December 12, 2008 — Contents

FRIDAY DECEMBER 12 CONTENTS

(1)  EDITORIAL:  A Russian Selection

(2)  EDITORIAL:  OMG! Are we Actually Winning?

(3)  In Russia, Now Business Journalists Come under Fire

(4)  Russia is #1! (oops, in Bribe Taking)

(5) In Moscow, the Mother of all Crashes

EDITORIAL: A Russian Selection

EDITORIAL

A Russian Selection

In decision science they speak of a “Hobson’s Choice” in which the decision maker is given only a take-it-or-leave-it alternative, much as was the case in “elections” in the USSR.  Then there is a “Morton’s Fork” scenario, which which two actual alternatives are presented but they lead to the same nasty result.  This is what Russian voters faced in 2000 when they had to choose between a card-carrying Communist aparachik and a proud KGB spy for president.  Neither model is adequate to encapsulate the horror of decisionmaking in Vladimir Putin’s neo-Soviet Russia.  A new term must be found.

The Moscow Times reports that upon the demise of KGB spy and Russian pope Alexei II (who collaborated with proud KGB spy Vladimir Putin from the onset of Putin’s time in government and helped to assist Putin on the way to becoming a Holy Russian Emperor) the Russian church is offering two candidates for succession.  Russia will either have Kirill, a maniacal funamentalist, or Kliment, a shameless Kremlin shill.  It’s the same as choosing between Vladimir Zhirinovsky and Dimitri Medvedev as Vladimir Putin’s so-called successor.

Call it a “Russian Selection.”

EDITORIAL: OMG! Are we Actually Winning?

EDITORIAL

OMG! Are we Actually Winning?

This blog experienced a watershed moment after Russia’s invasion of Georgia, when we suddenly became conventional wisdom after having been accused of extremism for several years.  Actually, the real turning point had been marked a bit earlier, when as the Russian stock market began to sputter we were cited by the prestigious mainstream publication the New York Review of Books.

It’s tempting to think that now as the year draws to a close we may be experiencing a second watershed moment, in which our policies actually begin to score tactical victories in battle against the Kremlin.  Our first great victory came when we drove the story of Oleg Kozlovsky into the mainstream press, winning not only major news stories in the Washington Post and Chicago Tribune but also a precious op-ed column for Kozlovsky in the Post, which then blossomed into a major human rights award and blogging on the Huffington Post blog.  In the wake of this coverage, Kozlovsky’s illegal internment in the Russian army was reversed.

And now, we’ve seen a stunning series of further sharp raps on the Kremlin’s boney knuckles.

In Putin’s Russia, now Business Journalists Come under Fire

Earlier this week we linked to a piece from Alex Rodriguez, one of the best Russia journalists in the world, from his paper the Chicago Tribune.  Rodriguez recited a litany of incidents of the Kremlin cracking down on journalists who dared to use the word “crisis” in describing Russia’s current economic picture.  One incident Rodriguez described was as follows: “Russia’s business daily, Vedomosti, received a warning from Russian authorities after it published an article by economist Yevgeny Gontmakher that discussed the potential in Russia for unrest spurred by the economic crisis.”

Now Robert Amsterdam has translated Gontmakher’s article. It follows. Hero journalist Grigori Pasko has his own take on these events, also on Amsterdam’s blog.

Scenario: Novocherkassk-2009

Yevgeny Gontmacher

06.11.2008, №210 (2232)

Vedemosti

I’m not going to pretend I’ve got my very own version of «Day of the Oprichnik». Vladimir Sorokin — he’s a professional writer, who has already managed to do this brilliantly. I’ve got another genre: I would like to attempt to model a situation that may with ever greater probability be realized somewhere in the depths of Russia already in the nearest future. There can be many concrete causes: from an attempt by the local powers to save money on people (by the way, just a few days ago, people blocked off the main street in Barnaul several times, protesting against an attempt to monetize city benefits) to heating interruptions in the upcoming winter. But the economic crisis, into which Russia is sinking ever deeper, hints at new story lines as well.

Russia is the World #1 — in Bribe-Taking

Transparancy International published its 2008 Bribe-Payers Index earlier this week. TI states:

The 2008 BPI ranks 22 of the world’s wealthiest and economically dominant countries by the likelihood of their firms to bribe abroad. It is based on the informed observations of 2,742 senior business executives from companies in 26 developed and developing countries, selected on the size of their imports and inflows of foreign direct investment.

Russia ranked #22 on the list, dead last, the most corrupt nation on the survey.  Russia was one of only seven countries on the list who are not signatories to the Organization for Economic Co-operation and Development’s convention against bribery.  China joins Russia on that list of shame, and was also near the bottom of the list.

UPDATE:  In response to a comment, we point out that TI’s most recent Corruption Perceptions Index, which ranks 180 countries (virtually the entire globe), finds that only 32 nations on the entire planet are more corrupt than Russia across a wide range of criteria.   So Russia isn’t an atrocity only when compared to “the world’s wealthiest and economically dominant countries” but by any standard you care to name.  As the commenter points out, it’s dubious whether Russia even belongs in the 22 nation group — many others have far higher per capita GDP than Russia and were excluded.

The Mother of All Crashes in Moscow Real Estate

Business Week reports:

Shares of Russian companies have lost nearly three-quarters of their value in six months. The price of government bonds is down by almost a quarter. The ruble is sliding, losing 20% of its value against the U.S. dollar since August. The price of oil, Russia’s chief export, has fallen by 70% since the summer. But for a long time, there was one asset in Russia—real estate—that somehow seemed capable of defying gravity.

Even as property market bubbles burst all over the world, the value of Russian real estate just seemed to go up and up. According to Moscow real estate agency IRN, residential property prices in Moscow did not peak until mid-October, rising by some 50% from a year earlier. With apartments in central Moscow selling for $6,000 per square meter ($557 a square foot), the city regularly tops lists of the world’s most expensive cities. Elsewhere in Russia, too, property values have climbed dramatically over recent years.

It couldn’t last, and it hasn’t.