Russia: Other Points of View

RUSSIA TODAY: CLINGING TO LIFE

FINANCIAL ANALYSIS

by Chris Weafer

• The global markets rally looked close to expiring on Monday but yesterday the US Treasury Secretary breathed life back into it to live a little longer. The strong gain in the US markets (S&P rose 2.1% to 850.1), plus the rise in the price of oil, will help the Russian markets to regain yesterday’s loss at the opening this morning. The banks, especially Sberbank, should lead the recovery after US banks led the way higher in their market. Oil company shares should also be modestly better with the better finish for crude on Nymex and the price gain in Asia this morning. 
• Asian equities are trading around 0.5% higher this morning, led by shares in banks and the technology sector. The former as a conta gion from the US banks move higher and the latter after a good report from a chip producer. Japan’s March exports fell 45.6% according to a government report. That is at least better than the 49.4% slump in February. A flimsy reason for optimism but a marginal positive nevertheless. 

UNREST IN MOLDOVA

ARTICLE CRITIQUE

Response to Wall Street Journal "Russia Supports Moldova Vote Probe" by Andrew Osborn, April 9, 2009 

by Gordon Hahn

The Wall Street Journal article reviewed below presents opinion or at the very least interpretive analysis – as news.  It also reveals a somewhat veiled one-sided perspective on the apparent attempt at a ‘colored revolution’ by nationalist and democratic elements against the communist-dominated government of Vladimir Voronin. Further, the article presents Russia’s support for Moldova’s legitimately elected government as evidence of Russian “ambitions”, the EU’s expansion is neutrally presented, NATO expansion is not mentioned, and NATO member Romania’s possible collusion with Moldova’s opposition parties is not pursued.

To access the full analysis, please click here Download WSJ_Osborn_9_Apr_09

PRESIDENT OF RUSSIA INTERVIEW WITH NOVAYA GAZETA

REPRINTS

www.kremlin.ru

April 13, 2009 

NOVAYA GAZETA (EDITOR IN CHIEF DMITRY MURATOV): I wanted to start with general issues, but some are more urgent. It might be better to cancel the election in Sochi rather than to imitate it Imitation is more cynical than abolition. Candidate Lebedev was barred from the election by a court, and candidate Nemtsov is kept away from campaigning.

PRESIDENT OF RUSSIA DMITRY MEDVEDEV: I do not yet know who was expelled and how, but in any case a full-fledged political struggle is taking place in Sochi. It is good that different political forces are participating in it. In my opinion, many municipal elections suffer from monotony, a lack of interesting candidates, and as a result are uninteresting.

It is true that people almost always vote for intelligible politicians rather than popular stars, but the more striking these events are the better it is for our electoral system, for democracy in Russia.

Now regarding the specific circumstances: in every election there will always be candidates who lose, candidates that are taken off the ballot, and this is the case everywhere in the world.

But in general I believe that such public campaigns are good for democracy.

MR. MEDVEDEV'S SILENCE

ARTICLE CRITIQUE

Response to New York Times Editorial "Mr. Medvedev's Silence" April 10, 2009

by Gordon Hahn

The New York Times has printed another editorial scolding the Kremlin for its rather soft authoritarianism that pales in significance compared to China, North Korea, Cuba, Saudi Arabia, and other authoritarian regimes generally overlooked by the mainstream media.  The most curious aspect of the article is the claim in the last paragraph that Medvedev was “democratically elected.”  This is opposite of what the Times has previously posted. The paragraph urges Medvedev to separate himself from his mentor, now Prime Minister and former president Vladimir Putin. It seems that the Times is “carrying water” for the White House.  In post Obama-Medvedev summit statements, the Times tried to play up Medvedev’s leading role in Russian foreign policy and his potential as a partner in turning around U.S.-Russia relations.  The goal seems to be to drive a wedge between Putin and Medvedev in the hope that a more independent Medvedev will be a less obstinate negotiator than Putin, and perhaps engage in a new perestroika. 

To access the full analysis, please click here Download NYT_editorial_10_Apr_09

RUSSIAN FEDERATION WEEKLY SITREP

by Patrick Armstrong 

President Medvedev has just granted an interview with Novaya Gazeta – the first to a Russian media outlet. It is worth reading before the Western mainstream media tells you what it thinks you need to know. I cannot emphasise this enough – you must read the ipsissima verba and not rely on reports from biased sources.

Lucre. Medvedev has published his income on his Website: appropriately modest.

Russia Inc. The Head of the Central Bank says inflation was 5.3% so far this year (4.8% the year before) and the Finance Minister says the budget deficit is 50 billion rubles (US$1.5 billion) in the first quarter.

Lenin. On 1 April  the Lenin statue near the Finland Station in St Petersburg was damaged by an explosion. This has occasioned many protests pro and con, and a Kremlin official reiterated  that the time was not yet ready to move the body from Red Square.

US-Russia. The Tone continues to be good but no real actions have been taken yet.

The WASHINGTON POST - DISTORTING THE TRUTH

COMMENTARY

by Gordon Hahn 

In his great novel “The Brothers Karamazov” Fedor Dostoevsky raised the issue of what “means” are justified to achieve noble ends.  He depicted a little girl, persistently beaten and relegated by her parents to sleeping in an outside shed in freezing temperatures and asked whether, given a choice, one should save this poor little girl or the world.  

In some ways international relations often pose a similar dilemma.  The U.S. is often faced with the choice between promoting human rights in authoritarian and totalitarian states while doing business with them in pursuit of U.S. national interests and security.  In many soft authoritarian regimes, individuals, small groups or parts of the population are subjected to human, civil, and/or political rights violations.  In such cases, the U.S. must choose between the authoritarian regime’s victims and the larger interests of the U.S. and its citizens. 

RUSSIA WEEK:FLYING WITHOUT WINGS

FINANCIAL ANALYSIS

by Chris Weafer

Trading today is expected to be much the same as on Friday. The London markets, and many others across Europe, are closed for the Easter Monday holiday. The US ADR market, and Nymex, will operate as normal. 

• The RTS extended its rally by another 9.6% last week, bringing the gain from January 24^th to 64% and from January 1^st to 29.4%. MICEX rose 10.9% last week and is now up 49.7% in 2009. But most investors still see this as bear market rally that is close to a reversal. While the momentum may carry prices a little further, especially if the bank results due in the US this week are positive, the risks are also building. Take profits into any further gains this week. 
• The return of investor demand for bonds has helped the rally in equities. Gazprom is expected to start marketing a $2 bln issue later this week, the first dollar bond from a Russian issuer in almost twelve months. 

THE COLORED REVOLUTION DISEASE HITS MOLDOVA

COMMENTARY

by Gordon Hahn 

Recent events in Chisinau have underscored our point about the dangers of certain aspects of U.S. democratization policy, which tends to encourage such revolutionary seizures of power.  Over a year ago ROPV carried an article on similar events after Armenia’s February 19 presidential elections sparked a similar attempt at colored revolution, killing eight and wounding many more.  It read in part:

"These sad results should be a lesson to U.S. and Western policymakers about the dangers of fomenting colored revolutions, no matter how peaceful and seemingly justified they might seem. Democratization at the fastest pace possible, in particular by means of revolution, is not the best solution to all problems, in all places, and all times. "

"It is an especially risky proposition to support the massing of thousands on the central squares of national capitols under regimes that the West deems undemocratic. Such regimes are by definition more likely to use force, and the use of force under such circumstances is likely to multiply, risking even civil war. In particular, it needs to be remembered that the spark - the wrong decision to answer a push with a punch or a punch with a knife cut or gunshot – can be ignited by any one of the thousands assembled. Such demonstrations, convened in a heated political atmosphere of electoral politics and high levels of distrust, are perhaps especially prone to violent turns. This is true regardless of the many lectures and lessons on methods of civil disobedience organized by Western NGOs, often covertly sponsored and funded by the U.S. and other Western governments."

RUSSIAN PROPOSALS TO THE LONDON SUMMIT

REPRINTS

The Government of the Russian Federation

The current global financial crisis has become a result of collapse of the existing financial system due to a poor management, which overlooked significant risks.

Global financial regulatory institutions failed to adequately respond to the developments in recent years, which confirmed that their activities do not meet the requirements of the today’s multipolar world. Due to the lack of instruments to prevent and minimize the consequences of crises or tools to influence strategies applied by market actors, the world has faced serious economic shocks and, as a result, an increased global social instability.

It becomes even more difficult to provide comfortable housing, education, quality health care or even food to a sizeable proportion of humankind. Global economic growth that took place during the recent years barely affected the living conditions of the poorest population groups because of the crisis.

Russia proceeds from the assumption that, under globalization, a normal functioning of global economy requires a stable and predictable international monetary and financial system functioning in accordance with pre-determined rules and based on macroeconomic and financial discipline maintained by major global economies. The current crisis has demonstrated that maintenance of such a discipline remains a task which still has to be fulfilled both by sovereign States and leading companies active on global markets.

LETTERS TO THE EDITOR

ROPV CONTRIBUTORS

Response to Financial Times "Precarious Podium" by Tony Barber, March 18, 2009 

By Padma Desai

“Precarious Podium” by Tony Barber (March 19) brought out the differences between the US and the EU and within the EU itself on issues relating to the size of the stimulus package for dealing with the mounting global recession and the problem of bailing out some overleveraged banks in EU member countries that have over-borrowed in hard currencies (including the Euro). A document released by the Kremlin (available on http://www.kremlin.ru/eng/text/news/2009/03/213994.shtml) states Russian position on some of these issues. At the same time, actual policy decisions of the Russian authorities with regard to overleveraged Russian banks and businesses that have borrowed in hard currency beyond their repayment capacities mark a move away from bailing them out during the current crisis.