Business Watch
Patrick Armstrong's Russia SitRep (64)
by Patrick Armstrong http://www.russiaotherpointsofview.com Medvedev Press conference. Medvedev gave a large press conference this week. He said he would announce “soon” whether he will run again. The inquiry into Sergey Magnitskiy will be concluded “soon”. He several times stressed that no one should stay in power forever (in the context of saying he had replaced half the regional leaders) and that people who do so come to “a rather bad end”. Russia’s political system is still being adjusted (“a forming democracy “) and that it was possible that Federation Council members (and governors) might be directly elected (not, apparently, “soon”). He understood that “local authorities try to varnish everything” when he comes to visit, but said that he also got information from blogs etc which “cut right to the truth”.
by Patrick Armstrong Alarums past. In November, accepting an award, the well-known Russian media personality Leonid Parfyonov gave a speech excoriating the state of the news media in Russia: a culture in which reporters were a species of “state official” ever attentive to their “boss’s bosses”; one in which everyone understood there were stories that “that can be broadcast on television and those that cannot”. This attracted some attention together withmentions of reporters killed or harmed in Putin’s time. While there is no doubt a good deal of truth in what he said, charges of control or bias in what is and is not broadcast are not unknown elsewhere. He also intimated that Russian TV was being dumbed down. Well that’s hardly unique to Russia either. In my opinion, anybody who depends on the MSM in any country for his news is missing a lot and the New Media is winning everywhere. And in Russia, you can read criticisms similar to Parfyonov’s translated from foreign media on the Net if you want to. But the point is that, whatever mixture of truth and exaggeration there may have been in his observations, it seems that nothing has happened to him. He lives and thrives.
By Patrick Armstrong Putin speech. Yesterday Putin gave his annual speech to the Duma reporting on the government’s activities and plans. He was generally upbeat about Russia’s recovery from the financial crisis. He returned to one of his key themes: “This country requires decades of steady, uninterrupted development. Without sudden radical changes in course or ill thought through experiments based so often in either unjustified economic liberalism, or, on the other hand, social demagogy. We need neither. Both will distract us from the general path of developing the country. And, of course, we should maintain civic and inter-ethnic peace, and put a stop to any attempt to cause our society to split and quarrel among itself”.
by Patrick Armstrong Another misquotation in the Only Story in Russia. RIA Novosti reports that Medvedev said that he and Putin would decide which runs for president soon. This assertion will, no doubt be endlessly repeated. But it’s not what he said. What he actually said was that he would decide fairly soon whether he would run for a second term: “I do not rule out the possibility of my running for a second term at the presidential elections. The decision will be taken very shortly”. (Eng Rus) A much better mindset than this sterile obsession with one or the other is the German concept of aVorstand; a corporate governance team which is “expected to act collectively and collegiately”. Medvedev himself said about the two of them “We have friendly and very warm relations that have been shaping over the last two decades. It is a long time, in my life, too ‑ you said I am not that old yet. I have known Mr Putin for almost half of my life, it is quite a lot, and we first met back in St Petersburg many-many years ago.” They’re a team. And they are in turn part of a team that has worked together quite effectively and harmoniously for some years. (I am obliged to Timothy Post for introducing me to the concept of a Vorstand.)
by Patrick Armstrong http://www.russiaotherpointsofview.com/ Two hats or one? In 2001 Putin appointed Aleksey Miller CEO of Gazprom. Always a state controlled company, the previous CEO had run Gazprom as if he personally owned it. Putin explained Miller’s appointment: “The first task is to safeguard the state’s interests in this company, to collect everything which by rights belongs to the state, and to make the company's activity and primarily its financial activity absolutely transparent to all shareholders, including minority shareholders”.
by Patrick Armstrong http://www.russiaotherpointsofview.com/ Libya. After Russia abstained on the UNSC resolution, allowing it to pass, the Foreign Ministry spokesman piously objected when the “no fly zone” enforcement began exactly as the US Defense Secretary had said it would two weeks before. Much as it may please some Russians to throw that fatuous word “disproportionate” back at the West, this is pretty hypocritical. Russia could have stopped it by veto. Meanwhile Medvedev has declared that Moscow is ready to mediate. That may happen yet: for all I know, NATO would still be fighting in Kosovo if Chernomyrdin and Ahtisaari hadn’t stepped in.
by Patrick Armstrong Anniversary. Twenty years today the USSR held a referendum on whether to support the proposed New Union Treaty. The new setup would have given much more power to the republics; the word used to describe it then was “confederation”. I recall much brouhaha about how the referendum would be a bust and even some “experts” claiming that no one knew what they were voting on (despite the fact that all the iterations of the treaty – 3 as I remember – had been published in the Soviet press). In the event there was a decent turnout and a strong support for continuing in the new arrangement.
by Patrick Armstrong Police Reform. The new law took effect last Tuesday (see here for a discussion of its provisions). As if in celebration, Medvedev dismissed seven high ranking police officers from around the country. And high-ranking they are indeed. No reasons were given. He had a meeting with Interior Minister Nurgaliyev and signed a number of decrees moving the effort forward. Something I have often wondered about is how one gets from here (an institution with a culture of corruption and incompetence) to there (something much better). It appears (but the wording of his instructions to Nurgaliyev is not clear and this is my best guess of what Medvedev told him) that all members of the present force (“militia”) will be, as it were, passed through a sieve and either dismissed or allowed to join the new force (“police”). Senior officers will be examined by the Head of the Presidential Administration, Sergey Naryshkin, and approved by Medvedev.
by Patrick Armstrong Revolutions. The Arab Revolution is making a few people (Gorbachev for one) speculate about the possibility of a similar rising in Russia. Speculation about a Russian “Arab scenario” is little more than wishful thinking from a negligible opposition that agrees on almost nothing. The “Arab revolution” is sui generis: rulers-for-life enriching their circle while impoverishing everyone else and populations in which half are under 30 or 25 with little to hope for. And someoutside advice. This is not Russia: simply stated, the necessary conditions are not there. The Duumvirate remains popular and for good reason: Russians can see and touch the improvement in their situation over the past decade. If in 15-20 years the same people were on top still taking about police reform, cooruption and modernisation that would be a different story. However, some of the other post Soviet states, especially those with rulers-for-life, could develop that way. One place to keep an eye on is Georgia: if Saakashvili contrives to stay in power (as he seems to be trying) and we have another few years of stagnation and blaming everything on Russia, it could happen there – at least some of theopposition says so.
by Patrick Armstrong Kuriles. I’m mystified why this issue has suddenly boiled up. Perhaps Medvedev’s visit last November has driven the two capitals into the inevitable rhetorical exchanges. Attempts are being made to calm things down: the two foreign ministers have promised to talk calmly and the chief of Antiaircraft and Missile Troops, responding to a suggestion that S-400 SAMs be deployed there,dismissed the idea as excessive and dangerous. The principal Japanese opposition leader has criticised his government for its language. At present each claims the islands and it is not easy to see how a compromise can appear. But there is at least one international example that might serve as a model – the Åland Islands.