Another Original LR Translation: Nemtsov Volume III, Part I

Editor’s Note: We are delighted to welcome back to our pages the irreplaceable Dave Essel, master translator of the Russian media. Today we begin publishing installments of the third white paper on the Putin regime issued by former first deputy prime minister Boris Nemtsov, along with co-author Vladimir Milov. Dave’s prior two translations appear in our header, and have been recognized by such lofty publications as the New York Review of Books.  As we have previously reported, the malignant Putin regime has already moved, in classic neo-Soviet fashion, to confiscate and suppress this manuscript before Nemtsov could try to distribute it, as it did with the others. Following is the introduction and the first two chapters.

PUTIN: What 10 Years of Putin Have Brought

An independent expert report by
Vladimir Milov and Boris Nemtsov

Translated from the Russian by Dave Essel

Introduction

In February 2008, we published our report “Putin – The Results” [TN: translated by me as “Putin: The Bottom Line”]. It seemed to us back then that it was about time to review what he had brought about now that his presidential term was coming to an end. We assumed that the policies of his successor would differ in at least some ways from those of the previous incumbent. However, Putin continues to play a key role in Russian politics and the course which he followed for 8 years has barely changed.

A great deal has happened since 2008. Russia has plunged into a deep economic crisis. Instead of growing, the economy is contracting. A budget deficit has replaced a former surplus, millions have lost their jobs. Prices, utilities foremost among these, are rocketing. Meanwhile, the number of billionaires has doubled and social and inter-regional inequalities have worsened.

Official propaganda would have it that everything is still fine, the country has weathered the crisis, has conquered terrorism and is beating corruption, that we are proceeding by leaps and bounds along the road of innovation and modernisation, that we are respected around the world, that we are getting wealthier, that there is less poverty, that men and women are bringing forth children, and that “Russia dying out” was a thing of the wild nineties.

The purpose of this report is to tell the truth about what is happening in Russia, to dispel the myths put about by the powers that be, and to relate real information to our fellow-countrymen who for 10 years have not been getting that from the cheerful and frequently false information disseminated by the government-controlled TV and print media.

This report is divided into nine parts. The most important sections are those devoted to corruption in Russia, population issues, social inequality, the economic situation, and the Caucasus question.

Unlike our previous report, which was published in a small print run of 5000 copies and was distributed in the main via the internet, this report is intended for a mass readership and is being published in 1 million copies. The report will be distributed not only in St. Petersburg and Moscow but all over the country – from Vladivostok to Kaliningrad.

CHAPTER ONE:  Corruption is Eating Russia Up

One of the direst results of Vladimir Putin’s rule has been that Russia has sunk into a dark pit of corruption. Still worse is the fact that corruption in the higher échelons of power in Russia has to all intents and purposes been legalised. Putin’s friends of old, such no-ones before he came to power as Gennadi Timchenko, Yuri Kovalchuk, the Rotenburg brothers, have all become dollar billionaires. It is hardly surprising that the country is beginning to copy its leaders’ modus vivendi.

Back in 2000, we were 82nd in Transparency International’s global corruption rating. (TI is an NGO that fights corruption and carries out research on corruption levels worldwide). By 2009, Russia was seriously down in the league table – in 146th place. Our neighbours on this level were Cameroon, Ecuador, Kenya, Sierra-Leone, East Timor, and Zimbabwe. Today Georgia – at 61st place – ranks way above us in the rating.

Under Putin, theft by officials has gone from a bad situation to a catastrophic one. Transparency International estimates the monetary value of the “corruption market” in Russia at $300 billion. That is one quarter of the country’s GDP!

Our international corruption ratings are confirmed by Russian government data. According to RosStat, the number of crimes recorded under the category “Corruption” rose by 87% between 2000 and 2009 – from 7000 to 13000. (Source: RosStat: Criminality – Crimes Registered by Category.)

These figures are of course dubious: at end 2009 – again according to RosStat – Russia’s army of officials numbered 870,000, a twofold increase over 1999, when there were 485,000 civil servants. One cannot possibly believe that only 13,000 of those 870,000 bureaucrats take bribes.

The corrupt are for the most part never punished in Russia. According to Chairman of the Supreme Court of the Russian Federation V. Lebedev, in 2008 only 25% of persons accused of bribe-taking received prison terms while 65% were given suspended sentences! (From a speech by Chairman of the Supreme Court of the Russian Federation V. Lebedev at a meeting of Russian Federation Court Chairmen on 27 January 2009, reported in Kommersant newspaper article of 28 January 2009 entitled “Majority of Those Convicted of Bribe-Taking are Policemen”.)

This is a clear demonstration of how Russia’s “Basmanny Court” justice system works: officials who take bribes are practically immune from serious punishment.

We also never received replies to these questions, which we asked in our earlier reports “Putin: The Results” and “Putin and Gazprom”:

How come the following were allowed to pass out of Gazprom’s control – Gazfond (the country’s largest private pension fund), Gazprombank (our second largest bank), Sogaz (a major insurance company), Gazprom-Media (the media holding which includes the NTV, TNT, and other media assets)? Why and how did Rossiya Bank and its main shareholder, Putin’s friend Yuri Kovalchuk, gain control over these assets? Where did more than 6% of Gazprom’s shares, which were on the company’s books in mid 2003, disappear to?

Why did Gazprom share hundreds of millions of dollars of its annual profits from gas transit and the re-export of Central Asian gas with EuralTransGas and RosUkrEnergo? Who are the beneficial owners of these intermediary companies?

Why did the state pay Roman Abramovich $13.7 billion for 75% of the shares of Sibneft, which there was absolutely no need for the government to nationalise? A new question arises out of this: why did Gazprom in 2009 decide to pay a further $4 billion to Italian ENI for another 20% of Sibneft shares when Gazprom already owned three-quarters of the company. Financing this purchase led to increased gas prices for Russian consumers.

Who is the true owner of Millhouse, the company through which Roman Abramovich operates?

Why do state-owned oil enterprises export a considerable proportion of their oil through Gunvor, which is owned by Putin’s  friend Gennadi Timchenko? How is it that Gunvor, which back in 2000 was an oil-trading bit-player, has during Putin’s time in power gained control over Russia’s oil exports?

Who is the real owner of SurgutNefteGaz, Gunvor’s largest oil supplier? As a result of our publication in “Putin: The Results” and “Putin and Gazprom” of certain facts regarding the transfer of assets worth over $60 billion out of Gazprom, Alexei Navalny demanded that the General Prosecutor’s Office investigate the matter. He actually received a reply, too: evading the issue, an assistant to the General Prosecutor wrote: “We can find no grounds for the Prosecutor’s Office to become involved”. (Letter ref 73/1-1222-2008 of 14.10.2008.)

Back when we published “Putin: The Results”, talk of Putin’s mighty personal friends with access to billions – Timchenko, the Kovalchuk brothers, the Rotenberg brothers – circulated only as rumours. Now, however, all these people can be found quite officially in the listings of Russian billionaires. According to Forbes magazine, Gennadi Timchenko is 36th in that list, with a wealth of $1.9 billion. Yuri Kovalchuk comes in at #67 with nearly $1 billion. Brothers Arkadi and Boris Rotenberg occupy slots 99 and 100 with a combined wealth of $1.4 billion. (Source: Forbes’ 2010 rating of Russian 100 richest businessmen.)

Putin has installed at the feeding trough not only his closest friends, but their relatives too. Yuri Kovalchuk’s son Boris was, at the age of 29, placed at the head of the Department of National Projects of the Government of Russia, which he ran from 2006 to 2009. When National Projects was rolled up, Boris Kovalchuk was given the post of Deputy Director of RosAtom and in late 2009 sent to head InterRAO, the state monopoly for electricity import/export. Meanwhile, Yuri Kovalchuk’s brother Mikhail heads the Kurchatov Institute [Russia’s leading research and development institution in the field of nuclear energy – Trans.], which the state has been financing in recent years to the tune of tens of billions of roubles.

Another example of nepotism à la Putin comes from billionaire brothers Arkadi and Boris Rotenberg. In the early 1990s, Arkadi Rotenberg helped V. Putin practise judo as his sparring partner (which is why he is often referred to as “Putin’s judo trainer”). Together with the previously-mentioned Gennadi Timchenko, he set up Petersburg’s YavaraNeva judo club of which Putin is the honorary president.

The Rotenberg brothers built their business on supplying pipes and providing building services to Gazprom. This despite the fact that they neither made nor built anything. Back in 2003-2004, Boris Rotenberg was a junior partner in Gaztaged, a company with a turnover of about $1 billion, through which pipe purchases for Gazprom were routed. He later acquired shares in SEPT (North European Pipe Project), a pipe-trading company with a turnover of around $1.5 billion which is going to supply pipes to the North Stream pipeline project. Arkadi Rotenberg controls StroiGasMontazh, a group which in 2008 bought controlling shares in 5 Gazprom subsidiaries making pipelines for the North Stream, the “Olympic” Dzhubga-Lazarevskoye-Sochi, and other pipeline projects. (Article “Friendly Division of Gazprom Spoils”, Vedomosti, 9 March 2010, “Building Giant Gets Personal Trainer”, Kommersant, 2 September 2008.)

Controlling Gazprom, as we can see, has become a nice little earner for Vladimir Putin and his friends. Sadly, Russian gas consumers have to pay for all this: prices to them have risen from an average of 358 roubles per 1000 cubic metres to over 2500 roubles in 2010.

There is reason to believe that all these Timchenkos, Kovalchuks, and Rotenbergs are no more that the nominal owners of their vast holdings and the real ultimate beneficiary is Putin himself.

In 2008, Timchenko’s partner in oil-trader Gunvor, Torbjörn Törnqvist, admitted in a letter to the editor of British newspaper The Guardian that Gunvor does have a “third beneficiary”. But who that is, no one knows. (“Who is Number Three at Gunvor”, Vedomosti, 25 December 2007; “Who is Gunvor’s Third Shareholder?”, Novaya Gazeta, 12 October 2009.)

Timchenko buys up key oil-and-gas assets in Russia. Gunvor has become co-owner of RosNeftBunker, which is building a oil terminal in the port of Ust-Luga. Gunvor is building another oil terminal in Novorossiisk. Timchenko’s Volga Resources fund controls over 20% of Novatek, Russia’s second largest gas extraction company and also about 80% of StroiTransGaz, one of Gazprom’s largest works subcontractors.

Timchenko companies hold licenses to work the massive Angora-Lensk gas field, shares in the giant Yuzho-Tambeisk gas field on the Yamal peninsula, and 30% of the project to develop the Lagansk field in the Caspian Sea. (“Timchenko Expands His Empire and Starts Drilling”, Vedomosti, 4 March 2010).

It is hardly surprising therefore that experts and followers of politics are competing with each other to guesstimate Putin’s personal worth. Is it $20 billion? $30 billion? More?…

Nepotism as a model is now ubiquitous in Putin’s Russia. There was not much to be heard about corruption surrounding Moscow Mayor Luzhkov back in the 1990s. But in 2000, his wife Yelena Baturina became a dollar billionaire and Russia’s richest woman. We wrote of this in our reports “Luzhkov: The Results and “Luzhkov: The Results II”. (See http://www.luzhkov-itogi.ru)

Baturina ranks #27 with a worth of $2.9 billion in Forbes’ list of Russian billionaires.

Thirty-four-year-old Dmitri Patrushev, son of the former FSB director and now Secretary of the Security Council of Russia Nikolai Patrushev, is VP of VneshTorgBank. His younger brother Andrei Patrushev is an adviser to the Chairman of the Board of Vice Premier Igor Sechin’s RosNeft. Disgracefully, Andrei Patrushev was in April 2007 by an ukase of President Putin (RF Presidential Ukase #545 of 24 April 2007) awarded the Order of Merit “for years of conscientious work” at a time when he been in RosNeft for less than a year following his graduation for the FSB Higher School.

Twenty-nine-year-old Sergei Ivanov, Vice-Premier Sergei Ivanov’s youngest son, was in February 2010 made deputy chairman of the board of Gazprombank, the country’s second largest bank, where he had been working since 2004. Alexandr, Sergei Ivanov’s eldest, is a director of Vneshekonombank, while is father is a member of the bank’s oversight committee. (“Room for the Kids: Yuri Kovalchuk’s Son May Head up InterRAO. How the Children of the Powerful Find Jobs in Russia”, Russian Forbes, 23 November 2009). Alexander, by the way, is the driver who in May 2005 ran over Muscovite Svetlana Beridze, who died of her injuries at the scene. The court decided to close the case “for lack of cause in the actions of the driver”.

Thirty-seven-year-old Stanislav Chemezov, son of RosTekhnologii Head Sergei Chemezov, one of Putin’s mightiest friends, owns shares in I.A.D. Business Industry (field: dual-purpose IT technologies with projects supported by arms-exporter RosOboronExport), in Russian Industrial Nanotechnologies, as well as in several building companies. He is also on the board of directors of AvtoVAZ Energo. (“RosOboronExport Head Sergei Chemezov Not One to Forget Friends”, Russian Forbes, October 2007; “RosOboronExport Looks to Its Own: Chemezov-Junior Joins the Board of AvtoVAZ Energo”, Vedomosti, 21 August 2007).

Thirty-one-year-old Alexei Bogdanchikov, eldest son of the head of RosNeft, worked in RosNeft from June 2004 before moving to work as business development director of gas extraction company Novatek, the company controlled by Putin’s friend Gennadi Timchenko.

Sergei, thirty-seven-year-old son of St. Petersburg Governor Valentina Matviyenko, became managing director of VTB-Kapital (now VTB-Development), VneshTorgBank’s real estate development arm.

Petr, the thirty-two-year-old son of Foreign Intelligence Head and former prime-minister Mikhail Fradko, is a member of the board and deputy chairman of Vneshekonombank.

When he was “appointed to the post of president” in 2008, Dmitri Medvedev declared that “war on corruption” was his priority. In the two years since then, Russia has dropped still lower in world corruption ratings, bribery is rampant, and levels of nepotism and favouritism unprecedented since the 1990s are there for all to see in the management of state property and funds. The pretend war against corruption began with a ruling that civil servants would have to publish declarations of their incomes and property. But it’s impossible to believe what the leaders of our country say about themselves.

The Meyendorf Palace of Tsar Putin

Putin declared that his income for 2009 amounted to 3.9 million roubles (~$125,000). On this income, our prime-minister was able to give a boy shepherd in the Tula region a wristwatch worth $10,500 only magically to be seen wearing a new model of the same a few days later. Medvedev, who declared that he earned 3.3 million roubles (~$106,000) in 2009, owns a flat in the super-élite Zolotye Klyuchi apartment complex, where the maintenance charge alone is at least $5000 a month. The watch Medvedev wears costs $32,200. The president’s and the prime-minister’s suits come from Brioni and Kiton (these go for €5000-7000 a shot) and are what Russia’s billionaires prefer. Against the backdrop of the collapse in road-building and of much of the country’s infrastructure, our country’s leaders are building and restoring residences for their beloved selves out of the state budget. They already have 13 of them dotted about the country! A presidential residence costing 7.7 billion roubles (a cool quart-million bucks) is being built on the Gamov peninsula in beggarly Primorsky Krai. The Konstantine Palace was restored at a cost of about $200 million early in Putin’s presidency. But the record for “effective” use of state must be held by Medvedev’s beloved Meyendorf Palace on the Rublevka. Over $100 million was spent on restoring this 1300 square metre property – over $80,000 (not roubles!) for each square metre, a monument to corruption in the age of Medvedev. The active residences all together cost the budget billions of dollars annually.

The Konstantin Palace of Tsar Putin

Corruption has eaten up the largest megaprojects of the Putin era. Even Transneft admitted to corruption problems in the construction of the Eastern Siberia – Pacific Ocean pipeline. (“Corruption thrives at the ESPO”, Rosbalt, 2 July 2008). In March 2010, a major scandal broke out among the higher leadership, leading to the resignation of deputy minister of the regions Sergei Kruglik, over misappropriations in the construction of the Olympic sites. (“Misaccounting Payback”, Kommersant, 6 April 2010).

While gabbling about fighting against the “revenge of the oligarchs”, Russia has witnessed the enrichment of a new and mightier Putinocracy. The number of billionaires in Russia doubled during the difficult year of 2009.

This criminal system must be destroyed. We need to radically reduce the power of the civil service and cut back their authority. The state needs to stop thinking it has the right to non-state functions such as controlling enterprise.

Terms for civil servants should be set at all levels of the service. This is needed so that officials cannot become entrenched in alliances with private enterprise. The universal principle should hold that, having served for 8 years, the civil servant retire, with no possibility of a “third term” or other chicanery for staying in power (such as moving from president to prime-minister).

Officials caught acting corruptly should be disqualified for life.

We need radically new law enforcement and an independent Federal Investigation Service in which there is no room for people with links to corruptioneers.

We need strict civil control over the government’s actions, the abolition of censorship in the federal TV channels, and normal conditions for the political opposition. The people should be able to freely discuss such subjects as corruption in government and demand that criminal charges be brought against corrupt officials.

An important precondition in the fight against corruption is that Russia should have independent courts. There is no way in which corruption cases will be heard objectively and the guilty punished while the courts remain under the control of the executive.

CHAPTER TWO: The Country is Dying Out

Putinist mythology would have it that we are seeing successes on the demography front, that the birth rate is rising, and so on and so forth. This is compounded by spreading another myth that the country “was dying out in the 1990s”. Let us look at the facts.Our population at 1 January 1992 was 148.5 million people, at 1 January 2000 it was 146.9 million. (Table data from RosStat). The drop between these two dates was therefore 1.6 million. At 1 January 2010, Russia’s population numbered 141.9 million, giving a drop of a whopping 5 million between 2000 and 2010!

The bitter truth therefore is that Russia has been losing 500,000 people a year over the last decade, a rate that bears no comparison with even the 1990s.

The main reason that our population is declining is supermortality. Around 15 per 1000 die every year. In July 2009, Russia could be found 12th from the bottom in the global mortality listing. (Source: CIA World Factbook). Our neighbour on the list are Nigeria, Zimbabwe, Chad, Somali. We have been maintaining African mortality levels in our country for many years now.

When it comes to life expectancy, our neighbours change. Here we rank 162nd with a life expectancy of 66 years, trailing behind Papua New Guinea, Honduras, and even Iraq (rank 144th / 70 years). The matter that screams out loudest from RosStat’s figures is male life expectancy: this stands at 61.4 years! (Average life expectancy in the EU countries is 79 years, in the USA 78, in Canada 81, in Japan 82.)

Russia’s birth rate is more or less normal for an European country – 11 births per 1000. (Remember that meanwhile we have 15 deaths per 1000).

In poorer countries, too high a rise in birth rates, especially in low income groupings encouraged to have more children through Putinite measures such as the “birth capital” allowance, can have negative consequences, lowering the overall standard of living and levels of care for the new-born and leading to high sickness rates. (Note, however, that the “birth capital” allowance of 250,000 roubles could buy one a mere 3-4 square metres of housing, based on average housing prices according to RosStat).

In April 2008, Minister of Health Tatyana Golikova was forced to admit that increased birth rates had led to increased infant mortality in 48 of the country’s regions. (in a speech to a plenary meeting of the ministry on 25 April 2008).

The problem is supermortality. The Russian government does not care for its population. One million six hundred thousand babies are born every year while 2,100,000 people die.

Russian mortality rates began to rise in the 1970s under Brezhnev and continued to do so right up to the mid 1990s. In 1995, mortality began to decrease and fell to under 2 million a year in 1998.

Under Putin, however, rates rose again and accelerated to reach a new peak in 2003, when 2.37 million deaths were recorded. The rate has not dropped below 2 million since then.

Russia’s exceptionally high mortality is the result of a concatenation of reasons. Nearly 60% of deaths are recorded as from cardiovascular causes, another 15% from cancer. Respiratory organs and digestive tracts claim another 4% each.

Russia is outstanding for its number of deaths from external causes – 12.5% of the total or more than 260,000 people annually. This is approximately twice as many as in China or Brazil and 4-5 time more than in Western countries.

The main external causes of death in the country are murder, suicide, and traffic accidents. The main explanation for so high a death rate from external causes are low levels of personal safety precautions, wrong lifestyles and poor quality of life, and the generally unhealthy situation in the country.

Russia ranks 19th in the world for its murder rate: 16.5/100,000. Our neighbours here are Ecuador, Swaziland, and Iraq. For Europe, we rank #1 and we also beat the USA, with an annual 6 murders per 100 thousand, by a wide margin. (Source: Global Burden of Armed Violence (GBAV) report, released in 2008 by the Geneva Declaration on Armed Violence and Development (www.genevadeclaration.org) and other national statistics).

Suicide is an even more serious problem. Over 41,000 commit suicide every year in Russia. This is twice as bad as Europe and three times as bad as the USA.

Too many people die in traffic accidents. According to Russia’s traffic police, there were 30,000 deaths on the roads while over were 270,000 injured.

Supermortality also comes from high levels of sickness in the population. The main reason for these health problems are our generally bad lifestyle, the lousy environment, and, very importantly, substandard medical treatment. Poor public health remains a serious problem which Putin was unable to make the effort to improve during the last decade with its rich windfalls.

What do average Russians think about what has been done by Putin and Medvedev in this field? A poll by the Levada Centre collected opinions on the national public health service in August 2008 and found the following:

• 66% of Russian believe that they will not receive good medical treatment when they need it

• 58% are not satisfied with Russia’s public health system.

In fact, the statistics show that sickness rates have been rising in Russia. The latest statistics from RosStat only go as far as 2007, but these show a rise from a 2000 base of 50% in cardiovascular diseases (Russia’s main cause of death) from 2.4 million to 3.7 million and 17% for cancers – from 1.2 million to 1.4 million.

Russia ranks between Morocco and Ecuador (112 to 114th places) in its spending on public health – 5.3% of GDP as against 9-11% for many Western European countries. (Source: World Health Statisitics, WHO, 2009). The 2009 planned budget allocation for public health, physical culture and sport was a mere 325 billion roubles. For comparison, a trillion – three times as much! – was allocated to law enforcement and the special services.

Conclusion: the state apparatus, state corporations, and the specials services are far dearer to Putin that the health of the Russian people.

The authorities have tried to get away with low-cost one-off offerings such as the much-vaunted “National Project: Health” instead of systemic reform to create a working national health insurance system.

Alongside the poor quality of medical aid, another key reason for Russians’ supermortality is drunkenness. Even the authorities admit this is the case. Here is an excerpt from a resolution (#46 of 29 June 2009) of Chief of Public Health G. Onischenko entitled “On the Supervision of Alcohol Production”:

“Real per capita consumption of alcohol, accounting also for alcohol-containing substances including perfume, household products, and other similar, is over 18 litres of pure alcohol per person per year.

According to medical statistics, 2.8 million Russians, or 2% of the total population, have serious alcohol problems that affect their health…

In 2008, mortality from alcohol-related causes (RosStat data) amounted to 76,268 persons…”

Just consider Onischenko’s figures! Eighteen litres of pure alcohol per person per year! RosStat’s official figure, by the way, is 9.8 litres. The rest of the alcohol consumed must therefore come from unofficial sources – from various sorts of moonshine with their related dangers to health.

The World Health Organisation considers that consumption of alcohol in quantities of over 8 litres per person per year is the critical level beyond which mortality from this cause rises. Russia’s consumption is over twice this level! It has been estimated that alcohol is the cause of the premature death of up to 700,000 thousand Russians every year. (Source: A.V. Nemtsov, Alcohol-induced Deaths in the Regions of Russia, an information bulletin of the Centre for Demography and Human Ecology of theRussian Academy of Sciences’ Institute of Population Studies, Issue 78, 2003, pp 1,2).

One in three Russians die from alcohol-related causes. Alcohol is yet another another reason for our supermortality.

For comparison, it should be noted that RosStat’s figure for alcohol consumption in 1999 was 8 litres per person per year with a true consumption rate of 14.5 litre per year. (Source: A.V. Nemtsov, The Lethality of Russian Drunkenness, Priroda Magazine, Issue 12, 2003, p. 11). Both official and unofficial figures therefore confirm that alcohol consumption has risen by about 25% under Putin.

Further tens of thousands of Russians die because of drugs. In June 2009, Anti-Narcotics Head V. Ivanov spoke of 30,000 deaths annually due to narcotics. (Source: Speech at Anti-Narcotics Committee meeting, Moscow, 26 June 2009). He mentioned the following frightening facts:

• Russia has between 2 and two-and-a-half million drug addicts with a main age range of 18 to 39.

• The average age of death for a drug addict is 28.

• 80,000 “new recruits” join Russia’s army of addicts every year.

• Russia has 5-8 times as many addicts as the EU states. Hard narcotics consumption is amongst the highest in the world.

In September 2009, the United Nations Commission on Narcotic Drugs published a report on Aghan opium in which it noted the following dreadful figures about Russia: the country annually consumes 75-80 tonnes of Afghan heroin, the number of addicts has risen tenfold in the last 10 years, and 30,000 people die from narcotics every year. This last figure is more that the Soviet Army’s losses for 10 years of war in Afghanistan. One should also compare these figures with European deaths from hard drugs – 5-8,000 deaths per year.

Furthermore, all this happening after Putin in 2002 set up a special body responsible for combating the spread of narcotics – GosNarkoKontrol.

Another serious Russian problem is that of smoking. The habit is very widespread. According to RosPotrebNadzor (Russia’s consumer body) 65% of men and 30% of women smoke and of these 80% and 50% respectively started in their teens.

Smoking is a cause in 27% of cardiovascular deaths in men, 90% of lung cancer deaths, 75% of deaths from other respiratory problems. Around 25% of smokers die prematurely: smoking on average reduces life expectancy by 10-15 years. (Source: RosPotrebNadzor statistics).

Cigarette sales have risen by 25% in the last ten years in both absolute terms (430 billion cigarettes last year as against 335 billion in 2000) and relative terms (3,000 cigarettes per person per year now as against 2,400 in 2000). The situation is radically worse than in the 1990s when cigarette consumption was half what it is now.

What has Putin done to redress this situation, to combat alcoholism, drug addiction, smoking? Not one thing.

Attempts to combat alcoholism by prohibition such as under Gorbachev and in Tsarist days failed. Today, the government is again talking about the need to combat alcoholism. Yet the strangest things are being done in this cause: from 2010, the government has decided that excise tax on beer will be tripled while only raising it 10% for vodka. It’s clear what this will lead to: strong spirits will be used to replace beer; drunkenness will rise. What were the authorities trying to achieve – improve the nation’s health or the bank balances of the vodka lobby?

How should one combat alcoholism? Our reply is by developing the middle classes. Alcohol consumption in Russia is a social phenomenon on the one hand and a tradition on the other. Research has been conducted that indicates a U-shaped dependency between quantity of alcohol consumed and income: the poor drink more (to drown their sorrows) and the rich drink more (consuming for kicks), while down at the bottom of the U the middle classes consume little alcohol and lead a healthier lifestyle.

There is even a phenomenon known as the French paradox. France is one of the world’s heaviest drinking countries, with a personal consumption of alcohol 11 times that of the USA. Nonetheless, France has more extremely long-lived citizens than anywhere else – 2,546 citizens over the age of 100 and an average life expectancy of 80. This all derives from France’s culture of alcohol consumption, from the fact of not consuming a great deal of spirits and staying with quality wine. But drinks of good quality are only an option for those with the money to buy them.

That is why we insist that alongside publicising healthier lifestyle choices, we should also stimulate and support the middle class. To do this, of course, will require changing the nature of the country’s economic policies. (Discussed in greater detail in our sections “Country of Screaming Inequality” and “Raw-Materials Appendage”.)

As far as combating smoking is concerned, there is no need to invent solutions – one simply needs to look at how this was done successfully in the US and in Western Europe over the last decades.

The population decline is going to be a long-term one. Russia has recently been losing 1 million able-bodied people a year and will continue to do so at this rate for some time to come as a result of high mortality rates and natural ageing of the population. The loss of a million able-bodied people is the equivalent of a drop of 1.5% of GDP. It also reduces contributions to the budget and to pension funds, which in turn inevitably leads to pension payment problems and a consequent rise in social tensions. Chronic depopulation therefore constitutes a real threat to the country’s economic development, will in all likelihood lead to worsening standards of living, and may even bring into question the country’s size and territorial integrity.

The authorities will inevitably have to look to an effective migration policy to fill the holes in Russia’s force of qualified and unqualified labour in order preserve Russia as a state.

On the contrary, however, the Putin régime in 2002 passed a repressive migration law which on the one hand increased the numbers of illegal immigrants and on the other reduced the flow of law-abiding and able-bodied people into the country. About 8 million Russia-speaking citizens of the post-Soviet republics flowed into the country in the 1990s. After Putin came to power, the influx dropped off.

This sharp drop in the number of migrants during Putin’s rule is one of the reasons for the collapse in Russia’s population numbers as compared to the 1990s.