MEDVEDEV SPEECH. In his speech opening the St Petersburg International Economic Forum Medvedev said he wants to turn Moscow into a “powerful global financial centre”; well, to do so would require a substantial reduction of corruption, criminality and opacity. He spoke of liberalising the gas market and reducing taxes on the oil sector. He also spoke of helping to overcome the food crisis (but how? more wheat?). He took some shots at the USA’s financial policies and mused about how the UN or something could do it better. For the rest he tried to present a picture of a Russia, prosperous (1st DPM Igor Shuvalov next day said Russia would become the 6th largest economy by the end of the year) and an important and responsible participant in the world’s economy.

HUBRIS. That’s what it sounds like to me. Putin, yesterday: “Our country has asserted itself as a major economic player, it formulates principal items for global agendas. Russia is one of what one calls the chief newsmakers of the modern world.” My sarcastic response would be: only as an energy exporter; not very successfully; bad news. But seriously, while the contrast with ten years ago is striking and in Russia’s favour, it is not truly a big player, it has not had much luck with its interests (see NATO expansion, for example) and news coverage is all “energy weapon”, “journalist murders”, “aggression” and the like. I think the ruling class overestimates the strength of Russia’s position. That is a problem.

HUMAN RIGHTS. Some developments under the new regime. On the 10th Medvedev had a meeting with the Human Rights Commissioner Vladimir Lukin and that day signed two laws affecting the Commissioner’s position and the rights of prison inmates. In each case the theme seems to be to bring the Public Chamber and NGOs into the process. Lukin was quoted as cautiously approving the new laws. We shall see what difference they make. The Public Chamber is potentially an important force in Russia but it is still finding its feet.

AT LONG LAST. People who have suffered the Heisenbergian car trip to Sheremetyevo will be happy to know that a high speed rail link between the centre of town and the airport opened yesterday.

BUDGET SURPLUS. The federal budget surplus is reported to be about US$50 billion so far this year. What a change from the 1990s when enormous wage arrears were the main feature of federal finances. Now the problem is one of success: what to do with all the money without firing up inflation. Maybe it’s time to cut taxes: an increase in the threshold for the mineral extraction tax is in the works but individuals can usually spend their own money more wisely than governments can.

FRENCH CULTURE. There is an outbreak of cars being set on fire in Moscow: about 35 so far.

CHECHNYA. A Russian general has just stated that there are no plans to disband the East and West battalions in Chechnya. Which still leave a lot of questions unanswered. But, because Chechen conscripts are placed in these units Groznyy probably wants to keep them (and they are rather brutally effective).

SOCHI OLYMPICS. The decision to award the 2014 Winter Olympic Games to Sochi has repercussions. Quite apart from the (potentially eye-poppingly corrupt) process of building the millions and millions of dollars worth of facilities there, there are the Abkhazia implications. Sukhumi will want a piece of the action. The Russian companies involved will want to cut their costs by importing what they can from Abkhazia. This is likely the principal incentive to get the railway operating. An optimist would think that Tbilisi and Sukhumi will now have an opportunity to cooperate but I suspect that Sukhumi, remembering its sack in 1992 (quoting a Western scholar: “The campaign of looting, rape, torture and murder mounted by the Mkhedrioni in the region did much to poison relations between Mingrelia and the rest of Georgia… Georgian forces behaved similarly upon their entry into Abkhazia in the summer of 1992”). will not be interested. And Saakashvili’s record here and in South Ossetia does not inspire confidence. It’s probably too late. But the exigencies of the enormous construction effort in Sochi will likely make tensions worse. (Link to a rational and informed piece on Abkhazia: there’s a lot of baggage in this place and I can’t shake the fear that most Western officials haven’t a clue).

ABKHAZIA. Confirming my suspicion that Moscow’s principal motive in Abkhazia is fear of another war, Foreign Minister Lavrov said the other day that the Russian peacekeeping force had been increased not for “preparing any intervention” but “to prevent the possible use of force by our Georgian colleagues”. However, Medvedev and Saakashvili have had their first contact and maybe they can establish a better personal relationship.

 

© Patrick Armstrong, Ottawa, Canada