Daily Archives: August 25, 2007

August 25, 2007 — Contents


(1) Lipman Rips Putin Another New One

(2) Russian Bear Eats Elections Like Candy

(3) Streetwise Professor on the Putin Economy

(4) NGOs Buried Alive in Neo-Soviet Russia

Lipman Rips Putin Another New One

Via crack Russia columnist Masha Lipman, editor of the Carnegie Moscow Center’s Pro et Contra journal, and the Washington Post, a timely reminder of the outrage of Russian history:

This month marks 70 years since the drastic surge of Stalin’s terror: In 1937 the Kremlin butcher scrapped even the faintest appearance of court procedures. The infamous “troika trials” — a system of justice by rubber-stamped death sentences — killed more than 436,000 in one year. The anniversary observances were intended to honor the victims. But the ceremony held earlier this month at Butovo, the site of mass killings on the outskirts of Moscow, revealed the government’s desire to keep the public’s mind off reflections about terror and its perpetrators.

The Russian Orthodox Church oversaw the ceremony, a religious service focused on the martyrdom of the executed, not on the crimes or who committed them. In an interview about three years ago, the superior of the Butovo church said he thought it best not to differentiate between those who were shot and those who shot them: “One shouldn’t search for who was right and who was wrong.”

Such forgiveness may be appropriate for the church — as a secular person, I am not in a position to judge — but it is not good for the nation, at least not until the commemoration has become a national cause and all victims as well as perpetrators have been officially named.

Russia does not have a national memorial or national museum dedicated to the mass killings of the Soviet people that were masterminded for decades by a monstrous tandem of the Communist Party and state security organs. Nor is there a national center where historical papers documenting mass repression are available to the public.

Since the late 1980s, groups and individuals have worked to collect this information, but their efforts remain uncoordinated. Pieces of their work are found here and there, sometimes at odd places, such as the office of one of Moscow’s downtown cemeteries, where some of the executed were cremated. Inside a dusty closet are piles of thick albums whose pages are covered with brief paragraphs about those shot by Stalin’s executioners. Some entries have photos; some victims remain faceless.

Vladimir Putin‘s government is averse to exposing or dwelling on the crimes of communism. Under Putin, the Federal Security Service (FSB), the successor to the KGB and earlier Soviet secret police agencies, has regained power. The FSB occupies the offices above a basement where innocent people were tortured and shot in Stalin’s time. Today, FSB officers refer to themselves as “chekisty,” the pseudo-romantic name for the state security officers of Lenin‘s, Stalin’s and Brezhnev’s times. The mood of self-assertive nationalism also plays a role. “There’s an official tendency to portray the past as a succession of victorious or positive developments, and terror simply does not fit in,” Arseny Roginsky, the head of the human rights group Memorial, told me. His group has collected and made available to the public archival materials about mass repression.

Memorial was founded in the late 1980s, when the Russian people attempted to face the results of decades of tyranny: the liquidation of the aristocracy; the extermination of peasants and priests; the deportation of ethnic minorities; the killings of artists, intellectuals, members of the Communist elite and Soviet military leaders. Back then, people understood who committed the crimes, and “Down with the KGB” was a chant heard at huge rallies in Moscow during the perestroika years.

Today, the Russian public has largely lost interest in comprehending what drove the country into the bloody insanity of self-extermination. People may be generally aware of the scope of the mass killings, but they would rather not dwell on them. In a soon-to-be-released national poll conducted by the Russian Levada Center polling agency, more than 70 percent of those surveyed said they considered Stalin’s terror an unjustifiable political crime, but almost the same number believe that “today it is not sensible to search for who is to blame.”

Visitors are scarce at Butovo, where more than 20,000 people were executed from 1937 to 1938, sometimes as many as 500 in one day. The site belongs to the Russian Orthodox Church, which has displayed the names of murdered clerics and church workers. All others — those of non-Orthodox creeds, secular and atheist victims — are collectively commemorated by a small stone, placed in 1993, with a short inscription noting that “thousands of victims of political repressions” were shot and buried there.

It seems logical that the church would take over the commemoration. In Russia, the top Orthodox clergy have traditionally been in harmony with the state’s rulers, no matter how savagely the people were treated. Today, the church may be relied on to handle the delicate subject of the mass exterminations by the gulag system and to impart the government’s implied message: Mourning the victims is okay within limits; broad public debates are unwelcome. Making connections between the past and the present is inadvisable. “The memory of terror is [being] pushed away from the public space,” Roginsky noted.

Those nations that seek to make Russia admit its guilt and apologize should bear this in mind. The Russian people themselves suffered the most at the hands of their rulers. And if as a nation we won’t hold anyone responsible for the grief, torture and death inflicted on our compatriots, how will we admit guilt for the harm done to others?

Russian Bear Eats Elections Like Candy

The Moscow Times reports on yet another nail in the coffin of Russian “democracy”:

Little more than three months before the parliamentary elections, Channel One has hired a television executive linked to United Russia to oversee its election coverage.

Opposition politicians said the appointment not only dashed their slim hopes of objectivity in pre-election television coverage but also showed tacit support of nationalism in the Kremlin. They promised to complain to the Central Elections Commission.

Andrei Pisarev [pictured — creepy, isn’t he?], formerly head of small Moscow-based Channel Three television, was appointed to the newly created post of deputy director general in charge of elections coverage by Channel One chief Konstantin Ernst in late July, a Channel One spokeswoman said Wednesday. Kommersant first reported the development Wednesday. Repeated attempts to reach Pisarev for comment were unsuccessful. Pisarev told Kommersant that he was not a member of United Russia.

Pisarev, however, has been credited with advising United Russia on several initiatives, including the pro-Kremlin party’s Russian Project. The project, unveiled in February, is ostensibly aimed to promote Russian culture and language in a series of conferences across the country, but it is seen by many as an attempt to steal the nationalist vote. “It is the Kremlin’s approval of nationalist ideology,” said Sergei Mitrokhin, deputy head of the liberal Yabloko party. He condemned Pisarev’s appointment as an example of “the insolence of the authorities” and said Yabloko would ask the Central Elections Commission to investigate the “illegal” recruitment. “After all, television itself determines the election result,” he said.

The Channel One spokeswoman, Larisa Krymova, said the appointment was made for “purely professional” reasons not connected to Pisarev’s political sympathies. “Pisarev is a well-known, professional director who has worked with Channel One on more than one occasion,” Krymova said.

Pisarev played a key role in Channel One’s coverage of the funeral of former President Boris Yeltsin in April, Kommersant said. Pisarev also has covered numerous Russian Orthodox events. Before heading Channel Three, he led the Orthodox Television Information Agency. Channel Three representatives declined immediate comment, asking that questions be sent by fax. United Russia spokesman Konstantin Mikhailov said he was unaware of the appointment. Asked whether Pisarev was indeed a party adviser, he said, “Ask Mr. Pisarev yourself.” United Russia dominates the State Duma, holding 305 of the 446 available seats, and follows any political course designated by President Vladimir Putin. Legislation backed by the Kremlin passes through the house unchallenged. That kind of control is what is at stake in the upcoming elections, said Oleg Panfilov, director of the Center for Journalism in Extreme Situations. “What a nightmare,” he said of Pisarev’s appointment. “Now the propaganda will begin in earnest.”

Streetwise Professor on the Putin Economy

Streetwise Professor on the prospects of the Putin economy (spoiler alert — they are bleak):

I got a chuckle reading this quote from a Moscow Times article on the growth of the Russian bureaucracy:

From inside the Kremlin’s walls to everyday lives with endless paperwork, bureaucracy rules. Like the nation’s economy, bureaucracy seems to be booming. Determining its exact size is difficult, much like navigating the mire of it. But by all accounts, the number of public servants today likely exceeds Soviet levels. And they are making substantially more money than their average compatriots. Sociologists have detected a growing inclination among young people toward jobs like customs officers or tax inspectors, despite widespread allegations of corruption and inefficiency. [Emphasis mine.]

Er, despite isn’t the right word. Because is more apt. Resources flow to their most highly remunerated use (not necessarily their most efficient one.) In societies where rent seeking is highly rewarded, resources will flow to activities conducive to rent seeking. Just as Willie Sutton said he robbed banks because that’s where the money is, young Russians are evidently seeking glorious careers in the customs or tax services for exactly the same reason.

This does not bode well for the future of the Russian economy. As Tullock, Anne Kreuger, Vishny & Shleifer, and others have noted, the flow of real resources into rent seeking activities creates a drag on growth. Vishny & Shleifer note that there are sources of increasing returns in rent seeking. Their basic mechanism is that rent seeking depresses the returns to private economic activity, which makes it more attractive to go into rent seeking governmental positions, which results in further depression of the returns to productive work, etc. There are other mechanisms at work too. North, Wallis, & Weingast note that “natural states” built on rent seeking need to suppress private economic activity in order to prevent the rise of political interests that would challenge the rent seekers. Mancur Olson argued that rent seekers come to dominate politics, and introduce rules and regulations that increase their opportunities to extract rents while throttling private economic activity.

Vishny & Shleifer also derived a model in which high rewards to rent seeking activity impede growth by inducing the most talented to go into non-productive activities. In this model, in the productive sector the rate of productivity growth depends on the skill of the most talented individual in that sector (because of spillovers/learning by doing–the less talented learn from the most talented.) High rewards to rent seeking induce the most talented to go into unproductive redistributive activities, thereby reducing growth in the productive sector. (The V-S model presumes free entry into rent seeking activities. Presumably the rent seekers will attempt to protect their turf and erect entry barriers that will mitigate this problem of dynamic inefficiency, but which will create other static deadweight losses as people expend real resources to attempt to get into the cartellized rent seeking sector.)

If the sociologists’ observations are accurate, this is an indication that rent seeking in Russia is not limited to expropriating foreign energy companies, but is instead a more pervasive phenomenon. This would represent a throwback to Tsarist times, and to traditional Russian patramonialism. Sigh.

One other thought comes to mind in this regard. The increasing centralization of power in the Putin years–the re-establishment of the “vertical power”–could actually make things less bad–not good, just less bad. Centralized, “cartellized”, coordinated rent seeking is typically less inefficient than the de-centralized, uncoordinated rent seeking that apparently characterized the Yeltsin years. Vishny-Shleifer analogized the cost of uncoordinated rent seeking to the losses that arise from multiple marginalization that occurs when complementary goods are sold by separate monopolists; integration into a single monopoly can improve efficiency in this case. With corruption, numerous independent bureaucrats each extracting a bribe will collectively charge a bribe that exceeds the monopoly bribe, creates more deadweight loss than the monopoly bribe, and actually results in lower bribery collections. Coordinating the activities of corrupt officials makes everybody better off–though not as well off as they would be if corruption were stamped out. Think of the “anti-corruption” campaigns in Russia as being aimed at making corruption more efficient, not as an attempt to stamp it out altogether. Where’s the fun (and profit) in that?

Similarly, Olson argued that a “stationary bandit” with monopoly control over a territory has an “encompassing interest” in encouraging some economic growth to permit him to extract greater revenues. In contrast, “roving bandits” view the populace as a commons, and have an incentive to steal as much as they can as soon as they can lest somebody else steal first. They have no incentive to encourage any economic growth as unlike the stationary bandit, they can’t get their hands on the fruits of this growth.

This is not to say that I advocate strong power verticals that coordinate theft. It is just to say that as bad as this is, things can be worse. This can also help explain Putin’s popularity. Compared to a normal civil society in which rent seeking and corruption are highly circumscribed, Putin’s Russia appears dreadful. But that’s not a comparison that most Russians can make, never having lived in such a normal civil society. Compared to the era of roving bandits and uncoordinated corruption that preceded Putin, ordered corruption by the vertical power looks pretty good. The tragedy is that many Russian minds identify chaotic corruption with freedom, economic liberty, and democracy, as that is how the transition was described to them. And Putin is not about to disabuse them of that notion. Indeed, he is doing everything to reinforce it, as AEI’s Leon Aron discusses in this article.

One last thing on the Russian economy. I am reviewing some data on recent Russian economic performance, and will soon post an extended entry analyzing that performance, and making some observations on what the future is likely to hold.

NGOs, Buried Alive

The Moscow Times reports on the Kremlin’s declaration of war on foreign NGO groups operating in Russia.

In a blizzard of bureaucratic absurdity, the new registration law for nongovernmental organizations has created administrative hurdles threatening to put many out of business and deterring others from setting up shop at all. When the bill passed last year, NGO representatives suggested that it was an instance of bureaucracy being deliberately beefed up to fight organizations the government dislikes. Now, they say that up to three-quarters of over 200,000 officially registered noncommercial organizations could face closure. “It’s just tremendous bureaucracy,” said Jens Siegert, head of the Heinrich Foundation’s Moscow office. He said his organization, affiliated with the German Green Party, had to hire one extra staff member solely to cope with the workload.

Part of that workload came from a stipulation in the law that every single organization had to submit new accounting forms to the Federal Registration Service, a sprawling government body with roughly 40,000 employees that reports to the Justice Ministry. The agency’s deputy spokeswoman, Lyubov Mikhailova, said that by May 20, just 48,470 — less than 24 percent of the more than 216,000 registered NGOs in the country — had submitted accounting forms, more than a month after the original deadline in April had passed. Mikhailova did not comment on what the consequences of noncompliance would be for the organizations. In a written response, she merely stated that during the first half of this year, 18,022 domestic and 34 foreign organizations received written warnings for not submitting the forms or violating submission procedures. This amounts to 8 percent of the national and 15 percent of the 226 foreign-run NGOs.

But critics say that just doing everything necessary to comply itself amounts to punishment. In addition, foreign-run organizations must hand in quarterly financial reports and a plan of their activities for the coming year that includes the amount of money allotted for each project by Oct. 31. Authorities must be notified of any new program at least one month in advance and of any essential change of plans within 10 business days of the decision.

The law also requires all foreign NGOs to re-register their offices by Oct. 18. Dozens of NGOs, including some that had submitted their documents prior to the deadline, were not in the registry by Oct. 18 and had to suspend their activities in Russia for days or weeks until the registry reviewed their paperwork and officially re-registered them. The recipients see the additional requirements as proof of what they believe is the regulation’s real purpose — to rule out the possibility that foreign organizations could provoke public unrest in the way the Kremlin believes happened in Georgia and Ukraine. “I call this law an Orange measure,” Siegert said in a telephone interview, referring to Ukraine’s Orange Revolution, which brought President Viktor Yushchenko to power. “NGOs are forced to occupy themselves with internal matters instead of their real work,” he said. He also suggested that the relatively low numbers of warnings issued was a sign that the authorities themselves were also overwhelmed by the workload.

The new regulations prevented small organizations in particular from focusing on their real activities, said Inara Gulpe-Laganovska, NGO liaison officer for Human Rights Watch in Russia. She also said the law contained disproportionate punishment for violations. “Only two types exist — suspension or liquidation,” she said in e-mailed comments. Aside from the burdens, critics say the law allows the authorities to engage in excessive interference. “The worst thing is that the reporting makes NGOs vulnerable by giving registration officials an unprecedented level of discretion in deciding which projects comply with Russia’s national interest,” Gulpe-Laganovska said.

Human rights campaigners also point to the fact that authorities have arbitrarily targeted some organizations with seemingly ludicrous demands. The St. Petersburg-based NGO Citizens’ Watch, for instance, has been asked to disclose the entirety of its written correspondence with anyone or any organization outside the office over a three-year period — including e-mails. “The registration service came to us in July and showed us a screening warrant,” the organization’s chairman, Boris Pustintsev, said in a telephone interview. “They then suddenly demanded that we produce all outgoing correspondence from July 2004 to July 2007.” Pustintsev said he initially refused because he believed the request exceeded the agency’s competence. After a board meeting, however, the NGO did grudgingly agree to comply “because otherwise the authorities could freeze our bank accounts,” he said. But Pustintsev added that Citizens’ Watch also decided to “raise hell” with the Federal Registration Service. “We will sue them, we will appeal to [service head Sergei] Vasilyev, and we might take the matter to the Constitutional Court,” Pustintsev said.

Other organizations have already been officially closed under dubious circumstances. The International Youth Human Rights Movement — a group that says it has 1,000 active members in Russia and abroad — learned in early August that it had been shut down by a court in Nizhny Novgorod. “The ruling was made June 13, but we only heard about it by chance almost two months later,” the movement’s coordinator, Dmitry Makarov, said in a telephone interview. The rationale behind the decision seems to stem from a basic bureaucratic mix-up. “The court based its decision on our failure to submit accounting forms to the local branch of the registration service,” Makarov said. Instead, he said, the documents had been filed to the Federal Registration Service in Moscow, as requested, because the organization had reorganized into an international group in 2004. Bereft of its legal status, the movement is now filing a legal complaint against the ruling.

Others are also trying to fight back. Agora, an interregional association of Russian human rights groups, said in a memorandum that it found 33 cases of unlawful actions from the service against NGOs from April 2006 to May 2007. Agora provided legal assistance to those concerned in 20 of them. The cases demonstrated the service’s “unfriendly bias against NGOs,” excessive demands on their operations and, in some cases, an unwillingness to maintain constructive relations, the memorandum said. Another consequence is that setting up an NGO has become a daunting task. A study prepared under the presidential human rights council found that the cost of legal procedures was 33 percent higher than setting up a business and requires more time. “It takes a minimum of six to eight weeks to register an NGO, while registering a commercial company takes from seven to 10 days,” said Anton Zolotov of the Institute of Civil Analysis, who co-authored the survey, preliminary versions of which were released earlier this year. Siegert said he knew of at least two cases where individuals had opted to open up a business instead of an NGO, just to avoid the hassle.

August 24, 2007 — Contents


(1) Kasparov Warns Australia on Selling Uranium to Russia

(2) More Proof of How Erudite and Informed Russians Are

(3) Annals of Russian Humliation

(4) The Observer Blasts “Neo-Soviet” Russia

(5) On Putin and the New Cold War

NOTES FROM ALL OVER: We can’t say it comes as much of a surprise to us, but it turns out that, on top of everything else, Maria Shamapova is bad in bed, too. Maybe right about now she’s thinking she should’ve stayed in Siberia and made tractors. And you know what? We’re kinda thinking that too. Whoops! This just in: That’s just another one of Mark Ames‘ lies. Apparently, when he needs to fill space, he just thinks up some lies. But you already knew that, didn’t you, clever little LR reader that you are. What you may not have known is that he was also lying when he said all those nasty things about America. Really, he makes George Bush look like Benedict Arnold.