EDITORIAL: Pilotless Russia, Drifting towards the Shoals

EDITORIAL

Pilotless Russia, Drifting towards the Shoals

Scholar Andrew Wood of Chatham House, a former British ambassador to Russia, has published a review of the Putin regime entitled “Ten Russian Propositions” which concludes that Russia is “in ill-piloted drift towards the shoals.”  He then offers ten blistering arguments to support his thesis, arguments which devastatingly expose the fundamental incompetence, hypocrisy and weakness of the maligant KGB regime that controls Russia using nothing but brute force.

The key points are as follows:

  • Despite some difference in tone and rumours of mutual irritation, no substantive change in the Medvedev-Putin tandem is in prospect.
  • The authorities would like economic dynamism and innovation without political renovation. This is impossible, however, because the power structures and the economy are too interwoven. There are no credible signs of manageable or steady change within the elite.
  • The economic crisis has shaken the ruling class. Public discussion of Russia’s long-term prospects is more open and more honest than it has been for many years. This matters, because it casts doubt not just on the ability of the current elite to manage affairs, but also their right to do so.
  • It is likely that the tension between economic renewal and the frozen political structure will continue to mount in 2010. Pressure is building within the system, and it will become increasingly difficult for outsiders, whether business or political, to manage their interests.

The central point Wood is making is that Russia is a powder keg waiting to explode.  The current regime is not applying sufficient force, as recently seen in the Kalingrad and Vladivostok protests, to keep the lid on as its policy failures, and resulting suffering of the population, continue to mount.

Therefore, there are only two possiblities:  One, that the regime lacks the capacity to apply that force, and in that case that it will be swept aside in another “Orange Revolution,” except that it may be replaced by an even more oppressive regime.  The other is that the regime will reveal a massive new level of force designed to crush this rising opposition, beginning with the installation of Vladimir Putin as “president for life.”

In either case, the forces the benefit from democracy and liberalism are in desperate, dire straits, and any assets of Western companies are imperiled.

5 responses to “EDITORIAL: Pilotless Russia, Drifting towards the Shoals

  1. The foregoing Editorial is more sophisticated way of saying what many have said.

    The Putin regime is stone dumb in their methods.

    Now they are going to develop a new state of the art bomber. Some time ago they were going to divert an asteroid.

    These jerkos just go on and on.

  2. Russia’s economic collapse shows in stark terms what happens when the state controls 60% of the economy, even Neo Soviet Putin has realised that he has pushed state control too far. Currently there are 420 companies deemed as strategically important which are off limits to foreign investors, a panicked Putin has now announced that 220 can now accept outside investment, a case of too little to late.

    There are dozens of international blue chip companies who simply will not invest in Russia, they know about the systemic corruption and monstrous bureaucracy, but even worse is the treatment of international companies already established inside Russia, for example Shell who were forced to reduce there 55% controlling interest in the Sakhalin 2 gas project to a poultry 25% (surprise surprise Gazprom were given the lion share), This Putin led initiative was done at a time when the USA was seen as a major customers for LNG gas produced at Sakhalin, and put simply Putin did not want Shell too reap the benefits even though it was Shell technology that made it happen, unfortunately for Putin this has backfired somewhat as the USA no longer needs this LNG as they now produce gas from shale. But there’s a principle at stake, in business contracts must be honoured, dictators like Putin should not move the goal posts otherwise investors are frightened off, and that’s exactly what’s happening, The Russian state is viewed as an unreliable partner,

    And then there the case of IKEA when they opened the St Petersburg store they authorised the agents to pay all the required bribes and kick backs and the store opened on time, They were then promised by Medvedev himself that this corruption would stop and he personally guaranteed IKEA that if they followed the correct procedure IKEA would incur no problems, He was taken at his word, after all he is the President(sort of), IKEAs new store in samara has now remained closed for the last 18 months bogged down in red tape!!!. (oops).

    Medvedev launches new initiatives to tackle corruption on a daily basis, but his words seem never to turn into deeds, to be frank Russia is a feudal society with corruption at its core there is no will on the ground to implement Medvedves reforms and lets be honest if a large part off your income comes from corrupt activity which is the case for millions of Russians well … nobody going to cut of their nose to spite their face are they?

    Medvedev is simply “whistling Dixie”

  3. Another piece of information you may find interesting,

    Currently the tax charged by the Russian state on gas is $5 per 1 thousand cubic meters produced, Putin is in a panic the demand for gas has dropped dramatically over the last 18 months, but our ginger friend needs tax revenue to meet budget requirement, Mr Gingers bright idea is to raise the tax from $5 too $35, now that’s one hell of a tax hike,

    Gazprom is state owned so they have no choice and I doubt the bureaucrats Putin has installed care, but international companies for example Shell/BP who are in Russia to make a profit from there multi billion dollar investment, well they must be seething, another reason “not” to invest in this totalitarian state, ruled by a crazed leadership thats becoming more and more out of touch with reality.

  4. Molodoi Perdun

    If the above analyses are correct, why are Russia’s real estate prices recovering after taking such a beating during the crisis? I mean, they fell pretty hard when they faced reality, so if the expected future is so bad, why are housing prices rising?

    http://www.irn.ru/gd/?class=all&type=1&period=0&step=week&grnum=1

  5. There is a slight In-crease in house prices, but this is not due to the economy becoming healthier, Putin has announced the state will invest $1 billion of tax payer’s money in the form of a subsidy to borrowers buying newly built properties, bringing down the interests rates from a crippling 14% to a slightly less crippling 11%,
    According to the social policy institute, of 70 million working Russians, only half have legal contracts, and are paid official salaries, which are demanded by banks.
    Seven million of those have the required $1000 dollars salary per month – and most of them will take a joint mortgage as a couple. That means about 3 million households could potentially need a mortgage – three times the current level.
    Anticipation of this has coursed the small bounce in prices,

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