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Arab Spring

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Sima Diab on Twitter makes the observation that the countries most affected by the “Arab Spring” are easy to find on a live air traffic map (because nobody is going there).

Don’t you just hear that crickets chirping sound of freedom ringing?

Incidentally, Russia’s and Britain’s hardline response to what is now universally understood to have been a terrorist bomb attack – evacuating its 70,000 stranded tourists there and barring further flights – is understandable but arguably short-sighted. 12% of Egyptian GDP accrues to tourism, and the rest of the economy is too sluggish to make good the difference. Less tourism equals economic decline equals a decline in good guy Sisi’s ratings and more support for bad guy Islamists.

With about half the country being essentially Islamists – that’s both the percentage of Egyptians who support death for apostasy and who voted for the Muslim brotherhood – a cutoff in tourist dollars (rubles, pounds sterling, etc.) is the last thing Egypt needs.

 
• Category: Foreign Policy • Tags: Arab Spring, Egypt, Revolutions, Terrorism 
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I am back to writing for the US-Russia.org Expert Discussion Panel, which since my hiatus has found an additional home at Voice of Russia. The latest topic was on whether Russia, China, and the West could find a common approach to the challenges of the Arab Spring. My response is pessimistic, as in my view Western actions are driven by a combination of ideological “democracy fetishism” and the imperative of improving their own geopolitical positions vis-à-vis Iran, Russia, and China. This makes it difficult to find any middle ground:

It is true that many Muslims in the Middle East want their aging strongman rulers out, and democracy in. Even Osama bin Laden, who purportedly “hates us for our freedom”, once mused that the reason Spain has a bigger economy than the entire Arab world combined was because “the ruler there is accountable.”

And this is also part of the reason why we should refrain from fetishizing “democracy” as the solution to all the region’s ills.

That is because liberal democracy as we know it in the West, with its separation of powers – in particular, that of the Church and state – isn’t at the top of most locals’ priority lists. It only really concerns the liberal youth who initially headed the revolt, while the other 95% of the population is concerned with more trivial things, like unemployment and food prices. As per the historical pattern with the French and Russian revolutions, the Arab Spring happened during a period of record high grain prices. And now as then, a revolution won’t magically create jobs or fill bellies.

In today’s Egypt, it is not foreign-residing technocrats like El Baradei, with his 2% approval ratings, who become President; nor is the cultural discourse set by young Cairo women who strip nude against patriarchy. Remove a secular, modernizing dictator from a country where 75% of the populations supports stoning for adultery, and sooner rather than later you get restrictive dress codes for women (de facto if not de jure), attacks against Christian minorities, and bearded Islamists worming their way into power.

As for Syria, the biggest practical difference is that the liberal minority in the opposition was sidelined even before the fall of the dictator, as it is the Islamists who are now taking the lead in the fighting against Assad.

Will the new regimes that emerge out of the Arab Spring be anywhere near as accommodating with the West as were the likes of Mubarak, or even Assad – who, as Putin reminded us, visited Paris more times that he did Moscow? Will religious fundamentalists be able, or even willing, to build up the (educational) human capital that is the most important component of sustained economic growth?wahh Will they even be able to regain control of their borders, or will they end up like Libya, an anarchic zone disgorging Wahhabi mujahedeen into neighboring countries that don’t really want them?

Western policy-makers do not seem all that eager to consider these questions. Maybe they think they can manipulate the Arab Spring to serve their own interests – after all, Assad’s Syria is an ally of Iran, supplies Hezbollah, and has security relations with Russia and China. They may be calculating that the geopolitical boon from removing the Alawites from power outweighs the costs of Islamists taking over in Damascus. Certainly there are grounds to doubt that genuine concern for democracy explains French, British, and American actions: After all, the two dictatorships friendliest to the West, Bahrain and Yemen, were actively supported in their crackdowns.

If the above interpretation is anywhere near true, there can be little hope for Russia and China finding common ground with the West. It would imply that the Middle East is a chessboard for Great Power games – and chess isn’t a game that you typically play to draw. The one thing everyone should bear in mind, though, is that no matter a man’s ideological leaning, he resents being a pawn. This is a life truism that was demonstrated in the attacks on the US consulate in Benghazi, that is being played out today in Mali, and that will continue to reverberate so long as the crusaders – for they are widely seen as such – remain in Dar Al-Islam.

(Republished from Da Russophile by permission of author or representative)
 
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I just remembered I’d made some in 2012. It’s time to see how they went, plus make predictions for the coming year.

Of course I failed to predict the biggest thing of them all: The hacking that made me throw in the towel on Sublime Oblivion (remember that?), but with the silver lining that I could now split my blog between my interest in Russia and my interest in many other things. After all tying my criticism of the Western media on Russia with topics like climate change and futurism and HBD was never a very good fit. Overall I am very satisfied with the new arrangement.

Predictions For 2013

(1) Russia will see slight positive natural population growth (about 50,000) as well as significant overall population growth (about 400,000). Do bear in mind that this prediction was first made back in 2008 when a Kremlinologist who did the same would have been forced into a mental asylum.

(2) The life expectancy will reach 71.5 years, the total fertility rate will rise to 1.8. The birth rate will reach a local maximum at about 13.3-13.5 (it will then remain steady for a couple of years, and then begin to slowly decline) while the death rate will go down to about 13.0-13.2). Net immigration should remain at about 300,000.

(3) Putin will not be overthrown in a glorious democratic revolution. In fact, things will remain depressingly stable on the political front. As they should!

(4) Currently Russia is one of Europe’s most corrupt countries. While it’s certainly not at the level of Zimbabwe, as claimed in the Corruption Perceptions Index, it’s not like having the Philippines, Romania, or Greece for neighbors on an objective assessment is anything to write home about. I believe that Russia missed a great opportunity to undermine the rotten culture of official impunity that exists there by refraining from prosecuting former Moscow Mayor Luzhkov with his Montenegrin villa, billionaire wife, and his VP Mayor Resin who wore a $500,000 watch following his dismissal in 2010. Today a similar opportunity presents itself with blatant evidence of large-scale corruption on the part of former Defense Minister Anatoly Serdyukov and his female hangers-on (see the comments threads here, here at the Kremlin Stooge for details). There are conflicting signals as to whether charges will extend to the very top, i.e. Serdyukov himself. Having incorrectly anticipated a Luzhkov prosecution, I am now once bitten, twice shy. So I’ll take the lame way out and call it a 50/50.

(5) Needless to say, the economy remains as uncertain as ever, and contingent upon what happens in the EU and the world. In the PIGS the economic contraction is finally starting to slow down, but Greece is something of a disaster zone, and Spain is raiding its pension fund to keep afloat. If this becomes unsustainable this year then the EU member states will have to make some fundamental choices: Fiscal union? Or its division into a “Hanseatic” core and Mediterranean periphery? Which of these three things will happen I find impossible to even begin to foretell… As applied to Russia, under the first two scenarios, it will continue plodding along at a stolid but unremarkable pace of 3-4% or so GDP growth; if things come to a head (as they eventually must) and Germany decides to toss the Latins overboard, then the divorce I assume is going to be very, very messy, and we can expect Russia’s economy to fall into recession.

(6) No special insights on foreign policy. Ukraine may join the Customs Union; however, I suspect that’s more likely to happen in 2014 or 2015, as Yanukovych faces re-election and has to make a choice between continued prevarication between it and the EU, and encouraging his Russophone base. The creeping influence of the Eurasian Union will likely keep US-Russian relations cold; whatever the current disagreement that’s talked about (Magnitsky Act; Dima Yakovlev Law; Syria; Libya…) I lean to the “Stratfor”-like position that at heart the US just does not want what it sees as a “re-Sovietization” of the region – which the Eurasian Union is, in geopolitical terms, if under conditions much softer than was previously the case – and will thus be driven, almost by force of instinct, to oppose this trend.

How did I do for 2012?

Here is the link again. In short, this wasn’t the best year for my predictions.

1. “So that’s my prediction for March: Putin wins in the first round with 60%, followed by perennially second-place Zyuganov at 15%-20%, Zhirinovsky with 10%, and Sergey Mironov, Mikhail Prokhorov and Grigory Yavlinsky with a combined 10% or so.I later ended up refining this, and running a contest. My predictions for the five candidates were off by an aggregate error of 14%. The heroic winner was Andras Toth-Czifra (who has yet to get his T-Shirt – my profound apologies dude, it will be done…) Half a point.

2. “I will also go ahead and say that I do not expect the Meetings For Fair Elections to make headway.” Correct, although this was self-evident to anyone not afflicted with Putin Derangement Syndrome (which admittedly doesn’t include 90% of Western Russia journalists). Full point.

3. Here I made general points that I still think fully apply. That said, my own specific prediction turned out to be false. “But specifically for 2012, I expect Greece to drop out of the Eurozone (either voluntarily, or kicked out if it starts printing Euros independently, as the former Soviet republics did with rubles as Moscow’s central control dissipated).” Wrong! I am perhaps foolhardy to do so, but I repeat this prediction for this year. I really don’t know why the Greeks masochistically agree to keep on paying tribute to French and German banks when they know full well they have no hope of ever significantly bringing down their debt-to-GDP ratio without major concessions on the parts of their creditors. Zero points.

4. Last year I made no major predictions about the Russian economy; basically, unexciting but stable if things stay normal – a downswing if the EU goes down, albeit not on as big a scale as in 2008-2009. I was basically correct. One point.

5. “I expect 2012 will be the year in which Ukraine joins the Eurasian common economic space.” Nope. To activate their Russophone base, they decided to go with the language law. Zero points.

6. “Russia’s demography. I expect births to remain steady or fall slightly… Deaths will continue to fall quite rapidly, as excise taxes on vodka – the main contributor to Russia’s high mortality rates – are slated to rise sharply after the Presidential elections.” Too pessimistic on births, albeit understandably so because Russia’s cohort of women in their child-bearing age has now begun to decline rapidly (the echo effect). Although ironically enough however I am one of the most optimistic serious Russia demographers. In reality, as of the first 10 months of 2012, births have soared by a further 6.5% (which translates to a c.8% increase in the TFR, bringing it up from 1.61 in 2011 to about 1.74 this year – that’s about the level of Canada and the Netherlands – while deaths have fallen by 1.5%, implying a rise in life expectancy from 70.3 years in 2011 to about 71 years in 2012 (which is a record). Most remarkably the rate of natural population growth is now basically break-even, with birth rates and death rates both at about 13.3/1000; the so-called “Russian cross” has become a rhombus. Still, considering that my predictions were basically more optimistic than anyone else’s (even Mark Adomanis’), I still feel justified in calling this n my favor. One point.

So, that’s 3.5/6 for the Russia predictions. I will be very brief on the non-Russia related ones, as this is a Russia blog.

7. Wrong, Romney did not win LOL. Although later I did improve greatly, coming 12th out of 66 in a competition to predict the results of the US popular vote. I now owe a few bottles of whiskey to various people.

8. US did not attack Iran, but I gave it a 50% chance anyway. So, half point?

9. “But I will more or less confidently predict that global oil production in 2012 will be a definite decrease on this year.” Too early to tell.

10. “China will not see a hard landing.” Correct.

11. “Record low sea ice extent and volume. And perhaps 100 vessels will sail the Northern Sea Route this year.More like 46 vessels, and completely correct on extreme new sea ice lows.

12. “Tunisia is the only country of the “Arab Spring” that I expect to form a more or less moderate and secular government.” I think that’s basically correct.

13. Protests will not lead to any major changes outside the Arab world – yes.

14. “The world will, of course, end on December 21, 2012.” Correct, we’re now living in a simulation, the real world having ended as I predicted.

(Republished from Da Russophile by permission of author or representative)
 
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http://www.youtube.com/watch?v=-IG4kceZBWA

Western liberals, their puppets, and the Arab Spring in a nutshell (and I do mean nut).

(Republished from AKarlin.com by permission of author or representative)
 
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As I reported in my post unveiling US-Russia.org, there are going to be weekly discussion panels moderated by Vlad Sobell. This is the first one I participated in. It is on the topic of US-Russia Relations Against the Backdrop of Word-wide Muslim Protests. Is this a clash of civilizations? Should the US patch up ties with Russia and forget about New Cold War in order to free resources for the greater challenge from radical Islamists?

I think I will be reposting my contributions to these Panels on this blog for the foreseeable future, with a time delay of a few days so that US-Russia.org maxes out on traffic. Here is my first contribution:

The American democratization agenda for the Middle East appears to be based around two premises: (1) The Arabs want the strongmen out; (2) They desire a Western-style liberal democracy. Consequently, aggressively supporting the transition should ease the US into the Arabs’ good graces – with all its attendant, oily benefits.

The first point is largely true. The second is not. Although large majorities of Arabs support concepts such as “democracy” and “free speech” in opinion polls, they should not be taken at face value. That is because similar majorities also support stoning for adultery and the death penalty for apostasy. In these circumstances the very idea of a “liberal democracy” is a contradiction in terms. To paraphrase a relevant sentence from the Tsarist-era book Vekhi, “Thank God for the prisons and bayonets, which protect us from the people’s fury!”

This is because the “clash of civilizations” isn’t something that is “fomented” by radical Islamists (or Western Islamophobes, for that matter). It is an actually existing state of affairs and “democratization” will only fully disrobe it, not make it go away.

The Europeanized liberals who were the motor of the protests in Egypt only constitute about 5% of that country’s population. While removing the dictator – be he a relatively benign one like Mubarak, or a bloodthirsty one like Gaddafi – liberates not only the intelligentsia, but also the (far more numerous) Islamist opposition. Of the foreign jihadists fighting in Iraq, it was rumored that Benghazi – focal point of resistance against the Jamahiriya – contributed the most per capita. Now Libya is a chaotic jumble of heavily armed gangs and militias, many of them with Islamist sympathies. Despite promises not to field a Presidential candidate, the Muslim Brotherhood in Egypt did precisely that and won the elections; since then, the old-regime generals have been replaced and the Brotherhood has consolidated its political dominance over the country. In the meantime, the economy has ground to a standstill.

Mubarak, Gaddafi, Assad, Ben Ali, etc. may not have been everyone’s cup of tea, but they did foster an adequate, if non-stellar pace of development; protected the rights of minorities such as the Coptic Christians; and typically maintained non-hostile, constructive relations with the West, Russia, and even Israel. It is unclear whether any of this will be preserved in the years ahead. They will certainly become more “democratic” – Iran, after all, is far more democratic now that it was under the Shah – but to what extent they will (or can) truly respect freedom of speech or worship is another question entirely. As strikingly shown in the past few days, there are problems even with honoring basic international norms like diplomatic immunity – and these are not without precedent (Chris Stephen’s ancestor by fate is Alexander Griboyedov, the poet diplomat killed and mutilated by a mullah-provoked Tehran mob in 1829).

But you can’t turn the clock back; we will have to learn to live with the new regimes emerging out of the Middle East unrest. One can hope for two things. First, that the West realizes that in terms of civilizational values, Russia and even China (all part of the “Functioning Core”, to borrow from Thomas P.M. Barnett) are far closer to it than most of the Muslim world, and adjusts policy accordingly. Second, that it takes a more balanced and realistic view towards these developments in the Arab world. For instance, it could recognize the Syrian conflict as a civil war, as opposed to a universal uprising against the dark lord Assad (and as such stop making unrealistic demands for him to step down as a precondition for talks).

Realistically, however, I suspect it will be a winter’s day in hell before the West’s infatuation with the Arab Spring is over.

(Republished from Da Russophile by permission of author or representative)
 
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And the protestations of demented democratists be damned.

[tweet https://twitter.com/MiriamElder/status/245839025204785152]

And even apart from all the HBD stuff, here is the most succinct summary of why democracy is never going to flourish in the Arab world for the foreseeable future.

Libya isn’t among the countries above, but it is conservative even by Arab standards. Benghazi contributed the most jihadists per capita to Iraq.

Mubarak, Gaddafi, Assad are (were) paragons of enlightenment and progress, at least to the extent their own populations allowed them to be. They kept the most regressive elements of their population in check while adequately developing the national economy and maintaining friendly relations with other countries. What more could one want?

To paraphrase a wise sentence from the Vekhi, “Thank God for the prisons and bayonets, which protect us from the people’s fury!” In other words, unapologetic reaction is the only sane political course in countries where 80% favor stoning for adultery.

But Western democratist idiots insist otherwise (yes, idiots: While imperialism by Islamist proxies is a tantalizing theory, the old adage that one should not attribute to malevolence what can just as easily be explained by stupidity comes into play). They think that the entire world conforms to their bizarre ideologies and if it doesn’t then a few bombs, grants, and copies of From Dictatorship To Democracy will patch things up.

So how’s that Arab Spring working out now, eh?

Would this outrageous breach of all diplomatic norms and ethos have occurred under Gaddafi? (no of course not…)*

RT was right. I was right. Even the NYT grudging admits it. Even Julia friggin’ Ioffe (kind of).

* Alexander Mercouris on the matter:

The US has now confirmed that it was none other than the US ambassador who was killed in Libya.

On the subject of whether this could have happened under Gaddafi, the short answer is no and we have conclusive evidence that proves this.

In February 2011 when the uprising against Gaddafi began the US and other western powers evacuated their citizens from Tripoli. There was considerable unease in western capitals that Gaddafi would try to hold on to these people as hostages. He did nothing of the sort. On the contrary he made sure that the Libyan authorities assisted with the evacuation, which could not of course have happened without their cooperation. Nor at any point during the fighting were any western journalists or diplomats who visited the part of Libya that remained under Gaddafi’s control any time threatened and harmed. I can only remember one incident when a British television returning from the rebel town of Zuwiyah after it had been recaptured by Gaddafi’s forces claimed to have been detained and beaten by Gaddafi’s security forces. For various reasons I had strong doubts at the time that this was true.

I happen to know various people who visited Libya whilst Gaddafi was in power. One was a Greek woman who bizarrely ran an estate agency there. The opinions of Gaddafi held by these people vary widely but all described a country that was very safe and very relaxed. Now that is “free” it is no longer either.

(Republished from AKarlin.com by permission of author or representative)
 
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The woman on the right is the Egyptian First Lady in 1930. The woman on the left is Mrs. Mursi, First Lady in 2012.

I do not know if there is any better illustration of the collapse in aesthetics, culture, etc. when Islamic radicals seize power thanks to their liberal, internationalist, and socialist enablers. Truly, it is a horror to behold.

PS. Sorry for the short nature of the posts of late. I’m very busy ATM.

(Republished from AKarlin.com by permission of author or representative)
 
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I will be jetting off tomorrow to Washington, but before I do – a translation of Edward Lozansky’s interview with Komsomolskaya Pravda (Америка ненавидит Россию, которую сама себе придумала). Lozansky, who used to be a Soviet dissident, is the organizer of the World Russia Forum and has many strong, pertinent views on why it’s a good idea to develop the US – Russian partnership.

An American politologist and a Russian journalist from Komsomolskaya Pravda tried to find out whether it’s possible to change Washington’s attitude to Moscow.

America Hates The Russia That It Invented Itself

Discussion with Edward Lozansky, Alexei Pankin, and KP’s Aleksandr Grishin.

A new period is beginning in US – Russia relations at the start of Vladimir Putin’s new term as Russian President. Washington doesn’t hide its critical attitude to Moscow, despite mutual assurances that the Reset is here to stay. American politologist Edward Lozansky and Russian journalist Alexei Pankin are with us at Komsomolskaya Pravda to discuss what we can expect from these new developments.

For some – a partner, for others – a competitor

Lozansky: I would identify two schools of political thought and public opinion. One of them is more influential than the other. It considers Russia to be not far removed from the Soviet Union, and while there may no longer be ideological differences, geopolitical conflicts remain unresolved. That is why Russia is seen as an unfriendly country. And how do you deal with an unfriendly country? You use hard power – the Pentagon, and soft power, including the media. And you take other opportunities to portray this country in a bad light. The vast majority of the American media holds these positions.

The second school consists of pragmatists, who consider that Russia has made certain progress in areas such as freedom, human rights, and democracy. They understand that it is not perfect – there are no perfect countries. Nonetheless, Russia is an important geopolitical partner of the US, and has to be treated accordingly. No interference in its internal affairs, but a search for common problems and their solutions.

This is the main difference. The first group assumes that Russia is a competitor and an adversary. The possible future President, Mitt Romney, even claimed that Russia is Enemy Number One, a characterization to which even his fellow party members objected. The second group considers your country a partner. Unfortunately, the second school, to which I attach myself, is less significant. Its voice only occasionally seeps into the mass media, while the first one dominates.

Pankin: As the editor of the Russian version of an international publishing journal, I have a lot of contacts with foreign journalists. And I am surprised that they, who monitor the state of freedoms in Russia and – one might think – would be a highly informed public, live in a world of strange stereotypes. I was recently in Tunis, where UNESCO was marking World Press Freedom Day. I was struck by the attitudes there towards me, as if I was someone who had escaped from Putin’s torture chambers. I was unable to explain to them that I was not some kind of downtrodden person, because they simply refuse to see anything which doesn’t coincide with their stereotypes.

For instance, they tell me: “What bad luck for you, that you guys elected Putin again.” And when you try to grind in the point that Putin got a MAJORITY OF THE VOTES in the country, that he was ELECTED by the people, you can see them becoming flabbergasted as their frames of reference are challenged.

Grishin: Well doesn’t this mean that for the American political majority it doesn’t matter who’s in power in Moscow, democrats or conservatives. Putin comes in, goes out, but Russia remains a geopolitical rival or enemy. It is Russia’s very existence in its current form that the US has a problem with. Is that not so?

Lozansky: It is likely that ultimately a few things will change, if people who are prepared to help the US more come to power. Much depends to what extent your policies support American interests. Take Georgia. They got colossal financial support. The biggest in per capita terms, by the way, of all the other countries that get American aid. For all its debts – and America has huge debts – it is still able to find the funds to support Georgia, because it considered to be a country that performs certain functions that answer to US geopolitical interests.

***

You can also watch a detailed discussion with Lozansky on Prosveshenie TV.AK

[youtube=http://www.youtube.com/watch?v=ZLqsjKQHWxo]

***

Fear and loathing in Washington

Grishin: Anyone in particular in Washington that Russia bothers, and how?

Lozansky: I would identify four groups, whom Russia bothers for one reason or another. First, the neocons. For them, Russia is always wrong. And they believe that it’s necessary to change the situation in Russia, relying on both hard power, and soft. This is a fairly influential group. It was especially dominant under Bush, when Cheney was one of its main leaders. And relations between Russia and America under Bush slipped below the levels of the Cold War.

The second group of the anti-Russian lobby are the ethnic communities of the East European countries, the Baltics. Those, who suffered under the USSR. For them, the new Russia might not quite be the USSR, but it is still a threat to their security. They retain the fear that Russia might at any time occupy them. The third group is the military industrial complex. For them, Russia isn’t only an enemy, but a bogeyman which they can trot out in order to earn orders and attract funding.

There is also a new element – oligarchic capital. Those are billion dollar fortunes, uncompromising hatred towards Russia’s leader. With such capital, it is possible to hire any journalist’s pen, the media. This factor, which previously did not exist, is very significant: This powerful group creates a certain background, applies pressure on the US Congress.

Grishin: Pressure on Congress – isn’t that from the realm of fantasy?

Lozansky: Every week Congress holds hearings in which Russia is subjected to the harshest criticism. Representatives of the Russian opposition take the floor. By the way, about this lack of freedom. They arrive there without ruffle or excitement, the leaders of this very opposition, from Bolotnaya. There they say the most dreadful things. Surprising even to the Americans. This is not accepted among us. You can criticize anyone you want at home, but when you go to another country, it is not acceptable to besmirch your own country… Such demeaning criticism, which Congressmen hear from Russian citizens, doesn’t happen in any other country. And then they come back to Russia.. And nobody arrests them, or throws them into any dungeons.

Pankin: What, in the opinion of Americans, now characterizes Russia? Rollback of democracy, suppression of freedom. They feel that only under Yeltsin was there a true democracy. They have forgotten Gorbachev and don’t want to understand that Yeltsin didn’t add anything to Russian freedoms, relative to the Secretary General of the CPSU Central Committee Gorbachev.

But with that very same freedom of speech, we’ve advanced very far. It has become a market. People got the opportunity, and learned to earn themselves a decent living. But all this is tossed to the side and ignored.

Our non-systemic opposition decided to ascertain the road to democracy with the American ambassador, coming as guests to Michael McFaul almost on his first day of work in Moscow.

For a large part of the US, Russia doesn’t exist

Grishin: There’s this anecdote, some people are on a famous radio station and having a live discussion on how there is no free speech in Russia and are not allowed to express their views. (AK: Refers to Echo of Moscow)

Lozansky: As regards this radio station, it truly amazes me. The majority shareholder is a structure, in which the government has a controlling stake. (AK: Gazprom) In the US we have “Voice of America”, which exists on government money. And they have no right to criticize either US policies, nor any individuals in government. In your country, this radio station almost acts as an opposition organizer. Here Russia is ahead of us on democracy.

Pankin: By the way, there are now some very interesting developments in the “Arab Spring” countries. From the stands come the same speeches which we heard back in the early 90′s, but when you climb down, you hear entirely different conversations in the gullies. That it was iPad-toting people who came out on the streets, but entirely different people came to power. In Cairo today there is panic among female professors: They fear that they’ll have a hijab forced over their heads.

Lozansky: Did you know, that after the Arab revolution, the Egyptian authorities raided the offices of Freedom House and arrested their employees, accusing them of interfering in the internal affairs of the state. And this was all after Mubarak. Also arrested were members of the International Republican Institute, the National Democratic Institute, which all continue to operate entirely freely in Moscow. And they had to be bought back.

Grishin: Let’s leave the Arabs aside, return to Russia and America and press freedoms. Edward, do you, with you views, get printed in the US? You do have, after all, many more freedoms than we do, according to US opinion.

Lozansky: Of course we have freedom – nobody is imprisoning me for my views. But there are problems with publication. The editors say, as you here put it, “Newspapers aren’t made of rubber.” And so it’s good when just one out of 15 articles goes through. But I also have an alternate path. I have a small business – “Russia House” in Washington – and I can sometimes just buy a page in the Washington Times newspaper and write everything I want to there.

But in general, I’m amazed by the significance that you attach to what they say about Russia in America. I can tell you that in America few people are actually interested in Russia. The Russian factor is mostly raised by those groups, which I described above, and they do it to advance their own interests. For the average American, especially during election season, the most important issue is the economy. The budget, gas prices, the unemployment rates are what most concern the American family. These are simple and human things, to which Russia is irrelevant.

(Republished from Da Russophile by permission of author or representative)
 
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It’s been a great year! To recap, in rough chronological order, 2011 saw: The most popular post (with 562 comments and counting; granted, most of them consisting of Indians and Pakistanis flaming each other); Visualizing the Kremlin Clans (joint project with Kevin Rothrock of A Good Treaty); my National Comparisons between life in Russia, Britain, and the US; my interview with (now defunct) La Russophobe; interviews with Craig Willy and Mark Chapman; lots of non-Russia related stuff concerning the Arctic, futurism, Esperanto, and the Chinese language; possibly the most comprehensive analyses of the degree of election fraud in the Duma elections in English; TV appearances on RT and Al Jazeera; and what I hope will remain productive relationships with Al Jazeera and Inosmi. Needless to say, little if any of this would have been possible without my e-buddies and commentators, so a special shout out to all you guys. In particular, I would like to mention Alex Mercouris, who as far as I can ascertain is the guy who contributed the 20,000th comment here. I should send him a special T-shirt or something.

In previous years, my tradition was to review the previous year before launching into new predictions. I find this boring and will now forego the exercise, though in passing I will note that many of the defining traits in 2010 – the secular rise of China and of “The Rest” more generally; political dysfunction in the US; growing fissures in Europe, in contrast to Eurasian (re)integration; the rising prominence of the Arctic – have remained dominant into this year. The major new development that neither I nor practically anyone else foresaw was the so-called “Arab Spring”, as part of a pattern of increasing political stress in many other states: Occupy Wall Street and its local branches in the West; the Meetings for Fair Elections in Russia; Wukan in China and anti-corruption protests in India. I don’t disagree with TIME’s decision to nominate The Protester as its person of the year. However, as I will argue below, the nature of protest and instability is radically different in all these regions. I will finish up by reviewing the accuracy of my 2011 predictions from last year.

tsar-putin 1. There is little doubt that Putin will comfortably win the Presidential elections in the first round. The last December VCIOM poll implies he will get about 60%. So assuming there is no major movement in political tectonics in the last three months – and there’s no evidence for thinking that may be the case, as there are tentative signs that Putin’s popularity has began to recover in the last few weeks from its post-elections nadir. Due to the energized political situation, turnout will probably be higher than than in the 2008 elections – which will benefit Putin because of his greater support among passive voters. I do think efforts will be made to crack down on fraud so as to avoid a PR and legitimacy crisis, so that its extent will fall from perhaps 5%-7% in the 2011 Duma elections to maybe 2%-3% (fraud in places like the ethnic republics are more endemic than in, say, Moscow, and will be difficult to expunge); this will counterbalance the advantage Putin will get from a higher turnout. So that’s my prediction for March: Putin wins in the first round with 60%, followed by perennially second-place Zyuganov at 15%-20%, Zhirinovsky with 10%, and Sergey Mironov, Mikhail Prokhorov and Grigory Yavlinsky with a combined 10% or so. If Prokhorov and Yavlinsky aren’t registered to participate, then Putin’s first round victory will probably be more like 65%.

2. I will also go ahead and say that I do not expect the Meetings For Fair Elections to make headway. Despite the much bigger publicity surrounding the second protest at Prospekt Sakharova, attendance there was only marginally higher than at Bolotnaya (for calculations see here). So the revolutionary momentum was barely maintained in Moscow, but flopped everywhere else in the country – as the Medvedev administration responded with what is, in retrospect, a well balanced set of concessions and subtle ridicule. Navalny, the key person holding together the disparate ideological currents swirling about in these Meetings, is not gaining ground; his potential voters are at most 1% of the Russian electorate. And there is no other person in the “non-systemic opposition” with anywhere near his political appeal. There will be further Meetings, the biggest of which – with perhaps as many as 150,000 people – will be the one immediately after Putin’s first round victory; there will be the usual (implausibly large) claims of 15-20% fraud from the usual suspects in the liberal opposition and Western media. But if the authorities do their homework – i.e. refrain from violence against peaceful protesters, and successfully reduce fraud levels (e.g. with the help of web cameras) – the movement should die away. As I pointed out in my article BRIC’s of Stability, the economic situation in Russia – featuring 4.8% GDP growth in Q3 2011 – is at the moment simply not conductive to an Occupy Wall Street movement, let alone the more violent and desperate revolts wracking parts of the Arab world.

3. Many commentators are beginning to voice the unspeakable: The possible (or inevitable) disintegration of the Eurozone. I disagree. I am almost certain that the Euro will survive as a currency this year and for that matter to 2020 too. But many other things will change. The crisis afflicting Europe is far more cultural-political than it is economic; in aggregate terms, the US, Britain and Japan are ALL fiscally worse off than the Eurozone. The main problem afflicting the latter is that it suffers from a geographic and cultural rift between the North and South that is politically unbridgeable.

The costs of debt service for Greece, Portugal, Italy, and Spain are all quickly becoming unsustainable. They cannot devalue, like they would have done before the Euro; nor is Germany prepared to countenance massive fiscal transfers. The result is the prospect of austerity and recession as far as the eye can see (note that all these countries also have rapidly aging populations that will exert increasing pressure on their finances into the indefinite future). Meanwhile, “core Europe” – above all, Germany – benefits as its superior competitiveness allows it to dominate European markets for manufactured goods and the coffers of its shaky banking system are replenished by Southern payments on their sovereign debt.

The only way to resolve this contradiction is through a full-fledged fiscal union, with big longterm transfers from the North to the South. However, the best the Eurocrats have been able to come up with is a stricter version of Maastricht mandating limited budget deficits and debt reduction that, in practice, translates into unenforceable demands for permanent austerity. This is not a sustainable arrangement. In Greece, the Far Left is leading the socialists in the run-up to the April elections; should they win, it is hard to see the country continuing on its present course. On the other side of the spectrum, the Fidesz Party under Viktor Orbán in Hungary appears to be mimicking United Russia in building a “managed democracy” that will ensure its dominance for at least the next decade; in the wake of its public divorce with the ECB and the IMF, it is hard to imagine how it will be able to maintain deep integration with Europe for much longer. (In general, I think the events in Hungary are very interesting and probably a harbinger of what is to come in many more European countries in the 2010′s; I am planning to make a post on this soon).

Maybe not in 2012, but in the longer term it is becoming likely that the future Europe will be multi-tier (not multi-speed). The common economic space will probably continue growing, eventually merging with the Eurasian Union now coalescing in the east. However, many countries will drop out of the Eurozone and/or deeper integration for the foreseeable future – the UK is obvious (or at least England, should Scotland separate in the next few years); so too will Italy (again, if it remains united), Greece, the Iberian peninsula, and Hungary. The “core”, that is German industrial muscle married to Benelux and France (with its far healthier demography), may in the long-term start acquiring a truly federal character with a Euro and a single fiscal policy. But specifically for 2012, I expect Greece to drop out of the Eurozone (either voluntarily, or kicked out if it starts printing Euros independently, as the former Soviet republics did with rubles as Moscow’s central control dissipated). The other PIGS may straggle through the year, but they too will follow Greece eventually.

I expect a deep recession at the European level, possibly touching on depression (more than 10% GDP decline) in some countries.

4. How will Russia’s economy fare? A lot will depend on European and global events, but arguably it is better placed than it was in 2008. That said, this time I am far more cautious about my own predictions; back then, I swallowed the rhetoric about it being an “island of stability” and got burned for it (in terms of pride, not money, thankfully). So feel free to adjust this to the downside.

  • The major cause of the steep Russian recession of 2008-2009 wasn’t so much the oil price collapse but the sharp withdrawal of cheap Western credit from the Russian market. Russian banks and industrial groups had gotten used to taking out short-term loans to rollover their debts and were paralyzed by their sudden withdrawal. These practices have declined since. Now, short-term debts held by those institutions have halved relative to their peak levels in 2008; and Russia is now a net capital exporter.
  • I assume this makes Russia far less dependent on global financial flows. Though some analysts use the loaded term “capital flight” to describe Russia’s capital export, I don’t think it’s fair because the vast bulk of this “flight” actually consists of Russian daughters of Western banking groups recapitalizing their mothers in Western Europe, and Russians banks and industrial groups buying up assets and infrastructure in East-Central Europe.
  • The 2008 crisis was a global financial crisis; at least *for now*, it looks like a European sovereign debt crisis (though I don’t deny that it may well translate into a global financial crisis further down the line). There are few safe harbors. Russia may not be one of them but it’s difficult to say what is nowadays. US Treasuries, despite the huge fiscal problems there? Gold?
  • Political risks? The Presidential elections are in March, so if a second crisis does come to Russia, it will be too late to really affect the political situation.
  • Despite the “imminent” euro-apocalypse, I notice that the oil price has barely budged. This is almost certainly because of severe upwards pressure on the oil price from depletion (i.e. “peak oil”) and long-term commodity investors. I think these factors will prevent oil prices from ever plumbing the depths they briefly reached in early 2009. So despite the increases in social and military spending, I don’t see Russia’s budget going massively into the red.
  • What is a problem (as the last crisis showed) is that the collapse in imports following a ruble depreciation can, despite its directly positive effect on GDP, be overwhelmed by knock-on effects on the retail sector. On the other hand, it’s still worth noting that the dollar-ruble ratio is now 32, a far cry from what it reached at the peak of the Russia bubble in 2008 when it was at 23. Will the drop now be anywhere near as steep? Probably not, as there’s less room for it fall.
  • A great deal depends on what happens on China. I happen to think that its debt problems are overstated and that it still has the fiscal firepower to power through a second global crisis, which should also help keep Russia and the other commodity BRIC’s like Brazil afloat. But if this impression is wrong, then the consequences will be more serious.

So I think that, despite my bad call last time, Russia’s position really is quite a lot more stable this time round. If the Eurozone starts fraying at the margins and falls into deep recession, as I expect, then Russia will probably go down with them, but this time any collapse is unlikely to be as deep or prolonged as in 2008-2009.

new-eurasia 5. Largely unnoticed, as of the beginning of this year, Russia, Belarus, and Kazakhstan became a common economic space with free movement of capital, goods, and labor. Putin has also made Eurasian (re)integration one of the cornerstones of his Presidential campaign. I expect 2012 will be the year in which Ukraine joins the Eurasian common economic space. EU membership is beginning to lose its shine; despite that, Yanukovych was still rebuffed this December on the Association Agreement due to his government’s prosecution of Yulia Tymoshenko. Ukraine can only afford to pay Russia’s steep prices for gas for one year at most without IMF help, and I doubt it will be forthcoming. Russia itself is willing to sit back and play hardball. It is in this atmosphere that Ukraine will hold its parliamentary elections in October. If the Party of Regions does well, by fair means or foul, it is not impossible to imagine a scenario in which accusations of vote rigging and protests force Yanukovych to turn to Eurasia (as did Lukashenko after the 2010 elections).

6. Russia’s demography. I expect births to remain steady or fall slightly (regardless of the secular trend towards an increasing TFR, the aging of the big 1980′s female cohort is finally starting to make itself felt). Deaths will continue to fall quite rapidly, as excise taxes on vodka – the main contributor to Russia’s high mortality rates – are slated to rise sharply after the Presidential elections.

7. Obama will probably lose to the Republican candidate, who will probably be Mitt Romney. (Much as I would prefer Ron Paul over Obama, and Obama over Romney). I have an entire post and real money devoted to this, read here.

The US may well slip back towards recession if Europe tips over in a big way. I stand by my assertion that its fiscal condition is in no way sustainable, but given that the bond vigilantes are preoccupied with Europe it should be able to ride out 2012.

8. There is a 50% (!) chance of a US military confrontation with Iran. If it’s going to be any year, 2012 will be it. And I don’t say this because of the recent headlines about Iranian war games, the downing of the US drone, or the bizarre bomb plot against the Saudi ambassador in the US, but because of structural factors that I have been harping on about for several years (read the “Geopolitical Shocks” section of my Decade Forecast for more details); factors that will make 2012 a “window of opportunity” that will only be fleetingly open.

  • Despite the rhetoric, the US does not want to get involved in a showdown with Iran due to the huge disruption to oil shipping routes that will result from even an unsuccessful attempt to block of the Strait of Hormuz. BUT…
  • While a nuclear Iran is distasteful to the US, it is still preferable to oil prices spiking up into the high triple digits. But for Israel it is a more existential issue. Netanyahu, in particular, is a hardliner on this issue.
  • The US has withdrawn its troops from Iraq. In 2010, there were rumors that the US had made it clear to Israel that if it flew planes over Iraq to bomb Iran they would be fired upon. This threat (if it existed) is no longer actual.
  • The US finished the development of a next-generation bunker-busting MOP last year and started taking delivery in November 2011. But the Iranians are simultaneously in a race to harden and deepen their nuclear facilities, but this program will not culminate until next year or so. If there is a time to strike in order to maximize the chances of crippling Iran’s nuclear program, it is now. It is in 2012.
  • Additionally, if Europe goes really haywire, oil prices may start dropping as demand is destroyed. In this case, there will be an extra cushion for containing fallout from any Iranian attempt to block off the Strait of Hormuz.
  • Critically, the US does not have to want this fight. Israel can easily force its hand by striking first. The US will be forced into following up.

The chances of an Azeri-Armenian war rise to 15% from last year’s 10%. If there is any good time for Azerbaijan to strike, it will be in the chaotic aftermath following a US strike on Iran (though the same constraints will apply as before: Aliyev’s fears of Russian retaliation).

world-crude-oil-prodcution-and-fitted-growth-oil-drum

[Source: The Oil Drum].

9. Though I usually predict oil price trends (with great and sustained accuracy, I might add), I will not bother doing so this year. With the global situation as unstable as it is it would be a fool’s errand. Things to consider: (1) Whither Europe? (demand destruction); (2) What effect on China and the US?; (3) the genesis of sustained oil production decline (oil megaprojects are projected to sharply fall off from this year into the indefinite future); (4) The Iranian wildcard: If played, all bets are off. But I will more or less confidently predict that global oil production in 2012 will be a definite decrease on this year.

If investing, I would go into US Treasuries (short-term) and gold to hedge against the catastrophic developments; yuan exposure (longterm secular rise) and and US CDS (potential for astounding returns once SHTF). Property is looking good in Minsk, Bulgaria, and Murmansk. Any exposure to Arctic shipping or oil & gas is great; as the sea ice melts at truly prodigious rates, the returns will be amazing. I do think the Euro will survive and eventually strengthen as the weaker countries go out, but not to the extent that I would put money on it. Otherwise, I highly agree with Eric Kraus’ investment advice.

10. China will not see a hard landing. It has its debt problems, but its momentum is unparalleled. Economists have predicted about ten of its past zero collapses.

11. Solar irradiation was still near its cyclical minimum this year, but it can only rise in the next few years; together with the ever-increasing CO2 load, it will likely make for a very warm 2012. So, more broken records in 2012. Record low sea ice extent and volume. And perhaps 100 vessels will sail the Northern Sea Route this year.

12. Tunisia is the only country of the “Arab Spring” that I expect to form a more or less moderate and secular government. According to polls, 75% of Egyptians support death for apostasy and adultery; this is not an environment in which Western liberal ideas can realistically flourish. Ergo for Libya. I can’t say I have any clue as to how Syria will turn out. Things seem strange there: Russia and Israel are ostensibly unlikely, but actually logical, allies of Assad, while the US, France, the UK, and the Gulf monarchies are trying their best to topple him. These wars are waged in the shadows.

I've got some ways to go before I reach Navalny's demagogic stature.

I’ve got some ways to go before I reach Navalny’s demagogic stature.

13. As mentioned in the intro, 2011 has been a year of protest. As I argued in BRIC’s of Stability, in countries like China, Russia, or Brazil they will remain relatively small and ineffectual. Despite greater scales and tensions, likewise in Europe (though Greece may be an exception); these are old societies, and besides they are relatively rich. They won’t have street revolutions. I do not think Occupy Wall Street has good prospects in the US. By acting outside the mainstream (as part of a “non-systemic opposition”, to borrow from Russian political parlance) it remains irrelevant – the weed smoking and poor sartorial choices of its members works against its attaining respectability – and municipalities across the US are moving to break up their camps with only a few squeaks of protest. (This despite the arrests of 36 journalists, a number that had it been associated with Russia would have cries of Stalinism splashed across Western op-ed pages). I say this as someone who is broadly sympathetic with OWS aims and has attended associated events in Berkeley.

The nature of protest in the Arab world is fundamentally different, harkening back to earlier and more dramatic times: Bread riots, not hipsters with iPhones; against cynical and corrupt dictators, not cynical and corrupt pseudo-democrats; featuring fundamental debates about reconciling democracy, liberalism and religion, as opposed to weird slogans like “Occupy first. Demands come later.” Meh.

14. The world will, of course, end on December 21, 2012.

What about the 2011 Predictions?

1) My economic predictions were basically correct: “Today I’d repeat this, but add that the risks have heightened… The obvious loci of the next big crisis are the so-called “PIGS” (Portugal, Italy, Greece, Spain), and Ireland, Belgium and Hungary.”

2) Neither the Iranian war (chance: 40%) or an Azeri-Armenian war (chance: 10%) took place. If they don’t happen in 2012, their chances of happening will begin to rapidly decline.

3) Luzhkov still hasn’t been been hit with corruption charges, but merely called forth as a witness. Wrong.

Prediction of 3.5%-5.5% growth for Russia was exactly correct (estimates now converging to 4.0%-4.5%).

With headlines this December cropping up such as “End is nigh for Russia’s ‘reset’ with US“, my old intuition that US – Russia imperial rivalry couldn’t be set aside with a mere red plastic button may have been prescient: “In foreign policy, expect relations with the US to deteriorate.”

4) Pretty much correct about the US and the UK, though I didn’t predict anything drastic or unconventional for them.

5) “Oil prices should stay at around $80-120 in 2010 and production will remain roughly stable as increased demand (from China mostly) collides with geological depletion.” Totally correct, as usual.

6) China will grow about 9.4% this year, well in line with: “China will continue growing at 8-10% per year. Their housing bubble is a non-issue; with 50% of their population still rural, it isn’t even a proper bubble, since eventually all those new, deserted apartment blocs will be occupied anyway.”

7) 2011 was the warmest La Nina year on record, so in a sense thermometers did break records this year.

“Speaking of the Arctic, as its longterm ice volume continues to plummet and sea ice extent retreats, we can expect more circumpolar shipping. I wouldn’t be surprised to see up to 10 non-stop voyages along the Northern Sea Route from Europe to China, following just one by MV Nordic Barents in 2010.” If anything, I low-balled it. 34 ships made the passage this year! Sea ice cover was the second lowest on record, and sea ice volume was the lowest. So in the broad sense, absolutely correct.

“Likewise, expect the Arctic to become a major locus of investment.” This year, plans were announced to double the capacity of the Port of Murmansk by 2015.

8) Wrong on the Wikileaks prediction. The insurance file was released by The Guardian’s carelessness (whose journalists, David Leigh and Luke Harding, then proceeded to mendaciously lie about it), not by Assange. And the extradition proceedings are taking far longer than expected, though my suspicions that his case is politically motivated is reinforced by US prosecutors’ apparent pressure on Bradley Manning to implicate Assange in the theft of the State Department cables.

9) On Peter’s enthusiastic reminder, I did get my Russia Presidential predictions for 2012 wrong. Or 75% wrong, to be precise, and 20% right (those were the odds that I gave for Putin’s return back in May). I did however cover it separately on a different post, here. That said, I do not think the logic I used was fundamentally flawed; many other Kremlinologists ended up in the same boat (and most didn’t hedge like I did).

(Republished from Sublime Oblivion by permission of author or representative)
 
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Anatoly Karlin
About Anatoly Karlin

I am a blogger, thinker, and businessman in the SF Bay Area. I’m originally from Russia, spent many years in Britain, and studied at U.C. Berkeley.

One of my tenets is that ideologies tend to suck. As such, I hesitate about attaching labels to myself. That said, if it’s really necessary, I suppose “liberal-conservative neoreactionary” would be close enough.

Though I consider myself part of the Orthodox Church, my philosophy and spiritual views are more influenced by digital physics, Gnosticism, and Russian cosmism than anything specifically Judeo-Christian.