects
Russia: Sustaining the Strategic Fleet
Russia: Missiles That Work
An SSBN and SLBM represent a complex synthesis of some of the most advanced technologies available to mankind. One must be carefully designed and tailored to work with the other. To develop, design, alter and produce both at once is a very risky proposition. Further complicating the matter, a rush forward with production has left Moscow working with not just one, but three hulls at various stages of completion even before the missile — also supposedly entering production — is flying properly, and before integration has been completed on a single boat.
Vysotsky’s point about “upgrading” the fourth hull simply means that the Russians hope to have the kinks hammered out and the SLBM fully integrated by the time the fourth hull really starts to take shape. In other words, the hope is that the fourth hull will be the first true “production” hull — the first with the design more or less fixed from the start.
While this is obviously less than optimal, Russia is working with what it has in hand, and it would be wrong to assume that the Russians’ troubles with the Bulava are insurmountable.
Ultimately, Russia is committed to the sea leg of its nuclear triad and is working deliberately — if slowly — to build the submarines that will carry its deterrent toward the middle of this century.
The SSN
Meanwhile, the last Akula II attack boat, laid down in the mid-1980s, is currently in trials (though there are rumors that this boat might be leased to India). The Akula IIs are by most accounts exceptional attack submarines, with levels of quieting comparable to or better than the U.S. improved Los Angeles class.
The launch of the Severodvinsk (of the Yasen or Project 885 class), the first new SSN to be designed and built since the collapse of the Soviet Union, is expected in 2009. Some sources suggest that a second of the class is already under construction, and that more could follow.
Though the Yasen class incorporates some modern design features with which Russian engineers have little experience, there is little doubt that the architecture relies substantially on the success of the Akula series, and comparable or better quality can be expected.
The SSN fleet is important for Moscow because of its geography. Split not only between two oceans, but also among many bodies of water, Russia’s fleet is based far from the world’s major sea lines of communication and often on the wrong side of chokepoints and technologically superior naval forces. The Soviets favored SSNs to hold those lines at risk, because their stealth and range allowed them to operate far from home port.
The Carrier
Russia’s talk of aircraft carriers is at once the most treacherous and the most ambitious. Stratfor has remarked before that the pursuit of a massive carrier fleet can be a path of folly, given not only the investment, but also the institutional skill needed to conduct deployments and flight deck operations — to say nothing of doing it well. The commitment of resources and effort, in other words, can often be used more effectively elsewhere.
Moreover, the Soviet Union has long struggled with carriers. Though it repeatedly had ambitions of a carrier fleet comparable to or second only to the United States’, the Kremlin only commissioned a full-deck carrier capable of launching conventional fixed wing aircraft in 1990: the Admiral Kuznetsov.
At nearly 60,000 tons and capable of embarking a large squadron of some 18 navalized Su-33 Flanker fighters, the Kuznetsov is larger than any other aircraft carrier in the world except those of the U.S. Navy. While five or six carriers over anything but the very long term might be ambitious to a fault for Russia, Russian shipyards are capable of building a ship of that size.
While Russia lacks much institutional knowledge about flight deck operations, the capability to regularly park very capable Flankers in the Mediterranean and beyond would be a significant shift in the global maritime balance, even if the ship and its escorts would likely fare poorly in an actual shooting war with U.S. and NATO naval formations.
While Vysotsky’s hint was only vague (and it largely looks like research is still ongoing), Russia’s new concept for carrier groups might include much higher integration with space-based sensors and platforms than ever before — an important objective if Russia hopes to even attempt to operate effectively far from its own shores in the 21st century.
In Context
Ultimately, Russia is beginning to rebuild from the ashes of the Soviet Union (in many cases with the benefit of the height of Soviet technology). But rebuilding a navy is about more than just hardware, and complex tasks like sustained flight deck operations and anti-submarine warfare are some of the most advanced techniques a navy can learn — in other words, they are often the last things a navy learns and the first it forgets.
Though some drills and occasional deployments are taking place, the Russian navy has a long way to go before truly regaining its proficiency from Soviet days. Nevertheless, it is wrong to judge the Russian military by the established standards of modern military thought. The Soviet solution to a problem was always a bit more quantitative and brute-force than a U.S. or NATO solution.
None of this is to deny or understate the challenges that Moscow faces. Rather, Stratfor is highlighting that the Russian navy is currently slated to have several new SSBNs and several more new SSN hulls in the water in three to five years, and could actually be investing significantly in constituting a small carrier fleet by then. While this might not win Moscow any wars with the world’s first-rate naval powers, it could begin to afford the Kremlin global military capabilities that it has long suffered without.
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August 8, 2008
Fighting in Georgia’s separatist enclave of South Ossetia picked up overnight Friday. Georgia moved regular army forces into the South Ossetian capital of Tskhinvali proper after having captured most of the suburbs and encircling the town. The Georgian government says that its forces now hold most South Ossetian territory, including all of the heights overlooking the capital.
South Ossetia seceded from Georgia in 1993 during the chaos of the Soviet breakup. In those early post-Soviet days, a crumbling Russia wanted to maintain footholds south of the Caucasus Mountains and ensure that Georgia could not become a launching point for foreign influence into Russian territory. On the other side of the border, Georgia was undergoing a nationalist spasm that made the South Ossetians believe that their destruction was imminent. These fears merged and the Russians provided the South Ossetians with the military capabilities they needed to secure and hold independence. Fifteen years later, the Georgians are attempting to eliminate the South Ossetian separatists.
But this conflict is about much more than simply which flag flies over a tiny chunk of territory in the Caucasus. Georgia is an extremely pro-American and pro-Western state and represents the easternmost foothold of American/Western power. It has also been in the Russian orbit for the bulk of the past 300 years. As such, it is the hottest flashpoint in Western-Russian relations. Which way the territory falls ultimately decides whether Russia can determine security concerns that literally fall right on the border of its heartland. To put it another way, what is being decided here is whether bordering Russia and simultaneously being a U.S. ally is a suicidal combination. Whichever way this works out, the dynamics of the entire region are about to be turned on their head.
The conflict started on Thursday because the South Ossetians feared that the Russians were about to sell them out. Russia does not want Georgia to join NATO — or even to be appearing to be seeking to join NATO — and so has cranked up political, economic and military pressure on Tbilisi. The two had been negotiating a deal by which Georgia would abandon its NATO bid and tone down its rhetoric in exchange for being allowed to continue existing. Since South Ossetia (and, to a lesser degree, Georgia’s other breakaway region of Abkhazia) gauges its own prospects for continued existence based on the level of tension between Moscow and Tbilisi, the South Ossetians feared that restoration of some sort of “normal” relations between Russia and Georgia could destroy them. Ergo they began shelling Georgian towns near Tskhinvali. The Georgians responded with an invasion.
Fundamentally there are only two locations in this conflict that matter: the capital and the southern end of the Roki Tunnel, which connects South Ossetia to Russia. The capital is the only city of note in South Ossetia, and the Roki is the only means for Russia to shuttle forces to and from the territory. The tunnel is only two lanes wide and is an excellent choke point. If Georgia can capture and hold those two targets, South Ossetia’s 15-year rebellion will in essence be over.
But that can happen only if the Russians let it. While Georgia’s forces — with U.S. training — have become demonstrably more capable in the past five years, Georgia remains a relative military pigmy and South Ossetia is a Russian client.
Effective Russian intervention has not yet materialized, however. Russian sources are reporting that the Georgians have engaged Russian peacekeepers (forces the Russians have long deployed to guarantee South Ossetia’s independence) and killed their commander. Georgian sources report that Russian jets have bombed Gori, a city in Georgia proper that is being used for the invasion’s launching point. Those reports also claim that Georgian forces downed one of the jets.
The truth of the reports from either side cannot be confirmed at this point, but this we know for sure: If the Russians were committed to assisting the South Ossetians, then the Roki tunnel would be flooded with military assets flowing south instead of evacuees flooding north. All reports at present indicate that the northern end of the tunnel is cluttered with evacuation buses, by some reports enough to transport a sizable portion of South Ossetia’s total population of about 70,000.
If the Russians do commit militarily, one of the most enthusiastic forces they could tap to assist South Ossetia are the Abkhaz. Like South Ossetia, Abkhazia is another Georgian separatist enclave that could have attained and maintained its de facto independence only with active Russian military support. The Abkhaz say they are willing to send at least 1,000 volunteers to back up South Ossetia, but it appears the Russians are restraining them.
The Russians appear to be making up their minds about what to do. President Dmitri Medvedev is chairing a National Security Council meeting as this diary is being published, a meeting that Prime Minister Vladimir Putin — at the Olympics in Beijing — is undoubtedly attending remotely.
The Russians now face an uncomfortable decision. South Ossetia wants to force Russia to intervene militarily, but Russia prefers to maintain the fiction that it is not Russian military assets that guarantee South Ossetian independence. Should Russia not intervene, however, it will essentially have demonstrated its ineffectiveness in its own back yard. Kosovo’s independence proved that Russian diplomatic power in Europe was nonexistent. Getting forced out of South Ossetia — a territory that Russia not only borders but has troops in — would be several steps past humiliation.
And so we would be very surprised if Russia does not act. Which means we are very surprised that the Russians have not yet acted firmly. They will need to do so very soon, for if Georgia manages to capture both Tskhinvali and the mouth of the Roki Tunnel, then Russia not only will have lost its foothold in the South Caucasus, but also will be unable to use purely conventional forces to put the military balance back where Moscow would like it to be.
So, for now, all eyes are on that security council meeting in Moscow. The Russians need to decide if they are all in.
stratfor
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Stratfor
Given the speed with which the Russians reacted to Georgia’s incursion into South Ossetia, Moscow was clearly ready to intervene. We suspect the Georgians were set up for this in some way, but at this point the buildup to the conflict no longer matters. What matters is the message that Russia is sending to the West.
Russian President Dmitri Medvedev summed this message up best: “Historically Russia has been, and will continue to be, a guarantor of security for peoples of the Caucasus.”
Strategically, we said Russia would respond to Kosovo’s independence, and they have. Russia is now declaring the Caucasus to be part of its sphere of influence. We have spoken for months of how Russia would find a window of opportunity to redefine the region. This is happening now.
All too familiar with the sight of Russian tanks, the Baltic countries are terrified of what they face in the long run, and they should be. This is the first major Russian intervention since the fall of the Soviet Union. Yes, Russia has been involved elsewhere. Yes, Russia has fought. But this is on a new order of confidence and indifference to general opinion. We will look at this as a defining moment.
The most important reaction will not be in the United States or Western Europe. It is the reaction in the former Soviet states that matters most right now. That is the real audience for this. Watch the reaction of Ukraine, Kazakhstan, Nagorno-Karabakh and the Balts. How will Russia’s moves affect them psychologically?
The Russians hold a trump card with the Americans: Iran. They can flood Iran with weapons at will. The main U.S. counter is in Ukraine and Central Asia, but is not nearly as painful.
Tactically, there is only one issue: Will the Russians attack Georgia on the ground? If they are going to, the Russians have likely made that decision days ago.
Focus on whether Russia invades Georgia proper. Then watch the former Soviet states. The United States and Germany are of secondary interest at this point.
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http://formerspook.blogspot.com/
SATURDAY, AUGUST 09, 2008
Going for the Knockout
On the second day of its conflict with Georgia forces, Russia's military strategy is becoming increasingly clear. With an overwhelming advantage in firepower--and near-complete control of the air--Moscow is going for the knockout punch, attempting to drive Georgia forces from the breakaway region of South Ossetia, and (perhaps) other areas as well.
As the Wall Street Journal notes in today's lead editorial, the latest conflict in the Caucasus is a study in miscalculations. Georgian President Mikheil Saakashvili, a close U.S. ally, has long pledged to retake South Ossetia and another separatist region, Abkhazia. The recent fighting apparently began when Mr. Saakashvilli sent his forces into Ossetia, attempting to reassert his control, once and for all.
But the Georgian leader apparently miscalculated. Within hours, Russian armored columns, backed by helicopters and aircraft, were rolling into the disputed areas, supporting "peacekeeping" forces that were already there. By some accounts, Moscow's forces have already reversed early territorial gains by Georgian forces; they have also conducted numerous bombing runs against airfields, port facilities and other strategic targets outside Ossetia and Abhazia, killing thousands of civilians.
By late Saturday, Georgian officials were requesting a cease fire--and help from the West. Readers will recall that Tbilisi has actively pursued NATO membership, and created one of the true, democratic regimes in the former Soviet bloc. Until a few days ago, more than 1,000 U.S. military advisers were in Georgia, providing training for the nation's armed forces. The two militaries have also worked closely in Iraq, where Georgia provides the third largest contingent of foreign security forces.
With those ties, Tiblisi is hoping that the U.S. and NATO offer more than "strong denunciations" of Russian military moves, and support for Georgia's territorial integrity. However, Washington and its European partners have no stomach for a possible conflict with Moscow--in Russia's vertiable backyard--so western efforts will be limited to diplomacy.
The Russians understand this, and that's one reason they're escalating military activity. Various media outlets report that Moscow's Black Sea Fleet is steaming south, preparing for amphibious operations along the Georgian coast. That would open a second front for the Tbilisi's out manned military, placing a further strain on defenders.
At this point, it's unclear what message the U.S. and NATO are sending to the Russians. As the WSJ observed earlier today, Russian Prime Minister Putin, who has discussed the crisis with President Bush in Beijing, needs to hear that imperialism in the Caucasus will have consequences for Moscow's relations with the west.
But no one seems ready to deliver that type of blunt warning to the Russia. Mr. Putin got a friendly hug from Mr. Bush before their meeting, and a few months ago, Germany vetoed plans to put Georgia and Ukraine on track for eventual NATO membership. That fact wasn't lost on Vladimir Putin, either.
Whatever his miscalculations, Mr. Saakashvilli represents the type of pro-western reformer that the U.S. has long sought in the eastern bloc. That's why the strike against Georgia (ultimately) represents an attack on democracy. If Russia presses its attack past the disputed regions--and continues its indiscriminate bombing of civilian areas--Washington and its allies will face a difficult choice.
No one wants a ground war in the Caucasus, but at what point will they draw a line against the Russians? And will they take a stand before (or after) the first T-90s roll toward Tbilisi?
Labels: Russia; Georgia; Caucasus conflict; U.S.; NATO
POSTED BY SPOOK86 AT 6:05 PM
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At the time I didn't understand why we supported the breakaway of Kosovo. As Stratfor predicted, the Russians looked for a place to retaliate rhetorically hoisting us on our petard with its justifications. What will they do now viz our efforts to stop Iran from going nuke?
Condi Rice is supposed to be a deep expert in Russian matters, but as best as I can tell the Bush administration has misread Putin and seriously overplayed our hand viz the Russkis.
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Kremlin Capers
August 11, 2008
Grim news continued to flow from Georgia yesterday. The Georgians said Russia had bombed the civilian airport in Tbilisi, while Russian warships off the coast began an economic embargo. Prime Minister Vladimir Putin left the Beijing Olympics and flew to Russian North Ossetia, where he revealingly criticized "Georgia's aspiration to join NATO."
Not least among the geopolitical realities coming to the surface at the moment is that of just who's top dog in the Kremlin. While it's widely thought Mr. Putin's power trumps that of Russian President Dmitry Medvedev, an interesting wrinkle has emerged elsewhere in the new Russia that has modern-day Kremlinologists wondering whether the president might yet become more his own man.
The story revolves around Russian coal and steel company Mechel, which is publicly listed on the New York Stock exchange. On Friday the firm said it was going to postpone a preferred share placement in the wake of a battering its shares took from the volatile Mr. Putin.
Late last month, Mr. Putin accused the company of price gouging and tax evasion and warned of investigations to follow. He also got personal after Mechel CEO Igor Zyuzin failed to show up to a meeting the prime minister was holding with business leaders. "The director has been invited, and he suddenly became ill," said Mr. Putin, according to the Moscow Times. "I think he should get well as soon as possible. Otherwise, we will have to send him a doctor and clean up all the problems." Mr. Zyuzin had been hospitalized a day earlier with heart problems.
Coming from Mr. Putin, such talk is nothing short of terrifying: Consider the fate of former Yukos CEO Mikhail Khodorkovsky, now in jail in Siberia while Yukos's assets were gobbled up by state-owned oil company Rosneft. Investors swiftly took note: Mechel's stock dropped by more than 33% in a day, while the Russian exchange fell by 9%.
The Mechel play springs from a familiar game plan, in which accusations of tax or regulatory problems become the alibis by which the Kremlin and its cronies seize the assets of unwanted competitors. "It is a strictly commercial operation in the framework of Kremlin Inc. Tribute is no longer enough for them; they want to take everything into ownership," speculates Russian analyst Vladimir Pribylovsky. A similar scenario has played out with British Petroleum's BP-TNK venture in Russia, in which the Russian partners used visa "issues" to force CEO Robert Dudley out of the country.
The surprise in all this is that President Medvedev has decided to protest. "We need to create a normal investment climate in our country," the President said, without mentioning Mr. Putin. "Our law-enforcement agencies and government authorities should stop causing nightmares for business." A Medvedev adviser added that "it is not correct to destroy your own stock market . . . and wipe off $60 billion." The Russian stock market is trading at a 22-month low.
The question for Kremlinologists is whether Mr. Medvedev's comments are evidence of some independence on his part and perhaps a looming power struggle, or merely amount to a good cop, bad cop routine. It would be heartening to think it's the former, and that Russia's leaders are beginning to realize there are costs to their habits of confiscation. But with foreign investors still looking to make a fast killing in Russian markets (foreign direct investment jumped by some 60% between 2006 and 2007), those costs apparently won't be paid for some time. Meanwhile, for anyone thinking of putting money into Russia, the message should be caveat investor.
See all of today's editorials and op-eds, plus video commentary, on Opinion Journal.
And add your comments to the Opinion Journal forum.
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How the West Can Stand Up to Russia
By GARY SCHMITT and MAURO DE LORENZO
August 12, 2008; Page A21
Given the cutthroat politics Moscow has practiced at home and abroad in recent years -- with only the softest protests from the U.S. and its allies -- no one should be surprised by Russia's decision to conquer the two breakaway regions of Georgia. Nevertheless, it should once and for all disabuse policy makers in Washington and Brussels of hopes that Russia intends to become part of the post-Cold War condominium of democratic peace in Europe. The point of the Kremlin's invasion of Georgia, which now threatens the capital city of Tbilisi, is to demonstrate to the world how impotent that security order has become.
For Moscow, Georgian President Mikheil Saakashvili's mistake in finally taking the bait of Russian provocations and ordering his troops in South Ossetia last week was the opening they sought -- and for which they had been planning for some time.
David Gothard
South Ossetia is not, as some have suggested, tit-for-tat payback for American and European recognition, over Russian objections, of Kosovo's independence from Serbia. Russia has been "at war" with democratic Georgia for some time. Driven to distraction by Mr. Saakashvili's assertiveness and Georgia's desire to join NATO, Russian Prime Minister Vladimir Putin first tried to bring the country to its knees through economic warfare beginning in 2005. He cut off access to Russian markets, expelled Georgians from Russia, quadrupled the price of Russian energy to Georgia, and severed transport links.
Georgia failed to collapse. To the contrary, it has flourished: After the Rose Revolution of 2003 ended the corrupt reign of Eduard Shevardnadze, the former Soviet foreign minister, Georgia instituted far-reaching reforms to its governing structures, cleaned up the endemic corruption that infected every facet of pre-Rose Revolution life, and found new markets for its products in Turkey and Europe. It persevered with some of the most profound and thorough economic and pro-business reforms ever undertaken by a developing country -- slashing taxes and government regulations, and privatizing state-owned enterprises. All of which is reflected in Georgia's meteoric rise on the World Bank's Doing Business indicators. The irrelevance of Russian economic sanctions to Georgia made the ideological challenge that the Rose Revolution posed to Putin's vision of Russia even more profound.
Unable to bend Tbilisi to its will, the Kremlin in recent months ratcheted up the pressure and provocations in South Ossetia and Abkhazia -- reinforcing Russian forces and Russian-backed paramilitaries, violating Georgian air space with Russian jets, shelling Georgian villages and outposts, and passing a resolution to treat the two provinces administratively as part of Russia. Starting in 2004, Russia began issuing passports to the residents of South Ossetia and Abkhazia, a fact that today serves as one of the main pretexts for the ferocity of Moscow's military campaign.
However, Georgia's "impertinence" in seeking NATO membership and building close ties with Europe does not fully explain Moscow's blatant display of brute power. In a speech before the Munich Conference on Security Policy in February last year, Mr. Putin made it clear that Russia would no longer accept the rules of the international road as set by the democratic West. It was an in-your-face challenge to the U.S. and Europe, and we blinked. With the exception of John McCain, who warned against "needless confrontation" on the part of Moscow, no American or European official at the conference made any attempt to push back. Ever since, Moscow's contempt for NATO, the European Union and Washington has only grown.
Reversing this course will not be easy, but it is absolutely necessary. At stake are international law, energy security, NATO's future, and American credibility when it comes to supporting new democracies. It is also about resisting Russia's openly hegemonic designs on its neighbors -- including Ukraine, which Mr. Putin reportedly described as "not a real nation" to President Bush at their meeting in Sochi earlier this year.
What can the West do? The first step is for the U.S. and its allies to rush military and medical supplies to Tbilisi. If we want democracy to survive there, Georgians have to believe that we have their backs. At the moment, the tepidness of the Western response has given them serious cause for doubt. In addition, Washington should lead the effort to devise a list of economic and diplomatic sanctions toward Russia that impose real costs for what Moscow has done. Russia should know that the West has a greater capacity to sustain a new Cold War than Russia, with its petroleum-dependent economy, does.
Next, the West should make use of Russia's claim that its role in South Ossetia and Abkhazia is driven by the need to protect the populations there. If so, Moscow should have no objections to U.N.-sanctioned peacekeepers and observers moving into those two regions to replace the jerry-rigged system of "peacekeepers" that, until the war broke out, consisted of Russian troops, local separatist militaries and Georgian forces. If nothing else, the goal should be to put Mr. Putin and Dmitry Medvedev, the new Russian president, on their back foot diplomatically.
Over the longer term, it is essential that Russia's stranglehold on Europe's energy supplies be broken. The EU's failure to get its house in order by diversifying energy supplies and insisting that Russia, in turn, open up its own market, has created a situation in which Moscow rightly believes it has significant leverage over the policy positions of key countries such as Germany.
It was Germany that led the opposition at the most recent NATO summit in April against a Membership Action Plan for Georgia, emphasizing that a country that has unresolved conflicts should not be allowed to enter NATO. We presumably won't know for some time what the precise calculations were inside the Kremlin when it came to the decision to send troops into Georgia, but one can surely assume that the German position did nothing to discourage Russia's plans.
The real payback for Moscow's decision to invade Georgia should be the sweet revenge of a strong, prosperous and fully independent Georgia. Building on the strides Georgia has already made, Brussels and Washington should give Tbilisi a clear road to NATO and EU membership.
Mr. Schmitt is director of the American Enterprise Institute's program on advanced strategic studies. Mr. De Lorenzo is an AEI resident fellow.
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Stratfor Today » August 14, 2008 | 1955 GMT
ALEXEY NIKOLSKY/AFP/Getty Images
Russian Prime Minister Vladimir Putin
Summary
In the months before the Russo-Georgian war, Tbilisi complained that Russians were increasing their intelligence operations inside Georgia and its two secessionist regions. Russia’s Federal Security Service (FSB, formerly the KGB) did indeed have heavy influence on Russia’s military operations in Georgia; the FSB reportedly laid extensive groundwork in the country and had a significant role in the campaign’s strategic planning.
Analysis
As the war between Russia and Georgia reaches a simmer and the diplomatic front becomes the point of focus, some interesting details about how this war was implemented are surfacing.
In the months leading up to the war, Tbilisi repeatedly levied charges of increased intelligence activity by the Russians inside Georgia and its two secessionist regions, Abkhazia and South Ossetia. It is to be expected that Russia would have heavy and entrenched intelligence links inside the former Soviet state — and doubly so within the two separatist enclaves that Russia protects. But in the decade since former Russian President and current Prime Minister Vladimir Putin came to power, he has strengthened and empowered Russian security services, particularly the Federal Security Service (FSB). Moreover, Putin has positioned his KGB or FSB cronies into many high stations of Russia’s government and institutions. It is not an understatement to say that the intelligence services are running Russia.
Having served in the KGB (now FSB) during the Soviet era, Putin naturally would look at the problem of Georgia through an intelligence officer’s lens and would be inclined to use the tools and methods of the security services. While not a military man himself, Putin clearly understands military strategy. Stratfor sources in Moscow have also indicated that the FSB laid extensive groundwork in Georgia and took a significant — perhaps leading — role in the strategic planning of the campaign. The source argues that this role was decisive in Moscow’s success. This was seen in how the war was carried out.
Ultimately, the Russian military is something of a blunt instrument. Operations in Chechnya showed that it is anything but subtle in its methods. In part, this is the reality of a large, conscripted military that relies on quantitative force. While details are still emerging about how the Georgian campaign was conducted tactically, the way Russia held at Tskhinvali in South Ossetia over the weekend before pushing forward to Gori (and from Abkhazia to Senaki at the same time) could suggest restraint and coordination on the part of the commanders on the ground — commanders either influenced or directed by FSB personnel, according to one Stratfor source. If it were up to the Russian military, it would have simply tidal-waved over the country.
Stratfor has already argued that Russia’s execution of the campaign was neither flawless nor exceptional. However, it achieved a number of both political and military objectives, and the way operations — especially later in the game — were carefully tailored and coordinated is noteworthy. Russia planned how far to push it and was perfectly willing to draw back from captured regions to achieve maximum military and political gain, with minimum military and political risk.
In thrusts to Gori and Senaki, the Russian military now appears to have pushed forward and retreated a number of times. There is little indication that heavy fighting with Georgian forces was the cause of this. Instead, it seems that the military was playing the part for the Kremlin — keeping pressure on Tbilisi by pushing in and through Gori, but also pulling back in order to give Moscow deniability when it served the Kremlin. Essentially, the entire campaign could have been tailored to minimize political fallout while moving beyond South Ossetia and Abkhazia to devastate the Georgian military’s war-fighting capability. This is a subtle balancing act the Russian military is not known for, and it could indicate that the FSB’s role in planning and execution was more signifcant.
Also, the entire Russian-Georgian war was as much a propaganda action for Russia as it was a military conflict. The nearly seamless way in which it was done — complete with the use of U.S. reporters embedded with Russian forces and Russian reporters at Washington press conferences — could only have been masterminded by the top echelons of the FSB.
The FSB is willing to make bold moves like invading Georgia, but the entire campaign was fought in a way that would minimize political fallout and ensure that other countries would not get involved — something the Russian military has no experience in doing.
But the Russian military and the FSB have a long and volatile history of simply not getting along or trusting each other. Having someone from the intelligence community run not just the country, but every facet of that country, has pushed the military into the back seat. Moreover, Putin has been slowly but deliberately pushing for military reform and modernization (including changes unpopular with the old guard) while being careful not to create a threat to his leadership. Many in the military who were so proud of the late Soviet years and so utterly devastated by the 1990s simply could not see how ineffective and corroded the military had become. The Russian military was overflowing with people — like the four generals who have been either sacked or moved within the past year — who only remembered the military’s former Soviet glory.
It has taken someone from outside the military institutions (Putin) to step back and assess how best to revive the Russian military. Putin has placed former security personnel in many key military and defense posts, keeping the military subservient to him while looking at how best to reshape the military into a tool useful to the Kremlin.
But in doing this, Putin could be turning the military into a tool for the FSB. This would be like the CIA in the United States telling the Pentagon how to wage a war. The two might cooperate (and have turf wars), especially in Afghanistan, but one does not control the other. In Russia, the leadership has always balanced the two sides or simply crushed them both equally, but Putin is changing how the shots are called and might be cultivating a whole new toolbox for the FSB to work with.
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Russia Is Still a Hungry Empire
By MATTHEW KAMINSKI
August 19, 2008; Page A17
The sight of Russian tanks rolling through Georgia was shocking yet familiar. Images flash back of Chechnya in 1994 and '99, Vilnius '91, Afghanistan '79, Prague '68, Hungary '56. Before that the Soviet invasions, courtesy of the Ribbentrop-Molotov pact, of Poland and the Baltics in '39 and '40. Kazaks, Azeris, Tajiks, Ukrainians remember -- from family stories and national lore -- their own subjugation to Russian rule.
AP
Other empires such as Britain and France adjusted, not without difficulty, to the fall of their distant domains. Far more of Russia's essence is tied up in the Imperium, and it barely tried to find a new identity after the Soviet Union fell. The war in Georgia marks an easy return to territorial expansion (here Moscow has taken chunks of Georgia for itself) and attempted regional dominance.
Russia is a relatively young nation, dating from after the turn of the previous millennium. Drive the highway from Gori to Tbilisi and you'll find signs of Christianity that predate Russia by some five centuries. Georgians will tell you, with a mixture of pride and scorn, that their culture and history goes back a lot deeper than Russia's.
Starting out as an isolated village, Muscovy grew by conquest, swallowing up lands and people at a dizzying rate, especially from the 18th century on. Though Russian nationalists claim otherwise, as a nation the Russians are a mix of Slavic, Asian and other European ethnicities. This national hodgepodge was wrenched together by an authoritarian czar who claimed his right to rule from the heavens.
The Soviets were even better empire builders. Vladimir Putin, whose formative years were spent in Dresden spying on the East German colonials, comes from this tradition.
Never in the history of empire was the periphery generally so much more advanced than the center. With each move into Europe, from the partitions of Poland to Stalin's great triumph at Yalta, Russia acquired what it didn't have -- an industrialized economic base, better infrastructure and above all contact with Western civilization. Aside from St. Petersburg and a few other towns, Russia itself stayed a largely rural, Eastern Orthodox backwater. It knew it too.
In the Soviet days, Russian culture, language and history were pressed on its captive nations. But these nations in and outside the U.S.S.R. never gave up their dreams of freedom. Starting in the Baltics, and then spreading to the Caucasus and Ukraine, their resurgence was, as much if not more than Mikhail Gorbachev, the internal force that brought about the Soviet Union's collapse. They easily imagined life without Mother Russia. Russia could not reciprocate. To dominate is to be.
Boris Yeltsin tried to give Russians an alternative narrative. For his own political survival he had to stoke a Russian reawakening against the Soviet behemoth. After leading the charge against the 1991 putsch, Yeltsin put forward democracy as a unifying and legitimizing idea for the new Russian state. But that went up in smoke with the shelling of the Russian parliament in 1993, the first Chechen war and the rise of the oligarchs.
Yeltsinism was fully discredited by the time Vladimir Putin took over. He doesn't give the impression he ever believed in its main precepts of partnership with the West and freedom at home. For a while, Mr. Putin pushed some economic modernization, including cleaning up the tax code. His instinct, however, led him toward the past. The so-called humiliations of the Yeltsin era, which to most Westerners who lived there then looks like a golden era of relative normalcy, called for vengeance. The young democracies around Russia that chose a future in the West were to be forced back into Moscow's sphere of influence.
It is curious to hear Russia invoke the Kosovo precedent to justify its invasion of Georgia. There is an unintended parallel. Two former communist apparatchiks (Mr. Putin and Slobodan Milosevic) took over weakened, demoralized countries and thought expansionist nationalism would lead them to glory.
The second Chechen war consolidated the Putin hold on power in 1999 -- as stirring up the Serbs in Kosovo did for Milosevic in the late 1980s. The Serbs were then like the Russians are today. A European nation, though somewhat set apart by Orthodox Christianity, that opts out of the Western mainstream. This choice, alas, requires victims like Kosovo Albanians or Georgians -- small nations whose fate the outside world might ignore.
The images from Georgia brought me back to a late May evening 12 years ago in Murmansk, the seat of Russia's Northern Fleet. There ahead of elections, I'd met a smart and amiable teacher in the Russian Arctic city who, true to his nation's reputation for hospitality, invited me home for vodka and some dinner.
Hours into our meeting I'd mentioned that perhaps Russia, then looking for its place, might aspire to become something like prosperous Norway just across the border from Murmansk -- a country able to provide its people a good life. It stopped him cold. In this grim setting, my new friend spat in disgust and said, "Russia is no Norway. It is a great power. It is destined to be great." Mr. Putin would doubtless agree.
Mr. Kaminski is a member of the Journal's editorial board.
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By MIKHAIL GORBACHEV
Published: August 19, 2008
Moscow
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THE acute phase of the crisis provoked by the Georgian forces’ assault on Tskhinvali, the capital of South Ossetia, is now behind us. But how can one erase from memory the horrifying scenes of the nighttime rocket attack on a peaceful town, the razing of entire city blocks, the deaths of people taking cover in basements, the destruction of ancient monuments and ancestral graves?
Russia did not want this crisis. The Russian leadership is in a strong enough position domestically; it did not need a little victorious war. Russia was dragged into the fray by the recklessness of the Georgian president, Mikheil Saakashvili. He would not have dared to attack without outside support. Once he did, Russia could not afford inaction.
The decision by the Russian president, Dmitri Medvedev, to now cease hostilities was the right move by a responsible leader. The Russian president acted calmly, confidently and firmly. Anyone who expected confusion in Moscow was disappointed.
The planners of this campaign clearly wanted to make sure that, whatever the outcome, Russia would be blamed for worsening the situation. The West then mounted a propaganda attack against Russia, with the American news media leading the way.
The news coverage has been far from fair and balanced, especially during the first days of the crisis. Tskhinvali was in smoking ruins and thousands of people were fleeing — before any Russian troops arrived. Yet Russia was already being accused of aggression; news reports were often an embarrassing recitation of the Georgian leader’s deceptive statements.
It is still not quite clear whether the West was aware of Mr. Saakashvili’s plans to invade South Ossetia, and this is a serious matter. What is clear is that Western assistance in training Georgian troops and shipping large supplies of arms had been pushing the region toward war rather than peace.
If this military misadventure was a surprise for the Georgian leader’s foreign patrons, so much the worse. It looks like a classic wag-the-dog story.
Mr. Saakashvili had been lavished with praise for being a staunch American ally and a real democrat — and for helping out in Iraq. Now America’s friend has wrought disorder, and all of us — the Europeans and, most important, the region’s innocent civilians — must pick up the pieces.
Those who rush to judgment on what’s happening in the Caucasus, or those who seek influence there, should first have at least some idea of this region’s complexities. The Ossetians live both in Georgia and in Russia. The region is a patchwork of ethnic groups living in close proximity. Therefore, all talk of “this is our land,” “we are liberating our land,” is meaningless. We must think about the people who live on the land.
The problems of the Caucasus region cannot be solved by force. That has been tried more than once in the past two decades, and it has always boomeranged.
What is needed is a legally binding agreement not to use force. Mr. Saakashvili has repeatedly refused to sign such an agreement, for reasons that have now become abundantly clear.
The West would be wise to help achieve such an agreement now. If, instead, it chooses to blame Russia and re-arm Georgia, as American officials are suggesting, a new crisis will be inevitable. In that case, expect the worst.
In recent days, Secretary of State Condoleezza Rice and President Bush have been promising to isolate Russia. Some American politicians have threatened to expel it from the Group of 8 industrialized nations, to abolish the NATO-Russia Council and to keep Russia out of the World Trade Organization.
These are empty threats. For some time now, Russians have been wondering: If our opinion counts for nothing in those institutions, do we really need them? Just to sit at the nicely set dinner table and listen to lectures?
Indeed, Russia has long been told to simply accept the facts. Here’s the independence of Kosovo for you. Here’s the abrogation of the Antiballistic Missile Treaty, and the American decision to place missile defenses in neighboring countries. Here’s the unending expansion of NATO. All of these moves have been set against the backdrop of sweet talk about partnership. Why would anyone put up with such a charade?
There is much talk now in the United States about rethinking relations with Russia. One thing that should definitely be rethought: the habit of talking to Russia in a condescending way, without regard for its positions and interests.
Our two countries could develop a serious agenda for genuine, rather than token, cooperation. Many Americans, as well as Russians, understand the need for this. But is the same true of the political leaders?
A bipartisan commission led by Senator Chuck Hagel and former Senator Gary Hart has recently been established at Harvard to report on American-Russian relations to Congress and the next president. It includes serious people, and, judging by the commission’s early statements, its members understand the importance of Russia and the importance of constructive bilateral relations.
But the members of this commission should be careful. Their mandate is to present “policy recommendations for a new administration to advance America’s national interests in relations with Russia.” If that alone is the goal, then I doubt that much good will come out of it. If, however, the commission is ready to also consider the interests of the other side and of common security, it may actually help rebuild trust between Russia and the United States and allow them to start doing useful work together.
Mikhail Gorbachev is the former president of the Soviet Union. This article was translated by Pavel Palazhchenko from the Russian.
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http://www.barentsobserver.com/russia-sends-aircraft-carrier-to-syria.4502333-16149.html
The Russian aircraft carrier “Admiral Kuznetsov” is ready to head from Murmansk towards the Mediterranean and the Syrian port of Tartus. The mission comes after Syrian President Bashar Assad said he is open for a Russian base in the area.
The “Admiral Kuznetsov”, part of the Northern Fleet and Russia’s only aircraft carrier, will head a Navy mission to the area. The mission will also include the missile cruiser “Moskva” and several submarines, Newsru.com reports.
President Assad in meetings in Moscow this week expressed support to Russia’s intervention in South Ossetia and Georgia. He also expressed interest in the establishment of Russian missile air defence facilities on his land.
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The main stock index is down 55% in four months, banks are starved for capital and teetering on the brink, the currency is at a one-year low and the government is throwing money at the problem. We're not talking about Wall Street.
The current carnage on Russian markets comes amid global market turmoil. But the dive in Moscow began before the wider world cared about AIG's balance sheet, and its chief causes are home-grown. To wit, the bill for eight years of Putinism is coming due. And a Kremlin leadership that only weeks ago brimmed with menacing self-confidence is struggling to slow this financial free fall.
APThe first sign of trouble came in late July when Prime Minister Vladimir Putin lashed out at a Russian coal and steel company, Mechel, for alleged price gouging and appeared to threaten personally its chief executive. Mechel shares fell by a third, and the incident sent a chill through the market as a whole. Investors woke up to the systemic risk to property rights and the lack of any rule of law in Russia. They did so belatedly, we'd add, considering the attempted or successful expropriation of Yukos, BP and Shell assets and the blatant use of state resources to menace private business.
Another trigger was last month's war in the Caucasus. The Russians routed the Georgian army in four days and annexed -- in all but name -- its provinces of South Ossetia and Abkhazia. Then Russia got routed by the global economy. Since the war started, investors have pulled more than $35 billion from Russian markets. Russian businesses are having trouble getting access to international financial markets, as foreign lenders wonder if they can get paid back. Some $45 billion in foreign debt held by Russian corporates must be refinanced by the end of the year, and the cost of doing so is rising.
Other emerging markets have been hit hard in recent weeks, particularly the natural resource-driven economies. But Russia's is the worst performing market in the world this year. The decline from the all-time high in May wiped out $680 billion in value; Russia's entire GDP was just $1,286 billion as of last year. On Tuesday, the main ruble-denominated index was off 11.2%, the steepest fall since the 1998 ruble crisis. It plummeted yesterday as well, before regulators stopped trading for good at midday.
Each of the past three days, the Russian central bank injected over $10 billion into the money market, and also moved to prop up the ruble. The Kremlin yesterday lent the country's three largest banks $44.9 billion. Thanks to the oil and gas windfall of the past few years, Russia has built up a $573 billion reserve war chest that can tide the financial system over for a while and avoid a rerun of the 1998 crisis.
Not forever, especially if oil prices continue their fall. Russia's economy is hugely dependent on natural resources. In good times, the Kremlin pocketed the billions and didn't worry about pushing economic reforms. The outside investment needed to diversify was discouraged by the Kremlin's backsliding on the rule of law. Now the drop in crude prices is squeezing the country's blue chips and the Kremlin's coffers, even though on the current budget the Russian state will break even with oil at $70 a barrel or above.
Long reluctant to criticize the thin-skinned Putin regime, businesses have started to voice their unhappiness. On Monday Putin sidekick and President Dmitry Medvedev hosted 50 leading businessman at the Kremlin, and acknowledged that the Georgia war contributed to the country's economic troubles. He said Russia didn't want to be isolated, but added, "If they" -- meaning the West -- "try to stop us accessing certain markets there will be no catastrophe for the state or for those sitting here."
As it has turned out, much faster than anyone realized or hoped during the Georgian war in August, Western governments haven't had to do anything to have Russia pay a price for its aggressive behavior. Which is fortunate, considering the weak stomachs in Europe and at the State Department for any serious response to the war. Investors did it for them.
The war has also exposed the fiction that Russia is the next China -- an authoritarian political regime that's stable, predictable and on a path toward becoming a free-market economy. It's authoritarian all right, but it lags China on other counts. After this war, Russia is unlikely to join China in the World Trade Organization. Georgia and Ukraine, another potential target for Russian aggression, are in that club and in a position to block entry. But the bigger hurdle ought to be the WTO's standard that candidates be "market-based" economies ready to respect the commitments and rules of this international organization. By this standard, Russia doesn't belong there, or in the OECD or G-8.
Perhaps the Russian people, who give their leaders high marks in opinion polls, will begin to see the economic toll from Putinism and question whether their country is well-served by this leadership.
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Geopolitical Diary: A Russian Financial Power Play in Iceland
October 8, 2008 | 0120 GMT
The Russians are coming. Only this time they are invited and by Icelanders of all people.
Icelandic Prime Minister Geir Haarde confirmed Tuesday that indeed the NATO member state and staunch U.S. ally against the Soviet Union during the Cold War had asked for a $5.43 billion (4 billion euro) loan from its “new friend” Moscow and that it did so because it found no aid coming from its Western allies. Iceland’s economy has been devastated by the global credit crunch that destroyed its banking sector and currency. Icelandic banks have been either nationalized or propped up by the state, but the krona (Iceland’s currency) is falling precipitously. The Russian loan may have staved off a speculative run on the krona that ultimately saves the country from complete bankruptcy.
It was hard not to notice the bitter and wounded tone of Haarde, particularly when explaining why Reykjavik turned to Moscow for help in the face of rejection from his country’s equally financially stressed Western allies. That tone may soon be repeated by a number of countries as the financial crisis picks off the weakest and shakiest economies, a tone that will certainly be welcomed by the Kremlin looking to extend its influence globally.
Of course, the game of handing out money to allies in exchange for influence is not new to Moscow. The Soviet Union based its foreign policy in large part on buying allies (particularly in the Middle East and Africa), a strategy that to an extent helped bankrupt Moscow and bring the Cold War to an end. Thus far, post-Soviet Russia has been extremely careful and frugal — even the Iceland financial package is a loan and not a grant — in part because of its experiences and lessons from the Soviet era and in part because there was not any money to be shared with potential allies in the aftermath of the Soviet collapse.
Recently, however, that frugality has changed dramatically. Rising commodity prices have allowed Russia to build a massive $750 billion reserve fund and its energy and metals behemoths (and their oligarchs) to amass fortunes and power that could easily be mobilized to serve the Kremlin’s interests. While it is true that the Russian stock market recently plunged to lows not seen since the Ruble Crisis of 1998, drawing calls from analysts around the world that Russian economy is in tatters, the relevance of equity markets to the Russian economy is not altogether clear. The stock market was created to bring in foreign investment, but with the Russian coffers swollen with energy money the Kremlin is not too worried — for the moment — about the flight of foreign capital.
Russia is therefore well positioned to use its vast reserves to play the key role of a creditor nation during the woeful time of a global credit crunch — a position of great power. And Iceland is not the only country vulnerable to the financial crisis.
Ukraine, Greece, Slovakia, Bosnia-Herzegovina, Austria, Romania and Hungary are some of the other countries that, for whatever reason, may be extremely vulnerable and of particular interest to Russia. These all have a particularly troubling combination of high public debt, a government budget deficit and a high government tax dependency. While predicting endangered economies is not an exact science, it is safe to argue that during a global credit crunch these economies would be put under extreme pressure to fund their budgets. For Moscow, the goal would be to aid countries where Russian capital intervention would both irk the West and advance its position in overall Russia-West brinkmanship. Furthermore, Russia would want to target countries where a few billion dollars would go a long way.
Countries with close ties to the West are ideal. For example, a financial package given to a country like Greece — which has an enormous public debt and high budget deficit and is therefore particularly endangered — would certainly be a useful strategic poke at the West. It is important to underscore that the Russian intention in these situations would not be to lure Athens or Reykjavik to allow a Russian military base or to abandon its alliances with the West. The idea would be to turn significant players in the West’s clique from skepticism toward Russia to a genuine appreciation for its generosity. The more members of NATO and the European Union that are indebted — both literally and figuratively — to the Kremlin for their financial survival, the more the proverbial window of opportunity will be cracked open for Moscow to act globally and in its periphery.
Russia of course has to play this strategy very carefully. The current state of affairs, in which Russia is the creditor nation and the West is either not unified (the European Union) or self-centered (the United States) will not last long. Russia’s upper hand in terms of liquidity is a transitory situation and the Kremlin knows it. It therefore will have to choose its battles carefully, placing strategic roadblocks in places where the West will have to take time to unwind Russian influence once the financial crisis is over, thus delaying the moment when the West focuses its attention fully on the Kremlin.
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Just wanted to note that in this financial crisis we are back to referring to the meeting of the most important economies of the world as "G-7", not G8 (with Russia), even though the Russian stock market has lost 2/3 of its value since May. A result of the war this August in Georgia?
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The Financial Crisis in Russia
Stratfor Today » October 28, 2008 | 1012 GMT
Editor’s Note: This article is part of a series on the geopolitics of the global financial crisis. Here, we examine how the global financial crisis will impact a resurgent Russia.
Standard & Poor’s rating service lowered Russian long-term sovereign credit rating outlook to negative Oct. 23 because of projections that Moscow will need to inject more credit into the faltering Russian banking sector. A credit rating indicates the agency’s estimation of a state’s ability to maintain debt payments, so in this case S&P believes that ongoing efforts to address the financial crisis could overtax the Russian government. The cut in debt rating comes as the yield on Russian government 20-year bonds has increased eight basis points (a 0.08 percent rise in yield) to 10.94 percent, indicating that the foreign appetite for Russian bonds is quickly dropping as credit becomes scarce and investors seek investments they feel are more secure. The bond yield of Russia’s largest company, natural gas behemoth Gazprom — which is also the single greatest source of Russian total external debt — has thus skyrocketed, and it now stands at almost 700 basis points above emerging sovereign debt. Meanwhile, the Russian stock exchange closed below 550 on Oct. 24, wrapping up a precipitous fall that has destroyed 80 percent of its value since May.
International Economic Crisis
The Financial Crisis in the United States
The Financial Crisis in Europe
Hungary: Hints of a Wider European Crisis
The Financial Crisis in Japan and China
Methodology by George Friedman
The International Economic Crisis and Stratfor’s Methodology
Related Link
The Geopolitics of Russia: Permanent Struggle
A comprehensive flight of investor capital is occurring in Russia for a number of reasons. This situation is placing great pressure on the Kremlin to use its capital reserves — the third largest in the world — to prop up the Russian banking sector and the main engines of the Russian economy: the energy and mineral sectors. In the short run, Moscow’s massive capital reserves will allow it to weather the global liquidity crisis and increase government control over all sectors of the economy. In the long run, however, Russia might face a dearth of capital as it drains its coffers trying to pump cash into the system, putting vital capital expenditure projects (such as improving infrastructure, improving oil and natural gas field development, and military spending) on hold to the detriment of its ability to face off with the West. The result will be an economy that has far more in common with the Soviet Union than with post-Soviet Russia — even post-Soviet Russia under Vladimir Putin. And that will affect Russia’s bid to reassert itself globally.
The Russian Golden Goose and the Liquidity Crisis
Russian state coffers contain roughly $650 billion. The money is actually divided into three different funds, with the international capital reserves accounting for the bulk ($515.7 billion as of Oct. 17) and the rest split between the National Welfare Fund and the Reserve Fund, Moscow’s long-term security blankets. The coffers have been filled with the profits from steadily rising commodity prices over the last five years, allowing Russia to amass a $50 billion budget surplus at the end of 2007 and pay off the majority of its externally held government debt.
The $650 billion figure, however, is down from $750 billion as recently as 3 months ago. This is due to the cost of the August intervention in Georgia (which cost $16.1 billion) combined with the huge number of liquidity injections (to the tune of roughly $90 billion) the state has had to make since the Sept. 16 and Oct. 6 Russian stock market crashes and in response to concerns about the stability of Russian banks.
Liquidity injections into the stock market and Russian banks were necessary because nearly $63 billion in foreign investment was pulled out of Russia immediately following the August intervention in Georgia. Foreign investors also withdrew because of a previous loss of confidence due to Russian disregard for investor rights, and because of a loss of confidence in Russian company and government bonds as the global liquidity crisis took root.
While embarrassing, the flight of foreign money from the stock market is not the Kremlin’s primary concern. The bigger problem is the collapse of confidence in Russian bonds and borrowers, the premier sources of foreign capital for funding the expensive projects of Russian energy and mineral giants.
Russian companies, as well as foreign investors looking to invest into Russia, prefer to raise capital through bonds because it does not mean taking input from foreigners on how to run their business. It also allows them to keep everything about their firms, from ownership and management structures to profits and managerial techniques, out of the public eye. Foreign bond holders only want a return at an agreed-upon date. With political risk created by the Georgian war combined with the global liquidity crisis, however, foreign investors have abandoned Russian bonds for safer investments, such as U.S. Treasury bills, elsewhere. This has left Russian companies without the ability to raise crucial capital.
Kremlin Tools to Combat the Liquidity Crisis
To inject liquidity into the system, the Kremlin first turned to the oligarchs, forcing them to inject between 10 percent and 30 percent of their total wealth into the markets and banks to shore up the financial system immediately after the Sept. 16 stock market crash. At an all-night mandatory meeting held in the Kremlin following the crash, oligarchs were ordered to plunge cash into their own faltering stocks, buy collapsing financial institutions directly, or simply fork over the cash and/or shares. Using oligarch money has the positive effect, at least from the Kremlin’s perspective, of further consolidating control over the oligarchs’ assets and decision making.
This move quickly drained the oligarchs of much of their on-hand cash, however. In the weeks since, they have largely seen their cash reserves exhausted by the combination of appeasing Kremlin demands and suffering losses from various margin calls. (In essence, they have been forced to immediately repay loans taken out to buy stock.) The only way for the oligarchs to repay these loans is to sell assets at cut-rate prices or stocks at depressed prices. So while the oligarchs are still rich in assets, they are now poor in cash, and are being forced to liquidate parts of their empires to remain liquid.
RUSAL kingpin Oleg Deripaska has been forced to ditch his Canadian auto parts venture, while Norilsk Nickel’s Vladimir Potantin is shopping around for buyers for his platinum mine in the U.S. state of Montana. Both have had to divest themselves of massive amounts of stock. In total, the 20 richest Russian oligarchs have lost personally or through their companies a combined $188.4 billion — and that figure comes only from publicly available information. While the oligarchs are still extremely wealthy, they have now been forced to give up or have lost sizable chunks of their fortunes, particularly in assets abroad. This renders them, as a tool for shoring up liquidity, a spent force for the purposes of stabilizing Russia.
This means that the Kremlin now has to pick up the slack with its own resources — namely, its $650 billion cash reserves — and that the worst of the liquidity problems are yet to come. In particular, Moscow will have to figure out how to isolate itself from the foreign liabilities accrued by its banks, both government and private, and by its energy and mineral companies.
Total Russian external debt as of June stood at $527.1 billion, of which banks — whether private or government owned — owed a whopping $228.9 billion. Domestic credit in Russia, which lacks a good system for circulation and accumulation, has always been scarce. This means Russian banks rely upon access to foreign capital to fund everything from car loans, mortgages and personal loans to Russian energy and mineral companies’ capital expenditures.
The problem with such a sizable debt is that while the ruble depreciates against the rising U.S. dollar because of Russian economic instability, capital flight and decreasing commodity prices (which act upon both the ruble and dollar simultaneously, increasing the dollar and decreasing the ruble), foreign debts made out in dollars begin to appreciate in value. Since the crisis began, the ruble has already dropped by a quarter, increasing the cost of servicing dollar-denominated debt by a like amount. The Kremlin will have to act fast to cover the debts of the banking sector, or else the debt might become unserviceable for the banks, which take in most of their revenue in rubles.
This of course assumes that the Russian consumers who took out the mortgages, car loans and personal loans will continue to service their debts, and that there will not be any significant bank run — far from a certainty given the notoriously bank-skeptical Russian populace. If the ruble continues to depreciate, Russian consumers might be unable to service their debts. This applies particularly to loans originally denominated in foreign currencies. The problem is widespread in Central Europe and the Balkans, and especially in Hungary, where foreign banks used the Swiss franc for consumer lending.
The other issue is the debt of the 14 largest Russian energy and mineral companies, which account for $142.1 billion of $185.4 billion non-bank privately held external debt. Particularly notable are the debts of Gazprom ($55 billion), Rosneft ($23 billion), RUSAL ($11.2 billion), TNK-BP ($7.5 billion), Evraz ($6.4 billion), Norilsk ($6.3 billion) and LUKoil ($6 billion). These debts are held in various dollar-, euro- and yen-denominated loans, and bonds, which are usually dollar-denominated. Unlike domestic Russian banks, which receive revenue in rubles, the energy and mineral giants will not have to contend with the problem of the appreciating dollar, because they receive their commodity-driven revenue in dollars. (All of world’s commodities are priced in dollars.) But these firms will have to contend with ever-decreasing revenue from which to service their loans as oil and minerals/metals decline in price. Oil and nickel are already down 55 percent and nearly 80 percent, respectively, from their peaks.
The Kremlin’s Choice
The Kremlin thus faces a choice between not spending its cash and risking countrywide private defaults by its banks and major companies, which would in turn trigger a complete collapse of the Russian financial system, or spending its reserves to shore up the system and severing nearly all links between Russia and the wider world. This really is not much of a choice, as the threat of further dollar appreciation against the ruble is nearly inevitable. Therefore, the Kremlin will most likely spend approximately $400 billion to buy up all of Russia’s foreign-held debt — $230 billion in bank debt and another $180 billion in various companies’ debts. (Russia lacks the option of printing currency, since the ruble is not worth much to begin with.)
Such a step would obviously drain Russia’s coffers, taking the maximum total reserves down to $250 billion. But this will have an upside. In addition to ending all outstanding foreign funding vulnerabilities, this move would make the entire Russian economy and financial system owe nearly all of its debt directly to the Kremlin. In one stroke, Russia will have recreated the financial system of the Soviet era, with all the political control that implies. (Ironically, by repaying the nearly $400 billion of its companies’ and banks’ foreign loans, the Kremlin will inadvertently also inject much-needed liquidity into Western and Japanese banks. The end result will go a long way toward recapitalizing the global banking system.)
But not all would be smooth sailing under this scenario. Russia needs massive amounts of capital to keep its long-term energy production and export industries healthy, and with energy prices weak, it simply cannot even attempt to generate the necessary funds itself. As foreign capital dries up and commodity prices fall, Russian energy companies will have no choice but to forgo capital expenditure projects that are vital for revamping Russia’s Soviet-era transportation infrastructure and increasing dwindling production in maturing oil and natural gas fields.
Russia has an excellent tool for addressing part of this problem. Unlike oil, natural gas prices do not respond to market change; fixed pipeline infrastructure combined with the difficulty of transporting the stuff gives the supplier much more pricing power. As the world’s largest exporter of natural gas and Europe’s largest supplier, Russia already has plans in the works to increase its prices to more than $500 per 1,000 cubic meters as of Jan. 1, 2009. Russia is not only certain to stick to this planned price hike despite falling global energy prices, but it also could increase the price further to buy itself some more time and income.
Despite the direness of its situation, Russia is not about to collapse. In reality, all this means is that Russia’s experience in grafting some elements of Western capitalism to the Russian political system is over. (Moscow’s bid to adopt Western economics wholesale died years ago.) Having a system where Russian firms cannot tap foreign capital markets and are instead dependent on the state is precisely how the Soviet state maintained operational and political control. It might not be central planning per se, but it is not too far off. For a number of reasons, such an economic system makes sense for a country as large and difficult to invest in privately as Russia.
But while Russia might hold together domestically, the Kremlin will need to rethink some of its broader international objectives. Increased international influence is a pricey affair, whether it means buying Ukrainian elections; shoring up Moscow’s presence in Georgia; pressuring the Baltic states; cozying up to Cuba, Nicaragua, and Venezuela; restoring its influence in the Middle East; fostering anti-ballistic missile defense social activism in the Czech Republic; or just generally increasing its intelligence activities abroad and updating its military capacity.
Ultimately, Russian stability in the post-Yeltsin era has depended on having free cash to direct where needed, when needed and in almost limitless quantities. For that, reduced access to international capital and a mere $250 billion reserve fund in an era of falling income might prove insufficient. Russia might be on the brink of a massive political consolidation into a stronger core state, but the liquidity crunch cannot help but limit its wider options. Simply put, Russia might be able to speak with a clearer voice, but its ability to project that voice has just been constrained.
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Geopolitical Diary: Seems Like Old Times at the Kremlin
November 12, 2008
Russian President Dmitri Medvedev on Tuesday sent a draft law to the Duma that would make a series of structural changes to the Russian government, including extending the president’s term. The draft law is no surprise; Medvedev laid out the changes in his first state address Nov. 5. But the details of the changes are quite interesting. The presidential term would be extended from four to six years, legislators’ terms would increase from four to five years, and there would be a shift in the way members of the legislature’s upper house, the Federal Council, are chosen.
Following the State of the State address last week, Medvedev’s aides had quickly explained that the extension of the presidential term would not affect Medvedev’s stay in office, but rather would apply to the next president. The Russian media have erupted with speculation that Prime Minister Vladimir Putin will be returning to the presidency, which he left earlier this year. Under Russian law, a president can serve more than two terms, but not consecutively. This has led to rumors in the press that Medvedev could step down in the coming year, allowing Putin to step into his old shoes and serve out the remainder of Medvedev’s term before potentially being elected to another two terms of his own. All told, it would mean that Putin could be in office for another 15 years.
According to Stratfor sources, Putin might lay the groundwork for such a move at the convention for United Russia — the ruling party — on Nov. 20, where he is to give a “campaign-style speech.” It does not really matter if Putin is president or prime minister; in either position, he is the one driving the train in Moscow. But he has allowed Medvedev to act as president, particularly in the decision-making process during the Russia-Georgia war and the financial crisis.
According to what Stratfor has heard from sources in Moscow, Putin has not yet decided whether to return to the presidency. The main reason he would want to return is that Medvedev isn’t seen as the authoritative figure Putin was in the same role — and with Russia attempting a resurgence on the global scene, it needs a powerful leader to command respect. On the other hand, Putin has never been interested in the daily tasks that go along with being chief, such as meeting with middle- or low-tier world leaders or making constant speeches. He is much more interested in decision-making — and the power that goes along with it.
This is where one of the key, but mostly overlooked, changes proposed by Medvedev comes into play. Though the details of this change are still murky, it calls for members of the Federal Council — who represent each of Russia’s 81 federal regions (republics, oblasts, krais, okrugs and the two largest cities) — to be chosen by the ruling party in each region. Since Putin’s United Russia controls most of the country already, and any stray regions most likely will be under that party’s control soon, the shift would put United Russia in charge of essentially the entire country, at the regional level.
Stratfor has watched as United Russia evolved from being merely another party in the country to the main party in Russia. Now it appears to be transforming into “the Party” — much like the Communist Party of the Soviet Union, which controlled the top echelons of the Russian government and held power in every region of the Soviet Union. Medvedev’s reforms officially would give United Russia that sort of power.
Moreover, this gives whoever is in charge of the party the bulk of power in Russia. Under most Soviet leaders, the ruler of “the Party” was the ruler of the country. But in modern Russia, the president must have no party affiliation, according to a social law — which is why Putin took the helm of United Russia only after becoming premier. This tradition can be changed, but thus far, it is not a part of Medvedev’s large government overhaul plan. Which leaves us wondering whether the shuffle in organization and positions is just about Putin returning to the presidency, or whether something larger — the question of who exactly will control “The Party” — is in play.
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A Brewing Storm in Russia
Can Russian liberalism survive the Putin/Medvedev regime?
Cathy Young | January 5, 2009
A year ago, Russia was in an odd place between oppressive stagnation and a glimmer of possible change. The ruling party, United Russia, had just consolidated its hold on the parliament in a rigged election; the presidential transition was revealed as the farcical anointment of a handpicked successor to Vladimir Putin—the docile Dmitry Medvedev, who quickly promised to make Putin prime minister. Yet some Russian liberals, and sympathetic Westerners, harbored at least modest hopes that Medvedev might prove more liberal than Putin and that the division of power between president and prime minister might weaken Russia's neo-autocracy.
Today, the winds of change in Russia are blowing again—harsh winds that may yet turn into a storm.
The liberalization from above turned out to be a non-starter, despite Medvedev's declaration that "freedom is better than non-freedom." Any hopes of a thaw, or a Putin-Medvedev fissure, were crushed when Medvedev's first 100 days ended with the war in Georgia. (Whatever Georgia's responsibility for triggering this war, it was preceded by years of provocation and manipulation by the Kremlin—intended to destabilize a government perceived as unfriendly and send an assertive message to the West.)
The surge of "patriotic" sentiment that followed Russia's victory threatened to take the country even further down the authoritarian road. But history works in mysterious ways.
While Western sanctions in response to the war proved short-lived, Russia paid a heavy price for its victory in the flight of foreign capital—which both predated October's financial crisis and exacerbated its effects in Russia.
The crisis revealed the clay feet of the Putin/Medvedev regime, not only showing the extent to which its relative prosperity was tried to high oil prices but also exposing the fakery of its feelgood propaganda machine. While state-controlled television news avoided the word "crisis"—except with regard to the West—Russian citizens rushed to convert rubles to dollars. Polls by the Public Opinion Fund found a sharp drop in confidence in the mainstream media. By late December, close to half of Russians said that media reports on the economy were biased and minimized economic problems; 30 percent (up from 23 percent in November) said that "journalists know the real state of the economy but are not allowed to tell the truth."
Trust in Putin and Medvedev may suffer as well. Bizarrely, over 80 percent of those polled recently still approved Putin's performance as prime minister—though only 43 percent thought Russia was headed in the right direction. Yet, of the 17 percent of Russians who watched Putin's live televised question-and-answer session on December 4, fewer than half were satisfied with his answers.
The first rumblings of discontent came after the government announced a hike in custom duties on imported used cars to help Russia's auto companies (run mostly by Putin cronies). Importing used cars from Japan is a major source of livelihood in the Far East, which responded with major protests that quickly became political. Some demonstrators openly denounced Putin, Medvedev, and United Russia; many angrily demanded television coverage. After a week of protests, a peaceful rally in Vladivostok was brutally broken up by the riot police on December 21; several journalists, too, were beaten and arrested. While television news ignored the incident, many mainstream newspapers did not. Remarkably, several local legislatures in the Far East have backed the protesters' demands. So far, the government has refused to budge. But what will happen if the ranks of protesters swell from hundreds to hundreds of thousands?
So far, the Kremlin's strategy for dealing with political opposition is a carrot-and-stick approach. Among the carrots: an effort to co-opt the opposition with the creation of a Kremlin-funded "liberal" party, the Right Cause, and the appointment of a prominent liberal politician, Nikita Belykh, to a governorship. The sticks include proposed legislation that would make it easier to convict dissenters of treason or espionage, at least if they have any foreign contacts, and to take such cases out of jurors' hands. These laws have drawn objections even from the governmental Public Chamber, a monitoring body meant to function as a collective ombudsman—though whether these objections will have any effect remains doubtful.
Unlike the Communist regime, the authoritarian Russian state still has room for some legal resistance—from the independent media to pro-democracy movements to judges who refuse to convict government critics under vague "extremism" laws. These small islands of freedom face a vastly unequal battle against the forces of repression; but the outcome in this battle is more uncertain than it has been in a long time.
Cathy Young is a contributing editor at Reason magazine. A shorter version of this article originally appeared in the Boston Globe.
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Geopolitical Diary: Russia's Shifting Relations with Washington and Warsaw
May 8, 2009
Russian Foreign Minister Sergei Lavrov met with U.S. President Barack Obama in the Oval Office on Thursday, discussing plans for Obama’s trip to Moscow in July. The relationship between Russia and the United States has been tense to say the least, although the Russians have introduced an interesting twist.
The last major meeting between American and Russian leaders came April 1 in London, when Obama and Russian President Dmitri Medvedev met at the G-20 conference. That meeting went poorly.
The issues on the table at that time included NATO’s expansion to former Soviet states, U.S. ballistic missile defense (BMD) plans in Poland, nuclear reduction treaties and proposed NATO military supply routes to Afghanistan. The Russians entered that meeting convinced they had the upper hand: They believed the NATO expansion issue was locked away and the Americans would have to implore their permission in getting supplies to Afghanistan. Russian leaders believed they could force the United States into more complex negotiations and a compromise over Poland that would nix U.S. plans for a BMD installation and military assistance in Poland.
However, this was not the case.
Washington did not make a serious push for Moscow’s help on supply lines for Afghanistan; it also re-opened the issue of NATO’s relationship with Georgia and Ukraine, two former Soviet states. The Americans made it clear that the Polish issue would not be discussed. The only item on which Russia and the United States seemed to agree was the need to renegotiate strategic nuclear reduction treaties. Consequently, there were bitter tastes in many mouths after the April 1 meeting, and bickering between Russia and NATO has escalated during the past month:
Russia has blocked almost every move by Western governments to increase their influence in Central Asia.
Russia has more than doubled its troop presence in breakaway regions of Georgia, from just over 3,000 to more than 7,600.
NATO has initiated military exercises in Georgia, despite Russian troops’ presence just 20 miles from the location of the drills.
In response, Russia has threatened to call off NATO-Russian relations.
NATO officials in Brussels expelled Russian diplomats over a spy scandal that involved the imprisonment of an Estonian official; Russia in turn has expelled Canadian NATO officials.
From the outside, it would appear that the core issues between Moscow and Washington have been pushed back into the former Soviet sphere and NATO-Russian relations. For instance, Poland has been a central theme for Russia and the United States, with Moscow’s concerns about U.S. military plans there very apparent. Warsaw and Moscow have had a terrible relationship: This has been evident in energy cut-offs, trade embargoes, spy scandals, Poland’s blocking of Russian-EU relations and more. There has been undisguised contempt on both sides for years. Russia has not attempted to deal with Warsaw directly, but instead has pressured the United States to abandon independent and anti-Russian Poland.
This approach hasn’t worked.
It was significant, then, that Russia’s foreign minister spoke in positive terms this week about “improving Russian-Polish relations.” The day before leaving for Washington, and following a meeting with Polish Foreign Minister Radislaw Sikorski, Sergei Lavrov went so far as to call Poland “pragmatic” — a marked departure from the “hysterical” and “irrational” labels that Russia has used in discussing Poland in the past. He even noted that Moscow was looking to re-establish the Polish-Russian Committee — an intergovernmental body that has not convened since 2004, when relations between Moscow and Warsaw began to sour.
This change in rhetoric gives us pause. We do not believe that Poland is about to change its stance against Russia or for the United States. But the shift in tone by Russia indicates that Moscow is, at least temporarily, abandoning its tried-and-failed approaches of indirect pressure and threats — by telling the Poles instead that they may have options in forming an understanding with Russia.
Moscow is giving Warsaw an opportunity to change the tenor of relations. The timing of this shift was deliberate, designed to give Washington something to think about as Lavrov met with Obama. The hope appears to be that Russia can change things on the ground with Poland by offering a little honey instead of vinegar.
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Video and pics from russia's may 9th 2009 parade. Comrade putin looks like he was having a good time.
http://ziza.ru/2009/04/30/repeticija...a_77_foto.html
http://www.youtube.com/watch?v=aYtC1MdPvWY&eurl=http%3A%2F%2Fwww%2Ecanadiangunnutz%2Ecom%2Fforum%2Fshowthread%2Ephp%3Ft%3D348403&feature=player_embedded
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Discontent Rises Sharply Among Russian Troops
Military Overhaul Brings Layoffs, Lost Apartments
By Philip P. Pan
Washington Post Foreign Service
Tuesday, May 26, 2009
USSURIYSK, Russia -- As a young officer fresh out of a Soviet military academy, Alexander Primak was assigned to serve in this frontier city in the Russian Far East, eight time zones away from his home town in Ukraine.
He spent the next quarter-century in the region, moving from garrison to garrison, rising to the rank of lieutenant colonel. But he always dreamed of moving back west, counting on the government's promise to reward officers with apartments upon retirement.
Now, as the Russian government pushes ahead with an overhaul of the military that eliminates the positions of more than half the army's officers, Primak is jobless at age 46 and stuck in Ussuriysk waiting for an apartment he may never get.
"They're finding any excuse not to keep their promises," the gray-haired colonel said coolly, maintaining ramrod posture as he sighed over a plastic cup of coffee in a roadside eatery. "When we were young, we put the motherland first. We were ready to tolerate discomfort and wait for something better. . . . Of course I'm disappointed."
Low morale over pay and housing has afflicted the Russian military since the fall of the Soviet Union, but grumbling in the ranks is rising sharply as President Dmitry Medvedev attempts to carry out the most ambitious restructuring of the nation's armed forces since World War II in the face of a severe economic downturn.
The plan seeks to transform an impoverished, unwieldy conscript army built to fight a protracted war in Europe into a more nimble, battle-ready force that can respond quickly to regional conflicts. Key to the overhaul is a drastic reduction in the number of officers, who now account for nearly one in three Russian servicemen.
By eliminating thousands of officer-only units that were designed to call up draftees in wartime, and moving to a leaner, brigade-based structure, Medvedev intends to cut Russia's officer corps from 355,000 to 150,000, dismissing more than 200 generals, 15,000 colonels and 70,000 majors.
The plan has run into stiff resistance, with some top military officials resigning in protest and the Kremlin firing others. Retired generals and nationalist politicians have accused Medvedev and Prime Minister Vladimir Putin of scaling back Russia's military ambitions by essentially giving up on trying to maintain an army capable of confronting NATO.
Officers and troops have staged scattered demonstrations across the country against the reform plan, which would also shut dozens of military hospitals, schools and research institutes. A top complaint is the government's failure to provide apartments to all officers who are discharged after more than a decade of service -- a benefit that dates to the Soviet era and is written into Russian law.
The apartments are important because military pay has lagged far behind the cost of living and few officers have enough savings to buy homes. But the army has suffered a severe housing shortage since the fall of the Soviet Union, when a wave of servicemen in need of lodging returned to Russia. The military's construction efforts have been plagued by corruption and inefficiency, and hundreds of thousands of active-duty officers as well as retirees are on waiting lists for accommodations.
"Our military organization, our fleet, has cheated me with housing," said Vyacheslav Zaytsev, a former submarine officer who was interviewed on television during a protest in the arctic city of Murmansk. "A homeless officer is a shame for a nation," read one demonstrator's sign.
Here in the coastal province of Primorye, tucked between China, North Korea and the Sea of Japan, as many as 8,000 officers are expected to be discharged in the restructuring, local activists said.
"In our region, over 3,000 officers will be fired from the navy alone. . . . Where will these people go? How will they live?" said Boris Prikhodko, a retired vice admiral, before a protest last month in nearby Vladivostok, the provincial capital and headquarters of the Pacific Fleet.
Under the law, retiring officers can request apartments anywhere in Russia or ask to keep the quarters assigned to them by the military. But in practice, most who have been sent to the Far East have little chance of getting housing anywhere else when they are discharged.
When Primak became eligible for retirement, for example, he asked for an apartment in Kursk, a city near the border with Ukraine, where his parents still live. But he was released without being given any apartment. "I realized then that in Russia there are laws that are enforced, and other laws that are maybe for the future," he said. "What they say on television and do in reality are completely different."
He and other officers in this city of 150,000 say local authorities have fallen behind in housing construction and have begun using loopholes to discharge officers without giving them apartments.
Some have been given certificates that aren't worth enough to buy adequate homes. Others have been relieved of duty but formally remain registered with their units with minimal pay so commanders can keep them on waiting lists.
The worst off are officers stationed in the scores of military garrisons scattered across the countryside here, isolated outposts that have fallen into severe disrepair and are set to be closed as part of the shift to a brigade structure. Many of these officers have been told to just keep their current quarters, which often lack running water.
"These poor guys have to stay the rest of their lives in these ruined garrisons, without even minimal sanitation conditions," said Vladimir Kaplyuk, a retired colonel who heads an aid organization for veterans in Ussuriysk. "But after the units are shut down, there won't be anything left but these officers there. No troops, no jobs, nothing."
Technically, Kaplyuk said, the officers will be on waiting lists for housing. "But for how long?" he said. "Some officers here have been waiting 12 years already."
One 48-year-old lieutenant colonel assigned to a garrison near the Chinese border said he was offered a certificate that would have allowed him to buy only a tiny studio apartment on the outskirts of Ussuriysk or a rural house without a sewer system or running water. When he refused to take it, he was discharged without an apartment and had to sue his commanders to get reinstated.
"I felt like they seized me by the scruff of my neck and threw me away as if I was something useless," said the colonel, a veteran of the war in Afghanistan who asked to be identified only by his first name, Viktor, because he feared reprisals. "I'm upset with everyone -- the state, the commanders -- and there are many people like me facing similar problems."
Officers said it would be difficult for them to unite and pose a serious challenge because they are forbidden from engaging in political activities. They said local authorities have been effective at containing dissent, recently quashing an attempt by discharged officers to stage a protest and arranging for them to gather in a room outside the city instead.
The Kremlin has also pledged to upgrade equipment and weapons and to sharply increase wages for the officers who are not dismissed -- promises that have helped it win support in the military for the reform plan, analysts said.
But most of the planned cuts and dismissals have yet to be completed, and discontent could rise further if the economy worsens, they said.
Alexander Ovechkin, 50, a lieutenant colonel in Ussuriysk who retired without receiving an apartment, said officers are frustrated in part because Medvedev and Putin have raised expectations, repeatedly pledging to build enough housing for all discharged and active-duty officers by next year.
"You can feel the social tension and uncertainty," he said. "They have promised a lot. . . . I'd like to believe it, but my experience is too sad."
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/25/AR2009052502184_2.html?hpid=sec-world
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Summary
The economic outlook for Russia appears bleak, and the road to recovery appears to be a long one. Rising unemployment, falling industrial production and the flight of foreign investment have put a dent in Russia’s massive currency reserves. However, the Kremlin has reasserted its power over the country and is in prime position to overcome its short-term challenges.
Editor’s Note: This is the eighth part in a series on the global recession and signs indicating how and when the economic recovery will — or will not — begin.
Russian President Dmitri Medvedev spoke of “alarming figures” when discussing the Russian economy during an exclusive interview with U.S. news network CNBC on June 2, pointing specifically to rising unemployment and falling industrial production. Medvedev also highlighted the expected Russian gross domestic product (GDP) decline, which according to him will be “no less than 6 percent” in 2009, but most likely close to 7.5 percent, a figure not seen since the fall of the Soviet Union.
Indeed, the prognosis for Russia appears grim. Russian GDP contracted by 9.8 percent year-on-year in the first quarter of 2009; industrial production has averaged double-digit contraction since January, and the April contraction equaled 17 percent year-on-year. Foreign investment has declined 30 percent year-on-year in the first quarter of 2009, and unemployment is likely to reach double digits by the end of 2009 — a dramatic increase over the 7.7 percent rate of 2008.
Moscow’s attempt to rein in the crisis is costing it its precious currency reserves and bloating its budget deficit after years of commodity-fueled surpluses. The budget deficit stood at 11 percent of GDP in April, and revenue destined for government coffers declined by a whopping 16.2 percent of GDP between April and May. Russia is staring at an approximate $100 billion budget deficit, a figure that is likely to consume all the cash in its Reserve Fund.
Russia does have a lot of money in its various government reserves, the combined value of which totals nearly $600 billion. (Its currency reserves stood at $409 billion on June 1, with the Reserve Fund at $100.9 billion and the National Welfare Fund at $89.9 billion.) There also is potentially another $40 billion to $50 billion in a third, less public fund. This is not too far from the $750 billion Russia had at the beginning of the economic crisis, but the expected $100 billion budget deficit in 2009 will further drain the reserves very quickly. The Russian Finance Ministry said recently that it might have to enter the international bond market to seek external funding for its budget deficit.
However, the effects of the current economic crisis do not foreshadow the decline of the Russian state. Conversely, the crisis has already strengthened the Kremlin’s grip on the country’s financial sector and its once-independent business elite, the oligarchs. With oil prices starting to rise again and the Kremlin now firmly in control of the country’s finances, it is likely that Russia will come out of the crisis with the Kremlin firmly in control of the economy, a natural order for Russia.
The Geography of the Russian Economy
Russia is blessed geologically and geographically, with its vast territory containing the world’s largest proven natural gas reserves, second-largest proven coal reserves, third-largest known and recoverable uranium reserves and eighth-largest proven oil reserves. However, from an economic development standpoint, Russia is anything but well endowed.
Throughout history, Russia has lacked navigable river transportation and access to ocean trading routes. Furthermore, Russia’s population is scattered across its vast territory, its natural resources are mostly found in unpopulated areas and a number of regional challengers constantly threaten its territorial integrity. Russia’s core is essentially the northeastern portion of European Russia. It has no natural borders, forcing Russia to strive continually to extend its control of territory to natural buffers (as far down the North European Plain as possible, to the Carpathian Mountains to the southwest, the Caucasus and Hindu Kush to the south and the Altai Mountains, Tian Shan and Stanovoy Range in the Far East).
With vast territory, constant expansion to the buffers and a lack of internal transportation, Russia requires a substantial amount of resources to maintain and defend its borders. It requires top-down management of the economy to focus resources on overcoming geographical impediments to development and security. As such, Russia is not a capital-rich country; it is starved for capital by its infrastructural needs, security costs, chronic low economic productivity, harsh climate and geography. Unlike the United States or the United Kingdom, where industrial and post-industrial economic development can spring forth with little or no direction thanks to favorable geography (intricate river transportation systems in the United States and access to oceanic trade routes for both) and the relative security of oceanic barriers, Russia has had to rely on firm state-driven economic development.
The current crisis has therefore returned the Russian economic system to its “natural” state, one in which the state is the main driver of activity. Gone is the experiment with nonstate-directed capitalism (roughly between 1991 and 2003), the Wild West, Russian style, where different elites and power groupings vied for economic and political power. The state’s ability to now marshal and focus resources toward infrastructure projects and resource exploration will help Russia in the short term. State direction and control will also help Russia focus its financial resources toward certain key foreign policy goals. In the long term, however, a lack of nonstate funding and private capital will be a problem, creating inefficiencies across the spectrum, particularly in areas where the state does not focus all of its resources. Additionally, Russia is facing a staffing problem. Running the vast country and its economy may simply be far too complex for its ever-more powerful executive.
The Current Recession: The Government Reclaims Control
To understand how the Russian state has fully returned to its natural position as the helmsman of the Russian economy, it is important to examine the effects of the crisis on the Russian financial and corporate systems.
The main negative effect of the current crisis for Russia is the credit crunch, which is even more serious than low commodity prices. Credit in Russia is scarce and is therefore essentially one of the most important imports for the country. Businesses that are not state-controlled require funding from abroad because the state hoards capital and only lends it through political links. As a result, Russian private banks and corporations that had gorged on the cheap credit that flowed on the international markets since 2001 were particularly hungry for foreign capital. The government was not going to supply this capital by sharing the surplus from commodity sales, particularly if the capital was going to private entities it did not control. While the credit crunch does not hurt Russia’s government-controlled strategic industries — whose profits are in dollars anyway — it will cause a restructuring of the private financial and corporate sectors.
When the financial crisis hit in mid-September 2008, the first place foreign investors looked to pull capital from were emerging markets. Investors had already soured on Russia because of the Kremlin’s repeated meddling in foreign ventures, and because of Russia’s August 2008 intervention in Georgia (after which $63 billion in foreign investment was pulled immediately). Consequently, Russia was first on the list of places to withdraw from. Net capital outflows from Russia reached a record $130 billion in 2008, followed by $39 billion in the first quarter of 2009. Investors scrambled to sell their Russian assets and then used those rubles to buy dollars, francs, yen or gold. When this deluge of rubles hit the foreign exchange market, the ruble’s value fell off a cliff, stoking fears in Russia of another “ruble crisis” that could cause social discontent, as it did in 1998.
To counteract the effects of capital outflows pushing the ruble’s value down, the Central Bank of Russia (CBR) intervened, using its massive reserves of dollars and euros to purchase rubles on the open market. Had domestic banks not sold their ruble-denominated government handouts, the CBR’s $210 billion defense of the ruble might have been less expensive. But instead of letting the ruble crash, the Kremlin opted to manage the inevitable decline and has since bought the ruble enough times for it to be supported by real demand.
Though the ruble has now stabilized, its fall in value has been a considerable problem for private banks and corporations, particularly those not engaged in commodity sales. Russian enterprises that engaged in commodity exports had no problem with a declining ruble, because all of their revenue is in foreign currency, and their costs (salaries, operation costs, etc.) are in rubles. However, private banks and corporations that depend on internal demand and consumption for revenue — everything from regional retail banks to auto manufacturers — were suddenly left holding enormous foreign-denominated loans with no way to repay them. Russian banks and corporations owe approximately $400 billion in external debt over the next four years, with $90 billion worth of debt due between the second and fourth quarters of 2009 for banks alone (although it is estimated that about $40 billion of that may be held by foreign bank subsidiaries). In 2010, Russian banks will have to repay another $75 billion.
This is where the Kremlin has firmly stepped in. Its strategy from the very beginning of the crisis has been to consolidate the banking system under its control, with the primary source of capitalization being short-term, high-interest loans designed to quickly transfer banks’ obligations from foreign hands into the Kremlin’s steely grip. These loans will now be coming due for small regional banks, and it is likely that Russian state-owned banking behemoths Sberbank and VTB will greatly enhance their market share as result of the consolidation. The government is already the single largest creditor to banks, with 12 percent of all bank liabilities held by the state (mostly short-term loans with 8.5 percent interest). At the same time, banks and businesses that owe money to the state, but that the state does not want to save, will be allowed to fail, further consolidating different economic sectors in the hands of a few government-controlled or directly owned enterprises.
The culling of the Russian banking system will not be without its serious effects, and the transition from private hands to government ownership will not be smooth. The recession has already cut domestic demand, which is a problem because Russian industry (aside from extractive industry) depends almost solely on domestic consumers, with some trade with the other Former Soviet Union states — which are themselves facing a difficult recession. Domestic manufacturing was already down 25 percent in April year-on-year, a figure that foreshadows a mounting number of bankruptcies.
As bankruptcies rise and companies default on their loans, the rate of nonperforming loans (NPLs) rises as well; it is already more than 4 percent and predicted to reach 10 percent. NPLs are usually a solid gauge of how well an economy is performing, and in the Western world, a rate of above 3 percent is usually considered a serious problem. In 1998, the rate of NPLs in Russia hit 40 percent. However, according to Renaissance Capital’s calculations, even if the share of NPLs reaches 20 percent in the current recession, the required recapitalization (money the state would have to throw at the problem in order to fix it) would be less than $30 billion — easily covered by Russian state coffers. This is mainly because the government has already devoted a considerable amount of money to the problem. But though the banks now have abundant capital (albeit in foreign currency), they are loath to lend to businesses, thus further exacerbating the crisis.
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Part of the Russian government’s latest recapitalization efforts is the $89 billion crisis measure fund, which was announced in April and will come on line sometime in June or July. A large part of the package, $52.9 billion, will go to various banking programs intended to recapitalize the banks; $23 billion will go to industry (the largest chunk to profit tax cuts that should benefit energy exporters and auto industry support); and $13.1 billion to labor market measures (including helping pensioners and unemployed people weather the crisis). The latter is intended to nip in the bud any social unrest stemming from rising unemployment. Russia’s steel industry, for instance, is strategic, has a powerful lobby and employs many people. Interestingly, while global steel demand and prices remain depressed, the utilization of production capacities at Russian steel companies has increased from around 57 percent to 71 percent since the beginning of the year. Despite the Kremlin’s measures, domestic steel demand remains weak, and thus the increase does not so much reflect increased foreign demand for Russian steel for government-funded infrastructure projects in China, India, and the Middle East. Rather, it reflects pressure by the Kremlin on Russian steelmakers to keep production going — therefore ensuring employment and stability in Russia’s one-industry towns — even if it means exporting steel below cost.
Social unrest, however, rarely causes revolutionary political change in Russia. The most famous examples of social unrest resulting in part from economic crisis, such as the revolutions of 1905 and February (March by the Gregorian calendar) 1917, essentially failed and had to wait for an elite-driven revolution (such as the October 1917) to succeed. In fact, when ruled by a focused and powerful central government, Russia’s population can be heavily strained, a fact that served Stalin’s industrialization efforts of the 1930s well. In order for the Kremlin to attain its goals of rapid industrialization, it drove much of the population into the ground. The social aspects of this effort are particularly notable and are different from other countries — particularly those in the West — in that the government’s economic efforts are not focused on profit, lowering unemployment and social stability. Russia’s main economic imperatives are dictated by its massive security costs, and are therefore concentrated on maintaining security and clamping down on social dissent and internal political or ethnic fragmentation, or both.
The current economic crisis is not without a social evolution of its own, although it is one where the government has turned on an elite group that threatened the Kremlin’s grip on Russia’s economy: the oligarchs. Because most successful regime changes in Russia are elite-driven, the oligarchs at one time represented a serious challenge to the Kremlin’s power. One of the most fundamental changes this economic crisis has had on the Russian economic system is that it has stripped the power of independent business empires run by the oligarchs. Indebted abroad when the crisis hit, the oligarchs were told that they would receive access to state funding only if they made substantial capital injections into the Russian economy themselves — particularly into the crashing stock market. In fact, Prime Minister Vladimir Putin made it a point to call all the major oligarchs to a meeting at the Kremlin as the crisis was unfolding, giving them a choice of either helping immediately or forsaking any future help from the state.
(click chart to enlarge)
After that initial choice, the oligarchs were essentially told that they would either toe the Kremlin’s line on economic and political matters, or receive no help at all as foreign banks recalled their debts. Once the oligarchs were sufficiently bled of capital, the state offered to bail them out in select cases, with funding coming with strings attached. The oligarchs that survive the culling will be the ones the Kremlin has selected for survival, thus creating evolutionary pressures that will breed loyalty and subservience. An illustration of this dynamic was Russian steel magnate Igor Zyuzin, who gave the Kremlin billions, reducing his worth from more than $10 billion to just $1 billion. Only after he proved his loyalty, which at the time had been questioned due to a public fallout with Putin, did the state-controlled Vnesheconombank offer him credit.
(Click here for interactive chart)
Oligarchs will still exist as an elite, but they essentially will be reduced to the role of “capital emissaries” of the Kremlin to the West and the rest of the world. As such, they will be a powerful (but not independent) tool for the Kremlin’s foreign policy designs, another addition to the already-powerful arsenal that also contains intelligence networks and energy exports. Oligarchs may have acquired their fortunes through guile and luck, but they are also the most business-savvy elite — particularly in terms of Western business practices — in Russia. They know exactly how the West is run, having made many partnerships abroad through acquisitions and investments. This makes them extremely valuable, particularly as the Kremlin begins to direct its resources to foreign investments in strategic industries (such as energy), and for political reasons.
An example of this new role for the oligarchs is Oleg Deripaska, who at one point was the richest man in Russia. Deripaska is the chief of RUSAL, the world’s second-largest aluminum producer, and investment firm Basic Element. Deripaska’s wealth dropped from an estimated $36 billion to somewhere between $3 billion and $4 billion as he poured immense funds into his company and the Kremlin. As a reward for his efforts, Deripaska could become the chief of a rumored consolidated — and state- directed — metals conglomerate, giving him enormous power, but power that he will exercise at the whim of the Kremlin.
He also will be one of the Kremlin’s first “capital emissaries” abroad, as signified by a recent partnership between the state-owned Sberbank and Deripaska-controlled auto manufacturer GAZ in the purchase of German carmaker Opel. Deripaska was able to use his partnership with Canadian auto parts manufacturer Magna International Inc., and state funding through Sberbank, to form a partnership that will see Opel producing cars in Russia. This is exactly the sort of deal the Kremlin wants to encourage. It is also the kind of deal that the Russian oligarchs, with their considerable foreign business acumen, can provide — combining foreign partners acquired through their businesses, Russian state financing and impressive personal charisma to conclude politically motivated business deals.
With the purchase of Opel, Russia has come to the aid of a crucial European power and its leader, German Chancellor Angela Merkel, three months before general elections — a favor Merkel will not forget should she return to power, which she most likely will. In the past, Moscow would have been unable to so effectively pair government funding and oligarch business acumen. Now it can do so in pursuit of foreign policy goals. The Opel bailout is part of Moscow’s strategic move to widen the rift emerging between Germany and the United States, and is therefore an extremely important — and very well-played — foreign policy initiative, and not just any other business deal.
In the long term, greater government control will not resolve the endemic problems Russia faces. Combined with its geographic and infrastructural challenges, Russia is also facing a daunting demographic challenge — a low birthrate combined with rising prevalence of HIV/AIDS and drug use — and an overall economic overreliance on energy exports. The share of energy exports as a percentage of overall exports has increased from 50.3 percent in 2000 to 65.8 percent in 2008, despite rhetoric from the Kremlin that it had been seeking to diversify the economy since Putin’s arrival on the political scene in 1999. Furthermore, demographic and geographical challenges are continuing to depress Russian productivity, with Russian labor productivity at only one-third of U.S. productivity.
Nonetheless, when the account of the costs and benefits of the current financial crisis is made, it will show that the crisis cost the Kremlin much of its currency reserves and money accumulated during the boom years between 1999 and 2008. However, the crisis also returned the Kremlin to the driver’s seat of the Russian economy, which is in fact the natural state of affairs because of Russia’s geography and impediments to security. It is from this position that the Kremlin will face the much more serious challenge to Russian economic well-being in the next five years: decreasing energy exports caused by European diversification efforts away from Russian natural gas, and the continuing demographic challenge. While the current recession may have bolstered the Kremlin’s powers in the short term, how the Kremlin tackles the long-term crises will define Russia in the 21st century.
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Putin's Plans for the Russian Economy
RUSSIAN PRIME MINISTER VLADIMIR PUTIN spoke at a Moscow banking forum on Tuesday about plans to liberalize the Russian economy. Specifically, he noted that a fresh round of government privatizations could soon begin, and that much of what was on offer would involve the government disposing of shares in companies that had been gained in exchange for bailouts during the global recession.
Nice words, but as Winston Churchill famously opined, “I cannot forecast you the action of Russia. It is a riddle, wrapped in a mystery, inside an enigma: but perhaps there is a key. That key is Russian national interest.” There is more to Putin’s speech than meets the eye.
“Putin is many things, but he is a Russian leader at heart — and Russian leaders tend not to rule with a particularly light touch or with generous forgiveness.”
Let’s shine a light on where most of these shares came from. The Russian development model of the past six years focused on tapping international capital markets. Russia refused to give up actual managerial control or meaningful ownership, so its companies — and particularly its state companies — issued bonds or took out loans with foreign banks rather than issuing stock. The process flooded the Russian financial sector with lots of someone else’s money. For most Russian corporations — and doubly so for most Russian state corporations — this amounted to a financial free-for-all. From 2004 to 2008, some $500 billion flowed into Russia through this practice.
When the global economic crisis emerged, all of those funding sources dried up in a matter of weeks. With the collapse of commodity prices, the ruble shed a third of its value. But those loans and bonds still required repayment — and not in rubles, since they were foreign borrowings after all. As a consequence, the Russian economy suffered a contraction worse than that of any other major state in the world. The Kremlin was forced to bail out many firms, particularly government firms, to prevent a broad collapse. To accomplish this, the Kremlin had to reach into its sizable purse — not something that its leadership does easily, or without a plan.
It has always struck us as a touch odd that no one has yet been called on the carpet for this financial mismanagement. Putin is many things, but he is a Russian leader at heart — and Russian leaders tend not to rule with a particularly light touch or with generous forgiveness. A few well-placed people screwed up and negated five years of economic stability in a single, catastrophic season. Even in the United States, where rule of law is robust and pockets are deep, people are going to prison for the things they pulled in the sub-prime real estate market.
We find it hard to believe that Putin’s speech is the end of the story. In fact, we think it is just the beginning.
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Russia's Message on Reshaping Its Nuclear Doctrine
RUSSIA IS EXPANDING THE SCOPE OF ITS NUCLEAR DOCTRINE to include pre-emptive use of nuclear weapons, Russian Presidential Security Council Chief Nikolai Patrushev said in an interview published Wednesday by Moscow daily Izvestia. The former director of the Federal Security Service (the successor agency to the KGB) emphasized that nuclear weapons might be used in a preventive manner to repel conventional aggression in regional and even local wars. He was talking about the pre-emptive use of tactical nuclear weapons — which is, incidentally, an option the United States retains.
Russia considers its nuclear arsenal to be the pillar of its defensive military capabilities, and tactical nuclear weapons increasingly have taken a central role in its defensive scenarios since the collapse of the Soviet Union.
“It is unlikely that the Russians would employ nuclear weapons in any given scenario, but whatever they say publicly has next to no bearing on what they actually would do in an unknowable, future situation.”
The potentially frightful speed of a modern nuclear exchange means there is little time for deliberation: To whatever extent possible, national command authorities seek to explore, understand and balance ahead of time the complexities and options of any given scenario. These scenarios are among the most closely guarded state secrets in the world. When and how they are updated is not generally a matter for public consumption.
And in any event, the fundamental reality remains: A nation’s senior leadership retains exclusive control over the use of nuclear weapons. Such a decision would be taken in a time of crisis, under a specific set of ultimately unknowable circumstances. Paper scenarios might inform that decision, but at the end of the day, the leader is not bound by them any more than he is bound by his country’s public nuclear doctrine.
Indeed, the manner in which a war is fought depends on any number of things — who struck first, who has the initiative, one’s strengths and weaknesses as well as the enemy’s, and so forth. But the first thing that goes out the window is the official, public statement about what that doctrine is or should be.
It is still unlikely that the Russians would employ nuclear weapons in any given scenario, but whatever they say publicly has next to no bearing on what they actually would do in an unknowable, future situation.
In other words, Patrushev’s interview was not an announcement to the Russian military that it is going to fight differently; such an announcement would come through different channels. Rather, Patrushev was telling the world that the Russian military is going to fight differently — whether that is the case or not. What is significant is not the public shift in nuclear doctrine, but the political decision to publicize it, and the timing of that decision.
It was no accident that the interview was published while U.S. Secretary of State Hillary Clinton was visiting Moscow. Patrushev was speaking to the West, and to the United States. He was attempting to shape Western thinking with three implicit points:
Russia is prepared to think in terms of the Cold War — with all the unpleasantness that could entail for the United States.
Russia has tactical nuclear weapons and a doctrine for using them — pre-emptively, if necessary.
Nuclear weapons are potentially on the table if fundamental Russian national interests are attacked, or even if Russia is threatened.
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Russia’s Leaders See China as Template for Ruling
By CLIFFORD J. LEVY
MOSCOW — Nearly two decades after the collapse of the Communist Party, Russia’s rulers have hit upon a model for future success: the Communist Party.
Or at least, the one that reigns next door.
Like an envious underachiever, Vladimir V. Putin’s party, United Russia, is increasingly examining how it can emulate the Chinese Communist Party, especially its skill in shepherding China through the financial crisis relatively unbowed.
United Russia’s leaders even convened a special meeting this month with senior Chinese Communist Party officials to hear firsthand how they wield power.
In truth, the Russians express no desire to return to Communism as a far-reaching Marxist-Leninist ideology, whether the Soviet version or the much attenuated one in Beijing. What they admire, it seems, is the Chinese ability to use a one-party system to keep tight control over the country while still driving significant economic growth.
It is a historical turnabout that resonates, given that the Chinese Communists were inspired by the Soviets, before the two sides had a lengthy rift.
For the Russians, what matters is the countries’ divergent paths in recent decades. They are acutely aware that even as Russia has endured many dark days in its transition to a market economy, China appears to have carried out a fairly similar shift more artfully.
The Russians also seem almost ashamed that their economy is highly dependent on oil, gas and other natural resources, as if Russia were a third world nation, while China excels at manufacturing products sought by the world.
“The accomplishments of China’s Communist Party in developing its government deserve the highest marks,” Aleksandr D. Zhukov, a deputy prime minister and senior Putin aide, declared at the meeting with Chinese officials on Oct. 9 in the border city of Suifenhe, China, northwest of Vladivostok. “The practical experience they have should be intensely studied.”
Mr. Zhukov invited President Hu Jintao, general secretary of the Chinese Communist Party, to United Russia’s convention, in November in St. Petersburg.
The meeting in Suifenhe capped several months of increased contacts between the political parties. In the spring, a high-level United Russia delegation visited Beijing for several days of talks, and United Russia announced that it would open an office in Beijing for its research arm.
The fascination with the Chinese Communist Party underscores United Russia’s lack of a core philosophy. The party has functioned largely as an arm of Mr. Putin’s authority, even campaigning on the slogan “Putin’s Plan.” Lately, it has championed “Russian Conservatism,” without detailing what exactly that is.
Indeed, whether United Russia’s effort to learn from the Chinese Communist Party is anything more than an intellectual exercise is an open question.
Whatever the motivation, Russia in recent years has started moving toward the Chinese model politically and economically. After the fall of the Soviet Union in 1991, Russia plunged into capitalism haphazardly, selling off many industries and loosening regulation. Under Mr. Putin, the government has reversed course, seizing more control over many sectors.
Today, both countries govern with a potent centralized authority, overseeing economies with a mix of private and state industries, although the Russians have long seemed less disciplined in doing so.
Corruption is worse in Russia than China, according to global indexes, and foreign companies generally consider Russia’s investment climate less hospitable as well, in part because of less respect for property rights.
Russia has also been unable to match China in modernizing roads, airports, power plants and other infrastructure. And Russia is grappling with myriad health and social problems that have reduced the average life expectancy for men to 60. One consequence is a demographic crisis that is expected to drag down growth.
The world financial crisis accentuated comparisons between the economies, drawing attention to Moscow’s policies. In June, the World Bank projected that China’s economy would grow by 7.2 percent in 2009, while Russia’s would shrink by 7.9 percent.
Politically, Russia remains more open than China, with independent (though often co-opted) opposition parties and more freedom of speech. The most obvious contrast involves the Internet, which is censored in China but not in Russia.
Even so, Mr. Putin’s political aides have long studied how to move the political system to the kind that took root for many decades in countries like Japan and Mexico, with a de facto one-party government under a democratic guise, political analysts said. The Russians tend to gloss over the fact that in many of those countries, long-serving ruling parties have fallen.
The Kremlin’s strategy was apparent in regional elections last week, when United Russia lieutenants and government officials used strong-arm tactics to squeeze out opposition parties, according to nonpartisan monitoring organizations. United Russia won the vast majority of contests across the country.
Far behind was the Russian Communist Party, which styles itself as the successor to the Soviet one and has some popularity among older people. The Russian Communists have also sought to build ties to their Chinese brethren, but the Chinese leadership prefers to deal with Mr. Putin’s party.
The regional elections highlighted how the Russian government and United Russia have become ever more intertwined. State-run television channels offer highly favorable coverage of the party, and the courts rarely if ever rule against it. United Russia leaders openly acknowledged that they wanted to study how the Chinese maintained the correct balance between the party and government.
“We are interested in the experience of the party and government structures in China, where cooperation exists between the ruling party and the judicial, legislative and executive authorities,” Vladimir E. Matkhanov, a deputy in Russia’s Parliament, said at the Suifenhe meeting, according to a transcript.
United Russia praises the Chinese system without mentioning its repressive aspects. And the party’s stance also appears to clash with repeated declarations by Mr. Putin, the former president and current prime minister, and President Dmitri A. Medvedev that Russia needs a robust multiparty system to thrive.
The two endorsed the results of Sunday’s local elections, despite widespread reports of fraud, prompting opposition politicians to call their words hollow.
Sergei S. Mitrokhin, leader of Yabloko, a liberal, pro-Western party that was trounced, said the elections revealed the Kremlin’s true aspirations. And the China talks made them all the more clear, Mr. Mitrokhin said.
“To me, the China meeting demonstrated that United Russia wants to establish a single-party dictatorship in Russia, for all time,” he said.
Throughout recent centuries, Russia has flirted with both the West and East, its identity never quite settled, and analysts said that under Mr. Putin, the political leadership had grown scornful of the idea that the country had to embrace Western notions of democracy or governing.
That in part stems from the backlash stirred in the 1990s, after the Soviet fall, when Russia faced economic hardship and political chaos, which many Putin supporters say the West helped to cause.
Dmitri Kosyrev, a political commentator for Russia’s state news agency and author of detective novels set in Asia, said it was only natural that the Kremlin would cast its gaze to the East.
“When they discovered that there was a way to reform a formally socialist nation into something much better and more efficient, of course they would take note,” Mr. Kosyrev said. “Everyone here sees China as the model, because Russia is not the model.”
http://www.nytimes.com/2009/10/18/world/europe/18russia.html?_r=1&pagewanted=all
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The Kremlin Wars (Special Series Introduction): The War Begins
October 22, 2009 | 1954 GMT
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Strange things are happening inside Russia these days. Pro-Kremlin political parties have boycotted the parliament, our sources say lawsuits are about to be filed against some of the state's favorite companies, and rumors are circulating high within the Kremlin that the Russian economy is destined to be liberalized.
When looked at separately, each of these currents can be rationalized, for Russia has just recently completed elections and the global financial crisis is still hammering its economy. But a deeper look reveals instability inside what is normally a consolidated, stable and politically-locked Russia. Something much bigger and more fundamental is afoot: a war among the most powerful men of the Kremlin is coming.
Though Russian Prime Minister Vladimir Putin undoubtedly rules the country, he does not rule it alone. Over the past decade he has carefully crafted a balanced structure of power. Beneath him on the Kremlin's organizational chart are two very ambitious men: Deputy Prime Minister Igor Sechin and Deputy Chief of Staff Vladislav Surkov. Both of these men control vast swaths of the government bureaucracy, state companies and levers of power throughout the Russian system -- including the powerful Federal Security Service (FSB) and Military Intelligence Directorate (GRU).
It is the classic balance-of-power arrangement. So long as these two clans scheme against each other, Putin's position as the ultimate power is not threatened and the state itself remains strong -- and not in the hands of one power-hungry clan or another.
But having all major parts of Russia's government and economy fall under the two clans creates a certain structural weakness, a problem exacerbated over the past few years by the effects on the Russian economy of chronic mismanagement, falling oil prices and, most recently, the global financial crisis. All have weakened the state. Economic problems have become so acute that Putin, for the first time since his rise to power in Russia, has had to step back and reassess whether his system of balanced power is the best way to run the country.
The first to plant this seed of doubt were the liberal-leaning economists (known as the civiliki) within Surkov's clan, who went to Putin over the summer and told him the Russian economy had to be fixed and that they knew how to achieve that. As it happened, their plan called for excluding Sechin's clan -- especially those in the FSB -- from any involvement in economic matters. The plan presents, of course, a good opportunity for Surkov to grab hold of a critical issue in Russia and twist it to weaken his rival clan.
And it presents Putin with a pivotal dilemma. He likes the idea of fixing the Russian economy and making it work like a real economy, but it would mean throwing off the balance of power in the country -- the equilibrium he has worked all these years to achieve. And should this balance be thrown off, the effects could ripple throughout every part of Russia -- all levels of government, influential security institutions and even the country's powerful state-owned companies.
When these issues came to our attention some months ago, our first thought was that they were merely the machinations of just another high-level Russian source hoping we would promote his agenda. So we sought confirmation with a number of unrelated sources -- and we received it. The final convincing event in our minds was Putin's Sept. 29 declaration that some heavy economic reforms are indeed necessary. We cannot rule out that this could all be a disinformation campaign -- those are as Russian as vodka and purges -- but we cannot ignore our intelligence from such a broad array of sources, especially when it's combined with signs of political and economic instability now cropping up inside Russia.
So, herewith, STRATFOR presents The Kremlin Wars, a five-part series on the civiliki's ambitious plan to repair the Russian economy, the impact of that plan on the equilibrium of Russian power and the dilemma Putin now faces in trying to keep Russia politically stable as well as economically sound.
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The Kremlin Wars (Special Series), Part 2: The Combatants
October 23, 2009 | 1507 GMT
Summary
Former Russian president and current Prime Minister Vladimir Putin is the indisputable executive power in Russia. His strength comes largely from his ability to control Russia's opposing political clans. Those two clans, which have been fighting for influence for most of the past eight years, are about to see fresh conflict as a new force, the civiliki, attempt to use Russia's economic crisis as an opportunity to reshape the country.
Editor's Note: This is part two in a five-part series examining the Russian political clans and the coming conflict between them.
Analysis:
Executive power in Russia indisputably rests with former president and current Prime Minister Vladimir Putin. Putin emerged as the supreme political force in Russia following the chaos that defined the 1990s precisely because he stepped outside of the fray and acted effectively as an arbiter for the disparate power structures. Although Putin's background is in the KGB (now called the Federal Security Service, or FSB) and he used these links in intelligence and security services to initially consolidate his reign, his power does not rest on those foundations alone. Putin's power comes from his ability to control Russia's opposing clans through favors and fear that he will give one clan the tools and authority to destroy the other.
The two main clans within the Kremlin are the Sechin clan led by Deputy Prime Minister Igor Sechin and the Surkov clan led by Russian President Dmitri Medvedev's First Deputy Chief of Staff Vladislav Surkov. These clans have been involved in almost continual competition for power for the past eight years. The group that may tip the balance in the coming clan wars is a newly defined class that is part of the Surkov clan: the civiliki. Putin's balance of power is intertwined with economic reform, and the civiliki -- a group of lawyers and economic technocrats -- want to use the economic crisis to reform Russia.
Sechin and the FSB and Siloviki
Sechin has deep roots within the FSB and the siloviki (a term which translates as "the strongmen") who are either directly linked to the FSB or are former security officers who have tried their hand at business or politics or both during their "retirement." Sechin and his group generally have a comparatively Soviet frame of mind, but without any ideological nostalgia for communism. They do, however, long for the powerful Soviet Union, which acted forcefully on the world stage, was respected by its foes and allies, was suspicious of the West and was led by a firm (bordering on brutal) hand at home. The economic system Sechin favors is one that harnesses Russia's plentiful natural resources to fund champions of industry and military technology, and essentially depends on high commodity prices to sustain itself.
Sechin's main source of power is undoubtedly the FSB. Although the FSB is fully loyal to Putin, this does not mean that it would not side with Sechin in a showdown against its opponents. Sechin uses the FSB as a talent pool from which to fill various positions under his command, including the chairmanships of various state-owned companies. This naturally irks the civiliki, who abhor the thought of intelligence operatives running Russian companies.
Aside from the FSB, Sechin's other pillars of power are the state-owned oil giant Rosneft and the interior, energy and defense ministries. The distribution of assets between the Sechin and Surkov clans is not random; Putin coordinated it precisely so that neither clan becomes too powerful. Sechin's control of Rosneft is therefore balanced by Surkov's control of Gazprom, the state-owned natural gas company. While Sechin gets control of the energy ministry, Surkov is in charge of the natural resources ministry and so on.
Surkov and the GRU
Surkov rose through the ranks by proving himself invaluable in two key episodes of Russian state consolidation: the Chechen insurgency and the collapse of the largest Russian private energy firm, Yukos. Originally from Chechnya, Surkov played a role in eliminating a major thorn in the Kremlin's side: Chechen President Dzhokhar Dudayev. He also helped mastermind Moscow's win in the Second Chechen War by creating a strategy that divided the insurgency between the nationalist Chechens and the Islamists. His role in bringing down Yukos oligarch Mikhail Khodorkovsky began the all-important consolidation of those economic resources pillaged during the 1990s by disparate business interests.
Surkov's power base is the Russian Foreign Military Intelligence Directorate (GRU). The GRU represents both military intelligence and the military. Throughout Soviet and post-Soviet history, it has been the counterbalance to the KGB/FSB. The GRU is larger than the FSB and has a longer reach abroad, although it its accomplishments are not as well known as those of the FSB.
Also under Surkov's control are Gazprom; the ministries of finance, economics and natural resources; and the Russian prosecutor general. However, Surkov's rival Sechin controls the interior and defense ministries -- which have most of Russia's armed forces under their command. This limits the GRU's ability to control the military.
Surkov has sought to weaken Sechin and the FSB's position by constantly looking for potential allies to add to his group. In 2003, he formed an alliance with the heads of the reformist camp -- previously known as the St. Petersburgers -- that has proven to be invaluable in the context of the financial crisis. It is this group, the civiliki, that will help Surkov in his attempt to defeat Sechin, possibly for the last time.
The Civiliki
The civiliki are rooted in two camps. The first is the St. Petersburgers group of legal experts and economists that coalesced around Anatoly Sobchak, mayor of St. Petersburg from 1991-1996. Many of Russia's power players -- from Putin to Medvedev to key civiliki figures like Finance Minister Alexei Kudrin and German Gref, the former trade and economics minister and current head of Sberbank -- either worked directly under Sobchak or were somehow related to his administration. The second is the somewhat younger group of Western-leaning businessmen and economists that eventually joined the reformists from St. Petersburg.
The civiliki primarily want economic stability and believe Russia has to reform its economic system and move past state intervention in the economy that depends largely on natural resources for output. They try to be non-ideological and are for the most part uninterested in political intrigue. In their mind, economic stability is to be founded on a strong business relationship with the West that would provide Russia with access to capital with which to fund economic reforms. From their perspective, funding from the West has to go to rational and efficient companies that seek to maximize profit, not political power.
The first grouping of economic experts and Western leaning businessmen was led by Anatoly Chubais, who led the St. Petersburg group and was essentially in charge of various privatization efforts in the 1990s under former Russian President Boris Yeltsin. However, most of the St. Petersburg group was sidelined by the general failure of economic reforms enacted during this period. They were then almost snuffed out by the siloviki during the commodities boom from 2005 onward, leaving only Kudrin in a position of some power.
However, Surkov rescued the civiliki and incorporated them, giving them the powerful protector they lacked. Part of Surkov's plan was to turn one of the more prominent civiliki -- Medvedev -- into a superstar at the Kremlin. In Surkov's mind Medvedev was the correct choice since he was neither FSB nor GRU, though Surkov still felt he could influence him. This move helped Medvedev become president. Since Medvedev's ascendance to the presidency, and with Surkov's support, the other civiliki leaders -- Kudrin and Gref -- have been given even greater liberty to run the economy without fear of being replaced. Kudrin is handling the economy while Gref essentially is masterminding the banking system reform. The two of them work very well together, and with their allies Economic Minister Elvira Nabiullina and Natural Resources Minister Yuri Trutnev.
There is a rapidly brewing Surkov-backed conflict between the civiliki and Sechin. The strife is rooted in the simple issue of efficiency: The civiliki argument is that the Sechin clan wasted the good years of high commodity prices, crashed the Russian economy and weakened the state. This forces Putin to look at the conflict differently from previous clan battles. The Surkov-Sechin arguments typically are "just" about power, and thus about maintaining a balance. But the civiliki see Sechin's group not so much as a threat to them but as a threat to Russia. This is an argument that Putin has been able to ignore, but the latest economic crisis could have changed this.
The civiliki have a ready-made solution for the inherent problems in the Russian economy. Surkov's support for the civiliki, along with the financial crisis, has given Putin pause and he is giving their proposals consideration. However, the implementation of such reforms could reignite the feud between the clans and thus completely destabilize the delicate balance Putin has attempted to keep in the Kremlin.
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The Kremlin Wars (Special Series), Part 3: Rise of the Civiliki
October 26, 2009 | 1131 GMT
Summary
The global economic crisis has led the Kremlin to examine its decisions about running Russia's economy, financial sectors and businesses. A group of intellectuals including Russian President Dmitri Medvedev, called the civiliki, want to use the crisis as an opportunity to reform the Russian economy. The civiliki's plan will lead to increased investment and greater efficiency in the economy, but it will also trigger a fresh round of conflict between the Kremlin's two powerful political clans.
Editor's Note: This is part three in a five-part series examining the Russian political clans and the coming conflict between them.
In the aftermath of the global economic crisis, Russian Prime Minister Vladimir Putin has had to step back and examine the Kremlin's decisions on running the country's economy, financial sectors and businesses and the effects of a state-controlled system on investment, growth and the freedom of capital. In response, a group of Russian intellectuals called the civiliki, who are trained in economics, law and finance, have presented proposals on "fixing" the economy. The civiliki (a play on words, since the Federal Security Service and other members of the security class in Russia are called the siloviki) is a new group of economically liberal-minded (by Russian standards) politicians and businessmen. This group includes Russian President Dmitri Medvedev, Finance Minister Alexei Kudrin (who is also a deputy prime minister), Sberbank chief German Gref and many more.
The civiliki are not ideologues like the liberal Russian reformers of the 1990s and understand that the Russian economy and institutions must maintain some sense of balance with national security and national interests. But the civiliki also see how much damage the siloviki's control of key power structures and businesses has done to the Russian economy.
The civiliki's plan has one main goal in mind: to implement real structural reform in Russia's major economic sectors. This will improve competition, attract investment and purge waste and mismanagement. The plan has three parts -- purge the non-business-minded siloviki from positions of economic responsibility, introduce new pro-investment laws and partially liberalize the economy. It is an incredibly ambitious plan that would reverse laws designed by the FSB and Putin over the past six years. But the reforms are being spearheaded by the one man Putin trusts on all finance and economic issues: the civiliki's Kudrin.
Related Links
The Kremlin Wars (Special Series Introduction): The War Begins
The Kremlin Wars (Special Series), Part 1: The Crash
The Kremlin Wars (Special Series), Part 2: The Combatants
Kudrin is an experienced official, being one of the very few to make the transition from the Yeltsin era to Putin's Russia and having held a prominent position in every one of Putin's governments. The reason for his longevity at the Kremlin is simple: Rather than playing politics (to the extent usually seen in Russia) he is a technocrat who makes decisions based largely on the economic facts. His numbers-oriented mind, apolitical nature and competency as a manager are at least as important to Russia's relative financial stability as the strong energy prices of the past decade. Because of this, Putin values Kudrin's counsel greatly. Kudrin has also been an important buffer between Deputy Chief of Staff and First Aide to Vladimir Putin Vladislav Surkov and Deputy Prime Minister Igor Sechin, the heads of the Kremlin's opposing clans -- until now.
Kudrin's Plan
Part 1: Purging the Siloviki
The most controversial part of Kudrin's plan is to purge the siloviki from positions of control over businesses and economic institutions. The siloviki clan, run by Sechin, took command of most of the Russian state firms over the past six years, and has -- by Kudrin's technocratic reckoning -- run them poorly. The siloviki run firms including oil giant Rosneft, rail monopoly Russian Railways, Russian airline Aeroflot, nuclear energy company Rosatom and arms exporter Rosoboronexport. The issue is that the siloviki have placed former KGB agents as heads of industry and businesses though many have no expertise as businessmen. According to Kudrin, it was largely Sechin's clan that sought access to international credit before the global economic crisis hit. Some $500 billion flowed into Russia via such connections, flooding the Russian financial sector with foreign capital. Sechin's clan spent the money as if it were free, often on irrational mergers and acquisitions that increased the clan's political power but had little economic purpose.
When the global recession occurred, all those funding sources dried up in a matter of weeks. And as the ruble declined, all of those loans still required repayment -- in the then-appreciated U.S. dollars, euros and Swiss francs. Consequently, the Russian economy suffered a contraction worse than any other major state in the world. The Kremlin was forced to bail out many firms, particularly those linked to Sechin's clan, to prevent a broader collapse. As part of the efforts to contain the crisis, the Kremlin also spent more than $200 billion on slowing the depreciation of the ruble so that the loans taken out by corporations and banks did not appreciate so much that they would not be repayable. From Kudrin's perspective, this was a huge cost to save companies whose managers had no business being in business.
Kudrin's plan is to weed out the security-minded officials now occupying leadership positions in industry and business, leaving only those who can actually run their institutions properly. But in doing this, Kudrin would strip Sechin's clan of massive economic and financial clout --something the siloviki would not stand for.
Part 2: Making Russia Investor-Friendly
Next, Kudrin's plan calls for legal changes that would make Russia more attractive to investors. One of the issues investors have with Russia is that there is very little legal protection, which leaves them highly vulnerable to hostile takeovers and becoming a target for the Kremlin or its power players. Moreover, the few legal authorities that do exist -- like the Federal Tax Service or the Audit Chamber -- often are tools for the Kremlin to help it pressure Russian and foreign firms that the government wants to either destroy or devour. The best-known case of this is the story of Yukos, whose owner Mikhail Khodorkovsky had evolved from businessman to ruler of Russia's vast oil sector and aspiring politician -- much to the Kremlin's ire. In 2004, the government brought the full power of a reinvigorated state to bear against Khodorkovsky and sent him to a Siberian prison. Other examples are of the Kremlin targeting energy assets belonging to foreign firms like BP and Royal Dutch/Shell to give those assets and/or control over projects to state-controlled energy firms.
In theory, the new investors' rights laws would protect businessmen and investors in Russia. The country has never had sound laws protecting investors' rights. However, it is most likely that any new laws will leave the state plenty of wiggle room to ensure that the Kremlin has significant control over investors' actions.
The next step to creating an investor-friendly Russia, according to Kudrin's plan, is to repeal the strict energy cap laws Putin put in place in 2007. These laws affect strategic industries and clarify which assets would be off-limits to foreigners. The sector affected most by these laws was energy. The laws limit foreign firms' ability to own more than 40 percent of a project in the country and forbid foreign firms from owning any projects involving the subsoil. These laws have made Russia an unattractive environment for foreign businesses to maintain or expand investments in energy projects, even though Russia is one of the world's most energy-rich countries.
But Kudrin's plan involves more than repealing the energy laws and allowing foreign firms to rush back in. There is a political side to the plan, masterminded by Surkov. The changes in Russian energy laws will allow foreign companies to own up to a 50 percent stake in projects, but if a foreign firm wants majority control then it must "trade" assets outside of Russia with one of the Russian energy behemoths. In essence, Russia will allow foreign companies to own majority stakes in large projects like the new fields on the Yamal peninsula in exchange for downstream projects in those companies' own countries. The goal is for Russian energy companies to not only move more into the downstream sector, but also have greater access to international markets -- something the Kremlin can use later for political purposes. STRATFOR sources say deals like this are already being negotiated with firms like BP, France's Total and EDF Trading, and U.S.-based ExxonMobil.
Part 3: Reprivatization
The last part of Kudrin's plan is to reprivatize the vast number of companies the Kremlin has taken over in the last few years. Under Putin, the Russian state once again became the main driver of economic activity. Upon becoming leader of Russia in 1999, Putin set a goal to reverse the massive privatization that occurred during the 1990s -- like the housing and voucher privatizations and loans-for-shares schemes -- that, in most Russians' eyes, wrecked the country. Putin wanted to put the Kremlin back in control by consolidating its power over a slew of economic sectors, including energy, banking and defense. As of this year, the Russian state and regional authorities own approximately 50 percent of Russian businesses, according to Kudrin.
In the short term, Russian state control over strategic sectors made sense. It pushed out forces that were not too friendly with the Kremlin, like the oligarchs and foreign groups. But it also allowed the state to marshal its financial resources toward certain key domestic and foreign policy goals. Russian economic consolidation under the state brought about a stability that most Russians had longed for after the 1990s.
However, in the long term, the lack of non-state funding and private capital has become a problem, creating inefficiencies across the board -- particularly in areas where the state does not focus a great deal of its resources. Russia is traditionally capital-poor; therefore, any major economic overhaul needs to include the creation of an investment-friendly climate. The financial crisis made this clear; when the state took on the burdens of the failing private sector, it swallowed more businesses and industries but also took on their debt and need for cash.
Kudrin's plan is for the state to step back and start reprivatizing some 5,500 firms over the next three years -- which would drop state ownership in Russian firms by approximately 20 percent. The goal is to abandon some of the companies currently draining the government's coffers, but this step will also generate cash through the sales needed for the government to plug 2010's estimated budget deficit. Kudrin also believes that once the government starts to reduce its stake in companies, a more competitive environment will form in the Russian economy, allowing it to become more diversified.
Kudrin wants to ensure that the next reprivatization looks nothing like the feeding frenzy of the 1990s. In the minds of the civiliki, the failures of the 1990s were caused not only by investor greed but also by the state's failure to create a rational environment for privatization. The Russian state in 2009 is much stronger than it was in the 1990s, so Kudrin believes that the new round of privatization would be controllable, and the fact that the Kremlin would know who would gain control of each company would keep anyone hostile to Russian (read: Kremlin) interests out. The last thing Kudrin wants is a new generation of oligarchs.
Kudrin's plan would start with selling the state's stakes in companies purchased during the financial crisis, such as telecommunications giant Rostelecom and a series of banks, including Globex, Svyaz and Sobinbank. After that, the civiliki would like to consider companies such as oil giant Rosneft, banking giant Sberbank and railway monopoly Russian Railways for privatization -- a rather bold move since many of these companies are run by the siloviki.
In Putin's mind, the state consolidated the economy during Russia's identity crisis in the 1990s. Certain people, groups, influences and companies needed to be purged, in his opinion. Now that this has been completed, the government can step back and, in a highly controlled manner, start to reprivatize businesses. Putin is starting to believe that this is all just a cycle.
Easier Said Than Done
Kudrin and the other civiliki's plans are a technocratic approach to a crisis that has been long in the making in Russia but was exacerbated by the global financial crisis. The civiliki's plans have very specific economic goals in mind, leaving out power politics. The plan is actually not a new one, but it is one that the siloviki have continually sidelined over the years as they placed national interests above economic reform. The civiliki have also never been powerful enough by themselves (even with one of their own as president of the country) to push through any of their reforms.
What the civiliki needed was for one of the truly powerful clan leaders in Russia to stand behind their reforms. Fortunately for Kudrin and the civiliki, one such leader -- Surkov, who serves as Medvedev's deputy chief of staff and first aide to Putin -- has done just that. However, Surkov is not interested in Kudrin's plan in order to reform the Russian economy. He sees the plan as something that will help him eliminate his rivals and consolidate his power.
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The Kremlin Wars (Special Series), Part 4: Surkov Presses Home
October 27, 2009 | 1138 GMT
Summary
Vladislav Surkov, who serves as Russian President Dmitri Medvedev's deputy chief of staff and leads one of the Kremlin's two main political clans, has given his support to a plan to reform the Russian economy. The plan, proposed by a group of liberal-leaning economists called the civiliki, would help Surkov divest Deputy Prime Minister Igor Sechin, the rival clan leader, of power. Surkov has a specific list of goals that would help him tip the balance of power in Russia in his favor.
Editor's Note: This is part four in a five-part series examining the Russian political clans and the coming conflict between them.
Since the current recession has exposed the weaknesses in the Russian economy, the reform plans designed by Russian Finance Minister Alexei Kudrin and a class of liberal-leaning economists called the civiliki have caught Russian Prime Minister Vladimir Putin's attention. But before Putin could take Kudrin's plan seriously, the civiliki needed support from a major power player in the Kremlin. That man is none other than Russian President Dmitri Medvedev's deputy chief of staff and one of the two major Kremlin clan leaders, Vladislav Surkov. Surkov's motivation for supporting the civiliki plan is not the same as Kudrin's, however; the finance minister seeks a technical overhaul of the system, while Surkov's goal is to further his own political ambitions.
Surkov: The Gray Cardinal
Surkov is a unique player within the Kremlin. Being half Chechen and half Jewish, Surkov has long known that his pedigree would hinder him from ever holding Russia's top offices. Instead, he has positioned himself as the "gray cardinal" -- the one who masterminds power behind the scenes -- for Russia's leaders. Surkov came to this position by methodically climbing up the ranks and leaving a long list of former bosses behind him. Some of the most notable heavyweights Surkov helped bring down are Chechen President Dzhokhar Dudayev and oil oligarch Mikhail Khodorkovsky. Among his experience is a reportedly long and deep history with the shadowy Russian Military Intelligence Directorate (GRU) in the former Soviet states and Central Europe. He is now the GRU's chief strategist.
Related Links
The Kremlin Wars (Special Series Introduction): The War Begins
The Kremlin Wars (Special Series), Part 1: The Crash
The Kremlin Wars (Special Series), Part 2: The Combatants
The Kremlin Wars (Special Series), Part 3: Rise of the Civiliki
Surkov has diversified his power base inside the Kremlin by securing the loyalty of the civiliki. These economically Western-leaning technocrats -- lawyers, economists and financial experts -- have been a powerful group since the fall of the Soviet Union, but have been leaderless since the 1990s after they were blamed for many of the economic troubles that wracked the country. Surkov recognized the liberal reformers' potential and offered them protection as part of his growing political clan.
The civiliki's loyalty has given Surkov an alternative power base to the GRU-linked bureaucrats and a new group of followers to maneuver into key positions in the Kremlin. A key example is Medvedev -- a civil lawyer by trade -- whom Surkov groomed to succeed Putin as president in 2008 to prevent another security official from taking the position. Not only did Surkov consolidate the liberal economists into one group but also came up with the term "civiliki" as a kind of play on words with the term "siloviki," which is the common name for Deputy Prime Minister Igor Sechin's clan and those in the FSB. The term civiliki stems from Medvedev's civil law degree and Surkov's desire to mold Russia's civil society.
Surkov has also sought to diversify his power across Russia. He is the chief ideologist behind the spread of nationalism throughout the country. He planted the seeds for a stronger Russia among the upcoming generations by creating the Nashi youth movement, which is reminiscent of the Soviet Komsomol youth. The Nashi -- estimated to number at 600,000 -- are tasked with promoting nationalism and loyalty to the state and helping to rid Russia of its enemies. They are a formidable force in the country and have been known to prevent anti-government rallies, pressure media critical of the Kremlin and make life difficult for foreigners and their businesses in Russia. The Nashi also promote academic achievement and hope to create the next generation of business and government leaders. They are fiercely loyal to Surkov, though he cannot legally be part of the organization because he is a government worker.
While Surkov has expanded his power throughout Russia, his greatest obstacle has been the rival clan led by Igor Sechin, which derives its power from the Federal Security Services (FSB, formerly KGB). It has never been a secret that the GRU and FSB have been adversaries since the creation of Soviet Russia, and it is only natural that Russia's two main clans are based within its two formidable intelligence agencies. Of course, Putin also had a hand in designing the current clan structure, splitting most government, economic and business institutions between the clans in order to balance them and prevent either the GRU or the FSB from becoming dominant.
But Surkov has been working to shift this balance by diversifying his clan away from the GRU and enveloping many different groups throughout Russia.
Tipping the Balance
The civiliki's plan to fix the Russian economy is based partially on purging forces that have placed personal interests above economic soundness. In this, they are mostly targeting members of Sechin's clan -- the siloviki, or "strong men," who are former FSB agents put in positions of financial or business leadership. It is not clear that this is an entirely fair assessment, since so many in Russia were guilty of gorging on cheap credit during the boom years preceding the financial crisis. Regardless, the motivation for the civiliki's desire to purge the siloviki is not political; rather, it is because the reformers see no reason for FSB intelligence operatives to run businesses or financial institutions in Russia because they lack the applicable business skills. Surkov has latched onto this concept as a way to finally eliminate much of the Sechin clan's power.
Typically, the civiliki would be wary of Surkov's politicization of their plan. However, over the summer the gray cardinal approached Kudrin -- the architect of the civiliki plan -- with a deal: Surkov would support the civiliki's reform plan if Kudrin helped Surkov with certain aspects of his plan to purge Sechin's clan from power.
But Surkov's plan is very risky and complicated, and involves infiltrating all the proper channels through which he can pursue his enemies in the Kremlin and its companies and industries. Surkov's plan has two parts -- one that targets the siloviki's economic institutions, and one that targets their positions in the Kremlin.
Part 1: The Witch Hunt
First, Surkov intends to go after the main companies and institutions from which Sechin's clan derives either power or funds. Under the civiliki's plan, companies that have been mismanaged or are financially unsound -- according to their assessments -- would be privatized. Surkov is taking this a step further and wants to launch a series of inquiries and audits targeting very specific state corporations all controlled by the Sechin clan.
In Russia, it is common for companies being targeted by the Kremlin to face audits, tax lawsuits and other legal investigations intended to pressure the companies or lead them to being purged or swallowed up by the state. The problem is that for Surkov to attempt to use such a tactic against either state or pro-Kremlin companies, he would have to go through the Federal Tax Service or Federal Customs Service, which are run by Sechin's people.
But this looks like it could soon change. As part of Surkov's clan, Medvedev has jumped on the civiliki's economic reform bandwagon. Publicly, the president has recently started suggesting that he could begin investigating Russian firms he deems inadequately run. He said on Oct. 23 that there will be changes in how state firms are organized and even hinted that some firms could be shut down if they do not comply. This is occurring because over the summer, Medvedev and Surkov worked on drafting legislation through the Presidential Council on Legal Codification that would allow the government to "eliminate certain state corporations" -- meaning these new maneuvers would not require going through the usual proper channels. All the details on Medvedev and Surkov's ability to target firms are not known, but quite a few details have been leaked to STRATFOR that indicate Surkov's seriousness.
Instead of trying to purge Sechin's control over the Federal Tax Service and Federal Customs Service, Surkov has started to create alternative avenues for investigations into powerful Sechin-linked and state-owned companies by going through the Prosecutor General's office, run by Surkov clan member Yuri Chaika, and Russia's Supreme Arbitrage Court, which was taken over recently by pro-Surkov official Anton Ivanov. Also in recent months, the Prosecutor General's office has bolstered its legal authority to work with the Audit Chamber and Federal Antimonopoly Service -- both run by Surkov loyalists, Sergei Stepashin and Igor Artemev. These bodies are very powerful and important tools necessary to effectively targeting weighty state firms.
According to STRATFOR sources, preparations to start the paperwork on these investigations into certain state and Sechin-linked companies could begin as early as Nov. 10. This will be the test for Surkov to see if he can legally purge Sechin's influence.
The Checklist
Surkov has a very precise list of companies and agencies to investigate.
At the top of the list is Rosoboronexport, the state defense exports, technologies and industrial unit. Rosoboronexport is one of the largest moneymakers for the state after energy, earning $7 billion in foreign arms sales in 2009 with another possible $27 billion in contracted orders. Rosoboronexport is led by one of the larger FSB personalities, Sergei Chemezov, who uses arms sales and production for the FSB's political agenda. However, the agency has been accused of hindering the arms industry's ability to keep up with sales and of making it harder for Russia to gain new military technology. Rosoboronexport has also grown unwieldy in that it also now controls non-defense assets like carmakers and metallurgical companies. Furthermore, Surkov does not like the FSB overseeing an organization that should in theory fall under the GRU, since it is military-related.
Next on the list is Russian oil giant Rosneft, which is considered the rival to the Surkov clan's natural gas giant Gazprom. The two companies have been in competition since an attempted merger between them failed in 2005. The competition heated up when each company crossed into the other's territory, with Gazprom opening an oil subsidiary and Rosneft purchasing natural gas assets. Rosneft would be one of the more difficult companies for Surkov's group to target, since symbolically it is considered one of the state champions. It is also the key moneymaking enterprise for the Sechin clan.
After Rosneft are two government bodies that handle a large percentage of the state's money and are overseen by siloviki or Sechin-linked people. The Housing Maintenance Fund, which handles between $3 billion to $5 billion annually, is facing accusations that no one independent from Sechin has checked on where the funds are being spent and that the fund is simply a front for the FSB's activities in Russia. The second body is the large Deposit Insurance Agency (DIA), which oversees all registrations of deposits into banks in Russia and insures most of the country's banks -- an incredibly powerful tool for the FSB. Kudrin has been so incensed by what he has called the mismanagement and misuse of the DIA that he placed himself on the agency's board over the summer. But now Kudrin and the rest of Surkov's group want to purge the siloviki from these institutions.
Also on Surkov's list are:
State nuclear corporation Rosatom, which controls nuclear power, nuclear weapons companies and other nuclear agencies
Olympstroy, the state corporation responsible for construction for the 2014 Olympics
State-owned Russian Railways, one of the largest railway companies in the world, which is run by Sechin loyalist Vladimir Yakunin
Avtodor, a new state-owned company responsible for revamping Russia's crumbling roads and highways (and therefore slated for vast amounts of investment to flow into its coffers)
Aeroflot, Russia's largest passenger airline, which is chaired by former KGB agent Viktor Ivanov and has been struggling during the financial crisis
It isn't clear what Surkov's ultimate goal is in investigating these companies -- whether he intends to destroy them, dismantle them, bring them under the control of his own clan or just privatize them so they are no longer in Sechin's grasp, or a mixture of these options. It is, however, clear that if he succeeds, Surkov would wipe out the siloviki's economic base and take away many of the tools they now use to operate effectively in the country.
Part 2: Kremlin Power Positions
The second part of the plan has to do with Surkov's goal of purging a few key Kremlin politicians from their positions in order to tip the balance of power in his favor. The positions on this list include the president's chief of staff, the interior minister and Kremlin speechwriters.
Rumors are already beginning to fly around Moscow that Sechin loyalist Sergei Naryshkin, who had until recently been considered a rising star within the Kremlin, will be soon ousted from his place as Medvedev's chief of staff. Surkov sees Naryshkin's placement just under the president and over Surkov as a major infiltration by the Sechin clan into his realm. STRATFOR sources have indicated that Naryshkin will be ousted on the grounds that he never successfully implemented Medvedev's anti-corruption campaign.
Next on the list is the Interior Ministry, led by FSB agent Rashid Nurgaliyev. As interior minister, Nurgaliyev oversees 250,000 troops and his own police units. Recently, certain powerful pieces of the ministry, such as the Ministry for Emergency Situations, have been broken off and are now outside Sechin's control.
Lastly, within the Kremlin, pro-Sechin and FSB-trained speechwriters have been sidelined. These longtime writers, like Dzhakhan Polliyev, are being pushed aside and new Surkov-trained writers like Eva Vasilevskaya and Alexei Chadaev are now writing speeches for Medvedev, Putin and others. This is very important in how the leaders portray the small nuances of power within and beyond Russia.
The point of the governmental changes is for Surkov to get his people into positions of power so that his group can actually change policy and tip the balance of power inside Russia. Surkov is not looking to make Russia more efficient, like the civiliki are -- though it is the civiliki's plans giving Surkov the tools and opportunity to try to achieve his goals.
Surkov has legitimate justification for quite a few of his changes, based on the civiliki's recommendations to fix the economy, but the rest of the changes are an incredibly bold step to tip the balance of power.
Putin has noticed this boldness. Moreover, Putin has noticed a lot of the large changes Surkov has made over the past few years to get more power for himself and his clan and diversify his power base inside Russia.
The issues now are how much further Putin will allow Surkov to go, and what Putin is willing to sacrifice to clip the wings of the gray cardinal.
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The Kremlin Wars (Special Series), Part 5: Putin Struggles for Balance
October 29, 2009 | 1139 GMT
Summary
Russian Prime Minister Vladimir Putin is at a decision point. After spending a decade consolidating political and economic power, he has to choose how to deal with Russia's troubled economy. Amid tensions between the Kremlin's two powerful clans, Putin's decision could leave Russia's political structure in tatters.
Editor's Note: This is the final part of a five-part series examining the Russian political clans and the coming conflict between them.
Analysis
Related Special Topic Page
Special Series: The Kremlin Wars
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Russian Prime Minister Vladimir Putin has spent a decade gaining control over the Russian political and economic system. However, economic difficulties are affecting Russia's political structure, and the remedy could break the whole system apart.
After coming to power in 1999, Putin spent five years getting a firm grip on the Russian political system. During the next five years, he focused on managing the balance between the Kremlin's rival power clans -- one led by Vladislav Surkov, currently Putin's first aide and Russian President Dmitri Medvedev's deputy chief of staff, and the other led by Igor Sechin, currently deputy prime minister -- while recentralizing the economy. In consolidating the economy, Putin granted these clans the unchecked ability to put many of Russia's largest and most important firms under state control.
Related Links
The Kremlin Wars (Special Series Introduction): The War Begins
The Kremlin Wars (Special Series), Part 1: The Crash
The Kremlin Wars (Special Series), Part 2: The Combatants
The Kremlin Wars (Special Series), Part 3: Rise of the Civiliki
The Kremlin Wars (Special Series), Part 4: Surkov Presses Home
This consolidation generally was more about giving the state control over Russia's vast strategic resources and purging influence from abroad or from those hostile to the Kremlin than about making economically sound decisions. The benefits of high energy prices and a surge of foreign investment into Russia made up for shortcomings in economic planning. But those good times have ended. Energy prices are considerably lower now, and foreign investment has dried up. Furthermore, many of those put in charge of the firms now managed by the Russian state did not know how to run a business. These firms collapsed during the ongoing global economic crisis, deeply damaging the Russian economy.
Putin has not been blind to the mismanagement and overextension in the economic consolidation, or to the long-term outlook for the Russian economy. Finance Minister Alexei Kudrin has presented Putin with a proposal to partially liberalize the economy, remove the poor managers, and put business-minded people in charge of the firms in the hopes of returning those firms to functionality and possibly profit. Putin might be considering these reforms, but he is not putting himself in a position to spearhead them. Though any real reforms inside Russia will require his approval, Putin has made sure that Kudrin and Medvedev are the public faces of those reforms. That way, if the reforms work, Putin could take the credit for approving them; if they fail, Kudrin -- and possibly even Medvedev -- would take the fall.
But beyond the chances of success or failure for Kudrin's proposed economic reforms is another problem: The reforms could compromise the balanced political system Putin has worked so carefully to construct and maintain.
Putin's Dilemma
Almost all of the managers that need to be purged under Kudrin's plan are members of the same power clan -- the siloviki, run by Sechin. Their removal would overturn the balance of power that has allowed Putin to rule for the past decade. It would leave Surkov's clan nearly unchecked in the Kremlin, and Surkov is already a powerful figure. He has been diversifying his power and, in addition to ruling over the Military Intelligence Directorate (GRU), now holds the loyalty of the liberal economic reformers called the civiliki, including Kudrin.
This is not the first time Putin has faced competing factions. During the first few years of Putin's presidency, he secured a landslide victory in 2003 Duma elections that gave his party, United Russia, dominance in the government. But Putin had to purge competing elements in the Yeltsin Family, the oligarchs, the security services and the St. Petersburg liberals. He wiped out some of these factions, like the Yeltsin Family and the oligarchs. He purged the non-loyal forces from the security services and St. Petersburgers and molded them into new factions. It is this second move that led to the rise of the clans led by Sechin and Surkov.
Putin's reign in Russia has always depended on balance, and now one of his top lieutenants is in a position to gain more power than Putin is comfortable with. Surkov knows he can never officially control Russia, but his ambition is to run it from behind the scenes. He has been fairly successful in this so far, but rival clan leader Sechin and his followers in the Federal Security Service (FSB) have always kept him and his GRU power base in check. Kudrin's plan, along with a few more changes to the system, would remove most of Surkov's obstacles. Moreover, Surkov is starting to garner a cult-like loyalty inside Russia that would make any Kremlin leader nervous. Putin knows Surkov is not trying to lead Russia officially, but his concern is that with Surkov's growing power, Putin could be displaced as Russia's chief decision-maker.
Besides Putin's desire to remain in control, the other concern is the response from the siloviki -- mainly made up of former KGB and current FSB personnel -- to a tip in the balance of power. The siloviki have never a secret of their loathing toward Surkov, his GRU and the civiliki. They would not stand for Surkov making the major decisions in the Kremlin. Russia can remain powerful only under authoritarian control, and that is something Surkov could never accomplish. Over the last decade, Putin managed to gain the loyalty of all the different Kremlin factions. Surkov could destroy that delicate balance.
Putin's Options
Putin could disregard Kudrin's plan, leaving Sechin's people in their current positions and ignoring any plans for privatization. That would maintain the power balance, and contain Surkov to a degree, but the economic tools that Russia would have at its disposal would become far less useful. Or Putin could allow very limited business privatization and restructuring in order to keep the system stable in the short run, disregarding the long-term effects of the current economic model. This means that at any time, if Kudrin's plans start to destabilize Russia politically, those plans could be abandoned and Kudrin or Medvedev blamed for the effects. Putin would hardly be the first Russian leader to allow the economy to crumble in order to maintain political control.
Putin could also implement Kudrin's reforms but politically hive off Kudrin and the civiliki from Surkov's clan and establish the civiliki as their own clan. Since Putin is an expert at creating balance, there has been some discussion that if Sechin's clan is about to lose some of its power and Surkov is about to become stronger, Surkov's clan could be split in two to make up for the imbalance.
This looks very similar to Vladimir Lenin's tripartite system, which involved the creation of a system within the Kremlin in which three clans play off of each other to keep balance. In Lenin's system, the KGB was one clan, the GRU was another and the third was a non-intelligence group sometimes simply called the State. In Putin's model, the FSB under Sechin would continue as one clan, Surkov's clan would oversee only the GRU and then the civiliki would form the third group, led by either Medvedev or Kudrin. For Lenin, the tripartite system worked in the short term, but it ultimately failed as the intelligence groups infiltrated the State.
Surkov has already thought of this option and knows Putin is considering it. However, he views the civiliki as being too dependent to form their own clan and feels they will always have some level of loyalty to him. Considering that the civiliki generally lack leadership and do not have a power base independent of Surkov, a successful application of the tripartite model would require greater management skills than Putin currently has.
Putin's Attention Span
Another problem for Putin is how much time and effort will be required to restructure Russia's economy, attempt to keep balance inside the Kremlin, and prevent a powerful Kremlin figure from threatening Putin's control. Putin and Russia have enough other concerns outside the country.
Russia is currently consolidating its periphery by bringing former Soviet states back into its orbit. Russia is in the middle of purging Western influence in Belarus, Ukraine, the Caucasus and Central Asia. Moscow is also working to prevent states further out on its periphery -- especially in Central Europe -- from becoming more pro-Western and allowing countries like the United States to have a presence there.
Russia has also been creating informal alliances with other regional powers like Germany, Turkey and Iran in order to counter the United States' global power and ability to work within Russia's sphere of influence.
If Putin is faced with a crisis at home, whether economic or political, he could have to pull back on Russia's bold moves abroad. Recently, with Russia consolidated and stable and the United States bogged down in Afghanistan and Iraq, Moscow has been able to make some major regional shifts in Eurasia. If this situation changes and Russia has to deal with domestic strife, then by the time Russia is stable enough to be able to act abroad again, the United States could once more be free to counter Moscow's moves.
It all hinges on Putin's decisions about managing Russia's faltering economy while maintaining control over those vying for power inside Russia. Putin has been successful when faced with such turmoil before, but it is unclear if that success can be repeated.
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Russia's Growing Resurgence
EVIDENCE OF RUSSIA’S ROLE IN THE OVERTHROW of the Kyrgyz government Wednesday became even clearer Thursday.
Not coincidentally, members of the interim government that the opposition began forming on Wednesday have lengthy and deep ties to Russia. Russian Prime Minister Vladimir Putin was not only quick to endorse the new government, but he also offered the opposition Russia’s support — financial or otherwise. Interestingly, Russia on Thursday also sent 150 of its elite paratroopers to its military installation in Kant -– twenty miles from the capital of Bishkek –- leaving a looming suspicion that Russia could step in further to ensure the success of the new government.
Protests take place regularly in Kyrgyzstan. The fact that Wednesday’s protests spun into riots, followed by the seizure then ousting of the government, followed by the installation of a replacement government set to take control — all in less than a 24-hour period — are all clear indicators that this was a highly organized series of events, likely orchestrated from outside the country. Furthering this assumption were reports from STRATFOR sources on the ground that noted a conspicuous Russian FSB presence in the country during the riots. These reports cannot be confirmed, but it is not unrealistic to assume that a pervasive presence of Russian security forces exists in the country.
There are many reasons why Russia decided to target Kyrgyzstan. The country lies in a key geographic location nestled against China and Kazakhstan, and surrounds the most critical piece of territory in all of Central Asia: the Fergana Valley. Whoever controls Kyrgyzstan has the ability to pressure a number of states, including Kazakhstan, China, Tajikistan and Uzbekistan. Kyrgyzstan was also the scene of the 2005 Tulip Revolution, which ushered in President Kurmanbek Bakiyev, who is now sheltering himself in the southern regions of the country. It was not that Bakiyev was pro-Western like other color revolution leaders in Georgia and Ukraine, but he was available to the highest bidder and the United States was willing to pay.
The United States has maintained a transit center at the Manas International Airport — which serves as a key logistical hub for its operations in Afghanistan — since 2001. Though Russia has four — soon to be five — military installations in Kyrgyzstan, Manas is the only serious U.S. military presence in Central Asia. With a Russian-controlled government coming into power in Bishkek, Moscow now holds the strings over Manas. This gives Russia another lever to use against the United States within the larger struggle between the two powers.
“As of Wednesday, Russia has now added to its repertoire the ability to pull off its own style of color revolution with the toppling of the Kyrgyz government.”
Russia’s main goal within that struggle is to have Western influence pulled back from its former turf — especially in the former Soviet states — and for the United States to accept Russian pre-eminence in the former Soviet sphere. But Russia is not just waiting for the United States to hand over its former turf. Instead, it has been actively resurging back into these countries using a myriad of tools.
Russia has long exerted its influence in the former Soviet states by attempting to ensure their economic reliance on Russia — as an integrated part of each country’s economy, and as an energy provider or energy transporter. This was seen in 2006 when Russia started cutting off energy supplies to Ukraine and also in Lithuania, to force the countries and their supporters in Europe to be more compliant.
Russia proved in 2008 that it was willing to use military force against its former Soviet states by going to war with Georgia. This move was particularly poignant since Georgia also had been a country turned pro-Western via a color revolution, and was pushing for membership into NATO. In early 2010, Russia showed that it could slowly organize forces in Ukraine to be democratically elected, replacing the pro-Western government elected in the Orange Revolution.
As of Wednesday, Russia has now added to its repertoire of tools used in the former Soviet states the ability to pull off its own style of color revolution with the toppling of the Kyrgyz government.
Russia has been systematically tailoring its resurgence into each country of its former sphere according to the country’s circumstances. This has not been quick or easy for Moscow. The overthrow of Kyrgyzstan has been painstakingly planned for nearly a decade to either flip the country back under Moscow’s control, or at least roll back U.S. influence and make the country more pragmatic to the Russian mission.
Russia knows there is no one-size-fits-all plan for its former Soviet states. The Kremlin cannot simply wage war with each country like it did with Georgia, cut off energy supplies like in Lithuania, set up a democratically elected government like in Ukraine or overthrow the government as in Kyrgyzstan. Now and going forward, Russia will tailor the type of influences it uses to each country it wants to control.
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Russia, Germany and the Bushehr Nuclear Facility Deadline
Reports circulated Tuesday that Russian Ambassador to the United Nations Vitaly Churkin issued complaints late Monday to members of the U.N. Security Council (UNSC) over Germany’s seizure of Russian cargo intended for the Bushehr nuclear power plant in Iran. There are few details about the cargo and its confiscation, and it is unclear when the seizure actually happened. Germany claims the shipment violated sanctions rules against transporting sensitive items to Iran.
The confiscation could be referring to an occurrence in January when Russian cargo, including computer and nuclear monitoring equipment, transiting Germany before heading to Iran was seized. This was followed by another related event in May when a handful of German businessmen connected to an unnamed Russian company working on the Bushehr nuclear facility were arrested in Germany by German authorities. On both occasions, German authorities claimed the offending actions violated sanctions rules against Iran.
Germany — the country that started the Bushehr project in 1975 — openly opposes further work and construction on the nuclear plant. Its opposition is in line with UNSC recommendations and the European Union’s directive against nuclear cooperation with Iran. As the political climate between the West and Iran worsened, Russia took up the Bushehr project in 1995 and has since used it as one of its main bargaining chips with the West on other critical issues.
“That Russia has not spun up the seizure beyond issuing informal complaints signals the fact that there could be something else afoot.”
Moscow and Berlin could have split over the issue of Iran after the German businessmen working for the Bushehr-related Russian company were arrested in May. Germany and Russia had been growing closer over the past few years in terms of politics, economics and security, so it was rare for Germany to oppose any Russian projects, especially one as prominent as the Bushehr plant. But there has been little fallout between the budding friends over either incident. The seizure and Churkin’s complaints to the Security Council on Monday have barely registered in either Russian or German media.
That Russia has not spun up the seizure beyond issuing informal complaints — there are many higher profile officials other than Churkin who could have condemned the act — signals the fact that there could be something else afoot. Moscow could possibly have arranged the whole event.
Such a scenario would be connected to a recent shift in Russia’s stance on Iran. Russia is currently in the process of implementing a comprehensive plan to modernize its economy and Moscow feels that foreign investment and technology — particularly from the West and the United States — are critical to the process. In return, Russia has pledged to be more cooperative with the West on key political issues, proving its intent by signing on to the latest batch of UNSC sanctions against Iran, after years of opposing them. After a recent trip to Washington, Russian President Dmitri Medvedev even suggested that Moscow could be on board for even more moves against Iran should the Islamic republic prove to be noncompliant.
In a bid to placate a worrying Iran, Moscow has continued to maintain that it has not completely abandoned support for Tehran. But a significant test for Russia’s commitment to either the West or Iran is on the horizon; Moscow currently faces an August deadline to complete the Bushehr nuclear facility. Russia is already nearly two years behind the initial deadline for completion. As it faces pressure from the West to disregard the August deadline, Russia’s reputation as a solid economic and political partner to Iran is on the line.
But Moscow may think that with a bit of maneuvering it could do both. By claiming the West confiscated the material and personnel needed to complete Bushehr by the deadline, Russia would be cleared of its responsibility to meet that deadline. At the same time, taking the confiscation issue to the UNSC shows that Russia is not completely abandoning Iran (though this low gesture is not likely to placate Tehran much). If Moscow’s plan involves maneuvering to once again extend the Bushehr deadline, it would mean a coordinated effort against Iran by Russia, Germany and possibly the United States.
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By THERESE RAPHAEL
The protests in Russia this week put the government on notice that the rebellious mood on display in Sunday's parliament elections could well go viral, a message that clearly has the Kremlin nervous. It responded with riot police, mass arrests, and dial-a-mob pro-Putin supporters.
Russians have had much to grumble about for as long as anyone can remember. Yet they have always tended to shake their heads, but not their fists, at injustices. If things seem more serious now it may be because the scale and brazenness of the lawlessness have stretched tolerance to the limits. Sunday's parliamentary vote in Russia may not have changed the political landscape outright, but it revealed a lot about the growing desire in grass-roots Russia for political change.
The daily grind of corruption was something Russians viewed as the price for a kind of stability and the rise of living conditions, but crimes committed in broad daylight, the perpetrators known and protected by officials, have grown too numerous to ignore. Mr. Putin's United Russia Party is widely referred to as the "Party of Crooks [or Swindlers] and Thieves" (the reference will get you more than eight million hits on Google).
The protest really took off after September's announcement by Mr. Putin that he would stand again for president. The prospect of another 12 years of Putin rule and the insult of what is effectively a fait accompli exploded in anti-government tweets and blogs and hasn't stopped growing.
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The leader of the opposition Yabloko party, Sergei Mitrokhin, right, holds a Russian national flag during protests against alleged vote rigging in parliamentary elections.
.Recently, Russians have rallied around cases such as the killing of Sergei Magnitsky, a 37-year-old Russian lawyer representing Hermitage Capital Management, who was imprisoned, tortured and beaten to death in 2009 after accusing Russian officials in a well-documented case of perpetrating a massive tax fraud. Posters and videos mentioning the Magnitsky killing and others were a feature of protesters and those campaigning against the governing party this week. The full details of Magnitsky's imprisonment, mistreatment and ultimate death are set out in a 75-page report released last week to the President's Human Rights Council in Russia and to the public. The report was downloaded more than 200,000 times in Russia within a few days.
As with the cases of journalist Anna Politkovskaya, who was gunned down in 2006, and of human rights lawyer and investigative journalist Stanislav Markelov, who was murdered a mile from the Kremlin in 2009, Magnitsky's story resonates with Russians for the bravery of his actions to expose corruption and the brutality of his death.
"The Magnitsky case is one of the most emblematic examples of the breakdown of law in Russia," says William F. Browder, Hermitage's founder. "Unlike many other murder cases, where there is some plausible deniability about who pulled the trigger, here we have in such granular detail who was responsible and a chain of command that goes right up to the cabinet. Because of that, this is like a cancer that they don't seem to be able to get rid of. And the more they try to cover up, the more this becomes the Watergate of Russia."
The U.S. State Department imposed visa sanctions as of July this year on an unspecified number of Russian officials who it says were involved in Magnitsky's torture and death. A broader bill in the Senate, the Justice for Sergei Magnitsky Act of 2010, sponsored by Ben Cardin (D., Md.) and John McCain (R., Ariz.) and co-sponsored by 26 Democrats and Republicans, is due for hearings next week. There is a similar bill before the Canadian parliament and like-minded initiatives under way in 11 EU member states. The Dutch parliament unanimously passed a resolution in July calling on the government to impose visa sanctions on officials involved in Magnitsky's imprisonment and death (so far the government hasn't acted on that resolution).
It's tempting to draw a dotted line from the Arab Spring to Russia's winter of discontent, but Russian social bonds are far weaker than those in the Arab world, families are much smaller, and at least a share of the grumbling can probably be numbed away with the proceeds of oil and gas sales. Given the option of fighting for change or leaving, most Russians would probably opt to hit the road.
Many Russians are voting with their feet in what looks like the biggest wave of emigration since the Bolsheviks came to power. In a Levada Centre poll in May, 22% of respondents said they wanted to move abroad permanently, compared to 13% two years earlier. A conservative estimate provided by the national audit office, which tracks tax receipts, is that 1.25 million Russians left in the last decade.
Nor are these largely economic migrants. Estate agents and private-school heads in London, Switzerland, Spain and elsewhere can readily testify to the growing demand from well-healed Russian clientele, while neighborhoods of the ultra-rich such as the fabled Ryublovka region outside of Moscow have seen an exodus. Unlike earlier waves of emigration, Russians leave these days to find a bit of peace and normality. They are materially well-off in Russia, but they are unhappy.
Unable to change a system where power is preserved through patronage and illegality, the government seems bent on trying to change the subject, much as the Communists once did. When Mr. Putin was booed recently as he went on stage to congratulate the winner of a martial-arts competition, Russian television edited out the snub. Coverage of the protests downplays their significance, just as state-controlled media went to great lengths to minimize coverage of the uprisings in Egypt and elsewhere in the Middle East. Mr. Putin, meanwhile, is often shown shirtless, in dark sunglasses or martial arts attire.
Mr. Putin will no doubt seek in the months ahead to portray his government as stable, fair and above all generous. But dissent seems to be stealing a march on the culture of compromise among many ordinary Russians and among the better-off. The result of March's presidential election may be foregone, but regime change in countries where democracy is not respected doesn't necessarily respect the electoral calendar.
Ms. Raphael is a former editorial page editor of The Wall Street Journal Europe
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Agenda: With George Friedman and Lauren Goodrich on the Russian Election
December 16, 2011 | 1955 GMT
Click on image below to watch video:
STRATFOR CEO George Friedman and Senior Eurasia Analyst Lauren Goodrich discuss the political challenges now facing Russian Prime Minister Vladimir Putin as he prepares to seek a mandate to resume Russia’s presidency.
Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy.
Related Links
• Russian Protests Alone Pose Little Threat to Putin
Colin Chapman: Russia’s Prime Minister Vladimir Putin says he’s going to allow protesters to hold a very large rally in Moscow on Christmas Eve. It’s a bold step from the man who wants to regain the presidency next March but whose United Russia party saw its vote fall below 50 percent in recent Duma elections. So have we all overrated Putin?
Welcome to Agenda with George Friedman, and joining us also our chief Eurasia analyst Lauren Goodrich. Now in the new year, Vladimir Putin and the United Russia party will be campaigning for Putin’s bid to retake the presidency. How do you expect them to adjust their strategy to take account of this recent challenge to Mr. Putin’s political monopoly?
Lauren Goodrich: Well Putin is going to have to address the protesters, and what the protesters are looking for is for the middle class to actually be heard for the first time in Russia — they have never had a voice; they have never had a leader and they never had anyone to represent them in the government. And so Putin at first is going to have to go to the protesters themselves and then there will have to be some structural changes within the party system.
George Friedman: I think the more interesting question here is: has the narrative on Vladimir Putin been right? There has been an assumption here that Putin could decide whether or not he or Medvedev would run, and that he was certainly going to win if he ran. I’m not really interested in these demonstrations nearly as much as I am in the electoral results. Rather than being preeminently dominant over the electorate, Putin didn’t do very well. There are a bunch of theories out there about how Putin planned to not to do so well and that, you know, this is really a brilliant strategy showing that this is really a democratic society and he’s in complete control. The other explanation is he really isn’t as popular as we thought. We at STRATFOR have been talking about Putin as a preeminent force and I begin to wonder whether we have to reexamine that, he may be weaker than he appears. Demonstrations always get a lot of attention and everybody focuses on transcendental meanings of that. Now let’s look at the numbers in that election.
Lauren: Well the numbers in the election is what is really interesting because the parties that rose and took United Russia’s seats in parliament they’re the nationalist parties, they’re the ones that are “Russia for Russians”, they want to take a harder stand in the country, a more nationalistic stand inside the country, and so that’s the Communists and the Liberal Democrats who did better. The other interesting thing is that among the minorities in Russia, especially in the caucuses, United Russia took almost all of the votes among minorities. It was the Russian population that decided to vote for the nationalists instead.
George: And then leaving out the question of Putin — you know, the personality — you’re seeing a serious split developing between the Russian population and non-Russian population, and this may well presage some serious tensions. But certainly it seems to indicate that Russia is far less united than United Russia would like to think and Putin’s position is not so obviously paramount. And without Putin this regime looks very different. So all I’m saying is that I was brought up short by the numbers, they weren’t what I expected. Granted, we can say that it’s a movement to the right rather than to the left. I’m not sure that any of us should be comforted by that.
Lauren: But that’s the difference is that the election results show a swing towards nationalism, versus the protests which weren’t nationalist protests. And so they’re two separate issues.
George: Well protests are held by whoever decides to show up. I mean, we in the West have this obsession with the assigning excessive significance to demonstrations. Demonstrations happen. People come out and demonstrate. It doesn’t show much at the elections, which were pretty much fair, people said some were. The election showed us something very
different. So what we learned is that the demonstrators were from the left and the electorate was moving to the right.
Colin: How seriously should we take the statement by Mikhail Prokhorov that he’ll run against Putin? Could this just be a
ruse?
Lauren: Well what I find most interesting about Prokhorov’s announcement is what happened right before the announcement. A few days before Prokhorov made his announcement Vladislav Surkov — who is Putin’s right hand — made a very public speech, which he doesn’t do very often. And in that speech he said that Russia needs a new political player in order to be in front of the middle class and also to represent big business inside of Russia. And then all of a sudden, two days later, you have Prokhorov make his announcement.
George: The problem of this announcement was that it looked more like an attempt by somebody not necessarily violently opposed to Putin to preempt the space that was opening up. The space is there on the right, as you said. And no right-wing personality has really emerged to really challenge that. This was an attempt to show an opposition. So it may have been a response to the elections. So you could both say that Prokhorov is not a particularly significant player in this but that Putin has some serious problems anyway.
Lauren: But if we’re looking at a swing to nationalism and then the West has created this narrative that Putin is losing power inside of Russia, whereas the polling numbers even going into the elections are exactly the results that happened. So anyone actually looking at the numbers would have seen that this was going to be the result — except the West has spun the narrative in a different way, bringing Prokhorov in so that the narrative is very interesting because he is very pro-Western, he’s liked in the West, he’s bigger than life here in the West. And so it kind of is a red herring to divert the West’s attention to Prokhorov instead of actually looking at what happened in the polling numbers.
Colin: Well, can I now move you on to the issue of corruption? More times than I think I can remember I’ve seen the expression “a party of crooks and thieves ascribe to this United Russia party,” and there has been quite a lot published in respectable newspapers like the London Financial Times about crony capitalism and well-rewarded oligarchs from St. Petersburg known to be close to Putin.
George: Well in the first place — and it’s really interesting that the Financial Times discovered crony capitalism in Russia, as if this was something new — this is the way Russia works. In part it works this way because of the way it privatized, and in part it works this way because Western interests were involved in that privatization. So this is Russia. It is not Britain, it is not Australia, and I’m glad the Financial Times realized that.
The problem that you have here is, however, that whatever comes out will be somehow linked to crony capitalism. But what is the ideology that it represents? I think what Lauren has pointed out, which I think is very important, is that unlike previous expectations — which have always been that Putin is the hard right guy and off in the wilderness is the guy in the white suit who’s really nice, liberal and a Minnesota Democrat — what we really find here is that what the opposition looks like is Communist and nationalist and much stronger than anyone would have thought of. The crony capitalization is not the issue on the table this day. What appears to be an issue is Putin — or something to the right of him — and not at all what we would have expected or wanted in the West, which is someone more like us.
Lauren: So there’s a split narrative going on of what the West is saying versus what is actually happening on the ground.
George: And that split is always there because the interesting thing of the past few years is that the West is constantly inventing liberalizing movements — whether it’s the Arab Spring or uprisings in Thailand — somewhere in the world there’s a liberalizing movement. The ability to get your arms around the idea that in many of these demonstrations and risings you’re not seeing liberalization but a hardline element coming out, frequently motivated by ethnic or racial issues, as in this case. For that we must also admit that nothing is definitive yet in Russia. This is a small thing that happened and we can build a large edifice out of what it means, but it’s an interesting thing that happened.
Lauren: And it’s also that the protests that just happened that look like they’re anti-Putin was just one set of protests, where the Russia for Russians protests and the nationalist protests have been happening every single week, and they’ve been growing in number to where you’re seeing 50,000 people on the streets versus 15,000 of the anti-Putin group.
George: It is very interesting, selectively, what is covered in Russia by the Western media and it’s things that comfortably fit into the vision of what ought to be happening. The more uncomfortable realities are not viewed and this election is really the case.
Colin: Now, let’s just conclude by talking about an anniversary. It’s almost 20 years to the week since the collapse of the former Soviet Union. Now Putin is saying he’ll build a Eurasian Union with former Soviet republics. Is this an achievable policy goal, given both the economic cost and the pushback from those who have tasted freedom?
George: Well, I’m not sure that there is an economic cost that large. From Putin’s point of view, the failure of the Soviet Union really consisted of the fact that Moscow guaranteed the economic interests of all of the constituent republics and huge amounts of money were flowing out from the center to these constituent republics. This union guarantees nothing. This union does not guarantee that Moscow is going to underwrite anything that the Ukrainians need, or the Belarusians or so on. It simply says that they’re going to be aligned. So this is very different from the Soviet Union.
Is it doable? Yes it’s doable, in part because Europe is collapsing and because any hope on the part of Ukrainians or anyone else that they’re going to get into the European Union (EU) in any meaningful time period has gone away. And so whereas in a country like the Ukraine, where Europe — however distant — appeared to be an option, you’re suddenly living in a world where that’s not an option, your options are limited, and in the end they center around your old partner and not particularly good friend — the Russians. So the real question is: 1) is it going to cost the Russians anything? I think they’ll profit from it; 2) Will it be possible? I think there’s very little alternative for many of these nations.
Lauren: And it’s already rolling as well. This next year we’re going to see a very important step to create this Eurasia Union. The customs unions are going to start to become a new organization and it’s also going to start expanding from being just Russia with Belarus and Kazakhstan to also start taking in quite a few other former Soviet states. So the ball is rolling on this.
Colin: Lauren Goodrich and George Friedman, thank you very much for your insights on Russia. I’m Colin Chapman. That’s Agenda for this week, thanks for being with us.
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Very interesting tidbits in this story such as the trade of Presidential votes for autonomy.
http://www.theglobeandmail.com/news/world/in-rebuilt-grozny-an-awkward-peace-with-russia/article2365069/?utm_medium=Feeds%3A%20RSS%2FAtom&utm_source=Home&utm_content=2365069
In rebuilt Grozny, an awkward peace with Russia
mark mackinnon
GROZNY— From Saturday's Globe and Mail
Published Friday, Mar. 09, 2012 6:33PM EST
Last updated Sunday, Mar. 11, 2012 9:39PM EDT
It looks triumphant: Vladimir Putin’s portrait hanging over a peaceful commercial street in Grozny, the capital of a Chechen Republic he went to war to keep as part of Russia. The boulevard was even given a new name to reinforce that impression of conquest; what was once Victory Avenue, marking the Soviet Union’s defeat of the Nazis in the Second World War, is now called Putin Avenue.
Beneath the portrait, something has indeed been accomplished. Where once there was only rubble (I stood on Victory Avenue in wartime 10 years ago and failed to find a single building undamaged by heavy weapons fire) is now a tree-lined boulevard framed by marble-fronted buildings housing cafés, pizzerias and advertising agencies.
When Russian voters returned Mr. Putin to the presidency last week, they did so in part because he is seen as having brought something like stability to Chechnya after almost two decades of no-holds-barred warfare here that often and horrifyingly spilled over into Moscow and other Russian cities. But in Grozny, it feels like it’s the Chechens – not Mr. Putin – who got what they wanted from the wars.
Chechnya today is ruled by Chechens under a form of Islamic law. Russia has maintained its territorial integrity, but the Russians who lived here once are gone, and few have any desire to ever see Grozny again. It’s easy to wonder whether two wars and some 160,000 deaths could have been avoided if the two sides had been willing to accept the awkward compromise they have now.
It’s Ramzan Kadyrov, a one-time rebel whom human-rights groups accuse of murder and torture, who really rules Chechnya. (At the south end of Putin Avenue is the city’s main Kadyrov Square, where a neon sign reads “Thank You Ramzan for Grozny!”) He maintains something resembling stability through a constant display of arms – Kalashnikov-toting police direct traffic in the city – and by dispensing billions of rubles from the Kremlin treasury, the price Moscow pays to have Mr. Kadyrov do the dirty work of fighting Chechnya’s remaining Islamic militants.
Another part of the Faustian pact Mr. Putin struck with Mr. Kadyrov was laid plain during the presidential election. According to the official count, an astounding 99.7 per cent of Chechens cast their ballots for Mr. Putin, though it’s easy to find those who say they voted otherwise or not at all.
Stuffed ballot boxes and Putin portraits aside, the state Mr. Kadyrov is building more closely resembles a Middle Eastern sultanate than any part of the Russian Federation. Facets of sharia law are in place – it’s the only part of Russia where alcohol isn’t freely bought and sold, and women who work for the government are required to wear head scarves. And the previously flat skyline is taking on a taste of Dubai, with a clutch of soaring skyscrapers and one of the largest mosques on the continent. The lone portrait of Mr. Putin is outnumbered by hundreds of smiling pictures of Ramzan and his father, Akhmad Kadyrov, the former Chechen president who was assassinated in a 2004 bombing as he sat in the VIP bleachers of the city’s main soccer stadium.
“I was a child of war. There was nothing good in our lives. Today, people come here from other republics to shop,” said Zalina Bisayeva, the 25-year-old manager of a boutique that sells Chechen-designed men’s and women’s clothing. “Everything is better now thanks to our President, Ramzan Kadyrov.”
Most jarringly, other than a military base beside Akhmad Kadyrov Airport, there are almost no Russians to be seen. (In a cruel twist of fate, nearly all of the 200,000 Russians who once lived here were killed or driven out by their own army's repeated sieges of the city.) The signs on the streets are still in Russian, but the language of life is Chechen. (Click 'next page' at the link.)
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Editor's Note: This is the first installment of a five-part series on Russian society and identity. Part 1 examines the overall problems facing the Kremlin as it attempts to consolidate Russia's diverse population.
Amid rising political, ethnic and generational tensions in Russia, Russian President Vladimir Putin has ordered his Cabinet to devise a national social and ethnic policy by Dec. 1 -- the first attempt to do so in 16 years. Russia is an incredibly diverse country in terms of its ethnic, religious, economic and political spheres. Throughout the country's history, leaders have made only three attempts to define and unite the many peoples of Russia under a common identity: once under Czar Nicholas I, once under the Soviet Union and now under Putin.
The current stereotype of a Russian citizen is a white, Slavic, Orthodox ethnic Russian who accepts the Kremlin's political system. Although this may be true for the majority of the country, notable ethnic, religious and political shifts are occurring in Russia that are forcing the Kremlin to develop new social policies in order to accommodate an increasingly diverse population -- and to reconsider the country's age-old problem of defining the Russian identity.
Throughout its history, Russia has sought to expand to defendable borders. The core of the country, which runs from north of Moscow down through the Volga region, holds the bulk of its population and food supply but is indefensible. Thus, for more than 500 years, Russia has worked to expand its territory to defendable geographic anchors, such as the mountains of the Caucasus, the Carpathians and the Tien Shan. Russia has also pushed out along the vulnerable North European Plain, one of the most critical routes for outsiders wishing to invade the country. These efforts have created a large buffer region surrounding the country's heartland. However, it has also meant that Russia has absorbed large populations that were not ethnically Russian or were hostile to Moscow. Russia's struggle to defend its territory from invasion has thus created the challenge of consolidating its internal population.
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Russia now has 21 national republics and 85 regional subjects spanning nine time zones. The country's population is currently divided between urban and rural residents, 185 ethnic groups, four major recognized religions (Orthodoxy, Judaism, Islam and Buddhism) as well as countless other faiths, and a growing number of political affiliations. Cross-border identification has also created divisions among populations found along Russia's shared borders.
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Ethnic Russians make up the bulk of the country's population and have been the ruling class since they broke away from the Mongol and Muslim Tatar empires in the 16th century. Because their territory spans from the Baltic Sea to the Pacific Ocean, the ethnic Russian rulers have power over millions of non-ethnic and non-Orthodox Russians, including Mongol, Turkic, Finnish and Inuit peoples, among others. And this is just inside Russia's current borders; the territory controlled under the Russian Empire and the Soviet Union included large additional regions of non-Russians. Moreover, the size of Russia's territory has allowed foreign influence to shape regional cultural values and traditions; for example, western Russia identifies somewhat with the West and Europe, eastern Russia identifies with Asia, and southern Russia is influenced by the Islamic world.
Related Analysis
Love of One's Own and Importance of Place
Such divisions create struggles among various groups and between these groups and the state. Although regional and ethnic loyalties can create conflict, they can also create kinship, helping unified minority populations to consolidate against the ruling class. An example of this occurred in the 1800s and the 1930s, when Russia attempted to consolidate control over what is today Uzbekistan. During both attempts, Uzbek populations were divided into clans that fought bitterly with each other but united in order to resist Moscow's rule.
With so many different identities in Russia, divisions typically are overcome only by ideology or administration. The Russian government's most successful period of control occurred during the Soviet era, when Moscow created an identity that could supersede the diversity within the empire and unite the population while creating an administrative system to organize the people and repress dissent. Putin has said that this strategy was one of that era's greatest achievements.
Read more: Reassessing the Russian Identity, Part 1: Introduction | Stratfor
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Reassessing the Russian Identity, Part 5: Faith, Age and the New Russian
Editor's Note: This is the fifth installment of a five-part series on Russian society and identity. Part 5 discusses the current religious and generational divisions in Russia and the creation of a new Russian identity. Read part 1, part 2, part 3 and part 4.
Moscow's secular stance regarding religion and the state has grown less definite again for quite a few reasons. During Boris Yeltsin's leadership of the Russian Federation, the state did not enact many policies regarding religion. Yeltsin did want religion limited, out of concern that foreign influence would seep into the country via diverse religious groups. He barred many foreign religious groups from entering the country unless they were Orthodox, Islamic, Buddhist or Jewish, but after that, religion was not a high priority for Yeltsin.
Russian leader Vladimir Putin intensified a revival of the Orthodox faith in the country, using it (much as the czars did) as a unifying force among the ethnic Russian people. But in recent years, this support for Orthodoxy has escalated beyond Kremlin control. During Putin's era, xenophobia -- particularly against Muslims of any ethnicity -- skyrocketed as well and overlapped with newfound loyalty to the Orthodox Church. Moreover, although many Muslim populations could band together during times of war with the state -- as seen in the Northern Caucasus in the mid-2000s -- currently there are divisions among Russia's Islamic populations as well. Overall, the country is experiencing a social instability based on religious affiliation not seen for some time in Russia.
The Rise of Ultra-Orthodoxy
Although the issue is nearly impossible to quantify, there seems to be anecdotal evidence of a notable escalation in extremism within the Orthodox faith in Russia. Between 70 and 80 percent of Russians claim to be Russian Orthodox, although most are non-practicing (a remnant from the Soviet period). Both Putin and former President Dmitri Medvedev heavily promoted Orthodoxy, and the church became one of the most important tools the Kremlin has used to unite society, at least among the ethnic Russians. But now that the Kremlin has pushed for the Church to have a greater presence in the country, some Russians' pro-Orthodoxy sentiments are escalating to extremism as the population reacts to generational and demographic changes in the country.
The more fervent Russian Orthodox sentiment seems to be rising in tandem with general xenophobia. The historical movement of "Russia for Russians" continually springs up in times of crisis in Russia, such as it did when ethnic Russians united during the wars in Chechnya. However, the current movement is not coming during a real crisis; it has resurfaced during the past two years. In November 2011, hundreds of thousands of Russians marched to protest increased immigration and the government's commitment to economically subsidizing Russia's Muslim republics in the Northern Caucasus. Orthodox fundamentalism spiked again in the summer of 2012 when the anti-Kremlin punk band Pussy Riot and its supporters held a series of demonstrations and defilements of Orthodox churches and symbols.
Related Analysis
Love of One's Own and Importance of Place
In response to the demonstrations against the Church and rise in anti-Muslim sentiment, volunteers have formed so-called Orthodox Brigades to actively patrol the streets to defend the Church. These brigades -- mostly comprising youth clad in black shirts that read, "Orthodoxy or Death" -- have been seen in dozens of cities across Russia over the past year and have sparked concern for minority populations. The governor of Krasnodar, Alexander Tkachev, has already formed a 1,000-strong brigade, saying that he will help finance it and that its members will work with local police to secure the streets. The Chechen parliament voiced opposition to Tkachev's move.
The Russian Interior Ministry has dismissed the brigades, saying that the Russian government will not work with them. Instead, the Kremlin is trying to harness the brigades' enthusiasm but shifting their focus away from purely Orthodox issues by creating "International Brigades" which will patrol the streets to help maintain order. The goal is to co-opt the Orthodox Brigades and expand them to include other ethnic groups -- something that the Union of Chechen Youth has said it will take part in. This, in theory, will help dissipate the brigades' Orthodox extremism.
Fissures Within Islamic Communities
Shifts inside Russia's indigenous Islamic communities have also occurred. As noted above, growth is taking place among key Muslim ethnic populations, such as Chechens, Ingush and Dagestanis -- the Muslim populations ethnic Russians tend to be most xenophobic about. There is a history of violence among these populations, which are located in the same region of the Northern Caucasus. It was the Chechen invasion of Dagestan in 1999 that sparked the Second Chechen War with the Russian state -- a war that did not end officially until 2010. Russia still carries out major military operations in the Caucasus, mainly focusing on Dagestan now that Chechnya is largely stable.
But rifts between these groups are in the forefront of the Kremlin's mind as issues regarding power in the region resurface. Chechen President Ramzan Kadyrov has stated that he is the protector of the peoples of the Caucasus and wants to leverage that into gaining more land for Chechnya, with hopes that Chechnya will swallow up Ingushetia first and possibly other Northern Caucasus republics later.
Another issue is an increase in tensions between various clans within the Sufi and Salafist Muslim populations. The majority of Russia's Muslims are of the liberal Islamic sect of Sufism. During the Russian wars in the Northern Caucasus over the past two decades, a radical element called either Wahhabism or Salafism became more prominent. During the Second Chechen War, the Russians pitted the Muslims fighting for nationalist reasons against those who were more oriented toward the Islamist ideology -- a tactic that was largely successful and created a nationalist Islamic population in the Caucasus willing to work with Moscow.
But with the wars over and with regular extremist activity still occurring in the Northern Caucasus, problems are arising among the different ethnicities and between the Sufis and Salafists. Such problems are also moving outside of the Caucasus. Four major plots targeting high-level Sufi imams in Dagestan by Salafists have occurred since October 2011, and three of the four imams targeted were killed. The latest Sufi leader targeted (in August), Sheikh Said Afandi, was working on a peace negotiation between the two groups. A similar incident took place in Tatarstan in July when a coordinated attack targeted the chief mufti of Tatarstan and his deputy. The current theory is that the attack was motivated by the Salafist-Sufi divide in Tatarstan. These sorts of incidents are not just religious in nature; they also have political motivations.
There is also a question of how susceptible the new generation of Muslims in Russia is to outside or radical sentiments. With 20 percent of Russians (ethnically Russian or not) born after the fall of the Soviet Union, a large portion of those Muslims in that age cohort have known only conflict, since a series of wars has occurred in their region for nearly 20 years. This could make them more vulnerable to outside or radical sentiment. On the other hand, that generation could want to move past such conflicts and adopt the more Russified attitude found in places like Chechnya under pro-Kremlin leader Kadyrov.
One attempt to combat extremism among Muslims in the Caucasus is the Chechen government's implementation (in tandem with the Kremlin) of its own brand of Islamic teaching in schools for very young and teenage students. This plan is just beginning and is using materials prepared by local religious leaders. Nearly all Chechen students are now taking courses on Islam and on how to behave as a Muslim.
The goal for the Kremlin and Kadyrov's government is to instill a version of Islam that can isolate those extremist views against the government and Kremlin-sanctioned society. Many in Chechnya have said that this plan strengthens Kadyrov's position in the Russian Northern Caucasus, since he is overseeing religious affairs and that Kadyrov is attempting to make Grozny the center of Russian-Islamic affairs.
It is too early to see what effects such educational programs will have. Islam has not been taught in schools in the Caucasus until now, so either it could unify the new generation of Muslims in one view of Islam or it could aggravate more radical movements who want to teach their own versions of the religion.
Political and Generational Changes
VIDEO: Russia's Demographic Challenge
.While ethnic and religious sentiments have shifted, so has the basic political mood -- though much of it is tied to the previous two issues, since they are all interwoven. Russia's typically steady political landscape was shaken in December 2011 when a series of mass protests across Russia started. The demonstrations initially were against parliamentary election results, but they continued through March and the presidential election. Now, numerous protests occur regularly and new political parties and coalitions are forming -- and it is all taking place very publicly.
After a decade of chaos in Russia, Putin consolidated much of the country with a series of sweeping political, economic and social reforms centering on his leadership. But as the series of crises -- such as the 1990s economic crisis and the wars in the Northern Caucasus -- that helped lead to Putin's rise and strengthened his ability to rally the country started to level off, the country began to prosper and the need for such a heavy-handed leader diminished.
Moreover, a generational change is taking place in Russia. Of the current population in Russia, more than 20 percent was born after the fall of the Soviet Union. This population was never Sovietized or united under one identity. Most of this population also lived its formative years in a stable and strengthening Russia under Putin. It is part of this population that is leading the push against government control of the country. The Kremlin has already begun countering this so-called rebellion by co-opting parts of the anti-Kremlin political movements, crushing others and dividing many of them.
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The Kremlin also is not trying to use one political party to rule over the country and unite the people politically, as the Communist Party did during the Soviet period. Instead, Putin has put forth the idea of a coalition of parties, groups and unions spanning the political spectrum -- though all under Putin's guidance. The All Russia Popular Front theoretically is meant to include any person or entity in the country supporting the betterment of Russia. Also known as the Popular Front, the movement has been slow in garnering support, though Putin has shown new enthusiasm in the past month in promoting the Popular Front.
Political dissent has always ebbed and flowed inside Russia, and although most Russians rallied behind Putin as the country's "savior" a decade ago, that sentiment has diminished. Putin is using many different tactics, from crackdowns to the creation of new political movements, to counter this. Moreover, Putin and his government are looking for a new way to unite the people -- particularly a way that will transcend personality and become part of the country's psyche. Putin wants to create a new Russian identity.
Formulating a New Identity for Russians
With so many serious divisions among the Russian people -- demographic, ethnic, religious, political and generational -- the need for a unified Russian identity to supersede all those differences has come back up for debate once again. In August, Putin said, "In the Soviet period a lot was done that was not very good, but a lot of good things were invented. For example, there was the concept of the Soviet people, a new historical community." Since then, there has been a debate on how to form a new identity for the current set of diverse people in the country. Putin has issued a presidential decree ordering his Cabinet to come up with a National Social and Ethnic Policy Strategy by Dec. 1.
The two Kremlin figures put in charge of this effort are Russian State Duma Chair Sergei Naryshkin and Deputy Premier Vladislav Surkov. Naryshkin is one of Putin's most trusted political allies. He reportedly served in the KGB then moved with Putin into the St. Petersburg circle of current Kremlin power players. Naryshkin is typically moved to positions where Putin needs a serious strategist; he has served as Gazprom adviser, military naval adviser, media chief and head of Russia's economic relations with the Commonwealth of Independent States, European Union and Far East. Surkov is a more controversial Kremliner. Not only is he half-Chechen and half-Jewish, he also formerly led the Kremlin clan of the civiliki. Surkov has experience in shaping some important initiatives, such as the Nashi youth program and the Kremlin's relationship with Chechnya.
The new social policy is meant to replace the vague 1996 strategy implemented by Boris Yeltsin. The initial drafts of the new strategy say that Russia is a "unique socio-cultural civilization entity formed of the multi-people Russian nation." Notably, the drafts of their new policy have removed the concept of the importance of ethnic Russians in the country.
Instead the focus will be on a multi-ethnic nation, with a proposed ethnic policy strategy that involves a covenant between all nationalities in Russia. The document is already getting quite a bit of attention, with support from Muslims -- ranging from imams to social and cultural groups -- in Chechnya and Tatarstan and the Armenian diaspora. More nationalist ethnic Russian and Orthodox groups have slammed the strategy, as they do not want a policy of inclusion for foreign or non-ethnic Russian groups.
Duma Deputy and member of the Presidential Council for Ethnic Relations Alexei Zhuravlev has proposed that the strategy as a whole should be sent to the Russian people for referendum in 2013. Putting the issue up for a public vote is risky because of the social, political and ethnic divisions among Russia's many peoples.
These divisions are exactly what this new strategy is trying to address, though no long-term answers to such dilemmas have been found in Russian history, except the brutal forced Sovietization of the people under Stalin. But with rifts in the population deepening like never before, the Kremlin has no choice but to try unifying the country, even if the plan is only marginally successful.
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Read more: Reassessing the Russian Identity, Part 5: Faith, Age and the New Russian | Stratfor
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http://www.thedailyshow.com/watch/tue-february-19-2013/how-i-meteored-your-motherland
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Summary
Russia's legislature is considering a proposal to abolish one of the country's top courts, the Supreme Arbitration Court, and consolidate it under the Supreme Court. The bill before the Duma also would expand the Kremlin's power to politically shape the country on a more granular level via the judicial system amid political and social changes inside the country.
This is the Kremlin's first consolidation of a major part of the Russian system since a series of consolidations in the early to mid-2000s. While there are systematic reasons for the judicial consolidation, the proposal -- spearheaded by Russian President Vladimir Putin -- faces opposition, as the new, larger court would tip the political balance within the country and eliminate a court system that was regarded as more efficient and less corrupt than the Supreme Court.
Analysis
Russia's judicial system consists of three courts: the Constitutional Court, Supreme Court and Supreme Arbitration Court. These courts oversee tiers of courts below them: regional, district, magistrate and others. Each high court has its own jurisdiction. The Constitutional Court is largely independent from its two sisters, as it only oversees matters pertaining to the Russian Constitution and disputes between federal bodies. The Supreme Court is the higher of the two remaining courts, having a general jurisdiction over civil, criminal and nearly every other type of case. The Supreme Arbitration Court, also called the Commercial Court, oversees economic and commercial arbitration.
Russia's Judicial System
But even with the distinctions between the types of cases the high courts oversee, there are some discrepancies and ambiguities between the Supreme Court and the Supreme Arbitration Court. The two have fought over power and jurisdiction since their inception in 1993. The Supreme Court and its supporters have argued that it holds final say in all matters except constitutional issues, even though the Supreme Arbitration Court is technically the ultimate venue for all commercial arbitration. The Supreme Court has, in several instances, encroached on commercial cases. This has occasionally led to one court overturning a verdict reached by the other court, and to commercial arbitration cases going to one court instead of the other in attempts to get a favorable outcome.
As far as perception, the Supreme Arbitration Court has been viewed as the more modern, efficient, impartial and less corrupt of the two high courts. The Supreme Arbitration Court's practices have even drawn praise from the European Court of Human Rights. The Supreme Court, however, has faced accusations from within Russia and by foreign groups of being protectionist, political and corrupt. The efficiency of the Supreme Arbitration Court could be attributed to the lighter caseload, as it receives only 35 appeals per month on average compared to the Supreme Court's 200 appeals per month.
There is also a political aspect to the courts' power struggle, because each is aligned with a different political group. The Supreme Court, headed by Vyacheslav Lebedev, is largely considered to have political support from the security hawk siloviki faction within the Kremlin. The Supreme Arbitration Court, headed by Anton Ivanov, is closer to the more reformist and liberal civiliki faction associated with Prime Minister Dmitri Medvedev.
In the past year, competition between the two courts has become increasingly fierce. In 2012, the Supreme Court attempted to create "administrative courts" that would oversee arbitration, meaning that all arbitration would become subordinate to the Supreme Court instead of the Supreme Arbitration Court. The Supreme Arbitration Court was able to block this move in March of this year. In recent months, the siloviki factions put forward the candidacy of Vladimir Vinokurov, who had never served as a judge, for deputy head of the Supreme Arbitration Court in order to infiltrate the system and undermine Ivanov -- something Ivanov was able to block politically because of his ally Medvedev's influence.
Attempts to Reconcile the Courts
Major structural reforms to clarify the courts' positions and power have been attempted continually, including previous proposals to merge the two courts. In the past year, Putin has attempted to find a compromise between the courts by proposing an Administrative Judiciary, which would create some sort of supreme judicial panel with three representatives from each of the three top courts. However, Constitutional Court Chief Valery Zorkin deemed this proposal unconstitutional in a rare disagreement between the court chief and the president. A series of criticisms in the media said the proposed Administrative Judiciary was too reminiscent of the Communist Party Central Committee, which developed centralized legal positions in the Soviet Union.
Instead, the president is now supporting the consolidation of the courts, which would give the Supreme Arbitration Court's functions to the Supreme Court, creating what Russian media have dubbed a "super court." The Supreme Court would then increase its number of judges from 125 to 170, which means that the new court would not absorb all of the current 53 arbitration judges. According to Putin, the consolidated court system would streamline judicial procedures and practices and eliminate redundancies.
This consolidation would require a change to the Russian Constitution, which divides the two court systems, though constitutional modifications would be relatively easy under Putin's direction. It would be the largest structural change within the Russian government since Putin's string of political, economic, social and security consolidations in the early 2000s.
Criticisms of Putin's Proposal
The Supreme Arbitration Court, as well as many in Russia's legal and political circles, has harshly criticized the proposed consolidation. On Oct. 10, seven judges from the Supreme Arbitration Court resigned in protest of the bill. The head of Russia's Intellectual Property Rights Court, Lyudmila Novoselova, said the quality of commercial arbitration would be reduced under the Supreme Court. Ivanov added that a unified court would end up being a "dinosaur guided by a small brain that needs tuning."
Many critics see political motives behind Putin's proposal. Having one super court instead of two competing courts would give one faction -- either siloviki or civiliki -- unprecedented power to shape politics, business and other facets of the country. It is unclear who would head the enlarged Supreme Court, which is aligned with the siloviki. Rumors have indicated that the Supreme Court's chief position could be given to the more liberal civiliki clan in order to avoid alienating foreign investors, who have said they are more willing to invest in Russia based on the more efficient track record of the Supreme Arbitration Court. Whoever might control the new Supreme Court, the appointment will create a battle within Putin's already delicately balanced inner circle.
There is another possible motive for Putin's proposal: The bill submitted to the Duma includes an amendment that would give Putin the authority to directly appoint prosecutors in the regions -- currently a prerogative of the prosecutor general. This would give the country's leader an unusual amount of granular power.
It could be that Putin is concerned about shaping the shifts taking place across the country. As Stratfor has observed, Russia is going through a series of social and political changes that are eroding Putin's consolidated control over the country. Handpicking the people within the regions' judicial circles could help Putin shape the policies and precedents for regional politics and business. In slipping the amendment in with larger judicial reforms, Putin could be signaling that he is increasingly worried about his power in the regions -- just as a growing power struggle is about to intensify in Moscow.
Read more: Russia: Putin's Motives for Judicial Consolidation | Stratfor
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Is Russia's Destiny Autocratic?
Global Affairs
Wednesday, February 19, 2014 - 04:07 Print Text Size
Global Affairs with Robert D. Kaplan
Stratfor
By Robert D. Kaplan
In 1967, the late British historian Hugh Seton-Watson wrote in his epic account, The Russian Empire, 1801-1917, "If there is one single factor which dominates the course of Russian history, at any rate since the Tatar conquest, it is the principle of autocracy." He goes on to explain how the nations of Western Europe were formed by a long struggle between "the monarchial power and the social elite." In England, the elite usually won, and that was a key to the development of parliamentary democracy. But in Russia it was generally agreed that rather than granting special privileges to an elite, "It was better that all should be equal in their subjection to the autocrat."
This profound anti-democratic tradition of Russian political culture has its roots in geography, or as Seton-Watson prefers to explain it, in military necessity. Between the Arctic ice and the mountains of the Caucasus, and between the North European Plain and the wastes of the Far East, Russia is vast and without physical obstacles to invasion. Invasion of Russia is easy, and was accomplished, albeit with disastrous results, by Napoleon and Hitler, as well as by the armies of the Mongols, Sweden, Lithuania and Poland. As Seton-Watson argues, "Imagine the United States without either the Atlantic or the Pacific, and with several first-rate military powers instead of the Indians," and you would have a sense of Russia's security dilemma. Whereas in America the frontier meant opportunity, in Russia, he says, it meant insecurity and oppression.
Because security in Russia has been so fragile, there developed an obsession about it. And that obsession led naturally to repression and autocracy.
Russia's brief and rare experiments with democracy or quasi-democracy were failed and unhappy ones: Witness the governments of Alexander Kerensky in 1917 that led to the Bolshevik Revolution and of Boris Yeltsin in the 1990s that led to Vladimir Putin's neo-czardom. Truly, Russia's fare has been autocracy, and given the utter cruelty of czars and communists, Putin is but a mild dictator. When Western pundits and policymakers say they are unhappy with his autocratic arrangement, they are basically making a negative judgment on Russian history. For by Russia's historical standards, Putin is certainly not all that bad.
Putin now represents an autocrat in crisis, a familiar story in Russia. His problems are, for the most part, unsolvable, like those faced by Russian autocrats before him. And there are many of them.
Controlling the ultimate destiny of Ukraine is of paramount importance to him, for reasons both geographical and historical. Russia grew out of ninth century Kievan Rus, located in present-day Ukraine. Ukraine's population density (compared to immense tracts of Russia) and geographical position make it a crucial pivot for the Kremlin, if it wants to permanently dominate Eastern Europe and the Black Sea. Yet, Putin finds that he cannot wholly control Ukraine or further undermine its sovereignty. There is simply a very substantial element in Ukrainian politics and society that demands a shift closer to Europe and the European Union. Putin has various tools to undermine Ukraine, such as erecting trade barriers and rationing deliveries of natural gas. But it is hard work, and he probably can never achieve an outright victory.
Putin fears the westward, pro-NATO and pro-EU stirrings inside the former Soviet republics of Georgia and Moldova. He fears unrest in former Soviet Central Asia, where reliably autocratic, Soviet-style regimes may soon face increasing turmoil at the hands of Islamic fundamentalists -- the very force Putin fears could destabilize Russia itself. Russia needs stability and compliance in its near abroad, and both will be increasingly at risk in Central Asia: Witness Kazakhstan's recent currency crisis. Putin not only worries about Russia's possible deteriorating position in world energy markets in the long term, but of the rising demographic weight of Muslims in Russian society over the long term, too.
Putin worries about an American-Iranian rapprochement, given how the estrangement for so long between those two countries has been so convenient to Russia's interest. Oh, and here's what Putin really isn't happy about: internal interference in Russian politics by American, pro-democracy nongovernmental organizations. What the United States considers human rights activity, he considers foreign subversion. And that goes for what American NGOs are doing in Ukraine also.
Putin wants to engage in cynical geopolitical deal making; instead he often gets lectures on morality from the West.
Could Putin actually be toppled? Not likely. The unhappiness with his rule that the Western media fervently wants to believe in is probably manageable, and a really free and fair election today in Russia would probably return him to power. He is only 61 years old and lives a relatively healthy life, unlike Yeltsin, who drank to excess. Sure, Putin is under extreme levels of stress. But you don't rise to his position in a place like Russia without the ability to handle levels of intrigue and anxiety that would psychologically decimate the average American politician.
The United States has every right to hate Putin for the Snowden affair alone. But, as I've indicated, Washington may be dealing with Putin for many years yet. As his dictatorship continues, he is liable to become more embattled, and rather than move toward reform, he is more likely to retreat further into a corrosive, authoritarian model. For that is a Russian historical tendency -- something Seton-Watson would have understood. If that is the case, Russian institutions and civil society, such as they exist, will further deteriorate. And with that, a post-Putin Russia, whenever it comes, could be a Russia in some substantial degree of chaos.
Putin is not like Spain's Gen. Francisco Franco, who in his latter years methodically laid the groundwork for a less authoritarian, post-Franco era. He is not like the collegial autocrats of present-day China, who have made their country -- with all its problems -- a relatively safe and predictable place for foreigners to do business and thus aid the development of the Chinese economy. While Russia, with its high literacy rates and quasi-European culture, cannot be compared with the much less developed Arab world, Putin's Russia does contain a scent of the thuggery and benightedness that characterized former regimes in Tunisia and Egypt. Because Putin is not a modernizer -- he is building neither a civil society nor a 21st century knowledge economy -- he is leading Russia toward a familiar dead end, from which only chaos or more autocracy can issue.
Russia is not fated to be governed illiberally forever. Geography is being tempered by technology, and individual choice can overcome -- or at least partly overcome -- the legacy of history. Though one cannot speculate about which future leader or group of leaders can save Russia, one can outline the shape of a less autocratic yet stable power arrangement. And that shape must feature decentralization. Because of Russia's very vastness -- nearly half the longitudes of the earth -- democracy in Russia must be a local phenomenon as well as a Moscow phenomenon. The Far East, oriented around Vladivostok, must be able to carve out its own political shape and identity, the same with other parts of Russia. The center must become by stages weaker, even as the whole Federation becomes more vibrant because of the emergence of a rule of law. Such a Russia would draw in a near abroad united by a legacy of Russian language use from Soviet and czarist times. Centralization is not the opposite of anarchy; civil society is. Thus only civil society can save Russia.
Read more: Is Russia's Destiny Autocratic? | Stratfor
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http://www.cnbc.com/id/101592426
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What Putin Is Costing Russia
Former finance minister Alexi Kudrin projects up to $160 billion in capital will flee this year.
By Ilan Berman
April 20, 2014 5:24 p.m. ET
Just how much is Vladimir Putin's Ukrainian adventure actually costing Russia? Quite a lot, it turns out.
New statistics from the Central Bank of Russia indicate that almost $51 billion in capital exited the country in the first quarter of 2014. The exodus, says financial website Quartz.com, is largely the result of investor jitters over Russia's intervention in Ukraine and subsequent annexation of Crimea.
As Quartz notes, this was the highest quarterly outflow of capital from the Russian Federation since the fourth quarter of 2008. While Russia can mitigate some of the damage because of its extensive foreign-currency reserves—estimated at more than $400 billion—the new Central Bank statistics signal that worse is still to come.
Russia's economic development ministry has downgraded the country's forecast to less than 1% growth this year; an earlier estimate had been 2.5%. The World Bank projects that the Russian economy could shrink nearly 2% in 2014. That would cost Russia in the neighborhood of $30 billion in lost economic output.
Meanwhile, the Russian government's bid to pressure Ukraine could end up backfiring. The state-controlled natural-gas giant, Gazprom, OGZPY +5.53% recently jacked up the price of gas to Ukraine by 80% and levied an $11.4 billion bill on Kiev for previously discounted energy sales. But observers say that the price hike could lead to a reduction in purchases as Kiev diversifies away from Russia toward friendlier European suppliers. This may already be happening. On April 9 the Ukrainian government retaliated by temporarily ceasing purchases of Russian gas, pending resolution of the pricing dispute.
Enlarge Image
Russian President Vladimir Putin discussing the country's economy, April 8. Getty Images
Moscow's international standing is becoming increasingly tenuous. Russia has already been ejected from the G-8 and its path to accession in the Organization for Economic Cooperation and Development has been halted, at least temporarily. In the latest development, the Parliamentary Assembly of the Council of Europe stripped Russia of its voting rights in protest over its interference in Ukraine.
Russia's annexation of Crimea it is turning into a costly boondoggle. The Kremlin has already earmarked nearly $7 billion in economic aid for the peninsula this year, funds that will be spent on everything from infrastructure to beefed-up pensions for local residents. Even when balanced against anticipated gains from Crimea's energy resources and savings on naval basing arrangements, among other factors, that's a cost Russia's sluggish economy can ill afford.
The situation could become even more dire if Western economic pressure, which is still minimal, is ratcheted up. U.S. Secretary of State John Kerry has threatened additional sanctions against Moscow in response to its instigation of pro-Russian protests in the Ukrainian cities of Kharkiv, Donetsk and Luhansk. Such measures, Mr. Kerry has indicated, could include broad restrictions against Russia's energy, banking and mining. These sanctions could have significant, far-reaching effects on the country's long-term economic fortunes.
President Putin is currently riding a surge of popularity at home, propelled in no small measure by his assertive moves in Ukraine. When tallied in mid-March by state polling group VTsIOM, Mr. Putin's approval stood at nearly 72%, a gain of almost 10 percentage points from earlier in the year.
But the longer the crisis over Ukraine lasts, the higher the economic costs to Russia are likely to be. Former Finance Minister Alexei Kudrin, for example, has projected that Moscow's maneuvers in Ukraine could result in up to $160 billion in capital flight this year, and he concluded that the Russian economy will stagnate as a result.
Sometime in the not too distant future, it might become considerably more difficult for the Kremlin to continue to ignore the real-world price that is associated with its policies.
Mr. Berman is vice president of the American Foreign Policy Council in Washington, D.C.
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http://www.wsj.com/articles/russia-to-cut-2015-budget-by-around-10-following-decline-in-oil-price-1421842914
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Russia: Rumors Indicate Security Services Shift
Analysis
February 5, 2015 | 10:15 GMT Print Text Size
A photo shows the Russian Federal Security Service headquarters in Moscow. (MAXIM MARMUR/AFP/Getty Images)
Summary
Rumors persist about continued restructurings and consolidations among the security services within Russia. The shifts are part of Russian President Vladimir Putin's attempts to make the security organizations more effective and to limit the power of many figures among the security circles' elite in light of the crisis in Ukraine and Moscow's standoff with the West.
Analysis
In 2014, Russia's security services suffered a series of failures regarding the uprising in Kiev, struggling to rally parts of eastern Ukraine and to read the West's willingness to unite over meaningful sanctions. These failures weakened the security services, the foundation of Putin's power in Russia. Particularly hampered was the Federal Security Service (FSB), Russia's largest security institution. The FSB is tasked with internal intelligence, and its sister agency, the Foreign Intelligence Service, is responsible for external intelligence. However, the Kremlin considers Ukraine — like many other former Soviet states — strategically critical to Russia's national security and territorial integrity, making the Ukraine crisis an internal problem and the FSB's responsibility.
The security services' failures also changed how countries along Russia's periphery view Moscow. Russia resurged into its former borderlands for nearly a decade, and its security services were widely seen as infallible. The events in Ukraine changed this view.
Restructuring
In mid-2014, rumors spread in Russian media that Putin had purged the FSB of those intelligence operatives and analysts who faltered in handling Ukraine. In November, Putin said the FSB would undergo "restructuring," though he was vague in discussing the changes. Over the past week, hints of this restructuring have appeared. Russian media group RBC reported that Putin has decided that smaller security services — the Federal Drug Control Service and Federal Migration Service — would be consolidated under the Interior Ministry, one of the FSB's primary competitors within the security circles. These two institutions previously had strong connections within the FSB; the Federal Drug Control Service's current chief was a KGB general.
Putin's first strategy is to streamline many of the security processes in Russia while focusing the FSB on its primary directive: internal intelligence and counterintelligence. The FSB's influence and focus have spread throughout many institutions, such as the drug control service and migration service. The consolidation of these smaller groups under the Interior Ministry could serve to purge the FSB and hone its focus to prevent any more failures that weaken Putin's power base or authority.
A second strategy could be to continue sidelining members of the security elite who could eventually challenge Putin's position. Putin's control over Russia is fairly solid. In the latest polls by Levada, his approval rating has lingered at around 86 percent, and 54 percent of Russians believe that no one could replace Putin — a doubling of support over the past year.
Many Powerful Figures
However, Putin still has concerns for his future, especially as hardships grow in Russia. Among the many powerful figures within Putin's inner circles who could compete with the Russian president is Security Council chief Nikolai Patrushev. Patrushev commands a great deal of loyalty among the FSB's ranks. He earned a reputation for organizing counterterrorism operations in Russia's northern Caucasus and was rumored to have organized many of the FSB's activities abroad, such as the assassination of former FSB agent turned critic Alexander Litvinenko. In 2008, Putin removed Patrushev as head of the FSB and moved him to the nominally important Security Council, which is considered more of an organizational role than a position of power.
In December, Stratfor received a report that Patrushev would be fired. However, because he has retained his post, it is likely that Putin decided to keep Patrushev in place because of his influence within Russia's security circles but limit his abilities. Multiple reports also surfaced in Russian media in November and January that Putin is backing Deputy Interior Minister Vladimir Zolotov and could give him the top Interior Ministry spot. Zolotov is the former longtime head of the Federal Protective Service, Putin's personal bodyguards, much like the U.S. Secret Service. Zolotov also was the bodyguard to Putin's mentor, Anatoly Sobchak, and is one of Putin's judo sparring partners. He is considered directly loyal to Putin and not tied into any other security circles or elites in the Kremlin.
The FSB has long influenced the Interior Ministry in an attempt to wield the ministry's large paramilitary and police forces. However, the Interior Ministry has begun acting more independently. Making Zolotov the ministry's chief could be another signal that Putin wants to ensure that the FSB focuses on its prime directive and that members of the FSB elite, including Patrushev, do not expand their influence.
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Michael Khodarkovsky
Aug. 18, 2015 7:05 p.m. ET
124 COMMENTS
‘Where is Garry Kasparov?” asked many Russians recently, when they discovered that the famed chess player was missing from the new edition of a book celebrating the achievements of Russia’s largest athletic association, Spartak—of which Mr. Kasparov was a member. It turns out that an article about Mr. Kasparov had been removed at the last minute. The message was clear: No achievement can trump political loyalty, and for Mr. Kasparov, a harsh critic of the Kremlin, the doors to the Russian version of the sports hall of fame are currently closed.
Erasing dissidents from history was a standard practice of Soviet disinformation. I recall how one day in the mid-1970s at my university library in Elista, a small city between the Black and Caspian seas, I could not locate a book by a well-known Soviet literary critic, Efim Etkind. When I asked the librarian, she looked at me as if evaluating whether my question was a provocation or simply a result of naiveté. Concluding the latter, she sternly replied that the book was no longer available because the author was a dissident and had emigrated to Israel. The book’s title was “A Conversation About Poetry,” and it had nothing to do with politics.
I thought of this last week when the zealous authorities in Sverdlovsk Oblast ordered the books of two British military historians, Antony Beevor and John Keegan, taken from library shelves. These classic books about the battles of Stalingrad and Berlin reveal the Soviet generals’ disregard for casualties and soldiers’ mass rape of German women in 1945, taboo topics seen as undermining Russia’s glorious victory. The authorities insisted that the books present “a mistaken representation” of World War II and “Nazi propaganda stereotypes.”
The short-lived outburst of freedom after the collapse of the U.S.S.R. in 1991 was followed by a slow return to Soviet values. After assuming the presidency again in May 2012, Mr. Putin appointed as minister of culture Vladimir Medinsky, a man widely considered to be a crude propagandist and henchman. The appointment came as a shock to the Russian intelligentsia and marked a new aggressiveness by Mr. Putin toward reshaping the cultural and ideological landscape. Mr. Medinsky has regularly denounced regime critics as Russophobes, Russian liberals as national traitors, gays as products of Western decadence, and modern artists and writers as blasphemous.
Opinion Journal Video
Editorial Writer Sohrab Ahmari discusses renewed fighting on the Ukrainian border and why the White House won’t help Kiev. Photo credit: Getty Images.
Mr. Medinsky has suggested that there was no anti-Semitism in the Russian empire, that the reign of Ivan the Terrible was not so terrible after all, and that Stalin’s purges were necessary. When accused of falsifying history, Mr. Medinsky responded that history is solely a matter of interpretation and mass propaganda.
Last month he defended a popular legend of 28 soldiers of the Panfilov division who lost their lives bravely defending Moscow from the Nazis in November 1941. Even in the face of the fact that some of these men proved to be alive after the war and the story was shown to have been concocted by the editor of the Red Star newspaper, Mr. Medinsky dismissed the critics of this tale of Soviet heroism. “The only thing I can say to them is: It would be good if we had a time machine and could send you, poking your dirty, greasy fingers into the history of 1941, into a trench armed with just a grenade against a fascist tank,” he said.
In early 2013, Mr. Putin proposed the introduction of a single history textbook for all Russian middle schoolers, and Mr. Medinsky promoted the idea. “One should not create pluralism in school children’s heads,” he was quoted as saying, as he expressed support for a single textbook with a clearly defined pantheon of Russian heroes to serve as models of the country’s greatness. In the end the government decided against a single version of the textbook, probably realizing that what could rouse patriotism in central Russia might do the opposite in Chechnya or other regions. Nonetheless, a basic textbook that follows an approved government blueprint is supposed to be out this fall.
This rewriting of history sometimes puts the government at odds with the Orthodox Church. Mr. Putin has burnished Stalin’s image, presenting him as a shrewd leader faced with hard choices—much the same way Stalin once ordered Sergei Eisenstein to make a film about Ivan the Terrible, with whom Stalin identified. Yet this rehabilitation of Stalin does not sit well with the church, which was destroyed during Stalin’s rule but now is one of Mr. Putin’s most reliable supporters.
More surprising was Mr. Putin’s claim that Crimea is an ancient and sacred Russian land, where Grand Prince Vladimir was baptized in 988 and from which he brought Christianity to Russia. Yet neither Russia nor Moscow existed in the 10th century, and Prince Vladimir ruled in Kiev, now the capital of Ukraine. Even at the height of Russian nationalism in the 19th century, emperors never disputed the link between Prince Vladimir and Kiev, where the imperial authorities constructed St. Vladimir University, St. Vladimir Cathedral and St. Vladimir Monument, depicting the prince, cross in hand, looking over the Dnieper River.
Now Mr. Putin wants to claim Prince Vladimir for his own. An 80-foot monument of the saint will be erected on a hill in Moscow this fall. The goal, of course, is to legitimize Mr. Putin’s annexation of Crimea and delegitimize the sovereignty of Ukraine.
To impose the state’s version of history, Russia’s government is using both carrots and sticks. Those who do not toe the line are denied government grants and have difficulty finding publishers for their books or venues for their performances. Critics who are particularly vocal are hounded out: The departures of two prominent economists, Sergei Guriev to France and Konstantin Sonin to the U.S., and the firing of history professor Andrey Zubov from the Moscow Institute of International Relations drew headlines. Yet few noticed when the historian Vladimir Khamutayev was forced to flee the country after arguing that his native region of Buryatia, which borders Mongolia, was “Russia’s silent colony.”
That Russia should be taking such steps now is particularly striking. In the past three years, the Dutch government apologized for the mass killings in Indonesia in the 1940s, the British for the colonial abuse in Kenya in the 1950s, the French for the injustice in Algeria in the 1950s-60s, and the Japanese for their actions during World War II.
But Russia marches backward to its own drummer. One can only hope that some day a different set of Russian leaders will realize that history is not simply fodder for mass propaganda, to be rewritten and disseminated by the state.
Mr. Khodarkovsky grew up in the Soviet Union and is a history professor at Loyola University in Chicago.
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Book recomendation:
'Once Upon a Time in Russia'
On best seller list. First hand accounts of the turmoil in former Soviet Union after 1989.
Written like a fiction novel but as far as accounts can be trusted is non fiction.
At the end of the 1990's decade seven men controlled an estimated 7% of the Russian GDP.
The so called "oligarchs". Some helped Putin get to be PM after Yeltsin resigned in 2000. Putin changed the game. They were no longer in charge. He was.
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Summary
Russia's State Duma, the lower house of Russia's Federal Assembly, and its Federal Council held an extraordinary session Nov. 20 to discuss issues related to terrorism. It is rare for both chambers to come together in session, let alone for a session to run into the night. The parliamentary meeting follows the release of a new poll showing that 65 percent of Russians fear that the Islamic State will carry out a terrorist attack inside Russia in 2016 — a number up from 48 percent last month.
Russia's increased focus on security and fighting terrorism will likely expand the powers of the security services, as proposed by Duma speaker Valentina Matviyenko. This raises the possibility of a struggle between the various security arms over those expanded powers into the coming year. If the Federal Security Service (FSB) can leverage the perceived threat of domestic terrorism — the prevalent fear in Russia — it could help boost the agency and its capabilities.
Analysis
Russia has some experience when it comes to combating terrorism, especially in the Caucasus, but is seeking to expand its remit. Many of the proposals presented during the Nov. 20 session were more stringent penalties for terrorists and those aiding them. The leader of the Just Russia party, Sergei Mironov, even proposed restoring the death penalty — a highly controversial issue already denounced by the Kremlin. Other measures discussed included enhancing security at public events and transportation hubs such as airports and train stations, which have been targets in the past. Historically, Russia's counterterrorism strategy focused on its own Muslim republics, such as Chechnya and Dagestan. Yet with the current threat emanating from abroad, many Russian lawmakers were quick to propose measures that would revoke travel passports issued to Russian citizens who visit conflict hot spots such as Syria and Iraq.
The FSB has done this before. When now-President Vladimir Putin came in to lead the FSB in 1998, he expanded the agency's powers to combat threats in the North Caucasus. Since becoming president, Putin has sought to balance the power of the FSB with other intelligence and security services, though given the current risks and circumstances the FSB will probably seek to expand its responsibilities and authority.
Consolidating Power
The FSB wants more influence in a number of areas. First, it wants greater control of the Investigative Committee, which is comparable to the FBI in the United States, wielding judicial and police authority. The FSB has greatly influenced the Investigative Committee at times, but now the agency wants formal jurisdiction to influence the Investigative Committee's actions. Second, the FSB wants more influence over its sister security service branch, the Foreign Intelligence Service (SVR), which oversees intelligence operations outside Russia. The FSB has jurisdiction over threats inside Russia and its borderlands, but because a threat to Russia's heartland is originating from conflict zones such as Syria, that could give the FSB recourse to insinuate itself into its sister agency. Third, the FSB is highly interested in gaining greater access to Russia's Chechen Republic. The FSB and Chechen President Ramzan Kadyrov have long fought over control of security and intelligence operations in the Caucasus republic, with Kadyrov blocking much of the FSB's activities in recent years. The death of prominent opposition leader Boris Nemtsov in 2015 did little to improve FSB-Chechen relations. The FSB could easily use the threat of Islamic State infiltration through Chechnya or the Northern Caucasus to expand the agency's powers in the region.
Another consequence of Russia's renewed focus on terrorism and external threats manifesting domestically could be another spike in xenophobic or nationalist movements. Nationalism is already at a record high in Russia following the conflict with Ukraine, anti-Russian sanctions enacted by the West, and the Russian annexation of Crimea. The Russian government has expounded these events into strong support for the Russian government, resulting in an approval rating for Putin currently around 89 percent. In the past, nationalist movements quickly turned into anti-Muslim or anti-foreigner sentiments. In 2013, non-state militias formed in the Volga region following a bus bombing. The militias ultimately ended up harassing and assaulting Muslims living in the region. In 2011, tens of thousands of Russians protested in Moscow and other large cities to "Stop Feeding the Caucasus," a movement meant to pressure the Kremlin to cut federal subsidies to the Muslim Caucasus republics. Currently, the government is framing its newfound focus on terrorism in relation to the Islamic State and the Iraq and Syria battlespace, but this could easily mutate into an anti-Muslim reaction throughout Russia as the country comes to terms with its own history of domestic terrorism.
Beyond the threat of internal or external terrorism, the Kremlin could simply use the blanket reasoning of security as an excuse to increase the monitoring and coercion of opposition groups or other entities flagged as undesirable by the Kremlin. Russia will hold parliamentary elections in 2016, and the Kremlin has been particularly focused on preventing unsanctioned groups and individuals from making gains during a time of economic and political uncertainty. The Kremlin's drive for control was evident during the 2015 local elections, when cities and regions were targeted based on their opposition to the Kremlin, which then swiftly derailed anti-government campaigns and movements before they could gain traction.
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Rocky times ahead for Putin and the ruble?
http://johnrlott.blogspot.com/2015/12/what-is-ahead-for-russia.html
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Rocky times ahead for Putin and the ruble?
http://johnrlott.blogspot.com/2015/12/what-is-ahead-for-russia.html
I don't see how they survive this economically, falling GDP, falling currency, falling oil prices. Lousy outlook for the global economy, china in trouble, Europe a mess, US in stagnation, and others in deep trouble. Global demand for oil isn't about to bounce back real quickly.
"Between June and December 2014, the Russian ruble declined in value by 59%"
Interesting timing. Crimea was 'annexed' by Russia two months earlier. Russia will need to annex something better than oil or poor neighboring countries to grow via imperialism.
At least Putin has Trump's admiration as a good, strong leader. He led them strongly down a storm sewer. Risk taking is different when you own a country; you can't easily bankrupt off the parts you don't like.
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I read in "Once Upon a Time in Russia" a read I recommend, how British intelligence traced the radioactive polonium from Litvinenkos' laced tea at a restaurant to the airport and essentially the border of Russia at which point their investigation was not allowed to proceed by the Russian authorities. Only 3 countries in the world can even make this stuff. To think Putin did not have a hand in this would mean total ignorance of his authority, power, and control in Russia. Litvinenko was an outspoken critic of Putin. Remember, He was in London at the time of his murder. So others reading this board agreed with me and decided it is time to revisit this murder:
http://www.nytimes.com/2016/01/22/world/europe/alexander-litvinenko-poisoning-inquiry-britain.html?_r=0
PS : I love Putin's patriotism towards his country and people, and wish we had the same here, but I don't respect his brutal thuggish methods. Rumors are he is one of the richest men in the world.
see replies 102 and 112 on this thread.
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Here is a couple of forum posts going back to Mig in 2006:
http://dogbrothers.com/phpBB2/index.php?topic=1085.0
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A British judge today announced that "Putin likely approved" the murder of Litvinenko a few years ago.
Two things:
1. How would he know?
2. What are you really going to do about someone (assuming it was true), going after one of his own?
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Do you really think that this outspoken critic of Putin killed by this extraordinarily rare radioactive isotope with its traces being detected back to Russia was performed without Putin's knowledge and approval? :-o
As far as what can be done about it probably nothing. But it is important to know this to understand the kind of man Putin is.
We don't imprison or murder people here for the exercising their freedom of speech.
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1. Do you really think that this outspoken critic of Putin killed by this extraordinarily rare radioactive isotope with its traces being detected back to Russia was performed without Putin's knowledge and approval? :-o
As far as what can be done about it probably nothing. But it is important to know this to understand the kind of man Putin is.
2. We don't imprison or murder people here for the exercising their freedom of speech.
1. Who cares?
2.Who am I to judge other people's shortcomings?
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Generally considered bad manners to kill your people in someone else's country.
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Perhaps....others might view it as defending one's patria.
Matter of perspective, at least to me.
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1. Who cares?
2.Who am I to judge other people's shortcomings?
Well the people of Russia should care.
Suppose Trump becomes President and does something you don't like and you speak out but alas you are murdered.......
Should anyone care?
Hey, Trump is not perfect eh?
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My line of thinking isn't for anyone...worse... I am certain that I walk what I talk, although I'll admit, it isn't everyone's way. It makes it frustrating at times.
We all die. I live in a society where life is cheap. It makes contrasts between the two difficult at best.
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DDF,
Fair enough.
I know what it is like not to be able to trust anyone. How money or threats can affect everyone around you.
How friends, neighbors, relatives, co workers can lie and commit crimes or contribute to those who do and act like nothing is wrong.
People you know are committing crimes right around you and you cannot do a thing.
They pretend they are like everyone else. Put up Halloween, Christmas lights, say hello to neighbors, take their kids to school, mow their manicured lawns.
And all the while they are part of organized crime.
They have their kids go to law school, they all know friends or friends of friends, relatives, union pals, who know people in places - DMV, police force, post office, bank, cable company, telephone company.
They know how to play the system. How to stay "outside" the law with regards to evidence. They know how to approach people to bribe, threaten. They can transfer their person to the right bank or the post office when needed.
People you've known for years look you in the eye and lie, you know they are lying but they won't admit.
Yes, just under the surface, the facade of politeness is the reality of humanity.
But through it all that doesn't mean we have to become them. If at least some of us don't try to stand up to this then we really have nothing. It really is all bullshit.
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DDF,
Fair enough.
I know what it is like not to be able to trust anyone. How money or threats can affect everyone around you.
How friends, neighbors, relatives, co workers can lie and commit crimes or contribute to those who do and act like nothing is wrong.
People you know are committing crimes right around you and you cannot do a thing.
They pretend they are like everyone else. Put up Halloween, Christmas lights, say hello to neighbors, take their kids to school, mow their manicured lawns.
And all the while they are part of organized crime.
They have their kids go to law school, they all know friends or friends of friends, relatives, union pals, who know people in places - DMV, police force, post office, bank, cable company, telephone company.
They know how to play the system. How to stay "outside" the law with regards to evidence. They know how to approach people to bribe, threaten. They can transfer their person to the right bank or the post office when needed.
People you've known for years look you in the eye and lie, you know they are lying but they won't admit.
Yes, just under the surface, the facade of politeness is the reality of humanity.
But through it all that doesn't mean we have to become them. If at least some of us don't try to stand up to this then we really have nothing. It really is all bullshit.
Eloquent, and exactly so.
I particularly liked the touch about the Christmas lights, because it's true.
Just had four people from my squad over at my house a couple of nights ago... wound up attacking my wife for the first time in five years, in a nightmare that was directly attached to them. I was breaking her neck. She woke me up.
Sometimes it's difficult to know that we are so beautiful and ugly all at the same time.
Sometimes I think, it's time to find something else to do.
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"Just had four people from my squad over at my house a couple of nights ago... wound up attacking my wife for the first time in five years, in a nightmare that was directly attached to them. I was breaking her neck. She woke me up."
Sorry to hear that.
If not for people like you we would have no society. Thank you for protecting us. I wish you and your family safety.
We would be even more controlled by criminals, by cheats and by our own evil halves.
I wish we had more law enforcement going after organized criminals of "soft" crimes not just the violent ones like you are in midst of.
Corruption is a much bigger threat to a civilized society than given credit (or blame). My next thought is that is why Clinton must pay for her crimes.
The corruption of our system is so obvious and laid open for all to behold. And the corruption of all her mobster friends and all her adoring fans showcases front and center how easily people, who otherwise are considered good citizens can be so corrupted by fame , money, power, and other selfish reasons. (or from intimidation).
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Says Stalin got it right. Really?
Unfortunately, Russia and Putin are relevant in the world and this latest story either gives insight into his thinking or more likely is the disinformation you would expect from a trained KGB professional.
http://www.theguardian.com/world/2016/jan/25/vladmir-putin-accuses-lenin-of-placing-a-time-bomb-under-russia
http://www.voanews.com/content/putin-denounces-lenin-says-stalin-got-it-right/3162079.html
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Thanks CCP. GC has met my wife. I got a great woman. Don't want to get off topic. Just wanted to say "thanks."
I'm way overpaid.
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Share
The Kremlin's Cracks Are All-Too Familiar
Analysis
February 27, 2016 | 14:00 GMT Print
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A Moscow rally commemorating slain opposition leader Boris Nemtsov in March 2015 (Wikimedia)
Summary
Feb. 27 marks the anniversary of the assassination of Russian opposition heavyweight Boris Nemtsov. His killing sparked two weeks of intrigue in Russia's top political circles, laying bare previously obscured Kremlin infighting and putting President Vladimir Putin's continued control in question. The dispute, which went far beyond the death of one opposition leader or even broad factional competition, was in fact a struggle over who controls Russia's future. In this it mirrored a three-year period of division in the early 1920s that ended in a leadership transition and set the trajectory of the Soviet Union.
Analysis
Struggles among the Kremlin elite are as old as the fortified stone citadel itself. The name Kremlin literally means "fortress inside a city," a potent metaphor for the murky elite power struggles at the heart of Russia's bustling government system. For the past decade, the Putin government has been divided into four camps: the powerful Federal Security Services (FSB), the so-called liberal reformists, the hawkish non-FSB security circles and a circle of those who are loyal to Putin alone.
Interactive
Interactive Graphic: Russian Influence
These clans are constantly competing for power, assets and influence, with Putin playing the role of arbitrator. At the moment they are balanced — no one clan can change the power at the top. Russian history has shown, however, that this can change quickly. The pattern in recent years has held steady, with the FSB squaring off against the other clans and even against Putin himself in some cases.
Ukrainian Roots
The story behind the Nemtsov assassination begins with the 2014 Euromaidan uprising in Ukraine a year before. The popular protests that ousted Kiev's pro-Russia government took Moscow by surprise. Russia's deep networks of influence unexpectedly failed to prevent a change in government, and only a sliver of eastern Ukraine rose up in defiance of the pro-Western government. For Kremlin insiders, blame for the failure fell squarely on the shoulders of the FSB, which held the main portfolio responsible for influence and intelligence inside of Ukraine. As a result, the FSB briefly lost its lead position overseeing Ukraine and, moreover, Putin reportedly restructured the group shortly thereafter.
This put the FSB on its heels, spurring it to engage in a series of power grabs that gave it control over key positions and increased its reach within various security circles. Toward the end of 2014, Putin's control over the FSB also came into question. His behavior became increasingly odd as he missed major press conferences and spent his birthday alone in the Siberian forest. Putin ultra-loyalists among the Kremlin elite, particularly Chechen President Ramzan Kadyrov, rallied around their leader, flooding social media with messages of support. The Chechen leader also gathered 20,000 troops from his infamous Chechen Brigades to support Putin and suggested deploying them directly to Ukraine.
The clash between Putin's cadre and the FSB escalated in 2015, culminating in two full weeks of disarray in the Kremlin. Nemtsov's assassination on Feb. 27, 2015, was part of this. Authorities then arrested a ring of Chechens connected to Kadyrov for the murder, and Putin canceled his trip to Kazakhstan, disappearing from public view for 10 days. Russian media went into a panic, speculating that illness or even a coup had taken Putin out of commission.
These high-profile power struggles added to the standoff in Ukraine. The start of an economic recession in Russia at the end of 2014 worsened the situation, creating a perfect storm for Putin. Today, Kremlin elites are still divided along the lines that emerged from the Ukraine crisis, disagreeing over both who should be in power and how to tackle Russia's various crises. Putin is still trying to manage these swirling controversies.
Stalinist Parallels
The current situation in the Kremlin bears distinct similarities to the period that saw the rise of Josef Stalin to replace Vladimir Lenin, a long process that was cemented in 1924 with Lenin's death. Lenin had ridden to power on the back of the Bolshevik Revolution, which stemmed from Russia's catastrophic role in World War I and collapse of the Tsarist system. As the Bolsheviks consolidated power in the early 1920s, they had to manage continual famines and an economy in shambles. Lenin ruled in conjunction with a system of elites who were rough analogues of the current Kremlin clans. Those in power were assiduous in moving to secure control over economic assets before the civil war among the Reds, Whites and an array of different forces had even ended. In fact, Lenin had begun his process of ruthless economic and political centralization as early as 1918.
But when the civil war ended and the Soviet system began to take shape, the elites within the Kremlin became deeply divided over what sort of economic system should come next. The region under Russian rule was in disarray, ravaged by war and blighted by famine. The Kremlin needed to catch up with the other great powers but was unsure how to rapidly modernize Russia's industrial sector. In another parallel to today, the main split was between those who wanted to pursue further centralization and those who wanted to reverse course and liberalize the economy. Lenin came down in favor of a more open economic system, warning that Russia is "being sucked into a foul bureaucratic swamp" of entrenched corruption.
Elites were similarly divided about policies in Russia's near abroad — much as Kremlin clans are today. In what came to be called the Georgian Affair, in 1922 Stalin proposed absorbing all the Caucasus states — Georgia, Azerbaijan and Armenia — into the Soviet Union in one overarching republic. His motivation was to prevent those populations from consolidating local power and challenging Moscow. Lenin accused Stalin of trying to create a "Great Russia," a historical concept that advocated that Moscow control all the lands of Rus, especially the ethnic and linguistically related populations of Ukraine and Belarus. Stalin won the debate, although Lenin continued to push his point in the years up to his death.
Similar concerns about Russia pushing beyond its borders undergird the ongoing dispute over Ukraine policy. For the past two years, Putin and many within the conservative non-FSB security circles have evoked a concept similar to Stalin's Great Russia, Novorossiya. The idea has its earliest roots in the ousting of the Ottomans by the Russian Empire and encompasses the swath of territory that includes southern Ukraine, modern day Transdniestria and the Donbas. Ultraconservatives in the Kremlin originally wanted Moscow to militarily capture all of Novorossiya, though Putin instead decided on a somewhat more moderate approach: annex Crimea and maintain eastern Ukraine as a semi-frozen conflict. Many are still pushing him to launch a full-on military intervention in Ukraine. However, the Kremlin's liberal circles have begun advocating a pullback on actions in Ukraine so sanctions can be lifted and the Russian economy can heal.
In the 1920s, the similarly divided elites shored up their respective positions. As Lenin's health declined, he continued to denounce Stalin as an unsuitable successor both within the Kremlin circles and in his written testament, which detailed his view of where the country should go. But Stalin had already started to groom loyalists behind Lenin's back and isolate Lenin from key decision-makers under the pretext of Lenin's illness. Toward the end of Lenin's life, there was a dilemma within Stalin's circles over whether to move against the iconic revolutionary. This led to wild vacillations of position and loyalties among the elites until Lenin's death and Stalin's consolidation.
Infighting among the Kremlin factions is similar to that seen in the Stalinist circles of the early 1920s. Putin has long been the uniting factor within the Kremlin, arbitrating among the clans, but now he seems increasingly isolated. Over the past year, Putin has encircled himself with ultra-loyalists and distanced himself from power players such as the FSB. One of the greatest factors keeping the Kremlin clans from moving against Putin is his extraordinary popularity among the Russian people. With myriad problems plaguing Russia, Putin is still the only elite able to appeal to the dissenting points of view — at least for the moment.
The echoes of the 1920s do not mean that Russia is going to witness the rise of another Stalin but that the Kremlin is in a period of division that makes it unclear precisely who is driving Russian strategy. Putin implemented a system over the past 15 years to stabilize Russia following the collapse of the Soviet Union and the chaotic years under former President Boris Yeltsin. This is much like the Soviet system, which attempted to stabilize the union following war, the fall of an empire and a revolution. But cracks in the system are surfacing, and Putin's ability to continue driving a united regime is in question. It is an uncertain period for Russia — on its borders, within the homeland, and inside the Kremlin itself.
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inspired by the discussion of rich socialist leaders in Venezuela and America, Vladimir Putin may be the richest man in the world. Not easily verified or verifiable.
http://www.celebritynetworth.com/articles/celebrity/how-vladimir-putin-stashed-away-a-secret-70-billion-personal-fortune/
http://www.investopedia.com/articles/investing/040716/vladimir-putin-richest-man-world.asp
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Please post those two URLs at
http://dogbrothers.com/phpBB2/index.php?topic=1468.0
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While media focused on bashing Ryan Lochte and Donald Trump, and bamster is playing golf with the lib of the day it appears may be Russia getting ready to invade Ukraine :-o
http://freebeacon.com/national-security/russian-military-forces-staging-near-ukraine/
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Dusting off Stalinism all over again becoming more obvious:
http://www.telegraph.co.uk/news/2016/09/19/russia-to-reinstate-the-kgb-under-plan-to-combine-security-force/
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Dusting off Stalinism all over again becoming more obvious:
http://www.telegraph.co.uk/news/2016/09/19/russia-to-reinstate-the-kgb-under-plan-to-combine-security-force/
It is my understanding that the FSB never stopped referring to it's self as the KGB internally.
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Feb. 8, 2017 6:53 p.m. ET
9 COMMENTS
A court in Kirov Wednesday convicted Alexei Navalny on dubious embezzlement charges, which means Russia’s most popular opposition leader will likely be barred from challenging Vladimir Putin when the Kremlin strongman makes his widely expected presidential rerun in 2018.
The 40-year-old Mr. Navalny rose to prominence a decade ago as an anticorruption blogger shedding light on the ill-gotten gains of the Kremlin oligarchy. Young and charismatic, he extended his appeal beyond the middle-class urbanites who read his blog. When he called ruling United Russia “the party of crooks and thieves,” the label stuck.
Prosecutors in 2011 launched an investigation into Mr. Navalny’s work as an unpaid consultant to a state-owned timber company, accusing him of masterminding the theft of some $520,000 worth of timber. The investigation was procedurally suspect from the start, not least because prosecutors repeatedly closed it for lack of evidence only to reopen it later.
Mr. Navalny was eventually convicted of embezzlement in 2013, but due to his enormous popularity and Western pressure, the authorities suspended his five-year sentence and allowed him to campaign for mayor of Moscow, where he finished second with 30% of the vote. The Russian Supreme Court overturned his 2013 conviction and ordered a retrial last year, after the Strasbourg-based European Court of Human Rights found procedural irregularities in the original trial.
Now comes the reconviction, and it amounted to a judicial raspberry blown at the European judges in Strasbourg. The Kirov judge reread the original verdict from 2013, Mr. Navalny told reporters. The court reimposed his five-year suspended sentence. With it comes a 10-year ban on running for elective office.
Mr. Navalny’s reconviction follows news last week that Vladimir Kara-Murza, a pro-democracy activist and contributor to these pages, had become ill with poisoning symptoms similar to those he suffered in 2015. Mr. Kara-Murza has now fallen into a coma.
The fashion among some Western politicians, from Donald Trump to François Fillon and Marine Le Pen in France, is to say they want to engage Mr. Putin the way Ronald Reagan did the Soviet Union. One difference is that the Gipper would not have hesitated to speak up for Messrs. Navalny and Kara-Murza.
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https://www.youtube.com/watch?v=qC7FiKMSUjg
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At 6:08 p.m. on Sept. 8, the cacophony of Kiev's Friday evening rush hour was pierced by an explosion under a black Toyota Camry in the middle of heavy traffic near Bessarabska Square in the heart of the capital. The car's driver, Timur Mahauri, a Chechen with Georgian citizenship, was killed instantly. His wife and their 10-year-old child who were riding with him were hurt, but they survived.
Mahauri was reportedly a member of a Chechen militant group fighting with Ukrainian troops against separatist and Russian forces in eastern Ukraine. Media reports suggested that Chechen President Ramzan Kadyrov considered him an enemy. In addition to these two possible motives for his assassination, Kiev has recently become a hot spot for the assassination of Moscow's enemies, and opponents of the Chechen government are being killed in a worldwide campaign. Indeed, given Mahauri's enemies and location, it is surprising that he didn't check his car for bombs before he got into it. This case provides important lessons for others.
Moscow's Wetwork
As I've discussed elsewhere, Russia's intelligence agencies have a long history of involvement in assassinations, refered to by its intelligence officers as "wetwork" or "wet affairs." Indeed, they have pursued the enemies of the Russian government around the globe: Alexander Litvinenko was murdered in London in November 2006; and Mikhail Lesin died under mysterious circumstances in Washington, D.C., in November 2015. They are not the only examples. It should come as no surprise then that people considered to be enemies of the Kremlin — including opposition politician Boris Nemtsov — are being murdered in Russia itself as well as in adjacent countries.
However, there does seem to be a discernible difference in the tactics used in different geographies. For example, in Russia itself, targeted individuals tend to simply get shot. Although Russian agents will publicly deny any involvement in such activities, in domestic operations, they don't really take too much effort to cloak their hand. Indeed, they seem to relish flexing their muscle to intimidate opponents. But outside Russia, they attempt to be more discreet. Even though the Litvinenko case ended up becoming highly publicized because of sloppiness in the operation, the use of the rare and radioactive isotope polonium 210 to poison him was intended to create a slow and subtle decline so as to create an air of mystery around his death, like the shadowy fates met by Moscow opponents Badri Patarkatsishvili in 2008, and Boris Berezovsky in 2013, both also in the United Kingdom.
Danger Lurks in Kiev
But in Ukraine, the Russians and their Chechen surrogates have operated with a mostly unveiled hand. In July 2016, Belorussian journalist and Russia critic Pavel Sheremet was killed when a sticky bomb planted under his car exploded shortly after he left his home for his office. As we noted at the time, the Sheremet assassination was a precise and professional operation.
In August 2016, Alexander Shchetinin, a Russian-born journalist and prominent critic of President Vladimir Putin, was found dead on the balcony of his Kiev home with a gunshot wound to the head. On March 23, Denis Voronenkov, a former Russian Communist Party lawmaker and another a well-known Putin critic, was shot dead as he walked down a Kiev street on the way to a meeting in a hotel. The brazen assassination occurred at 11:30 a.m. in central Kiev, despite the fact that Voronenkov had been accompanied by an armed bodyguard who shot the assassin dead.
On June 1, Adam Osmayev, a critic of the pro-Kremlin Chechen government, narrowly escaped death when his wife, a Chechen militant, shot and wounded a would-be assassin, who had shot him twice in the chest. The assailant, Artur Denisultanov-Kurmakayev, a Russian national born in Chechnya, had posed as a French journalist and had arranged an interview.
On June 27, Col. Maxim Shapoval, a Ukrainian military intelligence officer, was killed in an assassination similar to the Sheremet hit. A small sticky bomb had been planted under Shapoval's car; it probably used a plastic explosive and was command-detonated as he was on his way to work. Kiev has clearly become a dangerous place for those perceived to be enemies of Putin and his Chechen vassal, Kadyrov.
Not Amateur Bombmakers
And this brings us back to the Mahauri assassination. The device used to kill him spared his passengers, indicating that it employed a small shaped charge, also likely a plastic explosive, judging from video of the explosion. It also looks as if it had been command-detonated. The assassination carried all the hallmarks of a professional, state-sponsored operation. The device that killed him almost certainly had been built by an experienced bombmaker who calibrated its explosive potential to kill without causing too much collateral damage. Although this attack happened in the evening rather than during the morning drive to work, it carried many similarities to the assassinations of Shapoval and Sheremet. Ukrainian investigators will certainly be looking for forensic evidence to conclusively link the three bombings.
In addition to his activities in Ukraine, Mahauri had fought with the Georgian military when the Russians invaded that country in 2008, Ukrainian press reports say. That would have put him in the crosshairs of Russian intelligence, which reportedly had attempted to kill him on three past occasions, including placing a bomb in the stairwell of his apartment building in Tbilisi in March 2009. Given that history and the recent spate of assassinations in Kiev, Mahauri would have been wise to have taken more precautions.
The best defense against a sticky bomb attack is to keep a vehicle locked in a secure area to prevent easy access. After the Sheremet killing, video emerged showing the assassins putting the bomb under his car as it sat by the curb outside his apartment. If a vehicle must be parked in an unsecured area, a small mirror with a light on a telescopic pole can be used to check the underside for sticky bombs. Given the tempo of Russian and Chechen activity in Kiev, it is hard to believe that Mahauri had grown complacent. Investigators will be attempting to reconstruct his schedule before the detonation to clarify where and when the bomb had been stuck under his vehicle.
A number of Russia's enemies remain in Kiev. Given the recent deadly events, it would not be surprising if more murders followed there. To escape Mahauri's fate, those who find themselves at odds with the Kremlin will need to be more careful.
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second post
An unprecedented rash of bomb threats across Russia this week has left the country's emergency and security services scrambling to evacuate major cities. Though Russia is no stranger to bomb threats, it has never experienced so many at once. So far, over 115 threats have forced more than 130,000 people to evacuate 420 schools, shopping malls, theaters, train stations, airports, government facilities and universities across 22 cities stretching from Kaliningrad to Vladivostok. Meanwhile, some 40 threats have been made in Moscow alone, though emergency responders have not found explosive devices in any of the locations targeted.
Notably absent throughout these incidents has been media coverage by Russia's state-owned outlets. At first, Federal Security Service (FSB) sources told several outlets that the threats originated from IP-based phone lines outside Russia's borders, later claiming that the lines were traced to Ukraine. FSB sources then suggested on Sept. 14 that the threats could be linked to extremist groups, perhaps even the Islamic State. Some local media outlets, on the other hand, attributed the events to drills by law enforcement officials. National and local security services, for their part, have downplayed the threats.
Many actors, both at home and abroad, have an interest in wreaking havoc in Russia. Within the country, criminal groups and anarchists have a history of targeting U.S. airlines, Russian schools and Australian community centers with automated "robocall" bomb threats in hopes of forcing evacuations and sowing chaos. Beyond Russia's borders, other entities have motive for causing mayhem throughout the nation, particularly in the wake of Moscow's own hybrid warfare operations in Ukraine and Europe. The Islamic State, too, may seek to pressure Russia as the country's military intervention in Syria continues. Though the extremist group has little interest in warning of its own impending attacks, the evacuations could play into its hands by spurring the movement of large groups of people from relatively safe structures to more exposed locations in the surrounding area. Up to this point, however, the crowds removed from Russian buildings have not been targeted in this manner.
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The understanding of the social contract seems to be shifting around the world. But for Russia, at least, the phenomenon is nothing new. The country has tried any number of variations on the social contract over the more than 1,000 years of its history. Leaders traditionally have resorted to autocratic rule to keep the unwieldy nation together, periodically introducing institutions, such as the secret police forces of Ivan the Terrible and Czar Alexander III, or reforms — like Alexander II's measure to emancipate the serfs — to maintain order. Over the past century, Russia's social contract has endured one experiment after another as the Russian Revolution, the Cold War and the collapse of the Soviet system transformed the country. The system has undergone so many permutations that today it is all but obsolete, and no rule is too fundamental to break.
The Soviet Social(ist) Contract
The past 100 years have been a rollercoaster for Russia. The Bolsheviks came to power championing equality and a better life for workers and peasants. In turn, they expected the support and acquiescence of the Soviet people as they embarked on the economically and politically demanding task of building a new society. Josef Stalin changed the rules when he took control of the country, dispensing almost entirely with personal rights in the name of developing the Soviet Union. After Stalin's death, Nikita Khrushchev offered a new social contract that purported to relax the repressive rule of the previous two decades. The Soviet government gave citizens back some of the rights Stalin had stripped away and pursued policies to increase security, guarantee a basic standard of living for the population and maintain peace in exchange for the public's compliance.
Khrushchev's promise of peace was fundamental to the new social contract. As traumatic as Stalin's infamous purges were for the Soviet people, the harrowing events of World War II — in which more than 20 million Soviet soldiers and civilians died — quickly overshadowed them. The memory of the war was still fresh, and it weighed heavily on nearly every family in the Soviet Union. My grandmother would often say, "No matter what, the main thing is to avoid a war." And no matter how many tanks and missiles the Soviet Union produced, its leaders held fast to that conviction, even when the Cold War reached its hottest points. The public was well aware of the danger of a nuclear strike. Yet Soviet leaders were cautious to avoid incendiary threats, though a state propagandist might mention that the Soviet Union's nuclear arsenal was deep enough to turn any country into a pile of dust. (Today, by contrast, the threats are more brazen; Dmitri Kiselyov, whom President Vladimir Putin named as head of one of Russia's state-run news agencies, proclaimed on national television in 2014 that his country could turn the United States to "radioactive ash.")
A New System Emerges
By the late 1980s, the Soviet government had exhausted its social contract. Mikhail Gorbachev, the final leader of the Soviet Union, introduced the liberalizing policies of perestroika and glasnost in a last-ditch effort to keep the massive state together, but the reforms proved to be too little too late. The Soviet Union collapsed.
The ensuing chaos was as liberating as it was terrifying. In the 1990s, the Russian state had neither the will nor the ability to uphold its previous social contract. The Russian people, meanwhile, felt a growing desire for freedom and economic independence. The 1993 Constitution struck a compromise between the old and new elite, describing Russia as both a liberal and a social state that simultaneously maintained the separation of powers and bestowed its president with practically boundless authority. Two social contracts vied for dominance in the emerging country, one that promised social services in exchange for the public's support and one that offered freedom.
The Gangster's Rule for Governing
Neither side won. And so, as it entered the 21st century, Russia introduced a new model that would provide its citizens a reliable standard of living so long as they paid their taxes. Professor Alexander Auzan described the setup in an article about social contracts in Russia:
"Taxes are payment for social goods. But the saying, 'pay taxes and sleep well' is the typical motto of a stationary bandit who understands taxes as rent: You pay us rent and we leave you alone.'"
What Auzan outlines is a gangster's rule, but a rule nonetheless.
At some point, people started to ask what their taxes were getting them. The justice and safety they were theoretically paying for, after all, were in practice a privilege of the social and political elite. But for many Russians, even the prospect of security was worth the price, as long as the threat of attacks like the Beslan school siege and the Moscow Metro bombing loomed over the country. Skyrocketing oil prices, moreover, gave the government economic leverage over the public: Provided citizens agreed to sign over their political rights to the country's leaders, the administration would guarantee their financial security and prosperity. In this way, Putin's government bought the loyalty and support of the Russian people.
Since 2008, the situation in Russia has evolved, not only economically but also geopolitically. The same year that the global financial crisis hit, Russia went to war with the neighboring republic of Georgia. The timing was perfect. The United States was preoccupied with its own wars in Iraq and Afghanistan, while Europe — dependent as it was on Russian energy exports — wasn't prepared to challenge the country in its traditional sphere of influence. Though the conflict lasted only a matter of days, it was enough to re-establish Russia as a world power. When the country, emboldened by its success in Georgia, annexed Crimea a few years later, its actions came as a shock to the rest of the world. Even so, the move was a logical next step in Russia's brash new strategy for dealing with the international system. The country's newfound power was intoxicating for its leaders.
Because We Can
For the Russian people, the idea of belonging to a great power was equally intoxicating. By standing up to the West, Putin framed himself as the only world leader who would dare to challenge the United States' ascendancy. He even gained the respect of some Western libertarians, who saw him as a brave individual, unafraid to buck the global economic system, its overregulated banks and its greedy governments, regardless of the authoritarian measures he favored at home. Defying the global trends toward tolerance, human rights — including rights for women and members of the LGBTQ community — and freedom of expression, Russian authorities have instead played by their own rules, sanctions and international opinion be damned. The political firestorm surrounding Russia's alleged electoral meddling has only reinforced this strategy by confirming the country's status as a dominant power and fueling the administration's machismo. For years, the Russian government and its propaganda machine have worked to foster among their public a hatred and aggression toward the rest of the world. Having acted out that hostility on the international stage, the Putin administration now can sit back and watch the United States rage.
At some point, however, bravado may not be enough to ensure the Russian public's continued loyalty, and tax payments. A survey from independent pollster the Levada Center conducted in April revealed that 53 percent of respondents claimed to be fulfilling their obligations to the state, compared with 39 percent in 2001. But in a poll conducted the previous month, 31 percent of respondents said they received so little from the state that they felt they owed it nothing, and 32 percent said they could demand much more.
Putin's administration has demonstrated that the social contract no longer serves as the basis of a government's legitimacy. (Furthermore, the reconsideration of social contracts around the world suggests that Russia's disrespect for long-standing rules and conventions may be spreading like a virus.) A growing number of Russians are catching on to the one-sidedness of the current social contract under which they pay into a system that gives them little or nothing in return. And though Putin's macroeconomic policies have managed to keep economic disaster at bay despite the burden of sanctions, low oil prices and capital flight, his administration hasn't undertaken the structural reforms necessary to sustain the country in the long run. Gone are the days when the government could build a social contract on the promise of prosperity.
Still, as long as state-run outlets dominate the media, as long as Russia opposes the United States and decries the Western notion of tolerance, and as long as Russians can cover their expenses with risky but readily available microloans, the arrangement will endure. Opinion polls suggest that most Russians are delighted their country and their president are exerting international influence. The government and state-run media will continue to seize on Russia's national pride and geopolitical bluster — along with the discord plaguing Western powers such as the United Kingdom, European Union and United States — as next year's presidential election approaches.
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Russia's Fraying Financial Safety Net Hangs by a Thread
Russia's sovereign wealth reserves, once bloated by years of abundant petroleum revenue, are today just shadows of their former selves. And on Feb. 1, the country's Reserve Fund, designed to help the government balance its budget, will officially disappear as it is legally recombined with the National Wealth Fund, a separate pot of money that backs up Russia's pensions. But the merger is a move in name only: It will come after the country's Finance Ministry appears already to have drained the Reserve Fund's remaining $17 billion in cash to plug a looming budget hole. With Russia's financial security blanket wearing thin, the question as national elections approach will become whether its people will continue to trust the current administration to manage the country's increasingly shaky finances.
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Protests will return to Russia this Sunday. On Jan. 28, opposition figure Alexei Navalny will launch a multi-city series of demonstrations to call for a boycott of the presidential elections in March. Navalny, who has been barred from running, is urging voters to stay home even if they're planning on voting for an alternative to Russian President Vladimir Putin who, despite the expanding list of candidates running against him, is almost guaranteed a victory. But eighteen years after gaining power, Putin's hold over the country is growing tenuous. Russia is likely slipping back into a recession, its banking sector is going through a financial crisis, its regional governments are weakening and dissatisfaction is rising among the country's rich and poor alike.
Over the past year, Navalny has served as a mouthpiece for the aggrieved, exposing the lavish lifestyles of Russian elites and championing anti-corruption campaigns. Of the more than 1100 protests across Russia in 2017, two-thirds were connected to economic and financial woes. But Navalny has struggled to unite dissatisfied Russians behind his political movement, and Sunday's rally will be the first in a series designed to create a unified movement against to the Kremlin.
Voter apathy could be the people's greatest weapon.
Anti-establishment sentiment may also be compounded in the coming weeks, buoyed by the U.S. Treasury Department's so-called "Oligarch List." The report, an exploratory document released as the United States considers expanding sanctions against Russia, will single out the country's most powerful and reveal their wealth, their assets and more. A consolidated list of Russian elites could fan the flames of anti-corruption sentiment among citizens and protesters, particularly because the country's poverty rate is now rising faster than it has since 1998.
The Kremlin, for its part, has responded in a scattered fashion. Regional leaders have been ordered to tailor their own responses to rallies. Many leaders in protest hot-spots — such as Tyumen, Novosibirsk, Yekaterinburg and Volgograd — have issued permits for rallies in an attempt to keep them peaceful. But Moscow and St. Petersburg are the biggest challenges for both Navalny and the Kremlin. With protests planned in Russia's major cities, major clashes between demonstrators and the security services cannot be ruled out. In recent weeks, Navalny's various headquarters were repeatedly raided by police, and his employees have been continually harassed. Authorities in Russia's largest cities have denied permits for gatherings in central or culturally significant squares, offering alternative locations on the outskirts.
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By Ekaterina Zolotova
Is the Russian Economy Defying Western Sanctions?
The country’s economy is improving, but the devil is in the details.
In a recent interview, Russian President Vladimir Putin said the Russian economy had overcome some significant challenges over the past several years, namely Western sanctions imposed after Russia’s annexation of Crimea and the global slump in oil prices. According to Putin, inflation is the lowest it has been in modern Russian history, gold and foreign reserves are growing, economic growth is slowly rising and foreign direct investment is increasing. The effects of Western sanctions appear to be easing. In 2015, Russian gross domestic product declined by 1 to 1.5 percent due to sanctions. In 2017, this number declined to 0.5-1 percent.
If the Russian economy really is recovering, it would give Russia a better negotiating position when it comes to the conflict in eastern Ukraine and would diminish some of the leverage the West gained through sanctions. We previously forecast that Russia couldn’t afford to be isolated from the global economy any longer and would therefore be forced to make concessions on Ukraine to gain some relief from sanctions. But these new indicators have made us take a second look at that forecast.
The Russian economy has indeed displayed some surprisingly positive results in 2018. The State Duma reviewed the federal budget on June 7, and for the first time since 2011, Russia is expecting a budget surplus – totaling 0.5 percent of GDP, or roughly 481.8 billion rubles ($7.7 billion), this year. According to the review, state revenue so far in 2018 was 17 trillion rubles – 2 trillion rubles more than was expected in the budget released in December. And according to the minister of economic development, Russia’s GDP in 2018 may exceed 100 trillion rubles – an increase from 92 trillion rubles in 2017. The World Bank has confirmed that the Russian economy is improving and forecasts that the growth rate will reach 1.5 percent in 2018 and 1.8 percent in 2019-20. In addition, the Russian government expects that non-oil and gas revenue will continue to grow by more than 1.8 trillion rubles in 2018. The government has also said about 60 percent of Russia’s income is not related to oil and gas.
But Russia’s moderate recovery was largely due to the increase in oil prices since early 2018, leading to an increase in revenue by 1.76 trillion rubles. And despite the government’s efforts, the economy is still heavily dependent on the energy sector. In the first quarter of this year, oil accounted for 27.4 percent of Russian exports, and fuel and energy products accounted for 42.5 percent, largely unchanged from 2017.
In addition, Russia’s National Wealth Fund has increased due to higher oil prices, but only marginally. In May, the fund grew by 5 percent if calculated in rubles, but in
dollars, it actually declined by 3 percent, or almost $2 billion, due to the weak Russian currency. For now, Russia has chosen not to spend this money but rather to save it in case it ends the year in a deficit.
Even if the economy has improved on the macro level, it seems that Russians remain skeptical. Polls by the Russian Public Opinion Research Center show that the private sector still believes that the economy is struggling. In fact, 69 percent of companies said they believe the government’s economic policies will be ineffective, a 5 percent increase from last year. Business leaders cited economic uncertainty, rising taxes and declining domestic demand among the most important causes of the negative business environment in the country.
In the first quarter of 2018, consumer debt reached 4 trillion rubles, increasing by 5 percent compared to the same period in 2017. Almost half of this amount consists of overdue loans. A recent poll commissioned by the central bank showed that inflation expectations in Russia increased to 8.6 percent in May from 7.8 percent in April, partly due to the rise in gasoline prices by 5.6 percent from May to April and by 11.3 percent in annual terms, sparking fears of rising food costs. Eighty-three percent of Russians expect their financial situation will deteriorate due to rising gasoline prices.
(click to enlarge)
Indeed, Russia has seen some growth but little development. In May, following March elections, Putin outlined the economic goals of the new government. In the next six years, he said, the country will be among the five largest economies in the world and will have a growing population, increased life expectancy to 78 years, sustainable income growth and reduced poverty. According to Putin, the country would need an additional 8 trillion rubles to achieve these goals. Yet, it hasn’t made any serious reforms that will increase government revenue to this level or transition the economy away from resource dependence.
The government has admitted that it currently doesn’t have the money to fund Putin’s plans, and so it has to either raise more money somehow or cut spending. But if oil prices don’t continue to rise, the government still has few options to raise revenue. The share of the population that’s economically active is declining and incomes have been falling for years. Raising taxes would only increase the burden on this already overburdened group. (The government is actually looking at cutting excise taxes on diesel, a move that would slash regional budgets.) The government therefore has been considering raising the retirement age and implementing pension reforms to cut public expenditures. But these are highly unpopular measures.
The more difficult economic conditions in the country become, the more Russia will be willing to make compromises in places like Ukraine. This is why it’s important for Russian officials to tout the country’s economic successes, however small and temporary they may be. A strong economy can show the world that Russia is able to withstand the West’s efforts to rein in its foreign policy – which it’s not prepared to do just yet.
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https://strategypage.com/htmw/htwin/articles/20181113.aspx 120 deaths for every 100 births. No money for medicines, etc.
I'm looking for Trump to buy Siberia by the end of his second term.
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https://pjmedia.com/spengler/a-sino-russian-greater-asia-from-shanghai-to-lisbon/
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Russia Takes on Its Demographic Decline
A picture taken on March 30, 2017 shows a woman entering a building of Federal State Statistics Service (Rosstat) in Moscow.
Highlights
Russia's demographic decline will be a key concern for Moscow in the coming years as a result of emigration and low birth rates.
Contradictory data sets and the Kremlin's plans to attract migrants make it difficult to predict the exact extent and speed of Russia's demographic decline, but it will nevertheless impact the Russian economy and Moscow's ability to project power abroad.
Even if Russia succeeds in attracting significant numbers of migrants to mitigate its population decline, Moscow will face greater difficulties associated with managing domestic ethnic tensions and political instability.
From great power competition with the United States to internal unrest, Moscow has plenty of issues to deal with, but another problem looms ominously on the horizon: demographic change. Because of emigration and low birth rates, Russia's population is projected to decline precipitously in the next few decades. This could have significant geopolitical implications, impacting everything from the country's economy to its military power to its ability to project influence around the world — especially in its near abroad. But due to the disparities between population projections, and to Moscow's efforts to mitigate its decline, the true scale of the demographic threat facing Russia is unknown. While a perusal of various data sets suggests that fears of Russia's imminent demographic demise might be exaggerated, the country's planners still have much work to do to arrest the decline.
The Big Picture
Russia's demographic outlook will play a major role in shaping the country both internally and internationally in the coming decades. The looming population decline will challenge Moscow's ability to sustain its economic and military power, just as the changing ethnic balance in Russia will complicate Kremlin efforts to manage social and political instability.
See 2019 Second-Quarter Forecast
See Eurasia section of the 2019 Second-Quarter Forecast
See Russia's Internal Struggle
Disparate Data Sets
The primary sources for Russia's demographic data are the Federal State Statistics Service (Rosstat), a Russian government agency, and international bodies such as the United Nations and the Organization for Economic Cooperation and Development. In tracking Russia's historical and current population data, there is little discrepancy between the Rosstat and U.N. figures, but there is a far larger gap between Rosstat and the OECD regarding Russian emigration to specific countries like the United States and Germany.
That's because Rosstat only counts Russians who officially cancel their registration in their homeland — something that most emigrants do not do. As a result, the number of Russians emigrating from the country is much higher than the numbers Russia has officially reported, according to a study that the independent media outlet Proekt released in January, citing OECD data. Indeed, certain destination countries, including the United States, have reported Russian immigration figures as many as six times as high as those reported by Rosstat.
Crucially, however, the Proekt report cited OECD migration data published by the destination countries, which doesn't necessarily indicate that incoming Russians actually arrived from Russia. Instead, these "persons holding a Russian nationality arriving from anywhere" could, for example, be Russian citizens who emigrated from France to Germany. This could explain why the OECD figures diverge so much from Rosstat's numbers, as the latter only tallies people leaving Russia. But while the gap between the Russian and international numbers is simply too large to suggest that the difference consists of Russians migrating from third countries to the likes of the United States or Germany, it is likely an exaggeration to claim that the true rate of emigration is six times as high as the Rosstat figures; instead, the reality is somewhere in between.
What Awaits Russia
When it comes to projections for Russia's overall population, the country is currently projected to lose about 8 percent of its population by 2050 according to the United Nations. (Rosstat does not publish such projections.) Naturally, larger emigration numbers would accelerate the population decline. But given the incongruous data sets, it's difficult to project a precise timeline for Russia's downward demographic trend.
Another factor to consider is the Kremlin's efforts to offset its population decline and emigration trends. According to the Russian business daily Kommersant, the Russian government plans to attract 5 million to 10 million migrants from neighboring countries with large Russian-speaking populations, including Kazakhstan, Uzbekistan, Ukraine and Moldova, to offset Russia's population decline over the next six years. The government's efforts to attract migrants, as well as it bid to encourage more births, managed to hold the population trend steady in recent years, but 2018 was the first year since 2008 in which Russia's population dropped in absolute terms, falling by 93,500 to 148.8 million people. The country's current plan to attract at least 5 million migrants in just over five years, however, is far more ambitious.
The extent to which the Russian population will decline will have significant implications for Moscow. The continued fall in population will undermine Russia's economic position, particularly as the people most likely to leave are young, educated professionals in sectors like technology and the military. Rosstat, too, has noted the increased brain drain: In 2017, 22 percent of emigrants from Russia possessed advanced degrees, up 5 percent from 2012. The fall will make maintaining tax revenues and sustaining the pension system challenging for Russia, something that prompted the government to raise the retirement age effective this year.
The change will also alter Russia's demographic composition, as migrants from faster-growing countries in the Caucasus and Central Asia are likely to migrate to Russia in greater numbers to make up for the population loss. This, in turn, could foment more ethnic tensions in the country and increase political instability, as evidenced by recent protests against migration in Moscow and Russian Far Eastern cities like Yakutsk. The potential for ethnic tensions notwithstanding, the Russian government has few options but to attract more immigrants to offset its impending population decline.
From a geopolitical perspective, a weakened economy and smaller population will also compromise Russia's ability to project military power and political influence, as the country will lag behind countries that are growing in population and competing for influence in the region, including great power competitors China and the United States and even smaller powers like Turkey and Iran. So while the exact extent of Russia's demographic decline and changing ethnic makeup is difficult to predict, there is little doubt it will give Moscow great cause for concern in the long term.
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https://beta.washingtonpost.com/outlook/putins-power-depends-on-his-popularity-that-makes-him-vulnerable/2019/08/27/c5e0cf1a-b4a2-11e9-8e94-71a35969e4d8_story.html
For all his apparent strength, his hold on power is surprisingly contingent on maintaining public support.
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This reliance on popularity makes Putin vulnerable. Being too harsh on protesters could easily lead to a backlash in public opinion. But being too soft might encourage even more demonstrations against the evident corruption and mismanagement across Russia. As a result, the Kremlin often acts tough then backs off.
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Putin’s popularity is extraordinary valuable to Russia’s elites — its billionaires, generals and media superstars. They support him, and burnish his image, not (only) because they’re afraid of him or share his ideology, but because so long as he remains popular, they can maintain their position of privilege and keep the people at bay, despite staggering inequality; in 2015, the top 1 percent of Russian’s owned 43 percent of the nation’s wealth. As long as he is liked by ordinary Russians, Putin is the best defense of that wealth and privilege.
But a regime that is built on one man’s popularity is also a regime with a built-in weakness.
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the realities of a decade of economic stagnation — and five years of declining real incomes — start to erode support.
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With protests in Russia, China [Hong Kong] and Iran, wouldn't it be ironic if Trump got reelected and some of these thugs got dumped.
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With the Prime Minister's Resignation, Russia Initiates Major Constitutional Reforms
4 MINS READ
Jan 15, 2020 | 22:30 GMT
The Big Picture
Russia has been moving toward the inevitable scenario of a post-Putin era. Russian President Vladimir Putin won't be able to run for re-election in 2024 given constitutional limits, and he is seeking to shape a political system that continues his legacy rather than relying on any one powerful individual.
See Russia's Internal Struggle
What Happened
Russian President Vladimir Putin has set in motion his first real steps toward creating a political system that he hopes will maintain the country's course beyond his rule. Following Putin's address to the Federal Assembly, the Russian government of Prime Minister Dmitri Medvedev announced its resignation Jan. 15. Putin has already selected Medvedev's successor, submitting the candidacy of the head of the Federal Tax Service, Mikhail Mishustin, for Duma approval Jan. 16.
The announcement of the resignation followed a meeting between Putin and Medvedev after Putin's Federal Assembly address, during which he advocated for several changes to the Russian Constitution relating to the powers of the presidency and the Duma. These would include limiting presidents to two terms total. At present, presidents can only serve two consecutive terms, but the law doesn't specifically rule out multiple nonconsecutive terms (a loophole Putin himself took advantage of). In another change, parliament, not the president, would hold the sole power to select and appoint prime ministers and Cabinets. Under current law, the president selects a prime minister, subject to Duma approval.
Why It Matters
These changes reflect the maturation of the Putin regime after 20 years into a more resilient, less personality-driven structure able to maintain his political legacy. They indicate that Putin is working to lessen the role of personalities in parliament in favor of party rule of the legislature. The changes carry some risk, however, in that Putin's party could theoretically lose control of parliament.
With Medvedev having resigned, Putin can put in place a team of ministers charged with enacting the announced constitutional changes.
With Medvedev's resignation, Putin can put in place a team of ministers charged with enacting the announced constitutional changes. Kremlin watchers have observed a decline in Putin's trust in Medvedev for some time; for changes like these as critical to his aims for Russia, Putin will want a team whose loyalty and strength he can completely rely on. Mishustin has the additional advantages of being an economically savvy administrator who has not accrued significant ill will from the public. This will help him navigate a potential referendum on constitutional changes in 2020 or 2021 and 2021 Duma elections, all while contending with severe economic challenges.
A Managed Transition
The developments represent just the beginning of a long-term transition for Russia. For Putin to shape a system that outlasts him, many more steps will be required — and success is not guaranteed. First, a new government to support Putin's ambitions will have to be put in place, and the planned constitutional changes will have to pass. Additional changes to the responsibilities of the parliament and government, or the presidency, may be required ahead of 2024 to guarantee the United Russia party itself dominates Russian politics rather than whoever is serving as president.
The process can be expected to spark competition between Russian political factions, perhaps generating opposition from individuals who had hoped to win the presidency and so dominate the country. Perhaps more important, United Russia will have to devise a careful strategy to assure its control of the new structure. More power to parliament could backfire unless the party maintains strong control over parliament at a time when electoral challenges to United Russia have been on the upswing. Continued disruptions of opposition activities and offering Russian voters a number of alternatives within the United Russia-allied spectrum of parties will be key components of those efforts.
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Russia's Economy Faces Stormy Seas Despite Moscow's Optimistic Forecast
Sim Tack
Global Analyst , Stratfor
7 MINS READ
Mar 19, 2020 | 11:00 GMT
(Photo by Vladimir Gerdo/TASS via Getty Images)
HIGHLIGHTS
Russia will be able to implement its budget largely as planned as it empties foreign exchange reserves to make up for lost oil revenues.
But if oil stays below $40 throughout the year, Russia could slide back into recession and see its ongoing economic challenges worsen.
The current crisis will affect the purchasing power of the Russian population, which will cost the government popularity ahead of key elections in 2020 and 2021.
The current crisis caused by low oil prices and COVID-19 bolsters skeptical perceptions of Russia's 2020 growth forecast. With no revenues entering the country's National Wealth Fund at current oil prices, financing for Russian President Vladimir Putin's much-hyped social spending plan could become impossible to carry out. Growing inflation, rising prices and declining purchasing power are already unavoidable due to COVID-19 and low oil prices, with implications for political stability and elections in Russia.
The Big Picture
Russia is facing a new crisis before it can even fully pull its economy out of stagnation caused by its 2015-2017 economic crisis. Depending on how long it takes oil prices to return to the $40 range, Russia could face significant challenges to its budgetary ambitions, and to its ability to keep its economy out of a renewed recession.
See Russia's Internal Struggle
As elsewhere, Russia's stock markets have suffered and the ruble has continued to weaken. Low oil prices meanwhile threaten the sustainability of Russia's government budget. While Russia currently has substantial reserves that will allow it to weather immediate budget shortfalls, some anticipated sources of government spending may become unavailable. Meanwhile, Russia's economy may stall out and possibly even see a contraction in GDP, while rising inflation will further suppress the already-dwindling purchasing power of Russia's population.
Budgets Under Pressure
Despite the potential effects this crisis could have on Russia's economy, the government's response in terms of economic stimulus measures and direct intervention has remained relatively limited. Many adjustments to a world of oil prices well below the $42.20 budgeted price trigger automatically, but these will only help soften the macroeconomic blow since they do not provide economic stimulus beyond the regular budget. When oil prices drop below the level budgeted by the federal government, foreign currency reserves are automatically applied to cover shortfalls. The central bank will thus sell foreign currency for rubles to cover the shortfall in government revenue from oil prices below $42.20. With over $450 billion in foreign exchange reserves, Russia can easily weather the current oil prices of around $30 for another five years without depleting its reserves, but even pessimists don't expect oil prices to remain that low for that long.
Lost oil revenues might be tougher on Russia's regions. According to estimates, a majority of its regions could need to spend their entire reserves (a total of about $20 billion across regional administrations, with half held by the Moscow region and the balance by the other regions) during 2020 to make up for revenue shortfalls and the weak ruble. Even then, many would still have to take out significant commercial loans, or receive subsidies from the already-strained federal budget. These estimates are also based on a recovery of oil prices in the second half of 2020. If such a recovery does not occur, regional administrations could face an even worse situation, possibly requiring a significant bailout from the federal government if their debt burdens become unsurmountable.
Inaccessible Reserves
While Russia continues to emphasize that its reserves are sufficient to cover the shortfall in budget revenue, a politically critical part of the budget for the coming years could, however, become inaccessible at current oil prices. In order to pay for the social spending plan that Putin announced Jan. 15, the Russian government was counting on a special budgetary maneuver to pad the federal budget with funds from the National Wealth Fund. While the government can't directly tap its wealth fund, it planned to have the Central Bank sell its majority share in Sberbank to the National Wealth Fund — a legitimate investment for the fund — and to pay a portion of the profits from the sale into the federal budget.
For this sale to take place, however, the National Wealth Fund would need to grow by a significant degree in order to reach the required liquidity to afford the sale. The generation of liquidity in the National Wealth Fund, however, is done by skimming oil profits over an indexed value. This year, the fund will not produce any profits to skim when oil prices are below $41.60. With wealth fund liquidity insufficient to purchase the first tranche of the Sberbank sale despite the declining value of Sberbank shares, the sale has been postponed from June to December, and if oil prices haven't recovered by then, will be postponed even further.
Some financial analysts anticipate that if oil prices don't bounce back during the year and result in an annual average of over $40, Russia could see inflation rise to over 7 percent and enter a recession with a GDP contraction of over 1.5 percent.
Another major element of financing for this social spending was the rerouting of funds destined for the Pension Fund. This was possible at the beginning of the year, since the Pension Fund itself had been more profitable than expected. But as overall economic performance in Russia dwindles, so will the profitability of Pension Fund assets. This means Russia might not be able to redirect money initially destined for it without weakening the fund significantly.
The issues at the Wealth and Pension funds ultimately mean that the federal budget may not be able to meet Putin's social spending goals, or that meeting them may require cutting other planned budget expenses.
Negative Outlook
In its response to low oil prices, Russia's government has adjusted its expectations for budget revenue and inflation for 2020. It still, however, insists that all of its goals for new social spending and its growth target of 1.9 percent will be maintained. Analysts at the Accounts Chamber, the Russian parliament's public auditor, are less sanguine, and warn that Russia could face zero growth or even recession as poverty increases. The Accounts Chamber typically has a less optimistic outlook than the government, and its takes tend to be closer to reality. In this case, many other Russian financial analysts are backing the Accounts Chambers' stance. Even worse, some of those financial analysts anticipate that if oil prices don't bounce back during the year and result in an annual average of over $40, Russia could even see inflation rise to over 7 percent and enter a recession with a GDP contraction of over 1.5 percent.
As inflation — initially forecast at 2.2 percent for this year, but now expected to reach at least 4 percent during 2020 — goes up, this also means that the cost of consumer goods will rise in Russia. But wages, which never recovered from their contraction during the 2015-2017 crisis, will not be growing in sync with these price rises. Putin has requested that the government and Central Bank do whatever they can to shield the population from the effects of this crisis, but their means are limited. The State Duma has continued to proceed with legislation related to its social spending package, but without adjustments, whether it can proceed remains uncertain. Dwindling purchasing power had already become a controversial political issue in Russia last year, and the current crisis will only make matters worse.
This increases the potential for political unrest, and could sap the government's popularity ahead of the April 22 popular vote on constitutional amendments and ahead of next year's Duma elections. United Russia's control over parliament or the passing of a new constitution wouldn't immediately be at risk. But as a poor economic situation increases support for more potent opposition parties, these parties could enter the parliament and carve out a sustainable — if small — presence within Russia's political institutions. These parties' ability to compete with United Russia will be greater in regional gubernatorial and legislative elections in September 2020. The Kremlin will likely block most real opposition candidates from taking part in the latter elections, something it has done before. But even so, growing economic malaise could help reignite large waves of pro-democracy protests in the run-up to these elections.
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The Big Picture
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At the direction of President Vladimir Putin, the Russian State Duma is amending the country’s constitution by limiting the role of the presidency, while making different Russian branches of government more reliant on each other in an attempt to limit disruption and factional competition at the time of an actual succession. But with a constitutional amendment that would allow Putin to run for another two terms, the Kremlin is also trying to delay that inevitable transition as much as possible.
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Russia's Internal Struggle
The Kremlin’s efforts to extend President Vladimir Putin’s 20-year presidency will enable Moscow to sustain the policies that have seen Russia reclaim its great power status, while postponing the political and socio-economic instability that could result from transitioning to a new leader. Prolonging Putin’s tenure, however, will introduce greater long-term political challenges as he ages and risks a potential health emergency while in office. But even without such a crisis, postponing a succession until 2036 will still set Russia’s political elite up for having to deal with a transition of power at a time when popular pressures will be mounting over severe economic hardships.
A New Constitution, and New Terms for Putin
On March 10, Russia’s legislature approved an amendment that would reset the count of presidential terms served prior to the introduction of the new constitution. The change will enable Putin to stand for reelection in the 2024 presidential elections, increasing his ability to serve two additional six-year terms.
The amendments will be offered for approval in a popular vote (which was initially scheduled for April 22, but has since been indefinitely postponed due to COVID-19 lockdown measures). Approval is legally binding and would immediately alter constitutional provisions. But he Kremlin’s tight containment of opposition activity — and the fact that a referendum is not technically required to approve the amendments despite the veil of popular endorsement it’d provide — mean that the constitutional changes will pass one way or another.
Despite keeping Putin in power for longer, the new constitution will also erect limitations and balances between the different governing bodies of Russia in an effort to reduce the executive power of Putin’s eventual successor. These amendments include a stricter observation of presidential term limits, meaning future Russian presidents will only be able to serve two terms total in their lifetime. They also shift the responsibility for appointing certain cabinet positions — primarily those dealing with Russia’s economy — to the Russian State Duma rather than the presidency, which will maintain the right to appoint security- and foreign policy-related ministries. This separation of responsibilities will force the different branches of government to actively cooperate to access Russia’s resources of power.
What 12 More Years Could Bring
Putin has remained vague about his intentions, though he is widely expected to seek reelection under the new rules. With no clear designated successor, he is likely to seek another term to groom his replacement. If he is unable to find a fitting successor over those four years, there’s a good chance Putin may well run again in 2030.
His likely reelection would foster stability in Russia’s state-led economy, as Moscow focuses on driving domestic growth, diversification and self-sufficiency. Russia’s foreign policy would also continue to revolve around Putin’s goal to reestablish Russia as a great power.
• As Russian conventional military power has waned, Putin has prioritized Russia’s nuclear capabilities and deterrence abilities while supporting individual allies around the globe with military and financial assistance.
• Moscow has already tried to reduce its dependence on the hydrocarbons sector, placing a greater emphasis on the development of high-tech capabilities, with different state-owned entities spearheading efforts to develop quantum computing and artificial intelligence.
• Putin’s policies will also continue to lead to potential escalations and standoffs in proxy conflicts in Ukraine, Iran and Syria.
Putin’s age and general health over the next twelve years, however, could risk this strategy. At 67, his focus on physical fitness and apparent robust health has enabled him to reach and likely succeed the average life expectancy for Russian men (which is 68). However, the remaining four years of his current term, combined with the prospect of another twelve years in office, would make him 83 years old at the end of a final term — greatly increasing the risk of a health crisis, or even his death, while in office.
Postponing a succession until 2036 will still set Russia’s political elite up for having to deal with a transition of power at a time of severe economic hardships.
Multiple Axes of Transition
Shifting Russia’s next presidential transition to 2036 risks weakening Kremlin leadership at a time when the country is already expected to face significant economic and demographic crises. By about 2035, Russia will begin experiencing the next significant contraction of the size of its working population, exacerbating the imbalance in social spending and economic potential. Around the same time, Russia’s hydrocarbon production is also expected to have dropped significantly. Russia’s Ministry of Energy is projecting as much as a 40 percent drop in production by 2035, which will severely impact Russia’s government revenue and industrial strength. A succession in 2036 could devolve the centralized authority that Putin has commanded, as well as weaken the consensus and institutional cooperation needed to manage these challenges, by unleashing competition between the country’s different commercial-industrial factions, security organizations and political factions.
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https://www.foxnews.com/world/third-russian-coronavirus-doctor-plummets-from-hospital-window-under-hazy-circumstances-reports-say
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https://www.bloomberg.com/news/articles/2020-05-14/russians-running-out-of-money-add-pressure-to-end-virus-lockdown?sref=nXmOg68r
Rest of the world mostly hit harder than US, especially places that relied on oil revenues.
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For Russia, the Future Is North
Stabilizing its Arctic regions is becoming a priority for Moscow.
By: Ekaterina Zolotova
The fall of oil prices and the campaign to manage the coronavirus pandemic have taken a toll on Russian finances, perhaps nowhere more so than in the regions of the Arctic. In the Yamalo-Nenets Autonomous District and the Komi Republic alone, regional revenue fell by 60 percent compared with last year. The Krasnoyarsk Territory and Murmansk Region were also significantly affected. And while this is a sign of hard times to come for the people who live there, these oft-overlooked regions, which are among the biggest oil and natural gas producers for a national economy that relies heavily on oil and natural gas, also affect the financial stability of the country writ large. The Kremlin understands as much and, if push comes to shove, will make it a priority to maintain the economic health of the Arctic regions. But given its budgetary shortfalls, it will struggle to do so.
When the Soviet Union collapsed, the Russia it left behind was a much more “northern” country. It lost the fertile lands of Ukraine and Central Asia, and there was only so far it could expand south into the newly formed countries beneath it. And so the Arctic, which constitutes about 20 percent of Russian territory, has become a space in which Moscow can gain leverage and military and economic power.
Indeed, the region is considered by many to be essential to Russia’s becoming a great power again. For centuries, the Arctic was a liability, a natural border that hindered Russian expansion. Now, as climate change melts the ice and as technological development creates more opportunity, it’s an asset, one that can someday be a hub for trade and military activity. More important to Moscow, it’s a resource to mine. About 41 percent of all the Arctic’s oil and gas resources are located in Russian territory. More than 80 percent of Russia’s gas and about 17 percent of its oil is produced here, accounting for about 10 percent of the country’s gross domestic product and about 25 percent of Russia’s exports, and contributing some 15 percent to the government budget. (The Yamalo-Nenets Autonomous District itself accounts for about 43.5 percent of the total resources of the Arctic.) The region is also a potential source of rare earth elements.
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The promise of the Arctic has naturally attracted other countries that are now in direct competition with Russia over its potential benefits, including Denmark, Canada, Norway, Iceland, Sweden and the United States. Even countries that don’t directly border the Arctic – especially those in the Asia-Pacific – are showing interest, since the proposed North Sea trade route would significantly reduce the delivery time between Asia and Europe. To get a leg up on the competition, Russia needs a strong military, economic and commercial foundation. To that end, it has been expanding its military bases and its Arctic Fleet and has slowly begun to construct viable ports for the long term. Year-round, in particular winter, navigation cannot be carried out without a fleet of powerful atomic icebreakers, which need ports and other infrastructure. The government in Moscow knows that if it ever wants to establish such a fleet, it needs to start now.
Which is why the Kremlin wants to strengthen the region’s economy by attracting investments and qualified personnel, and by building infrastructure. Oil extraction, and therefore the expansion of Russian influence, requires a constant influx of skilled labor, modern technologies and infrastructure and, of course, the support of the local population. The collapse of the Soviet system had a huge impact on the development of the Arctic – production in Yakutia-Sakha and Chukotka decreased, some mining centers and industrial settlements were completely abandoned, poverty and unemployment rose, and the reduction in northern benefits accelerated the outflow of the population from the region. Regions like Yamal-Nenets and even Murmansk lost about 20-25 percent of their population.
Moscow knows from the experience in the immediate aftermath of the Soviet Union’s collapse that without financial and tax incentives, it will be difficult to keep a skilled population, capable of supporting economic projects in regions with a climate as harsh as that in the Arctic. In Soviet times, the government factored in the “cost of cold,” so sometimes wages in the Arctic were as much as four times higher than in other regions of the Soviet Union. This is why my grandparents moved from central Russia to Murmansk, and indeed, in the 1970s they could afford much more than people from Moscow. But even today, the region, which sports Russia’s highest per capita incomes, continues to attract labor.
It’s a good thing, too, because job vacancies in the region among resource extraction and industrial construction companies are growing. To stimulate labor inflows, the government has introduced the “northern allowance,” a bonus added on to wages. The size of the bonus depends on the region. For example, in the Chukotka Autonomous District, employees receive a bonus of up to 100 percent of their salaries, whereas in Yamalo-Nenets the bonus is 80 percent. This is why some northern regions like Yamalo-Nenets have the country’s highest level of family welfare. An average family with two children in Yamalo-Nenets in 2019 had almost 90,000 rubles ($1,300) left each month after covering the minimum expenses, compared to 55,000 rubles in Chukotka Autonomous District and 52,000 rubles in Nenets Autonomous District. In the region of Moscow, by contrast, the same family would have had about 40,000 rubles left. Average monthly wages in Chukotka and Yamalo-Nenets are also higher than in Moscow and other regions – 109,300 rubles and 102,100 rubles, respectively, compared to 95,000 rubles in Moscow.
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The government is trying to attract skilled workers in other sectors besides energy to come to the Arctic areas. For example, Moscow promised a one-time bonus of up to 3 million rubles for medical workers. In addition, the state is trying to attract investment and entrepreneurs by providing tax benefits and other tax advantages. Support is provided for the construction of ports, such as a zero income tax rate for 10 years or zero value-added tax on services for sea transport of export goods and their icebreaking support.
Because of low oil prices, the OPEC+ production cut and the overall economic slowdown, exploration and mining are on the decline, and there’s less investment flowing into the region. If the situation leads to an erosion of salaries or social benefits, people may begin to gradually leave the region, just as they did in the 1990s. But there are limits to how much financial aid Moscow can offer to prop up life in the Arctic, including for political reasons; already there is infighting within the Ministry of Finance, and there’s discontent in other regions, such as the Caucasus, due to insufficient funding. Even within the Arctic itself there is a rivalry between regions over funding.
To streamline its support policies and minimize dissatisfaction, the Kremlin has been considering optimizing the Arctic space and is striving to create an Arctic federal district. Yet this idea, too, sparked a backlash. The region is very divided in terms of population and wealth, and different regions have different opinions on ideal economic strategies and ecological questions. The indigenous population is dissatisfied with the activities of large Russian energy companies that often cause the destruction of their indigenous environment. Moreover, the ruling United Russia party is not strong in all the Arctic regions. The Kremlin tried to merge the Arkhangelsk Region with the Nenets Autonomous District last month, during the height of the country’s coronavirus outbreak, but was forced to back down in the face of local protests.
The slump in oil prices and the broader economic downturn will damage Russia’s efforts to develop the Arctic. Without financial
incentives and development, critical investment and specialists could even begin to move out of the region. This could put Russia at a disadvantage in the international race for influence in the Arctic. The Kremlin will make significant efforts to prevent this outcome and keep up the pace of economic development in its Arctic regions.
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Russia Considers a New Economic Model
Moscow’s tone about the future of the economy has changed.
By: Ekaterina Zolotova
The flaws in Russia’s economy might be too deep to gloss over. At an annual civil forum in Moscow on Saturday, Alexei Kudrin, the chairman of Russia’s Accounts Chamber and finance minister from 2000 to 2011, spoke rather pessimistically about the Russian economy. He predicted a drop in economic output this year of 4.5 percent, a significant fall in living standards and that 1 million more people will slide into poverty. It’s no secret that the Russian economy is under serious stress – made worse by the coronavirus pandemic – but Kudrin’s remarks were unusual for a government that has been promoting the rehabilitation of Russia’s economy by 2022. Given the unavoidable economic difficulties ahead, the Kremlin appears to be changing tone and priming the public for more hardship – and potentially a massive economic transformation.
From Bad to Worse
At the forum, Kudrin said Russia needed a new economic model, and it’s hard to argue with that. Oil remains the backbone of the Russian economy. Approximately half its exports are of mineral resources (mostly natural gas and oil), and oil and gas revenues make up about 30 percent of its federal budget (and that’s excluding tax revenues from oil and gas giants like Rosneft and Gazprom). The pandemic, however, has cratered economic activity, and thus demand for energy, and OPEC+ members including Russia agreed to cap production for the time being. In these circumstances, it is difficult for an economy that depends on energy exports to remain afloat. And even after demand recovers, Kudrin said he believes oil consumption will start to decline from its peak in the next 5-10 years, forcing Russia in the 2030s to shift away from oil exports.
One significant challenge is finding an effective economic model that can ensure Moscow’s continued control of its vast territory and far-flung regions. Today, the Kremlin maintains control using not only the security apparatus and political institutions but also the redistribution of budget revenues between regions. These revenues, however, depend on the oil and gas industry. Beyond its own borders, Moscow has offered neighbors discounted energy in exchange for greater regional influence and security, defending itself and its sphere from encroachment by China in the east, Turkey in the south and Europe in the west. But as the role of oil and gas in the Russian economy declines, the Kremlin will need its new economic model to serve a similar purpose with respect to building and maintaining allied relations with its neighbors.
During his speech at the civil forum, Kudrin suggested that what Russia’s economy needs is “revolutionary deregulation.” He recommended a model he called NEP 2.0 to encourage entrepreneurship, a reference to Lenin’s New Economic Policy of the 1920s following Russia’s Civil War. Under the original NEP, the Soviet Union temporarily turned toward state capitalism and away from extreme centralization – with noticeable success. By 1928, the national income had surpassed prewar levels and the material situation of citizens of all stripes had grown more stable. But when Stalin took power that same year he abandoned the NEP, whose legacy remains controversial in Russia to this day.
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The situation in Russia in 2020 isn’t even close to as bad as it was in 1921, but it’s going to get worse. Kudrin, after touting Russia’s victory over extreme poverty, said COVID-19 would by the end of the year force another 1 million Russians into destitution. In the second quarter of 2020, Russians’ real disposable income fell by more than 8 percent, and it dropped by another 4.8 percent in the third quarter. Leaders in Moscow apparently see the COVID-19 recession as an opportunity to implement transformational change.
A New Model
The Kremlin could, for example, claim that raising living standards and rescuing private small and medium-sized enterprises at this time will be too difficult, given the current extraordinary challenges, and save what’s left of its public funds for future use. Indeed, though Moscow has said it’s prepared to help stimulate the economy, it has been hesitant to pile more stimulus on top of its initial efforts to aid Russian businesses. In this way, it’s leaving the economic recovery in the hands of the Russian people. It believes that the economy will continue to chug along, while the state continues to manage key sectors including much of heavy industry and transport. (During the lockdown, the public sector appeared more stable than the private sector, so state-owned enterprises could also use this as an opportunity to dominate the market even more than they had before.)
Though Russia still has substantial reserves in its national wealth fund – roughly 13 trillion rubles ($170 billion) – it’s not in any hurry to spend them to prop up large Russian corporations. It sees relying on SMEs as a better method of stimulating economic recovery, in part because they don’t require the same level of financial support that large firms do, and in part because individual SME owners can’t challenge the Kremlin the same way powerful oligarchs who control massive Russian corporations can. So by allowing SMEs to take on the bulk of the responsibility for economic recovery, the Kremlin ensures that its own influence in the regions outside of the capital isn’t overrun by other wealthy interests.
Moscow is also using this time – while many countries’ economies are stalled by the pandemic, and while the United States is preoccupied with the presidential transition – as an opportunity to improve relations with the western buffer states and increase its influence among its neighbors. After negotiating a peace deal between Azerbaijan and Armenia over the Nagorno-Karabakh conflict, Russia secured a long-term presence in the South Caucasus by including in the deal a Russian peacekeeping force that will monitor the cease-fire. To its west, Russia saw President Alexander Lukashenko elected to another term in Belarus in August, and since the disputed election, he has been looking to Moscow for even more support and cooperation. Meanwhile, the conflict in eastern Ukraine remains frozen, which suits the Kremlin just fine.
One of Moscow’s key tools of projecting influence in the post-Soviet states is the Eurasian Economic Union. The head of the group’s executive body, the Eurasian Commission, said this week that the bloc was moving into a new phase of integration and ready to build projects worth $200 billion. A long-awaited draft agreement on gas prices and tariffs on gas transport – which will essentially create a common market for natural gas – is expected next year. (Members are still divided on this issue, however, meaning an agreement may be hard to come by. Belarus and Russia will therefore continue to negotiate between themselves while they await a broader deal.) In addition, Russia is spending millions to support external economies, even while its own economy struggles. It provides Kyrgyzstan, for example, millions of dollars’ worth of financial assistance. It is also considering financing the second stage of a project to increase production of hydrocarbons in Uzbekistan and has provided the country with loans worth $650 million. And it has also issued Belarus $1.5 billion in loans.
In the short term, the Russian economy will survive. In the long term, it will need substantial changes. It continues to depend too much on profits from oil and gas exports, which were previously used as an instrument of influence and control for the state. It now needs to look for new tools with which to maintain state power at the lowest possible cost. While the pandemic has presented many countries with enormous challenges, it may also present Russia with an opportunity to conduct an experiment in economic reform. And if the experiment succeeds, it could help the Kremlin fulfill both of its key imperatives: to preserve the unity and power of the state, and strengthen its power within the broader region.
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https://www.gatestoneinstitute.org/17014/russia-putin-navalny-protests
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Brief: Competition Over Russia’s Far East
The remote district is quickly becoming more strategically important to Russia – and thus to the region.
By: Geopolitical Futures
Background: The Russian Far East is the largest federal district in Russia and the farthest from Moscow. And because of its energy resources and access to the Pacific Ocean, it is quickly becoming more strategically important to Russia – and thus to the region.
What Happened: Several meetings are worth noting. On Feb. 20, the head of Russia’s Corporation for the Development of the Far East and the Arctic met with India’s ambassador to Russia to discuss regional development. They pledged to continue negotiations over a plan for India to supply the area with coal. A few days earlier, after meeting with Russian Foreign Minister Sergei Lavrov, India’s deputy foreign minister visited the Russian Diplomatic Academy, where he made clear that one of the goals of his trip was to enhance economic cooperation with the Far East. This is in addition to discussions Russia held with India (and Japan) some two weeks ago over economic, investment, scientific and technical cooperation in the region.
Bottom Line: Financial constraints have kept Moscow from developing the Far East as much as it would like. Instead, China is the district’s most important investor and trade partner. China is also, however, a regional competitor of India, which is clearly trying to compete with and undermine the influence of China in the region. To that end, it is finally implementing the “Act Far East” policy Prime Minister Narendra Modi announced in Vladivostok in 2019 – a policy meant in no small part to counterbalance Beijing. As for Russia, developing the Far East, even with foreign partners, generally serves Moscow’s purposes. China is much less happy with the competition.
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August 4, 2021
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The State of Russian Inflation
Moscow will want a semblance of stability heading into elections.
By: Ekaterina Zolotova
Economic problems accompanied the COVID-19 pandemic, and like the viral outbreak itself, they haven’t really gone away. Perhaps none is more talked about than inflation, which naturally becomes an untenable problem when prices grow so high that people are unable to pay for basic necessities. Take, for example, Russia, which had been struggling for years even before the pandemic.
The good news is that, according to Russia’s Ministry of Economic Development, Russia's gross domestic product increased by 10.1 percent in the second quarter of 2021 compared with the second quarter of 2020 and by 1.5 percent compared with the second quarter of 2019. The jump is due to a rapid recovery of key economic sectors and of the labor market. All the while, Russian inflation was kept in single digits.
The bad news is that this is only a preliminary estimate; more accurate assessments may be less rosy. Increased growth, for example, can be explained by the low baseline the growth started from. As for inflation, Russia has more complex structural criteria that factor into it. And in any case, rising inflation coupled with constantly falling incomes, as is the case in Russia, will create additional pressure on everyday Russians. Moscow, then, is again looking for ways to lower inflation (and solve other challenges) while trying to achieve a semblance of stability before the September elections.
Strategic Changes
Before the Soviet Union fell, its planned economy used fixed state prices for the vast majority of goods and services. Though this all but eliminated monetary inflation, it didn’t do anything to mitigate latent inflation – that is, the periodic shortage of goods. After the union collapsed, Russia lost economic ties to its satellite states, including arable land and productive capital. But more than that, it lost its international standing. So establishing influence in the post-Soviet space and attracting investment in the creation of new production facilities became a priority for Moscow. This required several strategic changes, not least of which was participating in world trade. Participation in the global economy, however, raised domestic prices.
In fact, in the early years of its existence, Russia faced a fairly long period of high inflation. Russia was in a state of political crisis in which it lost control over the money supply in the economy. At the same time, the continuing production declines reduced the volume of commodity supplies. Thus in 1992, annual inflation reached 2,508.85 percent. Moscow got that figure down to 11 percent by 1997 but only through an anti-inflationary exchange rate policy aimed at stabilizing and predicting the exchange rate of the ruble and in part by a contraction in demand.
But the government couldn't tame inflation for long. A financial crisis caused inflation to spike again the next year. Then, in the 2000s, the rise in oil prices on the world market, which led to a sharp increase in the inflow of foreign exchange, started to have an inflationary impact. From 2007 to 2009, oil prices and a lower ruble exchange rate again caused increased inflationary expectations among the population, whose income growth was unsustainable. Only the tight monetary policy of the Bank of Russia made it possible to stabilize the market exchange rate of the ruble. Moscow's tax maneuver in the oil sector also somewhat reduced its dependence on oil prices. And though policies such as these lowered inflation, they also slowed economic growth.
Russian Inflation Since the Fall of the Soviet Union
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Over the past few years, Russia has been able to sustain a “creeping inflation” with which the people and policymakers alike were comfortable, but it too proved unsustainable. The bank’s inflation target on an annualized basis is close to 4 percent. Since 2020, the growth in prices has gone beyond the target. In short, inflation has set record highs over the past five years as the growth of consumer prices in June reached 6.5 percent.
Potentially Unmanageable
The head of the Bank of Russia believes inflation will be a long-term problem, and the government will have to redress it on a number of fronts. First, the Ministry of Economic Development said that inflation was largely imported from the world food markets, since the main channel for inflation in Russia is exports – which is reflected in prices in the domestic market. (For example, a good harvest usually means cheaper wheat, but last year was not usual; prices started to grow because world prices increased. A floating duty on grain exports was introduced to contain price increases in the domestic market.) Although it is not the heaviest hitter in international trade, Russia remains a leader in certain commodity markets and a driver of regional trade. It also manages to maintain its position as a reliable supplier of energy resources to Europe and Asia, mainly due to the availability of infrastructure already in place – infrastructure that gives Moscow certain leverage in political and economic matters. In this regard, the structure of Russia's trade portfolio remains unchanged: Russia exports certain goods – mainly hydrocarbons, raw materials, weapons and foodstuffs – and remains dependent on oil revenue, which comprises a significant part of the budget and the reserve fund.
Second, imports have to be purchased at new prices and transported at new prices. Russia's most important commodity imports are machinery and equipment, the chemical industry, food products and raw materials for their production. Prices of all these goods increased, and despite the Kremlin's introduction of an import substitution policy, this only enhances the influence of international trade processes on the Russian economy. (The rise in prices for container shipments also has an impact on the inflation forecast.) In the first quarter of 2021, the increase in prices for imported products came to 15 percent – the highest ever during this period of inflation targeting by the central bank.
Russia's Elevated Food Costs
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Third, a weakening currency is also a traditional cause of inflation, since the price of imported goods rises. Despite a rise in oil prices, the Russian ruble remains weak – a consequence of import substitution. Expansion of the money supply through mass lending compounds the problem. Personal incomes have been consistently declining for several years, and in the first quarter of 2021, their annual decline accelerated again. Russian citizens seem to be trying to compensate with loans.
It’s worth noting that these problems have long been familiar to Russia. Despite the introduction of so many innovations, the Russian economy has always been inefficient and marked by regional disparities in production. Its labor force is also inefficient compared with other major countries; the output per employee is still several times less than in the U.S. and the EU. The shadow economy and the underdevelopment of the financial market add to inflation expectations.
In sum, the global rise in prices, caused by the wave of global demand, puts pressure on the growth of consumer prices, and this is becoming a problem for Russia primarily because, in contrast to many other countries, Russia will not be able to quickly deal with inflation. Of course, Russia is not in danger of collapse or hyperinflation in the near future. But in a country that has high levels of poverty, that lacks growth in real income, that has households that spend as much as 50 percent of their income on food, and that is a major trading partner for even poorer nations in the region, inflation could be a potentially unmanageable problem.
And so Russia faces a difficult choice: ensure economic growth when inflation rises, or keep inflation low for the people at the expense of growth. Moscow tends to choose whatever is best in the short term, especially during election season. Thus there has been a modest decrease in the prices of some goods, thanks in part to export duties and the floating duty mechanism. But the issue of domestic investment and increasing competitiveness – which must be addressed simultaneously to suppress inflation and to move to sustainable high-quality growth – still remains a painful thorn for those who will shape the country's course after September.
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Brief: Russia Warns of ‘Internal Threats’
Moscow is particularly sensitive to anything that could destabilize the country.
By: Geopolitical Futures
Background: More than most, Russia’s leaders have an imperative to maintain their country’s unity. Russia’s size, multinational demographics, uneven living standards and poorly developed infrastructure make this as difficult as it is urgent. It’s why the Kremlin is so sensitive to potential threats and closely monitors any flashpoint or hotbed of activity that could destabilize society.
What Happened: Speaking at the All-Russian Youth Educational Forum, Russian Defense Minister Sergei Shoigu said internal threats are more dangerous to the country than external ones. Such problems, he argued, could make Russia go the way of Yugoslavia, Libya, Iraq or Syria. Related: Last week, Shoigu alleged that there are propaganda centers located in Warsaw, Riga and Tallinn that are meant to undermine Russia.
Bottom Line: It’s a curious statement: vague in that Shoigu didn’t call out anything in particular by name, but specific enough about internal affairs to pique our curiosity. That it was made at all calls into question the country’s stability, especially if he was trying to head off something in the future.
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https://washingtontimes-dc.newsmemory.com/?token=37d289b176f81fc626f19de6b26c4a41_6149dd55_6d25b5f&selDate=20210921
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October 31, 2022
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Good News and Bad News for the Russian Economy
Silver linings can’t paper over nearly irreconcilable costs.
By: Ekaterina Zolotova
Years before the Russian war in Ukraine – in fact, years before Russia was even under sanctions – authorities in Moscow faced criticism from their constituents for “selling” the country’s resources and companies to foreign interests. The concerns were well founded: Foreign chains entered the market, gradually gained popularity and eventually conquered their markets, however niche, oftentimes becoming the largest companies in their respective industries.
Today, many of these companies are leaving, sometimes selling their businesses. The silver lining for Russia is that this allows Russian entrepreneurs to fill the void, even as businesses can skirt sanctions by importing goods from third-party countries. And so, after eight months of war, Russia seems to be adapting to new realities but continues to face logistical difficulties and general uncertainty, as evidenced by slowing production indicators and scrupulous preparation of upcoming federal budgets.
Better Than It Looks
Russian sanctions have been in place since 2014, but rarely did they affect the daily lives of ordinary citizens. The lone exception was agricultural products, which were replaced easily enough by domestic production and imports from Eurasian Economic Union countries. All the while, international companies continued to operate and even open new branches. Still, Moscow took steps to substitute imports of sensitive goods, knowing that the conflict in Donbas – which was largely responsible for the imposition of sanctions in the first place – was unresolved and any intervention in it could lead to tougher sanctions.
But the new sanctions levied after the invasion were much more severe in that they dramatically reduced what Russia could import. (Exports were comparatively less affected. In terms of value, they remain at high levels thanks to rising prices for raw materials and energy resources and to the pivot to Asian markets to offset losses in Europe.) According to preliminary estimates from Russia’s central bank, imports will fall by 32.6-36.5 percent by the end of the year. Meanwhile, foreign businesses took flight. By October, some 317 global companies left the Russian market, the most notable of which included Ikea, McDonald’s and Coca-Cola, which had a fairly large number of employees and some infrastructure and factories in Russia. Almost all major participants in the automotive industry have suspended operations at their production facilities. The disconnection of the SWIFT payment system, ideological disagreements with Moscow and, most important, logistical difficulties with the delivery of goods have called into question the prospect of conducting business in Russia henceforth.
It’s not an ideal situation for Russia, of course, but it’s not as bad as it may sound. For one thing, not all companies completely stopped their activities. Some either reduced investment and marketing programs, or temporarily froze operations until the dust settled. Many of those that have left have been replaced by Russian businesses. For example, Russian companies have replaced departed soft drink makers and restaurants, and Russian clothing brands have even found their way to the market. And naturally, these businesses employ workers the same way the old ones did. The formula for success seems to be to focus on the domestic market, shore up a little money, capitalize on good connections with countries in the post-Soviet space and, as important, be creative.
For another thing, some companies that left the Russian market in 2022 are already returning, even if they must do so under a different name. Reebok, for example, has made its way back under the auspice of a Turkish holding company called FLO Retailing Turkey.
Finally, businesses have created parallel imports and have used them effectively. In fact, after sanctions were imposed there was a marked increase in exports with trade partners in Russia’s near abroad. In the first half of 2022, exports from Armenia to Russia increased by 49 percent compared to the same period last year. Georgia increased trade turnover with Russia by roughly 50 percent while increasing exports to Russia by 11 percent. Imports from Kazakhstan rose by 30 percent. In other words, Russians can still buy an iPhone 14 or spare parts for their cars, and drink Coca-Cola, and fly out of the country using the services of other airlines.
Threats Remain
Even so, Russian industry isn’t out of the woods. In 2020-21 Russia recorded an increase in dependence on imports. The share of imports for non-food consumer goods such as clothes, shoes, appliances, cosmetics, etc. ranged from 40 percent to 90 percent, depending on the industry. (This ignores the fact there are simply no alternatives to some lost imports.) And there has been severe damage caused by the restriction to export products that Russia produces inefficiently: electronics, computers, components for the aerospace industry and other IT products. Even parallel imports cannot offset the damage. For example, because some foreign distributors have stopped cooperating with Russian partners, Russian companies have begun to import microchips through unofficial suppliers, often with poor results: As much as 40 percent of the microchips they receive from China are defective, compared with 2 percent before sanctions. (Anecdotally, this has prevented Russia from introducing a new 100 ruble banknote into circulation because only 20 percent of ATMs can accept them.)
Moreover, new Russian businesses have been unable to recoup all the jobs lost by departing companies, which created work throughout the entire production line, employing drivers, cleaners and so on. Decreased production will magnify these losses. McDonald's accounted for about a quarter of all taxes paid by the food services industry, and its share of local purchases of raw food materials, food products, packaging, and cleaning and detergents once reached as high as 90 percent, thus providing 100,000 jobs at suppliers' enterprises. Enough time has passed since the closing, sale and launch of the restaurant chain under a new brand to create trouble for those who worked directly or indirectly for the chain. Larger, more established companies like Mcdonald's can withstand things like decreased demand, declining real wages due to inflation, and consumer reluctance in the face of uncertainty better than their replacements can.
It’s no surprise, then, that the threat of bankruptcy looms, even if it is not visible in state statistics. Bankruptcy growth rates decreased in January-September 2022 due to a moratorium on bankruptcy, but analysts nonetheless predict a wave of bankruptcies in 2023-24, including among large enterprises and even entire industrial groups. The cause: the general accumulated negative effects of the COVID-19 pandemic, the 2022 sanctions, the departure of an active and solvent population abroad, and the general drop in supply and demand in different markets.
This is reflected in the indicators of economic development. Industrial production decreased by 3.1 percent in September compared to September 2021 – the largest decline in two years. An even bigger decline was seen in manufacturing industries such as coal mining, metal ores, and even oil and natural gas production.
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Implications
The implications of Russia’s economic decline are many. One of Moscow’s most urgent geopolitical imperatives is to unify, as best it can, the largest landmass in the world, often redistributing income and subsidizing key industries to do so. The biggest threat to the Kremlin, then, isn’t NATO but the population itself. Russians remember all too well the economic calamity of the 1990s, and the fear of reliving it compels ordinary citizens to stock up on things like buckwheat and toilet paper, and to distrust banks and overreact to everything from a new wave of coronavirus to a possible nuclear attack, which puts even more pressure on the economy, government and infrastructure. According to a survey conducted by the Levada Center, public sentiment has deteriorated sharply. Tension, anger, fear and melancholy are rampant, at levels not seen since 2000.
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This means that by the end of the year, the Kremlin will be facing three key challenges: completing a costly military operation that could damage, at least, the reputation of Russian leaders; coping with growing stress among the population and businesses alike; and diversifying exports. Each of these areas requires massive efforts and funding. The Kremlin understands that the Russian economy is entering a period of recession but expects it to be followed by a smooth exit, which will require investment and spending.
In the meantime, it faces the more immediate, more difficult task of planning the next few budgets amid a costly war, struggling businesses, an unhappy population and reduced imports.
There are many questions, and just as many opposing answers, about how to build the future economy. Some have proposed a State Defense Committee to lead all military and economic issues. But with a limited budget and the need to redistribute resources between regions, save bankrupt industries and solve social issues, the militarization of the economy looks like an extremely expensive solution, not to mention the socio-economic consequences inherent in such an enterprise. The Kremlin has no choice but to make sure it has enough funds to overcome all three problems simultaneously. This is no easy thing, and obviously the Kremlin is in no hurry; it’s biding its time, hoping the war in Ukraine tips in its favor. The most dangerous prospect will not be a budget deficit but an imbalance in all three areas, which will create an imbalance in the economy and in society.
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https://ricochet.com/1214468/finnish-intelligence-officer-explains-the-russian-mindset/
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Very good find!
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The Implications of Russia's Bleak Economic Outlook
11 MIN READJan 27, 2023 | 22:27 GMT
Russia's economic struggles are unlikely to alone force political change or de-escalation in Ukraine in the coming year. But medium-term challenges and the country's bleak structural outlook will undermine President Vladimir Putin's authority and complicate Russia's war efforts in Ukraine. A year after launching its war in Ukraine, Russia's economic outlook is bleak, but the risk of an acute crisis remains low. However, Russia's economic situation will likely worsen on Feb. 5, which is when the G-7's price cap on Russia's refined fuel sales will enter force, complementing the price cap on Russian crude that's been in place since Dec. 5. Moscow will likely continue to conceal and manipulate its economic data to avoid panic, which it has done since the start of the Ukraine invasion. But Russia's economy is slated to further contract in 2023 amid falling global prices for oil and gas, which have in recent years constituted approximately 20% of the country's GDP, 60% of its exports and 40% of its government's budget. The impact of Western sanctions and the G-7 price caps is also forcing Russia to sell its hydrocarbon exports at significantly discounted prices, further eating into the country's energy revenues. Russia's primary export-grade crudes, for example, are currently selling at about $40-$45 a barrel, amounting to a 50% discount compared with Brent crude (which is currently about $88 a barrel).
On Dec. 27, Russian First Deputy Prime Minister Andrey Belousov said the government expected Russian GDP to decline by 1% in 2023.
Russia's Economic Development Ministry forecasts a decline of 0.8%, while Russia's central bank forecasts a fall of 2.1%. Such forecasts still tend to be more optimistic than those from outside analysts. The International Monetary fund expects Russia's economy to contract by 3% in 2023, while a Bloomberg poll of economists from December estimates a 2.5% contraction. The chief economist of Alfa Bank, Russia's largest private commercial bank, forecasts a 6.5% contraction next year amid Russia's falling consumer demand, lower investment and loss of export potential.
Russia's economic contraction in 2022 would have been much larger if not for high global commodity prices (many of which Russia exports) in the months following the invasion. Oil prices this year are unlikely to compensate for Russia's falling oil and gas production in 2023 amid Moscow's inability to supply buyers amid a lack of tankers and sanctions. However, China's reopening amid the easing of COVID-19 restrictions and better-than-expected Western economic data will significantly support Moscow. The International Energy Agency estimates Russian oil production to fall around 1.6 million barrels per day (bpd) in 2023, which is a far cry from its pre-war levels of 9.7 million bpd. Russia's own 2023 budget projects a 23% fall in all oil and gas revenues compared with 2022.
On Jan. 11, Russian President Vladimir Putin ordered Deputy Prime Minister and former Energy Minister Alexander Novak to figure out how to prevent the high discounts at which Russian oil is currently being sold on global markets from creating problems for the Russian budget. Russia will soon be forced to offer discounts for its refined products (like diesel) as well. Such price slashes could be even steeper since tanker capacity for Russian refined products is more strained than it is for crude oil, which could force Russia to reduce domestic refining and sell more of its oil as crude. Russia's dependence on a small number of large buyers for its oil, namely China and India, will continue to give those states immense bargaining power over Moscow.
While Russia's economy will continue contracting and its budget deficit will grow, lower inflation and historically low unemployment levels will mitigate economic and political risks for Moscow in the short term. As in 2022, Russia's 2023 economic contraction will probably not significantly undermine political support for Putin, or lead to military production shortfalls that meaningfully affect Russia's ability to continue waging its war in Ukraine. This is largely due to Russia's low unemployment rate, which currently stands at 3.7% (this does not include military personnel, who are considered employed), with only 2.7 million Russians unemployed. With Russia experiencing a labor shortage, workers in the country now face less competition and feel empowered to seek high wages, often found in armaments industries. While this will fuel inflation, Russia will likely keep domestic consumer prices at acceptable levels in 2023; in fact, there are reports the Russian government is concerned about inflation being too low and thereby contributing to the country's demand stagnation. Russia's 2023 federal budget deficit is likely to far exceed the 2% of GDP forecast by the government (which was based on Russian oil selling at around $70 per barrel — well above the $40-$45 a barrel Russia is currently receiving). But Russia's growing deficit is unlikely to precipitate significant near-term economic repercussions for Moscow. This is because prior to the Ukraine invasion, Russia maintained one of the lowest debt-to-GDP ratios in the world among major economies at under 17%, and still has a substantial National Wealth Fund with which to plug the deficit.
Price growth in Russia has been significantly below 3% since September, below the Russian Economic Development ministry's 5.5% target and the Central Bank's 5-7% goal. Russian officials are worried that too slow of price growth will fuel mid- to long-term problems, including reduced output, increased unemployment and falling incomes.
The head of Russia's central bank, Elvira Nabiullina, has indicated that Russia's widening budget deficit could mean high inflation and, subsequently, prompt higher interest rates that further choke off the prospect of economic growth. But this does not pose an acute threat to Moscow's finances for two reasons. For one, the Russian government can borrow internally, having successfully issued three federal loan bonds on Nov. 23 that raised a total of 1.44 trillion rubles, or about $21 billion (the main buyers of these bonds were large domestic banks that borrowed the record sum of rubles from Russia's central bank through repo transactions, and this has so far not caused a significant increase in inflation). And secondly, Moscow can also continue to sell off assets from its sovereign wealth fund such as Chinese currency — the liquid portion of which, at current rates, would not be exhausted until 2025.
In the medium term, Russia's attempt to create a semi-autarkic economy will translate to declining living standards and greater difficulties in growing the country's defense production. But these impacts are unlikely to alone cause the political change or weapon shortages needed to end the war in Ukraine. Russia's most pressing medium-term economic challenge stems from its failure to replace key imports from the West, many of which are currently targeted by Western sanctions. The value of Russian imports has fallen by roughly 25% since the start of the war, and almost all sectors of Russia's economy relied on imported goods in some capacity prior to the invasion. Russia's import dependence extends to consumer products and industrial components, which have helped raise the standard of living in the country over the past 20 years. But more importantly, Russia remains highly reliant on imports of high-tech components and critical materials for military production.
Russia cannot, for example, build sufficient semiconductors and other electronics for its military production, let alone its overall domestic needs. Furthermore, since 2014, Russia established import substitution budgets intended to at least give it a head start on replacing key products and goods following the post-invasion collapse of imports. But the program has been widely seen as a near-total failure, as Russia neglected to establish domestic production for key machinery and technology, and is also still years away from doing so for key industries — leaving the country almost completely dependent on China for imports. But luckily for Russia, Western sanctions are leaky, enabling Russia's intelligence services to continue their long history of acquiring sanctioned goods and technology covertly. Russia can also secure many consumer goods and some key equipment through gray import schemes via China, Kazakhstan and Turkey. These two factors will mitigate the impact of Russia's failure to establish domestic production for the foreseeable future.
In 2014, the Russian government introduced an import substitution program that provides subsidies to businesses creating analogs for critical technologies and components previously purchased from the West. But in May 2022, influential Russian senator Andrey Klishas acknowledged that the program had 'completely failed' and that now the government's only real plan was to 'transplant our industry, and with it our economy, to a new, now Chinese, needle.'
Russia's history of stealing electronic and other technology from the West dates back to the Soviet era and earlier. The country's recent success in these efforts is evident in public reports detailing Western components illegally present in Russian military hardware. An August 2022 report by the U.K.'s Royal United Services Institute identified 450 unique microelectronic components of Western manufacture, most of which were subject to export controls, in 27 Russian weapons systems recovered in Ukraine.
In the long term, structural economic issues — including Russia's demographic decline, dependency on energy exports, and inability to attract investments — will severely restrain the country's growth potential, which could eventually threaten the war's popularity in Russia and the government's capacity to continue it. Moscow will not indefinitely be able to finance its deficit internally with monetary intervention, nor will it be able to replace its imports with domestically made substitutes in an economically viable manner in the coming decade. Many years down the line, medium-term challenges may leave the government unequipped to prevent a more substantial economic crisis in Russia, as the rents needed to make the investments to end its oil and energy export dependency are falling because Russia's average cost of production per barrel rises due to the lack of Western tech. Russia is also not making those investments anyway amid its contracting economy and use of budgetary resources on the war. Should Russia's export revenues from commodities continue to fall, this could eventually instigate a balance-of-payments crisis in Russia in which foreign investors would not intervene to bail out Russia. In the wake of such a crisis, even investors from friendly countries to Moscow would largely withdraw their capital, though China would likely preemptively intervene and finance Russia to prevent such an outcome. In any case, adding to Russia's gloomy outlook are additional structural factors, including a worsening demographic outlook amid ongoing mobilization that will exacerbate labor shortages. Growing state intervention in the Russian economy (which was already very high before the invasion) will also further limit Russia's productivity and growth potential as once-productive, private areas of the economy increasingly fall under government control. In all, low domestic savings and investment rates driven by stagnant GDP will put an even greater burden on the Russian government to prop up the economy — an increasingly politically risky and difficult task amid the need to simultaneously procure resources and manpower for the war in Ukraine.
Russia's stagnant economy won't make Russia's foreign policy more adventurous and will not have a major political impact in the near term. It will, however, discourage foreign investment and somewhat empower political reformists, though they are still unlikely to secure power should Putin leave office. Russia's struggling economy is unlikely to lead to major changes in the country's foreign policy, which has already become more aggressive since the invasion of Ukraine. Russia's foreign policy is unlikely to become significantly more hawkish, given the country's high losses of men and materials in Ukraine. The only serious potential target for such aggression, Kazakhstan, will also maintain its ties with Moscow and is closing its eyes on gray import schemes through its territory, aiding Russia. Still, struggles to attract significant new foreign investment — even from countries friendly to Russia — will cast doubt on the effectiveness of Moscow's foreign policy course. This will slightly empower reformers in Russia calling for reductions in tensions with the West and de-escalation of the war in Ukraine in order to begin restoring Russia's previous role in the global economy. But for now, there is little reason to believe that such economic arguments would prevail over more hawkish views calling for the continuation and escalation of the war in Ukraine in the still unlikely event that Putin suddenly leaves office.
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April 25, 2023
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Victory Day
By: George Friedman
We are a few weeks away from the anniversary of Victory Day, which marks the Soviet Union’s defeat of Nazi Germany. The annual parade in Moscow boasts pictures of famous Soviet and Russian leaders and heroes standing atop the Kremlin, watching all the new military weapons roll by. For U.S. intelligence, it’s like Christmas Day, as analysts are gifted a treasure trove of new military hardware to parse and analyze. But for anyone old enough to remember World War II, it’s a recollection of despair. A Russian associate once told me that those who died early and quickly were the war’s only victors. He took pleasure in the fact that Russia, whose chances of survival were dismissed by much of the world, handed to the Germans everything they had dealt out and more.
My father, who was born in Hungary, fought in World War II in his own way. Hungary allied with Germany and sent troops to fight Russia. A forced laborer, my father was at Voronezh north of Stalingrad, where the Hungarians and other allies were deployed. From his point of view, the Russians and the Germans were the same in that they were to be evaded at all costs.
The war began with a treaty between Germany and Russia. Together they agreed to invade Poland, which they did comfortably, with Russia taking the eastern portion. For Germany, the treaty with Russia vastly increased the chances of defeating Poland. Germany was unsure about it; it would be their first major campaign, and Berlin didn’t know how well Poland or its own army, for that matter, would fight. A German attack from the west and a Russian attack from the east simplified the matter. In any case, Germany saw Poland as the first step in a far more ambitious campaign. It wanted Europe, and Europe included Russia. Berlin intended to turn on Russia in Poland and drive toward Moscow to subdue a country of vast resources. The ensuing war lasted until 1945. The truth is we will never know how many died, only that a generation’s representatives stood in front of the Kremlin when the first parade was held.
To be sure, Russians regard the war as a brutal obscenity, but they also regard it as sacred. The dead might not be saints, but, in Russians’ eyes, they are worthy of the name. The viciousness of the Stalin regime is no secret, yet many in Russia still regard the war as a moment of test and triumph, a time that proved its worth on a global stage. Russians regarded their country as a superpower for a generation – not just because it had nuclear weapons but because it had the Red Army, which defeated Hitler and conquered much of Europe. Poles, Czechs, Hungarians, Romanians and half of all Germans bent their knees to Russia. It was not conquest by invasion, according to the Russians, but the consequence of self-defense.
Many Russians saw the collapse of the Soviet Union as an opportunity to become Western. To others, it was an embarrassment. Russia was not in their eyes the land of the heroes of World War II but a land of weakness. It had proved wanting. The land of Gen. Georgy Zhukov, the great commander of World War II, was now in the hands of shifty oligarchs.
The idea that the Russians had done this to themselves through corruption and weakness was as unbearable as such a fate might be to other countries. It was even worse since Russia had defeated Hitler and Napoleon. Russians saved Moscow because of the great distance they put between their capital and Europe. Now that distance was gone. They saw the United States as the dominant force in Ukraine, which now bordered Russia. For many Russians, it was nothing less than a national catastrophe.
There are those who blame their former ally and fellow superpower in the U.S. for the fall of the Soviet Union. To them, the idea that the heroes of World War II lost their country was less palatable than the idea that it had been torn down by America – an enemy they saw as worthy of the crime. The presence of the U.S. in Poland, a country they had once conquered and ruled, is for Russia not just a cruel trick of history but a carefully laid out American plot.
I think about cultural traditions like these as the Ukraine war drags on. I will not lay out the United States' defense, but I invite you to consider the nightmare Russia went through from 1945 and how many of the places of battle and war are still spoken of with pride and bitterness by Russians today. I am an American, and I know where Fulda Gap was, but in facing a nation that is actually an enemy, it is useful to understand the nightmares and compare them to ours.
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https://www.theguardian.com/world/2020/oct/20/orthodox-cathedral-of-the-armed-force-russian-national-identity-military-disneyland
April 25, 2023
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Victory Day
By: George Friedman
We are a few weeks away from the anniversary of Victory Day, which marks the Soviet Union’s defeat of Nazi Germany. The annual parade in Moscow boasts pictures of famous Soviet and Russian leaders and heroes standing atop the Kremlin, watching all the new military weapons roll by. For U.S. intelligence, it’s like Christmas Day, as analysts are gifted a treasure trove of new military hardware to parse and analyze. But for anyone old enough to remember World War II, it’s a recollection of despair. A Russian associate once told me that those who died early and quickly were the war’s only victors. He took pleasure in the fact that Russia, whose chances of survival were dismissed by much of the world, handed to the Germans everything they had dealt out and more.
My father, who was born in Hungary, fought in World War II in his own way. Hungary allied with Germany and sent troops to fight Russia. A forced laborer, my father was at Voronezh north of Stalingrad, where the Hungarians and other allies were deployed. From his point of view, the Russians and the Germans were the same in that they were to be evaded at all costs.
The war began with a treaty between Germany and Russia. Together they agreed to invade Poland, which they did comfortably, with Russia taking the eastern portion. For Germany, the treaty with Russia vastly increased the chances of defeating Poland. Germany was unsure about it; it would be their first major campaign, and Berlin didn’t know how well Poland or its own army, for that matter, would fight. A German attack from the west and a Russian attack from the east simplified the matter. In any case, Germany saw Poland as the first step in a far more ambitious campaign. It wanted Europe, and Europe included Russia. Berlin intended to turn on Russia in Poland and drive toward Moscow to subdue a country of vast resources. The ensuing war lasted until 1945. The truth is we will never know how many died, only that a generation’s representatives stood in front of the Kremlin when the first parade was held.
To be sure, Russians regard the war as a brutal obscenity, but they also regard it as sacred. The dead might not be saints, but, in Russians’ eyes, they are worthy of the name. The viciousness of the Stalin regime is no secret, yet many in Russia still regard the war as a moment of test and triumph, a time that proved its worth on a global stage. Russians regarded their country as a superpower for a generation – not just because it had nuclear weapons but because it had the Red Army, which defeated Hitler and conquered much of Europe. Poles, Czechs, Hungarians, Romanians and half of all Germans bent their knees to Russia. It was not conquest by invasion, according to the Russians, but the consequence of self-defense.
Many Russians saw the collapse of the Soviet Union as an opportunity to become Western. To others, it was an embarrassment. Russia was not in their eyes the land of the heroes of World War II but a land of weakness. It had proved wanting. The land of Gen. Georgy Zhukov, the great commander of World War II, was now in the hands of shifty oligarchs.
The idea that the Russians had done this to themselves through corruption and weakness was as unbearable as such a fate might be to other countries. It was even worse since Russia had defeated Hitler and Napoleon. Russians saved Moscow because of the great distance they put between their capital and Europe. Now that distance was gone. They saw the United States as the dominant force in Ukraine, which now bordered Russia. For many Russians, it was nothing less than a national catastrophe.
There are those who blame their former ally and fellow superpower in the U.S. for the fall of the Soviet Union. To them, the idea that the heroes of World War II lost their country was less palatable than the idea that it had been torn down by America – an enemy they saw as worthy of the crime. The presence of the U.S. in Poland, a country they had once conquered and ruled, is for Russia not just a cruel trick of history but a carefully laid out American plot.
I think about cultural traditions like these as the Ukraine war drags on. I will not lay out the United States' defense, but I invite you to consider the nightmare Russia went through from 1945 and how many of the places of battle and war are still spoken of with pride and bitterness by Russians today. I am an American, and I know where Fulda Gap was, but in facing a nation that is actually an enemy, it is useful to understand the nightmares and compare them to ours.
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Telling signs. Russia’s Finance Ministry published a preliminary assessment of the country’s federal budget so far this year. According to its estimates, budget revenue from January to April declined by 22 percent (to 7.8 trillion rubles, or $101 billion) compared to the same period in 2022. Oil and gas revenue plummeted by 52 percent from a year ago to 2.3 trillion rubles thanks to the falling price of Urals oil and to Russia’s declining natural gas exports. Expenditures, meanwhile, climbed by 26 percent to 11.2 trillion rubles. Russia’s federal deficit thus spiked to 3.4 trillion rubles, nearly 850 billion rubles more than the government had anticipated for the whole year. Dmitry Peskov called the situation “absolutely controllable.”
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August 9, 2023
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Russia’s Economic Rebound Nears Its Limits
The rapid recovery could give way to an equally sudden crash.
By: Ekaterina Zolotova
Despite unprecedented sanctions and massive expenses in the war in Ukraine, the Russian economy has managed to stay afloat for more than a year and a half. Even slight growth is not out of the question. The economy’s resilience can be explained by the revival of consumer demand, greater private investment, import substitution policies and government spending on defense. However, rosy rhetoric notwithstanding, serious internal and external challenges remain for the Russian economy.
Growth Factors
No strangers to economic strife, Russia’s policymakers could rely on a familiar playbook when confronted with Western sanctions following the invasion of Ukraine in February 2022. In the 1990s, large budget deficits financed by short-term government borrowing quickly caught up with Russia, forcing the country to devalue the ruble and submit to an International Monetary Fund rescue in 1998. By contrast, savings from oil export revenues enabled the Kremlin to withstand the 2008 global financial shock comparatively well. Today, Moscow puts a premium on maintaining large reserves and avoiding high levels of external debt. The economy suffered another setback in 2014-15, coinciding with the imposition of Western sanctions related to Russia’s annexation of Crimea, but the primary cause of the slowdown was a sharp fall in oil prices – partially analogous to the situation today. A floating exchange rate enabled the Russian central bank to save foreign exchange reserves and focus on fighting inflation caused by the ruble’s depreciation.
Russia is currently focused on mitigating downward pressure on the ruble, monitoring the federal budget and plugging gaps with the National Wealth Fund, which consists of about 12 trillion rubles ($125 billion) from oil and natural gas revenues. Last year’s windfall from oil and gas exports reduced the government’s need to tap the NWF, but revenues from energy are down significantly this year. But thanks to higher domestic production and imports, the non-oil tax take is much higher. For example, in June it was above even pre-pandemic levels – ironically supporting the Kremlin in its long-standing goal of diversifying its revenue streams. (However, industries that rely on imported goods run the risk of price increases.) Additionally, the Kremlin plans a 10 percent one-time excess profit tax on large businesses. It could use that money to cover the budget deficit, or it could reinvest it in new import-substituting production, which would have positive effects down the road.
Russian Federal Budget
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The ruble’s recent decline also indicates that the central bank is allowing the exchange rate to fluctuate. A weaker ruble comes with some advantages. For example, the state receives more revenue in the national currency as exporters convert their increased oil and gas forex earnings on the Moscow Exchange into rubles so they can pay taxes and expenses. (The Russian government prefers an exchange rate of between 80 and 90 rubles to the U.S. dollar.) To relieve some pressure on the ruble, the Russian Finance Ministry decided not to buy foreign currency with its oil and gas windfall in the coming months, as prescribed by budget rules. (According to the rule, the ministry, with the help of the central bank, buys yuan and gold when revenues exceed a specific threshold.)
Dynamics of U.S. Dollar/Russian Ruble Exchange Rate
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Other positive factors for the Kremlin include rising oil prices, improving business sentiment and relatively low inflation. Specifically, Russian crude and petroleum products have recently begun selling above the G-7’s price caps. The central bank’s business climate indicator remains close to the highs of the last decade, and estimates of overall current conditions are above the 10-year average. And inflation in the first half of the year was just 2.76 percent. Further, after falling by 1.8 percent in the first three months of the year, the economy grew by 4.8 percent in the second quarter compared with the same period in 2022. (However, much of this can be attributed to base effects.) Lending and business investment remain high; small and midsized private businesses in a few sectors have benefited from liberalization; and weapons production is a major boon for growth.
Reasons for Concern
Still, Russia’s economy faces two important, interconnected challenges. First is the risk of overheating, which could destabilize the economy without improvements in spending or Russia’s economic isolation from the West. Second, Russia’s exports could suffer from a potential slowdown in the global economy.
The central bank has been warning about potential overheating. Though it hailed the economy’s nearly completed return to pre-war levels of activity, the bank noted that this suggests Russia has almost exhausted its capacity for sustainable growth. Unexpectedly strong domestic demand (public and private) fueled Russia’s rapid recovery, but soon the country will need to increase either its own production or its imports to keep pace. The former will be difficult. Many firms are already operating at capacity, and companies have noted a shortage of workers.
At the same time, it is hard to ramp up imports given the higher costs and delays imposed by Western sanctions. By volume, Russian imports were already 16 percent lower in 2022, and although Moscow has made progress on redirecting trade toward “friendly” countries, it is still heavily dependent on foreign trade. The Ministry of Economic Development estimates that “unfriendly” countries now account for 35 percent of Russian merchandise exports, down from 58 percent at the start of 2022. Direct imports from the European Union fell to about 55 billion euros ($60 billion) from 89 billion euros. However, China’s share in Russian imports has grown to 34 percent from 25 percent. Neither has Russia weaned itself off foreign currencies, which are still used to settle about 70 percent of the country’s goods trade.
An even more serious challenge could come from an economic slowdown in Russia’s key trading partners. For example, Turkey has become a major buyer of Russian energy and a supplier of Western goods, but its economy is fragile. Turkish imports of Russian goods were 43 percent lower in June 2023 than a year earlier. Similarly, China, a crucial buyer of Russian energy, imported less oil by volume in June than it has at any point this year except January. Global demand is gradually weakening, and other countries in Africa, Latin America and Asia cannot always supply Russia with the goods it can no longer secure from the West.
The Kremlin’s optimistic assessments of the economy are not entirely misplaced. But the rapid recovery could give way to an equally sudden crash. Despite sanctions, Russia remains deeply embedded in international trade – only now with a smaller, less wealthy pool of partners. Import difficulties and maxed-out domestic production have already started to push inflation higher. A new round of overheating and recession may be just around the corner.
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August 14, 2023
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Daily Memo: Russian Ruble Falls, Pakistan Suspends Russian Oil Imports
Both developments are bad news for the Russian economy.
By: Geopolitical Futures
Blame game. The value of the Russian currency dropped on Monday to more than 100 rubles to the dollar, its lowest rate since March 2022, just weeks after the Russian invasion of Ukraine. The ruble has fallen by 40 percent over the past 12 months. An economic adviser to the Russian president blamed the central bank’s loose monetary policy for the currency’s weakening. Though he acknowledged the negative effects of a weak currency on the economy, he said the ruble will stabilize in the future.
Quality control. Pakistan suspended imports of Russian oil over complaints from refiners about its low quality. Pakistan Refinery has reportedly refused to process more Russian oil because it didn’t yield enough petrol.
Turkmen concerns. Turkmenistan expressed concern about Moscow’s statement last week that more countries could join its gas union with Kazakhstan and Uzbekistan. Turkmenistan is worried that the project, which is still under development, could be expanded to include one of its own major energy customers, China. In a statement, the Turkmen Foreign Ministry said the creation of gas unions and alliances in the region could affect its interests.
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Russian revenue. Russian oil and gas companies' revenue in the first three quarters of 2023 declined by 41 percent, according to Russia’s central bank. The drop was attributed to sanctions and lower energy prices. The average price of Russia's Urals oil in 2023 fell to $59.54 per barrel compared to $80.58 in 2022.
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A photo released by Russia’s Investigative Committee showing one of the houses in Derevyannoye that Igor Sofonov and his alleged accomplice are accused of having burned down following the murder of six residents in the village on August 1.
A photo released by Russia’s Investigative Committee showing one of the houses in Derevyannoye that Igor Sofonov and his alleged accomplice are accused of having burned down following the murder of six residents in the village on August 1. RUSSIAN INVESTIGATIVE COMMITTEE/TASS/ZUMA PRESS
By Matthew LuxmooreFollow
Dec. 5, 2023 12:01 am ET
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In early August, police in Russia’s rural northwest were called to the scene of a mass murder. In the charred remains of two homes set ablaze hours earlier, they found the burned, mutilated bodies of six local residents.
News of the massacre shook Derevyannoye, a village of 1,200 people, where sailing boats bob in Onega Lake and the border with Finland is a three-hour drive away. What was most shocking was the identity of one of the two suspects: a repeat offender freed from a maximum-security prison to fight in Ukraine.
Igor Sofonov had been in and out of jail for 20 years by the time he joined Storm Z, a unit of convicts created to bolster Russia’s war effort. If he and others survived long enough to complete their six-month contracts, they were promised their freedom through a secretive program of presidential pardons.
Sofonov survived, and returned to Russia with the remainder of his sentence for drug trafficking erased. He is among around 30,000 enlisted ex-prisoners, many of whom had been serving long prison terms for violent crimes, who have returned home to liberty.
A photo of Igor Sofonov posted to his account on VKontakte, a Russian social-media platform, shortly before he was dispatched to Ukraine.
Many are traumatized by their experiences of war, in which their underequipped, all-convict units, such as Storm Z, were commonly used in near-suicidal assaults. Others are emboldened by a Kremlin narrative that portrays them as heroes deserving respect.
Communities across Russia have been brutalized by scores of crimes perpetrated by these returning convicts, according to a Wall Street Journal review of court documents, interviews with friends and relatives of suspects and victims, and reports in Russian media. Rights activists said dozens more go unreported.
One man staged a shootout in a cafe, killing one person and seriously wounding another, according to court documents. Another is accused of raping two girls. A third, who had been convicted of murder three times, poured gasoline on his sleeping sister and burned her alive, according to the court’s press office.
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The offenses committed by the convict soldiers risk shattering Russian President Vladimir Putin’s narrative that the war protects Russia from its enemies.
“I don’t feel safe. Thousands of criminals are walking our streets,” said Anna Pekaryova, whose grandmother Yulia Buyskikh was killed in March by a convicted murderer, Ivan Rossomakhin. He had wandered the streets of her village 600 miles east of Moscow—swinging an ax and carrying a pitchfork—after fighting for the Wagner paramilitary force in Ukraine and returning a free man. “I have lost count how many times such crimes have happened.”
Prison population shrinks
Prisoners were routinely dragooned into armies for centuries up through World War II, when a renewed emphasis on the laws of war, and the professionalization of military service, sidelined the practice and made it taboo in the Western world.
In the modern era, Napoleon deployed penal brigades as he scaled up the scope of warfare across Europe in the 19th century. Hitler had his Strafbataillon, and Stalin’s Red Army drafted criminals and political prisoners from the Gulag labor camps.
Few survived. Putin’s convict army has suffered heavy casualties, too—first under the direction of Wagner, led by Putin’s former lieutenant Yevgeny Prigozhin, then as the Russian army’s own penal units, formed after Prigozhin rebelled against the military leadership shortly before his death in a plane crash in August.
Wagner corralled convicts into disposable penal units that were thrown into the fray by commanders whose disregard for losses shocked even the most hardened Ukrainian soldiers. Ex-Wagner fighters said Prigozhin embraced a policy in place under Stalin of executing on the spot those who retreated.
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A Ukrainian unit commander passes the body of a dead Russian soldier at the front line in Andriivka, Ukraine. PHOTO: ALEX BABENKO/ASSOCIATED PRESS
When the prisoner recruitment started, Putin’s campaign in Ukraine had largely stalled, and his army needed more troops. Offering convicts their freedom was a way to expand the ranks without ordering an unpopular mobilization of more reservists.
In June, Putin confirmed that he pardons ex-convicts, and acknowledged that some reoffend. “This is inevitable,” he said. “But the negative consequences are minimal.”
In 2021, the Russian president pardoned just six people, according to the Kremlin, which hasn’t revealed the number of people given amnesty since the invasion of Ukraine.
Russia hasn’t confirmed the total number of convicts recruited by Wagner and the Defense Ministry, but figures from the prison service show a reduction of more than 35,000 in the country’s total prison population between May 2022 and January 2023, the peak of Wagner recruitment. It hasn’t published such figures since.
The Kremlin was asked in November by reporters whether it would reconsider its policy of pardoning people convicted of the most gruesome crimes, such as a member of a cannibal gang who returned to Russia that month after cutting short a prison term for multiple murders.
The policy remains unchanged, Putin’s spokesman Dmitry Peskov replied. He said that men freed from prisons to fight in Ukraine were “atoning for their crimes on the battlefield with their blood.”
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In September, a court in Rostov near the border with Ukraine sentenced 34-year-old convicted murderer Sergei Rudenko to 11½ years behind bars for strangling a woman to death after an argument over an apartment rental, according to prosecutors. He had been serving an 11-year sentence for murder and theft when the war began and was freed after fighting for Wagner, local media reports said.
Some well-known criminals have been freed. Sergei Khadzhikurbanov, who was sentenced to 20 years in 2014 after being convicted as an accomplice in the murder of investigative journalist Anna Politkovskaya, was pardoned after a six-month tour in Ukraine last winter with the Russian army. Politkovskaya was shot dead in the elevator of her Moscow apartment building in 2006 after writing stories that criticized the Kremlin’s war in Chechnya.
Sergei Khadzhikurbanov, shown at his trial, was sentenced to 20 years in 2014 after being convicted as an accomplice in the murder of investigative journalist Anna Politkovskaya. He was pardoned after a six-month tour in Ukraine last winter with the Russian army. PHOTO: PAVEL GOLOVKIN/ASSOCIATED PRESS
The pardons can also mean expunging the criminal records of repeat offenders. Olga Romanova, head of prisoners’ rights NGO Russia Behind Bars, said Russian courts are removing from databases the criminal records of many men amnestied to fight in Ukraine.
“No one wants these statistics,” Romanova said.
If they commit more crimes, they aren’t tried as reoffenders, meaning they can’t be punished to the full extent of the law. And some are given more lenient treatment by judges because they served in Ukraine, according to court records and interviews with lawyers representing the defendants.
The spate of crimes leaves the Russian state in a bind. Putin has lionized the Russian men who fight in Ukraine. War gives convicted criminals a chance to be depicted as the ultimate patriots, their portraits displayed in local museums devoted to war heroes. Some are invited to give talks at Russian schools, more than 60 of which have been renamed in honor of soldiers.
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Once convict recruits return to Russia, they are free to live their lives as pardoned men. Most struggle to find work and many look for ways to fight again in Ukraine by signing up with Defense Ministry units, according to Yana Gelmel, a Russia Behind Bars activist who regularly speaks with discharged convicts and convicts serving on the front lines.
There is no government program in place to resocialize them or smooth their transition to civilian life, she said, which leaves scores of villages like Derevyannoye worrying over what will come next.
‘They called us dogs’
The prison recruitments began in the summer of 2022, when Prigozhin, a catering entrepreneur who had served nine years in prison during the Soviet era, promised a state pardon to inmates who fought alongside regular Russian forces for his Wagner group in Ukraine.
When the first batches of pardoned convicts returned from Ukraine in January, Prigozhin lauded their exploits and said society should treat them with the utmost respect. “I told you I need your criminal talents to kill the enemy at war,” he said in a speech broadcast by Russian media as he stood on the tarmac beside a military aircraft that flew the men home. “Now those criminal talents aren’t needed.”
A video grab from footage posted this past May by the late chief of Wagner Group, Yevgeny Prigozhin, shows Prigozhin with soldiers in Bakhmut, a city they captured that month. PHOTO: CONCORDGROUP OFFICIAL/AGENCE FRANCE-PRESSE/GETTY IMAGES
By June, shortly before his death, Prigozhin said 32,000 of the convicts Wagner hired had returned to Russia, their records wiped clean, while the Defense Ministry had begun to scale up its own recruitment of prison inmates.
Sofonov, 37, who is accused of the killings in Derevyannoye, signed up to fight in October last year when Defense Ministry representatives visited the St. Petersburg prison where he was nine months into a four-year sentence on a drug trafficking charge, according to court records and Sofonov’s fellow inmates and relatives.
He created a new account on the Russian social-media platform VK, using his surname and his new military call-sign, the Karelian, after his home region. One of the first photos he posted shows him with three other men, all in military uniforms with rifles in their hands.
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“Everyone here is from the camp,” Sofonov wrote, using a Russian slang term for prison.
He left for Ukraine in December. “That’s it. I’m off,” he wrote on his VK page, beside a photo of himself in an olive-green coat with army patches. “Awaiting your return home, alive!” his mother, Lyudmila Sofonova, wrote in the comments section.
Sofonova, a single mother of five who lives several hours’ drive north of Derevyannoye, in a small village that has already lost three residents on the Ukrainian front lines, said she opposed her son’s decision to fight. “I told him, ‘You know this is a one-way ticket?’” she said in a phone interview. “He said ‘yes, but it’s still better than sitting in jail.’”
Anatoly Maslov, a soldier who met Sofonov in December during Russia’s costly offensive to take Soledar, a town in east Ukraine, confirmed that Sofonov joined the Defense Ministry’s penal battalion, Storm Z. Sofonov’s own posts on VK corroborate this. On Feb. 26, he wrote: “Storm detachment.” Later he replaced his profile picture with the emblem of Storm Z: a skull with a lightning bolt on its forehead.
Smoke rises after shelling in Soledar, the site of heavy battles with Russian forces in the Donetsk region, Ukraine. PHOTO: ROMAN CHOP/ASSOCIATED PRESS
Convicts are the lowest rung in Russia’s military hierarchy, routinely subjected to hazing. There is strict discipline—those who drink, take drugs or are caught trying to desert are executed, former fighters say. Captured Storm Z recruits interviewed in Ukraine by the Journal have said they were issued Soviet-era rifles and thrown into futile assault waves against well-defended Ukrainian positions.
One former Wagner fighter interviewed by the Journal said a member of his penal unit was savagely beaten in December, tied to a tree and left to freeze to death after a dispute with an officer. The fighter said he saw others shot for refusing orders.
The convict soldiers were also complicit in war crimes. The former Wagner fighter gave a detailed account of a massacre of civilians that he said his unit conducted in Soledar following the Russian takeover of the city. “They called us dogs,” he said of his commanders. He fled in January and has been hiding in Russian-occupied territory.
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‘Discovered himself’ at war
For many, the offer of cash and a pardon outweighed the fear of death. One Storm Z fighter said he received a salary of 70,000 rubles a month, double the average wage in his part of Russia. “I had a choice: rot in prison another eight years, or try to survive six months in Ukraine,” he said. “I chose the latter.”
The Russian Defense Ministry has never acknowledged creating Storm Z units. It didn’t respond to a request for comment on the scale of convict recruitment, on the origins of its prison recruitment drive or on the treatment of convict recruits.
Captured Russian soldiers at a prisoner-of-war camp in western Ukraine. Many of them are Storm Z fighters and other former prisoners. PHOTO: JOSEPH SYWENKYJ FOR THE WALL STREET JOURNAL
‘I had a choice: rot in prison another eight years, or try to survive six months in Ukraine,’ said one Storm Z fighter, pictured in a POW camp in western Ukraine. ‘I chose the latter.’ PHOTO: JOSEPH SYWENKYJ FOR THE WALL STREET JOURNAL
The last time Maslov saw Sofonov was in March, around the time Sofonov returned from Ukraine to Russia. “Demobilization,” Sofonov wrote on VK that month. Alexey, a friend of Sofonov’s, told the Journal that “he discovered himself” at war, finding at last a sense of purpose.
In a video message to Alexey on July 22, Sofonov said he was staying with his mother, helping with odd jobs. He said he wanted to marry a medic he met while recuperating from light shrapnel wounds in Russian-occupied Luhansk.
Sofonova, his mother, said her son was quiet after his return, refusing to speak about his time at war. He was wounded when a Ukrainian drone dropped a bomb into his dugout. The attack killed several of his fellow soldiers.
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She said he had lost his passport and because of that couldn’t find work back in Russia, and was despondent. And far from being treated like a hero upon his return, he had his jaw broken when he was mugged on a visit to his brother in Petrozavodsk, the regional capital. The assailants took his watch, his wallet and his military documents, Sofonova said.
In late July, Sofonov traveled to stay with his sister in a village a 30-minute drive from Derevyannoye. One evening he got a call from a friend he had served time with in jail, Sofonova said. The friend asked him to come to Derevyannoye, according to Sofonova, and to bring some booze.
Gelmel, the Russia Behind Bars activist, said men such as Sofonov often have delusions of grandeur. After years feeling no one needs them, they suddenly believe they were chosen by the state for the country’s defense and can commit new crimes without repercussions.
“They were in a system set up to control them,” she said of the prison system where many such men spend most of their lives. “And now no one has control over them any more.”
That night with his prison friend, on Aug. 1, Sofonov began drinking heavily. At around 2 a.m., residents said, the two men broke into a house in Derevyannoye, stabbing and killing the owner and his father when they tried to fend off the intruders.
They then entered a second house where a female acquaintance lived, and got into a fight with her husband. According to a person familiar with the case files, Sofonov shouted that everyone living in the house were “ukropy,” a derogatory term for Ukrainians. “We need to clean the place out,” he said, using military jargon. Investigators said the men killed four people in that house, before setting both houses alight to cover up evidence of their crimes.
Sofonov is now in pretrial detention as investigators gather evidence for trial. Since he has had his record wiped clean, according to relatives and the person familiar with the case, he won’t be tried as a repeat offender.
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Romanova from Russia Behind Bars said that as the crimes committed by reoffenders mount, the government is trying to keep convict recruits from returning home. In September, the head of the Russian parliament’s defense committee, Andrey Kartapolov, said recruitment of fighters by the Defense Ministry is “an ongoing process” and service members will only return home once the war is over. Convicts recruited by the Defense Ministry since April said they have been forced to renew contracts that were set to expire after six months.
Sofonov’s mother said men like her son should never have been released from prison. “If they end up in Ukraine,” she said. “They should stay there until the end.”
In Derevyannoye, where locals previously raised funds for the war effort and posted about their hopes that the “heroes” who left for Ukraine would return in one piece, many are now on edge. One resident said people are installing extra security measures and rarely leaving home in the evening.
“We scrutinize everyone,” the resident said. “We used to sleep soundly. Now we listen out for every rustle after dark, and react to every bark of a dog.”
There is also another, more specific fear seeping through the village—the fear that Sofonov, if he is convicted and returned to prison, could again seek his freedom by fighting in Ukraine.
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38.
I am a big fan of both geopolitics and alternate history and I would like to ask you a question: in your opinion, without changing the overall situation too much, what could have been done to prevent the entire Wagner situation from happening in the first place and what would have changed on the ground? Maybe a requirement to sign a contract with the MOD from the start of the mobilization or maybe Shoigu's son joining Wagner or maybe something else? Hoping to hear from you soon
I don’t think the Wagner situation—namely, the ‘uprising’ and ‘march of justice’ on Moscow, as it was dubbed—could have been prevented. The reason is, the relationship between Wagner and the Kremlin was extremely toxic, and this had very deep roots that went back many, many years, long before the SMO.
There were stories about Wagner and the MOD’s toxic relationship in both Syria and Africa that would make your head spin. I’ve posted many of them, such as the two sides literally threatening to shoot down each other’s planes/helicopters, which was corroborated by a neutral third party from the Syrian army.
One of the most damaging alleged episodes revolved around the infamous Wagner attack on Deir Ezzor where the U.S. claims to have “killed hundreds of Wagner troops” in an airstrike. Several high profile figures like Israel Shamir have claimed that the MOD deliberately sabotaged Wagner to cut them down to size by secretly working with the U.S. to turn off Russian S-300 systems in order to allow U.S. to strike Wagner.
At the time this happened, no one in their right mind would ever believe such a thing could be possible, least of all me. But now in retrospect, I wouldn’t doubt it for a moment, given everything we’ve seen in Ukraine where the two sides have literally attacked each other multiple times. If you’re interested, you can actually read Shamir’s accounting of it here; it tells not only of the Deir Ezzor story but others as well, but keep in mind none of it is corroborated and the author takes a decidedly biased pro-Wagner and anti-MOD stance which could color his commentary.
The point is that their disagreements and rancor goes back a very long way, almost to the beginning. The SMO proved to be a culmination of the highly vexatious relationship because of the existential nature of the SMO. Everything was on the line for both sides, literally. That means no one was willing to compromise and old wounds were torn open between Prigozhin and the MOD.
Having Wagner sign contracts even at the beginning would likely have never worked for those very reasons. Prigozhin would never have given up his independence, and the project he considered to be his ‘baby.’ The only thing that could have prevented it would be less incompetence on the MOD’s part, which would have kept Prigozhin at bay. But that’s not something easily solvable either because it likewise had deep institutional roots stretching back through the entire post-Soviet era. The course of the SMO was a very painful correction process, a sort of harsh ablution like a snake shedding its skin. The process would always be messy and marked by fits and starts, as years of entrenched and calcified bad habits in the core of the system had to be chipped away like built up plaque. There’s no way to do this that would’ve placated Prigozhin.
So, in essence, my view is that the two were on an inevitable collision course whose intensity was magnified in every way by the unprecedented, existential nature of the SMO, where not only were reputations and careers on the line, but the entire corporeal existence of the various involved parties, PMCs, and the state itself.
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https://simplicius76.substack.com/p/the-truth-about-russias-economic
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March 22, 2024
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To Plug Russia’s Fiscal Gap, Something Has to Give
The Kremlin is targeting the lowest hanging fruit.
By: Ekaterina Zolotova
The Russian government is working on a plan to introduce a progressive taxation system in order to plug the growing budget gap. Ahead of presidential elections last weekend, Vladimir Putin said in an interview with state media that he believed both ordinary Russians and Russian businesses viewed the move with a degree of understanding. Having secured a fifth term on Sunday, Putin hopes the measure will help boost budget revenue, finance key social and military endeavors, and avoid further bloating of Russia’s external debt.
Russia’s Economic Reality
The Russian economy will face a number of challenges during Putin’s next term as president. Chief among them will be the Russian regions’ struggle to cope with unrelenting sanctions pressure and guaranteeing that the economy can attract enough foreign exchange to cover the country’s budgetary needs. The Kremlin has limited the number of economic changes it’s willing to make in order to avoid destabilizing the economy any further, but it can’t allow the country’s external and internal debt and budget deficit to swell uncontrolled. Something has to give.
In 2023, Russia’s federal budget saw a deficit of 3.24 trillion rubles ($35.4 billion), or 1.9 percent of gross domestic product, in part due to rising spending. In the first two months of 2024, federal budget expenditures amounted to 6.5 billion rubles, a 17.2 percent increase from the same period in the previous year. But the problem isn’t limited to the federal government; individual Russian regions are also experiencing soaring debt. According to Russia’s Ministry of Finance, 73 of Russia’s federal subjects have seen increases in public debt, which totaled 3.2 trillion rubles for all regions in January, a 15 percent increase over January 2023. Traditionally, loans provided from the federal government account for the majority of regional debt – nearly 77.4 percent so far in 2024 – though they’re often not paid back. In a recent address to the Federal Assembly, Putin announced that the government would write off two-thirds of the regions’ outstanding debt on budget loans. However, the state still plans to increase its provision of infrastructure loans (issued at 3 percent interest per year for up to 15 years) to the regions by no less than 250 billion rubles annually starting next year, meaning that their public debt will only grow. (These loans are crucial to maintaining and improving infrastructure, so forgoing the money isn’t really an option for the regions.)
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The Kremlin needs to address the situation, but it’s options are limited. It’s grappling with a slowing economy as foreign companies continue to hesitate to do business with Russia. The Russian economy is starting to overheat, with growth rates expected to decline after sharp increases last year as the economy recovered from the initial fallout of the Ukraine invasion in 2022. Gross domestic product increased by 3.6 percent in 2023, but some economic forecasters predict just 2 percent growth for this year. In addition, the demand for labor decreased substantially this month for the first time since spring 2022. As falling labor demand is often a result of declining industrial output, this could indicate the beginnings of a recession.
The Kremlin can’t allow the income levels of the poor and middle classes to fall. In addition to growing inflation, which now exceeds 7 percent, Russian society is characterized by a high degree of inequality. In 2023, Russia’s Gini coefficient, which measures a country’s level of income inequality, jumped to 0.403 from 0.395 a year earlier. Considering that at least a third of the population lives on state benefits and that many others work in state institutions, supporting social projects and income growth may require much more financing than the Kremlin is willing to allocate. Russia still has a safety net in the form of the National Welfare Fund, which holds about 12 trillion rubles. But its ability to replenish this fund is constrained, in part due to Western sanctions, which are limiting its revenue from oil and gas, and in part due to the lack of infrastructure connecting Russia’s energy sector to potential new markets. Thus, Russia’s only way to offset its growing budget spending is to introduce progressive taxation.
Sharing the Burden?
The government believes this system won’t result in mass unrest or social destabilization, or at least not as much as doing nothing to address the problem would. Roughly 76.4 percent of Russia’s federal budget revenues come from taxes. Most of this is collected through fees and payments for the extraction of natural resources – which account for almost 50 percent of all tax revenue. However, due to an OPEC+ deal to cut output, Russia’s lack of new technologies and export limits, Moscow has been forced to reduce oil production, limiting government revenue derived from energy sector taxation and fees. The government’s second-largest source of tax revenue – duties paid on imports – is also not a reliable source of income considering the West’s increasingly tight sanctions regime and new trade routes being developed that allow countries to conduct trade without accessing Russian territory. Value-added tax accounts for 20 percent of all tax income, but given the rising inflation rate, the Kremlin can raise the VAT only in very targeted ways without provoking public backlash. For example, the VAT on hamburgers increased from 10 percent to 20 percent last October. This forced the former McDonald’s restaurant chain, now called “Vkusno i Tochka,” to raise prices for its burgers, but it did not result in any serious social unrest.
The government’s only reliable option to increase tax revenue is to introduce higher personal income tax rates – under the pretext of sharing the tax burden more equitably. Personal income taxes currently account for 10 percent of budget revenue, but this can increase significantly under a progressive taxation system. Initial indications of a transition to just such a system appeared in 2021, when it was announced, at the initiative of the president, that income over 5 million rubles per year would be taxed at 15 percent, while those earning less than this amount would continue to pay the flat rate of 13 percent.
The government is now talking openly about introducing a full progressive taxation system. While the majority of the population won’t see significant changes to their tax payments, wealthier segments of the population will be expected to pay more, according to the proposals for implementation that the government is considering. One of the plans under consideration would tax those earning less than 360,000 rubles at a rate of 0 percent, up to 5 million rubles at 13 percent, between 5 million and 10 million rubles at 15 percent, 10 million to 50 million rubles at 25 percent, between 50 million and 100 million rubles at 30 percent, and more than 100 million rubles at 35 percent. The scheme would affect less than 10 percent of the entire Russian population, which has an average monthly income of 100,000 rubles.
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It’s difficult to say how much revenue a progressive taxation system generate. Considering that the biggest burden will fall on a small, though wealthy, segment of the population, it seems that the Kremlin isn’t willing to take the risk of angering the middle class or scaring off businesses and potential investors by imposing broader tax hikes. It’s a limited measure that can partially offset losses, but it’s no panacea, and it certainly won’t replace tax revenue from the largest source: the oil industry. It also comes with a number of risks. It’s possible that tax evasion will spike, the gray market will grow, and more people will transition to self-employment to try to avoid paying higher tax rates.
But higher rates for the wealthiest individuals are now seen as inevitable. It’s possible, then, that Putin was correct in asserting that Russian individuals and businesses understand why the changes to the tax system are being imposed, knowing that they can’t do much to stop them anyway. But their support will continue only as long as they see some benefits, either to market conditions or to their own pocketbooks, in exchange.
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https://twitter.com/i/web/status/1771236203305509005
https://www.theguardian.com/world/2024/mar/22/moscow-concert-hall-shooting-blast
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https://jamestown.org/program/moscows-disturbing-reaction-to-crocus-city-hall-attack/?fbclid=IwAR0sCZinIn7YxtYvfC5z-xxkbQbbtSpN_Xtna-dkONyKsI4hXUNZnHe5-uU_aem_AWX2jOkJNprcQgZuGRr43tgfYgm2E99XnH89mIk9JNaNdl2oRPgB9QI52lI7GobvILZp-h4PkI5MxXHZeEmgbfbR