Russia: Other Points of View

PERESTROIKA 2.0 AND THE MOSCOW SPRING

REPRINTS

This article was originally published by Fair Observer  on May 11, 2012

The fruits of Putinism and the Putin-Medvedev tandem.

As the Russian winter turns to spring, the country has seen a return to opposition politics, political competition, and dissent within the corridors of power, and the election of a more opposition-minded parliament and an all-too-familiar president. Regardless of what US mainstream media and academia have told you, the liberalization and re-democratization of the winter-spring transition from the presidency of Dmitry Medvedev to that of Vladimir Putin are nothing new. December’s watershed events were the logical outcome of a four-year-long process that marks Russia’s return to democratization and market reforms and perhaps a longer-term transition without revolutionary excesses preferred by Putin.

The pro-Kremlin United Russia party’s poor showing in December’s Duma elections, along with the mass demonstrations for free and fair elections and the re-democratization proposals introduced by Medvedev in their aftermath, should not have been a surprise. Sovietological groupthink made Mikhail Gorbachev, perestroika 1.0, Boris Yeltsin’s revolution from above, and that revolution’s failure to quickly bring democracy surprising, and russological groupthink has left us unprepared for Medvedev’s long-denied thaw and Perestroika 2.0. The new Moscow spring and Perestroika 2.0 are real and need to be properly understood by presidential candidates and policymakers alike.

MEDVEDEV'S CONSERVATISM

COMMENTARY

by Gordon Hahn

In recent remarks outgoing Russian President Dmitrii Medvedev declared himself to be a conservative. He made his remarks in a speech accepting a proposal to become a member and chairman of the Kremlin’s United Russia party (Irina Granik, “Ni razu ne liberal,” Kommersant, 28 April 2012). Unfortunately, there have been some grossly inaccurate and politicized ‘analyses’ of his remarks.

For one thing, his comment was spun to mean that he was rejecting liberalism in the Russian sense, which is often equated with pro-democracy sentiment. For example, political activists Liliya Shevtsova and David Kramer use it to argue against Medvedev’s ‘liberal’ credentials: “(O)bservers, including some in the U.S. government, offered gushing praise of Medvedev, attributing great significance to his pronouncements on modernization and anti-corruption. More recently, Medvedev set his admirers straight. ‘In my views, I've never been a liberal,’ he announced after accepting an offer to lead the United Russia party, essentially admitting that he had been lying not only to his Western interlocutors, but to his citizens as well.  Medvedev became a convenient excuse for some who wanted to reconcile or do business with the Kremlin.  In reality, his hollow rhetoric legitimized the reality of Russian authoritarianism and helped the Russian political elite and business oligarchs interact with the West” (Lilia Shevtsova and David J. Kramer, “Medvedev the Phony,” ForeignPolicy.com, 7 May 2012, www.foreignpolicy.com).

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

Vorstand reshuffle. Putin was inaugurated on Monday and, as promised, immediately nominated Medvedev as PM. He was confirmed by the Duma the next day (Communists and Just Russia voting against). I was intrigued by their first reported actions: Putin ordered the creation of a business ombudsman to defend “the rights of entrepreneurs” showing that improvement of Russia’s business climate is a high priority. Medvedev called for a new system of state defence orders. This last has been notoriously opaque; many complain the money is not wisely spent and Russian-made weapons are over priced and not modern. Note that each of these touches on corruption: there are those who think that Putin returned to the Presidency because only he has the political muscle to attack this pervasive problem. Perhaps so, we will see. I still think that we need to see someone in an office close to the two led away in handcuffs for an anti-corruption drive to really bite.

Foreign policy. Putin quickly issued a host of decrees, one on foreign policy. The first priority is “to assist in creating favourable external conditions for the Russian Federation’s long-term development, modernisation of its economy, and strengthening its positions as an equal partner on global markets.” The second is “to seek to assert the rule of law in international relations, to advocate the leading role of the UN in global affairs and the fundamental principles of the UN Charter that require the development of friendly relations between nations on the basis of equality, respect for each others’ sovereignty and territorial integrity…” This is a country that wants a quiet life so it can develop its economy.

ISLAM, ISLAMISM AND POLITICS IN EURASIA REPORT, NO.56, 7 MAY 2012

by Gordon Hahn

CONTENTS

RUSSIA

• OPERATIONAL TREND LINES IN THE CAUCASUS EMIRATE’S TERRORIST INSURGENCY – by Gordon M. Hahn and Anna Nevo
• CE AMIR UMAROV ISSUES VIDEO ANSWERING QUESTIONS
• 2012’S SECOND SUCCESSFUL SUICIDE BOMBING ATTACK IN RUSSIA: A DOUBLE ISTISHKHAD OPERATION IN DAGESTAN
• MORE TOP CE AMIRS KILLED
• ACTING AMIR OF THE DAGESTAN VILAIYAT IDENTIFIED AS DV CENTRAL SECTOR AMIR ‘ABU MUKHAMMAD (USMAN)’ RUSTAM ASILDAROV
• TURKISH AMIR KILLED IN SERGOKALA, DAGESTAN
• CE-TIED JAMAAT UNCOVERED IN NOVOSIBIRSK
• DAGESTAN’S CHIEF MUFTI AKHMAD-HADZHI ABDULAEV CALLS FOR RESTRAINT
• PROMINENT RUSSIAN MUSLIM LAWYER DEMANDS SHARIAH LAW IN RUSSIA AND THREATENS JIHAD 

AZERBAIJAN

• APRIL 2012 BATTLE WITH CE-TIED ISLAMISTS IN GANJA, AZERBAIJAN

* IIPER is written and edited by Dr. Gordon M. Hahn unless otherwise noted.  Research assistance is provided by Sara Amstutz, Mark Archibald, Michelle Enriquez, Seth Gray, John Andrew Jones, Casey Mahoney, Anna Nevo, Daniel Painter, and Elizabeth Wolcott.  

To access the full report, click here Download Hahn_IIPER56

RUSSIA, THE WEST, AND THE SUNNI-SHIITE TRAP

COMMENTARY

By Gordon M. Hahn 

During the Cold War Washington and Moscow constructed the barricades that made for what Alexander Solzhenitsyn called “a world split apart.” 

Today, there are still many issues on which the U.S. and the West stand on opposite sides of the barricade from Russia.  Now, however, the twilight socialist-capitalist ideological struggle is absent.  The only ideological aspect to new divergence (and competition of interests) is external to the immediate Russia-West relationship––and is “religious” not economic.

Specifically, it consists of the Islamist theo-ideology and the growing polarization between Sunnis and Shiites across the Muslim world.  While the U.S. and the West tend to come down on the side of the Sunnis, Moscow tends to side with Shiite Iran, its allies in Syria, and the Shiite opposition in Bahrain.  This trap is complicating efforts to coordinate Western and Russian policy on the revolutionary situation in the Muslim world in addition to the related global jihadi revolutionary alliance.

RUSSIA WEEK - PLUS ca CHANGE... OR, MAYBE NOT

FINANCIAL ANALYSIS

by Chris Weafer

Anybody that thinks there is safety in number clearly hasn't been paying attention to the stock market pages.

Irene Peters

After last month’s US non-farm payrolls report fell well short of expectations, investors will be very keenly focused on the next update, which is due on Friday. The low number last month set the backdrop for increased investor nervousness and weak markets through April. Was that data point a blip or part of a new trend? The answer will be a major factor in whether investors again retreat from markets and risk through the summer months, or whether this will be one of those rare years with a summer rally.
 
The headlines in Russia will be about the imminent inauguration of Vladimir Putin next Monday (May 7) and speculation about the make-up of the new government, which will be appointed during the same week. Both the president-elect and prime minister-elect have been spreading word of their policy priorities in recent weeks, and some individuals, widely tipped to be in the next cabinet, are also talking about their view on policy priorities and budget issues in particular. That said, nothing dramatic and few surprises are expected.
 
In stock terms, the trend in favor of safer domestic themes should continue, as both global concerns and tax uncertainty hangs over the extractive industry exporters. Stocks in this theme will likely see continued volatility and short-term trading opportunities, but with little prospect of a steady price appreciation until the major external risks are resolved. The exception may be Norilsk Nickel. The price of copper rose 3.2% last week and looks set for further gains on the back of concerns over supply and falling inventories. In addition, the news that Russian oligarch Alisher Usmanov is increasing his equity stake in the company (by 1.2% in the recent move) may raise speculation that the long drawn out stand-off between the two core shareholders (Vladimir Potanin and Oleg Deripaska) may be about to enter a new phase, which could lead to a final resolution.  
 
Take note that there will be a quiet start to the week, as Russia takes a two-day holiday to celebrate May Day. Moscow’s bourses will be closed Monday and Tuesday, while the GDR and ADR markets in London and New York will trade as usual. The local prices will adjust for the missing two days at the start of trading on Wednesday.

To access the full note with supporting statistics, click here  Download Rus_Strategy_Week_Apr_30_'12

RUSSIA'S STRATEGY

REPRINTS

by George Friedman

www.stratfor.com

The collapse of the Soviet Union in 1991 reversed a process that had been under way since the Russian Empire's emergence in the 17th century. It was ultimately to incorporate four general elements: Eastern Europe, Central Asia, the Caucasus and Siberia. The St. Petersburg-Moscow axis was its core, and Russia, Belorussia and Ukraine were its center of gravity. The borders were always dynamic, mostly expanding but periodically contracting as the international situation warranted. At its farthest extent, from 1945 to 1989, it reached central Germany, dominating the lands it seized in World War II. The Russian Empire was never at peace. As with many empires, there were always parts of it putting up (sometimes violent) resistance and parts that bordering powers coveted -- as well as parts of other nations that Russia coveted.

The Russian Empire subverted the assumption that political and military power requires a strong economy: It was never prosperous, but it was frequently powerful. The Russians defeated Napoleon and Hitler and confronted the far wealthier Americans for more than four decades in the Cold War, in spite of having a less developed or less advanced economy. Its economic weakness certainly did undermine its military power at times, but to understand Russia, it is important to begin by understanding that the relationship between military and economic power is not a simple one.

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

Change. More change working away. Last Sitrep I reported about a quarter of Russians had travelled outside the former USSR. Now we find that about 90% have cell phones and about 40% of adults use the Internet daily. ROMIR tells us that 70% of Russians have savings, the overwhelming majority in Rubles, many in banks. And a per-capita GDP is getting on for half that of Japan. I believe that easy communication, travel, access to the New Media and savings accounts are the outward signs of internal change: “middle class” things. I think it’s fair to say that Russia has never been a “middle class country” before: it’s not there yet but getting there.

Police. More police outrages: more torture cases revealed; a conviction for same; a conviction for murder. There is some pressure building to have the Interior Minister dismissed.

Corruption. Medvedev admitted his campaign had yielded only modest results. Putin said much the same thing at the end of his second term. For my money it’s Russia’s worst problem.

WHY RUSSIAN IS SO OBSTINATE ON SYRIA?

by Martin Hellman

Secretary of State Hillary Clinton has described Russia’s refusal to support a UN resolution on Syria as “despicable.” But, as usual, there’s another perspective. Burned by the West’s transforming the UN resolution that called for protection of Libyan civilian into a mandate for regime change, Russia is worried about a repeat in Syria. And, it doesn’t help garner Russian support when Senator John McCain warns Vladimir Putin that he could meet Gaddafi’s fate, or that Fox News “accidentally” substituted footage of Athens’ streets burning when reporting on Russian protests in Moscow. Both the Western and the Russian perspectives on Syria have value. Taking off our blinders and incorporating both views would help minimize the suffering in Syria, as well as reduce the risk of a Russian-American confrontation – and a nuclear catastrophe. A recent article by Fyodor Lukyanov, Editor-in-Chief of the Russia in Global Affairs journal provides more details on the Russian perspective and is highly recommended reading.

About Martin Hellman

RIGGED RUSSIAN ELECTION?

by Martin Hellman

Given how our media have covered Russia’s March 4 presidential election, it is understandable that many Americans believe Vladimir Putin stole the presidency. The reality, however, is very different. From all the reading I have done, it appears that there was some electoral fraud, but that Putin would have won by a significant margin in any event. Aside from being wrong, the disconnect between American perception and Russian reality adds a needless component to the risk of a nuclear confrontation.

To continue reading, click here

THE LITVINENKO CONTAMINATION CASE IS CONTAMINATED

ROPV CONTRIBUTORS

by William Dunkerley

Mention the Alexander Litvinenko case, and people think of radioactive contamination.  Now, though, it's looking like the case itself has become contaminated.

The London Coroner's office has played a central role in the Litvinenko case. But these days it appears to be in disarray and hiding from the public.

What's Behind This?

It is now almost five and a half years since Litvinenko's death. But the Coroner still has not ruled on the manner and cause of death. That means it's not official that radioactive polonium killed Litvinenko. What's more, it's not even official that he was murdered.

PERESTROIKA 2.0 AS DEMOCRATIC TRANSITION

COMMENTARY

by Gordon M. Hahn

Recent events raise hopes for regime transformation in Russia.  For the past four years Russia has been undergoing a very gradual liberalization that has been much like an iceberg melting.  The big question is how and what kind of transformation it will be.  A country’s form of rule can be transformed in several ways, and can produce democratic, authoritarian, totalitarian, or hybrid (soft authoritarian or weak democratic) outcomes.  Historically, there are two basic kinds of internally-driven regime change: revolution and transition.  These transitions, as a rule, are more likely to produce democratic outcomes than revolutions.

Revolutions from below are led by elements within society.  Opposition forces seize power––eschewing, destroying, and replacing the old order’s leaders and institutions.  Revolutions from below can be peaceful, as in Czeckoslovakia in 1989 and the Phillippines in the 1990s, or they can be violent as they were in France at the end of the 18th century, also in Russia and China during the first half of the 20th century.  Violent revolutions from below rarely produce democracy.  Peaceful ones often do.    Revolutions from above, however, can be led by state actors who take control of some state institutions legally, but then use them against other state actors (illegally or extra-constititonally) in order to dismantle some of the old order’s state institutions and replace with them with new ones to enact a new form of rule.   Whether military-led (as in the Meiji era in Japan, Ataturk’s Turkey, or Nasser’s Egypt) or civilian-led (as in Russia’s revolution from above led by Soviet party and state bureaucrats against the CPSU and Soviet state apparati), revolutions from above tend to produce authoritarian regimes or weak democracies.   

ISLAM, ISLAMISM AND POLITICS IN EURASIA REPORT, NO.55, 16 APRIL 2012

SPECIAL REPORT

Jihadist and Islamist Trends in Eurasia in 2011

Parts II and III

by Gordon M. Hahn

Senior Associate, Russia and Eurasia Program, Center for Strategic and International Studies

* IIPER is written and edited by Dr. Gordon M. Hahn unless otherwise noted.  Research assistance is provided by Yelena Altman, Sara Amstutz, Mark Archibald, Michelle Enriquez, Seth Gray, John Andrew Jones, Casey Mahoney, Anna Nevo, Daniel Painter, and Elizabeth Wolcott.  IIPER accepts outside submissions.

To access the full report, click here  Download Hahn_IIPER55

RUSSIA NEEDS NEW MODEL OF GOVERNANCE BASED ON PUBLIC INVOLVEMENT - GREF

REPRINTS

MOSCOW. April 13 (Interfax) - Russia could improve the effectiveness  of governance using crowdsourcing technology, the president and chief  executive of Sberbank, German Gref said in an article published in Vedomosti on Friday

"We need to introduce a fundamentally new model of governance, based  on the maximum involvement of the country's citizens in all stages of  making key government decisions at the federal and regional levels,"  Gref said.

Russia does not need to vainly repeat the experience of developed  countries in the area of governance, particularly since at present  they are experiencing the same problems, though to a lesser degree, he  said.

In Russia, the problem of effective governance is historical, Gref  said. The two traditional Russian questions: "who is to blame?" and  "what is to be done?" point to the original ineffectiveness of problem  solving in the past and the lack of an answer to the question of what needs to be done to correct the situation, he writes.

The absence of an effective system of governance leads to greater  dependence on the leader of the country or region, Gref believes.

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

Open mikes. Everyone by now has heard about what Obama said to Medvedev. A cynic would say that Obama could have done all that in his first two years when his party had a majority in Congress, or even now while it still has one in the Senate. But, here we are, back where we started. Romney’s response was preposterous but it appears that all the standard memes about Russia-the-Eternal-Enemy are firmly embedded in his mind. If he is elected, there will be bad times ahead for US-Russia relations. My fuller response will appear at Russia Profile Experts’ Panel on Friday.

Police. Clearly Medvedev’s police reform was, to put it mildly, incomplete. After the murder of a suspect in Tatarstan, the Russian Investigative Committee spokesman told regional units to check all complaints about police misconduct. Almost immediately, 66 more cases were revealed there. And still more elsewhere. A police accountant was charged with stealing payroll money and the head of a regional traffic police department with accepting a bribe. The “performance review” accepted 90%; too many.

AMERICA'S MISSILE DEFENSE INTENTIONS

by Vlad Sobell

New York University, Prague

The most interesting thing about America’s Missile Defense (MD) intentions is why the US is apparently bent on going ahead with developing the system, come what may. The official explanation – the potential threat from Iran or North Korea – surely belongs to the realm of fairy tales: if one day Iran were able to develop nuclear missiles that could reach Europe or Israel, the US (and its allies) would destroy the capability to build such missiles before they saw the light of day. As regards North Korea, it menaces its immediate neighbors primarily through its oversized conventional forces, which could inflict swift and heavy damage on Seoul. While certainly strengthening the regime’s hand, its nuclear program does not materially alter this long-standing state of affairs. And North Korea is, in any case, kept in check by China’s ability to bring down the regime at any time it sees fit. So that leaves the US’s desire to discomfort Putin’s Russia as the only plausible explanation for pursuing MD. 

The Cold War, of course, did not end in 1991 with the demise of the Soviet Union.  The stand-off between NATO and Russia continues – as evidenced by the armed conflict between a Western ally (Georgia) and Russia in August 2008. However, unlike the Soviet era, the current phase of the War is not about the rollback of Communism; it is about establishing who is the “top dog” on the strategically crucial Eurasian continent. Washington cannot compromise because by doing so it would be vacating the arena, implicitly giving a green light to what it regards as Russia’s “neo-imperialism”.

ISLAM, ISLAMISM AND POLITICS IN EURASIA REPORT, NO.54, 31 MARCH 2012

SPECIAL REPORT

Jihadist and Islamist Trends in Eurasia in 2011

Part I

By Gordon M. Hahn

Senior Associate, Russia and Eurasia Program, Center for Strategic and International Studies

PLUS: First Suicide Bombing of 2012 in Russia Occurs in Dagestan

* IIPER is written and edited by Dr. Gordon M. Hahn unless otherwise noted.  Research assistance is provided by Yelena Altman, Sara Amstutz, Mark Archibald, Michelle Enriquez, Seth Gray, John Andrew Jones, Casey Mahoney, Anna Nevo, Daniel Painter, and Elizabeth Wolcott.  IIPER accepts outside submissions.

To access the full report, click here  Download Hahn_IIPER54

ALEXANDER LITVINENKO: THE DEATHBED STATEMENT - WHO REALLY WROTE IT?

ROPV CONTRIBUTORS

By William Dunkerley

Who wrote Alexander Litvinenko's so-called deathbed statement? That may sound like a trick question. You know, like "who's buried in Grant's tomb?" But there are serious questions about the media's reportage on Litvinenko's final statement: who wrote it, and did Litvinenko even agree with what it said?

Regardless of who wrote the statement, its stinging accusation that Vladimir Putin poisoned Litvinenko dominated world headlines in late 2006. Indeed, it rocked the world. As a consequence, relations between Russia and Great Britain started to take on a Cold War character. Diplomats were expelled, and things went downhill from there. The U.S. Congress chimed in with threatening rhetoric of condemnation.

But amidst all this hyper-reaction, media reports presented no evidence to substantiate the content of the accusation. A new video analyzes the coverage. It points to the whole story having been concocted in the media, with no factual basis.

THEY ARE STILL AT IT: MSM CONTINUES TO DISTORT RUSSIAN REALITY

COMMENTARY

by Gordon Hahn

In the latest fiascoes that leading U.S. mainstream media (MSM) call journalism, news reporters continue to distort or ignore the continually-changing Russian reality. Meanwhile, a new reform era continues into its fifth year.  I alerted leaders on ROPV to the coming thaw in April 2008, covered the thaw’s predicted gradual progress from summer 2008, and traced its evolution into a perestroika 2.0, and the attendant glasnost 2.0 culminating its first phase in December 2012. 

During this entire period – 2008-2012 – the New York Times (NYT), Washington Post (WP), and Wall Street Journal (WSJ) rarely if ever mentioned Medvedev’s reforms, no less the overarching liberalization trend that began with Dmitrii Medvedev’s arrival to the presidency.  On the few occasions when they did allude to reforms, they ridiculed them as mimicking reform-put-forward as deceptions in order to justify the allegedly “false words” from Medvedev in support of democratization. This I also covered on ROPV.  The MSM’s take was that nothing is happening, since Medvedev is the puppet of the real ‘national leader,’ the neo-Stalinist KGB man, Vladimir Putin.  As we hear again today, Putin, as Russia’s ‘Stalin of today’ would never countenance liberal reforms, and would only ‘tighten the screws.’

RUSSIA WEEK - A ZENO PARADOX

FINANCIAL ANALYSIS

by Chris Weafer

You can't change the past, but you can ruin the present by worrying about the future.

Anonymous

"If" and "maybe". The equity market ignored the positive factors in the domestic market and instead prices were hit harder than in any other big global market. The reason cited was because of fears over how possible problems in other economies, if they happen, may eventually affect the positive picture in Russia. A lot of "ifs" and "maybes" for an equity market that is already pricing in $80/bbl Brent and not so much a hard landing as a crash landing in China. It is a paradox of which Greek philosopher Zeno would have been proud. But, as last week's fund flow data from EPFR Global showed, retail investors are, for now, avoiding the negative sentiment and last week's almost 5% market decline was mainly a result of trader activity. 

Russia is still a high-beta global theme. Despite the low valuation, Russian equities remain a high-beta investment in global markets. That is because of the very low base of domestic long-term focused investment money. This is a persistent problem referred to by President-elect Vladimir Putin in one of his election manifesto installments and one that will not change until the proposed measures to create a bigger domestic investor base are initiated. The trend in the market this week will, therefore, continue to be dictated by global market events, albeit the evidence on Friday, when both Moscow indexes rallied almost 1.0%, suggests that there will be more of a wait-and-see approach rather than a continuation of the anticipation of bad news that brought us lower last week. 

Fearful of a repeat of 2008. Last week, Russian equities fell (almost 5%) by more than twice the weakness in China's market (down 2.3%), even though the main worry for investors is the strength of China's economy. Investors fear a repeat of 2008, when rising oil and political optimism pushed the RTS Index to a record high in mid-May only to see the market stage a spectacular collapse in 2H08. The currency market is behaving differently. The ruble is not spooked by global fears but reflects the fiscal and budget impact of current oil prices, the strong economic start and the more positive indicators about political and policy changes. Last week, the ruble ended exactly flat against the dollar, while most Asian emerging market currencies fell 0.5-1.0%. 

To access the full report, click here  Download Rus_Week_Mar_26