RUSSIAN FEDERATION SITREP

by Patrick Armstrong

Electoral system. In the beginning, the Duma’s 450 seats were chosen half by party list and half by single mandate with a 5% threshold. Then Putin I changed it to all party list and 7% threshold. Putin II has just sent a bill to the Duma to change it back to the original. So what was the point of all that? The new law forbids electoral alliances – obviously another attempt to force like-minded people to unite. But we have 20 years of observational experience that Russian liberals refuse to sink their (small policy but large personality) differences. On a personal note, I was an observer in the 1995 election when 40-some parties ran. The party vote ballot was the size of a newspaper sheet and few voters had a clue. Are we going back to that?

Corruption. Investigations all over the place. Phoney academic degrees; embezzlement at RusHydro; two frauds in the Penitentiary Service; tax evasion at RUSAL; a former Duma Deputy. And not to forget OboronServis: Prosecutor General Chayka says 25 separate cases have been combined, the total cost of which is now said to be over US$400 million. The MoD is target-rich: a general is suspended, a former financial administrator jailed, a possible rotten rations scandal, and a supplier case. And the Olympics appear on the horizon: cost inflations. Sergey Ivanov has said that no one is immune. The Central Bank has weighed in with a statement that illegal money transfers amounted to US$49 billion in 2012 and that every tenth company making settlements through its payment system dodged tax payments in 2012. Obviously these cases have been in preparation for some time and investigators are digging. Definitely a serious campaign.

Demonstrations. The Constitutional Court ruled that the minimum level of fines for violations of laws governing protests should be lowered and the Duma promised to do so soon. A couple of demos on Saturday: a Udaltsov-sponsored one pulled a couple of thousand and a pro-government one two to three times as many although there was a strong smell of fakery about it.

Demographics. The Health Ministry tells us that infant mortality was 8.7/1000 in 2012 which is a very considerable increase from the 7.1/1000 claimed for 2011. The true reason for the increase is that Russia has now adopted the WHO standard of definition. See Adomanis.

Security concept. A new one is out but I haven’t read it – I’ve read so many of these impenetrable, repetitive, long-winded and curiously pointless documents in my career that I really have to nerve myself up to tackle another one. Judging from what Vlad Sobell tells me (he has read it) the major changes are a more pessimistic world view (and who would contradict that?) and much smaller expectations of cooperation with the USA (ditto). The main themes of multi-polar, UN, international norms, that have been repeated over and over, remain. I have never understood why Moscow produces these things – Western commentators typically go through them to find a sentence to spin to keep the anti-Russia fire burning. I suppose they are thought to serve some bureaucratic function, but, having laboured in a bureaucracy, my guess is that they are filed, unread.

Assets, real and otherwise. Moscow and Havana are a bit closer to dealing with the US $30 billion or so that Havana owes. They say part will be written off and part restructured. I expect Moscow will be lucky to get a kopek on the ruble. This should remind us of a post-Soviet reality. When the Russian Federation took over the USSR’s debits and credits, it took responsibility for debts to groups like the Paris Club that expected to be paid in full and acquired “assets” like Cuba’s debt. Indeed, when we add to these real obligations and worthless credits the capital flight from Russia and the supply of underpriced energy to its neighbours, it’s clear that Russia was actually subsidising people to its west in the 1990s.

Mores. It is often forgotten in the West that Russians are somewhat old-fashioned in their attitudes. We are reminded of this truth when prosecutors issue a warning to a department store decorating its windows with mannequins having sex. What would have happened in London, New York or Toronto in the early 1960s?

Georgia-Russia. More progress. Russian inspectors have cleared the way for the resumption of wine and mineral water exports. The two are holding regular meetings about improving relations where they can. Saakashvili, as usual, is spreading disinformation: his latest fable is that his defeat was a made-in-Russia operation. (Will his American flacks pick this up?) But, fortunately, he doesn’t seem to be getting any traction: the Georgian parliament today issued a unanimous statement on the course of Georgia’s foreign policy which greatly toned down the anti-Russia stuff.

© Patrick Armstrong Analysis, Ottawa, Canada Hyperlinks ought to work immediately but, if not, right-click, copy link location, put it in your browser.

Comments

[Alexander Mercouris]

Dear Patrick,

Three very brief comments on your usual excellent survey:

1. It is one of the wonders of international financial transactions that it is considered completely respectable to default on loan obligations to Russia. Not only will Cuba never repay Russia a single rouble but it follows a long line of other countries that have done the same thing. Did Egypt ever repay the massive loans for economic and military assistance the USSR provided in the 1960s and 1970s to Nasser and Sadat? Did China do the same for the loans it got from the USSR in the 1950s? Will Venezuela repay its loans to Moscow if the government there changes? Borrowing from Moscow is a one way bet in your favour. No one criticises you if you default on it and your international rating actually improves. The only mystery is why Moscow goes on doing it.

2. On the subject of the mannequins, whilst I agree that Russians are fairly old fashioned I suspect that if the mannequins were displayed actually performing sex then the shop would be prosecuted even in liberal London. I am not familiar with the obscenity laws but there would be concern that putting mannequins performing sex on public display might be seen by minors. In Britain shops are required to put pornography on a top shelf precisely so it is not accessible to minors. Of course with the internet all this is becoming pointless.

3. Good news about Georgia generally. I have to say that I am surprised at how quickly the Saakashvili regime with all its attendant myths and fables has unravelled. It makes one even more suspicious of some of the commentary that was previously written about him. I wonder whether he was ever as popular as legend made him.