Daily Archives: June 30, 2008

EDITORIAL: Russia, Bringing up the Rear (Again)

EDITORIAL

Putin’s Russia, Bringing up the Rear (Again)

Much attention has been paid of late to the so-called “BRIC” group of nations — that being Brazil, Russia, India and China. Apparently, Russia entertained some sort of fanciful notion that at least in that company it might attain some type of leadership position. If we look at the economic performance of this group, however, then we see that, just as is the case with the G-8, Russia is woefully bringing up the rear, by far the least qualified member of the clan.

With just 143 million people, Russia lags in the basic criteria of population. Brazil has 188 million, India 1.1 billion and China 1.3 billion. All of the other three countries have vigorous, growing populations. Russia’s population is dramatically shrinking, expected to halve by the middle of this century.

According to the 2008 World Wealth Report published by Merrill Lynch and Capgemini, India led the group in creation of millionaires in 2007 at the rate of 23% growth, with China in second place at 20% and Brazil in third at 19%. Russia brought up the rear at a lowly 14% growth. All of the other three showed an increase in the rate of millionaire production, but not Russia, whose rate fell from 16% the prior year. (America still dominates the ranks of the world’s millionaires, with one out of every three found there.)

You might think the return of 19.2% on Russia’s RTS stock market index was impressive — until you looked at the return of the Indian Sensex towering above it at 47%, or Brazil’s Bovespa index at 44%. Then you’d see Russia’s performance as being rather puny indeed. And they all pale next to China’s Shenzhen index, which returned 167%. Why would anyone in their right mind even consider investing money in the Russian market when Russia is ruled by an autocrat, a proud KGB spy who has infamously confiscated the resources of foreigners on a regular basis. With a democracy like India or Brazil beckoning, Russia can only be seen as sloppy seconds.

And of this group only Russia is a net exporter of oil. Only Russia relies on the price of crude oil on international markets to bolster its economic performance. The other three nations are all net importers, in other words burdened by that price as an inhibiting factor, yet they still dominate Russia in economic performance. Do you dare to imagine the situation that would prevail if oil prices were much lower?

Is there any group of nations you can collect where Russia isn’t seen as a silly junior partner?

In a truly appalling statistic, Merrill Lynch reports that even though the rate of millionaire creation in Russia fell in 2007 compared to 2006 by nearly 13%, the market capitalization of Russia’s millionaires increased by a whopping 38%. In other words, wealth continued to accumulate in the hands of a tiny group of oligarchs to an increasingly obscene extent — Merrill Lynch reports that orders from yachts longer than 200 feet were larger from Russians than for any other nation in the world including the United States, which has by far the largest single concentration of such persons. So just as in Tsarist times, not only is Russia’s national wealth being greedily hoarded by a tiny elite cadre, but they are every bit as blatantly shameless about conspicuously consuming that wealth. It’s almost as if they feel they could lose it any second in some catastrophic event — like, say, the collapse of the monarchy and the Soviet dictatorship all in the space of less than 100 years.

The Financial Times reports: “The EU is by far Russia’s most important trading partner and also its biggest source of investment. Russia is the EU’s third largest partner, after the US and China.” In other words, Europe is much more important to Russia than Russia is to Europe, yet Russia demands to be treated as if that were not the case, and apparently seeks similar treatment within BRIC. It is behaving just like the old USSR used to do, demanding respect rather than earning it, and the result can be no better than the USSR experienced.

EDITORIAL: More Sports Humiliation for Putin’s Russia

EDITORIAL

More Sports Humiliation for Putin’s Russia

If anything more revolting happened last week than the sight of crazed Russian nationalists whooping it up on the streets of Moscow, and calling themselves “champions,” because their national football squad had defeated tiny Netherlands using not a Russian but a Dutch coach, we must have missed it. Only in Russia does reaching the semi-finals of a regional sports tournament qualify as a champion’s achievement.

The arrogance was flying fast and furious, as only Russians can manufacture it. Russian Midfielder Konstantin Zyryanov stated: “We have beaten two very strong teams, I think this improves our chances. I want to play Spain [in the semifinal]. We made lots of mistakes against Spain [in the group match] and now we have fixed them very quickly.”

Be careful what you wish for, Konstantin.

Nobody even remotely familiar with the sorry legacy of sports in Putin’s Russia could have been surprised when Russia was shut out in its next match against Spain, 3-0, and hence ejected from the tournament. Over the course of two matches against the Spaniards, Russia was outscored by a ghastly 7-1 and outclassed in every aspect of the game (this even though Spain’s star player David Villa was out of the second match on an injury in the early going).

Except the Russians, of course, who sat there slack-jawed just long enough to realize it must have been a massive Russophobic conspiracy that did them in. Woe to any Spanish person that might be encountered on the streets of Moscow (not that there are any, of course, since Moscow is about as attractive to a Spaniard as Antarctica to a Nigerian).

It seems that Russia’s “strategy” for victory — bribing its players with unlimited access to costly whores — worked out no better than bribing mothers to have babies has proven to. The team lost, and the population continues to shrink rapidly. So much for the “Russian solution” to everything — corruption.

And that wasn’t the end of Russia’s humiliation, either. Both the top-ranked Russian male and female tennis players, as we reported yesterday, were blown off the court in easy straight sets at Wimbledon by opponents who were not ranked in the world’s top 100. Neither managed to get as far as the third round.

Ouch.

Strange to say, though, we were rooting for Russian football against Spain. Had the Russians won, it would have been a beautiful argument that by allowing themselves to be led by foreign ideals Russians can achieve greatness. After all, such progress as Russia did make in the Euro tournament this year, getting a semi-final bid, was due in large part to the efforts of the team’s non-Russian coach, who sought to make massive reforms in the shoddy program he inherited from the desperate Russians. Now, the Russians will probably say they would have won the whole thing if only they’d had a “real Russian” to lead them. Granted, we would have been forced to endure the cacophonous din of Russians bellowing that winning this tournament “proved” they now ruled the world no matter how man other spectacular failures they might have, but that would have been a small price to pay and actually somewhat amusing.

But in reality, the whole situation is simply a farce. Russia got to the quarter finals by beating Sweden and Greece, teams that had a grand total of one win between them in the tournament and which together don’t have half Russia’s population. It then got to the semi-finals by beating the country its own coach came from, presumably giving them quite a nice inside track, a country so small it can barely be seen on a map. When Russia was forced to contend with a big boy like Spain, it when down to spectacularly lame defeat not once but twice.

And this is the story of Vladmir Putin’s Russia. It simply couldn’t care less about reality or actual success, just as was the case in Soviet times. Instead, the denizens of Putin’s Russia appear to prefer to live in a world of their own imagining, and to pass of any failure as owing to pure dumb luck. This is precisely the attitude that destroyed the USSR from within, and it will have no different result in Putin’s Russia.

EDITORIAL: More Sports Humiliation for Putin’s Russia

EDITORIAL

More Sports Humiliation for Putin’s Russia

If anything more revolting happened last week than the sight of crazed Russian nationalists whooping it up on the streets of Moscow, and calling themselves “champions,” because their national football squad had defeated tiny Netherlands using not a Russian but a Dutch coach, we must have missed it. Only in Russia does reaching the semi-finals of a regional sports tournament qualify as a champion’s achievement.

The arrogance was flying fast and furious, as only Russians can manufacture it. Russian Midfielder Konstantin Zyryanov stated: “We have beaten two very strong teams, I think this improves our chances. I want to play Spain [in the semifinal]. We made lots of mistakes against Spain [in the group match] and now we have fixed them very quickly.”

Be careful what you wish for, Konstantin.

Nobody even remotely familiar with the sorry legacy of sports in Putin’s Russia could have been surprised when Russia was shut out in its next match against Spain, 3-0, and hence ejected from the tournament. Over the course of two matches against the Spaniards, Russia was outscored by a ghastly 7-1 and outclassed in every aspect of the game (this even though Spain’s star player David Villa was out of the second match on an injury in the early going).

Except the Russians, of course, who sat there slack-jawed just long enough to realize it must have been a massive Russophobic conspiracy that did them in. Woe to any Spanish person that might be encountered on the streets of Moscow (not that there are any, of course, since Moscow is about as attractive to a Spaniard as Antarctica to a Nigerian).

It seems that Russia’s “strategy” for victory — bribing its players with unlimited access to costly whores — worked out no better than bribing mothers to have babies has proven to. The team lost, and the population continues to shrink rapidly. So much for the “Russian solution” to everything — corruption.

And that wasn’t the end of Russia’s humiliation, either. Both the top-ranked Russian male and female tennis players, as we reported yesterday, were blown off the court in easy straight sets at Wimbledon by opponents who were not ranked in the world’s top 100. Neither managed to get as far as the third round.

Ouch.

Strange to say, though, we were rooting for Russian football against Spain. Had the Russians won, it would have been a beautiful argument that by allowing themselves to be led by foreign ideals Russians can achieve greatness. After all, such progress as Russia did make in the Euro tournament this year, getting a semi-final bid, was due in large part to the efforts of the team’s non-Russian coach, who sought to make massive reforms in the shoddy program he inherited from the desperate Russians. Now, the Russians will probably say they would have won the whole thing if only they’d had a “real Russian” to lead them. Granted, we would have been forced to endure the cacophonous din of Russians bellowing that winning this tournament “proved” they now ruled the world no matter how man other spectacular failures they might have, but that would have been a small price to pay and actually somewhat amusing.

But in reality, the whole situation is simply a farce. Russia got to the quarter finals by beating Sweden and Greece, teams that had a grand total of one win between them in the tournament and which together don’t have half Russia’s population. It then got to the semi-finals by beating the country its own coach came from, presumably giving them quite a nice inside track, a country so small it can barely be seen on a map. When Russia was forced to contend with a big boy like Spain, it when down to spectacularly lame defeat not once but twice.

And this is the story of Vladmir Putin’s Russia. It simply couldn’t care less about reality or actual success, just as was the case in Soviet times. Instead, the denizens of Putin’s Russia appear to prefer to live in a world of their own imagining, and to pass of any failure as owing to pure dumb luck. This is precisely the attitude that destroyed the USSR from within, and it will have no different result in Putin’s Russia.

No Liberalisation from Medvedev

Paul Goble reports:

Dmitry Medvedev’s personnel changes at the Federal Security Service (FSB) and the Federal Narcotics Control Service (FSKN) do not point to any liberalization in the Kremlin’s approach, however much some in both Moscow and the West have invoked them as an indication that the new Russian president plans to change Putin’s policies in the security area. Instead, Anatoly Soldatov, a leading Moscow analyst, argues in an article published not in Russia but in Poland, Medvedev’s moves are a continuation of Vladimir Putin’s policies at the end of his presidency. And those policies, Soldatov says, are intended to expand the country’s security agencies beyond their traditional role as guardians of the state to become active supporters of Russian corporate interests, both public and private, not only within the Russian Federation but internationally as well.

When Medvedev recently fired FSB head Nikolai Patrushev and FSKN leader Viktor Cherkesov, however, “many [immediately] drew the conclusion that Medvedev was more liberally inclined than was Vladimir Putin,” the longtime specialist on intelligence services points out. But such judgments, he continues, are at a minimum “a great exaggeration.” At least since the fall of 2007, he argues, “the Kremlin really has revised the place and role of the force structures, but this does not have any relationship to the personality of Medvedev and his views about liberal values. Instead, it reflects a further “’corporatization’ of the Russian state. When Putin appointed Mikhail Fradkov head of the Foreign Intelligence Service (SVR), the then Russian president said that that service must “more actively stand up for the defense of the economic interests of our companies abroad.” Thus, Soldatov adds, “the president “directly required” a state agency to “act in the interests of Russian companies” rather than the state.

The recent scandal involving Russian purchases of secret helicopter technology in Germany, the Moscow analyst says, suggests that Putin’s directive was quickly implemented. And the more recent discovery of “spies” within TNK-BP as Moscow seeks to oust British interests there suggests that the FSB has been given the same charge. Thus, the longtime researcher on Russian security agencies suggests, “the general trend of converting [Moscow’s] special services into agents of Russian business” begun under Putin “has been followed” by Medvedev in the latter’s “choice of people to head the two main Russian special services – the SVR and the FSB.”

Like Fradkov whose career and even connections with the intelligence services were in the economic area – in the 1970s, Fradkov served in the Soviet embassy in India where he was involved in the sale of Soviet armaments to New Delhi –Aleksandr Bortnikov, Medvedev’s choice to head the FSB, is someone more concerned with economic issues than anything else. Bortnikov throughout his career at the FSB has focused on economic issues, rising to the position of head of its economic section prior to his appointment as director. In that capacity, he did not display the kind of naked ambition or interest in high Kremlin politics that have landed others at the FSB in trouble.

Soldatov concedes that “the actions of the Kremlin are not always logical, but in this case, we see an absolute consistency in the actions first of Putin and then of Medvedev,” a pattern that makes nonsense of claims that the new president has displayed his “liberalism” by such appointments. Instead, the editor of the Agentura.ru portal suggests, what is on view both in Putin’s actions and those of Medvedev is the “’corporatization’ of the Russian state:” the transformation of the intelligence services into instruments for the promotion of the economic and hence political interests of the Russian state.

It is of course possible that Medvedev may prove to be in some way more liberal than his predecessor was, Soldatov clearly implies, but the current Russian president’s latest personnel moves in the intelligence area are not convincing evidence of that, however much some in Moscow and even more in the West want to believe.

How Putin Muzzled the Russian Press

Garry Kasparov writing in the Wall Street Journal:

“How come I am still alive? When I really think about it, it’s a miracle.” Several years back so spoke Anna Politkovskaya, the late Russian investigative journalist who for years fearlessly explored the depths of war-ravaged Chechnya.

She is now the subject of the documentary “Letter to Anna” by Swiss director Eric Bergkraut. The film premiered in the U.S. last night at the Human Rights Watch Film Festival in New York. Politkovskaya reported conversations with families ripped apart by war. She was also the voice of Russian soldiers who were ashamed of the atrocities committed in their country’s name. Her work made her the enemy of many powerful people, and on Oct. 7, 2006, the 48-year-old was gunned down in the foyer of her apartment building.

In May, Dmitry Medvedev took Vladimir Putin’s chair, if not his power. At the World Russian Press Congress in Moscow on June 11, Mr. Medvedev pledged to “support media freedom.” But the picture remains bleak.

Mr. Medvedev recently touted the need for a “Cyrillic Internet” and criticized the closing of Russian-language media enterprises in former Soviet states where local languages are reasserting themselves after Soviet-era restrictions. He also lauded the quality of Russian television, even as Kremlin paranoia about what appears on TV has reached new heights.

Vladimir Posner, president of the Russian Academy of Television, recently confessed that he submits a list of desired guests on his show to Channel One management, who then lets him know whom he can and cannot invite. Political analyst Mikhail Delyagin criticized Mr. Putin on the air and was digitally deleted from a talk show.

The Kremlin’s subjugation of the Russian press has been, along with a rise in oil prices of over 700%, key to the perceived success of the Putin regime. Mr. Putin learned the importance of controlling the mass media early on. In 2000, faced with a public outcry over the botched rescue of the crew of the Kursk nuclear submarine that sank during a training exercise in the Barents Sea, he went after the press.

Media outlets have been taken over by forces friendly to Mr. Putin and his closest associates. This “soft censorship” is accompanied by the more conventional kind, such as lists of verboten topics for television, where a vast majority of Russians get their news.

It wasn’t always this way. The corruption of the Boris Yeltsin era is burned into Russia’s collective memory only because the press reported it at the time. In the 1990s, competing oligarchs waged war against one another in their media outlets. It was not a fight fought fairly or decently, but many facts came to light as thousands of honest journalists worked to bring the truth to the Russian public.

The elite circle of oligarchs surrounding Mr. Putin have much greater power and riches than did Yeltsin’s entourage. They dominate the media, and thus very little is known about how they amassed their fortunes. In 2000, there were no Russians on the Forbes magazine list of the world’s billionaires. By 2005 there were 36.

Today there are 87, more than Germany and Japan combined, in a country where 13% of our citizens live under the national poverty line of $150 a month. This massive concentration of wealth is mirrored in the Russian stock market. In 2007, the top 10 listed companies accounted for 68.5% of the primary Russian bourse. Gazprom alone represented over 27%.

The Western press has helped paint a rosy picture of the business environment in Russia. But consider the travails of British Petroleum. BP owns half of TNK-BP, with the other 50% owned by wealthy Russians. BP thought it was playing the game correctly by colluding with members of Mr. Putin’s inner circle. Now a boardroom battle is pitting BP against its oligarch partners, who do not hesitate to bring state power to the fight.

Western fantasies about Russia’s situation don’t serve anyone in the long run, least of all the Russian people. The Politkovskaya documentary will hopefully help bring attention to the reality of censorship and corruption in Russia. At the film’s appearance in Prague last March, former Czech President Václav Havel stated, “It would be good if many people could see this film. Especially politicians who kiss and embrace Russian politicians, almost dizzy with the smell of oil and gas.”

Crime out of Control in Putin’s Russia

Paul Goble reports:

Violent crime in Russia continues to rise 13 percent a year and now may even exceed the levels of the 1990s, a trend that is hitting that country’s mid-sized cities hard and one that calls into question Vladimir Putin’s largely successful effort to present himself at home and abroad as the man who brought law and order to the Russian Federation. That is the depressing conclusion of the cover story in the current issue of “Russian Newsweek,” a story that its analysts had to piece together given Moscow’s increasing unwillingness since 2002 to release accurate information about crime in general and by urban area in particular.

The magazine’s researchers focused on the 156 cities in Russia with populations of more than 100,000 each and identified the 50 “most dangerous” cities in that country in terms of the rate of crime per capita, places where in most cases few Westerners live but in which large numbers of Russian citizens are forced to try to survive. In per capita terms, the ten most dangerous cities in terms of crime were Surgut, Perm, Syktyvkar, Berezniki, Khabarovsk, Chita, Yakutsk, Irkutsk, and Abakan, all of which had crime rates exceeding 395 crimes annually per 10,000, a figure that means one in every 25 residents was touched by crime during the last 12 months. (Although the capitals, Moscow and St. Petersburg, have the largest number of crimes because of their size, the two rank relatively low in terms of the number of crimes per capita, with Moscow where there were 198 crimes per 10,000 residents last year only in 111th place among Russian cities and St. Petersburg where there were 176 crimes per 10,000 people 122nd.)

In addition to these global figures, the “Russian Newsweek” analysts after a multi-month investigation came up with rates per capita for the same set of cities concerning especially violent ones like murders, rapes and attempted rapes, and narcotics crimes. The leaders in the murder category for the period 2002-2006 were Kyzyl with 9.32 murders per 10,000 residents, Chita with 7.91, and Yakutsk with 7.31. The leaders in the rapes and attempted rapes category were Kyzyl with 5.55 per 10,000, Gorno-Altaysk with 2.51, and Chita with 2.02. The leaders in the narcotics category were Birobidzhan with 46.51 such crimes for every 10,000 residents, Surgut with 37.98 and Tyumen with 37.95. Other cities trailed far behind in terms of the rate of crime, including again Moscow and St. Petersburg and those places where foreigners are most likely to live.

As every student of crime knows, statistics about this aspect of human activity are notoriously unreliable. On the one hand, many crimes are never reported to the authorities either because the victims do not expect justice or because they do not want to have to deal with the authorities or to call attention to themselves But on the other, officials sometimes have an interest in boosting the number of crimes they have to deal with in order to justify higher budgets and sometimes have equal but opposite interest in suppressing the number of crimes reported in order to demonstrate their success in maintaining law and order.

Over the last 15 years, all these factors have played a role in Russia, the Moscow weekly points out. In 2001, for example, the interior minister demanded that militiamen who refused to register crimes be fired. As a result the number of crimes in Russia jumped from five million in that year to 13 million the next, a figure that many experts say still understated crime there.
But during the later Putin years, the Kremlin sought to present itself as a victor in the fight against crime, and the authorities suppressed information and probably understated the number of crimes they did report lest people discover that “the wild 1990s” had been succeeded by the equally “wild 2000s.”

In the opinion of Moscow criminologist Boris Kalachev, the reason for Russia’s high rates of crime is the ratio between rich and poor. When the number of poor is more than four times the number of rich people, he argues, crime goes up. In most of Western Europe, this ratio is five to one. In Italy and Spain, it is seven to one, and there the crime situation is worse. But in Russia, he notes, this critical ratio is far higher. In the mid-1990s, it may have been as high as 100 to one and even if one accepts the official figure of 12 to one which most experts think is far too low, the ratio now is 12 poor people to every rich one, a pattern that generates crime, according to Kalachev. Reducing this ratio should be a major state goal, he says, but doing so won’t be easy, given the high level of inflation the country is experiencing. At present, he says, there is a curious coincidence that may say far more about the future than anyone cares to think: Both crime and inflation are rising at almost exactly the same rate – 13 percent.

June 29, 2008 — Contents

SUNDAY JUNE 29 CONTENTS

(1) The Sunday Photos

(2) The Sunday Illiteracy

(3) The Sunday Imperialism

(4) The Sunday Sob Stories

(5) The Sunday Funnies