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Will Russia acquire Keflavik without the need for an amphibious invasion, as in the Clancy-verse? Potentially, they could neutralize the SOSUS (a long unrealized Soviet ambition) and reinforce their position in the Arctic-Atlantic region for just 5bn $. This is compared to the 700bn $+ the US has spent in Iraq to little discernible effect.

What the Russians want in return for bailing out Iceland

Near-bankrupt Iceland’s €4bn ($5.43bn) loan from Russia is still not a done deal. Iceland’s central bank Governor David Oddsson says that talks are still “ongoing” but that any aid from Russia would be “very much welcomed.”

You can understand why Iceland is desperate for a massive euro-injection in the current bank crisis: the Sedlabanki, the central bank in Reykjavik, urgently needs euros because it has only €4.5bn in its current reserves and the country’s banking system needs to refinance about €10bn before year end — not easy when the Icelandic krona has fallen 40 per cent against the Euro currency so far this year.

But what price will the Russians demand for their bailout? A highly-placed source in Reykjavik tells Coffee House that Iceland might look kindly on requests from Russia’s military to use America’s former military base in Iceland. America closed its Naval Air Station at Keflavik Airport two years ago, handing back the Nato facility to the Icelandic government.

Now the word in Reykjavik is that the Russians could have use of it in return for the loan. Not that Keflavik would become a Russian air base — Iceland is a member of Nato, so that is out of the question — but it would suit the Kremlin to be able to use it for, say, refuelling and maintenance. Having use of such a facility only a few hours flying time from North America would be a major Russian propaganda coup and cause consternation in Washington.

Iceland is in two minds. It wants to remain a loyal Nato member. But it is also in financially desperate straits and there is some resentment about the abrupt manner in which the Americans left, leaving the massive facility to deteriorate. So Iceland might look more kindly on any Russian request than the rest of Nato thinks.

UPDATE: Sources in Reykjavik, who’ve now read our story, tell Coffee House that Iceland turned to Russia for a loan after the EU, the Scandinavian countries and the US Federal Reserve turned it down.

EDIT: Looks like Lucas is also wondering what Russia is up to in the seas above Europe.

(Republished from Sublime Oblivion by permission of author or representative)
• Tags: Economy, Finance, Iceland, Military 
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For all the noise being made this month about Georgia, about NATO, about Tibet, etc, possibly the most portentous is that it seems Russia hit its oil peak (strictly speaking, its second – the first happened in 1987), well in line with peakist predictions. Production increases via application of new technology, as seen in the late 90′s and early 2000′s have been mostly exhausted; there are no megaprojects to bridge the gap beyond 2010. (There has been some noise about new oil field discoveries off Brazil’s coast which could contain as many as 33bn barrels, which has our dear Economist rejoicing: “the discoveries do suggest that the gloomiest pundits are wrong to predict that the world will soon run out of oil”. Just two problems. The issue is not about the world running our of oil – it’s about economically damaging declines in production which will, and are, hitting crucial sectors like transport and agriculture. Secondly, and more to the point, even the high estimate of 33bn barrels is enough for less than half a year of today’s demand of 85bn barrels.) Massive expansion in Russia has been the main reason while oil is peaking now, rather than five years ago. This, coupled with stagnant Saudi Arabia ‘refusing’ to increase oil production so as to leave more for future generations and oil prices rising to 120$, looks set to vindicate the Oil Drum predictions below.

The phenomenom of peak oil is starting to become a new conventional wisdom. Krugman penned an excellent article on this, an interesting example of mainstream economists and “doomers” getting wedded:

Nine years ago The Economist ran a big story on oil, which was then selling for $10 a barrel. The magazine warned that this might not last. Instead, it suggested, oil might well fall to $5 a barrel.

In any case, The Economist asserted, the world faced “the prospect of cheap, plentiful oil for the foreseeable future.”

Last week, oil hit $117.

It’s not just oil that has defied the complacency of a few years back. Food prices have also soared, as have the prices of basic metals. And the global surge in commodity prices is reviving a question we haven’t heard much since the 1970s: Will limited supplies of natural resources pose an obstacle to future world economic growth?

How you answer this question depends largely on what you believe is driving the rise in resource prices. Broadly speaking, there are three competing views.

The first is that it’s mainly speculation — that investors, looking for high returns at a time of low interest rates, have piled into commodity futures, driving up prices. On this view, someday soon the bubble will burst and high resource prices will go the way of

The second view is that soaring resource prices do, in fact, have a basis in fundamentals — especially rapidly growing demand from newly meat-eating, car-driving Chinese — but that given time we’ll drill more wells, plant more acres, and increased supply will push prices right back down again.

The third view is that the era of cheap resources is over for good — that we’re running out of oil, running out of land to expand food production and generally running out of planet to exploit. I find myself somewhere between the second and third views.

There are some very smart people — not least, George Soros — who believe that we’re in a commodities bubble (although Mr. Soros says that the bubble is still in its “growth phase”). My problem with this view, however, is this: Where are the inventories?

Normally, speculation drives up commodity prices by promoting hoarding. Yet there’s no sign of resource hoarding in the data: inventories of food and metals are at or near historic lows, while oil inventories are only normal.

The best argument for the second view, that the resource crunch is real but temporary, is the strong resemblance between what we’re seeing now and the resource crisis of the 1970s.

What Americans mostly remember about the 1970s are soaring oil prices and lines at gas stations. But there was also a severe global food crisis, which caused a lot of pain at the supermarket checkout line — I remember 1974 as the year of Hamburger Helper — and, much more important, helped cause devastating famines in poorer countries.

In retrospect, the commodity boom of 1972-75 was probably the result of rapid world economic growth that outpaced supplies, combined with the effects of bad weather and Middle Eastern conflict. Eventually, the bad luck came to an end, new land was placed under cultivation, new sources of oil were found in the Gulf of Mexico and the North Sea, and resources got cheap again.

But this time may be different: concerns about what happens when an ever-growing world economy pushes up against the limits of a finite planet ring truer now than they did in the 1970s.

For one thing, I don’t expect growth in China to slow sharply anytime soon. That’s a big contrast with what happened in the 1970s, when growth in Japan and Europe, the emerging economies of the time, downshifted — and thereby took a lot of pressure off the world’s resources.

Meanwhile, resources are getting harder to find. Big oil discoveries, in particular, have become few and far between, and in the last few years oil production from new sources has been barely enough to offset declining production from established sources.

And the bad weather hitting agricultural production this time is starting to look more fundamental and permanent than El Niño and La Niña, which disrupted crops 35 years ago. Australia, in particular, is now in the 10th year of a drought that looks more and more like a long-term manifestation of climate change.

Suppose that we really are running up against global limits. What does
it mean?

Even if it turns out that we’re really at or near peak world oil production, that doesn’t mean that one day we’ll say, “Oh my God! We just ran out of oil!” and watch civilization collapse into “Mad Max” anarchy.

But rich countries will face steady pressure on their economies from rising resource prices, making it harder to raise their standard of living. And some poor countries will find themselves living dangerously close to the edge — or over it.

Don’t look now, but the good times may have just stopped rolling.

No wonder survivalism is becoming respectable again.

(Not that I think the world is going to become a Mad Max abode; there’s still plenty of discretionary energy consumption that can be cut, and in the longer term future both wind and solar energy have very good prospects. Nonetheless, according to this study, “Exergy services can be equated to exergy inputs multiplied by an overall conversion efficiency. which, of course, corresponds to cumulative technological improvements over time. Based on this hypothesis economic growth from 1900 to 1975 or so is explained almost perfectly, exceptfor wartime perturbations.” Hence I suspect there will be a period of serious economic disruption in the period between 2010-20, when oil and natural gas spiral down and both coal and uranium will be hard pressed to fill the gap (economically viable reserves may well be close to peak, as described here (coal) and here (uranium), and 2030-50, when renewable energy starts to come on-line in a really big way.)

Not surprisingly, two key trends – rising energy prices and climate change – are colluding to produce a scramble for the Arctic and its lucrative hydrocarbons deposits. Russia has foresightedly been marking territory by staking claims in the UN, planting its flag at the North Pole sea floor and carrying out strategic bomber flights over the Arctic. Canada, Denmark and Norway have also been getting on in the action, while the US has been lethargic. Climate models indicate an ice-free summer by 2015, meaning northern Russia will become a major new transportation hub between Europe and East Asia (thus making the old dream of a North-East passage a reality).

While wildlife wilts, agriculture booms – “Greenland is experiencing a farming boom, as once-barren soil now yields broccoli, hay, and potatoes”, and Russia keeps getting warmer. (What with rising world grain prices and the big lands left fallow following the Soviet collapse, it is easy for Russia to cement its status as a leading grain producer (from 81mn tonnes in 2007 to 110-120mn tonnes within a decade) by expanding the agricultural sector, a trend explained in The Medvedev Economy and confirmed by state investment into agriculture.) Not only will Russia remain a major hydrocarbons exporter, but will add cereals to its portfolio (which will, besides, increase in price), thus avoiding the fatal Soviet situation where profits from oil exports were eaten up by having to buy Western grains.

But returning to the FP Arctic Meltdown article and hydrocarbons,

The largest deposits are found in the Arctic off the coast of Russia. The Russian state-controlled oil company Gazprom has approximately 113 trillion cubic feet of gas already under development in the fields it owns in the Barents Sea. The Russian Ministry of Natural Resources calculates that the territory claimed by Moscow could contain as much as 586 billion barrels of oil — although these deposits are unproven. By comparison, all of Saudi Arabia’s current proven oil reserves — which admittedly exclude unexplored and speculative resources — amount to only 260 billion barrels.

Currently, Russia has passed its second oil peak. Could the above make for a third peak? Discovery precedes recovery by around 30 years. 586bn barrels is about twice bigger than oil reserves in Russia proper before extraction ever began. Without ice, the extractive environment in the Arctic will be comparable to that of the North Sea. As such, it is plausible that Russia may even, around 2020-30, experience a third oil peak, at a time when global supply is severely constrained and prices are at 300-400 $ per barrel. What with its current (relatively low) consumption, this means that Russia may be spared from the energy crunch that will hit other energy-dependent economies in this time period.

Perhaps most significant will be the geopolitical impacts (which, btw, we have covered in Towards a New Russian Century?). Russia is going to have to fundamentally rethink its traditional conceptions of itself as a land power, strategically weak and surrounded by predatory peoples who periodically exhaust the carrying capacity of their lands and launch invasions. It is going to become surrounded by ice-free water on two sides, along whose coasts will accumulate a rapidly expanding population (especially if environmental collapse causes mass immigration from South Asia, the Middle East and the Far East). This, along with a much greater stake in coastal transportation and off-shore hydrocarbons deposits, will require a much more powerful navy. No wonder Russia has tentative plans to create the world’s second largest surface navy within the next two decades, to which purpose a 410x100x14m drydock is currently under construction at Severodvinsk.

The IMF has released its prognosis for the world economy. A slowdown is inevitable, driven by a US correction due to a housing crisis and its contagion of the world financial system.

Global growth will decelerate in 2008, led by a sharp slowdown in the United States, amid a housing correction and a financial crisis that has quickly spread from the U.S. subprime sector to core parts of the financial system, the IMF says in its latest World Economic Outlook.

Citing the unfolding financial market turmoil as the biggest downside risk to the global economy, the April 2008 report said the IMF expects world growth to slow to 3.7 percent in 2008—0.5 percentage point lower than what was forecast in the January 2008 World Economic Outlook Update.

Further, world growth would achieve little pickup in 2009, and there is a 25 percent chance that the global economy will record 3 percent or less growth in 2008 and 2009, equivalent to a global recession.

The main emerging market economies will diverge rather than decouple, with growth in China, India, Russia and CEE slowing but not catastrophically so, remaining close to their long-term trend rates.

However, the government is even more optimistic, projecting 7.6% growth for 2008. Considering that Q1 GDP growth was 8.0%, driven as in the year before by consumption and investment, they have grounds for their optimism. On the other hand, CPI (inflation) is rising worrying fast, reaching an annualized rate of 13.3% this March, although it should be noted this is a worldwide phenomenom experienced by China (8.3%), India (8.6%), Czech Republic (7.1%) and Latvia (16.8%).

The Ukraine (26%+) has been hit not only by high food and energy prices, but populist government largesse. (To take their minds off these matters, perhaps that’s why Hitler action dolls have gone on sale there, more proof if any is needed of the proclivities to fascism of certain sections of Ukrainian society. Gazprom will probably end 2008 as the company with the world’s second highest revenue (around 41.5bn $), similar to the budget of an economic basket case, say, Ukraine (43bn $). (Can’t help making these cheap shots, just ignore them if they irritate you).

The IMF has also released new estimates for GDP growth through to 2013. By the end of that period, Russia’s PPP GDP should overtake Latvia’s and be level-pegging with Poland’s. The rise in nominal GDP is projected to be more dramatic (graph lifted off this thread):

The Economist has an interesting graph breaking down GDP increase for major regions in the world by capital, labor and total factor productivity (GDP itself can be expressed as a Cobb-Douglas function of the above 3 components) from a WB report, Unleashing Prosperity.

It is a splendid vindication of the ideas I expressed in Education as the Elixir of Growth. There, I made the argument that the education/’Human Capital Index’ (HCI) of each country is matched to a ‘potential GDP level’; where there is a large gap between potential and actual GDP, economic growth is highest. This above all explains the impressive economic growth we’re seeing in well-educated but relatively poor countries like Russia (once it abandoned its socialist shackles), and explains well the unimpressive growth of countries like Brazil, an badly-educated country with a correspondingly unimpressive economy.

However, the linkages between HCI and productivity are even higher than between HCI and GDP (as GDP also depends on labor and capital inputs, which themselves depend on other demographic and social factors). From the chart, we can see that middle-income CIS countries (of whom Russia is, by far, the largest and most significant) had the largest increases in TFP, thus reflecting the huge gaps in its potential and actual productivity. While China’s absolute growth was much larger, almost half of it was down due to increases in labor and capital. However, considering China’s recent labor shortages and its unsustainably high investment rates, it is very unlikely that double-digit growth will continue in the near-to-medium future, particularly further taking into account that a) exports will be hit by US recession and b) from 2009 onwards the oil peak will start biting ever harder (as covered above). Latin American countries were the worst performers, seeing no improvement in TFP – in other words, they are about as productive as their levels of human capital allow them to be (withouta resource windfall or two).In a snapshot of other economic and related news, the housing bust has spread to the UK. Haiti’s government collapses after food riots – an ominous foreboding of things to come elsewhere? Between 2000 and 2007, median family incomes stagnated in the US, in stark contrast to the period between every other recession (the fact that the 2000′s saw a broad consumer boom becomes all the more worrying). The falling dollar has made US assets attractive, and Russia has accumulated around 10% of US steelmaking capacity – although it has not limited itself to the US, but also went on a shopping spree around Germany. Russia may allow the ruble to appreciate to rein in inflation. Moscow’s budget is now as big as New York’s. Confidence in the economy is increasing. According to the FT, Moscow could become Europe’s second financial center (after London) in ten to fifteen years. The Russian ‘brain drain’ has to a large extent ceased as funding and salaries increase in academia.

On 21st April, Georgia accused Russia of an “unprovoked act of aggression” after a Russian jet allegedly shot down an unmanned Georgian reconnaissance plane over Abkhazia. This came in the wake of Russia stepping up its political representation in the region, while Georgia implicitly compared Western policy towards Russia with Nazi appeasement. Meanwhile Putin urged the West not to ‘demonise’ Russia. (The IHT has a piece that criticizes US aloofness in its relations with Russia in The Missing Debate.)

Watch the cool video below, it’s now every day that you get to see a MiG-29 fire an R-60 missile at CBDR, within visual range and head on.
Presumably Russia wishes to make a statement that it is ready and willing to defend Russian citizens (i.e. the vast majority of Abkhazians, and South Ossetians). It is also Russia’s traditional foreign policy level over Georgia – it’s separatist enclaves – being exploited. When Georgia pursued a relatively neutralist line towards Russia (under Shevardnadze), Russia kept at arms length from the separatists, but established a military presence in the region. Now that Georgia has received a promise of eventual membership from NATO, however, the levers have been pulled. If Georgia received MAP at the next summit, expect formal recognition of Abkhazia and South Ossetia.
A German man is on trial in Germany for allegedly selling military technology to Russian intelligence. The Russian Army apparently has some serious problems with obesity. Greece agrees to host a section of Gazprom’s planned South Stream pipeline. Berlusconi held his first foreign meeting with Putin on 17th April, and Robert Amsterdam penned an acerbic yet poignant portrait of the less wholesome similarities between the two countries.
The most recent data on Russian and American strategic nuclear armaments, as declared for the START Treaty, is available here. In contrast to the late Soviet period, it is now the US that has a preponderance of platforms. The breakdowns in deployed systems, Russian and US respectively, go as follows: ICBM’s (481 to 550); SLBM’s (288 to 432); heavy bombers (79 to 243); total (848 to 1225). The breakdown by numbers of deployed warheads is: ICBM’s (2027 to 1600), SLBM’s (1488 to 3216); heavy bombers (632 to 1098); total (4147 to 5914). The breakdown by throw-weight for ICBM’s and SLBM’s is 2370MT to 1830MT. In other words, while Russia has a slightly larger overall megatonnage, it has fewer strategic platforms and its missiles are less accurate. This is not yet a critical situation, what with the current international relations paradigm; nonetheless, further investments are necessary, particularly into the submarine and bomber part of the triad as well as ABM, in anticipation of the end of MAD due to the development of effective and comprehensive missile shields – which are closer to fruition, at least in the US, than most people realize. Perhaps I’ll write more on this in the future.
An interesting article from the Times on WMD developments in Syria and North Korea.
Foreign Affairs has The Age of Nonpolarity as its kindpin article for May/June.
Summary: The United States’ unipolar moment is over. International relations in the twenty-first century will be defined by nonpolarity. Power will be diffuse rather than concentrated, and the influence of nation-states will decline as that of nonstate actors increases. But this is not all bad news for the United States; Washington can still manage the transition and make the world a safer place.
Indeed, one of the cardinal features of the contemporary international system is that nation-states have lost their monopoly on power and in some domains their preeminence as well. States are being challenged from above, by regional and global organizations; from below, by militias; and from the side, by a variety of nongovernmental organizations (NGOs) and corporations. Power is now found in many hands and in many places…Today’s world is increasingly one of distributed, rather than concentrated, power.
Getting everyone to agree on everything will be increasingly difficult; instead, the United States should consider signing accords with fewer parties and narrower goals. Trade is something of a model here, in that bilateral and regional accords are filling the vacuum created by a failure to conclude a global trade round. The same approach could work for climate change, where agreement on aspects of the problem (say, deforestation) or arrangements involving only some countries (the major carbon emitters, for example) may prove feasible, whereas an accord that involves every country and tries to resolve every issue may not. Multilateralism à la carte is likely to be the order of the day.
I agree that the US is in relative decline and about the rise of multilateral pragmatism in diplomacy. Nonetheless, I question the thesis that state power is eroding. The state remains as strong as ever, and far stronger than their equivalents a hundred years ago. Several European nations take in more than 50% of their GDP in taxes. This rate in the distant past was only reached during times of total war, e.g. WW2. States are most certainly not “challenged” by either global organizations (which are simply assemblies of states where they can seek concensus), militias (which have always existed) or NGO’s (which operate under statal jurisdictions).
Putin has become leader of United Russia, in addition to being the Prime Minister. Sean’s Russia Blog already has an excellent analysis in Gensek Putin (which also features a nice little demographics discussion in which my posts on the matter were mentioned).
That of course raises the issue of whether a nothing party like United Russia will actually give Putin something. As Konstantin Sonin noted in the Moscow Times, leading United Russia wouldn’t necessarily give Putin any guarantee over controlling the government. “The party has nothing to offer Putin in his struggle for power,” says Sonin…
The chairman position gives Putin virtually unlimited power within UR. Putin will have the power to appoint party leaders and suspend their powers, and override any party decision expect for those adopted at congresses. His removal is only possible with a 2/3 congressional vote.
If Putin can be taken at his word, he has plans for United Russia. In his address to the Congress he stated that the party of Power needed to “reform itself become more open for discussion and for taking into account the opinion of the electorate, it must be de-bureaucratized completely, cleared of casual people pursuing exclusively their own material gains.” Look out, there’s a new sheriff in town.
Plans have already been set in motion for the recognition of internal factions. Three “clubs” have been created within United Russia to represent its right, center, and left. There is the Center of Social Conservative Policy, headed by Andrei Isaev, the liberal-conservative “November 4th” club led by Vladimir Pligin, and the State-patriotic club led by Irina Yarovaya. Whether these clubs will actually mean anything in terms of inter-party dialog remains to be seen.
Putin’s chief task, if he chooses to take it, will be to rid the party of what he calls “corrupt people.” A task easier said than done. Historically, attempts to clean up party corruption have horribly failed. Often the anti-bureaucratic campaigns, purges, and even arrests within the Communist Party created more corruption. And like the Communist Party of the past, United Russia seems allergic to any real cracking down on its corrupt members. Last week, the United Russia dominated Duma rejected a bill which would require deputies to declare the incomes and property of their relatives up to three years after leaving office. Hiding wealth and property in the names of family members is a common, albeit crude way, of hiding corruption.
Basically, if Putin actually decides to lead United Russia, he’s going to have his hands full. Just because he is the almighty Putin doesn’t mean he will be successful.
Michael Averko has an excellent article in American Chronicle, Ukraine and “Russophobia” Uncensored, which covers more on the Annals of Western Hypocrisy (which goes on and on, World and Time without End). I’ve quoted the first three paragraphs:
Since the Soviet breakup, Ukraine has been geo-politically spun in two ways. When Ukraine’s less Russia friendly side appears to have enhanced its stature, there is an increased yearning to drive Ukraine away from Russia as much as possible. When Ukraine’s more Russia friendly grouping seems strengthened, there is greater talk of mutual respect for the two Ukrainian ways of viewing Russia. Another Ukrainian perspective falls somewhere in between the two.
On NATO expansion, “the will of the people”, takes a back seat for the Russia unfriendly crowd. The Orange Ukrainian government’s desire to have Ukraine in NATO has consistently run contrary to the majority of its citizenry. The explanations for this unpopularity include a not so well informed Ukrainian public, caught in a Cold War time warp.
In comparison, there is little second guessing of polls showing that most Ukrainian citizens have a positive attitude on their country joining the European Union (EU). For some, Ukrainians are ignorant when stating apprehension about NATO and knowledgeable upon agreeing with the anti-Russian consensus; albeit for not always the same reason.
Sean’s Russia Blog has comprehensive coverage of the Putin / Kabaeva rumors. Also a story about the hobbies of Russia’s nanotechnologists, e.g. building marchhead-sized chess sets.
Demographic stats from Rosstat have come out for Jan/Feb 2008. While the birth rate increased by 11.3%, so did the death rate by 2.6%, reaching 15.8 / 1000 from 15.4 / 1000 in 2007. Seems that January was not an anomaly – the rapid improvements seen since 2005 have petered out, at least temporarily. But this is not totally unexpected, however. As I noted in my demographics posts, there is a very close correlation between mortality and the alcohol/food price ratio. Overall inflation in Jan-Feb was 3.5%, food price inflation was 3.6%; but the price of alcohol increased by 1.9%. The alcohol/food price ratio has fallen further, perhaps to its lowest ever historical level. In other demographic news, in 2006 there were 1.6mn abortions in Russia, hugely down from the 1990′s but still 2 to 3 times higher per capita than in the West.
Finally a few public opinion polls. In February 2008, PEW released figures that showed 6 3% of Russians preferred a strong leader over democracy, down from 70% and 21% respectively in 2002, but a lot higher than in 1991, when a majority (51%) favored a democracy over a strong leader (39%). 74% would rather have a strong economy, while only 15% would like a good democracy. Ukraine, Bulgaria and even Poland show similar figures. In another rather interesting result, half of Russians agreed with the statement that ‘most people in society are trustworthy’, which is higher than the average for Eastern Europe and about average for Western Europe.
59% of Russians (almost certainly correctly) say there is no life on Mars, while 26% disagree. 49% of them believe that there’ll be a human on Mars and 59% think there’ll be a lunar base within the next 50 years. (Russia, like the US and China, has tentative plans for both enterprises). A new ‘Space Competitiveness Index‘ (whatever that means) has been compiled, in which Russia takes third place behind the US and Europe. China is fourth.
(Republished from Sublime Oblivion by permission of author or representative)
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America’s desire to have Ukraine and Georgia accede to MAP foundered on European opposition from Germany, France and (somewhat surprisingly) the UK, despite Saakashvili’s implicit comparison of this to Nazi appeasement. Nonetheless, this is good for NATO as an alliance (as we’ve covered previously, the European desire for a rapprochement is linked to Russian logistical help on Afghanistan), as well as in line with public opinion about the importance of good relations with Russia amongst the Ukrainian and Georgian publics. This is not to mention Russia itself, where 64% think Georgian accession to NATO is a security threat and where Ukrainian accession could result in restrictions in territorial revisionism and new visa controls.

However, this was most certainly not a Russian victory, as RFE noted:

There would be no MAP at this time, that was true. But there would be what sounded like a pretty firm commitment of eventual membership. Not a firm commitment for MAPs — but actual membership. All the key players who famously opposed the MAP this time around were on board, including Germany and France. Moreover, NATO foreign ministers have been instructed to assess Kyiv and Tbilisi’s progress in December 2008 and have authority to issue formal MAPs as early as then — provided the progress was sufficient. It would all be in an official protocol by the evening, we were told. The mood in the Georgian and Ukrainian delegations pivoted on a dime, from bitter disappointment to unexpected elation. Ukrainian President Viktor Yushchenko said Ukraine had “broken the sound barrier.” Georgia’s Mikheil Saakashvili called the announcement a “geopolitical coup.” One top Georgian official, speaking on background, told my colleagues from RFE/RL’s Georgian Service that the decision was even better than getting a MAP. They would be admitted to NATO after all. The only question was when.

The US also got an agreement with the Czech Rep. on the radar station for their missile defence system. Meanwhile, east European countries led by Poland and Estonia have pressed for even more anti-Russian measures.

Yet at its core, the dispute within NATO is about the renewed threat from Russia. Members of “old Europe” may hope to avoid a clash with the Kremlin, but many countries of “new” Europe say the struggle has already begun. For them security lies in expanding the frontiers of what was once the transatlantic alliance to the Black Sea and ultimately to the Caspian.

Even its strongest advocates recognise that such expansion raises questions about the purpose of the alliance: should it be mainly a military organisation, or a political club of democracies? Radek Sikorski, the Polish foreign minister, questioned whether the promise of mutual defence from armed attack enshrined in Article 5 of NATO’s charter was becoming “diluted”.

Mr Sikorski wants NATO to move military infrastructure east. He complains that NATO hesitates even to make intelligence assessments of perils from Russia. Others want more attention to non-conventional threats, given last year’s cyber-attack on Estonia, blamed on Russia. Not that they ever bothered producing evidence. “We do a disservice to Russia by not taking it seriously,” said Toomas Ilves, Estonia’s president.

Putin opted for a pragmatic response, repeating Russian concerns about NATO expansion and missile defence (“an attempt to neutralise, whether immediately or in the future, its nuclear arsenal”), and recommended that a) the radar in Czechia be cemented into the ground, b) switching on the system only when an Iranian or other threat materializes, c) integrating early-warning systems and d) maintaining a constant Russian military presence at the sites. It would be interesting to see what the West, always accusing Russia of non-coperation, will make of these, but the augurs aren’t promising – the eastern Europeans have already objected to the last proposal.

According to rumors, Putin unloosed the rhetoric behind doors, hinting that Russia work to break up Ukraine and extend recognition to Abkhazia and South Ossetia, citing the Kosovo precedent.

President Vladimir Putin hinted at last week’s NATO summit in Romania that Russia would work to break up Ukraine, should the former Soviet republic join the military alliance, Kommersant reported Monday. Putin “lost his temper” at the NATO-Russia Council in Bucharest during Friday’s discussions of Ukraine’s bid to join NATO, Kommersant cited an unidentified foreign delegate to the summit as saying. “Do you understand, George, that Ukraine is not even a state!” Putin told U.S. President George W. Bush at the closed meeting, the diplomat told Kommersant. After saying most of Ukraine’s territory was “given away” by Russia, Putin said that if Ukraine joined NATO it would cease to exist as a state, the diplomat said. Putin threatened to encourage the secession of the Black Sea peninsula of Crimea and eastern Ukraine, where anti-NATO and pro-Moscow sentiment is strong, the diplomat said, Kommersant reported.

Not surprising, Timoshenko and Ukraine’s ambassador to Russia were not impressed. Nonetheless, the fact remains that pro-Russian sentiment is strong in Eastern Ukraine, Crimea was given away to Ukraine by Khrushev in 1954 and NATO expansion closer to Russia’s border cannot be allowed.

Russian Soviet-era dissident novelist Solzhenitsyn took a break from writing his glybs (a joke for those who’ve read Moscow 2042) to launch a diatribite against Bush for honoring the so-called Holodomor and ignoring the fight against fascism:

The interview came after Solzhenitsyn unleashed a memorable broadside last week against US President George Bush who, during a two-day visit to Ukraine, laid a wreath at a monument to victims of the great famine of the 1930s, in which millions of Ukrainians died. Ukraine’s pro-Western government has dubbed the catastrophic 1932-33 famine holodomor (literally, ‘death by hunger’). It claims that it was a genocide.

In a vituperative piece, however, Solzhenitsyn dismissed the claim as ‘rakish juggling’ and said that millions of non-Ukrainians also perished in the famine, which was engineered by the Soviet Union’s leadership. ‘This provocative outcry about “genocide”… has been elevated to the top government level in contemporary Ukraine. Does this mean that they have even outdone the Bolshevik propaganda-mongers with their rakish juggling?’ an incensed Solzhenistyn wrote. Bush had been duped by a ‘loony fable’, he added.

And from Russia Today,

This provocative outcry of genocide was voiced only decades later. At first, it thrived secretly in the stale chauvinist minds opposing the “bloody Russians”. Now it has got hold of political minds in modern Ukraine. It seems they’ve surpassed the wild suggestions of the Bolshevik propaganda machine. “To the parliaments of the world” – a nice teaser for the Western ears. They have never cared about our history. All they need is a fable, no matter how loony it appears.”

Just proves how the West, its rhetoric to the contrary, behaves just like any power – it uses you for its own interests, before casually discarding you when you become a political embarassment – a fan of President Vladimir Putin with an increasingly nationalist anti-western tone (perish the thought!). As they say, the Moor has done his duty, he can now go.

Russian govt. expects proposals to improve 2020 development plan, in particular “property rights protection, the development of corporate management, an environment of competitiveness, financial markets, and measures to enhance efficiency of state-owned companies”. As we’ve already reported, “Russia’s president-elect Dmitry Medvedev, who held his first State Council Presidium meeting in the West Siberian city of Tobolsk on Thursday, proposed a ban on unauthorized checks of small businesses”.

Russia should shift highly qualified people from industry to the innovation sectors. Russian banks flooded by foreign billions, forcing efficiency increases on domestic banks and improving access to credit. Russian firms ditch London for Asia for their listings due to booming economies and less stringent disclosure requirements. British supermarket chain Tesco has announced plans to expand in Russia. Increasing numbers of people in Britain are putting their pensions in Russia and other emerging markets – risks are perceived to be higher, but so are returns.

On 6th March the Nikitsky Fund released its always excellent Truth and Beauty (… and Russian Finance), Against Respectability. Here’s a few succulent quotes and comments from their article
Against Respectability – A Rant:

  • Viewing the media, we find that respectable commentary follows a well-defined pattern. Anyone who fails to respect an entire herd of sacred cows is quickly consigned to the lunatic fringe. Unlike the Soviet System, modern capitalism silences its critics not with gags and gulags, but by drowning them out with a cacophony of well-targeted info-tainment, asystem far more pernicious than anything Soviet censors could have aspired to (for, unlike the BBC, hardly any educated person believed what he read in Pravda).
  • Western-style corruption involves ownership of media by financial interests, government influence over editorial boards, state co-option of senior editorial figures, and occult financial flows. The end result is more pernicious – a well-orchestrated campaign of convergent disinformation, which most readers are too lazy or complacent to penetrate.
  • In the BBC/Economist world, there is a select group of countries (Iran, Cuba, Russia…) about which one can say virtually anything – from unbalanced criticism of real ills, to outright slander. A second group (e.g. Singapore, Brazil, Georgia) is susceptible to moderate criticism which must, however be kept credible; finally, even the most savage criminality by a third group (UK, US, EU) if it criticized at all, is discussed in the mildest and most balanced possible terms.
  • Why? 1) outright corruption, 2) an attempt to ingratiate themselves with the information-bearers (political leaders, etc) and achieving a sense of belonging to the inner circle that
    these hacks so desperately crave
    and 3) making up for past mistakes, e.g. the BBC on challenging Blair on Iraq.
  • BBC – made a hero out of Khodorkovsky and the Yukos/Menatep gang, claiming they have a massive following in Russia – even going so far as to interview Misha’s parents (but not the parents of those the organization murdered, obviously – that would spoil the mood).
  • Financial TimesThe FT is caught in the same terrible bind as much of the Western Press – is Russia a weak, spent force to be pitied, or instead, a deadly, looming colossus, to be feared? Unable to decide, they risk ridicule by alternating back and forth between the two… (and yes, it was terribly rude of those Russians to succeed when their betters thought they should fail). Lambasts its agitprop article Why Putin’s rule threaten’s Russia and the west, which fails by proving Godwin’s Law in its first sentence. Then it fails some more by contrasting Russia’s supposedly low growth with other former Soviet countries – an argument I demolished here (funny how all Russophobe articles all trot out the same points. So much for Western “media diversity”. Still, it makes my job easier. Shoot a few holes in one, and they’re pretty much all dead). Next on the list comes Kazakhstan – a thriving, Western style democracy (well, Dick Cheney likes it…maybe ‘cause it smells of oil). Belarus follows (another fine example of democracy in action), then come Tajikistan (don’t you wish you were there?), and the Balts.
  • Wolf – predictably – employs the oldest trick in the journalistic book: why bother trying to substantiate a weak argument when you can simply find someone to say it for you –quoting him gives it an aura of “fact” – reporting that is, not mere editorializing! Wolf thus approvingly quotes that “superb scholar” Ander Aslund (he who fatally discredited the Carnegie Endowment by soliciting a large bribe from Khodorkovsky, then shilling for Yukos so egregiously that in the end, even Carnegie had to force him out), the mad, Russophobic Lucas (he who in 1998 predicted, that Russian GDP would collapse, the rouble would go to 10,000/$, while Russia broke up into 4 warring regions), and tired old McFaul, who under Yeltsin was so important, and is now routinely and cruelly ignored. Wolf even stoops to quote the Neocon Freedom House, the home of such luminaries as Wolfowitz, without mentioning that it is a Washington-funded propaganda center.
  • While denying Russia’s success becomes exponentially harded year on year, these tools now resort to the myth that a) Russia was doing just fine in 1999 and b) all positive developments since then were despite, not because of, Putin (but heck, even Illarionov disagrees with that last bit!, at least when talking with other Russians). Not to mention that their likes were writing articles like Russia is Finished back in those good old days!
  • As anyone who lived here at the time will tell you, this is patent nonsense. At best, Russia had reached some slight degree of stabilization. Save for currency overvaluation, all of the problems which gave rise to the August 1998 collapse were still present – predatory oligarchs, regional Balkanization, budgetary chaos, and a dysfunctional tax system. If one simply reads the stories in Western press from that period, not one of them suggests that Putin would be any more a success than Yeltsin – he was to be nothing more than Berezovsky’s puppet – and Russia was receding back into the third world…so unfortunate that journalists are not obliged to defend their track records!…Eight years later and Russia is stable, wealthy and growing three times as fast as anyone else in the G8; average incomes have increased fivefold, poverty has fallen by 60%, the middle class has more than doubled. Since 2006, birth rates finally started to rise as people finally have enough trust in the future to risk having children.
  • Outside the smug and self-centered world of the sunset Western powers, Russia is respected and envied, if not always loved. Much of this was due to one man – “providential” hardly seems too strong a word. And whatever misery T&B still has to endure at the hands of the local bureaucracy, as Russophiles, we are deeply grateful to Vladimir Vladimirovich.

In geopolitics, Russia challenges US in the Islamic world. The Muslim world is no longer a good card for Washington to use against Moscow, in fact it has flipped. Russia is far more popular amongst Muslims than the Great Satan and with just a very few exceptions, no Muslim country recognized Kosovo. This positions it in good stead to build bridges between Islam and the West, or to lever the former against the latter, as it chooses. This is reflected in Russia constructing Saudi Arabian railways, building nuclear plants in Egypt and developing Iraqi oil fields, as well as selling arms to everyone.

As covered in previous News, Russian weapons sales to China fall due to rapid indigenous Chinese progress and Russia’s strategic concerns. Iran: Russia, China Unlikely To Welcome Tehran Into SCO - as long as SCO-US relations don’t deteriorate too much, anyway. Meanwhile, Russian intelligence sees U.S. military buildup on Iran border. The prelude to the Iran Plans, as uncovered by Seymour Hersh; or more posturing? Realistically speaking, however, Iran’s ADGE (Air Defense Ground Environment) is sparse and outdated; the USAF will face few problems conducting surgical strikes on nuclear facilities.

A very cold war indeed – the Guardian has awoken to the new Great Game about to be played out at the top of the world as Canada, Russia, Denmark and the US increase their military presence and claim territory suspected to be rich in hydrocarbons. Meanwhile, Russia has also extended its claims on the Sea of Okhotsk.

In addition to credit and sub prime woes, we are also facing the spectre of the oil peak. I must remind myself to write a more detailed exposition on the topic once the Demographics project is finished and time is freed up; otherwise, read the Futurist’s optimistic take on it and my response.

Meanwhile, we are also facing the end of cheap food, as wheat, corn and rice prices explode, triggering food riots and social unrest throughout the world. This is linked with China’s growing apetite for meat, oil price rises and adverse weather (driven by climate change – my predictions may already be coming true). But preventable and unnecessary factors include America’s biofuels splurge, which a) is very energy inefficient, b) diverts food from the global poor to SUV owners and c) accelerates climate change in a vicious circle.

Disappointing jobs figures offer yet more proof that America is in recession. The Nikitsky Fund report mentioned above has an entertaining (at least for non-Americans) description of the hole it’s in:

Welcome to The Wall Street Mortgage Meltdown

Like the mythical frog lured into complacency as he is slowly boiled to death, Investors are becoming accustomed to a daily flow of news which would have seemed utterly outlandish just a year ago; indeed, T&B was routinely mocked for predicting some of the current carnage – though by no means either the speed of the unwind, nor the extent of the damage.

1. The term “collapse” is being used with increasing frequency when referring to the
world’s erstwhile reserve currency, which – after meeting the initial resistance we predicted at the $1.45 level, the dollar now heading for our second support level – $1.57- 1.60. A classical currency crisis involving the dollar no longer seems outlandish. Investors would do well to treat the constantly renewed reassurances that it has “finally bottomed” with great caution.

2. The Chairman of the US Fed has just warned of the likelihood of collapse of some of the “smaller US banks” (we agree, but fear that for one or more of the bigger ones, it is just a matter of time)

3. When the credit crisis began last August, terrifying stories of overall losses to the banking sector ranging up to $50bn began to circulate. A few months later, Goldmans shocked the market by speaking of eventual losses ranging up to $200bn. Yesterday, UBS (and they should know!) warned that losses to the financial system would total $600bn. We await the next estimate with some trepidation.

4. Large segments of the US credit market have simply shut down – structured finance, high yield, CLOs, and much of the corporate and municipal loan markets. The solvency of the banking sector is no longer taken for granted. Frighteningly, it appears that only a small fraction of the expected damage has already been recognized – a collapse of the conduits and the CDS markets could yet bankrupt much of the financial system.

5. The US housing market is heading into a depression. The famous “nationwide
housing prices have never fallen on a year-on-year basis” has been firmly debunked. Goldmans estimates that prices are crashing at an annualized rate of 18%. As more supply continues to come onto the market due to completions and repossessions, a crisis is developing. According to RMS, if housing prices fall another 10% (ed: and they certainly will) – 20 million US homes will have negative equity value. We are utterly amazed by the inability in Washington to cobble together some sort of a viable rescue plan, as the crisis continues to worsen.

6. Having been aggressively pro-cyclical during the good times, the Bush administration’s legacy will be a Federal Deficit ranging up to $800 bn (source: Bill Gross, Pimco). As further structural factors kick in (lower returns on assets, retiring baby-boomers, underfunded state pensions, increased medical costs) huge cuts in
expenditures and increased taxation are inevitable.

7. The rating agencies have been fatally compromised. Corrupted by the easy money to be made in sweetheart deals with Wall Street Banks, they actively helped to stuff
toxic waste into every corner of the global financial system. By continuing to rate the soon-to-be bankrupt bond insurers triple-A (they must currently pay 1400 bp over Libor for their borrowings, i.e. deeply distressed levels); the agencies have forfeited any last remaining pretense to independence or credibility.

8. The childlike faith of international financiers in the safety and stability of the US dollar and US financial assets in general, has now imperiled the very survival of some of their institutions. This faith will not be restored. The dollar-centric system is dead. The ability of the US to run a trillion dollar military while maintaining domestic consumption and investment on other people’s dime is now history.

9. The fate of the global economy and of the G7 economies in particular, is almost
entirely dependent upon the ability of a select group of emerging countries to maintain their recent rapid economic growth. The tail now wags the dog.

10. As long warned by eco-crazies, numerous countries are seriously threatened not just with ecological havoc but with imminent famine due to explosive growth in food prices, driven by unsustainable population growth as well as the criminally irresponsible craze for Northern hemisphere biofuels.

11. Oil prices have broken through $100, wheat prices have more than doubled in one year, and gold is heading for $1000 (alas, we missed this last trade). Global inflation is being driven not primarily by excessive demand, nor by monetary madness, but by the uncontrollable increase in cost of commodity inputs – which are not amenable to control by monetary means. Supply is becoming the major issue. Competition for resources from emergent “Chindia” has fundamentally altered the relative positions of producers and consumers…to the benefit of the former.

12. Quite extraordinarily, amidst all the devastation – Russia is increasingly assuming the role of a safe haven! No subprime, virtually no structured finance, reasonably profitable banks, and a rouble seeing gradual appreciation. Add in the huge twin surpluses, political stability and sustained economic growth (8.1%), along with good domestic liquidity (with a little help from the Central Bank.) Only inflation
(largely commodities-driven) is a substantial issue. Doomsday scenarists and survivalists should take note of Russia’s self-sufficiency in energy, food and metals.

Russophobe developments include Tim Bell going to work for Lukashenko to polish his image. If his relationship with Berezovsky is anything to go by, the West will soon by lining up to lick dear old Batka’s boots. The West reveals its innate hypocrisy – Russia slams acquittal of Kosovo war crime rebel as biased. Slanderous serpent Aslund sells an asinine story, Putin’s last stand, venom practically poring out from its text. Loco Lucas scares us with a piece on Russia’s alleged SIGINT activities. Robert Service (We provoke Russian paranoia at our perilBy agreeing to place an American defence system in Eastern Europe, Nato has given the Kremlin the perfect excuse to further cement its autocratic rule) has the right idea, but for the wrong reasons.

Thankfully Russophiles balance out the picture somewhat. The excellent Russia scholar Nicolai Petro has a piece on the Russian elections, which makes the point that all the allegations levelled against Russia in electoral performance can equally be made against most European countries and the US, and that their cardinal sin was in making the “the wrong choice by voting in favor of a continuation of the present political course”, as in Palestine or Venezuela. His other article, Should Moscow Root for Obama?, comes to the conclusion that all the candidates are dinosaurs.

For now, the dinosaurs are firmly in control of US foreign policy toward Russia, on both the Republican and the Democratic side. Senior advisors from all three campaigns took part in the March 2006 Council on Foreign Relations report, “Russia’s Wrong Direction,” co-chaired by Jack Kemp and John Edwards. Criticized by Russian commentators as hopelessly out of touch with today’s Russia, it remains,
nevertheless, the touchstone of US thinking about Russia. So long as that is true, the only thing to expect from US policy toward Russia is a further slide into irrelevancy. The initiative for change, it seems, will have to come from Russia.

Note that both these pieces confirm the views expressed on this blog here, here (under The Myth of Sham Elections) and here (although I did say Clinton may be the least worst).

Russophile blogger colleen shows up Lucas, if indeed it isn’t obvious by now, for the incompetent lunatic he is.

Edward Lucas used to think and say that German Chancellor Angela Merkel hated
Russia, loathed it from birth, and will lead a strong European Union against Russia. I’m not sure exactly in which way, but Lucas could have easily contemplated economic embargoes and public slanders and stuff like that. He is a very fantastic and imaginative writer, no less. lol

But he does hate Russia a lot, no doubt, so maybe when it came to writing about ways a German-led E.U. would stick it to Russia, he would have thought of something clever.Anyway, something must have happened in the hot summer days of 2007, while I was probably at a beach in the still-affordable Hampton Bays, which led Lucas to change his mind. Did Angela Merkel telephone Lucas threatening a lawsuit for libel? Was The Economist scared that such a phone call was forthcoming and decided to pull the plug? Did the FSB pressure Lucas, or was it the KGB??? Was David Miliband in on it, perhaps trying to resuscitate British-Russian relations?Or, did Lucas himself decide to end the outlandish, misguided, and ill-conceived allegation himself?

Maybe, just maybe, Lucas realized that he’s just making things up after it became more and more apparent that the Russian-German strategic partnership forged between Putin and Schoeder is simply being reinforced during Merkel’s reign. This signifies that strong Russian-German relations are not reliant on any one political party in Germany and reflect more of a state-policy.

An Economist writer admits the obvious fact Russian is the world’s best language. A new feminine vodka brand was launched, thus joining the sovereign vodka Putinka and masculine Grazhdanskaja Oborona (Civil Defence), its supposed Nazi imagery criticized by the human rights folks and praised by the far right “White Pride” movement.

Topping off the ludicrous, Abramovich plans a bridge from Chukotka to Alaska. Then again, the source for this is “speculation within the Russian press”…so maybe not.

Following my introduction to Levada, I’m presenting a few more polls from their archives.

NATO poll – the number of Russians thinking that Ukraine joining NATO represents a threat to Russian national security increased from 60% in 2000 to 74% in 2008. For Georgia, it was 77% in 2008.

Can Western criticism of Russia on democracy and human rights be considered interference in Russia’s internal affairs? – 51% say yes, while only 27% say no. Take that, Russophobes of the world! You’re not needed, least of all by Russians!

Internet poll – the number of individuals saying they possess a mobile phone increased from 2% in 2001 to 19% in 2004 and 71% in 2007. The number of people whose families possess a computer increased from 4% in 2001 to 10% in 2004, 17% in 2006 and 28% in 2008, while the number of people saying they use one everyday increased from 9% in 2001 to a quarter in 2008. Weekly Internet use has expanded to 18% in 2008 from 3% in 2001. (Internet penetration in Russia as of 2007 is estimated from 20% to 25%.)

Electronics poll – From 2003 to 2007, the percentage of Russians saying they have access to a computer increased from 26% to 43%, Internet access increased from 15% to 29%.

How did things change in Russia in the past ten years? The percentage of people saying respect for the state has strengthened rose from 10% in 2000 to 44% in 2007, respect for marriage from 5% to 17%, respect for the law from 4% to 29%, personal responsibility from 11% to 33%, the work ethic from 12% to 26%, belief in God from 67% to 64%, concern for social outcasts from 16% to 31% and tolerance for others from 25% to 26%.

Two comments. Firstly, while more people said most of these situations got worse rather than better, it needs to be borne in mind that people generally mistake these questions for current perceptions rather than conduct a real analysis of trends. For instance, there are many cases when crime goes down but people say it increased. Secondly, goes to show that, if it isn’t already obvious to everyone who is not a religious nutjob, that belief in God does not necessarily correlate with more morality.

How would you rate Putin? – 70% are positive on living standards, 85% on foreign policy, 64% on security and 62% on democracy and human rights. As of 2008, his main achievements are judged to have been economic and social, while his greatest failures were in the war against corruption and crime.

Which country would you prefer to live in? – From 2000 to 2008, the percentage of Russians who’d like to live in a Great Power or in a small, cosy country increased from 63% to 75%; those who’d like to live in a country which actively defends its culture and traditions as opposed to a completely open country increased from 62% to 77%; the percentage of Russians who’d prefer to live in a country heavily influenced by religion as opposed to secular state decreased from 33% to 27%.

What do Russians believe in? – 45% believe in the Afterlife, 40% believe in the Devil, 45% in Heaven, 40% in Hell and 49% in religious miracles. Worryingly high figures.

According to this poll, Communists are by far the most pessimistic people in Russia, while those who are pro-Putin and pro-United Russia have the most confidence in tomorrow. The Liberal Democrats (ultra-nationalists) are in between.

(Republished from Sublime Oblivion by permission of author or representative)
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The US State Department has released its latest human rights report – as usual, a veritable list of America’s bugbears (North Korea, Myanmar, Iran, Syria, Zimbabwe, Cuba, Belarus, Uzbekistan, Eritrea and Sudan are the ‘top ten’). It is true that the majority of the above are pretty odious regimes, with the partial exception of Belarus and Cuba.

Nonetheless, the State Department shoots itself in the foot – the hypocrisy is revealed immediately by thinking Belarus; Kazakhstan; Saudi Arabia. Obviously, having lots of oil and being friendly to the superpower has highly democratizing effects…

The fact that China was dropped from The List didn’t stop them from issuing a Human Rights Record of the US in 2007, which cites an increase in violent crime, police brutality and unaccountability, world beating prison population, racism, sexism, increasing socio-economic stratification and huge HR abuses abroad and calls on Americans to finish with double standards and ‘reflect on their own issues’. Russia wasn’t much impressed either.

This is all part of a positive development in which maligned countries are starting to go on the offensive over accusations of human rights abuses from the US. For instance, a Russian think-tank dedicated monitoring Western democracy and human rights abuses and softening Russia’s image has been registered in Paris and New York, as part of a general push to burnish Russia’s image in the Western press, TV and the Internet.

The lesson? The US should think very carefully before making condescending pronouncements of who is good and who is evil before the international community, and should do much more to ensure basic freedoms are upkept in its own backyard – otherwise, by leaving itself so exposed to charges of bias and hypocrisy, it hurts human rights not only domestically but globally.

Russia throws a wrench in NATO’s works – the important European members of NATO (Germany and France) have refused to contemplate admitting Ukraine and Georgia to the Membership Action Plan during the Bucharest summit in April 2008. This is because, now that NATO is faced with the prospect of losing in Afghanistan, it would like to see co-operation from Russia and its Central Asian allies on establishing an air corridor to Afghanistan, so as to bypass unreliable and troublesome Pakistan. Nonetheless, the United States is the least enthusiastic about this, since closer co-operation with Russia would entail recognizing their failure to contain Russia from its former Soviet empire in Asia, jeopardizing plans to project NATO as an alternative to the UN and increasing Russian diplomatic influence amongst the West Europeans (which would affect their automatic acceptance of America’s traditional trans-Atlantic leadership role).

The IHT notices that Russia and China rethink arms deals, thus echoing Forbes’ January piece, which I covered here. Famous neocon Perle has published an absurd piece claiming the arms race was a myth.

The Economist has succeeded in finally discovering a blindingly obvious fact. Just as average personal affluence is measured by GDP per capita rather than absolute GDP, so changes in individual prosperity is better measured by GDP growth per capita rather than GDP growth. As you’ve noticed, this is the method I used in my analytical economic piece Education as the Elixir of Growth. (On that topic, there’s more support for that theory from the Economist – the admission that a link between the rule of law and growth has been much tougher for economists to establish, in contrast to my link between the gap between human capital and expected GDP per capita, and economic growth).

Looking at things this way, common perceptions of economic performance change substantially. From 2003-2007, the United States no longer performs dramatically better than sclerotic ‘old Europe’ or Japan; meanwhile, Russia (7.4%) bests fellow BRIC member Brazil (a meager 2.3%) and even shining India (6.8%), although China maintains an impressive lead (10.2%). By this measure, the new millenium has seen the fastest growth ever observed in the world economy. But it would also imply that the US was in recession since late last year.

They also have an article about maths, including America’s worrying long-standing inability to produce enough of them (but which was masked by imports from the former Soviet Union and East Asia). Nonetheless, the fact that these countries have retained their Communist-era strengths (as reflected in things like Maths Olympiad and programming competition results), coupled with their rising economic strength and planned expenditures on attracting new cadres into academic work, means that the US will increasingly have to concentrate more on its indigenous human capital.

Illarianov shows why few serious economists listen to him with his article in Kommersant called Bananotechnologies. While I can’t be bothered ripping apart the article like I did with The Trouble with Russia’s Economy, I’d like to make two remarks. Firstly, it doesn’t reflect well on Illarianov when he makes fun of strategic investments (from oil revenues) into technological development in Russia, a tried and proven development strategy across the East Asian tigers. Secondly, his persistent Freedom House- and AEI-inspired complaints about Russia’s supposed lack of freedom and civil rights lose much of their effect when you consider that this intensely anti-Kremlin article was published in Russia’s leading business newspaper, owned by Gazprom-linked oligarch Alisher Usmanov.

Standard & Poor’s revised its Russia ratings to positive, Moscow is now Europe’s hottest real estate market and Russian car production went up by 10.4% in 2007, nearly reaching 1.7mn units – more than Italy (1.3mn) and gaining on the UK (1.8mn). Hope this news will dispel the negativity from Illarianov’s gratuitous pessimism.

Finally, the BBC covers Siberian prison’s beauty pageant.

(Republished from Sublime Oblivion by permission of author or representative)
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The most important development has been Medvedev’s election to the Presidency with 70.2% of the vote. While it has not been squeaky clean (and as such, no different from any other Russian election under either Yeltsin or Putin), the more hystryonic claims of voter intimidation are to be treated with a pinch of salt – for a start, it’s a secret ballot, and as such authorities can have no control over how people vote in the booth. Even Nigel Evans, a British parliamentarian and member of PACE’s monitoring team, admitted “There does not seem to be any voter intimidation“.

Media coverage has been skewed towards Medvedev (who was a key government official – deputy prime minister – as well as election candidate), but this is not surprising in a country where opinion polling typically put his popularity at around 80%, in contrast to Zyuganov’s c.10%, Zhirinovsky’s c.10% and the ‘Liberals” c.1%. (This is also the reason Medvedev refused to participate in TV debates). The elections followed the polls, which heavily suggests that they were free. In fact, the major upset was Zyuganov, who managed to scrape 17.8% (well above what most polls predicted) to the detriment of Medvedev.

Now Russians do get coverage of the latters’ platforms and as such it is not surprising they are rejected – the Communists talk the talk but can’t walk the walk; the Liberal Democrats are too crudely clownish to have genuine popular appeal; and the ultra-low ratings of ‘liberals’ is largely of their own making. After all, the media reflects, as well as manufactures, consent.

Edit: now the Western media resorted to whining about police detaining opposition protestors in Moscow. All I will say on the matter is that the Moscow protest was unsanctioned and as such is illegal, and any self-respecting country would enforce that. In contrast, the St.-Petersburg liberal faction did bother getting official permission to hold a rally, which went off peacefully. Of course, if you do get permission, then you won’t get to see your face in the Western press whining about the injustice of it all – a particularly pertinent point, because it often seems that ‘liberals’ like Kasyanov and Kasparov care more about their Western constituencies than Russians.

An oligarch dies in his Surrey mansion. Although at first he supported the new reforming President with financial and media resources, he later turned against him, accusing him of sliding into authoritarianism. In turn, he was charged with plotting a coup in his native country and has since lived in self-imposed exile in the UK and Israel. He claimed he was the target of an assassination attempt orchestrated by elements of his homeland’s government, and this was even supported by a tape (albeit of uncertain authenticity). Which country?

Not Russia. (But I bet that’s what you were thinking, right?). Georgia. The death I am referring to is that of Badri Patarkatsishvili, who collapsed of a heart attack. The Times covered it extensively and quite fairly. The nuts and and bolts are covered in Badri Patarkatsishvili: exiled oligarch who lived in the shadow of death, Georgian billionaire found dead in Surrey feared plots and Tycoon tells of plot to kill him in London, as well as some rather interesting connections. For instance:

Mr Patarkatsishvili lived in Russia between 1993 and 2001. In the 1990s he was wanted by Russian authorities on charges of theft from the country’s largest car factory, AvtoVAZ, which he ran with Mr Berezovsky.

He was also accused of plotting to arrange the escape from custody in 2001 of Nikolai Glushkov, deputy director of Aeroflot, Russia’s national airline, who had been accused of fraud.

The man charged with breaking out Mr Glushkov was Andrei Lugovoy, who was arrested and jailed after the attempt failed. Mr Lugovoy is wanted by the British Crown Prosecution Service for the murder of Litvinenko, the dissident former Russian spy poisoned in London with radioactive polonium-210 in 2006.

Mr Lugovoy was responsible for protecting Mr Patarkatsishvili and Mr Berezovsky at the time as head of security at the Russian TV channel ORT, which the two men controlled.

Mr Patarkatsishvili remained good friends with Mr Lugovoy, a former KGB officer who is now a member of the Russian parliament. The pair were seen socialising together in Tbilisi, the Georgian capital, shortly before Mr Litvinenko was poisoned.

Mr Litvinenko also had links with the Georgian businessman. Sources in Tbilisi have told The Times that he stayed at Mr Patarkatshvili’s residence in Georgia en route to Turkey when he fled Russia to seek asylum in London in 2000.

Russian prosecutors claim that Mr Litvinenko also visited Mr Patarkatsishvili as well as Mr Berezovsky in London shortly before he was poisoned. They accuse Mr Berezovsky of involvement in the murder of the former Federal Security Service (FSB) agent as part of a plot to damage President Putin’s international image.

Georgia’s former Defence Minister, Irakli Okruashvili, accused Mr Saakashvili of encouraging him to kill Mr Patarkatsishvili in 2005, although he later retracted the claim.

Really makes one wonder who’s for who in these circles. If indeed he was murdered (there are, after all, chemical agents capable of causing heart attacks without detection), who did it and what was the motive? Georgian security officials concerned at his plotting of a new color revolution (they claim he was caught offering 100mn $ to a police chief to support opposition demonstrators; Badri claimed it was a honeytrap)? (For – want Saakashvili to remain in power, cast suspicion on Russia; against – risky, does Georgia even have the means?)? Elements of Russian intelligence services to discredit Georgia (For – despite recent thaws, Saakashvili is still set on NATO accession; against – Badri is damaging enough to Georgia alive, wouldn’t they have made a Georgian connection much more explicit than a random heart attack, risky)? Berezovsky (For – discredit Russia, last person to see Badri alive, a history of people inconvenient to him dying; against – risky, Badri is enemy of Saakashvili who is enemy of Putin, as is Berezovsky)? Some mafia or another (Badri’s own past is far from squeaky clean – many Georgians consider him a mobster)?

But ultimately I suspect this was a genuine heart attack, his feud with Saakashvili not rising above black PR. He had a family history of cardio-vascular disease, didn’t exercise, chain smoked and probably subsisted on a traditional (read: lethal) Russian/east European diet. But ultimately this is a murky case and I doubt anything definitive will ever come out of it.

The same cannot be said of the Western media, which is transparently Russophobic. Far from blaming the ‘authoritarian’ Georgian government (about whom, after all, there is direct evidence in the form of aforementioned tape), some totalitarian publications kicked their smear campaigns into full gear immediately – against Russia! Mixed in with unrelated rants against Russia’s closure of British Council offices and its constitutionally mandated refusal to extradite Lugovoi, the point is implicitly made that the FSB, if not Putin himself, are behind the death of Patarkatsishvili – ‘a sworn enemy of Russian President Vladimir Putin’. No mention of Georgia. Eventually, all memory that Saakashvili and elements of the Georgian security forces are also linked to Patarkatsishvili will be erased. Russia will stand guilty before the world, because who controls the present controls the past, and who controls the past controls the future. Just like in 1984. And so the Annals of Western Hypocrisy go on. Talking about hypocrisy, lunatic Lucas also insisted on having a say in the British tabloid Daily Mail. I’ve replied to it on his blog.

Speaking about assassinations and stuff, it seems the traitorous slime Gordievsky has crawled out from under his rock to whine about how he fears he will be next Alexander Litvinenko.

The other main news is the declaration of independence by Kosovo from Serbia, which has been recognized by the US and the major West European countries. I’ve compiled a map below (dark green = recognize; green = say they’ll recognize; red = states insisting on further negotiations under UN auspices; dark red = don’t recognize). Note: Georgia, Azerbaijan should be dark red – forgot to add them in. Sorry.

Firstly, we are against recognizing Kosovo because it a) violates the principle of national sovereignty – the dominant paradigm of international affairs since the Congress of Vienna, b) sets an unwelcome precedent in which aliens can take a chunk out of a country by outbreeding the original denizens over generations (particularly pertinent to places like the US South-West or Londonistan), c) unfairly punishes a politically modern Serbia for the transgressions of a previous regime and d) rewards the likes of Thaçi and his KLA cronies, the former terrorists and drugpushers who now run Kosovo.

Unfortunately, Serbia has little choice but to acquiesce to this as a fait accompli. However, if I were a Serbian policymaker, I would continue down the road to European integration (after all, no need to cut off the nose to spite the face), but refuse to recognize Kosovo, assert it as eternal Serbian territory in the Constitution and maintain charges of treason against the Kosovar leadership. Similarly, if Serbia joins the EU or even NATO, it will remain a Russian ally and can function as a Trojan horse in these organizations (as Bulgaria is alleged to be). As such, this is the best course for Russia to pursue, at least until it regains its superpower status.

Finally, no, this does not mean that Russia should now recognize de facto independent states like Abkhazia, South Ossetia or the Dniester Republic. Since it has positioned itself firmly on the side of state sovereignty (as opposed to Western ‘liberal interventionism’), appearing to switch sides on particular cases like Abkhazia or South Ossetia will undermine its principled stand (as seen by the international community). Furthermore, this is compounded by the fact that both Georgia and Moldova, quite wisely, have also refused to recognize Kosovo. The same applies to Crimea and the Ukraine.

Lenin once said that the capitalists will sell us the rope by which we’ll hang them. Russophobes kindly give it away for free. The BBC World Service has conducted a poll across 31 countries to assess Putin’s legacy as he steps down from the Presidency – you can read it here.

As for the analysis, Fedia Kriukov’s excellent Russia in the Media blog beat me to it in A Charmed Profession. Might as well quote in extenso:

The first part of the poll, conducted in 31 countries including Russia and the G7, dealt with the influence of President Putin on various aspects of Russian and global affairs. Two of these aspects stand out in particular: They are the quality of life in Russia and democracy and human rights situation in Russia. Why do they stand out? Simply because they are an internal Russian matter, i.e. one has to actually be in Russia in order to form a sufficiently educated and hopefully accurate opinion on the topic. Global affairs are anyone’s fair game, but internal situation in any country needs to be assessed from within. Logical, isn’t it?

So what data are we dealing with here? When it comes to Putin’s influence on the quality of life in Russia, 77% of Russians hold a positive view of it, and 8% — negative. Of the residents of G7 countries, on the other hand, only 39% hold a positive view, while 44% are negative. On to democracy and human rights: 64% of Russians think Putin’s influence was positive, while 12% think it was negative. The residents of G7 countries, once again, beg to differ: only 26% have a positive opinion, while 56% think that Putin strangled the nascent Russian democracy, personally butchered 200 Russian journalists and 500,000 Chechens, and also poisoned the “KGB spy” Litvinenko with polonium had a largely negative influence.

It’s all clear with Russians: if a Russian wants to form an opinion of his quality of life, for starters he can open his fridge and compare its current contents with what was in it in the 90s. Or he can look at his paycheck. Or vacation time. Or the feeling of security. Same with democracy — in Russia, one can simply look out the window, and there they are, Russia’s democracy and human rights, out in full force! But if one lives in a G7 country, how can you look into a Russian’s fridge? How can you look out a Russian’s window? Well, probably a million of G7 countries’ citizens have visited Putin’s Russia by now. Tens of thousands have stayed long enough to form an educated opinion of what it feels like to live in Putin’s Russia. But that is such a drop in the bucket compared to the entire population!

You can figure out what it says about the state of Western journalism by yourself. (If not, continue reading Fedia’s post).

The Economist has also joined the party with this graph of leaders’ approval ratings. Putin, quite literally, stands head and shoulders above the rest. (Note how those who preach to Russia the most about democracy tend to put up less than impressive performances).

But one shouldn’t expect too much from the Economist, who attribute this to ‘beating the nationalist drum’ (I suppose Russians don’t give that much of a damn about 10-15% annual real increases in salaries). Nor from their contributors (I give a few succulent quotations):

Putin’s popularity can be partially attributed to the fact that he has closed down, taken over, and otherwise muzzled the media in Russia and that some of his most vocal critics have been silenced in the most permanent and brutal of ways. The murder of Anna Politkovskaya serves as a warning to any who dare to criticize Putins policies and chills all substantive debate on what is best for the Russian people.vfisher. Love this – just the right blend of ignorance and self-righteousness, of truthiness. A true Westerner.

In fact Putin’s popularity will last as long as crude oil stay high. In reality most of the Russians live at a very low standard compared to developed countries and even countries like Poland, Greece etc. But combination of oil money ingections though social payouts and massive propaganda makes Russians feel happy. Believe these Russians that can think independently are not fan of Putin and his totalitarian state.Olexiy, Kiev. A Ukrainian talking to Russians about prosperity. Rolls eyes.

Rather than rqnking leaders by popularity (usually ephemeral, often suspect), why not rank them by policies and performance in dealing with their countries’ problems. Harder work, longer term, but surely much more worthwhile. After all, Hitler was pretty popular in Germany until he lost the war.Plein d’Espoir. At least they’re very reliable at proving Godwin’s Law.

Have you considered for a moment that most Russians would be afraid to say they didn’t like Putin? I’m sure Hu Jintao also has wonderful approval ratings too.cdicanio. Brilliant. Now we’re being compared to China.

Sometimes I wonder why they bother. Why don’t they just cut the crap and say it straight – Russians are seduced by Putin’s smile because they don’t share western values.

Finally, other news in brief.

Armenia’s capital Yerevan has seen protests again alleged rigging of the elections, which Western observers said was generally free and fair. Eight people were killed and martial law was imposed. I don’t have any detailed knowledge about the finer nuances of Armenian politics, so I’ll let this pass.

The Economist has released an interesting map showing places where Internet content is blocked. Note how Russia is the freest country in the world, at least by this measure.

Russia’s population down 0.17% in 2007 to 142 mln – another nail in the coffin for the Myth of Russia’s Demographic Meltdown. Not that population decline is in itself disastrous (what matters for prosperity is the dependency ratio, for which Russia’s future projections are no worse than that of the G7); but it seems that population decline itself is nearing an end as birth rates rise and death rates fall. I would like to point out that I was almost completely right when in one of my first articles, Reading Russia Right, I said ‘totaling up the figures would give a rate of population increase in 2007 in Russia of around -0.15%’.

On the military front, the US expresses concern about growing Russian military spending. Let them; I don’t care much. This is a natural response to the underspending in the 1990′s, when the military-industrial complex languished (although they did not stop R&D); even today most military modernization goes towards upgrading older systems (e.g. extending service life for ICBM’s) rather than new purchases. On the topic of military spending, the US is still the world’s top leader by far, spending 712bn $ in 2007; nonetheless, it should be mentioned that official figures understate Russian (and Chinese) military spending due to a) purchasing power parity differences, b) accounting tricks and c) some of it being structural.

In related news, Russia has launched its first nuclear submarine since Soviet times, the Yuri Dolgoruky – two more are currently under construction, and a dozen are planned to be commissioned within the decade. Since the US is steadily building up its ABM capabilities at Fort Greely (Alaska), Vandenburg (California) and now Poland (as is likely), it would make sense for Russia to concentrate more efforts on the submarine part of its nuclear triad (as land-based ICBM’s are more vulnerable to being successfully shot down by ABM) and eventually its bomber force (on the subject of which, Russia is developing a new stealth bomber, possibly a resurrection of the Soviet Ayaks project).

Russia has agreed to write off 91% of Iraq’s 13bn $ Soviet era debt, no doubt in return for Lukoil salvaging its Qurna deal. Russia’s telecoms industry is also acquiring a global presence – AFK Sistema set to become pan-Indian mobile operator, a market with the potential for massive growth in the immediate years ahead.

Not related directly to Russia, but an interesting development – Chavez orders ten army brigades to the Colombian border in response to a Columbian strike against FARC within Ecuadorian national boundaries, which killed Paul Reyes, one of its main leaders. Ecuador and Venezuela also terminated diplomatic relations with Colombia.

Now this is still, for all Chavez’ rhetoric, unlike to escalate to all-out war – after all, Columbia doesn’t want it, while Venezuela must consider the American response, not to mention its own chances. Nonetheless, I’ve looked at the stats for these countries and this is what I found:

Columbia vs Venezuela, Ecuador, FARC

Armed forces: 207,000 (145,000 excluding non-combatant support personnel) vs 87,500 (+recent 100,000 militia) / 59,500 / 11,000 = 158,000. Columbia will have the numerical advantage, at least in properly trained personnel; however, assuming Ecuador joins in, they’ll have to fight on three fronts. Both Columbia and Venezuela have undergone intensive military modernization the last few years.

Tanks: none vs. 86 outdated MBT’s, 154 outdated Venezuelan light tanks and 140 very outdated Ecuadorian light tanks. Personnel carriers on both sides obsolete. While Venezuela leads, its armored advantage is irrelevant. This is because tanks are unsuited for jungle warfare. Granted, Venezuelan wargames demonstrate that their most likely avenue of attack would coincide with conventional armored thrusts into the La Guajira peninsula, which is flat – however, this is negated by RPG’s and the large amount of Colombian fortifications there. At most it will be a diversion.

Air: 30 vs 76 fighters; mostly outdated mishmash with 90 Black Hawks vs. mostly mishmash, but with 14 modern Su-30MK2′s (with 10 more to be comissioned this year) and 10 operational F-16′s, so Venezuela will possess air superiority – its ace. Unless the US decides to get seriously involved.

Naval: 3 destroyers/12 frigates/4 subs vs. 6 frigates/2 subs, 2 frigates/6 corvettes/2 subs. There isn’t sufficient naval strength on either side to effect a blockade – at least for now. (In June 2007 Chavez confirmed he intends to procure five modern Russian Kilo-class 636 subs). Hmmm…if I were Chavez I’d also try to obtain Moskit anti-ship missiles as soon as possible to deter the US from becoming involved, taking a cue from Iran.

Population, GDP: 44mn, 264bn $ vs. 28mn, 263bn $, 14mn, 62bn $.

Venezuela and Columbia have similar levels of socio-economic development, although Venezuela has oil – which pushes its GDP levels up to Colombia’s level, which has a larger population.

Colombia’s army has little heavy equipment, being mostly designed as a counter-guerilla type force; Venezuela’s is more traditional, geared towards winning conventional wars, with extensive recent efforts at military modernization. Venezuela will possess air and probably naval superiority. Assuming no big outside actors become involved – a big if – Venezuela will very probably comprehensively defeat Colombia, especially if Columbia still has to face off FARC and Ecuador on other fronts.

I doubt the US will get overtly involved, at least not unless Colombia begins to lose badly (but not too quickly). Ground invasion, of course, is out of the question – the US does not have the necessary reserves, while projecting air and naval power will take weeks. (Of course, Venezuela can play the oil card, what with today’s very tight supply – cutting out Venezuela would make oil prices sky-rocket).

In conclusion, if the US doesn’t get involved – Venezuela will win. If the US does get involved, Venezuela can still win, but it will have to be quick about it. Otherwise, it will lose its key advantage – air superiority – and will end up with a stalemate at best, albeit with the world in turbulence from 200 $ / barrel oil prices.

Edit: actually found an analytical article on the topic of If Colombia and Venezuela went to war, who’d win? The author is bullish on Colombia; some of the commentators lean more to my way of thinking.

(Republished from Sublime Oblivion by permission of author or representative)
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The Western media has begun to whine about the Russian presidential elections five weeks in advance. Their beef is that Kasyanov was barred from running, ostensibly because above 5% of his required signatures were rigged, but actually to undercut the last independent candidate – Russia’s last and only hope of salvation from the ‘slippery slope to totalitarianism’ (according to Misha “Two Percent” Kasyanov, anyway).

Nonetheless, let’s apply some common sense. Kasyanov’s level of support is around 1% of the electorate, as even the BBC, grudgingly admits. This means around 1 million people. Are we supposed to believe, then, that below 5% of his supposed 2 million signatures were illegitimate? Or were they much higher than 5%, and much higher even than 13.36% (according to the Electoral Commission)? My opinion is that they simply only bothered discarding the most egregiously falsificated ones – enough to disqualify Kasyanov and reveal him for the corrupt, seditious fraud he is.

Perhaps Westerners may care to consider the reason ‘liberals’ lose in Russia has rather more to do with the liberals themselves rather than Stalin Reborn, aka Putin.

Then there’s the whining over Medvedev refusing to participate in TV debates. In my opinion, when you have an overwhelming lead in approval ratings (around 70-85%), relative to the two other main candidates (10-15%), there is little point in agreeing to debates – which are entirely voluntary affairs. In any case, it is questionable what kind of public good debating with an ultra-nationalist clown (Zhirinovsky), an unreformed Communist (Ziuganov) and a political minnow who makes Ralph Nader seem a celebrity (Bogdanov) is going to serve. As it stands, the other candidates are free to participate on two state-owned channels weekly, and air their grievances – which Ziuganov has been doing a lot of, showing up Western claims that crooks (Kasyanov), neocons (Kasparov) and fascists (Limonov) are the only “real independent” candidates for the claptrap they really are.

As I’ve said repeatedly, Saakashvili is in many ways a mirror image of Putin. From the methods by which he steals elections to renegade oligarch look-alike nemeses. Albeit he probably doesn’t travel as much – Putin managed to visit 64 countries in 190 foreign trips during his Presidency.

On the economic front, an article in JRL argues that Russia still has a great deal of under-utilized capacity in agriculture and forestry – unlike industrial output, they have yet to overtake their Soviet peaks. The state under Medvedev intends to invest in sectors where private business is unwilling to go due to their limited capital, amongst them aerospace, nanotechnology and agriculture. Nonetheless, a boom due to expansion in those sectors, contrary to the article’s assertions, is impossible, considering that agriculture made up just 4.6% of Russia’s GDP in 2007. The ruble is also to become free-floating within the next three years.

More on the theory that Russia will be an island of stability in the coming economic storm, due to its huge foreign currency reserves and isolation from the US. In other news, recent data shows that Russia’s economic growth in 2007, at 8.1%, was even faster than previously thought.

Russia is to stop renting radars abroad due to the unreliability of its “allies”. The Russian Air Force will receive new attack helicopters in 2009.

There are plans to create a national DNA bank.

Sean’s Russia Blog reports that Mercer Human Resource Consulting has ranked Russia’s capital as the most expensive city in the world for the second consecutive year. As is well known, however, that only really applies to Western expats with a fondness for 5-star hotels, lobster and high-class escorts.

India is to celebrate the Year of Russia in 2008, just as China celebrated it in 2007. Ah, the joys of soft power…

(Republished from Sublime Oblivion by permission of author or representative)
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The conventional wisdom seems to be that Russia, due to its strong macroeconomic fundamentals and relative isolation from the world economy, will weather the oncoming credit crisis well. In fact, Kudrin (the Finance Minister) suggested ‘Russia and other countries with large gold and currency reserves can…can support the global economy by flexing the financial might of their sovereign funds’, insisting that Russia remains a ‘haven’ of stability amid global financial crisis. This is a sentiment shared by Russia’s senior executives, 73% of whom are ‘very confident’ of revenue growth in 2008 (up from 35% last year). CEO’s from Brazil (63%), India (90%) and China (73%) also feel confident, in contrast to most Western businesspeople, e.g. the US (36%), Japan (31%) and Italy (19%) – who are much less confident than a year ago.

Flextronics and Peugeot plan to build plants in Russia, while Russia is going to build a railway in Saudi Arabia and a hydropower station in Tajikistan. The Russian search engine Yandex enters the world’s top ten, with 566 million searches, or 0.9% of the world’s search requests. Russia, Kazakhstan and Belarus are to expand the role of the Eurasian Economic Community by signing nine treaties to draw up a regulatory framework for the Customs Union.

Moscow State University Buys Russia’s First IBM Blue Gene Supercomputer – to be used for fundamental research in nanotechnology, new materials and life sciences. It can run at 27.8 trillion operations per second (Tflop/s). This means Russia will get a second supercomputer in the world’s top 50.

Whatever you thought of Russia’s 2007 parliamentary elections, one unqualifiably good thing is that there are now 62 women (13.8%) in the Duma out of 450, up from 9.8% in the 2003 Duma. (For comparison, Sweden is at 47.3%, US is at 15.2% and France is at 12.2%). This means Russia moved up from joint-95th to 75th in the Women in National Parliaments metric. It also means Russia will do better on rankings like the Global Gender Gap Report, where Russia is 45th – mostly because of low female participation in politics.

Medvedev made some soothing noises, saying that Russia “is building a democracy in which representatives of state power must diligently fulfill the obligations that they have taken upon themselves”, emphasizing the need for a stable democracy with a functioning civil society and guarantees of the rule of law and asserting the world has nothing to fear from Russia.

Lavrov had his annual press conference, in which he reaffirmed Moscow’s position on Kosovo, the British Council, Abkhazia and South Ossetia, NATO and warned some Baltic countries not to glorify Nazism.

Talks of Cold War with Russia is ‘nonsense’: Rice – I quite agree.

Russia-Backed Think Tank To Study Western Democracy – Good.

More tidbits on the missile defence front. Both Slovakia and the denizens of the Polish town where the missile interceptor station is to be based are against missile defence. Meanwhile, Russia’s military chief of staff Yuri Baluyevsky has said Russia is prepared to use pre-emptive nuclear force to defend its national interests – repeating military doctrines assumed in the early 1990′s. (Perhaps this is why NATO has chosen to preserve its self-assumed right to initiate a first strike.) But bearing in mind what we wrote in our second News post, this is an entirely predictable posture.

Ukraine’s President Viktor Yushchenko, Prime Minister Yulia Tymoshenko, and Parliament Chairman Arseny Yatsenyuk made public a joint letter to NATO Secretary General Jaap de Hoop Scheffer, declaring Ukraine’s readiness to advance to a Membership Action Plan with NATO and requesting a decision to that end by the Alliance at its Bucharest summit in early April. Considering ‘support remains confined to some 20% of the overall electorate’, while over half are against joining NATO, it is not surprising there have already been anti-NATO protests in the capital (which is actually strongly pro-Tymoshenko). The Party of Regions and the Communists are adamantly against joining NATO.

RAF alert as Russia stages huge naval exercise in Bay of Biscay – Russia holds its largest naval exercise since Soviet times with France.

Putin hails setting up of 15 regional high-tech clinics in Russia

In Russia, Space Exploration Takes Back Seat to GPS – because apparently Glonass is still plagued by inaccuracy and incomplete coverage. I don’t think that’s a reason to slow down on other projects, though.

Putin: the brutal despot who is dragging the West into a new Cold War – at least according to crazed Russophobe hack Edward Lucas. I give him his richly deserved comeuppance in Comments.

McCain appoints Putin ‘President of Germany’ – a Bushism from another crazed Russophobe.

Gay Parade in Moscow planned for May – there was a discussion on comparative gay rights in Latvia and Russia between pēteris cedriņš and stalker (me) here.

(Republished from Sublime Oblivion by permission of author or representative)
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Freedom House publishes its 2008 report on Freedom in the World.

Russia scored a 6 for Political Rights and and 5 for Civil Rights (1 is best, 7 is worst). According to their figures, Russia is no different from Algeria, Azerbaijan, Bhutan, Brunei, Egypt, Kazakhstan, Oman, Pakistan, Qatar and the UAE, and less free than Afghanistan, Jordan, Kuwait, Morocco, Nepal, Togo, Thailand and Yemen. In other words, it sits right alongside the the tinpot dictatorships and monarchies of this world.

As you might well imagine, we have issues with that – and we’ll cover them in detail, probably in our next Editorial. Suffice to say for now that Da Russophile disagrees.

Russia’s Lavrov to attend Georgia inauguration – it was expected that Russia would send someone lower-ranking than its Foreign Minister. Probably this is tied with Saakashvili recently opting for better ties with Russia.

Polish President Warns About Russia Policy – sour old grapes (ducklings?) remain, but the Polish President is weak and his brother was swept out of power by a landslide. The forwards-looking Tusk administration lifted Poland’s opposition to Russia joining the OECD, and in return the Russians allowed Polish meat imports again after a 2-year ban. Goes to show that if you’re nice to Russia, Russia will be nice to you.

Welfare the big idea for Russia’s Medvedev – looks like the country is headed for a left turn (like Khodorkovsky predicted in 2005, ironically enough). Since 1999, Russia has built up the foundations for a modern economy and now it’s time to start re-building the welfare state. Medvedev has managed Russia’s National Priority Projects, and his main goals will now be to reform pensions (which are on average less than a quarter of the typical monthly wage of nearly $600) and tackle wealth inequality. He has also stepped up campaigning for the March Presidential elections.

A Go-Forward Path for Generating Prosperity – this describes recent oil-profits-aided government efforts to kickstart a hi-tech (IT, nanotechnology, biotech) industry in Russia, drawing on Indian (technoparks), Israeli (state venture company to invest in promising projects) and east Asian (special economic zones) experience. Russia has the R&D infrastructure for these plans to take off, but linking universities to industry remains a difficult task. It recommends a ‘go-forward strategy’ for Russia to concentrate on building up small- and medium-sized enterprises serving the domestic market, before going into internationally competitive enterprises.

U.S. Presidential Contenders: Who to Bet On? – Russia Blog also wrote an article on who the best US president would be from Russia’s perspective. McCain is a Russophobic Cold Warrior of the old school. Clinton was fine (saying that it’s not her right to dictate what government Russia should have – thanks, that’s so generous of you!), until she hurled a personal insult at Putin, alleging that since he was a KGB man, he had no soul (not that I think he or anyone else has a ‘soul’ for that matter either, but you’re a fine one to talk about who does or doesn’t have souls, Hillary!). Obama’s Realpolitik view is that Russia is “neither our enemy nor close ally”, and is most concerned about taking US and Russian ballistic missiles “off high-trigger alert and to dramatically reduce the stockpiles of our nuclear weapons and material” – we can sympathize with that. Huckabee has made few statements on Russia, mostly on co-operating on international terrorism. He’ll probably be like a second G.W. in more ways than social conservatism.

Death toll in fires hit 16,000 in Russia in 2007 – sad statistics, several times the rate in western Europe, but the number of blaze fatalities dropped by 7% from 2006. As such, it reflects general mortality trends from transport accidents, alcohol deaths, suicide and murder.

Belarus considers buying advanced Russian air defense system

New Car Sales In Russia Could Reach 2.7 Million In 2008 – some facts:

  • Russia is currently Europe’s third-largest car market.
  • Foreign manufacturers’ share of all new car sales rose to 64% in 2007 from 54% in 2006.
  • Sales are shifting to regional centres, reflecting the general trend of consumer growth.
  • Russia’s Economy Ministry expects annual cars sales in Russia to reach 4 million by 2010, making it Europe’s largest car market.

Russia looks for clout in pipeline talks – more on Jan 14′s Bulgaria story. The Burgas-Alexandroupolis is part of Russia’s web of pipelines approaching Europe. In total, they have considerable excess capacity, which will enable Russia to shift gas flows from one country to another, giving it increased political clout. Gazprom is also acquiring the NIS, the Serbian state oil company, apparently uncontested and at a massive discount. This is presumably in return for supporting Serbian sovereignty over Kosovo.

U.S. no longer values freedom? – allegations of dodgy voting procedure in New Hampshire from Russia Today, where in one county Ron Paul received no votes but had people complaining they voted for him. A Google search confirms rumors exist but it seems the Western media haven’t caught up with them.

(Republished from Sublime Oblivion by permission of author or representative)
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President Putin’s visit to Bulgaria to bring pipeline deal, NPP contract

A new company is being created, in which Russia will own a 51% stake, to build a pipeline to carry Russian oil via the Bulgarian Black Sea port of Burgas and Greece’s Alexandroupolis on the Aegean, so as to bypass the congested Bosporus. It will pump 35mn metric tons a year, though capacity can eventually be increased to 50mn.

Atomstroyexport, Russia’s state nuclear equipment monopoly, has also been awarded a contract, estimated at 6bn $, to build two reactors for Bulgaria’s second nuclear power station in the town of Belene. According to Foreign Minister Lavrov, more agreements could be signed on Putin’s visit to the country, timed to coincide with celebrations of the 130th anniversary of the liberation of Bulgaria from Ottoman rule by a force led by Russia’s Tsar Alexander II.

Gazprom expands gas supplies to Turkey – because Iran stopped supplying them because of rising domestic demand due to a cold spell. Meanwhile, Turkey has stopped the transit of Azeri gas to Greece pending the resumption of the Iranian supplies.

Italy’s Alenia permitted blocking stake in Sukhoi subsidiary – Alenia Aeronautica will get a 25%+1 share blocking stake in Sukhoi Civil Aircraft, a subsidiary in Russian aircraft maker Sukhoi. They are partners in building the Sukhoi SuperJet-100, a 75-90 seat regional jet carrier expected to compete with similar aircraft from Bombardier and Embraer. The Italian firm will help with European marketing and compliance with noise and emissions standards. Nonetheless, the nativist tradition is still upheld – foreign residents should account for no more than 25% of Sukhoi Civil Aircraft executives and its chief executive should a Russian national.

Russia won’t exceed 1990 level in CO2 emissions until 2020 – which we suppose is a good thing, since that would mean totally effortless compliance on Russia’s part with the Kyoto Protocols.

Estonia trial of Russia activists

Organize peaceful demonstrations in Estonia (OK, we’ll refrain from adding a cheapshot extra S to the country’s name), despite police provocations. Have your protests interrupted by vandalism and looting on the part of apolitical opportunists (218 out of almost 300 vandals arrested during events on 26.–28. April, had a previous criminal record). Be detained for 7 months and hope you don’t get another 5 years on top of that.

Actually this calls for an Editorial: Annals of Russophobic Fascism. I’ve already gathered the material so expect this sometime in the week ahead.

Russia rebukes UK over British Council defiance – we can’t say we agree over Russia pressuring the British Council (we’re sure there are more suitable targets, which don’t benefit thousands of Russians uninvolved in all these diplomatic-political shenanigans). Nonetheless, refusing to move out is a hopeless struggle and the BC would be wise to cut its losses and turn over St. Petersburg and Ekaterinburg operations to local intermediaries.

Postponed exercises with Russia to go ahead this week: NATO – for some reason this is nowhere near as well advertised as military relations between Russia and China, e.g. the SCO military exercises in 2007. The media always needs enemies.

(Republished from Sublime Oblivion by permission of author or representative)
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Rally against Georgia poll result

Thousands of opposition supporters have taken to the streets in Georgia in protest at what they say were rigged presidential elections last weekend. Those gathered in the capital, Tbilisi, are demanding a second round of voting. Pro-Western leader Mikhail Saakashvili polled 53%, narrowly averting a run-off against his nearest rival, Levan Gachechiladze, who won 25% of the vote. Mr Saakashvili called the snap poll to resolve a crisis after suppressing anti-government rallies two months ago.

The BBC’s Neil Arun, who was at the rally, said much of the protesters’ anger was directed at Western observers who have said the polls were essentially democratic, although there were significant problems. The authorities have warned the demonstrators they will not tolerate any more civil unrest.

And time and time again, consistently, there surface allegations of fraud. This is not to say Georgia is a failure at democracy, but that there were serious problems in the conduct of these elections is in no doubt.

Georgia protesters give poll icy reception

Facing the demonstrators across the river was the Narikala fortress, established in the 4th Century AD and expanded in the 16th. Closer to the crowd, overlooking it from a hill, was the glass dome of Mr Saakashvili’s new presidential palace, lofty and unfinished.

“The courts are corrupt, the prisons are full. There is no justice, no democracy in this country,” said Nikusha, a man in his early 20s with his face half-hidden by a scarf. “He is selling off the country,” said another young man, Rati. “Sure, we need foreign investment but he is giving all our wealth away for nothing.” Nearby, a group of women waved posters of the main opposition presidential candidate, Levan Gachechiladze. “Saakashvili promised us democracy but he has given us a dictatorship,” said Nino, in her late 50s.

“Saakashvili is far from perfect but he’s the best man for this country right now,” says Giorgi, who works as a translator for foreign companies. “These opposition guys think democracy is like a tree-house you build over the weekend. But it takes years of strong leadership for it.”

He is widely credited with smashing the crime syndicates that once controlled Georgia and with cutting corruption in the police force. Some of the president’s backers say that while his opponents complain of authoritarianism, it is authority itself that they resent.

Meanwhile, Saakashvili follows a quintessentially Russian (Petrine) means of modernizing the country’s social institutions – by a regression into authoritarianism, which can paradoxically reinforce pre-existing reactionary tendencies. Everything said of Saakashvili above – praise and criticism – can be said of Putin too. Putin, though, gets most of the latter in the Western press, while Saakashvili is a darling. And so the Annals of Western Hypocrisy go on.

The BBC Russian story is bigger on facts. Saakashvili won 53.47%, followered by Gachechiladze (25.69) and Patarkatsishvili (7.10%). This was confirmed by the Electoral Commission by a narrow margin (7 to 6). Saakashvili is by law the President of Georgia and his position seems secure for now, despite the opposition’s impressive achievement of bringing 70,000 people out onto the streets in Tblisi. Nonetheless, revolutions are rarely made in poor weather, and the demonstrations were called off after record frosts in the Georgian capital.

Beer becomes the toast of Russia

Russians’ love of vodka shows no sign of abating but over the past few years soaring beer sales suggest old and young alike have turned their attention elsewhere. Beer consumption has risen from 20 litres per person a year to nearly 80 litres and while growth appears to be slowing that is from sky-high levels.

Against guidance growth of 5 per cent in 2005, and 3-5 per cent in the following two years, the beer market grew 6 per cent in 2005, 10 per cent in 2006 and 17 per cent in the first nine months of last year. Growth at BBH, the market leader in Russia with a 38 per cent share, has been even more explosive. The brewer saw sales rise 21 per cent in 2005 and 2006, and 33 per cent in the first three quarters of 2007.

That is a view echoed, perhaps not surprisingly, by John Nicholson, head of S&N’s international business and its senior executive in Russia. “This year Baltika is set to exceed Heineken as Europe’s most popular lager, while Russia will become the third-biggest beer market in the world,” he says. Zagvozdina also points out that while sales growth is slowing, the value of the market is rising fast as prices increase and consumers switch to more expensive beers.The Renaissance analyst says she believes the value of the market grew 21-23 per cent last year, and she expects growth of up to 14 per cent this year with at least a further four years of further “robust growth”.

Nicholson says: “Disposable income is rising at such a pace that consumers are trading up and there is a lifestyle change away from vodka. We launched Foster’s and Kronenbourg 18 months ago. Kronenbourg is the most expensive brand in the market but it has seen huge growth.” With the Western European markets going backwards in terms of sales volumes, the attraction of Russia, with its 140m inhabitants, is plain to see. With the neighbouring markets that BBH operates in, including Uzbekistan, Kazakhstan and Ukraine, providing a similar population collectively, the attractions become compelling.

We can’t say we entirely approve of this development (it would be much better in terms of public health for Russia to develop as a wine-drinking country – it’s even got the potential to produce wine of its own, near its Black Sea coast), it illustrates Russians’ rapidly rising real incomes, which have been growing at more than 10% annually for the last decade. It’s not surprising, then, that beer consumption has increased so much, especially when you counter in the fact that Russian TV fills up with beer adverts after 9pm every day in the same way American TV is always full of ionised junk food. While DR prefers wine, champagne, we’ll settle for a nice cold bottle of Baltika over a KFC any day.

Is Pulp Fiction Russia’s Failure? – this article basically says that Russians are better at reading academically (Russian 4th-graders came first internationally in the PIRLS 2006 reading assessment) than reading to solve everyday problems (in the PISA 2006 Reading section Russians scored substantially below the international average).

Odnoklassniki: Russians Connect to Their Student Days – Russians can use the Internet to reconnect with their former school buddies.

Russian cruiser heads for the Mediterranean – part of Russia’s reassertion of its strength. This is linked to it building a naval base in Syria.

(Republished from Sublime Oblivion by permission of author or representative)
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Net capital inflow into Russia hit $82.3 bln in 2007

MOSCOW, January 11 (RIA Novosti) – Net capital inflow into Russia reached a record $82.3 billion in 2007, almost double the previous year’s figure, the Central Bank announced on Friday.

In 2006 the figure was $42 billion. In the last three months of 2007, net capital inflow was $23.5 billion, compared with net outflow of $7.6 billion in the third quarter.

This is around 6% of Russian (nominal) GDP. Foreign investors are rushing in to buy into Russian IPO’s.

Russian carmaker AvtoVAZ raised exports 7.9% y-o-y in 2007

AvtoVAZ’s domestic sales reached a record high of 663,500 cars, 6.2% more than in 2006.

The company expects to raise 166 billion rubles ($6.8 billion) in 2007 earnings and is seeking to increase its yearly output to almost 1.3 million cars by 2012.

Foreign car manufacturers aim to raise car production up to 1mn by 2012. This means that around about 3mn cars should be produced in Russia by 2012, double the 2007 figure (1.5mn) – a production capacity equivalent to that of France today.

US missile plan under threat as Poland demands guarantees

Poland and Russia engaged in their first talks over the Pentagon’s plans to install missile defence systems in central Europe yesterday, amid signs that the project could unravel because of political shifts in the US, Poland, and the Czech Republic.

Russia’s deputy foreign minister, Sergei Kislyak, went to Warsaw to warn the Polish foreign minister, Radek Sikorski, of the “strategic dangers” posed by the project, bitterly opposed by the Kremlin which is threatening a new arms race if the US goes ahead. Over the past week a flurry of coordinated statements from the new liberal government of the Polish prime minister, Donald Tusk, in Warsaw has signalled the mounting troubles engulfing the missile shield project.

Poland is demanding security guarantees and beefed-up air defence hardware from Washington, worried that the deployment of interceptor missile silos on Polish territory could jeopardise rather than enhance Polish security.

Despite opposition to the project among Czechs – rising to 70% in a survey this week – the Czech government is keener than its Polish counterpart to strike a deal with the Americans.

For the first time this week Poland contradicted Washington’s claims. “This is an American, not a Polish project,” said Sikorski. “We feel no threat from Iran.”

The missile shield is not in Poland’s or the Czech Republic’s direct foreign policy interests. Iran’s current most advanced missile, the Shahab-3, has a range of 2100km – ie, its maximum range just about covers Greece’s eastern border. While the Fajr-3 is a MIRV and has a slighly longer range (2500km), military analysts believe it to be a bluff. While there are rumors of a Shahab-5 (ICBM with 10,000km range), it remains just that – rumors. In any case, if the United States truly believes Iran is the threat, they could have taken up Putin’s goodwill offer to site the radar station in Azerbaijan.

As it stands, the Russians can be forgiven for thinking this missile defence is aimed against them (the Russian General Staff thinks in terms of capabilities, not intentions). The influential US Foreign Affairs journal argued that the next two decades could see the rise of US nuclear primacy (the Russian development of advanced ICBMs with evasive capabilities like the SS-30 Bulava can be seen as a response to this threat). This is a goal that is perceived to be true, due to the “Bush administration’s 2002 National Security Strategy”, which “explicitly states that the United States aims to establish military primacy: “Our forces will be strong enough to dissuade potential adversaries from pursuing a military build-up in hopes of surpassing, or equaling, the power of the United States”.” To quote from the article in extenso:

Washington’s pursuit of nuclear primacy helps explain its missile-defense strategy, for example. Critics of missile defense argue that a national missile shield, such as the prototype the United States has deployed in Alaska and California, would be easily overwhelmed by a cloud of warheads and decoys launched by Russia or China. They are right: even a multilayered system with land-, air-, sea-, and space-based elements, is highly unlikely to protect the United States from a major nuclear attack. But they are wrong to conclude that such a missile-defense system is therefore worthless — as are the supporters of missile defense who argue that, for similar reasons, such a system could be of concern only to rogue states and terrorists and not to other major nuclear powers.

What both of these camps overlook is that the sort of missile defenses that the United States might plausibly deploy would be valuable primarily in an offensive context, not a defensive one — as an adjunct to a U.S. first-strike capability, not as a standalone shield. If the United States launched a nuclear attack against Russia (or China), the targeted country would be left with a tiny surviving arsenal — if any at all. At that point, even a relatively modest or inefficient missile-defense system might well be enough to protect against any retaliatory strikes, because the devastated enemy would have so few warheads and decoys left.

And that’s the crux of the matter. The Russian General Staff fears that the US believes it has the capability of executing a decapitating first strike against Russia. Seen in that context, the European missile shield (whose current 10 interceptor missiles can be increased once built, of course, and with much less media fuss) becomes the means by which the US hopes to prevent a massive retaliatory strike from hitting the homeland. Are their fears justified? We don’t know – we hope not, anyway. But as long as Russia and NATO remain fundamentally separate and conform to Cold War thinking – or appear to conform to Cold War thinking – the possibility that the Russian generals and nuclear war planners are right cannot easily be dismissed.

Déjà Vu – Tymoshenko, Ukraine’s PM again, wants to review agreements of gas prices with Gazprom. Go on. After all, populism always fails against Realpolitik.

Russia’s Top Beauty – mmmh. Doesn’t look that fit.

Trial of activists in spring riots begins in Estonia Jan. 14

eSStonia shows its true colors – black, with a hint of red and white.

Man in south Russia dies after warming his bed with irons

Again, some things never change.

(Republished from Sublime Oblivion by permission of author or representative)
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Russian moves to ban tobacco advertising

MOSCOW, January 10 (RIA Novosti) – The Russian government has decided to completely ban tobacco advertizing, by signing up to a World Health Organization anti-smoking convention.

In its first session of the year, the government approved a draft law on joining the WHO Framework Convention on Tobacco Control (FCTC), which stipulates a ban on advertizing tobacco products.

The FCTC requires parties “in accordance with their respective constitution and constitutional principles, to undertake a comprehensive ban on all tobacco advertising, promotion and sponsorship within five years of the WHO FCTC’s entry into force for that Party.”

About time, considering that 70% of men and 30% of women smoke in Russia, one of the highest rates in the world, and that 300,000 people die from smoking every year in Russia.

India could become largest Kamaz truck maker outside Russia - illustrates the recent phenomenom of how large well-capitalised emerging market companies are starting to branch out geographically – not just to the West (as with the highly publicised merger between Mittal Steel and Arcelor in 2006), but to each other.

Russia, Greece, Bulgaria initial Balkan pipeline project co. deal – another blow against European energy independence.

Putin appoints ‘nationalist’ Rogozin as Russia’s NATO envoy – lol. Talk about rubbing salt into wounds.

Russia’s first space launch of 2008 scheduled for January 28 – Russia’s space industry has not been dormant since the fall of the Soviet Union. Indeed, in the last few years it has embarked on a number of ambitious objectives. These include the reactivation of GLONASS (equivalent of the GPS), numerous scientific projects (Spektr, Radioastron, Koronas-Foton, Moon-Globe and Rezonans), the upgrade of its Soyuz space vehicles and development of the Kliper reusable space shuttle and plans to build a lunar station and put a human on Mars within a generation. And Roskosmos manages to do it with about 1/20th of NASA’s budget. This all calls for a future Editorial.

New serial Tu-160 Blackjack bomber undergoes flight test, Russia to have 50 silo-based Topol-M ICBM systems by end of 2008 – which goes to show the strategic arms industry isn’t idle now either. Seems like the US will have to do without nuclear primacy.

Drunken Russian plane passenger detained after hijack attempt – some things never change, though.

(Republished from Sublime Oblivion by permission of author or representative)
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.