OVER-CENTRALISATION. I have long thought that Putin, probably as a result of his fear that Russia would break up, over-centralised control (From his first phone-in in 2000: “The ‘power component’ in this country has become weakened and everything went tumbling down”.). One of Medvedev’s problems, therefore, is to reduce this centralisation: his goal of “modernisation” is impossible if all decisions are made at the centre. Yesterday, the Institute of Contemporary Development, with which Medvedev is associated, issued its report on what should be done. In brief, it calls for a general loosening of the political and command system of the country and a number of changes; many reverse decisions Putin made when he was President and mark somewhat of a return to the Yeltsin period. No doubt the Kommentariat will go into a frenzy of speculation about a struggle between the two Duumvirs, but I believe that this is all part of the next stage of the Team’s Plan. The report is probably to be seen as a contribution to the discussion. We will see what happens.

MCDONALDS. Some years ago I was asked at a conference what I thought to be the best thing that Canada had done for Russia: I answered McDonalds, to the surprise of the assembled policy wonks and academics. Not everyone is aware that it was the Canadian branch of the company, and the determination of its Chairman, George Cohon, which made it happen. Snooty people can sniff all they want, but food was in short supply then in Russia and the McDonalds restaurant on Pushkin Square never turned anyone away. And, important then: clean toilets. And everything was priced in rubles. Since then McDonalds has expanded all over Russia. It has stayed the course through crises; it invested its earnings back into Russia; it makes most of its product in Russia thereby forcing its standards on suppliers; it virtually introduced a real service culture to the country; it has been a school for management; it has inspired many Russian imitators. On Sunday it celebrated the twentieth anniversary of opening.

GDP. On Monday RosStat reported that Russia’s GDP had declined 7.9% in 2009; the good news was that a decline of 8.5% had been projected.

AEROFLOT. Apparently abandoning an idea to create a large regional air carrier, Putin announced that Aeroflot would take over a number of regional carriers. The stated reason is to improve service and safety as many of the “babyflots” that came into existence in the 1990s are in trouble. Reminiscent of the creation of the Canadian National Railway out of bankrupt lines in the 1920s.

PEOPLE POWER. There was a large protest by several thousand people in Kaliningrad on Sunday over some tax increases. This has stirred some alarm locally and at the centre as people scurry there. A number of things appear to have coalesced to cause the protest and, for once, all the opposition parties got together to organise it. Much of the anger seems to be aimed at the Governor, Georgiy Boos. It remains to be seen whether this is anything more than a local grievance (vide the protests in Vladivostok last year) or has wider implications.

NORWAY SPIRAL”. Remember the lights over Norway last December? This analysis makes interesting reading. The author suggests that the Bulava failures may be a cover for the (successful) testing of something else.

NORTH CAUCASUS. Security forces claim to have killed one of the original jihadists who came to the North Caucasus in the first Chechen war. He is Mohamad Shaaban, an Egyptian, and is described as having arrived in Chechnya in 1992 and, together with Khattab, organised the “North Caucasus branch of al-Qaeda”.

OIL AND BELARUS. Moscow and Minsk signed an agreement last week on supplies and transit and the problem seems to be now over. By the way, those who think that Ukraine’s future is to be under the Russian boot might profit from studying Minsk-Moscow relations over the years.

UKRAINIAN ELECTION. A change has been made to the election rules which Tymoshenko claims could lead to cheating against her (mind you, the argument for making the change was to prevent her side from cheating). President Yushchenko has signed off on the change. Some pundits opine that there is a below-the-surface alliance between Yushchenko and Yanukovych. Meanwhile, Tymoshenko threatens to call her people onto the streets if she doesn’t like the result (bet they don’t show up). Polls indicate a narrow win by Yanukovych on Sunday. Unity seems as far away as ever.

IRAN. Is Teheran about to reverse its position on the uranium enrichment proposal? Who knows?

© Patrick Armstrong Analysis, Ottawa, Canada (see