Daily Archives: April 2, 2008

Another Original LR Translation: Latynina on the "Economic Miracle" by our Original Translator

Why Regulate Prices During an Economic Miracle?

Yuliya Latynina

Yezhednevniy Zhurnal

March 28, 2008

The Ministry of Economic Development has issued a list of goods that in the near future will disappear from Russian stores, including: bread, milk, yogurt, meat products, salt, sugar, tea, as well as beef, pork, chicken and eggs. Technically, this is the list of products on which the government will regulate prices.

In countries with market economies, the government regulates prices only in extreme situations, like during a war or natural disaster. But here in Russia, they keep telling us about Putin’s economic miracle – and suddenly introduce the sort of regulations one would expect during a catastrophe.

Let’s take a look at why prices have been rising in Russia and who has been losing out as a result.

One can distinguish three different reasons for the rise in prices. The first is that world commodity prices are increasing due to vigorous development in the countries of the Third World and resulting changes in their food preferences, as well as changes in the preferences of Europe. To put it bluntly, China, which used to stuff itself on just rice, has now started drinking milk and eating meat – making the prices rise for these commodities. Prices are rising because the peasants in China, the poor people in the U.S., and even the Arabs in Algeria, have all started eating better. But only in Putin’s Russia are rising prices not the result of an improving quality of life for poor people, but a reason for their continued decline.

Secondly, Russia is experiencing a general inflation: income from oil is rising, and as is always the case, when money flows into a country, the prices never remain the same. But the amount of money in Russia as a whole is growing faster than the amount of money in the hands of poor people. Over the past eight years the federal budget has grown from $20 billion to $200 billion – but obviously, the incomes of the poorest parts of the population have not risen by ten times. Easy money has been heating up prices, but has not been landing in the pockets of the poor.

Thirdly, the appetites of Russian bureaucrats have been growing sharply, and with them, the percentage they take from the price of all goods. Here’s just one example: Two years ago, under pressure from the FSB, the authorities announced that sales could be made only with the use of cash registers equipped with special “electronic cash register ribbon protection” (EKLZ). As FSB director Patrushev explained it in his letter implementing the regulation, these measures will help counter the cash-based black market and funding for terrorism. The FSB director failed to mention, however, one relevant detail: that the introduction of EKLZ equipment would bring in around one billion dollars per year for the FSB-controlled, government-owned company “Atlas” – the sole manufacturer of the above-mentioned EKLZ ribbons.

The $200 that it costs to equip each cash register with the tape is nothing for a wealthy supermarket, where the customers walk out with black caviar and Cristal champagne. But it is significant indeed for the small grocery store, where little old ladies come to buy bread and yogurt. This indirect tax, which is being gathered by the FSB from consumers (note too that the tape equipment is not hard to remove for an additional cost), will fall most heavily on poor people.

What will be the results of price regulation?

First, it will be murderous for the approximately 30 million Russian citizens who are associated in one way or another with agriculture. The increase in prices on agricultural products has given these people the ability to make money. The adoption of price limits imposed by the Ministry of Economic Development will mean that these people will not be able to sell the meat products, eggs or beef produced by them at prices higher than the fixed level.

Secondly, it will be murderous for the poorest of consumers. Of course, not all prices will be regulated – only those deemed “socially significant”. This means that the cheaper products, on which the prices are fixed, will disappear from the shelves, while the more expensive products remain. Poor people will either have to spend all day looking for the cheap goods that are supposedly still available, or pay for something they can’t really afford – exactly as it was during Soviet times, when people either had to stand in line for products in short supply, or else buy the exact same items at higher prices in a marketplace.

Thirdly, it will increase the incomes of government employees. The Ministry of Internal Affairs [MVD – runs the national police], which cannot find the time to search for murderers, rapists and thieves, is already quivering in excitement as it demands the right to check stores for increased prices.

It would be hard to find another measure adopted in the past year which so perfectly captures the true nature of the regime under which we live. A regime which, under the guise of caring for the population, increases the incomes of its bureaucrats and intentionally turns the government from being a system for ensuring equal rules of the game into an instrument for extorting money from those who have no rights.

EDITORIAL: Peter Lavelle, Scum of the Earth

EDITORIAL

Peter Lavelle, Scum of the Earth

On Monday evening, visitors to the Moscow Times newspaper’s website got a rather unpleasant shock. Not only did they discover what appeared to be a truly godawful makeover (all the color was gone, and opinion pieces were displayed without the author’s name visible, much less a synopsis as used to be the case — the whole thing was gone by Tuesday morning, thank heavens), but mixed in with the news stories at the top of the page, without being marked as opinion, was a propaganda diatribe from the loathsome little maggot Peter Lavelle, one of the few Westerners with so little morality that he joined the staff of the Kremlin’s contemptible propaganda campaign known as Russia Today. Thankfully, that feature too was gone by Tuesday morning, and Lavelle’s outrageous screed was by then properly marked as op-ed.

But in what we consider a gross lapse, the Moscow Times failed to identify “Russia Today” as being a state-operated propaganda entity — leaving lay readers clueless as to his (and its) deep-seated biases. As longtime readers and admirers of the paper, we can’t remember having been more disappointed to see something in the paper’s pages. It’s like coming across a rodent dropping in your nice bowl of Raisin Bran.

The MT routinely gives voice to the psychopathic Russophile set, and often one can make the argument that they are performing a useful service, giving us a window into how these nasty pieces of filth “think” and how they plan to attack us. Letting them embarrass themselves, in some cases, can be said to be a more effective way of defeating their argument than any actual opposition argument could ever be.

But the MT degrades itself by publishing Mr. Lavelle’s malignant flatulence (search him out in our pages if you want to know the full scope of the odious outrage he represents), and to do so without a a clear warning of who and what he is most unfortunate. Let’s take a little spin through the “points” (numbered and in italics) he claims to be making and you can gape at the carnage for yourself as we refute them (in boldface).


At the outset, we should make note of the reason for Mr. Lavelle’s interest in writing at this time. The Kremlin has dispatched its propaganda minions because of the picture above, which shows U.S. President Bush in Kiev on Tuesday warmly greeting Ukraine’s president Viktor Yushchenko, whose face is disfigured after surviving a Kremlin assassination attempt via Dioxin poisoning. The American leader proclaimed unequivocally to his Ukrainian counterpart: “Your nation has made a bold decision and the United States strongly supports your request. In Bucharest this week, I will continue to make America’s position clear: we support MAP for Ukraine and Georgia. My stop here should be a clear signal to everybody that I mean what I say: It’s in our interest for Ukraine to join.”

As the brilliant Anders Aslund notes in a column we publish below, the Kremlin’s foreign policy has been a total failure on every front, and Putin is just now waking up from his bender to realize that Russia stands utterly alone (Aslund notes that Putin recently compared the United States of America to Nazi Germany). But Ukraine moving into NATO is surely Putin’s lowest moment ever. It’s a catastrophic failure for the Putin regime, and not even his greatest fans can deny that. They thought the American president was a patsy, and they thought the world was trembling before Russia’s “resurgent” might. Instead, it’s clear that Bush has finally been listening closely to the crazy, unhinged rhetoric that has been flying out of Putin’s mouth recently, and taken the necessary countermeasures.

Those with weak stomachs, turn away now. Here comes the Kremlin’s frenzied, desperate “answer” to Bush.

(1) Bush may want to make a deal with Putin over missile defense, a deal that could be “the single foreign policy success of Bush’s presidency.” (2) Bush’s ” neocon handlers” have no desire whatsoever for a deal with Putin, they just want to get rejection so they can push forward regardless of his wishes but with convenient cover.

So, in other words, Mr. Lavelle has no idea why Bush is coming to see Mr. Putin. Don’t forget about this, because it’s important when you get to point #8 below. How can drivel like this possibly makes its way into the pages of a respectable newspaper?

(3) “Bush said he looked into Putin’s eyes and saw his soul. Bush has since been ridiculed as naive for making the statement, but maybe his words were a kind gesture of pity to the leader of a country on its knees.”

So, in other words, Mr. Lavelle has no idea what Bush’s attitude towards Mr. Putin is. You only see this kind of psychotically unhinged inconsistency from those who are not being edited because truth has no significance in their activities (and, of course, from very young and mindless children). Essentially, those who produce Russia Today know that nobody in the West is going to fall for this load of crap, so they just churn out whatever they can to make their taskmasters happy — just like in Soviet times. What else would explain their hiring a totally uncredentialed and pathetic loser like Lavelle instead of somebody who actually knows something?

(4) “Just eight years ago, Russia was a country that did not matter anymore. The former superpower was broke, in chaos and almost absent on the international scene. It did not take much time for Putin and Russia to show Bush and the world that the Kremlin was not interested in pity, hand-outs or being Washington’s junior partner.”

Yes, by all means, no need for any handouts to Russia’s male population, which lives nearly 20 fewer years than their American counterparts. Russia is in the top 25 world nations for mortality and outside the top 100 for male adult lifespan. Its citizens work for a pathetic average hourly wage of $4 and are facing a massive AIDS crisis. Its per capita purchasing power parity GDP is not in the world’s top 50. And yet it doesn’t want or need anyone’s help. Rather, it feels it has a right to be treated as an equal — even though it doesn’t treat nations like Georgia or Ukraine that way.

(5) Today Russia is back on its feet. Its foreign policy interests are legitimate, and the Kremlin will go to great lengths to defend them. Any other country in the same position would do the same. This is why the West today simply doesn’t “get Russia” and is often intensely negative toward Putin.

Back on its feet? The only nations of the world that Russia can count as friends are pariahs like Venzuela, Iran and Syria. Russia will go to great lengths to defend Iran? Yes, we know all about what General Yuri Baluyevsky said about not hesitating to be the first to use nuclear weapons in battle. And apparently, Mr. Lavelle is pleased about that. It’s apparently “legitimate” to send money and guns to terrorist groups like Hamas and Hezbollah, as Russia is doing, in his view.

Is this blathering dolt really the best the Kremlin can come up with? If so, that’s probably the most damning evidence imaginable of its total failure.

(a) What annoys most Russians is how the West — both the politicians and the media — deny that Russia has it own foreign policy interests. What goes on in Russia’s backyard obviously concerns the Kremlin. Former Soviet republics like Georgia and Ukraine wish to move closer to Western institutions. That is fine. But NATO’s continued desire to expand is a legitimate Kremlin concern. Any country in Russia’s position, watching a military alliance move closer to its borders, would be worried.

Stalin had “foreign policy interests.” So did Hitler. Apparently, Mr. Lavelle feels that Russia was obligated to respect and recognize Hitler’s “foreign policy interests” just like Neville Chamberlain and Josef Stalin did, apparently he feels Stalin’s pact with Hitler was a good idea. Do you notice how he doesn’t say one single word of criticism regarding the possibility that Georgia and Ukraine may have “legitimate” security concerns about Russia that Putin is flouting or ignoring, concerns which push them predictably towards NATO? Is he really saying that Russia’s concerns about NATO are legitimate but Georgia and Ukraine’s concerns about Russia are not? Can he be that fully neo-Soviet? You better believe he can. And that, of course, is why Russia Today hired this vicious freak.


(b) And what about Washington’s missile-defense system for Eastern Europe? Once in place, this security gambit will pose a threat to Russia’s nuclear deterrent. Because of this, the Kremlin has no choice but to respond to the plan with a large dose of skepticism. I sense, however, that the Kremlin is open to a deal that will safeguard its security.

There is only one way a “missile defense system” can be a threat to Russia, and that’s if Russia is planning to fire missiles at the countries it protects. Apparently, Mr. Lavelle is confirming Russia has such plans, and demanding the right to proceed with them unimpeded. Those are the words of a true psychopath.

(6) Today, the United States has a long and serious list of complaints about Russia, perhaps topped with its concerns that the Kremlin might use energy as a political weapon. This notion is simply ridiculous. Russia and its energy companies merely want to be paid world prices for energy. Period. Ukraine and Belarus are not victims of Kremlin bullying. It is these two countries, not Russia, that serve as the barriers that must be overcome before Russia and its energy customers can attain energy security. Furthermore, Russia’s energy resources are its own. The state alone will decide how foreign companies profit from its natural resource endowment. This applies to companies including Shell and BP and their trials and tribulations in Russia’s oil and gas patches.

So let’s see if we understand. Russia’s concerns about America are “legitimate” but America’s concerns about Russia are “ridiculous.” Have we got that right? And it’s the Americans who fail to treat Russia with respect, correct?

This man is a maniac!

(7) The issue of Russia’s democracy also is often used to lecture Russia. The fact is that Russia’s democracy is very young. Only now are meaningful political parties coming into being. Campaigns and elections have a very long way to go, but make no mistake: Today’s parties and elected officials reflect citizens’ preferences like never before. Thoughtful commentary on democracy’s progress is needed, but lecturing is not.

Well that sure seems strange. Didn’t he say in point #4 that Russia wasn’t interested in being a “junior partner”? Didn’t he say Russia needed to be treated fully as an equal? So how come now when democracy is the issue, Russia is “young” and can’t be expected to meet the West’s advanced standards. In addition to that jaw-dropping hypocrisy, he’s lying too (of course). Russia has held five presidential elections. By the time of America’s fourth presidential election, John Adams and the first party of power had already lost power to rival Thomas Jefferson and his opposition party, and Adams stepped aside to let an entirely new type of ruler have power.

(8) Bush will be going to Sochi with his hat in his hand. Putin will not. Putin has already built a legacy — that Russia counts in the world. Bush’s eagerness to meet in Sochi speaks volumes about the state of Russian-U.S. relations and the myths that need to be dispelled.

Didn’t he say in point #2 that Bush might be going as part of a neocon plot to set up Putin for a big fall? If he’s so sure he’s going with his hat in his hand, why didn’t he say that in the first place. Stalin also “built a legacy.” Many Russians are proud of it. Is Lavelle also tickled? Apparently so. This is the psychotic, dangerous rambling of an evil lunatic, helping Russia to do all it can to destroy his native land. He’s a traitor, and the only thing that saves us from him is his own stupidity and incompetence. Russia attracts such people like a flame attracts moths in the dark of night.

Mr. Lavelle, as a Kremlin sycophant, doesn’t face arrest or persecution like Russians such as Oleg Kozlovsky, so he has no idea what real life is like on Russia’s mean streets — nor does he have any idea how it feels to be a Georgian, Ukrainian or Estonian being menaced by Russian energy warfare, or an American or Briton being buzzed by Russian strategic bombers.

He’s just plain treacherous and evil — and that’s the long and the short of him.

Russia’s Next Collapse Will be its Last

Writing in the Moscow Times Richard Lourie, the author of A Hatred For Tulips and Sakharov: A Biography, says that the next time Russia collapses will be the last time Russia collapses. Having already crumbled twice in a century, one must question the rationality of Russians favoring Vladimir Putin with such overwhelming support. History shows that they simply can’t be that sure he won’t bring the whole country once again to its knees.

Though the Constitution does not say it in so many words, the main task of the Russian president is to keep the country from falling apart. In taking the oath of office, the president swears to protect “the security and integrity of the state.”

Russia has collapsed twice in the less than a 100 years, in 1917 and again in 1991, and there is no assurance that it won’t happen again. True, it has come back strong each time — first as the Soviet Union and now as the Russian Federation — but there are only so many times you can pull off that trick. The next collapse will surely be the last.

Though flush with cash and newfound power, Russia’s leadership remains traumatized by the sinking of the Soviet Union. The real shock was how quick and easy it was. That shock and the fear of losing control explain much of the country’s behavior both internationally and domestically — for example, in the recent managed State Duma and presidential elections.

Speculation on who will be calling the shots after Dmitry Medvedev is sworn in is interesting, inevitable and irrelevant — at least as far as the nature of the challenge facing the nation is concerned.

Structurally speaking, the problem the country faces today is much like that the one that tsarist and Soviet Russia faced. By refusing to share power and to adapt to changing conditions, the rulers create a crisis that, unaddressed, ultimately proves lethal. The interests of the nation’s ruling class threaten the very existence of the nation itself.

How does the new Russia avoid the same fate? In a word — diversify.

Economically, Russia can save itself from its overdependance on oil, gas and other commodities by doubling its bet on scientific projects like nanotechnology. Success will not be immediate, but the dividends could prove enormous in the fields of energy, medicine and defense. Success will also restore some of the scientific luster the country enjoyed during the early space age.

Russia has already begun diversifying economically. Russian companies own Getty, a U.S. chain of gasoline stations, and Evraz, Russia’s largest steelmaker, has agreed to pay $4 billion for IPSCO’s North American plate and pipe business. Pepsi recently bought a three-quarter share in Lebedyansky, the country’s largest juice manufacturer, for $1.4 billion.

What’s good about this kind of commercial interdependence is that it will eventually lead to problems and disputes, which will have to be settled by lawyers and in court. Gradually, a body of law and a habit of law will be built up. It can serve as a basis for civil and political law that has so far eluded Russia.

At some point in this process, Russian television will also need to diversify. In practice, this might mean placing blocks of air time outside state control, independent channels owned by oligarchs, or some form of national independent television, though that is harder to visualize. In any case, if the flow of information becomes more constricted, the country’s prestige will suffer an even more precipitous decline. It will also mean that by depriving scientists, businessmen and citizens of information, the Kremlin will be repeating the self-destructive mistakes of the past.

Once business, law and communications have been diversified, genuine political opposition parties can be allowed. This need not be done because freedom is God’s gift to humanity or because it is kinder and nobler to allow people genuine choice in all aspects of life. In the end, a measure of real accountability on the part of politicians, a real fear of losing office in unriggable elections and the heated exchange of ideas that is part of any real campaign debate will have the salutary effect of reducing social tensions and preventing destabilizing concentrations of power.

Democracy is the ultimate diversification. And Russia’s survival will depend on it.

Russia’s Next Collapse Will be its Last

Writing in the Moscow Times Richard Lourie, the author of A Hatred For Tulips and Sakharov: A Biography, says that the next time Russia collapses will be the last time Russia collapses. Having already crumbled twice in a century, one must question the rationality of Russians favoring Vladimir Putin with such overwhelming support. History shows that they simply can’t be that sure he won’t bring the whole country once again to its knees.

Though the Constitution does not say it in so many words, the main task of the Russian president is to keep the country from falling apart. In taking the oath of office, the president swears to protect “the security and integrity of the state.”

Russia has collapsed twice in the less than a 100 years, in 1917 and again in 1991, and there is no assurance that it won’t happen again. True, it has come back strong each time — first as the Soviet Union and now as the Russian Federation — but there are only so many times you can pull off that trick. The next collapse will surely be the last.

Though flush with cash and newfound power, Russia’s leadership remains traumatized by the sinking of the Soviet Union. The real shock was how quick and easy it was. That shock and the fear of losing control explain much of the country’s behavior both internationally and domestically — for example, in the recent managed State Duma and presidential elections.

Speculation on who will be calling the shots after Dmitry Medvedev is sworn in is interesting, inevitable and irrelevant — at least as far as the nature of the challenge facing the nation is concerned.

Structurally speaking, the problem the country faces today is much like that the one that tsarist and Soviet Russia faced. By refusing to share power and to adapt to changing conditions, the rulers create a crisis that, unaddressed, ultimately proves lethal. The interests of the nation’s ruling class threaten the very existence of the nation itself.

How does the new Russia avoid the same fate? In a word — diversify.

Economically, Russia can save itself from its overdependance on oil, gas and other commodities by doubling its bet on scientific projects like nanotechnology. Success will not be immediate, but the dividends could prove enormous in the fields of energy, medicine and defense. Success will also restore some of the scientific luster the country enjoyed during the early space age.

Russia has already begun diversifying economically. Russian companies own Getty, a U.S. chain of gasoline stations, and Evraz, Russia’s largest steelmaker, has agreed to pay $4 billion for IPSCO’s North American plate and pipe business. Pepsi recently bought a three-quarter share in Lebedyansky, the country’s largest juice manufacturer, for $1.4 billion.

What’s good about this kind of commercial interdependence is that it will eventually lead to problems and disputes, which will have to be settled by lawyers and in court. Gradually, a body of law and a habit of law will be built up. It can serve as a basis for civil and political law that has so far eluded Russia.

At some point in this process, Russian television will also need to diversify. In practice, this might mean placing blocks of air time outside state control, independent channels owned by oligarchs, or some form of national independent television, though that is harder to visualize. In any case, if the flow of information becomes more constricted, the country’s prestige will suffer an even more precipitous decline. It will also mean that by depriving scientists, businessmen and citizens of information, the Kremlin will be repeating the self-destructive mistakes of the past.

Once business, law and communications have been diversified, genuine political opposition parties can be allowed. This need not be done because freedom is God’s gift to humanity or because it is kinder and nobler to allow people genuine choice in all aspects of life. In the end, a measure of real accountability on the part of politicians, a real fear of losing office in unriggable elections and the heated exchange of ideas that is part of any real campaign debate will have the salutary effect of reducing social tensions and preventing destabilizing concentrations of power.

Democracy is the ultimate diversification. And Russia’s survival will depend on it.

Russia’s Next Collapse Will be its Last

Writing in the Moscow Times Richard Lourie, the author of A Hatred For Tulips and Sakharov: A Biography, says that the next time Russia collapses will be the last time Russia collapses. Having already crumbled twice in a century, one must question the rationality of Russians favoring Vladimir Putin with such overwhelming support. History shows that they simply can’t be that sure he won’t bring the whole country once again to its knees.

Though the Constitution does not say it in so many words, the main task of the Russian president is to keep the country from falling apart. In taking the oath of office, the president swears to protect “the security and integrity of the state.”

Russia has collapsed twice in the less than a 100 years, in 1917 and again in 1991, and there is no assurance that it won’t happen again. True, it has come back strong each time — first as the Soviet Union and now as the Russian Federation — but there are only so many times you can pull off that trick. The next collapse will surely be the last.

Though flush with cash and newfound power, Russia’s leadership remains traumatized by the sinking of the Soviet Union. The real shock was how quick and easy it was. That shock and the fear of losing control explain much of the country’s behavior both internationally and domestically — for example, in the recent managed State Duma and presidential elections.

Speculation on who will be calling the shots after Dmitry Medvedev is sworn in is interesting, inevitable and irrelevant — at least as far as the nature of the challenge facing the nation is concerned.

Structurally speaking, the problem the country faces today is much like that the one that tsarist and Soviet Russia faced. By refusing to share power and to adapt to changing conditions, the rulers create a crisis that, unaddressed, ultimately proves lethal. The interests of the nation’s ruling class threaten the very existence of the nation itself.

How does the new Russia avoid the same fate? In a word — diversify.

Economically, Russia can save itself from its overdependance on oil, gas and other commodities by doubling its bet on scientific projects like nanotechnology. Success will not be immediate, but the dividends could prove enormous in the fields of energy, medicine and defense. Success will also restore some of the scientific luster the country enjoyed during the early space age.

Russia has already begun diversifying economically. Russian companies own Getty, a U.S. chain of gasoline stations, and Evraz, Russia’s largest steelmaker, has agreed to pay $4 billion for IPSCO’s North American plate and pipe business. Pepsi recently bought a three-quarter share in Lebedyansky, the country’s largest juice manufacturer, for $1.4 billion.

What’s good about this kind of commercial interdependence is that it will eventually lead to problems and disputes, which will have to be settled by lawyers and in court. Gradually, a body of law and a habit of law will be built up. It can serve as a basis for civil and political law that has so far eluded Russia.

At some point in this process, Russian television will also need to diversify. In practice, this might mean placing blocks of air time outside state control, independent channels owned by oligarchs, or some form of national independent television, though that is harder to visualize. In any case, if the flow of information becomes more constricted, the country’s prestige will suffer an even more precipitous decline. It will also mean that by depriving scientists, businessmen and citizens of information, the Kremlin will be repeating the self-destructive mistakes of the past.

Once business, law and communications have been diversified, genuine political opposition parties can be allowed. This need not be done because freedom is God’s gift to humanity or because it is kinder and nobler to allow people genuine choice in all aspects of life. In the end, a measure of real accountability on the part of politicians, a real fear of losing office in unriggable elections and the heated exchange of ideas that is part of any real campaign debate will have the salutary effect of reducing social tensions and preventing destabilizing concentrations of power.

Democracy is the ultimate diversification. And Russia’s survival will depend on it.

Russia’s Next Collapse Will be its Last

Writing in the Moscow Times Richard Lourie, the author of A Hatred For Tulips and Sakharov: A Biography, says that the next time Russia collapses will be the last time Russia collapses. Having already crumbled twice in a century, one must question the rationality of Russians favoring Vladimir Putin with such overwhelming support. History shows that they simply can’t be that sure he won’t bring the whole country once again to its knees.

Though the Constitution does not say it in so many words, the main task of the Russian president is to keep the country from falling apart. In taking the oath of office, the president swears to protect “the security and integrity of the state.”

Russia has collapsed twice in the less than a 100 years, in 1917 and again in 1991, and there is no assurance that it won’t happen again. True, it has come back strong each time — first as the Soviet Union and now as the Russian Federation — but there are only so many times you can pull off that trick. The next collapse will surely be the last.

Though flush with cash and newfound power, Russia’s leadership remains traumatized by the sinking of the Soviet Union. The real shock was how quick and easy it was. That shock and the fear of losing control explain much of the country’s behavior both internationally and domestically — for example, in the recent managed State Duma and presidential elections.

Speculation on who will be calling the shots after Dmitry Medvedev is sworn in is interesting, inevitable and irrelevant — at least as far as the nature of the challenge facing the nation is concerned.

Structurally speaking, the problem the country faces today is much like that the one that tsarist and Soviet Russia faced. By refusing to share power and to adapt to changing conditions, the rulers create a crisis that, unaddressed, ultimately proves lethal. The interests of the nation’s ruling class threaten the very existence of the nation itself.

How does the new Russia avoid the same fate? In a word — diversify.

Economically, Russia can save itself from its overdependance on oil, gas and other commodities by doubling its bet on scientific projects like nanotechnology. Success will not be immediate, but the dividends could prove enormous in the fields of energy, medicine and defense. Success will also restore some of the scientific luster the country enjoyed during the early space age.

Russia has already begun diversifying economically. Russian companies own Getty, a U.S. chain of gasoline stations, and Evraz, Russia’s largest steelmaker, has agreed to pay $4 billion for IPSCO’s North American plate and pipe business. Pepsi recently bought a three-quarter share in Lebedyansky, the country’s largest juice manufacturer, for $1.4 billion.

What’s good about this kind of commercial interdependence is that it will eventually lead to problems and disputes, which will have to be settled by lawyers and in court. Gradually, a body of law and a habit of law will be built up. It can serve as a basis for civil and political law that has so far eluded Russia.

At some point in this process, Russian television will also need to diversify. In practice, this might mean placing blocks of air time outside state control, independent channels owned by oligarchs, or some form of national independent television, though that is harder to visualize. In any case, if the flow of information becomes more constricted, the country’s prestige will suffer an even more precipitous decline. It will also mean that by depriving scientists, businessmen and citizens of information, the Kremlin will be repeating the self-destructive mistakes of the past.

Once business, law and communications have been diversified, genuine political opposition parties can be allowed. This need not be done because freedom is God’s gift to humanity or because it is kinder and nobler to allow people genuine choice in all aspects of life. In the end, a measure of real accountability on the part of politicians, a real fear of losing office in unriggable elections and the heated exchange of ideas that is part of any real campaign debate will have the salutary effect of reducing social tensions and preventing destabilizing concentrations of power.

Democracy is the ultimate diversification. And Russia’s survival will depend on it.

Russia’s Next Collapse Will be its Last

Writing in the Moscow Times Richard Lourie, the author of A Hatred For Tulips and Sakharov: A Biography, says that the next time Russia collapses will be the last time Russia collapses. Having already crumbled twice in a century, one must question the rationality of Russians favoring Vladimir Putin with such overwhelming support. History shows that they simply can’t be that sure he won’t bring the whole country once again to its knees.

Though the Constitution does not say it in so many words, the main task of the Russian president is to keep the country from falling apart. In taking the oath of office, the president swears to protect “the security and integrity of the state.”

Russia has collapsed twice in the less than a 100 years, in 1917 and again in 1991, and there is no assurance that it won’t happen again. True, it has come back strong each time — first as the Soviet Union and now as the Russian Federation — but there are only so many times you can pull off that trick. The next collapse will surely be the last.

Though flush with cash and newfound power, Russia’s leadership remains traumatized by the sinking of the Soviet Union. The real shock was how quick and easy it was. That shock and the fear of losing control explain much of the country’s behavior both internationally and domestically — for example, in the recent managed State Duma and presidential elections.

Speculation on who will be calling the shots after Dmitry Medvedev is sworn in is interesting, inevitable and irrelevant — at least as far as the nature of the challenge facing the nation is concerned.

Structurally speaking, the problem the country faces today is much like that the one that tsarist and Soviet Russia faced. By refusing to share power and to adapt to changing conditions, the rulers create a crisis that, unaddressed, ultimately proves lethal. The interests of the nation’s ruling class threaten the very existence of the nation itself.

How does the new Russia avoid the same fate? In a word — diversify.

Economically, Russia can save itself from its overdependance on oil, gas and other commodities by doubling its bet on scientific projects like nanotechnology. Success will not be immediate, but the dividends could prove enormous in the fields of energy, medicine and defense. Success will also restore some of the scientific luster the country enjoyed during the early space age.

Russia has already begun diversifying economically. Russian companies own Getty, a U.S. chain of gasoline stations, and Evraz, Russia’s largest steelmaker, has agreed to pay $4 billion for IPSCO’s North American plate and pipe business. Pepsi recently bought a three-quarter share in Lebedyansky, the country’s largest juice manufacturer, for $1.4 billion.

What’s good about this kind of commercial interdependence is that it will eventually lead to problems and disputes, which will have to be settled by lawyers and in court. Gradually, a body of law and a habit of law will be built up. It can serve as a basis for civil and political law that has so far eluded Russia.

At some point in this process, Russian television will also need to diversify. In practice, this might mean placing blocks of air time outside state control, independent channels owned by oligarchs, or some form of national independent television, though that is harder to visualize. In any case, if the flow of information becomes more constricted, the country’s prestige will suffer an even more precipitous decline. It will also mean that by depriving scientists, businessmen and citizens of information, the Kremlin will be repeating the self-destructive mistakes of the past.

Once business, law and communications have been diversified, genuine political opposition parties can be allowed. This need not be done because freedom is God’s gift to humanity or because it is kinder and nobler to allow people genuine choice in all aspects of life. In the end, a measure of real accountability on the part of politicians, a real fear of losing office in unriggable elections and the heated exchange of ideas that is part of any real campaign debate will have the salutary effect of reducing social tensions and preventing destabilizing concentrations of power.

Democracy is the ultimate diversification. And Russia’s survival will depend on it.