Business Watch
Patrick Armstrong's Russia SitRep (64)
by Patrick Armstrong Medvedev address. He gave his annual address on Tuesday (Russ Eng not available yet). These things are never high rhetoric but are rather a list of points, mostly about domestic concerns. I haven’t read the whole thing yet but Medvedev’s now-customary themes of modernisation, bettering the lives of ordinary people, police reform, the environment and corruption were all present. As far as foreign issues were concerned, we see again the long-time message that Russia is prepared to cooperate but not to be taken advantage of.
by Patrick Armstrong NATO-Russia. A major change, at least on the rhetorical level. NATO adopted a new Strategic Concept. About Russia it said: “NATO-Russia cooperation is of strategic importance… we want to see a true strategic partnership between NATO and Russia… the security of NATO and Russia is intertwined”. Medvedev attended the last day and a joint statement reiterated the above. Russia was invited to join a Europe-wide missile defence system. Medvedev welcomed all this at the press conference.
by Patrick Armstrong Privatisation. The government has approved a privatisation plan for state-owned entities. Economic Development Minister Nabiullina hopes that it could raise US$33 billion over the next 3 years. Some big entities will be affected. But only United Grain Company is fully for sale; for all the others the government will retain the dominant share and, therefore, control. So it’s not clear how attractive small pieces of these companies will prove to be. The other problem of course is that the big privatisations of the 1990s were rigged, the government got little and well-connected individuals became super rich. But there are some important differences today – apart from better government control.
by Patrick Armstrong NATO. NATO’s courtship of Russia proceeds: now, according to the Secretary General, Russia is a “partner of strategic importance”. An earlier meeting between Russia’s CGS and SACEUR seems to have passed off productively. So maybe, although inevitably it will be concealed in NATO’s wooden language, the Lisbon summit may produce a breakthrough in relations – long overdue but welcome nonetheless. I could understand if Moscow, after 15 years of abuse and no longer the suppliant, were cool to NATO's overtures. But for the good of us all I hope it rises to the occasion.
RUSSIAN FEDERATION WEEKLY SITREP
by Patrick Armstrong
NATO-Russia. Lots of things are rumoured: see this in the Independent for example. On a personal note I feel a lot of schadenfreude here. When I was working for the government, I wrote many briefing notes saying that NATO should listen to what Moscow was saying and take it seriously; not necessarily agree, but seriously think about it. But no, NATO light-heartedly (not my expression but George Kennan’s) went ahead and expanded here, there and everywhere, broke its promises, enjoyed its adventures, all under the complacent assumption that Russia was negligible and its objections could be dismissed as mere self-interest, or spun as threats. No more. NATO has discovered that it really needs Russia in Afghanistan.
By Patrick Armstrong The Third Turn. Earlier this week Medvedev was in France talking with Sarkozy and Merkel. It doesn’t look as if anything much was decided but it was another step in Europe’s change of attitude towards Russia, moving into what I call the “third turn” (during the 1990s Russia was seen as a backward younger brother and, from 2000-2008, as an enemy). From the press conference. Sarkozy: “We are certain that Russia, Germany and France share common positions in many respects”; “we live in a new world, a world of friendship between Russia and Europe.” Merkel: “we need to put relations between Russia and NATO on a rational track. After all, we face some of the same threats in the world today.” “Rational” – interesting choice of word: are we to assume the previous policy was irrational?
Russia Weekly SitRep October 14 by Patrick Armstrong UK-Russia. The British Foreign Secretary visited Moscow yesterday with the intention of improving relations. There are two principal irritants: the UK gives shelter to Berezovskiy and Zakayev, both of whom Moscow wants for various crimes and the UK wants Lugovoy in connection with the Litvinenko death (although the one Western reporter who has seen the evidence the British supplied is scornful of it). If anything actually comes of this apparent attempt to mend relations, Berezovskiy might be advised to start packing his bags.
by Patrick Armstrong
Luzhkov. The storm clouds gather. There was a great deal of construction in Luzhkov’s Moscow and many contracts were won by companies controlled by his wife, Yelena Baturina, who became very wealthy. On Tuesday Finance Minister Kudrin said a quarter of his decrees, many of them dealing with construction, were signed in secret. One of his deputies has just been charged with bribery. The Russian Audit Chamber says it has numerous documents showing the city government spent budget funds inefficiently. Maybe a prosecution is being prepared. Meanwhile, still defiant, Luzhkov has said he will start his own political movement and he has been given a position at the International University in Moscow.
by Patrick Armstrong
Luzhkov. Medvedev dismissed Luzhkov as mayor of Moscow on Tuesday and appointed his 1st Deputy Vladimir Resin pro tem. The reason given was that he hadlost confidence in Luzhkov. Luzhkov thereupon resigned from the pedestal party. As usual, some in the Kommentariat are trying to spin this as evidence that the Duumvirate is cracking, but Putin seemed quite comfortable with the decision. So now what? I see three possibilities from Medvedev’s side. 1. Luzhkov, who is 74, is allowed to go quietly into retirement. 2. He is given some face-saving appointment. Either seems to be more likely (based on past practice) than the third which is that a corruption prosecution is opened against him,his wife or both.
by Patrick Armstrong Luzhkov. The number one story in Moscow these days is the future of Mayor Luzhkov. It is highly probable that the present campaign against him is blessed by the Kremlin. It is rumouredthat the object is to get him to go quietly. Luzhkov is a powerful man but that’s a lot of pressure. I expect that he will “retire at his own request for personal reasons” as they used to say (videIlyumzhinov).