THE DUUMVIRATE. I regard The Economist as a generally worthless commentator on Russia, useful only because it is a reliable guide to the “mean sea level” of conventional opinion. In its 6-12 October 2007 issue, it was confident “It has always been a question of how, not if, Vladimir Putin would retain power”. Now it’s not so sure: maybe Medvedev is in charge. Its latest piece (JRL/2008/130/6) finally understands that Putin could have amended the Constitution easily and run for a third term. The point is not that The Economist has become any more thoughtful but that its change of mind is an indication that conventional opinion is coming around to the idea that maybe the whole thing wasn’t, as the October 2007 headline read, “Vladimir Putin: The never-ending presidency”. Revisiting my five hypotheses, I am coming to think that the choice is now between Numbers 4 and 5: I never thought 1 and 2 very likely and 3 is certainly dead. For what it’s worth, but presumably signalling new tactics if not a new strategy, there has been criticism of some of Putin’s legacies appearing in the Russian press.

IN A NUTSHELL. Having been away for a while, I am catching up. What occurs to me is this simple summary. Putin saw his job as stopping the rot and can justifiably regard himself as having been reasonably successful at doing so. Medvedev sees his job as “modernising” Russia; or perhaps a better term is establishing “good governance”. These are two different but related missions. Each has the persona and skills for his task and neither would be very convincing at the other. But they are on the same team trying to get to the same place.

COLOUR REVOLUTIONS. Vladislav Surkov, widely regarded as the Kremlin’s chief political theorist, has just said that the threat of a “colour revolution” being introduced into Russia is now over. (By the way, I am now much more sceptical about the, shall we say, spontaneity of the “Orange” and “Rose” “revolutions” than I was at the time – and I was sceptical then). I never thought such a thing could happen in Russia but it is clear that some in the Presidential Administration did. Another fear that probably had a bearing on Putin’s decision to stay around.

USA-RUSSIA. A VTsIOM poll on how Russians view the USA shows that the generally positive impressions of five years ago are unchanged. About 50% had positive attitudes in both periods while the negatives have actually declined from 29% from 40%. Which certainly goes against a lot of conventional wisdom (Ref).

MECHEL. Thanks to some rather Stalinesque remarks by Putin, the company’s value has taken a hit and people are starting to worry about Russia as a reliable investment area again. His complaint seems to be that the company may (or may not) have been evading taxes but it seems a stunningly inept thing to say in public. Interestingly, today Medvedev said that officials “should stop causing nightmares for business”. Stay tuned.

KHODORKOVSKIY. Applied for parole on the 16th. As usual there are two opinions, each asserted with utter conviction: 1) the request will be rejected 2) the request will be approved. We’ll soon know.

ECONOMY. Still growing but slowing: GDP is up about 6% since last June, but June’s increase in industrial production (0.9%) was the lowest since November 2002. Inflation is now predicted to be about 11% for the year. But, thanks to energy prices, Russia has more than half a trillion dollars in reserves and US$44 billion in debts.

GAS PRICES. Will be rising. Gazprom’s CEO expects a European price of at least US$500 tcm by the end of the year and has cut a deal with Turkmenistan that will greatly raise the price. Ukraine’s arrival at “world prices” may be sooner than it hopes, given that much of its gas is from Uzbekistan. Get ready for more “Russia’s energy weapon” thinkpieces.

ESTONIA. 8.2% of Estonia’s residents are denied citizenship; mostly Russophones, they have taken Russian citizenship – what would you do if you couldn’t get it from the country where you live? The government has rejected an amendment to allow their Estonian-born children to become citizens automatically. This rather obvious violation of basic rights will, no doubt, prevent Estonia’s joining the EU or NATO. Or perhaps not.

CAUCASIAN RUMOURS OF WARS. Has a low grade shooting war begun in South Ossetia? Or is it another of the periodic flare-ups? The campaign season in mountainous areas is short and starting to end. Moscow sent some fighters over the territory in an admitted show of force it hoped “dampened the zeal of hotheads in Tbilisi”.

ABKHAZIA. The German Foreign Minister has been trying to sell a settlement plan. Three stages are reported: Tbilisi will promise not to use force and refugees will return, then some reconstruction and only then a resolution of Abkhazia’s status. Too little too late, I think, but it may prove to be the basis for something in the end.

© Patrick Armstrong, Ottawa, Canada


BALANCE. A Levada poll shows a probably important change in political reality. For years opinion polls have ranked the president distinctly higher than the PM or government. This was so even in the Yeltsin era (although all at very low levels in the latter years). What this poll shows is that Putin’s presence has pulled the government rating up: in the 40s through most of his presidency, it is now in the 60s. At the same time his rating remains in the 80s and Medvedev’s is in the 70s. If this trend holds – and why shouldn’t it? – Russia’s political structure will be much better balanced than it has been. Further evidence, to my mind, of my fifth hypothesis.

CORRUPTION ET AL. Medvedev mused that some provision should be made for transferring assets held by civil servants into trusts and said a first draft of a national plan for combating corruption has appeared. A presidential aide suggested that “independent directors” might replace state officials in some state-owned companies. Of course if that turns out to be a way of letting former members of Putin’s administration keep these lucrative positions… I can understand why you would want to place government officials in these important companies (remember Gazprom under Yeltsin?) but the problem then becomes: where do their interests now lie?

MILITARY. I have been hearing rumours of something happening in the defence apparatus. What has surfaced is that the Defence Minister said the Forces would be reduced to one million by 2013: The original target had been 2016 but “We suggested doing it faster…”. Then a 1st Deputy Defence Minister made the observation that training methods were still rooted in the 1960s and 1970s despite “the experience of the two anti-terrorist campaigns in the North Caucasus and the coalition forces in Afghanistan”. Yesterday the Public Chamber published a report about corruption in the Armed Forces: “Businessmen in epaulets” was a memorable expression. Maybe the rumours of disagreements current a couple of months ago have something to them.

TEMPS ET MOEURS. “2008 Nashi Summer Camp To Focus on Business Training Program” (JRL/2008/125/7).

TAXES AND FOREIGN NGOS. Putin has cut the number of international organisations that can avoid Russian taxes from 101 to 12. This will no doubt be played as another crackdown but a little time on Google suggests that at least one of the entities (IFAW) does not appear to have a Russian branch, although it has many other national branches. Maybe it should set up a proper local Russian branch. In short, this may have more to do with Russia treating such things as other countries do rather than allowing them to browse Russia for cash.

YAVLINSKIY. At the recent Yabloko conference, Grigoriy Yavlinskiy announced he was retiring as leader: his nominee, Sergey Mitrokhin was duly elected. I can’t help thinking that his adamant refusal to ally with anyone else has produced Yabloko’s decline and helped create the reality that today’s “liberal” “opposition” (how many sneer quotes can I get away with?) is little more than a stunt for foreign TV. The head of the St Petersburg branch, who has been critical of Yavlinskiy’s leadership, welcomed the change, saying he expected Mitrokhin to work towards a unification of this potential political grouping.

KHODORKOVSKIY. I have long wondered whether Medvedev might signal a new look by letting, one way or the other, Khodorkovskiy out of jail, given that the Yukos prosecution marked such a turn in Western conventional opinion about Russia. On the one hand, Khodorkovskiy’s lawyers have said they have advised him to apply for parole; on the other, new charges against him are been mentioned. We’ll see. It’s an issue receiving some debate.

IMPERIAL FAMILY. A spokesman for the Prosecutor General’s Office has confirmed that the bodies of Crown Prince Aleksey and Grand Princess Maria have been identified. So all the remains have now been found.

DEMOGRAPHICS. The latest statistics for January-April show continued improvement at each end, although the population is still shrinking: the decline was 96,000 this year compared with 148,100 for the same period last year. Births were said to be 547,100 (488,700 last year).

BELARUS. Medvedev and Lukashenka met; the communiqué spoke of cooperation “on the principles of a market economy”. So no cheap gas. On the other hand, Venezuela will lend Belarus US$500 million to help pay the bills.

CAUCASIAN RUMOURS OF WARS. Bombs in and around Abkhazia: Sukhumi blames Tbilisi, Tbilisi blames Abkhazian criminals. Sukhumi says Tbilisi has begun UAV flights again; Tbilisi denies it. On the 1st Sukhumi sealed the border with Georgia. Javier Solana recommended direct dialogue between the two.

© Patrick Armstrong, Ottawa, Canada