Business Watch
Patrick Armstrong's Russia SitRep (64)
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.
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.
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 133rd worst? I doubt it.
by Patrick Armstrong
Corruption. Well, there sure are a lot of investigations going on and they reaching levels within sight of the top of the power heap: after all Serdyukov was appointed by Putin who stuck by him for years against the resistance of the generals. This blog entry enumerates some of the biggest corruption investigations: it mentions the Defence Ministry property scandal (the new Minister has just fired another official, but probably not for that connection); RosTelekom; a former Agriculture Minister; GLONASS; a big one in St Petersburg and a swindle in Perm Region. Kommersant estimates the total bill at 57 billion rubles (about US$1.8 billion). And maybe more from the Defence Ministry: there are reported to be 60,000 empty apartments for military retirees. A fraud case has opened in Yekaterinburg. Arrests for mistreatment of convicts and perhaps more coming after the prison riot in Chelyabinsk last month.
Corruption. There are those who believe that one of the main reasons for Putin’s re-appearance in the President’s chair was that only he has the political muscle to really move on Russia’s widespread problem of corruption, especially corruption at the top. I have always said that we won’t know that the anti-corruption drive is serious until it takes down someone in an office near Putin’s or Medvedev’s. Do we start to see this? The OboronServis case is getting bigger. The case concerns skulduggery with the extensive number of military properties. Some charges have been laid and the inquiry has been widened.
Opposition vote. The opposition ran an electronic vote to choose their… what? – leaders? most popular figures? coordinators? The results are here (Russian). The top 5 are Navalniy, Bykov, Kasparov, Sobchak and Yashin. What I find striking is, in a supposedly computer-savvy broadly-based movement, that only about 80,000 actually voted out of the 170,000 who registered. One cannot say that the phenomenon is insignificant, but it does not seem to be so very large after all.
This is a summary of Patrick Armstrong’s article which appears on Russia: Other Points of View complete with hyperlinks to all sources.
Pressure. A prominent Russian businessman says he will sell all his assets in Russia and retire so as to end what he calls “relentless pressure from the authorities”, specifically from “Directorate K of the FSB.
Syria et al. Whenever something horrible happens in the world that Western governments and media outlets actually notice, we find two different reactions from Moscow and Washington. Moscow confines itself to anodyne statements about constitutional agreement, peace and so forth – admirable sentiments which do nothing. Washington, on the other hand, feels it has to pick a side and blame those that don’t. US media outlets either create this judgement or follow along (which comes first?). Washington then accuses Moscow (and others) of preventing it “doing something”; the media picks up this line and fills up with stories (many of which don’t prove to be true: this one again, for example).
by Patrick Armstrong
The cards are re-dealt. After the usual considerations, negotiations and calculations, the re-shuffle is probably complete. There is a new government with many new faces. A new Security Council – most positions ex-officio. Defence is unchanged (many thought Serdyukov was going to go) but there is a new Interior Minister (police reform has proved to be somewhat unfinished). Sergey Lavrov continues as Foreign Minister. True to his habit, Putin has sent no one into the darkness; many of the old faces being “kicked upstairs”. Neo-Kremlinologists are scrying the auguries but as far as I can see, we have the same Team, with new people moved up from the “farm teams”. What ought to be apparent, after more than a decade’s observation, is that Putin has created a remarkably collegial, discreet and effective team. He’s had a few former insiders join the opposition but (I can’t resist) nothing like Saakashvili who has seen almost every former minister, associate and ambassador go into the opposition. Further thoughts coming Friday here.
Vorstand reshuffle. Putin was inaugurated on Monday and, as promised, immediately nominated Medvedev as PM. He was confirmedby 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.