Daily Archives: June 2, 2008

June 2, 2008 — Contents

MONDAY JUNE 2 CONTENTS

(1) EDITORIAL: Its Own Worst Enemy

(2) The Specter of Inflation Looms over Putin’s Russia

(3) Putin, Now and Forever

(4) Russia in the Jaws of a Visegrad

(5) Annals of Shamapova

NOTE: Oborona held a protest march calling for the freedom of political prisoners such as Mikhail Khodorkovsky on May 31st. A vigorous Oleg Kozlovsky led the march and spoke to the press, his blog has the details. So much for the attempt to intimidate him with imprisonment. Take that, Mr. Putin. You can’t keep a good man down! Perhaps, we see Russia’s Gandhi taking his first steps towards history.

EDITORIAL: Its Own Worst Enemy

EDITORIAL

Russia: Its Own Worst Enemy

It was widely reported last week that the U.S. Army thinks it has a crisis on its hands.

115 American soldiers committed suicide last year, up nearly 13% from the year before. With just over 500,000 soldiers in the U.S. all-volunteer army, that works out to a rate of 19 suicides per 100,000 soldiers. Though the rate of suicide in the U.S. armed forces is lower than that in the general population, the military still thinks it is much too high, and they’re planning to take dramatic steps to reduce the rate.

They might relax a bit if they took a look at Russia.

Although Russia’s population is less than half the size of America’s, Russia uses conscription to draft hundreds of thousands of young men into the army each year, and fields ground forces of roughly the same size as the United States. And the Moscow Times reports that the Russian army experienced nearly three times more suicides last year than did its American counterpart — a shockingly high 341 Russian soldiers took their own lives last year.

These lives were lost due to terror and depression flowing from the barbaric, ritualistic hazing process that befalls all new recruits and is known in Russia as dedovschina. In one case, a recruit was so brutally tortured that the entire lower half of his body had to be amputated, including his genitals. As a result, a massive corrupt industry has been spawned in Russia whereby bribes are paid by young men’s parents in order to avoid the horror of military service.

Nobody can victimize a Russian better than another Russian, something that’s been true right the way through Russian history and makes gibberish out of Russian fears of and hatred for foreigners.

And let’s be clear: The Russian Kremlin is ruled by a proud KGB spy who has liquidated all political opposition and wiped out the independent media. In other words, he’s a natural born liar and there is no check on his statements. So that figure of 341 suicides is almost surely a gross understatement. Russia is claiming that this year’s number is a reduction of 15% over last year, although not a single concrete policy step to reduce dedovschina, or any other suicide-motivating factor, can be identified. We believe that the Kremlin is simply lying, articulating the largest possible reduction is thinks it can get away with.

Clearly, the Russian army’s most dangerous foe is . . . itself.

As is so often the case with Vladimir Putin’s Russia, American problems don’t look nearly so serious when they are compared to that neo-Soviet nightmare. One Russian person kills him/herself every ten minutes in Russia (that adds up t0 60,000 per year or 41 suicides per 100,000 people — only Lithunania has more). That just about says it all, doesn’t it? This figure is four times higher than for the United States.

Russia’s problem, in other words, is compared to America’s an urgent crisis, while America’s just isn’t. Russia has a net loss from its population of up to 1 million people per year owing to a wide variety of problems including suicide at a frenetic pace, while America is growing by leaps and bounds. Thus, if Russia doesn’t solve its problem, it will simply cease to exist. People wait in line for years to enter the United States’ “golden doors,” while nobody at all — other than Russians being booted out of former Soviet republics, is waiting to enter Russia.

Yet, even though America’s problem isn’t nearly as serious, Americans are prominently and publicly debating the issue and actively looking to reform and improve. What is Russia doing? It’s covering up the information and proceeding as if there were no problem. It’s jailing opposition critics like Oleg Kozlovsky and squelching reporting on TV and in print, so in fact there’s no information to debate even if critics were free to do so. This is exactly what happened in the USSR, an unreformed behemoth gradually declining into torpor and disaster, and now Russians are doing it all over again, handing power to proud member of the clan of KGB thugs who destroyed the nation the first time.

When will they ever learn?

The Specter of Inflation Looms Above Vladimir Putin’s Russia

The Moscow Times reports on the specter of inflation looming above Vladimir Putin’s Russia:

It’s early evening at the upscale Scandinavia restaurant, and its courtyard a few meters off Tverskaya Ulitsa is starting to fill up with customers.

Bustling servers bring out plates piled high with beef burgers, while diners indoors tuck into the pricier steaks and fish.

But behind the scenes, the Swedish restaurant is starting to feel the pinch.

“We haven’t marked up the prices on some of the favorite dishes for six years,” said Marina Averchenkova, the restaurant’s public relations director. “But as long as we work a lot with imported products such as meat and wine, prices in Europe have put us in the situation where we have had to raise our prices.”

With the state expecting inflation to top 15 percent in May, rising costs are forcing thousands of enterprises to hike prices even as they struggle to keep costs down.

Prime Minister Vladimir Putin says Russians can live with double-digit inflation for years, but it is a claim that may be put to the test if the government does not act urgently to contain soaring costs.

After eight years as president, Putin has passed on to Dmitry Medvedev stewardship of a booming economy. But it could prove to be a poisoned chalice. The country is facing sky-high inflation — driven by food prices — that threatens to undermine many of the Putin-era successes.

It is not a Russian phenomenon, of course. Across the globe, food costs have escalated on the back of years of underinvestment in agriculture, poor harvests and higher demand for grain from emerging economies, such as China. Tens of thousands of people across the world marched on May 1 against the rising cost of food and falling wages and pensions. In Russia, too, there are signs of growing unrest as inflation starts to bite.

Real inflation is believed to be higher than the official figures, and a recent poll indicated that about 67 percent of Russians identify inflation as the most urgent issue facing the country today.

Inflation rose for the first time in years in 2007, hitting 11.9 percent. The Economic Development Ministry remains hopeful that inflation will be contained at 10.5 percent this year, while economists say it could reach 11.5 percent to 14 percent. Even the figure of 14 percent is arguably optimistic, given that consumer prices have risen by 7.5 percent so far this year.

While prices have risen rapidly for some time now, particularly in higher-end segments of the economy, such as property, it was only last fall that the specter of inflation truly reared its head. With State Duma and presidential elections fast appearing, the authorities got down to work fast on growing food prices.

But their efforts — which included price caps on food and hikes on several import and export tariffs — have been widely derided by economists as populist and cosmetic. With a new government installed this month, hopes have been kindled that the bureaucrats will now start to take substantive steps to tackle inflation.

For sure, the government is taking inflation seriously. But officials have shown a deep-rooted disinclination to do anything that would alienate the population and threaten economic expansion.

Over the past 18 months, the country has seen a significant increase in money supply; the ruble has depreciated against the euro and the yen, and the government has pursued an aggressive spending program as it seeks to uphold economic growth, which has averaged at more than 7 percent in the last eight years.

It is no coincidence that inflation has struck in the middle of a debilitating international financial crisis that has rocked confidence in the global financial sector and brought the United States to the brink of recession.

Faced by the prospect of tougher lending conditions for banks and, in turn, their consumers, the Central Bank responded by printing more rubles — a decision that released liquidity into the system to shore up the financial sector but further fueled inflation.

But there is good news, too. Central Bank chief Sergei Ignatyev said Wednesday that the money supply has risen by a mere 0.7 percent in the year to April, compared with 11.2 percent over the same period last year, giving the Central Bank the confidence to predict slowing inflation over the rest of the year.

Nevertheless, there is no easy solution, and policymakers remain divided on how to tackle the problem, which has a real potential to undo the government’s popularity.

Problem No. 1: Overheating Economy

Liberal members of government have warned repeatedly that the state’s aggressive appetite for spending — on wages, infrastructure and other national projects — is fueling inflation.

“Real budgetary expenditure rose by 26 percent last year. It’s too much and is greater than the total growth of our economy,” Deputy Finance Minister Dmitry Pankin said at a forum this week. “This is influencing inflation.”

It is a point made by his boss, Finance Minister Alexei Kudrin, time and time again. The keeper of the country’s purse strings, Kudrin has navigated the country through eight years of prosperity and has fiercely opposed the government’s tendency to support big-spending programs, which would ensure continued high growth. The government has also poured money into pensions and state sector salaries, further measures that fuel inflation.

With global growth under threat because of the financial crisis, Russia is selling itself to foreign investors as a place where the rewards are still rich. It is a silver lining that many believe the country can ill afford to ignore.

Indeed, economists are already predicting that Russia’s growth will slow this year, although the effect will be much less than in the West, as banks see overseas funding dry up, resulting in fewer loans.

A split in the government on the pace of growth spilled into the public in April when Kudrin and Economic Development Minister Elvira Nabiullina squared off over whether the economy was overheating, the state at which growth becomes unsustainable. Kudrin’s conclusion, that the economy is overheating, is shared by many economists.

“Inflation has really been able to run away … because the economy is simply growing too fast,” said Rory MacFarquhar, chief economist and a managing director at Goldman Sachs.

He said the economic growth could be slowed to a more sustainable rate by reining in government spending and curbing credit growth.

But it appears that Kudrin is fighting a losing battle. Putin has outlined massive investment for transportation infrastructure this month, and more is to come. Oil, meanwhile, has soared to more than $135 per barrel, delivering windfall profits for the state.

“As long as the price of oil is so high, this is an argument that Kudrin cannot win,” said Martin Gilman, former representative of the International Monetary Fund in Russia.

If inflation cannot be contained, however, the economy faces a very real risk of slowdown.

Problems will arise if inflation reaches 15 percent to 20 percent, the level at which it could start to dent investor confidence, said Oleg Vyugin, chairman of MDM Bank and the former head of the Federal Service for Financial Markets.

“If inflation is kept under current limits and it is manageable, then it is possible to avoid [damaging the economy],” Vyugin said. “But if businesses see that the government is not in a position to control inflation, then there will be serious damage.”

Problem No. 2: Monopolies

The many monopolies have also been a major contributor to inflation by introducing aggressive price hikes for services.

The government regulates prices in a range of sectors, from electricity and gas to telecommunication services. The prices are usually set at the beginning of the year and in some sectors are subject to reforms and liberalization, which implies double-digit growth in prices in many cases.

“I think the government has to come up with a reasonable plan on how to regulate these tariffs taking into account the [current level of] inflation,” Vyugin said.

In addition, anti-monopoly rules should be enforced against companies that try to regulate prices, he said.

Earlier this year, Putin sought to blame monopolies for high food prices, claiming that they effectively created a cartel to keep costs high. It is a theme he took up again in his candidacy speech for prime minister, calling for tougher implementation of the anti-monopoly policy.

But he also ruled out curbing the power of the country’s natural monopolies, which include companies such as Gazprom and Transneft, arguing that the money for reform and upgrading of the country’s infrastructure had to come from somewhere.

Solution No. 1: Appreciation

One way to bring down costs would be to allow the ruble to strengthen against other currencies, namely the euro and the dollar. For example, a liter of German orange juice that sells for 2 euros at home costs 74 rubles to import at the current exchange rate of about 37 rubles to the euro. But the same liter would cost only 72 rubles if the ruble appreciated to 36 to the euro.

This difference is potentially significant because food is a main driver of inflation in Russia and, Putin said recently, big Russian cities import up to 70 percent of their food.

The Central Bank tightly controls the ruble’s exchange rate by buying and selling rubles to keep the ruble steady against major foreign currencies.

Until the government relinquishes control of the ruble, it will not be able to target inflation in the long-term, some economists said.

“They really do need to let go of the exchange rate,” MacFarquhar said. “But there is a very deep-seated reluctance to get into the position of overvaluation after 1998,” the year of the Russian financial crisis.

Vyugin said the Central Bank should have let go of the ruble months ago, given the money pouring into the economy in the shape of investment flows, on the one hand, and services and trading boosted by high oil prices on the other.

“When the economy experiences this kind of double inflow, the currency has to be appreciated,” Vyugin said.

Many major investment houses are banking on exactly that. Goldman Sachs, Deutsche Bank and Merrill Lynch recently advised clients to buy rubles in anticipation of a policy change on the currency. They predicted that the currency could appreciate by as much as 4 percent in the next six months.

But to rein in inflation for good, the ruble would need to be appreciated by about 20 percent, some economists said. Politically, such a measure would face stiff opposition. Domestic exporters, which make up a powerful lobby in the government, benefit from a weaker ruble, which adds to their competitiveness abroad. On the flipside, domestic exporters, particularly in the oil industry, are also seeing inflation eat into their competitive advantage by increasing their costs.

The Central Bank is reluctant to appreciate the ruble. Fearing ruble speculation that would result in greater inflows of money, the bank said last year that it no longer considered the exchange rate policy to be an effective way to battle inflation.

In a speech to the Duma before his confirmation as prime minister early this month, Putin dismayed many economists by saying the government’s anti-inflationary efforts would focus on boosting investment in agriculture, enterprise and curbing the power of monopolies. He made no mention of ruble appreciation and suggested that the state’s goal was to return to single-digit inflation “within the next few years” — an indication that the prospect of ruble appreciation had been shelved.
A few weeks later, the Central Bank muddied the picture further, saying it would conduct daily interventions in the local forex market to head off speculators and make the exchange rate more flexible. In doing so, the bank introduces greater volatility into the market, making it harder for dealers to predict the bank’s next move. It is also a first step toward an inflation-targeting regime.

But perhaps the biggest turnabout came this week, when the Central Bank indicated that it would start to broaden the ruble’s traded range on a very gradual basis and might let the currency appreciate within months. Nevertheless, the bank has made clear its determination to pursue every other available avenue first.

Gilman, who teaches at Moscow’s Higher School of Economics, argued that a drastic ruble appreciation was not the answer. “Firstly, it would be a signal to investors that the ruble is a safe one-way bet,” he said. “But the longer-term problem is that Russia is not going to be running a current account surplus for very much longer. Do you want the ruble appreciating by 20 percent if Russia is going to be running [a] deficit? Is that really an intelligent policy?”

Solution No. 2: Monetary Tightening

The Central Bank’s primary tool to fight inflation so far has been to tighten monetary policy by raising interest rates.

Interest rates have been hiked twice this year, and more increases are expected. But economists call this measure ineffective in a climate where the exchange rate is tightly managed. Higher interest rates combined with a weaker ruble would encourage investors to pour more money into Russia, negating the effect of such a move in the first place.

“Whenever you have interest rates hikes in a fixed exchange system, it generates capital inflows and monetary expansion rather than monetary contraction,” said Vladimir Osokovsky, chief economist at UniCredit Aton. “For example, in the U.S., you cut interest rates and the dollar depreciates, [which leads to] monetary expansion. … Here, the monetary expansion and contraction is driven by capital inflows and outflows rather than the efforts of the Central Bank.”

Raising interest rates will work only when the ruble is allowed to float freely, he said.

Of secondary importance is that consumer credit is a relatively nascent phenomenon in Russia, where only a minority of the population hold credit cards and mortgages account for a mere 2 percent of gross domestic product, compared with 40 to 50 percent in the West. While higher interest rates in the West would discourage spending, in Russia the effect of such a move is minimal.

“The Russian authorities are between a rock and a hard place,” Gilman said. “There is very little that monetary policy can do to change this situation.”

In the meantime, the Central Bank has announced that it will raise bank reserve requirements aggressively from July 1, forcing banks to set more money aside and thereby slow lending growth. Corporate lending has grown at a phenomenal rate, up by 70 percent in the first quarter alone, and banks have historically been able to capitalize on cheap interest rates abroad to lend at a higher cost at home.

Solution No. 3: A Coordinated Policy

The Central Bank is inching toward an inflation-targeting regime, but it has indicated that this will only start to happen toward the end of this year. Inflation targeting would effectively imply a relaxation of control over the exchange-rate mechanism and a tightening of control over capital inflows. “That’s what the Central Bank is doing, and that is what they have to be doing from a macroeconomic viewpoint,” said Osokovsky, of UniCredit.

But it is a long-term solution, and there would be a significant time lag before it would begin to have an impact on inflation.

The U.S. economy, meanwhile, is playing a significant role in fueling Russian inflation. With the ruble tied closely to the dollar, the key international reserve currency, Russia is effectively importing loose U.S. monetary policy. Since the beginning of the year, the U.S. Federal Exchange has desperately tried to inject dynamism into its flagging economy by dropping interest rates to just 2 percent. This has led to an avalanche of dollars into the economy, which feeds into countries such as Russia that tie their currencies to the dollar. It is unlikely that the Fed will tighten its monetary policy before the U.S. economy starts to pick up.

“U.S. monetary policy is very soft today, and a lot of funds in the Middle East and Asian countries have accumulated dollars and are now trying to spend them,” Vyugin said. “It’s a source of inflation.”

There is little Russia can do to influence U.S. monetary policy, but Gilman suggested that Russia could build an informal coalition of countries to put pressure on the United States.

How that pressure would be applied is another matter entirely. Both Russia and Saudi Arabia have enormous dollar reserves and would be in the strongest position to threaten gently to sell off dollars and even diversify into other currencies.

The United States, however, would most likely think Russia was bluffing, Gilman said. If Russia then went ahead and sold a few billion dollars, the value of the dollar might plunge or U.S. bond prices might drop like a lead balloon, which would hurt the housing market as interest rates rise, he said.

“It is kind of like an atomic bomb. It is a very dangerous weapon,” he said.

Putin, Now and Forever

Irina Filatova, aprofessor of the State University,High School of Economics in Moscow, and professor emeritus and senior research fellow of the University of KwaZulu-Natal in South Africa, writing in the Guardian’s “Comment is Free” blog:

Back to the USSR” is the way liberal political analysts in Russia and abroad often refer to the legacy of Putin’s presidency. This is not quite right. If the legacy of the last president is “back to” anything, it is to the centuries-long tradition of Russian statehood – in other words, more or less full control by the centre over the regions and over all spheres of the economy and society. The Soviet model was, of course, the ultimate expression of Russian statehood, but this is not what Russia’s second president – or the part of the elite that he represents – has recreated.

One of the most important aspects of Putin’s legacy is the submission of the regions and provinces to Moscow. Putting an end to their disobedience and dissent was a lengthy process, in which the substitution of appointed governors for the elected ones was merely the coup de grace. It was preceded by the appointment of presidential representatives to the provinces and by the introduction of a new structure and composition for the Federation Council – the upper chamber of the Russian parliament and previously a centre of power for the regions.

The taming of business is another and perhaps even more important aspect of Putin’s legacy. There’s nothing Soviet about it, for there was, of course, no room for private business in the nationalised economy. But a tame business sector, dependent on the monarch for its existence and well-being, is very much the tradition of Muscovy. The Stroganovs, Russia’s famous traders and manufacturers, were rich enough to fund the government’s war efforts in the 17th century, but were still dependent on the crown for their business licenses and for permits to trade abroad. Why nationalise, if private businesses, having been beaten into submission (the Khodorkovsky affair was only the best known of a long line of similar sagas), provide the centre with whatever it wants? To be fair, there is simply no other way for business to survive.

A state monopoly over the most lucrative spheres of trade is also a centuries-long tradition. Furs and salt, wax and honey, and then vodka and gold, were long among the main sources of income for tsarist and Soviet treasuries.

The military have always played an important role in the militarised tsarist and Soviet state and economy – so there is no real surprise about the rise of the “siloviki”. And the attempts to subjugate the opposition by whipping up nationalism and xenophobia, provoking an increase in terrorism in response – all run true to form.

Putin’s main legacy, however, is Putin himself. Power in Russia has always been personalised, not institutionalised, and Putin has done everything to strengthen his personal power and to organise institutions to serve it, not the other way round. But here parallels stop and the mystery begins. Having achieved all this, Putin suddenly decides to step down. In the name of what? The constitution? Bowing to the proclaimed rules in order to give the Russians a good example? But even if it were so (which it isn’t, because he has already broken these rules by becoming head of a party), isn’t it clear that it is too late? Power will follow Putin wherever he goes. It is not by chance, that, according to some Russian sources, up-and-coming officials at the upper-middle level are now orientating their careers towards the Russian “White House” – the seat of the government – and not towards the presidency. They know where the power is.

Evgenia Albats, one of Russia’s top political commentators, quotes the story of how in 2000 Madeleine Albright was asked whether she thought that Putin was there for a long time. Her reply was “forever”. It is hard to disagree.

Russia in the Jaws of a Visegrad

The Economist reports that Lithuania,, Sweden and Poland are taking the lead on confronting neo-Soviet Russia, even if the bigger nations of Europe stand on the sidelines as usual:

WHETHER it was brave or clumsy depends on your point of view. But Lithuania (population 3.5m) has nudged the European Union (population 500m) into a slightly tougher stance towards Russia. Talks on a (long overdue) partnership agreement were first postponed because of Russia’s embargo on Polish meat. When that was lifted, the obstacle became Lithuanian demands for firmer terms concerning energy, judicial co-operation and Russia’s treatment of countries such as Georgia.

EU diplomats fumed about Lithuania’s tactics, complaining of belated timing, poor preparation and unrealistic expectations. A few said this was just the sort of thing to strengthen the view in “old Europe” that letting neurotic and primitive ex-communist easterners into their club had been a mistake. Certainly some foreign ministers’ meetings discussing the issue have been remarkably stormy by EU standards.

But a meeting on May 27th agreed upon a new negotiating mandate, with small but significant changes on some points sought by Lithuania. “They have attracted attention to Russia’s behaviour in Georgia, which is timely and good,” says an official from a neighbouring country. The talks on the partnership agreement will start at an EU-Russia summit in Siberia next month.

The question is how fast they will go. Germany wants things sewn up, at least in principle, within a year. That seems too soon to countries that are hawkish on Russia, as well as to the European Commission. This camp wants a more detailed deal, in which Russia would have to make big changes on such contentious issues as its energy monopolies, investor protection and illegal migration. In return the EU would offer a laxer visa regime and let Russian energy companies expand westwards more easily.

Other countries are moving to counter what they see as Germany’s overly Russia-friendly policies. Poland and Sweden this week launched their own plan, called the “eastern partnership”, to offer generous trade and other co-operation to Ukraine and Georgia, as well as to other interested countries. The aim is to recreate the model of the “Visegrad” group of four central European countries in the early 1990s, which helped ex-communist states to prepare for what at the time seemed the highly uncertain prospect of EU membership.

For the first time in any EU initiative, the plan explicitly includes Belarus (albeit only on a “technical” level for now). Russian regions such as Kaliningrad are also welcome to apply for some of the goodies that a partnership agreement can offer, such as better border crossings and environmental projects. Ex-communist Poland and rich, neutral Sweden may prove an effective combination. Their forceful foreign ministers, Radek Sikorski and Carl Bildt, get on well. Bravery is good. But brains are even better.

Annals of Shamapova

It’s turned out to be another one of “those” tournaments for Maria Shamapova at Roland Garros in Paris this week. Set up so she couldn’t possibly lose, she did so anyway.

After achieving the “#1 ranking” upon the resignation of Justine Henin, Shamapova has been given a draw in France that allows her to avoid, in all likelihood, the need to face a top-20 non-Russian opponent until the finals. Both of the dangerous Serbians and both of the dangerous Americans were placed on the opposite side of the draw from Sharapova, whose pathway to the finals was impeded only by the lowly likes of Svetlana Kuznetsova and Vera Zvonareva and Elena Dementieva, the serveless wonder.

In other words, the luckiest player in the world seemed right back on form. Why, it was almost as if the tournament organizers had stacked the draw specifically to put Shamapova’s pretty, marketable face in the finals.

Should she have won the tournament, this America-trained, America-resident athlete would remind many of how Russia recently won a soccer title with a Dutch coach and a Ukrainian star over woefully lame competition through the luck of the draw. Not exactly a case study in self sufficiency or success.

But in fact, Shamapova didn’t even manage to reach the quarter-finals, winning only two games in the decisive third set of her fourth-round match with a non-top-ten seed and putting Ana Ivanovic in perfect position to strip away Shamapova’s happenstance #1 by winning the tournament, allowing Shamapova to hold the top spot for even less time than the puny period she had it on her first go-round (she has never won a tournament while holding the #1 ranking).

And let’s be clear: the presence of Russians in the second week of a grand-slam tournament is cause for nothing but gloom among knowledgeable tennis fans. They are, quite simply, nearly unwatchable, a toxin in the blood stream of the game. Sharapova’s play at in Paris was abysmal, she was simply been lucky to get through the first week, struggling to eke out three-set wins against unknown competition, and on Saturday the American commentators bemoaned at length that all the interest was gone after the disappearance of the game’s three great current stars, Henin and the Williams sisters. Just watch the expression on any true fan’s face when you propose he watch a quarter-finals match between Dinara Safin and Svetlana Kuznetsova, or a semi between, and you’ll see a visage that tells you they’d rather watch bowling — or grass growing.

Russians are killing women’s tennis, it’s a simple as that.

The French crowd saw it all clearly enough. The Associated Press reports:

For Sharapova, things really began to fall apart when she served while trailing 3-2 in the third set.

At 15-love, Safina’s forehand landed near a line, and Sharapova missed a backhand. Sharapova asked the chair umpire to check the mark from Safina’s shot, drawing scattered noise from the crowd, and the call stood. On the next point, Sharapova botched a sitter and put a forehand into the net—drawing cheers, generally considered a breach of etiquette among tennis spectators. Another short ball came at 15-30, and perhaps wary of another miscue, Sharapova sent it back cautiously, allowing Safina to pound a forehand. That prompted a scream from Sharapova. As play proceeded, her yells became louder and louder as she berated herself, at least once with colorful language. Her departure from the French Open was filled with sound and fury: her stroke-accompanying shrieks, her self-loathing shouts between points and the spectators’ hearty boos and high-pitched whistles that ushered the No. 1-seeded woman to the exit.

That’s right — the French booed her off the court, the #1 player in the world.

And so it goes in Vladimir Putin’s Russia.