PUTIN’S VIEW. Occasionally we get a succinct indication of Putin’s thinking. Here’s one from a meeting with the State Council on Friday: “We must not allow our political culture to follow a Ukrainian scenario, and we must also prevent it from sliding into totalitarianism and despotism. Unfortunately, we know examples of this within the post-Soviet space”. A not unreasonable via media.

NATO. Relations proceed as NATO continues its self-educational process of realising Russia is more important than it used to think it was.

PREDICTION. A study by PricewaterhouseCoopers predicts that, by 2050, Russia’s economy will be the sixth-largest in the world and larger than any in Europe. There are too many future unknowns to put much stock in these kinds of predictions but it is interesting (amusing?) to juxtapose this with the commonplace predictions that Russia will collapse, sink into permanent poverty or that Russians will disappear from the earth.

VOTING. The Central Elections Committee has proposed the elimination of preliminary voting; it is widely regarded as the principal means of “improving” election results. (I refuse to say “fixing”: under no conceivable circumstances, with the government so supported and the opposition so irrelevant, would United Russia not dominate elections across the country).

SHAYMIYEV. I have long been intrigued by Mintimer Shaymiyev who has been more or less running Tatarstan since 1989 (and a major player there since 1983). I was impressed by the negotiation of the power-sharing treaty with Moscow in the 1990s (which still has legs: I love that “associated (объединенное) with the Russian Federation”) and the way in which Moscow was skilfully manipulated by Kazan. Indeed, at one point in the First Chechen War Shaymiyev’s website could not resist pointing out how much cleverer he had been than Dudayev had been in Chechnya. Dudayev threw away the power-sharing treaty that the Chechen parliament negotiated with Moscow in 1992: because freedom needed sacrifice. On the contrary, one of the Tatarstan negotiators told me, never did they make the mistake of breathing the word “independence”. On Friday he announced he would not seek another term as President and will retire in March. Age, presumably, he’s 73 (and maybe a gentle hint from Medvedev). Tatarstan seems to be one of the better-off and more peaceful parts of the Federation. Medvedev has nominated PM Rustam Minnikhanov. Who knows, maybe the Mayor of all the Moscows (who is 74) will hang up his hat next!

KARABAKH. On Monday the Presidents of Russia, Armenia and Azerbaijan met in Sochi and agreed to a “preamble” to an agreement on Karabakh. For some years this issue seems to have been snatched back from solution at the last moment: often what happens is that the war veterans in all three participants (it’s important to remember there are three; it’s not just between Yerevan and Baku) protest any compromise.

IRAN. Foreign Minister Lavrov is quoted as saying that Moscow is disappointed with Tehran’s reaction to the proposal on nuclear fuels and added that “it is impossible to wait forever”. “Forever”, however, is a long time and doesn’t preclude more waiting.

GEORGIA. The Georgian government has issued a policy statement on South Ossetia and Abkhazia. It’s the usual stuff except for this: “Georgia seeks to achieve these objectives only through peaceful means and diplomatic efforts, and rejects the pursuit of a military solution”. For years Moscow tried to get Tbilisi to formally renounce force (and the ceasefire agreement does oblige it to do so) so this may mean something. But, on the other hand, there is no reason to believe anything that comes out of Saakashvili or his government. And, of course, the statement appears only now that the territories have been lost to Tbilisi for the foreseeable future and the Ukrainian election (in which Saakashvili seems to have tried to meddle) has removed one of Saakashvili’s most important friends (and weapons suppliers – will the new Ukrainian President will look into that murky story?). Finally, a strategy of “engagement through cooperation” might have been a winner in 1989, but it’s too late now: Tbilisi has attacked the two too many times.

© Patrick Armstrong Analysis, Ottawa, Canada (see http://www.russiaotherpointsofview.com/)

UKRAINE-RUSSIA RELATIONS. Will obviously be “better” as neither winner is running on an overtly anti-Russia platform. That having been said, a better word would be “rational relations”. The NATO obsession was a disaster for relations (and extremely divisive inside Ukraine, where an overwhelming majority want good relations with Russia) and that is now over. There will, however, still be disagreements but, with luck, they can be settled outside of an apocalyptic framework.

INTERNET. The latest numbers suggest about a fifth of Russian adults (24 million) use the Internet daily. This figure is said to be up about 20% since last year. (JRL/2010/11/5). As I have said many times before, the standard scare pieces about government control of Russian media omit to mention Internet access (probably because they are mostly written by Old Media types). The New Media is replacing the Old all over the world.

NORTH CAUCASUS. Medvedev’s latest idea is to create a new North Caucasus federal district, appointing Aleksandr Khloponin presidential envoy. What is interesting about the appointment is that he is not a security man but someone evidently intended to improve the desperate economic situation.

DWELLINGS. Many Russians privatised their dwellings for modest sums (about 80% in Moscow, for example), but many still have not. The Duma has extended the deadline for another 3 years.

CHICKEN WARS. In the 1990s chicken legs were an important US export to Russia – Americans apparently prefer white meat and Russians were then happy to eat any meat. But Russia has just, to quote Putin, adopted EU standards: “We simply took them for use in our own country”. This really has nothing to do with Russia: the Europeans also reject US imports for convincing reasons. Negotiations continue (and with Europe too).

Nukes. Medvedev has said that negotiations are progressing. The target seems to be 1500-1675 warheads and 500-1,000 delivery vehicles each. This would seem to leave each with an admirable sufficiency of destruction.

INTERIOR MINISTRY. The police force scores high in public perception of corruption and there is supposed to be a reform going on. Meanwhile, the policeman who blew the whistle about police corruption in Krasnodar has been charged by his former colleagues; make of that what you will. There’s supposed to be an investigation there too. Heads of Russia’s media outlets have sent a letter to the Minister requesting police protection for reporters; this after a reporter was arrested and fined for covering an unauthorised protest. The Public Chamber will take up the reporter’s case, so this may result in a precedent the police will be inclined to follow.

UKRAINE ELECTION. Two good things. Turnout was about two-thirds which shows that, however disgusted they may be with the “Orange stagnation”, Ukrainians have not lost faith in the process. And the election was reported by all foreign observers as being to an acceptable standard. The bad news is that the country’s division remains. Outsiders have – or should have – only one interest in the outcome of Ukrainian elections and that is security; the last being greatly affected by stability. Ukraine is much divided by its history and east and west have quite different interests on many subjects. The NATO membership question, injected by the “Orange Revolution”, is the single-most divisive issue that I can image: nothing could be better calculated to remind Ukrainians, every moment, of what divides them. The NATO obsession helped paralyse politics, turning every question into one between treason and patriotism. Ukraine’s genuine problems are the common post-communist ones greatly intensified by the financial crisis: for this Ukraine needs a government of national unity, or if that is not possible, a president who can claim to be president of all Ukraine and not just half of it. In this respect, a better result would have been to have had the winner of the first round score in the forties and cruise to a convincing victory in the sixties or seventies. Instead, the results follow what opinion polls have shown for years: Yanukovych’s support in the mid-thirties is based on the east and south; Tymoshenko, about ten points behind, has her support in the west and centre. Thus the expectation is that winner will only score in the low fifties and will, therefore, be president of half of Ukraine. Pundits are punditting away, but there are questions we simply do not know the answers to. Conventional wisdom seems to be developing that Yanukovych has never been able to score more than the low forties; this is true, but neither has Tymoshenko. Can losers move their votes to one or the other? (In any case, Tyhypko (13%) and Yaysenyuk (7%) are reported as saying they will support neither). Results here.

© Patrick Armstrong Analysis, Ottawa, Canada (see http://www.russiaotherpointsofview.com/)

TEN YEARS. Putin became acting President on the last day of 1999 and was elected in March. When he came to power, judging from the essay he wrote, he set himself four tasks: 1) to reverse the economic decline; 2) to reverse the disintegration of Russia; 3) to increase Russia’s influence in the world; and 4) to introduce a rule of law or, as I prefer to put it, a rule of rules. Then economic indicators were trending down; Russia seemed to be literally breaking up (this fear often featured in his early speeches); most world capitals slighted it as a negligible and declining power; and the “rule” in Russia was that of corruption and incompetence. No one can deny that he has made great progress in these aims. The economy has turned around: here he had luck with high energy prices, but his policy did not squander the money. He has certainly restored central control – too much in my opinion – but no one now talks about the coming disintegration of Russia. Russia is taken much more seriously today although here the result is mixed. To those who will ever regard a weak Russia as a danger and a strong Russia as a threat, Putin’s effects have been wholly negative; but these people will never be pleased. Russia must now be taken more seriously (even though I think that Putin and his team sometimes overestimate its power and influence). But there has been little progress on the fourth aim. Nevertheless, few have been as successful at accomplishing their purpose as Putin and his team have. The team is still in place and is moving on the second half of the program. Putin stopped the decline and it is Medvedev’s task, as he ceaselessly says, to “modernise” Russia. The economy may be improving but it needs a new “modern” basis; the over centralisation of the Putin period should be relaxed; Russia has to improve its standing in the world so as to be seen as more of a problem-solver and less as a problem-causer (which, of course, requires a certain change of attitude in the rest of the world as well as a change in Russia’s behaviour); and finally the “rule of law” must replace “legal nihilism”. Medvedev will not see the resolution of these problems, but he will move them along. I am reminded of a remark made by Dr Leonid Abalkin about 15 years ago: reform will be in three stages, the first stage will take one year, the second five years and the third thirty years. The Putin team is popular in Russia today for a very good reason: it has delivered what governments are hired to do. Altogether, it has been quite a turnaround in the last ten years: no one would write “Russia is Finished” today; now conventional wisdom has moved to the “Russia resurgent” meme (but, note, Russia remains a problem!). The plain fact is that Russia is doing better than any of the final 12 members of the USSR and the ruling team has broad, real and persistent support firmly based on things that Russians can see happening around them. This, incidentally, is the principal reason why Russian elections are so unsurprising: Russians vote for more of the same and that means voting for the team’s pedestal party. In Ukraine, for example, this broad support does not exist: support there for the government is “the lowest in the world”.

ANTI-ALCOHOL CAMPAIGN. PM Putin has approved an anti-alcohol campaign. Certainly a major problem in Russia (and for a long time – English sailors in Murmansk in the 1500s are reported to have been pretty stunned by what they saw) and a major contributor to the death rate. But, Gorbachev’s efforts only resulted in the destruction of ancient vineyards in Georgia and Moldova and a sugar shortage when samogon production took off. We’ll see whether this campaign is more successful. Distilled alcohol consumption is a problem in northern countries generally and it is moderated by high prices.

HAITI EARTHQUAKE. The ever-efficient Russian Emergency Ministry has got its rescue teams off to Haiti.

NORTH CAUCASUS. The authorities claim more successes this week: perhaps the jihadists were ill-advised to keep their attacks up in winter.

RUSSIA INC. FOREX and gold actually grew last year by US$13.52 billion to US$440.6 billion and have gone up a bit so far this year.

UKRAINIAN ELECTION. For what it’s worth, a VTsIOM poll suggests that Serhey Tyhypko is catching up to Tymoshenko. The consensus of other polls is that Yanukovych will lead on the first round and he and Tymoshenko will go into the final round. But, maybe not. A possible decision by voters sick of the post-“Orange” stalemate might be that Tymoshenko and Yanukovych were part of it because each served a term as PM under Yushchenko. There may, therefore, be a chance for someone not involved. We’ll find out next week.

© Patrick Armstrong Analysis, Ottawa, Canada (see http://www.russiaotherpointsofview.com/)

HAPPY NEW YEAR! С НОВЫМ ГОДОМ!

JIHADIST WAR IN RUSSIA. The jihadist war continues in the North Caucasus. After the deaths of Khattab in 2002 and Basayev in 2006, jihadist activity slowed greatly; but a new leader, who has re-animated the “Caucasus Emirate” has appeared, (Said Abu Saad Buryatskiy). His new tactics use suicide bombers to target the security forces and other opponents. Since the last Sitrep, there has been a murder attempt on an imam, car bombs in Nazran and elsewhere in Ingushetia, a police chief murdered in Dagestan, a bomb defused in Kabardino-Balkaria, a suicide car bomb in Makhachkala and today mines near a railway line in North Ossetia. However, in strong contrast with their ineffectiveness when the international jihadists arrived 15 years ago, the authorities also win some: a group, together with an important leader was killed in Chechnya; another group with its leader was killed in Dagestan. The last produced a document showing payments (reportedly local extortions as well as monies from UAE, Georgia, Turkey and Azerbaijan). Two more were killed today in Dagestan. This is, of course, the very same war, animated by the same ideology, using the same methods and fought for the same purpose, which we see in the USA, Pakistan and Saudi Arabia and around the world. It’s just being fought in a different place. But, because that place is Russia, many in the Kommentariat cannot make the connection. (And I’m not convinced that very many intelligence and security services truly understand it either).

POPULATION. The Health and Social Development Minister said that, as of 1 November, the population was 141.9 million and by 1 January it would be 15,000 to 25,000 larger than it had been the year before. The increase comes from immigration (about a third of a million) because the natural decline continues. Although at a slower rate: the birth rate is up about 3% and the death rate down about the same. The government program is having an effect at both ends of the demographic problem.

FINANCIAL CRISIS. Last week Medvedev said that Russia had passed through the worst of the global financial crisis and he anticipated modest growth in 2010. Indications suggest he is correct in thinking so.

INTERIOR MINISTRY. Medvedev has signed a decree ordering the Interior Ministry Staff to undertake reform because “there has been a recent increase in offences against law and disciplinary infractions committed by police officers”. It is reported that some of the aims are a 20% staff reduction and a review of selection procedures. Eradicating corruption – which is to say, getting it down to “normal G7” levels – will be a long, weary effort for Medvedev and his successors.

STREET THEATRE. Here we go again: “opposition” groups apply for a demonstration permit; the city refuses, claiming the location was already booked; they march there anyway; they are arrested and soon released; Western governments huff and puff. When they march where the city permits them (and what city allows anyone to demonstrate anywhere at any time?) nothing happens.

THINGS THAT AREN’T REPORTED. There are all kinds of projects in Russia that don’t get much mention. Two items caught my eye recently: an upgrade of the control system for Russia’s railways and the “modernity” of the ambulance in this photo. Not all of Russia’s new money is being spent on yachts and fast cars.

PEOPLE POWER. There was a blow to the opposition to Gazprom’s proposed high-rise in St Petersburg when the city council voted against holding a referendum on its construction.

GAS. Gazprom has announced that Belarus will be charged about $168 tcm in the first quarter of 2010 (up from 2009’s average price of US$150 tcm). Meanwhile Russia and Turkmenistan have agreed on gas supplies at the European price level (last year’s price was about US$300 tcm).

CUSTOMS UNION. As of Friday, Russia, Kazakhstan and Belarus have begun using common customs tariffs. It is planned to introduce a common customs space in July and a single economic space in January 2012.

UKRAINIAN ELECTION. The last poll before the presidential election on the 17th shows Yanukovych leading comfortably (about 30%), Tymoshenko second (about 20%) and Yushchenko far behind. Therefore, Yanukovych will not likely win on the first round but will presumably on the second against Tymoshenko on 7 February. I would suggest that any other result would be prima facie evidence of severe cheating, given that these polling results have held for the past couple of years. I wonder who really won in 2004.

© Patrick Armstrong Analysis, Ottawa, Canada (see http://www.russiaotherpointsofview.com/)