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Articles on Russia after 2013
Putin's Russia
Articles on Russia before 2013

  • (october 2013) Putin's Russia.
    On 24/11/2011 Putin assumed presidential powers again, after briefly stepping down and letting his trusted pupil Dmitry Medvedev be president for a few years. The democratic world rolled their eyes: here is another autocrat who wants to stay in power no matter what while pretending that his country is democratic.
    There are two problems with this simplified interpretation: 1. Putin was and is the most popular and trusted politician in the country; and 2. Reliable witnesses think that Putin honestly believed his return was necessary to save Russia (or at least his party United Russia) from trouble (do not forget that Putin did save Russia when it was sliding into anarchy and bankruptcy following the capitalist rape and the Chechen insurrection of the 1990s).
    The West likes to think that Russians yearn for democracy like the Arabs, but there is nothing resembling the Arab Spring in Russia. Most Russians are indifferent to politics because the Russian people do not have a tradition of true multiparty democracy. Whether under the czars, under communism or under Putin, their country has always been run by the most powerful man (or woman) in the country. The rare elections simply rubber stamped his or her rule. The bottom line: Putin is as legitimate a leader as it gets. And certainly enjoys a higher approval rating than the democratically elected Congress of the USA.
    Putin faces three order of problems: 1. economics; 2. domestic politics; 3. foreign policy.
    1. Russia's economic growth has slowed down to 1.5%, although Putin keeps planning for 5% (an old Soviet attitude, the idea that the central government decides GDP). Such a slow growth rate, possibly leading to a long period of stagnation, would be worrying enough, but the underlying fundamentals are even more disturbing. To start with, Russia's productivity is about 20% of the USA. Capital markets are underdeveloped. Foreign investment is tiny. The biggest sector of the economy (energy) is in the hands of state bureaucrats (more later about this). The inefficiency of government spending is the consequence of a vast system of chronic corruption. The percentage of GDP that is lost to corruption is obviously not known, but estimates can be as high as 15%. The way the national budget is allocated would be alarming anyway: education and health spending have gone down, whereas defense spending has gone up. Balancing that budget still depends on oil and gas exports. Without gas and oil i estimated (based on official Russian statistics) that government debt would be about 10% of GDP, enough to make the budget of the USA and even Greece look good.
    Attempts at reforms that would change these fundamentals collide with vested interests.
    A lot of that oil and gas wealth depend on two giant corporations: Gazprom and the newly created Rosneft, now the largest oil company in the world. Gazprom is a colossal bureaucracy that totally missed the revolution in natural gas (i.e. fracking). Russia is literally a decade if not two behind the USA and Canada. There is every indication that Rosneft will be as slow as Gazprom at adapting at new technologies. Since energy is such a crucial sector of the Russian economy, this situation does not bode well for the future, and may actually explain why economic growth is suddenly so sluggish. The consequence is that Putin has to prepare the Russian population, especially the youth, to a growing gap between expectations and reality.
    It actualy helps that the Russian population is declining: Russia does not need to create as many jobs for young people as, say, Spain. It is therefore twice scary that Russia has a problem of youth unemployment.
    This leads to problem #2: domestic politics. Western media are obsessed with the democratic opposition, notably the man who unsuccessfully ran for mayor of Moscow, Alexei Navalny. However, that man lost, and would have lost in a freer election: Russians do trust Putin's men in every position of power. The democratic opposition did relatively well in the september 2013 regional elections, but they lost everywhere, and unfair Kremlin practices can only be partly blamed for it.
    Like it or not, the illiberal politics of the Kremlin are popular with the Russian public. Putin has been able to create an alliance with popular forces that is often underestimated in the West (mainly because Western politicians are failing to create the same alliances back at home). For example, Putin enjoys the full support of the Orthodox church, which appreciates his constant appeal to traditional Russian values and the Kremlin's anti-gay and anti-decadence stands (hence the law discriminating against homosexuality and the arrest of the rock band Pussy Riot, widely derided in the West but widely jsutified by religious Russians). The identification of state and church is probably the single most stunning departure from the Soviet era. The Orthodox church is getting back the lands that were expropriated by the Soviet Union, something that no other religious group is getting (not even the Catholic church).
    The illiberal policies, therefore, do not constitute, per se, a truly undemocratic attitude: they reflect the will of the people as much as Obama's stand on gay marriage reflects the will of the people in the USA. The damage that these illiberal policies is causing is more subtle and hard for Putin himself to appreciate. They undermine the urban elite, the very group that, more than anyone else, could transform Russia into a vibrant, modern nation. This is a tiny percentage of the population, unnecessary for Putin's rule, but indispensable for taking Russia to the next plane of development.
    Ditto for banning foreign non-governmental organisations (NGOs) and slowly but steadily criminalizing domestic NGOs by broadening the definition of "treason". These are the agencies that, by working outside the government, were creating not only a more transparent society but a more modern one.
    Unfortunately for Russia, Putin can dispose of this opposition elements without fearing any reprisal from the masses.
    Putin does not fear the democratic opposition, which is a lot less popular than him. He does fear a diferent political entity, less publicized in the Western media: the populist nationalist right. The "Russians" block is an emanation of that spirit. The first symptom that nationalism was getting out of control came in december 2010, in december 2010 when football hooligans and xenophobic extremists joined in rioting against the police following the murder of a football fan by illegal Muslim immigrants and the release of those same suspects by the police. There never were comparable riots to protest Putin's illiberal policies. The xenophobic urban thugs can cause trouble that the democratic opposition cannot. Worse: the appeal of these urban thugs is much broader, because the under-employed youth blames the millions of illegal immigrants (mainly from Central Asia) for its economic woes. Navalny is now championing laws that would restrict immigration from Central Asia and the Caucasus. Putin cannot match his rhetoric for a simple reason: Putin's foreign policy of keeping those very countries into the Russian sphere of influence. The last thing that Putin wants to do is to increase the separation between Russia and the former Soviet republics, but that's precisely what many people would like to see in order to keep illegal immigrants at bay.
    The Russian youth, in general, is another emerging problem. Putin won the people's trust by providing stability and some certainty about the future. Stability is no longer enough for the young. It was for their parents, who went through the traumatic experience of the collapse of communism. People born after 1991 have little patience for the inefficiencies and backwardness of the Russian system. They are "wired" and aspire to high-tech jobs and to the kind of modern life they see in Western films. They listen to rock music, not to Russian folk music. Sadly, many young Russians are emigrating to the West despite the fact that Russia has incredible natural resources. Russia doesn't offer them an attractive future. During the Cold War the Soviet Union lost many brilliant scientists to the West, but it was always able to retain some world-class physicists and mathematicians. It looks like modern Russia might not be able to do the same.
    On the other hand, older Russians know that, for better and for worse, this is very much a Putin-dependent system. Whenever Putin does not act, nothing happens, as demonstrated by recent floods that showed the complete inability of the system to provide even minimal help to the people (until Putin in person showed up and personally directed the rescue mission).
    Putin's strength also rests on the dysfunctional West: Russians are deeply aware that Western Europe is bankrupt and that the USA is ungovernable. Compare with Putin's economic miracle and Russia's stable government.
    Third, foreign policy. Putin honestly cares for Russia's safety and for Russia's dignity. Both issues resonate with ordinary Russians in a way that the West underestimates. Hence, Putin's stand on Syria: Putin was right that the civil war would benefit mainly the Islamic fighters, and many of them are from Chechnya, and they might go back to cause trouble in Russia if they win in Syria.
    The West reads all sorts of hidden intentions in Putin's stands, but maybe we should learn to take his words at face value. He was right on Iraq (it did turn out into a nightmare for the USA and the whole region). He was right on Georgia (the Georgian president started that war, and the West was hypocritical in defending Georgia's raid against its separatist republics after supporting Kosovo's independence from Serbia). And now Putin feels that he has been proven right on Syria: Western support for the opposition/rebels has resulted in the rise of Islamic fighters, the very enemies that the USA is fighting with its drone strikes in Pakistan, Afghanistan, Yemen and Somalia. From Putin's viewpoint, Obama is simply adding Syria to the list of the countries that will have to be cleared of Al Qaeda terrorists in the near future. (And it is hypocritical again that the USA sides with the democratic opposition in Syria after siding with the ruling Sunni leader of Bahrein against the Shiite masses that were demanding democratic elections and were attacked by the army just like in Syria). Russia vetoes military action against Syria the same way that the USA consistently vetoes action against Israel, widely considered to have violated international law in its occupation of Palestinian territories. Putin is still angry at what NATO did in Libya, interpreting a United Nations mandate to protect civilians as an invitation to overthrow Libya's government and istall a puppet government. In his view the traumatic transition in Libya has caused the country to fall into anarchy and he can easily point at the assassination of the US ambassador in Bengazi as evidence that he was right: that ambassador would still be alive if Qaddafi's government had not been overthrown by NATO bombings.
    The West also tends to ignore the fact that Putin has supported the USA several times: in Afghanistan, with Iran, with North Korea. It is not true that Russia has always opposed the USA. On the contrary, it has mostly helped the USA. When Russia dares contradict the USA, the Western media present it as a Cold War kind of stand, not a principled decision but a geopolitical tactic. There is, instead, a strong chance that Putin is simply acting according to his beliefs, and that he thinks (and most Russians think) that the facts have proven him right over and over again.
    The West also misses some of the internal reasons that dictate Putin's choices. For example, a community of Circassians lives in Syria. They moved there when Russia took the region from the Ottoman Empire in the 19th century. Their roots are inside what is now Russia. The more Syria falls into anarchy, the more likely that Russia might face a wave of immigration from Syria. There are also about 30,000 Russian citizens living in Syria. And, as mentioned, there are already Chechen fighters in Syria, who might some day return to Chechnya to fight the Russian army. Last but not least, the Russian Orthodox church feels strong about protecting other Orthodox churches around the world, and Syria has a sizeable Orthodox community. These reasons alone would be enough for the Russian public to support Putin's stand. It is much more than one man's aversion for he USA.
    Let us not forget that the Russian population sided with Putin on Syria, whereas every poll showed that the population of the USA was not siding with Obama. One president had his country behind him, the other one didn't even have his own country behind him. And, internationally, Obama was way more isolated than Putin (in fact, more isolated than Assad of Syria himself). A lot was weird about Obama's stand on Syria, not much about Putin's.
    One basic problem in the relationships between Russia and the USA is the lack of trust. Russia (not only Putin) feels that the USA took advantage shamelessly of the collapse of the Soviet Union to surround Russia with military bases. There are now soldiers of the USA in Eastern Europe, in most of the Middle East, in Afghanistan, in Mongolia and, of course, in Korea and Japan. Meanwhile, the European Union has absorbed half of the Soviet Union's sphere of influence in Europe and is currently trying to absorb Moldova, Ukraine and Armenia (in one fashion or another). Even Serbia, that Russia defended when NATO was bombing it, has opted to join the European Union.
    In 2010 Russia's ally Viktor Yanukovich was elected president of Ukraine defeating the West's favorite, Yulia Tymoshenko, and even proceeded to throw her in jail in late 2011. Nonetheless, Ukraine is about to sign a free-trade deal with the European Union that looks like and smells like a first step towards integration into the Western economic sphere. Russia retaliated by imposing extra customs checks on Ukrainian imports and threatening sanctions.
    From the Russian point of view, the European Union has no need for Ukraine: the only reason to be so eager to deal with Ukraine is to weaken Russia. This reinforces Russia's feeling that the West is ready to take advantage of any Russian moment of weakness. Putin honestly felt that Hillary Clinton was conspiring to overthrow his government through NGOs (Russia started expelling foreign NGOs in september 2012). Look at what NGOs like USAID were doing in Russia and it's hard to believe in Clinton's good faith and not to justify Putin's paranoia. (Forget Snowden. He is irrelevant, and probably an annoyance. He didn't tell the Russians anything that they didn't know already.)
    It doesn't help that Western Europe is investing in new pipelines to circumvent Russia and provide access to competing oil and gas markets in Kazakhstan and the Caucasus. Until recently all gas routes between Central Asia and Europe went through Russia, thus strengthening Putin's economy. How should Putin interpret this strategy if not as direct blow to his power?
    One has to wonder where the bleeding will stop. Belarus is run by what many consider the last communist czar, Alexander Lukashenko, who has traditionally sided with Russia because the West treats him like an embarrassment. However, Russia and Belarus got into major arguments that peaked (so far) with Belarus arresting a Russian businessman, Vladislav Baumgertner, head of potash firm Uralkali, and Russia banning imports of Belarusian pork.
    Russia cannot just blame the West for a problem that it has not been able to remedy: there doesn't seem to be a single country in the world that prefers economic ties with Russia over economic ties with the West. This has multiple causes: credibility (Europe has expanded over the decades and almost always successfully); respect for independence (even the most powerful European countries, such as Britain and Germany, have refrained from trying to influence the outcome of elections in other countries of the European Union); and rule of law (that reassures members on what will happen to the union in the future). Unions with Russia tend to be dominated by one country (Russia), are not clear in the way they are run and will evolve, and have a poor record of accomplishments. Historically, Russia also faces a poor record: many former colonies of the Western powers (starting with the Americas) got richer under European domination, whereas too many former Russian "colonies" (such as Prussia, the Baltic republics, Poland, the Czech republic, Slovakia) got poorer under Russian domination. An alliance with Britain and Germany, no matter how declining their power might be, is still viewed by ordinary people as something to be proud of, whereas an alliance with Russia is rarely seen that way. That is a problem that Russia needs to address if it wants to be treated as a world power not only because of its nuclear weapons.
    Putin has probably made a colossal mistake when it comes to the Arab world: he had defended one dictator after the other, well knowing that millions of ordinary Arabs were not on his side. As one dictator after the other has fallen, Russia has become less and less welcome in the Arab world. No wonder that Putin is making such a last stand on Syria: Russia is out of every other Arab country.
    Interestingly, Putin does not seem to perceive China as a threat, despite the fact that it is China's phenomenal ascent that is threatening Russia's place as second major power of the world. China's growing population along the border with Siberia clearly provides an odd contrast to Russia's sparsely populated Siberia. On top of that, it is more likely that Siberians are attracted to China (by the weather if not by the booming economy) than viceversa. China also competes with Russia for the natural resources of Central Asia. However, Putin's Russia seems more comfortable coexisting with China than with the West. One reason, of course, is that China did not surround Russia with military bases and did not try to attract Russia's neighbors into a Chinese-dominated alliance.
    There are good news, however. First and foremost, Russia does have huge shale oil and gas resources that only await to be exploited. It is just a matter of time. Russia is already beginning to shift its focus from Europe to the Asian markets, where China can help fund and man modernizing projects. Secondly, there are very competent economists in Putin's government. They created the Silicon Valley of Russia, Skolkovo, which could become an important incubator of technological startups. Even Russian NGOs, that still operate, are actually very competent and resilient. In foreign policy Lavrov is widely admired as one of the best foreign ministers in the world. Lavror is probably annoyed by his naive American counterparts (and by their silly mistakes that complicate things for Russia too).
    See also: Russia, Syria and the West; The logic of Russia's isolation; The West is wrong on Russia; Russia the peacekeeper.
    TM, ®, Copyright © 2013 Piero Scaruffi All rights reserved.
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    Articles on Russia before 2013

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