Russia: Other Points of View

RUSSIAN FEDERATION WEEKLY REPORT

by Patrick Armstrong

On and on. Apart from the fact that I was about as wrong as wrong can be in my election bet, I am not happy with Putin’s decision to return. I believe that leaders have a “best before date” – eventually they run out of their possibilities. The wise leader quits at the top of his game after having trained up his successors. But, having said that, who has ever done it other than Sulla or Washington? Not Thatcher, Churchill, Roosevelt, De Gaulle etc etc. Putin, possibly the best leader that Russia has had in its thousand-year history, has, I believe, succumbed to the delusion that he is indispensable. Will he prove to be, as he evidently believes, the Ataturk or Lee Kuan Yew of Russia? Or merely the Turkmenbashi or Lukashenka of Russia? No one would say that he is stagnant now, but what about after six or twelve years more?

Although Medvedev said that this was always the agreement, it is possible that the ever-cautious Putin has come back because he fears the future and believes Russia will be better off with The Boss openly at the top of the power structure. Perhaps there is unrest in The Team that only Putin can settle (Kudrin’s departure suggests this could be the case). Perhaps he believes the apparent decline in support for United Russia can only be reversed by him (while he has often complained about the lack of initiative and creativity in United Russia, he has also said many times that it is a necessary instrument). Or does he foresee coming international troubles that will require his steady hand? (The next US President is likely to be a Republican with a reflexive antipathy to Russia. The EU – a vital trade and investment source – is melting down. The future of Belarus and Ukraine is iffy. China is rising. NATO is again re-drawing the map. The “Arab world” is in flux.) We still don’t know the details.

DON'T PANIC OVER PUTIN

by Gordon Hahn

CNN

September 27, 2011

Editor’s Note: Gordon M. Hahn is a senior associate at the Center for Strategic and International Studies. He is also the author of Russia’s Islamic Threat.

With news that Vladimir Putin will run for president in Russia, the media is destined to be filled with doom and gloom articles about Russia’s return to domestic totalitarianism and international imperialism.  But there is no reason to panic. The return of Putin to the presidency will not necessarily be followed by a reversion to the harder line policies of Putin’s two previous presidential terms.  Putin’s decision to run for the presidency and, upon his inevitable election, to appoint Medvedev as premier will most likely lead to more continuity than change from the Medvedev era.

It is important to remember that Medvedev’s policies have been, for the most part, Putin’s as well.  None of Medvedev’s policies  efforts to reform the police, fight corruption, humanize prisons and sentencing rules, allow more opposition protests, reduce the ministries’ dominance in positions of power, apply more soft power in the North Caucasus, crackdown down on ultra-nationalists and organized crime, privatize state businesses, and seek more cooperation with Washington and other foreign capitals  could have initiated without Putin’s general support.

WE THE PEOPLE

by Sharon Tennison

I'm writing you from Petrozavodsk, Russia, a city of 250,000 people which was established by Peter the Great over 300 years ago as a foundry town to build cannons and parts for ship building. It is situated about three hundred miles northeast of Petersburg and is the capital of the region of Karelia.

In 2001 Charles Heberle received an email from Russia which said, "We have studied your American website and want to know if your program, "You The People," could be adapted to Russia's reality? (Other Americans involved with democracy building in the U.S. had received similar emails). A trans-Atlantic email correspondence began.  Charles was invited to come to StPetersburg for interviews. In the end he won the competition.  He then was invited to make a presentation at a conference on democracy development in Russia.  Among other VIPs, Sergei Lavrov, Ministry of Foreign Affairs, was there. The next day a man from Moscow appeared to vet Charles.  He identified himself as William Smirnov, President Putin's Civic Education Adviser.  Charles later found out that the group vetting him was a front group ordered by Putin in 2000 to:  "Find someone who can teach us democracy.  Obviously western governments don't know how to do it."

PUTIN'S RETURN

by Chris Weafer

It is no great surprise. Putin has given plenty of clues that he intends returning to the presidency in 2012.
 
The concept of a lame-duck presidency, i.e. for the remainder of the Medvedev term, is not relevant. It is clear that Putin has continued calling the shots since he formally left office in May 2008.
 
The reason for making the announcement so early is to shift the focus in the Duma election from United Russia to a plebiscite on Putin. Given United Russia's failing popularity and the real risk of a very low voter turnout, making the election a trial run for the presidential vote offers the party the best chance of retaining its current share of Duma seats.
 
There will not be a return to the government style and agenda priorities of the previous Putin administration. That simply is not an option. It is clear that the current economic model, i.e. reliance on oil wealth, cannot sustain growth in economy. To achieve the targeted 5.0%-5.5% growth Russia will need to attract a significantly larger volume of investment and the involvement of foreign investors.

I expect Putin will establish a very pro-business and pro-reform cabinet.
Membership of the WTO is a priority.
 
I do not expect any market recation to the news - investors are more concerned about global events and the weakening oil price.

RUSSIA TODAY: FED DELIVERS A "SIGNIFICANT" BLOW

FINANCIAL ANALYSIS

by Chris Weafer

Russian equities and the ruble face another battering today after US markets and commodities reacted very negatively to the US Fed decision and that weakness has been extended across Asia trade this morning. Most Asian indices are trading between 2% and 3% lower in afternoon trade. Brent is at $108.65 p/bbl, down another $1.7 p/bbl, and copper is 3.4% lower. The price of gold is off 1.9% ($1,773.9 per ounce) and silver is down 2.7%. The dollar-euro rate is at $1.3547. 

There is nowhere to hide this morning as investors will adopt a prudent sideline approach until they see how the US markets follow through, later today, from yesterday's big fall. The usual high-beta global themes, such as steels and mining sector stocks, will again lead the losses today. The banks will also be weak as US banks led the fall on Wall Street after Moody's cut the rating of three US banks and the Fed specifically highlighted "strains in global financial markets" as the major cause of concern. The weaker oil price will also undermine the oil producer shares.

THE RUSSOPHOBES WERE RIGHT... (ABOUT THE WRONG COUNTRY)

REPRINTS

by Anatoly Karlin

www.sublimeoblivion.com 

After peaking in 2007 at the height of its oil boom, the Russian economy slid off the rails, with GDP collapsing by 25% from peak to trough. Attempts to stem the decline by arresting pessimistic economists failed. Its image as a tiger economy, heavily promoted by Kremlin ideologues, was revealed to be a sham. Though anemic, growth returned this year; but little of it trickles down to ordinary Russians. Unemployment is over 16%, birth rates have collapsed, and millions of citizens are voting with their feet and migrating to work as laborers in affluent Western Europe.

This demographic free fall threatens to dash any remaining hopes of Russia ever converging to European living standards. Birth rates have fallen by 25% since the post-Soviet era peak in 2008, and the total fertility rate ­ the average number of children a woman can be expected to have over her lifetime ­ is now one of the lowest in the world, surpassed only by a few small, rich Asian states like Taiwan and Singapore. And with young professionals rushing for the exits, this situation is unlikely to be reversed any time soon. Last year, half a million people out of Russia's 143 million population left for greener pastures; this figure has already been exceeded in the first half of this year. Already falling at an alarming 840,000 in 2009, population decrease further rose to 1,220,000 in 2010 and on current trends will approach 2 million this year. This demographic death spiral is the epitome of Putinism's failure. The Leon Arons and Nicholas Eberstadts of this world were correct all along. Having been a Russophile shill all these years, it is time for me, like Johann Hari, to admit to my failures, apologize to the readers I misled, and go back to journalism school.

YET ANOTHER EXAMPLE OF THE ECONOMIST'S AWFUL RUSSIA COVERAGE

REPRINTS

Forbes.com

September 12, 2011

By Mark Adomanis

The other day I noted an especially overdrawn article titled "Time to Shove Off" that had recently appeared in The Economist. The article's thesis was basically the following: Russia is again stagnating and all of its most talented and successful people are preparing to leave, a development which will eventual cripple the country. I briefly noted that I thought this was a load of rubbish and that the article omitted a huge number of relevant facts that contradicted its analysis.

One of the truly great things about the internet and the rapid spread of information it enables is that the groups analyzed by the "experts" in the Western media are not simply mute observers. They can actually engage in the conversation, point out mistakes and factual errors, or simply suggest alternate explanations that are more deeply informed by knowledge of the local culture.

Thanks to Kevin Rothrock, who runs the outstanding Russia-focused blog A Good Treaty, I came upon a particularly excellent example of this at the Russian-language news site Slon.ru. Stepan Opalev wrote a pithy, and, at least judging from the evidence he assembled, rather scathing response to The Economist.

LOST ELECTIONS

REPRINTS

 

Russia Watchers

September 15, 2011

Prokhorov's revolt

By Joera Mulders

We were to be entertained by two days of political theater resulting in more exposure for oligarch turned politician Mikhail Prokhorov. Today the show however abruptly ended with Prokhorov’s resignation and a declaration of war against the grey cardinal of Putins’ second and Medvedev’s first presidencies, Vladislav Surkov.  What just happened?

The socio-economic state of Russia isn’t as grim as often portrayed, but it is serious. The social contract of the Putin years, loyalty in exchange for rising disposable incomes, cannot be continued, at least not on the pace people have grown accustomed to.  When the political and business elites wish to maintain economic growth above annual 3-4%, unpopular decisions cannot be stalled much longer. Social reform will have to start after the elections.

Within the elites there is a certain level of understanding that the political spectrum needs more plurality to reflect the expectations of the growing middle class and to channel feelings of dissent. This is the essence of ‘managed democracy’, or to do more justice to the direction of the vector: managed democratization. We’re not talking big changes here. A mere 10% less Duma seats for the United Russia party, meaning a small majority in the next parliament and the emergence of a few new voices would already be a strong signal, reflecting a trend of social and political development towards more plurality. 

THE WASHINGTON POST ARTICLE ON RUSSIA-MUSLIM RELATIONS

ARTICLE CRITIQUE 

With Minor Improvement, The Washington Post Again Misleads U.S. Public on Russian-Muslim Relations

By Gordon M. Hahn

The Washington Post, through the pen of Kathy Lally, is up to its old tricks.  Writing articles that try their best to appear unbiased, it tries to impress on the uninformed its one-sided view of Russia and, in this case, its relations with its Muslim.

In a September 5^th article on the jihad in Dagestan “In Russia’s Dagestan, resentments erupt into violence”, the WP and Lally do their best to give the appearance of balance.  Sure enough, the article begins with mention of suicide bombers emerging (going on for over two years already in Dagestan) and that weekly “three policemen are killed and numerous civilians become casualties.”   But there is no mention anywhere in the article of the organization behind these attacks: the jihadi terrorist network of more than a thousand mujahedin and tens of thousands of supporters called the Caucasus Emirate (CE). 

In years past, the WP never mentioned the CE’s amir Dokku ‘Abu Usman’ either.  Thus, minor progress can be noted here in that Umarov is mentioned along with his alliance with Al Qa`ida.  But this is like writing about Ayman al-Zawahiri and mujahedin in Afghanistan and Pakistan without mentioning Al Qa`ida or Anwar al-Awlaki and mujahedin in Yemen without mentioning Al Qaidia in the Arabian Peninsula.  Lally writes about Umarov as if he were a lone terrorist trapped in the woods not the amir of the CE and its thousand or more mujahedin: “Doku Umarov, a Chechen terrorist with al-Qaeda connections suspected of hiding in Dagestan who has been accused of terrorist attacks on Moscow.”  In fact, Umarov’s role is much more central.  He appoints and leads the top amirs of the CE’s four main regional networks spread across the North Caucasus called ‘vilaiyats’ or governates, including the amir of the Dagestan Vilaiyat’s (DV) mujahedin.  A former DV amir, moreover, is the CE’s Shariah Court judge or qadi. 

GETTING THE CAUCASUS EMIRATE RIGHT

by Gordon Hahn

A report of the CSIS Russia and Eurasia Program 

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