September 27, 2007 — Contents

THURSDAY SEPTEMBER 27 CONTENTS

(1) EDITORIAL: Russia is an Evil Empire

(2) Annals of Putin’s Failure: The Poor Get Poorer

(3) More International Evaluations, More Pathetic Failure for Russia

(4) Aslund on Zubkov

(5) Annals of Kremlin Inc.

NOTE: Pajamas Media Blogger/Editor Fausta Wertz will be hosting a BlogTalk radio show tonight at 9 pm (EST). On the program, Cinnamon Stillwell discusses the international trend on libel tourism, where reporters are sued for libel in countries other than where they reside. Dr Rachel Ehrenfeld, author of Funding Evil: How Terrorism is Financed and How to Stop It will discuss her book and the libel lawsuit following its publication. This program couldn’t be more timely in light of our lead post today concerning Russian support for terrorism and rogue regimes, so tune in if you get the chance and feel free to call in to give your thoughts or ask a question. Click here to access the program at the air time.

Thanks for reading La Russophobe !

EDITORIAL: Russia is an Evil Empire

EDITORIAL

Russia is an Evil Empire

Displayed at the left you see a photograph of Shiri Negari, who was murdered on Tuesday, June 18th, 2002, by a Palestinian suicide bomber on her way to work. She was 21 years old.

Blogger Michelle Malkin took this photograph while participating in a protest against the visit by crazed Iranian dictator Mahmoud Ahmadinejad to Columbia University in New York City for a speaking engagement; the lunatic was in town to address to the U.N. General Assembly at its opening ceremonies.

Shiri speaks from the grave in this image, attending the protest in spirit to remind those gathered that she, too, would have liked to address the students at Columbia, but was prevented from doing so by terrorists from Hamas who were funded by Iran’s government, which is led by Ahmadinejad — who in turn has called for a holy war against Israel wiping it off the face of the earth. All of the NATO allies are now furiously arrayed against Iran and, amazingly enough, France’s new president is leading the charge to impose draconian sanctions to keep Iran in line. If France is willing to take action, you know that Ahmadinejad is just as extreme as he can possibly get.

One might well ask: Where does Ahmadinejad get the brazen hubris necessary to confront the overwhelmingly more powerful team of the United States and Europe in this haughty, contemptuous manner? His nation, alone, is far too puny to work up such suicidal pathos (look how easily the U.S. destroyed the regime of Saddam Hussein in Iraq). There’s a clear answer: He gets it from Russia, and specifically from Russia’s dictator Vladimir Putin. It is no overstatement to say that Russia is the real root cause of turmoil in the Middle East.

And make no mistake: turmoil in the Middle East is directly in Russia’s interests. Even if it doesn’t actually undermine U.S. security, it still creates the conditions of uncertainty which tend to keep international oil prices inflated, and those prices are the Kremlin’s lifeblood. By supporting terrorist and rogue regimes in the Middle East, Russia not only gets the chance to vent its pathological hatred of America and her values, but more importantly supports the only pillar of its economy. Peace and stability in the Middle East are the last things Russia wants.

Recently, we published a drawing depicting Putin and Ahmadinejad as lovers, and the two truly are birds of a feather. Ahmadinejad is cracking down on Iran’s universities, seeking to purge them of all secular influence, while Putin is developing the maniacal “Nashi” youth cult in Russia. Ahmadinejad denies that Iran has any homosexuals, and hence can’t be accused of persecuting them, while Putin jokes about rape in front of a diplomatic delegation. Ahmadinejad says the Jewish holocaust never happened, and Putin says Stalin wasn’t really so bad after all. Both are shutting down newspapers and arresting or killing journalists at breakneck speed, and centralizing their power whilst crushing local government. One could go on for days listing the barbaric outrages taking place in these two countries and pointing out their similarities; it’s almost impossible to decide which one is a greater affront to democracy, almost as if they are engaged in a sickening pas de deux, the Fred and Ginger of atrocity, barbarity and vulgarity.

And the two are very literally in bed together where hatred of America, Europe and Western values are concerned. Recently, the U.S. military confirmed that Iran is providing missiles to the Islamic terrorists in Iraq which are being used to kill Americans on the ground there. While these particular missiles apparently came to Iran by way of North Korea, Putin’s Russia is also providing Ahmadinejad’s Iran with the technology it needs to develop nuclear energy, which Iran hopes will be the basis for its obtaining a nuclear weapon. Faced with the threat of Western attack should a bomb become possible, Iran has also obtained a missile defense system from Russia to thwart such an attack. Russia has continually refused to cooperate with Western moves to sanction Iran, providing it with the diplomatic cover it needs to continue killing American soldiers in Iraq as it seeks to exercise imperial control over that troubled nation.

And we must not forget that Russia is doing far more than making common cause with Iran in order to foment turmoil and instability in the Middle East. It is directly supporting Hamas itself, as well as Hezbollah and Syria, with diplomatic protection, weapons and lots of cold hard cash. And Russia’s hostility is not limited to the Middle East; it is also providing weapons and diplomatic support to the crazed dictator Hugo Chavez in Venezulea, and seeking to cooperate with the abusive, anti-democratic communist regime in China.

The ironies are almost overwhelming, of course. You can’t get any more anti-Muslim than Russia’s conduct of its war against Chechnya, and there is zero tolerance for dark-skinned non-Orthodox people in Slavic Russia, yet the hyper-Islamic Ahmadinejad and the ultra-Orthodox Putin both have no problem abandoning their supposed core values and ignoring this fundamental hostility in the short term (just the same way that it was easily possible for Stalin to enter into a secret pact with Hitler selling out Europe). Although these kind of alliances between rogue nations always lead ultimately to their destruction (both Hitler’s Germany and Stalin’s USSR were obliterated), in the short term the new Evil Empire means a great deal of trouble for the West if it is allowed to fester and grow. Immediate action is needed to prevent this from happening. A new Ronald Reagan must step to the forefront, and the upcoming U.S. presidential elections are the ideal place to start looking for her (or him).

It’s time to give up the ridiculous, childish and arrogant idea that the only reason Iran and Russia are keeping company together is that our misguided policies have driven them together. The idea that by “engaging” these two regimes we could “convince” them to stop desecrating the globe with their barbarism is a flight of fancy, the easy way out, too good to be true. It’s oh-so-comforting to imagine that we are so powerful that if we only say the right magic words, all our enemies will turn into friends, or at least harmless bystanders, that we don’t have to fight — and this is exactly what our enemies want us to think. They want us to drop our guard, “engage” them with meaningless rhetoric and allow them to consolidate, manipulate and destroy.

It was not kind words of understanding that brought down the USSR, it was direct confrontation. And it was simply insane for us to believe that simply because it had been defeated the USSR would slink away into the recesses of history, never to be heard from again. Would we have become happy communists if the USSR had won the cold war? Of course not. And Russia has not abandoned its fundamental hostility to our values or its desire to rule the world with its own brand of what’s-good-for-you. It simply bided its time waiting for the chance to lash out, and rising oil prices have made it think (quite wrongly) that the time has come.

It was possible for us to turn Japan and Germany into friendly, democracy-respecting nations because we physically gutted their leadership and obliterated them militarily. No such thing happened in Russia after World War II, and today the “president” of the country is a proud KGB spy who spent most of life trying to destroy our democratic friends in Germany. As long as Putin and his ilk hold power in Russia, that nation will remain devoted to our destruction by any means possible. They are a mere shadow of their former might, and so the only way they can make serious trouble for is is by getting us to drop our guard. And so that is what they are endeavoring feverishly to accomplish.

That Vladimir Putin, presiding over a nation which loses up to 1 million from its population every year due to demographic crisis, and works for an average wage of $3/hour, would think he has the time and energy to spare to make common cause with one of the world’s most despised despots, antagonizing the entire world into a cold (and perhaps hot) war, and that nobody within Russia would seriously challenge his doing so, is clear proof of the depth and breadth of Russia’s abiding hatred for the West and its total inability to act rationally in the face of it. And what else should we expect from a man who spent his entire life in the KGB, learning not merely to hate the West but to destroy it by any possible means. Do we really believe he simply woke up, as if from a dream, when the USSR collapsed and abandoned his life’s work? If so, we deserve to suffer for our stupidity, hubris and insularity.

We must fight back, and we must do so now. There are those who argue that it was wise to give Ahmadinejad the opportunity to speak at Columbia, since it helps to elicit his crazy views and lay them before the world, helps us to better understand how to deal with him. This is pure nonsense. Ironically, Columbia’s own president said, introducing Ahmadinejad as a speaker: “You are either brazenly provocative or astonishingly uneducated. Mr. President, you exhibit all the signs of a petty and cruel dictator. When you come to a place like this it makes you simply ridiculous.” So much for respectfully allowing him to speak and eliciting his views! As David J. Feith & Jordan C. Hirsch of National Review put it:

It is naive to ignore the uses to which Ahmadinejad will put his invitation. Over the past years, Ahmadinejad’s confrontational rhetoric and policies have resulted in diplomatic isolation and economic hardship for Iran. These developments are unpopular among Iranians. It is beneficial to Ahmadinejad and his regime, then, if he can claim to the Iranian people that his leadership is not hurting their country. If he can demonstrate that he is treated abroad as a respected leader, he will be better able to counter his critics at home. Columbia’s invitation thus gives political assistance to Ahmadinejad.

By allowing Ahmadinejad to speak, Columbia has enabled his dictatorship and increased his power, not diminished it. The same happened when Putin was invited on Larry King. It would be one thing to extend such invitations if we were actively engaged in combat with our enemies, but we are not. As Anne Applebaum wrote in the Washington Post: “it was deeply naive to imagine that the Iranian president would enter into a ‘vigorous debate’ with students who were deploying their ‘powers of dialogue and reason,’ as Columbia University President Lee Bollinger stated before the event, or that he would answer the appropriately aggressive questions Bollinger put to him.” Applebaum points out that Columbia didn’t even insist on an exchange whereby Ahmadinejad would allow a strongly anti-Iranian Westerner to address a large group of students at one of Iran’s most prestigious universities — much less is Columbia devoting its resources to figuring out ways we can remove this maniac from his seat of power and oppression.

We must not do the same with Vladimir Putin, it’s his only hope of defeating us with only the feeble resources of the neo-Soviet Union at his disposal. We have to stop asking for it — or we’re going to get it. Right between the eyes.

Thanks for reading La Russophobe !

Annals of Putin’s Failure: The Poor Get Poorer (and in Russia, that means just about Everybody)

Kommersant reports:

Over the past eight years income has grown rapidly, but so has inequality. Putin’s abundance has not yet reached everyone: the rich get richer faster than the poor. The Gini Coefficient, which reflects the material inequality in a country, grew from 0.395 in 2000 to 0.407 in 2004. According to RMEZ, the income of the richest 20% of households was 6 times richer than the poorest 20% of households. To compare, this factor was only 5.2 in 2005. Measured by expenditures, the split is even greater: a factor of 6.7 in 2005 and 8.9 in 2006. This spread points to a colossal difference in lifestyle – but not in terms of mansions and limousines. The best-off Russian families, compared to their poorest countrymen, spend 7.7 times more on fruits and vegetables, 10 times more on alcohol and 12.6 times more on meals outside the home.

The unevenness of income growth calls into question the possibility of ending poverty in Russia. Unfortunately, it is extremely difficult to determine whether the government has succeeded in cutting poverty in half. The poverty level ratings vary greatly depending on who you consider to be poor. According to Rosstat, in 2000 42.3% of Russians had incomes below the cost of living. In 2004 25.5% of Russians earned less than the cost of living. However, the percent of families who receive charity or help from relatives is growing steadily. Currently 29.9% of the population fits this category. In other words, whatever the statistics say, one third of families are poor enough to accept material support from those around them.

According to the Institute of Sociology at the Russian Academy of Sciences in a report “Urban Middle Class in Russia” (2007), more than 20% of the economically active ubran population and about 14% of the country’s overall population belong to the middle class. About 22% of the population is on the periphery of the middle class. The income threshold for middle class is 10,500 rubles per family member per month. 54% of Russia’s middle class are workers in the government sector, 16% of the middle class income is received as social aid. Experts don’t see significant prospects of the middle class growing.

So to recap: 86% of Russia’s population lives on less than 10,500 rubles (about $400) per person per month, or about $15 per day. If you have that much, you are labled “middle class” by Putin’s government — but in fact, you are super rich. “Middle class” should properly refer to the average or median income of the country, not at miniscule group squeezed into the top 14% of the whole country between the desperately poor and the obscenely wealthy. And what’s far more disturbing is that the gap between rich and poor is accelerating rapidly, just what happened in Tsarist times to trigger the Bolshevik revolution. Mind you — these are the Kremlin’s own numbers we’re talking about. What the actual, horrifying truth may be, one can only guess.

Thanks for reading La Russophobe !

Annals of Putin’s Failure: The Poor Get Poorer (and in Russia, that means just about Everybody)

Kommersant reports:

Over the past eight years income has grown rapidly, but so has inequality. Putin’s abundance has not yet reached everyone: the rich get richer faster than the poor. The Gini Coefficient, which reflects the material inequality in a country, grew from 0.395 in 2000 to 0.407 in 2004. According to RMEZ, the income of the richest 20% of households was 6 times richer than the poorest 20% of households. To compare, this factor was only 5.2 in 2005. Measured by expenditures, the split is even greater: a factor of 6.7 in 2005 and 8.9 in 2006. This spread points to a colossal difference in lifestyle – but not in terms of mansions and limousines. The best-off Russian families, compared to their poorest countrymen, spend 7.7 times more on fruits and vegetables, 10 times more on alcohol and 12.6 times more on meals outside the home.

The unevenness of income growth calls into question the possibility of ending poverty in Russia. Unfortunately, it is extremely difficult to determine whether the government has succeeded in cutting poverty in half. The poverty level ratings vary greatly depending on who you consider to be poor. According to Rosstat, in 2000 42.3% of Russians had incomes below the cost of living. In 2004 25.5% of Russians earned less than the cost of living. However, the percent of families who receive charity or help from relatives is growing steadily. Currently 29.9% of the population fits this category. In other words, whatever the statistics say, one third of families are poor enough to accept material support from those around them.

According to the Institute of Sociology at the Russian Academy of Sciences in a report “Urban Middle Class in Russia” (2007), more than 20% of the economically active ubran population and about 14% of the country’s overall population belong to the middle class. About 22% of the population is on the periphery of the middle class. The income threshold for middle class is 10,500 rubles per family member per month. 54% of Russia’s middle class are workers in the government sector, 16% of the middle class income is received as social aid. Experts don’t see significant prospects of the middle class growing.

So to recap: 86% of Russia’s population lives on less than 10,500 rubles (about $400) per person per month, or about $15 per day. If you have that much, you are labled “middle class” by Putin’s government — but in fact, you are super rich. “Middle class” should properly refer to the average or median income of the country, not at miniscule group squeezed into the top 14% of the whole country between the desperately poor and the obscenely wealthy. And what’s far more disturbing is that the gap between rich and poor is accelerating rapidly, just what happened in Tsarist times to trigger the Bolshevik revolution. Mind you — these are the Kremlin’s own numbers we’re talking about. What the actual, horrifying truth may be, one can only guess.

Thanks for reading La Russophobe !

Annals of Putin’s Failure: The Poor Get Poorer (and in Russia, that means just about Everybody)

Kommersant reports:

Over the past eight years income has grown rapidly, but so has inequality. Putin’s abundance has not yet reached everyone: the rich get richer faster than the poor. The Gini Coefficient, which reflects the material inequality in a country, grew from 0.395 in 2000 to 0.407 in 2004. According to RMEZ, the income of the richest 20% of households was 6 times richer than the poorest 20% of households. To compare, this factor was only 5.2 in 2005. Measured by expenditures, the split is even greater: a factor of 6.7 in 2005 and 8.9 in 2006. This spread points to a colossal difference in lifestyle – but not in terms of mansions and limousines. The best-off Russian families, compared to their poorest countrymen, spend 7.7 times more on fruits and vegetables, 10 times more on alcohol and 12.6 times more on meals outside the home.

The unevenness of income growth calls into question the possibility of ending poverty in Russia. Unfortunately, it is extremely difficult to determine whether the government has succeeded in cutting poverty in half. The poverty level ratings vary greatly depending on who you consider to be poor. According to Rosstat, in 2000 42.3% of Russians had incomes below the cost of living. In 2004 25.5% of Russians earned less than the cost of living. However, the percent of families who receive charity or help from relatives is growing steadily. Currently 29.9% of the population fits this category. In other words, whatever the statistics say, one third of families are poor enough to accept material support from those around them.

According to the Institute of Sociology at the Russian Academy of Sciences in a report “Urban Middle Class in Russia” (2007), more than 20% of the economically active ubran population and about 14% of the country’s overall population belong to the middle class. About 22% of the population is on the periphery of the middle class. The income threshold for middle class is 10,500 rubles per family member per month. 54% of Russia’s middle class are workers in the government sector, 16% of the middle class income is received as social aid. Experts don’t see significant prospects of the middle class growing.

So to recap: 86% of Russia’s population lives on less than 10,500 rubles (about $400) per person per month, or about $15 per day. If you have that much, you are labled “middle class” by Putin’s government — but in fact, you are super rich. “Middle class” should properly refer to the average or median income of the country, not at miniscule group squeezed into the top 14% of the whole country between the desperately poor and the obscenely wealthy. And what’s far more disturbing is that the gap between rich and poor is accelerating rapidly, just what happened in Tsarist times to trigger the Bolshevik revolution. Mind you — these are the Kremlin’s own numbers we’re talking about. What the actual, horrifying truth may be, one can only guess.

Thanks for reading La Russophobe !

Annals of Putin’s Failure: The Poor Get Poorer (and in Russia, that means just about Everybody)

Kommersant reports:

Over the past eight years income has grown rapidly, but so has inequality. Putin’s abundance has not yet reached everyone: the rich get richer faster than the poor. The Gini Coefficient, which reflects the material inequality in a country, grew from 0.395 in 2000 to 0.407 in 2004. According to RMEZ, the income of the richest 20% of households was 6 times richer than the poorest 20% of households. To compare, this factor was only 5.2 in 2005. Measured by expenditures, the split is even greater: a factor of 6.7 in 2005 and 8.9 in 2006. This spread points to a colossal difference in lifestyle – but not in terms of mansions and limousines. The best-off Russian families, compared to their poorest countrymen, spend 7.7 times more on fruits and vegetables, 10 times more on alcohol and 12.6 times more on meals outside the home.

The unevenness of income growth calls into question the possibility of ending poverty in Russia. Unfortunately, it is extremely difficult to determine whether the government has succeeded in cutting poverty in half. The poverty level ratings vary greatly depending on who you consider to be poor. According to Rosstat, in 2000 42.3% of Russians had incomes below the cost of living. In 2004 25.5% of Russians earned less than the cost of living. However, the percent of families who receive charity or help from relatives is growing steadily. Currently 29.9% of the population fits this category. In other words, whatever the statistics say, one third of families are poor enough to accept material support from those around them.

According to the Institute of Sociology at the Russian Academy of Sciences in a report “Urban Middle Class in Russia” (2007), more than 20% of the economically active ubran population and about 14% of the country’s overall population belong to the middle class. About 22% of the population is on the periphery of the middle class. The income threshold for middle class is 10,500 rubles per family member per month. 54% of Russia’s middle class are workers in the government sector, 16% of the middle class income is received as social aid. Experts don’t see significant prospects of the middle class growing.

So to recap: 86% of Russia’s population lives on less than 10,500 rubles (about $400) per person per month, or about $15 per day. If you have that much, you are labled “middle class” by Putin’s government — but in fact, you are super rich. “Middle class” should properly refer to the average or median income of the country, not at miniscule group squeezed into the top 14% of the whole country between the desperately poor and the obscenely wealthy. And what’s far more disturbing is that the gap between rich and poor is accelerating rapidly, just what happened in Tsarist times to trigger the Bolshevik revolution. Mind you — these are the Kremlin’s own numbers we’re talking about. What the actual, horrifying truth may be, one can only guess.

Thanks for reading La Russophobe !

Annals of Putin’s Failure: The Poor Get Poorer (and in Russia, that means just about Everybody)

Kommersant reports:

Over the past eight years income has grown rapidly, but so has inequality. Putin’s abundance has not yet reached everyone: the rich get richer faster than the poor. The Gini Coefficient, which reflects the material inequality in a country, grew from 0.395 in 2000 to 0.407 in 2004. According to RMEZ, the income of the richest 20% of households was 6 times richer than the poorest 20% of households. To compare, this factor was only 5.2 in 2005. Measured by expenditures, the split is even greater: a factor of 6.7 in 2005 and 8.9 in 2006. This spread points to a colossal difference in lifestyle – but not in terms of mansions and limousines. The best-off Russian families, compared to their poorest countrymen, spend 7.7 times more on fruits and vegetables, 10 times more on alcohol and 12.6 times more on meals outside the home.

The unevenness of income growth calls into question the possibility of ending poverty in Russia. Unfortunately, it is extremely difficult to determine whether the government has succeeded in cutting poverty in half. The poverty level ratings vary greatly depending on who you consider to be poor. According to Rosstat, in 2000 42.3% of Russians had incomes below the cost of living. In 2004 25.5% of Russians earned less than the cost of living. However, the percent of families who receive charity or help from relatives is growing steadily. Currently 29.9% of the population fits this category. In other words, whatever the statistics say, one third of families are poor enough to accept material support from those around them.

According to the Institute of Sociology at the Russian Academy of Sciences in a report “Urban Middle Class in Russia” (2007), more than 20% of the economically active ubran population and about 14% of the country’s overall population belong to the middle class. About 22% of the population is on the periphery of the middle class. The income threshold for middle class is 10,500 rubles per family member per month. 54% of Russia’s middle class are workers in the government sector, 16% of the middle class income is received as social aid. Experts don’t see significant prospects of the middle class growing.

So to recap: 86% of Russia’s population lives on less than 10,500 rubles (about $400) per person per month, or about $15 per day. If you have that much, you are labled “middle class” by Putin’s government — but in fact, you are super rich. “Middle class” should properly refer to the average or median income of the country, not at miniscule group squeezed into the top 14% of the whole country between the desperately poor and the obscenely wealthy. And what’s far more disturbing is that the gap between rich and poor is accelerating rapidly, just what happened in Tsarist times to trigger the Bolshevik revolution. Mind you — these are the Kremlin’s own numbers we’re talking about. What the actual, horrifying truth may be, one can only guess.

Thanks for reading La Russophobe !

More International Evaluations, More Pathetic Failing Grades for Putin’s Russia

Robert Amsterdam points to a just-published report from Freedom House which, once again, condemns Putin’s Russia for destroying civilized government in favor of crude authoritarian dictatorship. It seems Russia’s rulers have such contempt for the people of Russia that they don’t believe they can govern themselves. Now THAT is real “russophobia.”

Russia’s scores in all four of the main categories (accountability, rule of law, transparency, and civil liberties) fell significantly (see page 13 of the PDF) when compared to 2005 and Russia did not manage one single score as high as “4” on the scale of 1-7 (with 7 being best) in the 13 subcategories that establish the four main categories. It was below a score of “3” in all but six. A score of “5” constitutes the “basic standard” of democratic governance.

As summarized by the Financial Times, the report states:

Russia “has come to resemble the autocratic regimes of central Asia more than the consolidated democracies of eastern Europe”. For the past two years “Russia could no longer be considered a democracy at all according to most metrics”, and is less democratic today than it was in 2005. It highlights the high threshold for parties to be elected to the Russian parliament, opacity in the award of broadcasting licences, corruption, the rareness of jury trials and uneven enforcement of property rights. “Civil society has been a clear target of the Russian government over the past two years,” Freedom House says.

The Associated Press adds:

Russian President Vladimir Putin’s governing concept, called sovereign democracy, “contains little in the way of genuine democratic governance (and) is also held out as a model for hybrid regimes and autocracies on the Russian Federation’s periphery.” In other words, several of the former Soviet republics. HIV/AIDS, a rapidly shrinking population, and runaway corruption that touches virtually every sector and eats at society’s fabric also put a drag into the Russian system, the analysis said.

So, in the ideological manner of the USSR, Russia is not only abandoning civilized values itself, but it is seeking to influence other nations, previously under its jackboot, to do the same.

Meanwhile, the World Bank also came out with an evaluation, this time for “ease of doing business.” As the Moscow Times reports, Russia placed 106 out of 178 countries surveyed and its scores declined in half the ten categories under reivew. The MT states: “In ease of getting business licenses, Russia ranked 176th out of 178, one place ahead of Ukraine. Although Russia performed comparatively better than other Commonwealth of Independent States countries on the ease of paying taxes, it still ranked 110th out of 178 countries worldwide. Georgia, which last year was ranked the fastest-reforming country in the survey, was fifth this year, remaining one of the stellar performers for simplifying business regulations, easing tax burdens and increasing access to credit.”

The report states:

The survey, titled “Doing Business 2008,” looked at 200 regulatory reforms in 98 economies that reduced the time, cost and hassle for businesses to comply with legal and administrative requirements. The rankings also track indicators of time and cost to meet government requirements in business startup, operation, trade, taxation and closure. Russia’s fall in the rankings comes from a reluctance to continue reforms and complacency associated with its resource-fueled economic boom, said Simeon Djankov, the lead author of the report. “Russia was doing quite well in the period between 1998 and 2000, when President Vladimir Putin took over the reins of power, but since then, only two reforms — tax and credit information — actually took place,” Djankov said. “The period of slowdown in reform is consistent with the [period] of increase in oil revenues.”

So Russia was doing well before Putin became president, badly afterwards. Its scores continue to decline every year throughout his rule, yet he only becomes more and more popular with the Russian people.

There’s only one word for that, folks: suicide.

Meanwhile, how can any thinking person possibly believe that a country with these kinds of scores can be fit for membership in a group like the G-8 or the World Trade Organization?

Thanks for reading La Russophobe !

More International Evaluations, More Pathetic Failing Grades for Putin’s Russia

Robert Amsterdam points to a just-published report from Freedom House which, once again, condemns Putin’s Russia for destroying civilized government in favor of crude authoritarian dictatorship. It seems Russia’s rulers have such contempt for the people of Russia that they don’t believe they can govern themselves. Now THAT is real “russophobia.”

Russia’s scores in all four of the main categories (accountability, rule of law, transparency, and civil liberties) fell significantly (see page 13 of the PDF) when compared to 2005 and Russia did not manage one single score as high as “4” on the scale of 1-7 (with 7 being best) in the 13 subcategories that establish the four main categories. It was below a score of “3” in all but six. A score of “5” constitutes the “basic standard” of democratic governance.

As summarized by the Financial Times, the report states:

Russia “has come to resemble the autocratic regimes of central Asia more than the consolidated democracies of eastern Europe”. For the past two years “Russia could no longer be considered a democracy at all according to most metrics”, and is less democratic today than it was in 2005. It highlights the high threshold for parties to be elected to the Russian parliament, opacity in the award of broadcasting licences, corruption, the rareness of jury trials and uneven enforcement of property rights. “Civil society has been a clear target of the Russian government over the past two years,” Freedom House says.

The Associated Press adds:

Russian President Vladimir Putin’s governing concept, called sovereign democracy, “contains little in the way of genuine democratic governance (and) is also held out as a model for hybrid regimes and autocracies on the Russian Federation’s periphery.” In other words, several of the former Soviet republics. HIV/AIDS, a rapidly shrinking population, and runaway corruption that touches virtually every sector and eats at society’s fabric also put a drag into the Russian system, the analysis said.

So, in the ideological manner of the USSR, Russia is not only abandoning civilized values itself, but it is seeking to influence other nations, previously under its jackboot, to do the same.

Meanwhile, the World Bank also came out with an evaluation, this time for “ease of doing business.” As the Moscow Times reports, Russia placed 106 out of 178 countries surveyed and its scores declined in half the ten categories under reivew. The MT states: “In ease of getting business licenses, Russia ranked 176th out of 178, one place ahead of Ukraine. Although Russia performed comparatively better than other Commonwealth of Independent States countries on the ease of paying taxes, it still ranked 110th out of 178 countries worldwide. Georgia, which last year was ranked the fastest-reforming country in the survey, was fifth this year, remaining one of the stellar performers for simplifying business regulations, easing tax burdens and increasing access to credit.”

The report states:

The survey, titled “Doing Business 2008,” looked at 200 regulatory reforms in 98 economies that reduced the time, cost and hassle for businesses to comply with legal and administrative requirements. The rankings also track indicators of time and cost to meet government requirements in business startup, operation, trade, taxation and closure. Russia’s fall in the rankings comes from a reluctance to continue reforms and complacency associated with its resource-fueled economic boom, said Simeon Djankov, the lead author of the report. “Russia was doing quite well in the period between 1998 and 2000, when President Vladimir Putin took over the reins of power, but since then, only two reforms — tax and credit information — actually took place,” Djankov said. “The period of slowdown in reform is consistent with the [period] of increase in oil revenues.”

So Russia was doing well before Putin became president, badly afterwards. Its scores continue to decline every year throughout his rule, yet he only becomes more and more popular with the Russian people.

There’s only one word for that, folks: suicide.

Meanwhile, how can any thinking person possibly believe that a country with these kinds of scores can be fit for membership in a group like the G-8 or the World Trade Organization?

Thanks for reading La Russophobe !

More International Evaluations, More Pathetic Failing Grades for Putin’s Russia

Robert Amsterdam points to a just-published report from Freedom House which, once again, condemns Putin’s Russia for destroying civilized government in favor of crude authoritarian dictatorship. It seems Russia’s rulers have such contempt for the people of Russia that they don’t believe they can govern themselves. Now THAT is real “russophobia.”

Russia’s scores in all four of the main categories (accountability, rule of law, transparency, and civil liberties) fell significantly (see page 13 of the PDF) when compared to 2005 and Russia did not manage one single score as high as “4” on the scale of 1-7 (with 7 being best) in the 13 subcategories that establish the four main categories. It was below a score of “3” in all but six. A score of “5” constitutes the “basic standard” of democratic governance.

As summarized by the Financial Times, the report states:

Russia “has come to resemble the autocratic regimes of central Asia more than the consolidated democracies of eastern Europe”. For the past two years “Russia could no longer be considered a democracy at all according to most metrics”, and is less democratic today than it was in 2005. It highlights the high threshold for parties to be elected to the Russian parliament, opacity in the award of broadcasting licences, corruption, the rareness of jury trials and uneven enforcement of property rights. “Civil society has been a clear target of the Russian government over the past two years,” Freedom House says.

The Associated Press adds:

Russian President Vladimir Putin’s governing concept, called sovereign democracy, “contains little in the way of genuine democratic governance (and) is also held out as a model for hybrid regimes and autocracies on the Russian Federation’s periphery.” In other words, several of the former Soviet republics. HIV/AIDS, a rapidly shrinking population, and runaway corruption that touches virtually every sector and eats at society’s fabric also put a drag into the Russian system, the analysis said.

So, in the ideological manner of the USSR, Russia is not only abandoning civilized values itself, but it is seeking to influence other nations, previously under its jackboot, to do the same.

Meanwhile, the World Bank also came out with an evaluation, this time for “ease of doing business.” As the Moscow Times reports, Russia placed 106 out of 178 countries surveyed and its scores declined in half the ten categories under reivew. The MT states: “In ease of getting business licenses, Russia ranked 176th out of 178, one place ahead of Ukraine. Although Russia performed comparatively better than other Commonwealth of Independent States countries on the ease of paying taxes, it still ranked 110th out of 178 countries worldwide. Georgia, which last year was ranked the fastest-reforming country in the survey, was fifth this year, remaining one of the stellar performers for simplifying business regulations, easing tax burdens and increasing access to credit.”

The report states:

The survey, titled “Doing Business 2008,” looked at 200 regulatory reforms in 98 economies that reduced the time, cost and hassle for businesses to comply with legal and administrative requirements. The rankings also track indicators of time and cost to meet government requirements in business startup, operation, trade, taxation and closure. Russia’s fall in the rankings comes from a reluctance to continue reforms and complacency associated with its resource-fueled economic boom, said Simeon Djankov, the lead author of the report. “Russia was doing quite well in the period between 1998 and 2000, when President Vladimir Putin took over the reins of power, but since then, only two reforms — tax and credit information — actually took place,” Djankov said. “The period of slowdown in reform is consistent with the [period] of increase in oil revenues.”

So Russia was doing well before Putin became president, badly afterwards. Its scores continue to decline every year throughout his rule, yet he only becomes more and more popular with the Russian people.

There’s only one word for that, folks: suicide.

Meanwhile, how can any thinking person possibly believe that a country with these kinds of scores can be fit for membership in a group like the G-8 or the World Trade Organization?

Thanks for reading La Russophobe !

More International Evaluations, More Pathetic Failing Grades for Putin’s Russia

Robert Amsterdam points to a just-published report from Freedom House which, once again, condemns Putin’s Russia for destroying civilized government in favor of crude authoritarian dictatorship. It seems Russia’s rulers have such contempt for the people of Russia that they don’t believe they can govern themselves. Now THAT is real “russophobia.”

Russia’s scores in all four of the main categories (accountability, rule of law, transparency, and civil liberties) fell significantly (see page 13 of the PDF) when compared to 2005 and Russia did not manage one single score as high as “4” on the scale of 1-7 (with 7 being best) in the 13 subcategories that establish the four main categories. It was below a score of “3” in all but six. A score of “5” constitutes the “basic standard” of democratic governance.

As summarized by the Financial Times, the report states:

Russia “has come to resemble the autocratic regimes of central Asia more than the consolidated democracies of eastern Europe”. For the past two years “Russia could no longer be considered a democracy at all according to most metrics”, and is less democratic today than it was in 2005. It highlights the high threshold for parties to be elected to the Russian parliament, opacity in the award of broadcasting licences, corruption, the rareness of jury trials and uneven enforcement of property rights. “Civil society has been a clear target of the Russian government over the past two years,” Freedom House says.

The Associated Press adds:

Russian President Vladimir Putin’s governing concept, called sovereign democracy, “contains little in the way of genuine democratic governance (and) is also held out as a model for hybrid regimes and autocracies on the Russian Federation’s periphery.” In other words, several of the former Soviet republics. HIV/AIDS, a rapidly shrinking population, and runaway corruption that touches virtually every sector and eats at society’s fabric also put a drag into the Russian system, the analysis said.

So, in the ideological manner of the USSR, Russia is not only abandoning civilized values itself, but it is seeking to influence other nations, previously under its jackboot, to do the same.

Meanwhile, the World Bank also came out with an evaluation, this time for “ease of doing business.” As the Moscow Times reports, Russia placed 106 out of 178 countries surveyed and its scores declined in half the ten categories under reivew. The MT states: “In ease of getting business licenses, Russia ranked 176th out of 178, one place ahead of Ukraine. Although Russia performed comparatively better than other Commonwealth of Independent States countries on the ease of paying taxes, it still ranked 110th out of 178 countries worldwide. Georgia, which last year was ranked the fastest-reforming country in the survey, was fifth this year, remaining one of the stellar performers for simplifying business regulations, easing tax burdens and increasing access to credit.”

The report states:

The survey, titled “Doing Business 2008,” looked at 200 regulatory reforms in 98 economies that reduced the time, cost and hassle for businesses to comply with legal and administrative requirements. The rankings also track indicators of time and cost to meet government requirements in business startup, operation, trade, taxation and closure. Russia’s fall in the rankings comes from a reluctance to continue reforms and complacency associated with its resource-fueled economic boom, said Simeon Djankov, the lead author of the report. “Russia was doing quite well in the period between 1998 and 2000, when President Vladimir Putin took over the reins of power, but since then, only two reforms — tax and credit information — actually took place,” Djankov said. “The period of slowdown in reform is consistent with the [period] of increase in oil revenues.”

So Russia was doing well before Putin became president, badly afterwards. Its scores continue to decline every year throughout his rule, yet he only becomes more and more popular with the Russian people.

There’s only one word for that, folks: suicide.

Meanwhile, how can any thinking person possibly believe that a country with these kinds of scores can be fit for membership in a group like the G-8 or the World Trade Organization?

Thanks for reading La Russophobe !

More International Evaluations, More Pathetic Failing Grades for Putin’s Russia

Robert Amsterdam points to a just-published report from Freedom House which, once again, condemns Putin’s Russia for destroying civilized government in favor of crude authoritarian dictatorship. It seems Russia’s rulers have such contempt for the people of Russia that they don’t believe they can govern themselves. Now THAT is real “russophobia.”

Russia’s scores in all four of the main categories (accountability, rule of law, transparency, and civil liberties) fell significantly (see page 13 of the PDF) when compared to 2005 and Russia did not manage one single score as high as “4” on the scale of 1-7 (with 7 being best) in the 13 subcategories that establish the four main categories. It was below a score of “3” in all but six. A score of “5” constitutes the “basic standard” of democratic governance.

As summarized by the Financial Times, the report states:

Russia “has come to resemble the autocratic regimes of central Asia more than the consolidated democracies of eastern Europe”. For the past two years “Russia could no longer be considered a democracy at all according to most metrics”, and is less democratic today than it was in 2005. It highlights the high threshold for parties to be elected to the Russian parliament, opacity in the award of broadcasting licences, corruption, the rareness of jury trials and uneven enforcement of property rights. “Civil society has been a clear target of the Russian government over the past two years,” Freedom House says.

The Associated Press adds:

Russian President Vladimir Putin’s governing concept, called sovereign democracy, “contains little in the way of genuine democratic governance (and) is also held out as a model for hybrid regimes and autocracies on the Russian Federation’s periphery.” In other words, several of the former Soviet republics. HIV/AIDS, a rapidly shrinking population, and runaway corruption that touches virtually every sector and eats at society’s fabric also put a drag into the Russian system, the analysis said.

So, in the ideological manner of the USSR, Russia is not only abandoning civilized values itself, but it is seeking to influence other nations, previously under its jackboot, to do the same.

Meanwhile, the World Bank also came out with an evaluation, this time for “ease of doing business.” As the Moscow Times reports, Russia placed 106 out of 178 countries surveyed and its scores declined in half the ten categories under reivew. The MT states: “In ease of getting business licenses, Russia ranked 176th out of 178, one place ahead of Ukraine. Although Russia performed comparatively better than other Commonwealth of Independent States countries on the ease of paying taxes, it still ranked 110th out of 178 countries worldwide. Georgia, which last year was ranked the fastest-reforming country in the survey, was fifth this year, remaining one of the stellar performers for simplifying business regulations, easing tax burdens and increasing access to credit.”

The report states:

The survey, titled “Doing Business 2008,” looked at 200 regulatory reforms in 98 economies that reduced the time, cost and hassle for businesses to comply with legal and administrative requirements. The rankings also track indicators of time and cost to meet government requirements in business startup, operation, trade, taxation and closure. Russia’s fall in the rankings comes from a reluctance to continue reforms and complacency associated with its resource-fueled economic boom, said Simeon Djankov, the lead author of the report. “Russia was doing quite well in the period between 1998 and 2000, when President Vladimir Putin took over the reins of power, but since then, only two reforms — tax and credit information — actually took place,” Djankov said. “The period of slowdown in reform is consistent with the [period] of increase in oil revenues.”

So Russia was doing well before Putin became president, badly afterwards. Its scores continue to decline every year throughout his rule, yet he only becomes more and more popular with the Russian people.

There’s only one word for that, folks: suicide.

Meanwhile, how can any thinking person possibly believe that a country with these kinds of scores can be fit for membership in a group like the G-8 or the World Trade Organization?

Thanks for reading La Russophobe !

Aslund on Zubkov

The always brilliant Anders Aslund, senior fellow at the Peterson Institute for International Economics in Washington, D.C., and author of How Capitalism Was Built: The Transformation of Central and Eastern Europe, Russia, and Central Asia, describes “a new Prime Minister with a new politburo” in the Moscow Times:

President Vladimir Putin’s appointment of Viktor Zubkov as prime minister came as a complete surprise. Although 85 percent of the Russian population had never heard of him, and at 66, he has had a lot of time to make himself known, the State Duma approved his nomination with an overwhelming majority. Most of the discussion has centered on the possible presidential succession, but since the prime minister is Russia’s top economic policymaker, we need to consider what Zubkov may mean for the country’s economic course.

Although Zubkov has kept such a low profile, key facts are known. His outstanding achievement is that he organized the exclusive Ozero dacha cooperative. Zubkov awarded Putin and many of his key cronies with dachas in the early 1990s. Now, Zubkov received his own reward.

Zubkov’s second achievement was that he worked for almost two years as Putin’s first deputy for foreign economic relations in the St. Petersburg mayor’s office, a notoriously corrupt part of an awfully corrupt office, as documented by a liberal Petersburg politician and former St. Petersburg Duma deputy, Marina Salye, who has since disappeared. At that time, if not before, Zubkov came to know all the secretive figures in Putin’s company — notably KGB men Igor Sechin and Viktor Ivanov. By turning to Zubkov, Putin has further narrowed his base.

Admittedly, nothing in Zubkov’s curriculum vitae suggests that he has worked directly for the KGB, but since late 1993, he has worked for two dubious institutions: the Federal Tax Service and the Federal Financial Monitoring Service — or, as the Russians say, “financial intelligence.” Although Zubkov has done nothing to build modern Russia, he has collected fine files on Russians’ international transactions.

Nonetheless, Zubkov is not known to have done anything significant to cleanse Russia’s dirty finances. That task fell upon the late Andrei Kozlov, the former first deputy chairman of the Central Bank. Vedomosti notes that the most evident example of Zubkov’s professional activities was the run on Guta Bank, which resulted in its demise and quick takeover by VTB, and the run on Alfa Bank, which appeared to be completely unjustified.

As Russia’s chief financial inspector, Zubkov has met many people, and the various opinions of him are strikingly similar. Zubkov is a Putin loyalist and is even on first-name terms with the president. He is an old-style communist official, who did a party career rather than a KGB career, maintaining fairly communist views. He is the missing link of the stagnant and cynical Brezhnev period that has played so little a role in Russian politics.

In addition, Zubkov belongs to the Sechin-Viktor Ivanov group. But he might form an independent group with his son-in-law, the furniture trader who became defense minister without merits. He seems both austere and cautious, not arousing personal enemies. Although he is surrounded by massive corruption, Zubkov himself is not identified as evidently corrupt, though such suggestions should be taken with a great caution in this corrupt and authoritarian society.

Our next key is the new government, which the all-powerful Putin has appointed. During Putin’s second term, the government has done next to nothing. Incredibly, he has only made three personnel changes in his government.

The only strong reformer in his old government was Economic Development and Trade Minister German Gref, and he has been sacked. Admittedly, he was replaced by his former first deputy, Elvira Nabiullina, who has a wonderful reputation. Her critical shortcoming, however, is that she is polite and soft, while Gref is a ferocious fighter. She is likely to lose the many good fights that Gref undertook.

Mikhail Zurabov had a terrible reputation as health and social development minister, and what is most shocking is that Putin ever appointed him in the first place. The social sector is the most ignored and backward in Russia today. Rather than making a serious appointment to replace Zurabov, Putin selected the wife of Viktor Khristenko, who is the industry and energy minister.

Zubkov and his son-in-law, Serdyukov, staged a real comedy when Serdyukov resigned as defense minister, citing his relation to the new prime minister. But Serdyukov’s conundrum lasted just one week. Putin’s Russia has become a country of family clans, as Vlast magazine recently showed. Young men, think of what Putin’s daughters will do when they grow up!

At long last, Putin sacked his old nemesis, Vladimir Yakovlev, the former governor of St. Petersburg whose unjustified longevity in government only raised queries about his serious kompromat, or incriminating material, on Putin. Dmitry Kozak, Putin’s old chief legal adviser, is a positive addition to the government, although the judicial reform he designed was demolished by Putin through the Yukos affair.

Before the last presidential election in 2004, Putin made all Cabinet changes before the election, making clear to the Russian people that their votes did not count. Presumably, he has done the same thing this time around. Putin is telling us that he wants another do-nothing government. Frankly, that is the most positive message we could hope for.

A big change during Putin’s second term is that substantial power has moved from the government, the governors and the parliament to the new “Politburo,” as the top of the presidential administration is so appropriately called. Nothing in the formation of the new government suggests that this unfortunate trend will be halted. Whatever little Zubkov has said, his future policy line appears quite clear.

There is one important positive element: Finance Minister Alexei Kudrin is staying on, and he was even promoted to deputy prime minister again. Kudrin is Russia’s best guarantee of macroeconomic stability and sanity.

The ouster of Gref, Russia’s only strong advocate of membership in the World Trade Organization, means that Moscow is unlikely to join that organization for years, as long as Putin and Zubkov are in power and oil prices stay high.

Zubkov’s nomination speech to the Duma focused on industrial policy in a very communist vein. He also focused on building up the military-industrial complex, emphasizing aircraft and the shipyard industry. If he does not change his tone, he is likely to dig Russia into an industrial grave. Moreover, Russia’s devastating renationalization campaign is likely to continue.

Frankly, all Zubkov talked about was more state control and state support of virtually everything — not least the countryside. But this is expected, given his knowledge and experience as an old sovkhoz director; Zubkov knows very well how to waste state resources. Is that really what modern Russia needs?

Zubkov did mention the need for a law on corruption in his speech to the Duma, but his statement was exceedingly vague. How could it be otherwise? If he were truly serious about fighting corruption, he would not have accepted the reappointment of Putin’s worst cronies to his government.

Thanks for reading La Russophobe !

Annals of Kremlin Inc.

Radio Free Europe reports on the corporatization of Russia under Vladimir Putin (now that Russia has been re-Tsarized, one can’t help but wonder how long it will take until it is re-Bolshevized, and how long after that Russia goes the way of the USSR, and what will take Russia’s place, and whether it will be anything more than a desert).

The domination of the siloviki — people who emerged from the KGB or its successor organizations — in Russian political and economic life is an accomplished fact. Over the seven years of President Vladimir Putin’s administration, a core group of some 6,000 siloviki has moved into key controlling positions throughout government and business. But the question remains: for what purpose have these products of the country’s totalitarian past taken over and what can we expect to see in Russia’s domestic and foreign policies?

Conspiracy Theory?

Along the lines of this thinking, apn.ru, a website run by the conservative National Strategy Institute, ran several publications this month arguing that the talk of “silovik power” is just “a conspiracy theory,” a figment of the imagination of “liberals” who are only scaring themselves and others. The articles argue that Russian policies are irrational and opaque and that power in the country remains concentrated in the hands of the “raw-materials oligarchs.” Putin and the siloviki have neither a long-term strategy nor a coherent ideology.

Some observers have argued that the siloviki of today’s Russia differ substantially from the monolith of the Soviet KGB that kept a huge swath of the world in terror for decades. They argue that today’s siloviki have no consolidating center, espouse no common ideology, and are riven into viciously competing factions. Sometimes this competition breaks out into open conflict, sometimes even leading to kidnappings or killings. In at least one case, Putin was compelled to intervene and reshuffle part of the community.

Many analysts, however, are inclined to disagree. The Institute of Social Planning, a Moscow think tank, issued a study this year that found the influence of the siloviki in politics and the economy is “enormous,” while that of the purported oligarch is “negligibly small.” The aggregate opinion of the 670 experts surveyed for the study is that the siloviki influence on Russian policy manifests itself primarily via the networked influence of their representatives in the regions on policies in their regions.

At the federal level, Putin and the siloviki have acted in ways that betray their sense that the upcoming legislative and presidential elections don’t matter much. Putin has initiated several ambitious national programs operating on a timetable extending for years into the future, while Sergei Ivanov, then a first deputy prime minister and a leading contender to succeed Putin in March 2008, presented to the St. Petersburg International Economic Forum in February a plan to push Russia into the ranks of the world’s five most developed economies by 2020.

The state budget adopted this year covered not the usual 12 months, but the entire period until 2010. At the same time, Russia has been acting in a consistently aggressive manner in the international arena, particularly on global energy markets. These facts and others seem to indicate that the silovik-based community that has come to monopolize power in Russia is implementing a coherent, long-term strategy. Many elements of this plan have been incorporated into the campaign program of the pro-Kremlin Unified Russia party, which is called “Putin’s Plan.” And recently published books, memoirs, and available KGB documents may offer insight into the nature of their ambitions.

Putin’s Plan

Putin’s rise to power in 1999 and 2000 marked the second time in recent history that a state-security chief became the country’s supreme leader. The first was Yury Andropov, a KGB chairman who was much admired by Putin and who was elected general secretary of the Soviet Communist Party in November 1982. Although Andropov only ruled the Soviet Union for 15 months before his death, he had an ambitious vision for reforming the Soviet economy and making it competitive with the West. Andropov had a keen understanding of the weaknesses of the Soviet system both because of the information at his disposal when he ran the KGB and because of his experience at the KGB itself. Interestingly, the KGB and the Soviet military-industrial complex were the only two Soviet entities that functioned successfully — precisely because, like Soviet Olympic athletes, they had to perform in constant competition with the best counterparts that the outside world had to offer.

Author and journalist Maksim Kalashnikov (real name: Vladimir Kucherenko) in 2003 wrote a book called “Forward To The USSR-2” in which he laid out what he claimed to be Andropov’s reform plan. Its essence was to combine the strengths of the military-industrial complex and the KGB by carrying out an authoritarian modernization plan that would result in a modern corporate state. Kalashnikov’s has collaborated on other books with banker Sergei Kugushev, who in 1983 was a young economist working in an analytical group studying modernization proposals under Andropov. He claims he personally helped draft this version, which he calls the “Red Star Corporation.”

A key part of the purported Andropov plan was to be played by the KGB’s Sixth Directorate, which was concerned with economic-intelligence gathering. This directorate had accumulated masses of classified technologies taken from Soviet innovators and stolen from the West by KGB operatives. This information would be used to spark a scientific-technical revolution that would drive the country’s modernization.

‘Best And Brightest’

The plan also envisions the cultivation of the Soviet Union’s “best and brightest,” who would be recruited into the KGB. Many KGB officers had an intimate knowledge of the strengths and weaknesses of market-based economies and open, muliparty political systems. Interestingly, the main reservoir of cadres for the KGB was the Komsomol Soviet youth organization, from which many of the post-Soviet Russian oligarchs also emerged.

Andropov, though, died after just over a year in office and, beginning in 1986, Soviet leader Mikhail Gorbachev attempted a different reform plan that led to the collapse of the Soviet Union.

Many critics blame President Boris Yeltsin and his circle for failing to dismantle the KGB after they came to power in 1991. Many of those who were in power at the time failed to understand the strength and resilience of the KGB, while others had less excusable reasons for failing to act. At any rate, it would have been Herculean task to dismantle completely an organization that had controlled so much of Soviet life for decades and that numbered more than 500,000 uniformed officers and uncounted millions of secret informers.

Nevertheless, Yeltsin was wary of the KGB and succeeded in breaking up its monolithic structure into a number of successor agencies. He made efforts to reform the state-security apparatus and to institute some oversight mechanisms. One result of these half-hearted and incomplete reforms, though, was a mass exodus of KGB officers out of state service and into the private sector. By some estimates, some 100,000 former KGB officers took up jobs in business.

During the mid-1990s, when the process of the privatization of Russia’s natural-resources sectors was in full swing, Yeltsin made the mistake of instructing hundreds of state-security officers to monitor the handover of state entities and strategic resources and reserves. The Yeltsin administration felt the former KGB officers could prevent the process from descending into chaos and help identify desirable new owners. The budding oligarchs themselves made the mistake of trying to “privatize” the KGB by bringing hundreds of former officers into their own organizations as analysts, consultants, and security personnel. Looking with hindsight at the fates of former oligarchs like Boris Berezovsky, Vladimir Gusinsky, and Mikhail Khodorkovsky, it is less than certain who used whom.

In 2005, a book called “Project Russia,” by unnamed authors, appeared on the website of a state-security veterans organization in St. Petersburg. The book describes the role that KGB veterans played in selecting and molding the aggressive young entrepreneurs who by the mid-1990s had come to be known as the Russian oligarchs.

The book claims that the emerging siloviki viewed privatization as a temporary process from the outset and, therefore, took pains to select new owners whose main trait was not their managerial genius but their controllability. “Project Russia” refers to them dismissively as “toy oligarchs.” Although the siloviki tried to eliminate people with “large-scale thinking and political ambitions,” some of the finalists did “cross the line.” “But today all these ‘politicians’ have either fled the country, are serving time, or died under obscure circumstances,” the book declares.

The dispossession of the oligarchs has accelerated the shift of power in Russia toward the siloviki, and the remaining so-called oligarchs are notable primarily for their docility. Kremlin-friendly billionaire Oleg Deripaska recently affirmed that he is ready to “return” all his assets to the state at a moment’s notice, and he and fellow billionaire Roman Abramovich fall all over themselves to make generous donations to Kremlin-backed projects like the 2014 Winter Olympics in Sochi. “Kommersant-Dengi” this month published an impressive list of the industrial and financial enterprises that have been renationalized since 2002.

But the property of the oligarchs was never the end goal of the siloviki effort. They are seeking total, state control of the national economy. A distinguishing characteristic of the siloviki — unlike the old oligarchs — is that, with very few exceptions, there are no billionaires among them. They are content to control property rather than own it, and prefer to exercise that control from the boardrooms of state megacorporations that dominate major sectors of the economy and that are tied together in an informal network. They envision a corporate state.

Many Western analysts resist applying the term “corporate state” to Russia because of its associations with Italy under Benito Mussilini, Spain under Francisco Franco, and Portugal under Antonio Salazar. Russian analysts, politicians, and officials, however, use the term freely. Central Election Commission Chairman Aleksei Churov told NTV on August 31, for example, that Russia has formed “a corporate state.” “We have a state corporation and we are electing the top management of our state corporation,” he said.

It remains unclear how far the siloviki intend to and will be able to carry out this reform vision. But Kalashnikov’s “Forward To The USSR-2” gives one ominous vision:

“It is a clandestine state, operating covertly under a seal of secrecy. It is invisible to the West and the majority of Russia. It is a hybrid of the special services, a nearly religious order (a group of people who passionately want to create a Russian miracle), a network of high-technology projects, financial-investment structures, and a web of propaganda…. Figures from this secret state say where to invest money. They choose projects and technologies. They direct investments and plan operations to take over whole branches of industry both on the territory of the late USSR-1 and right up to Europe and the United States. A transnational business network is being built — the USSR-2.”

Thanks for reading La Russophobe !