Daily Archives: October 25, 2007

EDITORIAL: Is Russia’s Economy Collapsing?


Is Russia’s Economy Collapsing?

The Russian economy has been showing a shaky, creaking vulnerability of late that is surprising even to the jaundiced, cynical observers here at La Russophobe. Despite the fact that the price of oil has soared to stratospheric new highs in recent weeks, approaching $100 per barrel, when the American stock market took a 500-point, 2.5% hit to the Dow Jones Industrial Average last week, famously oil-rich Russia immediately felt a worse ripple effect, with its key average dropping 3.5%. It must send waves of panic through Russian traders to imagine what might have happened to their market if America’s had plunged while oil was at a record low. And the recent announcement that Russia is on the cusp of a major liquidity crisis can’t help them sleep any better, either.

And there was more horrifying bad news that left no room for Russophile rationalization: Dictator Vladimir Putin announced a wave of Soviet-style price fixing. It’s been announced that Russia is facing double-digit consumer price inflation for 2007, and prices may be rising at double that rate on the small basket of foodstuffs and other items that are readily affordable to the mass population, which works for an average wage of less than $4 per hour. It’s quite shocking to think that G-8 member Russia needs to resort to the tactics of Zimbabwe strongman Robert Mugabe in order to stave off short-term panic, simply making price rises illegal — as if that was a way to solve inflation that the other G-8 members never thought of.

And Putin has gone further, implying he believes the price fixing moves won’t be enough to guarantee his party’s success in upcoming parliamentary elections. He’s blocking the arrival of Western monitors to oversee the fairness of the polls, and he’s banning outright the participation of key opponents. It’s an important election, since it’s the means by which Putin proposes to stay in power, taking the lion’s share of parliamentary seats and assuming the role of prime minister.

It almost makes it seem that Russian’s much ballyhooed oil resources are not all they’re cracked up to be. In fact, that’s precisely the case.

RIA Novosti reports that Russian Industry and Energy Minister Viktor Khristenko has predicted Russia’s oil output for 2007 will be 3.6 billion barrels. This is somewhat more than the U.S., at about 2.8 billion barrels, produces, but real issue in terms of U.S. supply is that the gigantic, dynamic U.S. economy consumes nearly 21 million barrels each day, whereas Russia consumes only about a relatively puny 2.5 million barrels per day – at ten times less, a pretty good reflection of the difference in GDP between the two countries, currently in a ratio of about 12:1.

Russia will consume about 0.9 billion barrels of oil in 2007, so it will have about 2.7 billion barrels available to sell to the world. If it sold all those barrels at the market price (it actually can’t do this), and if the market price were $100 per barrel (it hasn’t reached that level yet), then Russia would have a gross income of just over $200 billion from its spare oil. Let’s say it has only 10% production costs (given Russian corruption levels, that’s probably very conservative) — this would leave about $180 billion for the Kremlin to do as it likes with.

Let’s say the Kremlin wanted to divide up that money equally among the people of Russia, for them to better their lives with. Of course, it has no such intention, and will spend the vast majority of this money supporting instability in the Middle East to keep the price of oil high and building up Russia’s military so as to prop up the dictatorship. But let’s just say.

Russia has 140 million people. So if that $180 billion were divided equally among them, they would each get about $1,200. That would mean each Russian person would have an extra $3.50 per day — one hour’s average wages for a Russian — to spend on bettering his life. As the common man is concerned, roughly 20% of that figure would be eaten up by inflation, so the Russian would be left with about $2.80 each day to live it up with.

And remember, that $2.80 is the very best case scenario for the Russian. In actual fact, virtually none of this oil “wealth” will be passed on to him by his government, which will instead send some of it to terrorist groups like Hamas and Hezbollah as well as rogue nations like Syria and Iran so they can continue their nefarious activities aimed at destabilizing the Middle East, thus keeping the price of oil high, and use the rest to start a renewed arms race with the United States — an arms race which will bankrupt Russia just as the first one bankrupted the USSR — and to maintain the Kremlin’s oligarchs in the style to which they are accustomed (the same style enjoyed by the old Soviet politburo).

It hardly matters. That $2.80, after all, wouldn’t be enough to solve any of the life-threatening social ills that prevent the average Russian man from living to see his 60th year and cause the Russian population, despite record levels of immigration, to suffer a net loss of up to 1 million people each and every year. Yet, Russia’s entire economy hangs on the significance of this sum; without it, Russia is quite simply a third-world state with no conceivable argument for G-8 membership. Its capital markets, and undoubtedly its “president,” are only too well aware of this fact, it seems.

Latynina on KGB Mindreaders

Writing in the Moscow Times, hero journalist Yulia Latynina exposes yet another ridiculous neo-Soviet fraud:

During a televised call-in session with President Vladimir Putin on Thursday, an engineer from Novosibirsk asked Putin what he thought about former U.S. Secretary of State Madeleine Albright’s comment that Russia “unjustly controls” too many natural resources in Siberia. Putin responded that he was unfamiliar with the statement, but that he knew “some politicians play with such ideas in their heads.”

Question: Where did an ordinary guy like this engineer learn about Albright’s phrase?

The first mention of that phrase was made in June 2005, when a contributor to an Internet site calling herself — or himself — “Nataly1001” wrote the following: “Albright said that there can be no discussion of worldwide justice as long as a territory like Siberia is owned by a single country.”

A heated discussion followed on the site. Skeptics demanded that Nataly1001 provide the source for her quote, while others cried, “You are quoting Zbigniew Brzezinski, not Albright!” In the end, the exact source of the quote was never found.

Nonetheless, Alexei Pushkov, the host of the television program “Postscript,” chose to believe Nataly1001’s assertion — with or without a verifiable source. “The quote that Siberia is too large a territory to belong to a single state has been attributed to Madeleine Albright,” Pushkov said on his June 14, 2005, program. “And even if she didn’t say it exactly like that, she probably thought it, or else some other bright American was thinking it.”

From that time forward, people have` referred to that “Postscript” episode as a rock-solid, credible source.

Whatever the case, I’ll set the reader’s mind at ease: It was, in fact, Albright’s phrase. This can be concluded from an interview with Major General Boris Ratnikov, published in Rossiiskaya Gazeta on Dec. 22, 2006. The interview was titled, “The Secret Service Has Read Albright’s Mind.”

It just so happens that Ratnikov commanded a secret mind-reading division that could have been called “subliminal intelligence.” So, on the eve of the war in Yugoslavia, the general, seemingly in an attempt to get more stars on his epaulet, claimed to have “hooked up to Albright’s subconscious mind.”

“We detected a pathological hatred of Slavs in Madame Albright’s thoughts,” Ratnikov said. “She is outraged that Russia holds the world’s largest natural resources reserves.”

The KGB actively used this “technology” of spreading disinformation in the 1970s. First, certain information was presented in foreign communist newspapers as “suppositions.” Then a Soviet paper repeated the same information verbatim, quoting the foreign article as its reliable source. After that, this information was officially presented as a “well-known truth” to the Central Committee of the Communist Party.

Now the Internet has taken the place of newspapers in disseminating disinformation, but the technique is the same. The disinformation is planted by an anonymous source. It acquires legitimacy after a snowball effect takes place when references and cross-references to the disinformation multiply exponentially, thus giving the information credibility.

In this case, the final stage of legitimization came when an ordinary Siberian engineer mentioned the quote that so many people had attributed to Albright. The engineer completed the loop by kindly passing the information along to Putin.

But judging from the president’s reaction, he had already been briefed on Albright. Surely Putin has also been warned that the United States is on the verge of starting a war to seize Siberia’s oil and gas resources, that there were plans in place to assassinate him during his recent visit to Iran and that Washington is plotting a subversive Orange Revolution for Russia. Only the secret services can save Putin and Russia from all of these dangers because they are the only ones who possess extrasensory perception, which will allow them to penetrate into the inner minds of all of Russia’s adversaries.

This is what Russia has come to. Sad, isn’t it? And the saddest thing of all is that it’s all quite Freudian, since if the U.S. owned Siberia Russia would surely attack it as an unfair attempt to dominate the globe.

Larisa Arap Speaks

It’s really encouraging to see mainstream media like the Boston Globe is not going to simply forget shocking neo-Soviet abuses like those that occurred in the case of Larisa Arap (regular LR readers are already well familiar with her; if you are not, enter her name into the search engines at the top and bottom of the page or simply click “weaponizing psychiatry” at the bottom of this post), but rather will continue to investigate and report them. The Globe reports:

It was just an errand, one more stop to get through the red tape, said Larissa Arap.

Arap, a rights activist in Russia, said she was seeking a driver’s license, and all she needed was a routine signature from a doctor certifying that she was in good health. But instead of complying, a psychiatrist in the northern Russian town of Murmansk asked Arap whether she was the one who had written “Madhouse,” an article in a local paper that had exposed unorthodox and dismal conditions in psychiatric wards.

As she slowly responded “yes,” Arap recalled, it dawned on her why a security vehicle was parked outside. A policeman came in as two others waited in the hallway. The psychiatrist refused to sign the document.

“Because you are the author who wrote about the closed psychiatric system, which is forbidden, we are sending you to a psychiatric institution,” the psychiatrist said, according to Arap.

What followed that July day was a horrific six-week stay in psychiatric wards, said Arap, who recounted her story in an interview last week in Washington.

Activists say Arap was only one of countless Russian citizens who have been wrongly spirited into the hallways of mental facilities. The tactics echo those used during Soviet times, when a whole class of professionals, doctors, judges, and low-level officials cooperated with government officials to silence critics.

Some government critics have called the phenomenon “police psychiatry.”

These days, such tactics are used to muzzle political opponents, incapacitate rivals, or simply remove tenants from apartments where they are not wanted, said Marina Litvinovich, who accompanied Arap to Washington and who serves as a political adviser to the civic organization run by chess champion Gary Kasparov.

Arap said that, in her case, police dragged her out of the medical office and forced her into an ambulance, which took her to the Murmansk psychiatric clinic. She said they beat her in the waiting area, injuring her spine. Medical personnel ripped her clothes off and tied her to a bed, she said.

Officials at the clinic have denied allegations of abuse. “We are representatives of a state medical institution; they are libeling Russia,” said Yevgeny Zenin, the hospital’s chief doctor, according to Reuters.

Today, Arap, 49, still walks slowly, and there is swelling around her ankles.

“They started injecting me with some substance. I was petrified and I started having double vision. I lost consciousness and all sense of time. I would drift in and out of consciousness,” recalled Arap.

Her skin taut over hollow cheeks, Arap said she still feels the after-effects of the experience.

While she was being held, regional representatives of Kasparov’s group, the United Civil Front, and Arap’s husband wrote letters demanding that the hospital stop administering the substance.

Kasparov and other rights defenders raised their voices in protest as well, and Arap was transferred to a facility in Apatity, about 180 miles away.

All in all, Arap spent 45 days in confinement; she said the conditions were humiliating. At one point, she said, she went on a five-day hunger strike to protest. She lost 22 pounds from her already-skeletal frame.

An independent commission of psychiatrists and experts was set up to look at the case at the request of human rights ombudsman Vladimir Lukin. A court eventually ruled that Arap did not need to be in a psychiatric clinic. She was released Aug. 28.

While she was held, Arap said, she spoke to dozens who were perfectly healthy but found themselves in the same situation: forcibly hospitalized for political reasons, or because of some competitive business venture that wanted them out of the picture.

Litvinovich said it’s much easier to send people to a psychiatric hospital than to have them murdered. “Sure, you can get someone killed. But it is expensive and dangerous,” she said. “If you have them committed, it is cheaper and simpler; you just pay off the cops, doctors, the courts.”

Russian Voters are for Sale . . . Cheap!

Other Russia reports:

Representatives of the United Russia political party continue to regularly give out gifts to voters across Russia, which is illegal according to the electoral code. Vedomosti reported on October 23rd on just a handful of instances:

On October 5th, in the town of Baksan (in the Kabardino-Balkar Republic), party officials joined the regional administration to give out 150 gift-bags of household food products. They were also handing out envelopes full of money. On the 15th, members of the local party branch stopped in to a boarding school for orphaned children in the village of Kremenchug-Konstantinovsk, joining players of the Spartak football club. They brought the school a TV as well as a DVD player, and gave out candies to the children.

State Duma deputy Pavel Semenov (who is number three on United Russia’s Parliamentary candidate list for the Chuvash Republic), sent sets of skis to 12 Chuvash schools. He also gave out bundles of toys to ten area kindergartens. Semenov’s assistant, Svetlana Gordeyeva, proclaimed that this was perfectly legal since the gifts were made before United Russia turned in its final candidate lists to the Central Electoral Commission.

On October 12th, St. Petersburg television showed people dressed in United Russia apparel participating in a handout of food to citizens, including 5 kilos (11lbs) of potatoes, 1 kilo of carrots, 1 kilo of beets, and a head of cabbage. Overall, more than 20,000 area residents received packages of food, which were donated by the local administration in order to help ordinary people deal with double-digit increases in food prices over the past months.

The Central Electoral Commission has pledged to look into the donations and determine whether they qualify as illegal measures used to swing voters. The law forbids political parties from giving out any material goods, other than items bearing symbols of the party, such as tee-shirts or key chains. The alleged incidents follow a trend of the United Russia using any means necessary to swing votes. These gifts are undoubtedly readily welcomed by citizens. The partisan nature of the incidents, however, makes the situation unsettling, particularly to opposition parties who are not funded by the Kremlin.

Question: If Vladimir Putin is so popular, and Russia is doing so well, why do they need to buy votes?

Annals of "Pacified" Chechya: Female Suicide Bombrers Return

The Moscow Times reports:

A woman was killed Tuesday when an explosive she was carrying detonated in a minibus in Dagestan, reviving fears of a return of female suicide bombers after a three-year lull. The explosion, which injured eight people, ripped through a minibus with 15 people at around 11:20 a.m., just after the vehicle passed a police checkpoint at the village of Lenin-Aul, about 10 kilometers east of the Chechen border with Dagestan, said Mark Tolchinsky, a spokesman for the Dagestani Interior Ministry. “The woman was blown to pieces, eight passengers were wounded, three of them badly,” he said by telephone from Makhachkala. The woman had not been identified as of late Tuesday. Tolchinsky said the explosion had likely been caused by a hand grenade, noting that investigators had found a linchpin at the site. It was unclear whether the woman had set off the explosion on purpose or even knew that she had been carrying an explosive. The minibus had been heading for the town of Khasavyurt.

Saidulah Batdalov, the lead investigator into the explosion, declined to comment when reached by telephone Tuesday. He told reporters from a local newspaper, Nastoyashcheye Vremya, that he doubted the woman was a suicide bomber, said Sergei Rasulov, the newspaper’s deputy editor. “He told us that no specific elements of the so-called shahid belt used by Chechen suicide bombers, such as nuts and bolts that increase the force of the blast, were found in the minibus,” Rasulov said. Nevertheless, most news reports about the blast Tuesday referred to the woman as a female suicide bomber.

Female suicide bombers appeared in Russia exactly five years ago, when women wearing explosives were among the 42 Chechen rebels who took 800 people hostage in Moscow’s Dubrovka theater on Oct. 23, 2002. Chechen rebels denied any involvement in the minibus explosion in a statement posted on their Kavkaz Center web site Tuesday. Adam Dolnik, a terrorism researcher at the Centre for Transnational Crime Prevention in Australia, voiced doubt that the explosion was a premeditated suicide attack. He said a minibus filled with commuters was an “unlikely target” for rebels, who have in the past picked police and military targets for suicide attacks in order to make national headlines. In June 2003, a female suicide bomber attacked a commuter bus in North Ossetia, but the bus was carrying military personnel serving at an air base in Mozdok.

If Tuesday’s blast was a suicide bombing, more attacks should be expected, said Dolnik, who recently published a paper about the Beslan hostage taking in September 2004, the last time female suicide bombers participated in an attack. Dolnik said Chechen rebel leader Doku Umarov had refrained from suicide bombings to avoid bad publicity as he tries to expand the insurgency across the North Caucasus. “If he is changing it now, then it is probably a sign of bad things to come,” Dolnik said. Andrei Soldatov, a terrorism expert with the Agentura.ru investigative web portal, also said the explosion looked accidental, given a lull in news about the Arab fighters believed to be behind the hard-line tactics in the North Caucasus. “Even if the woman was a suicide bomber, she didn’t seem to be prepared,” he said. After the Beslan attack, special services have concentrated on hunting down the foreign insurgents who fought alongside the Chechen rebels, killing many of them. Female suicide bombers, called “black widows” by some journalists, have participated alone or as members of bigger terrorist squads in more than 20 attacks from 2002 to 2004 that claimed more than 700 lives.

If Tuesday’s attack was by a suicide bomber, it might have been planned by some group other than Umarov’s, said Louise Richardson, executive dean of the Radcliffe Institute for Advanced Studies and an author of several books on terrorism. “I expect the most likely explanation of the resumption is what is called ‘the contagion effect’ — that is a tactic that is successfully used by one group is copied by other groups, even when they are very different,” she said in a written response to questions.