Daily Archives: March 16, 2007

March 16, 2007 — Contents

FRIDAY MARCH 16 CONTENTS

(1) Who Lost Russia? (includes reader poll)

(2) And now a Bubble Burst . . . and now a Stock Market

(3) From Russia with Thugs

(4) Putin’s Political Axe Falls Yet Again

Who Lost Russia?

Below, Washington Post columnist Fred Hiatt asks who is responsible for the rise of the Neo-Soviet Union. But first, what about you, dear reader? Who do you think is most responsible for this catastrophe? Vote now:

Who is most responsible for the rise of dictatorship in Russia?
The People of RussiaThe KGBWestern GovernmentsWestern MediaRussian MediaRussian “Oligarchs”Boris YeltsinBill ClintonGeorge Bush Sr.George Bush Jr.NATOCommunismThe USSRThe USAMikhail GorbachevWestern Critics of RussiaWestern Apologists for RussiaCapitalismBad LuckFate
 
Free polls from Pollhost.com

Who lost Russia? As the world’s biggest country backslides ever more quickly into authoritarianism, the answer you hear increasingly is: the United States.

Curiously, you hear it both from Russians, who simultaneously deny that anything bad has happened and blame America for it; and from Americans, who assume that a few tweaks of policy could have made everything come out differently in Moscow.

One version blames America for backing Boris Yeltsin, who presided imperfectly over Russian democracy in the 1990s and so, the story goes, soured Russians on the very idea of freedom. Another blames America for allowing former Soviet satellites to join NATO, hurting Russians’ feelings and promoting a nationalist backlash.

As readings of history, these theories mix elements of truth with great dollops of illogic. It’s true that Russians endured trying times after communism crumbled. Prices rose, promised pensions vanished and unsavory characters became millionaires.

But the same was true in Estonia, Ukraine, Poland and many other countries. Democratization wasn’t pretty anywhere. The question is why those countries managed to weather the transition and come through, with varying degrees of success, to the other side, while Russia was left looking for scapegoats.

As to NATO: On the one hand, you have, say, Estonia, a democracy of 1.3 million people, freely joining in 2004 an alliance of like-minded democracies. On the other hand, you have Vladimir Putin abolishing local and provincial elections, muzzling the press and imprisoning his political enemies. If you fail to see the connection, it’s because there is none.

A Russia developing in a healthy way would be happy to see its smaller neighbors democratize, improve ties with the West and prosper, all of which could redound to Russia’s benefit. Russia’s leaders know perfectly well that there is no military threat from Estonia and never will be. But because they continue to define greatness in terms of state ownership and control, they prefer an impoverished and dependent Belarus to a thriving and autonomous Poland.

So what can explain Russia’s de-democratization? Russians often blame their own “serf” mentality, a cultural tradition arising from centuries of autocracy that left them supposedly unsuited for self-rule. A more refined version points out that communism lasted a generation longer in Russia than in Central Europe, which at least emerged with faint memories of between-war civil society.

Then there is Russia’s misfortune to be rich in oil, gas, diamonds and other resources. Latvia and Slovenia understood that they needed predictable laws and respect for private property to attract foreign investment; Russia knew the oil multinationals would come fawning even to a regime that expropriated when convenient. Estonia viewed government’s role as enabling its citizens to create wealth; Russians used government to grab the wealth that nature had provided.

Being at the center of an empire might also be a misfortune. Other countries could blame Russia for their lost decades; Russia, having no one to blame, couldn’t face its history. And since even the diminished, post-Soviet Russia contained nations of non-Russians, from Chechnya in the south to Tatarstan in the middle to Sakha in Siberia, the new Russia could not build itself on ethnic Russian nationalism and had trouble finding any other source of national identity.

All of these factors may play some role. But Michael McFaul, an expert on democratization at Stanford University and the Hoover Institution, cautions that “the structural explanations — culture, history of communism, oil and gas — can be easily overplayed, while the actual decisions and mistakes of individual leaders can be forgotten or excused.”

That’s true of U.S. mistakes, too. The United States doesn’t determine Russia’s fate, but it has influence at the edges. It could speak straightforwardly with Russia’s leaders and search for areas of common interest, while defending the rights of Russia’s neighbors to chart their own course and of Russia’s citizens to live in freedom.

Instead, U.S. officials too often treat Russia like a touchy adolescent that shouldn’t be provoked. Last week Rep. Tom Lantos (D-Calif.), chairman of the House Committee on Foreign Affairs, complained that for the fourth year in a row the administration has proposed “devastating cutbacks” in programs to assist democratic and civil society groups in Russia.

That’s something for which the United States should be blamed. Or, as Lantos said: “At a time when supporters of democratic reform, the rule of law, and human rights are being assassinated or carted off to the gulags of Siberia, we should not be starving these groups of vital support.”

And Now a Bubble Burst . . . and now a Stock Market

Reuters reports on impending doom for the Russian stock market:

Prominent emerging markets investor Jim Rogers said Russian equity markets were overvalued and could burst “sooner rather than later,” revealing the skeletons in the cupboard of its “outlaw capitalism.”

“I wouldn’t put a nickel of my own money in Russia, and I wouldn’t put a nickel of your money there either,” Rogers, a long-time commodities bull, told Reuters by telephone from New York on Wednesday.

“Everything about Russia is one big bubble, and it’s going to pop. It’s going to happen sooner rather than later,” said Rogers, who co-founded the Quantum Fund with George Soros in the 1970s and has focused on commodities since 1998.

“When that happens, people will look around and say, how did that happen? That’s when we’ll find out about all the skeletons in the cupboard.”

The fund manager said the Russian state was confiscating assets and company owners were cashing out via a series of initial public offerings in London.

The Kremlin has muscled its way into big deals with foreign companies under President Vladimir Putin and taken control of strategic industries including oil.

Late last year, after months of official pressure, Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and its Japanese partners agreed to cede control to Russian gas monopoly Gazprom (GAZP.MM: Quote, Profile, Research) of the vast Sakhalin-2 natural gas project.

“Russia is a disaster,” Rogers said. “Everybody in Russia is busy stripping assets. If you ride across Russia, you are not going to see a lot of money being spent on railroads, pipelines or roads.”

“It’s outlaw capitalism.”

Russian stock prices surged 80 percent last year, driven by an economic boom now into its eighth year on the back of high oil prices and soaring consumer demand. But the RTS stock market is down about 7 percent in the year to date amid a global sell-off triggered by concerns over U.S. growth and inflation.

Referring to a rash of Russian companies that have listed shares in London, Rogers said: “People don’t have a clue. They’re buying blind pools, and companies are saying ‘Just give us your money, we’re not going to tell you what we’ll do with it’.”

Investors last got their fingers burned in Russia after the August 1998 domestic debt default and rouble devaluation sent volatility through world markets, losing major banks billions of dollars.

But Rogers warned: “Things will be worse this time. 1998 was a stock market bubble; this time we have a huge housing and commodities market bubble.”

Rogers predicted Russian stocks would suffer huge losses when the bubble pops. Some stocks could go down by as much as 90 percent, others 40 percent, while some could disappear, he said.

From Russia with Thugs

Check out Hot Air’s video report “From Russia with Thugs.”

Putin’s Political Axe Falls Yet Again

The Beeb reports, via it’s media monitoring service, on yet another nail in the coffin of democracy in Russia:

Russian papers say that Alexander Veshnyakov has been removed from the post of head of the Central Electoral Commission because of his criticism of the behaviour of pro-Kremlin parties and opposition to amendments to electoral legislation. Pro-government papers appear to be silent on the issue.

Madina Shavlokhova in Gazeta

Why was Veshnyakov rejected by the president, even though he has expressed his wish to stay for a further, third term on several occasions? His criticism of changes to electoral legislation probably played a role in this. For example, he publicly opposed the abolition of the ‘against all’ option on the ballot paper and the removal of the minimum turnout requirement. He also criticized the use of vote-grabbing methods, which the United Russians actively resorted to…

Moskovskiy Komsomolets

At the State Duma, for example, the news of Veshnyakov’s dismissal had the effect of an exploding bomb… Everybody had been almost certain that he would keep his post… On the one hand, the head of the Central Electoral Commission is only a technician. On the other hand, he is potentially a very dangerous figure for the authorities. After all, if he were suddenly to rear up and say how elections really should be held, the scandal would be enormous. All chairmen of the CEC – Ryabov, Ivanchenko and, finally, Veshnyakov – have loyally served the highest authority. However, eventually, small ‘flaws’ were found in the behaviour of Ryabov and Ivanchenko, which gave reason to believe that, in certain circumstances, they might well start playing their own game. Now the same fate has befallen Veshnyakov…

Nezavisimaya Gazeta

Throughout his years at the helm, Mr Veshnyakov has, with Calvinist asceticism, stripped away all the ‘excesses’ and liberties of electoral legislation drawn up during the Yeltsin period… Veshnyakov only put a foot wrong when, obeying common sense, logic and his own knowledge, he opposed amendments which abolished the ‘against all’ option and the turnout threshold… he certainly knew what he was letting himself in for when he engaged in public polemics with the initiators of the amendment. So, all credit to him…

Irina Nagornykh in Kommersant

The leaders of the ‘No1 party of power’… may have convinced the president that, with the State Duma and presidential elections approaching, the centre does not have sufficient control over the system of electoral commissions, and may have lobbied for Alexander Veshnyakov’s dismissal… opposition figures believe Veshnyakov’s dismissal is linked to changes to the electoral system, with the reduced role of elections and the transformation of the Commission into an ineffectual body ready to approve any unlawful decision by the Kremlin… The first sign that observance of the letter of the law is no longer relevant, came with amendments to the law ‘On guarantees’…, in accordance with which a member of the Commission no longer has to have legal qualifications

Putin’s Political Axe Falls Yet Again

The Beeb reports, via it’s media monitoring service, on yet another nail in the coffin of democracy in Russia:

Russian papers say that Alexander Veshnyakov has been removed from the post of head of the Central Electoral Commission because of his criticism of the behaviour of pro-Kremlin parties and opposition to amendments to electoral legislation. Pro-government papers appear to be silent on the issue.

Madina Shavlokhova in Gazeta

Why was Veshnyakov rejected by the president, even though he has expressed his wish to stay for a further, third term on several occasions? His criticism of changes to electoral legislation probably played a role in this. For example, he publicly opposed the abolition of the ‘against all’ option on the ballot paper and the removal of the minimum turnout requirement. He also criticized the use of vote-grabbing methods, which the United Russians actively resorted to…

Moskovskiy Komsomolets

At the State Duma, for example, the news of Veshnyakov’s dismissal had the effect of an exploding bomb… Everybody had been almost certain that he would keep his post… On the one hand, the head of the Central Electoral Commission is only a technician. On the other hand, he is potentially a very dangerous figure for the authorities. After all, if he were suddenly to rear up and say how elections really should be held, the scandal would be enormous. All chairmen of the CEC – Ryabov, Ivanchenko and, finally, Veshnyakov – have loyally served the highest authority. However, eventually, small ‘flaws’ were found in the behaviour of Ryabov and Ivanchenko, which gave reason to believe that, in certain circumstances, they might well start playing their own game. Now the same fate has befallen Veshnyakov…

Nezavisimaya Gazeta

Throughout his years at the helm, Mr Veshnyakov has, with Calvinist asceticism, stripped away all the ‘excesses’ and liberties of electoral legislation drawn up during the Yeltsin period… Veshnyakov only put a foot wrong when, obeying common sense, logic and his own knowledge, he opposed amendments which abolished the ‘against all’ option and the turnout threshold… he certainly knew what he was letting himself in for when he engaged in public polemics with the initiators of the amendment. So, all credit to him…

Irina Nagornykh in Kommersant

The leaders of the ‘No1 party of power’… may have convinced the president that, with the State Duma and presidential elections approaching, the centre does not have sufficient control over the system of electoral commissions, and may have lobbied for Alexander Veshnyakov’s dismissal… opposition figures believe Veshnyakov’s dismissal is linked to changes to the electoral system, with the reduced role of elections and the transformation of the Commission into an ineffectual body ready to approve any unlawful decision by the Kremlin… The first sign that observance of the letter of the law is no longer relevant, came with amendments to the law ‘On guarantees’…, in accordance with which a member of the Commission no longer has to have legal qualifications

Putin’s Political Axe Falls Yet Again

The Beeb reports, via it’s media monitoring service, on yet another nail in the coffin of democracy in Russia:

Russian papers say that Alexander Veshnyakov has been removed from the post of head of the Central Electoral Commission because of his criticism of the behaviour of pro-Kremlin parties and opposition to amendments to electoral legislation. Pro-government papers appear to be silent on the issue.

Madina Shavlokhova in Gazeta

Why was Veshnyakov rejected by the president, even though he has expressed his wish to stay for a further, third term on several occasions? His criticism of changes to electoral legislation probably played a role in this. For example, he publicly opposed the abolition of the ‘against all’ option on the ballot paper and the removal of the minimum turnout requirement. He also criticized the use of vote-grabbing methods, which the United Russians actively resorted to…

Moskovskiy Komsomolets

At the State Duma, for example, the news of Veshnyakov’s dismissal had the effect of an exploding bomb… Everybody had been almost certain that he would keep his post… On the one hand, the head of the Central Electoral Commission is only a technician. On the other hand, he is potentially a very dangerous figure for the authorities. After all, if he were suddenly to rear up and say how elections really should be held, the scandal would be enormous. All chairmen of the CEC – Ryabov, Ivanchenko and, finally, Veshnyakov – have loyally served the highest authority. However, eventually, small ‘flaws’ were found in the behaviour of Ryabov and Ivanchenko, which gave reason to believe that, in certain circumstances, they might well start playing their own game. Now the same fate has befallen Veshnyakov…

Nezavisimaya Gazeta

Throughout his years at the helm, Mr Veshnyakov has, with Calvinist asceticism, stripped away all the ‘excesses’ and liberties of electoral legislation drawn up during the Yeltsin period… Veshnyakov only put a foot wrong when, obeying common sense, logic and his own knowledge, he opposed amendments which abolished the ‘against all’ option and the turnout threshold… he certainly knew what he was letting himself in for when he engaged in public polemics with the initiators of the amendment. So, all credit to him…

Irina Nagornykh in Kommersant

The leaders of the ‘No1 party of power’… may have convinced the president that, with the State Duma and presidential elections approaching, the centre does not have sufficient control over the system of electoral commissions, and may have lobbied for Alexander Veshnyakov’s dismissal… opposition figures believe Veshnyakov’s dismissal is linked to changes to the electoral system, with the reduced role of elections and the transformation of the Commission into an ineffectual body ready to approve any unlawful decision by the Kremlin… The first sign that observance of the letter of the law is no longer relevant, came with amendments to the law ‘On guarantees’…, in accordance with which a member of the Commission no longer has to have legal qualifications