Russia: Other Points of View

THE WEST'S OVERPLAY AND PUTIN'S CALCULUS AND MIS-CALCULUS

COMMENTARY

By Gordon M. Hahn

The picture being painted of the causes of the present Ukrainian crisis is badly distorted on both sides. The West’s caricature of reality depicts an eternal Russian imperialism and the dictator Putin seemingly doing what comes natural – invading foreign lands in order to re-establish the Soviet Union/Russian Empire. This tale ignores a history of hubristic Western policies that willfully ignored both Russian and, in the long-run, Western interests.

Since almost immediately after the Cold War, the West has been expanding NATO towards Russia’s borders with minimal effort to re-think the alliance, incorporate Russia, or take Moscow’s security interests into account. Similarly, the Clinton Administration bombed a Russian ally without a UN resolution violating Yugoslavia’s sovereignty. The West then recognized and actively organized Kosovo’s independence from the country, violating UN resolution 1244 which mandated Yugoslavia’s territorial integrity. To be sure, Russia just as brazenly followed suit and recognized and now guarantees with Russian troops the independence of South Ossetiya and Akhazia after the 2008 Georgian-Russian South Ossetian war. That war was a product of the seemingly inexorable NATO expansion.

Directly or indirectly, the West helped prepare the 2003 Georgian Rose and 2004 Ukrainian Orange Revolutions, bringing democratic-nationalist governments to power that were openly antagonistic toward Moscow. NATO and EU expansion to Georgia and Ukraine, both on Russia’s border, was put on the agenda. Tensions within both countries over this aggravated grave inter-ethnic and/or sovereignty disputes in which Russia had a stake, given their potential for destabilizing Russian domestic inter-ethnic relations. Russia includes North Ossetiya as well as ethnic Russian and Muslim Tatar kin of those in Ukraine.

CIS/UKRAINE: THE ONLY CERTAINTY IS CONTINUED UNCERTAINTY

FINANCIAL ANALYSIS

By Chris Weafer

“When politicians start talking about large groups of their fellow (citizens) as 'enemies,' it's time for a quiet stir of alertness. Polarizing people is a good way to win an election, and also a good way to wreck a country.” 

Molly Ivins, Author and political commentator

• The peace proposals offered by the president – an early election and a power sharing government – is a positive step forward in terms of politics but does little to resolve some of the key questions for investors and concerning the economy in 2014. The “deal” leaves open the question of who will provide the rescue deal that Ukraine critically needs and on what terms. Until resolved this will continue to hang over the debt, equity and currency markets. Clarity is not expected until after the elections. 

• Critical for bond holders and the currency is whether the Russia rescue deal remains in place or whether it will be suspended until the outcome of the elections is known. The next comments from Moscow will be key for the short-term performance of debt issues. In the event the deal is suspended or delayed, default risk will rise. If a pro-western government eventually takes power then default risk will be very high as an EU/IMF substitute deal will not protect all bond holders and will insist on the currency peg being eliminated. 

• In any event, given the continuing negative impact on the performance of the economy, including tax revenue generation/collection, the government will need more than the $15 bln agreed with Moscow last December. The total cost of a default-avoiding bailout for 2014 is likely to have risen to $20 bln at this stage.

Note; I do not propose to rehash the pros and cons of the politics. There is plenty of coverage of the issues in the media. This note is confined to the “what if” scenarios which may impact on the economy, on asset valuations and the possible contagion to Russia. 

To access the full report, click Download CIS_Ukraine_Briefing_Feb_21_14 

WHY MUST THE WEST BLAME ALL RUSSIA'S ILLS ON PRESIDENT PUTIN?

REPRINTS

by Kanwal Sibal

http://www.dailymail.co.uk/

From our vantage point the vicious onslaught against President Vladimir Putin in western political circles, especially the media, is difficult to appreciate.

The media is of course reflecting prevailing political attitudes towards the Russian president in US and European political circles. Unconstrained by diplomatic fetters, it can be exceedingly harsh, with the governments having the argument of press freedom to reject any responsibility.  

The fact the Western press can claim to be free and often attacks government policies does not mean that it cannot be faulted for bias, disregard of facts and poor judgment when it pronounces on affairs not its own.

More so when this media boasts of maintaining the highest standards of journalism in terms of ethics, independence and respect for facts. In reality, this argument of independence and objectivity is exaggerated. 

Media-persons are not alien implants in their own countries - they are part and parcel of the societies they live in. US and European journalists look at the world with American or European eyes, not as detached and neutral observers floating in a no man's land. 

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

Sochi. The anti-Sochi campaign is in full swing. (The Guardian gets everything in including the coming lack of snow about which it has some mystical foreknowledge). We have not just the homosexual stuff (a German reporter somewhat surprised to get the nonplussed view of the owner of one of two Sochi gay bars) but also the sad history of the Circassians. I have noticed pieces here and there concluding that Russia must “acknowledge its violent history in the region” or something. That’s odd, I don’t recall huffy op-eds calling on Canada to acknowledge how it came to possess the site of the Calgary Olympics or the USA the Salt Lake City site (opportunity there for two “acknowledgements”). What a load of pretentious rubbish! The cruel fate of the Circassians is hardly unknown in Russia and the authors of these pieces seem to be equally unaware of who they are (not Turkic. Quite the reverse in fact) but also that there are plenty of Circassians still living there. And that some are returning. This is all part of the current thrust of anti-Russia propaganda. As to corruption, these expensive Olympics (but the Russian Audit Chamber says direct Olympic expenses are more like $6-7 billion) may well exceed the Olympic norm but a lot has actually been built. While the site is ideal, the decayed Soviet infrastructure was not. Here is a list in Russian of what has been created in exchange for the 50-some billion – much more than just sports facilities: roads, bridges, power plants, tourist facilities to name a few. Moscow appears to be using the Olympics as an opportunity to make its Black Sea coast into an up-to-date tourist attraction. A website written by two Westerners, one of whom lives there shows many of these new things. There are going to be a lot of surprised Westerners; but then, Westerners depending on their media for information have been surprised by Russian reality for two decades now.

RUSSIA'S INFLUENCE

REPRINTS

Gazeta.ru

November 21, 2013

Fyodor Lukyanov

Russia is becoming almost the key participant in all political processes in the Near East. During these days alone Israeli Premier Binyamin Netanyahu and his Turkish counterpart, Recep Tayyip Erdogan, have been in Moscow, one after the other. Sergey Lavrov is participating in a decisive round of talks on Iran by "the six." At the same time Russian diplomats are trying, after all, to set the Syrian "Geneva-2" in motion, communicating with Damascus and with representatives of the opposition, and are continuing work on the destruction of chemical weapons in Syria. Several days ago a Russian-Egyptian meeting was held in Cairo in the "2 + 2" format (the ministers of defense and foreign affairs), and weapons contracts are expected based on its results. 

The situation is an unexpected one. Just a few months ago it was considered that Moscow was hopelessly losing its positions in the Near East. The last clients inherited from the Soviet past were losing power in their countries, new ones were not taking shape, and Russian policy was occasioning hostility and rejection on the part of the majority of capitals and religious and ethnic groups in the region. 

With what is this turn of events connected?

While paying tribute to the move with chemical weapons, the elegant nature of which was appreciated by all and which will most likely go down in diplomatic history, it has to be admitted that Russia's successes derive from the failure of others.

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

SYRIA. So, another fun military intervention that will be over by the weekend is about to light-heartedly begin. It is justified by unshakeable evidence that will later turn out to be ephemeral; evidence so certain indeed that we can’t wait for the inspectors who were conveniently nearby to report. Actually, it’s already fading. As before, the costs will go to us and the benefits to our enemies. I just don’t understand why we are spending our blood and treasure supporting our enemies .I never thought I would ever agree with Robert Fisk, but there it is.

RUSSIA-SYRIA. I believe there is too much talk of Syria being Russia's "ally" and all that: I see such assertions as part of the preparation of the intellectual battlespace: Putin and Assad are each made a more acceptable target by their alleged close association. Moscow has three main interests here. Principled: Moscow sees the actions of Washington and a few others re-arranging governments as destructive of such principles of international behaviour as exist. Practical: Moscow believes, and precedent suggests it is correct, that these “humanitarian interventions” just make things worse. Personal: the appetite grows with the feeding; is Moscow on the list to be overthrown by the new moral imperialists? The consequent instability can overflow into Russia. As a member of the P5 it is a strong upholder of the UN, a forum in which it is a big player with a veto; it doesn’t like all that to be bypassed by some sanctimonious fraction of NATO. All quite simple in fact and firmly based on national interest. The famous “Mediterranean naval base” in reality amounts to the occasional use of a dock in a small port (look at it on Google Earth). The arms sales are small change and the big ticket items are postponed. There is little Moscow can do to stop intervention, but Putin plays the long game. From that perspective, these “humanitarian interventions” weaken the USA and the other participants. He is the only adult in the playpen.

EDWARD SNOWDEN AND THE HISTORY OF POST-SOVIET RUSSIAN-WESTERN RELATIONS

COMMENTARY

by Gordon M. Hahn

If you want to understand why Russian-American and Russian-Western relations have deteriorated to the point where Russian President Vladimir Putin refuses to handover NSA contractor Edward Snowden, a little historical context is in order.

None of the below is to comment on whether Putin’s rule is democratic or his refusal is the correct course of action from either a moral, ethical, or practical point of view. Rather, it is to say that Western actions of the past have mattered greatly in Russian-Western relations,  and secondly that Russia remains a great power with its own interests which are increasingly defined by an antagonism towards the West––in significant part created by Western actions.

Perhaps most important for Putin in determining his actions regarding Snowden is the earlier refugee status given to Russia's criminal oligarch, Boris Berezovskii, and the Chechen guerrilla extremist, Akhmed Zakaev, by US allies in London.

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

Syria. So the West doing it again, intervening in a fight by trying to pick the right side on the foolish assumption that if Assad is wrong the others must be less wrong; this will lead to more involvement because mere arming won’t do the job. It will, as before, wind up giving aid and comfort to the very people it’s fighting elsewhere in the world. Especially as they are strengthening their position in Syria. The triumph of hope over experience. Even such a reflexive supporter of the present US Administration as the NYT can see this. And, somehow, it’s all Putin’s fault. Incredible. The CW excuse is not believable as Ron Paul explains. I rarely agree with Brzezinski but he’s right to call it propaganda. And what you hear about Russia is part of the information “battlespace preparation”. And it’s been a successful distraction campaign: the S-300 fuss covered up the deployment of Patriots and today’s headlines read “Putin opposes West” rather than “Another military adventure to benefit our enemies”.

G8 meeting. Much abuse of Putin at the G8 meeting over Syria. But as to Harper’s  “G-7 plus one” I would be surprised if Japan supported this new “humanitarian intervention” and Germany hasn’t in the past. Maybe Italy’s not too enthusiastic either so I suspect it’s more like G4 ½ plus 3½ . Interventions were once legitimised by the UN (1^st Gulf War); then by NATO (Kosovo); now by some of NATO (Libya). Apparently there is still supposed to be an effort to be led by Moscow and Washington to produce some sort of political solution.

Trial. A protest last year against Putin’s re-appearance led to violence. All my sources agree it was started by a small band of protesters; the police may or may not have over-reacted. (BTW one of the best pieces of evidence that it was pre-planned is Ksenia Sobchak’s live journal entry in which she says she will not be attending because she knows an incident is planned.)  The trial of the alleged ringleaders has begun (“Bolotnaya Case”). By the way, contrary to what you hear in the West, Putin’s support rating, according to Levada, while perhaps declining a bit, remains at levels most other politicians can only dream of.

RUSSIAN FEDERATION SITREP

by Patrick Armstrong

BEREZOVSKIY. Suicide after the loss of the rest of his money seems the most likely theory although his “friends” are being as suggestive as possible (See Dunkerley on these nebulous suggestions). But I notice that this time, the Western MSM, ever ready in the past to uncritically re-type an anti-Putin handout, is holding back: maybe the judge’s opinion of Berezovskiy’s veracity has persuaded them not to be so credulous. And so the Western media has lost one of its favourite sources for anti-Putin stories. Perhaps we will now learn more about the many mysteries surrounding Berezovskiy. The murder of Paul Khlebnikov (the ur-source of the “journalists murdered in Russia” theme), connections with Chechen slavers and kidnappers between the wars, funding for Shamil Basayev, the apartment bombings, the shaping of the Litvinenko story (every character in it worked for, or had worked for, him), the murder of Anna Politkovskaya, the shaping of the Pussy Riot story. Then there’s the story that he wanted to go back to Russia. Lots of rumours, few facts. I am amused that this obit by Masha Lipman manages to avoid all these questions.

LITVINENKO INQUEST. Postponed until October – that will be about the seventh anniversary of his death and still no official finding on what happened! They say that MI6 was paying him. Not the open and shut story we were sold and getting less so by the moment.

RUSSIAN FEDERATION SITREP

By Patrick Armstrong

CORRUPTION: IS ANYTHING REALLY HAPPENING? I recommend reading our discussion. But, if you don’t read the whole thing you must read Anatoly Karlin’s entry: all we ever hear is that Transparency International puts Russia near the bottom. But other ratings contradict its: Karlin names them, gives their scores and discusses about the implications. His conclusion is that Russia is pretty much at the world average. Myself, I don’t take these ratings on Russian corruption, press freedom, human rights or anything else very seriously because they’re all too affected by the prevailing memes and I suspect the motives of most of the raters. But Karlin’s point is that TI’s ratings fit poorly with other indicators. Russia is certainly very corrupt but 133^rd worst? I doubt it. (TI, by the way, rates Georgia at 51; let’s watch that rating under Georgia’s new management.) Meanwhile the investigations roll on. More in the military, which some observers rate as the most corrupt part of the body politic: one of the principals in the OboronServis scandal has been released with movement restrictions; she fully cooperated with the investigation, they say, so we’ll be hearing more. A case about soldiers being left to starve has been opened. And the Audit Chamber says it has uncovered nearly US$4 billion in waste and misappropriation in 2012 (more than 10% of the budget). A former Agriculture Minister is questioned in a fraud case revealed last November. And a brand new embezzlement case at the Skolkovo high-tech centre of which Medvedev was so proud. Come to think of it, you should read Sergei Roy’s entry too. “Appropriation of budgetary resources”; that’s what Russia’s big-time corruption involves: the transformation of public money into private benefit. Too many investigations now to keep track of.