COURT ACTIVITY. Lots of activity in the legal system. In old cases, the Moscow City Court announced that it would hear an appeal against the new jail term for Khodorkovsky and Lebedev on 17 May. This follows last week’s Supreme Court ruling that their pre-trial detention was not legal. Perhaps we will see a reduction in sentence or maybe even an acquittal. Valeriy Borshchev, of the presidential council on human rights, said that that body’s investigation showed that charges against Sergey Magnitskiy (who died in pre-trail detention 18 months ago) were fabricated. Meanwhile, in Switzerland, a money-laundering probe against a former Russian tax official has been opened at the request of the company with which he was associated. In on-going cases, two defendants accused of the murders of Stanislav Markelov and Anastasia Baburova in January 2009 have attempted suicide; the verdict was supposed to come out today. And in coming cases, the Russian Audit Chamber says it will sue the former Bank of Moscow president, Andrey Borodin, for US$1 billion (the sum he is supposed to have extracted from Moscow City). Medvedev’s campaign against “legal nihilism” presumably excludes pre-determined verdicts, fabricated evidence and requires punishment. We will see how these work out. Meanwhile Medvedev signed into law an extension of defence lawyers’ rights.

PAVLOVSKIY. Gleb Pavlovskiy, long time political fixer and advisor to the Kremlin, has severed (or been severed from) his connection with the Presidential Administration. He gave his reasons in an interview yesterday. He is disturbed by the fact that neither of the Duumvirate has announced his candidacy; this he says, is creating competition between their two “fan clubs”. Pavlovskiy makes no secret that he thinks Medvedev should be the “consolidated team” candidate and implies that his credibility was impaired by the opposition from Putin’s “fan club”. He, however, utterly denies a split between the two leaders: “There is no split and rumours about it are unfounded (неправомерны)”. The potential difficulty with the Duumvirate idea was never competition between the two principals but struggles between their apparats. When one of the two is up, so is his tail and vice versa. Putin, ever cautious, thinks it’s too early to announce – he wants to get the Duma elections over first – but Medvedev seems to be willing to announce earlier. Myself, I don’t see why it shouldn’t be announced earlier – it’s not as if Zhirinovskiy (running yet again – that’s every presidential election since the first twenty years ago) is likely to win otherwise. Or Zyuganov.

UNITED RUSSIA. There is a good deal of discussion going around that the pedestal party is slipping in the polls and may even lose its predominance. I’m less convinced: too much analysis seems to assume that the choice is between United Russia and the Archangel Michael’s party. Michael won’t be running but the Communists and Zhirinovskiy will and Russian electors will have the same old tired choice: more of the same or the obsolete past. Nonetheless, there is a good deal of struggling under the blanket and it is time for the Duumvirate to decide on its candidate and end the struggles between the “fan clubs”.

STATE AND ECONOMY. On Monday, addressing the boards of the Ministry of Economic Development and the Ministry of Finance, Putin said “We need to reduce the government’s unjustified presence in the economy and excessive amounts of government property creating more room for private initiative.” Is the Kommentariat going to start writing headscratchers on how Putin has now become the anti-Putin? His speech could have been given by Medvedev: reducing reliance on commodities, more innovation and modernisation. Same team, same plan, different phase.

POLICE. More senior police officers fired. No reason announced but, given their positions, peculation looks likely. And more appointments as seniors pass their tests.

LIBYA. As NATO’s operations in Libya inexorably expand, my suggestion that Russia may become the necessary intermediary comes a little closer: it is reported that Foreign Minister Lavrov was in discussion with the Libyan PM on a ceasefire. Lavrov also made it clear that Moscow will not support any new UN resolution that “stipulates further aggravation of the civil war and violence”. Putin remains scornful. Shades of NATO’s Kosovo adventure in which a limited and quick – or so it was expected – air operation went on for a couple of months with talk of introducing ground troops until Chernomyrdin and Ahtisaari brought it to an end.

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

PUTIN SPEECH. Today Putin gave his annual speech to the Duma reporting on the government’s activities and plans. He was generally upbeat about Russia’s recovery from the financial crisis. He returned to one of his key themes: “This country requires decades of steady, uninterrupted development. Without sudden radical changes in course or ill thought through experiments based so often in either unjustified economic liberalism, or, on the other hand, social demagogy. We need neither. Both will distract us from the general path of developing the country. And, of course, we should maintain civic and inter-ethnic peace, and put a stop to any attempt to cause our society to split and quarrel among itself”. To my mind stability is still the dominating theme for him (probably less so for Medvedev, given the difference in age and experience – Putin was 39 when the USSR fell apart, Medvedev 26. A significant difference I believe). He enumerated a number of targets for the future having to do with the economy. His observation (supporting his contention that Russia had done better than some others) that Portugal had asked for emergency financial assistance put me in mind of his remark a decade ago: rather than Russia struggling to catch up to Portugal, it may happen that it passes Russia, going in the other direction.

PEDESTAL PARTY. On Friday he gave another important speech to the leaders of United Russia. To my mind the most important point was his call for competition inside the monolith. What he appears to be suggesting is that UR candidates in the Duma elections (in December), rather than nominated from above, should be chosen through some sort of electoral process presumably resembling a US primary. The party leadership enthusiastically agreed with the proposal. An interesting idea: we will see how authentic it is in practice (as little as local bosses can get away with no doubt).

PARTY OF POPULAR FREEDOM. And yet another liberal party. Boris Nemtsov, Mikhail Kasyanov, Vladimir Ryzhkov and Vladimir Milov created the Party of Popular Freedom in December and it is beginning to stir. We’ve seen a lot of these come and go: usually they founder on the egos of the leader; each Russian liberal appears to believe that only he is fit to be leader of a “united” movement. Probably this attempt will fade away as so many others have but I was struck by an interview with Ryzhkov in which he sounded quite realistic (JRL/2011/65). He sees potential support in the range of 10% rather than some notion that a majority will support them. I’m also impressed that the website is in Russian – I always wondered what the target for sites like this really was. And it’s not the Kremlin that crushes these things. Ryzhkov named three problems of liberals in Russia: 1) “All previous parties were clubs comprising intellectuals, mostly from Moscow, who established these parties in accordance with their own ideas concerning what the people needed”; 2) “[The 1990s] compromised the democratic idea thoroughly… A good deal of Russians regard the words ‘democrat’ and ‘rascal’ as synonyms” and 3) “the eternal discord among democrats. Hence the lack of success.” So some difference. But the odds are poor. But one of these days Russian liberals will get together.

KHODORKOVSKIY. The Supreme Court has ruled that the detention of Khodorkovskiy and Lebedev before their second trial was not legal. There is, after all, a new law that says people charged with economic crimes should not be parked in the (often lethal) pre-trial detention prisons. We shall see what difference this will make to their situation but it is another sign that Russia is not entirely run out of one office.

JACKSON-VANIK. A lawsuit has been filed in the USA to require Obama to remove Russia from the restriction. They believe he has the necessary legal authority. US Presidents routinely promise to end it, but it never happens. Its retention is another of those things that makes suspicious Russians believe that it’s all a swindle.

CORRUPTION. There was a large anti-corruption demonstration in Moscow – several tens of thousands they say – on Sunday. It attracted Nashi and the Party of Popular Freedom as well as the newly-appeared “white aprons”. It looked rather un-spontaneous to me but may develop into something more popularly rooted.

PEOPLE POWER. An Arbitration Appeals Tribunal ruled that Rosneft must provide information on its 2009 board meetings to minority shareholder and blogger Aleksey Navalniy, who has consistently called for greater transparency in Russian business practices. Another small victory for the ordinary citizen.

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

ANOTHER MISQUOTATION IN THE ONLY STORY IN RUSSIA. RIA Novosti reports that Medvedev said that he and Putin would decide which runs for president soon. This assertion will, no doubt be endlessly repeated. But it’s not what he said. What he actually said was that he would decide fairly soon whether he would run for a second term: “I do not rule out the possibility of my running for a second term at the presidential elections. The decision will be taken very shortly”. (Eng Rus) A much better mindset than this sterile obsession with one or the other is the German concept of a Vorstand; a corporate governance team which is “expected to act collectively and collegiately”. Medvedev himself said about the two of them “We have friendly and very warm relations that have been shaping over the last two decades. It is a long time, in my life, too   you said I am not that old yet. I have known Mr Putin for almost half of my life, it is quite a lot, and we first met back in St Petersburg many-many years ago.” They’re a team. And they are in turn part of a team that has worked together quite effectively and harmoniously for some years. (I am obliged to Timothy Post for introducing me to the concept of a Vorstand.)

DEMOGRAPHICS. The situation continues to slowly improve. January’s births were down a bit from last year but deaths were down further and the net population loss was reduced from about 44,000 to about 39,000. Anatoly Karlin keeps an eye on the data and his conclusion is that, when you add in immigration, Russia’s population has stopped falling. Whether Karlin’s prediction (“I can confidently predict that the 2020 Census will show a population bigger than this year’s”) comes true or not, it’s high time to stop talking about Russia’s “demographic collapse.” The program started some years ago is clearly working. According to data from a 1987 statistics book I possess, the USSR gross death rate began to increase in the Khrushchev period and rose from 7.4 to 10.2 per thousand at the beginning of the Gorbachev period. The effects can be found throughout the post-communist world. Russia was not the worst affected and is making progress.

FSB NOT TOO HAPPY. First the Communications Minister said there were no plans to ban Skype, gmail, hotmail or the like after an FSB official had said he thought they should be. Then an “art collective” got an award for a rude graffito near the FSB headquarters in St Petersburg. Haven’t we been told endlessly that such things are not possible in Putin’s neo-KGB state?

CORRUPTION. Last week police raided the office of the Moscow Administration of the Federal Tax Service and home of its deputy head as part of investigation into the attempted theft of US$70 million by a St. Petersburg firm. A Moscow court has suspended the President of the Bank of Moscow and one of his deputies from the bank’s management for duration of a criminal probe into a large loan. The story is that money from the City’s budget made it into Baturina’s hands. It sounds more and more as if a web is being woven around Luzhkov and his wife.

FRIVOLITY. A flash mob blowing soap bubbles appeared in the Arbat on Sunday.

INCOMES. Putin and Medvedev have declared their incomes. Appropriately modest. Of course neither has had to spend much of his own money for years.

CARS. Russia’s economy is recovering – fairly successfully – after the global financial crisis with increases across the board. But, for some reason sales of cars and light commercial vehicles have really taken off: they are reported to be up 77% year-on-year in the first quarter.

GEORGIA. An Israeli armaments company is suing Tbilisi claiming non-payment for weapons sales made before Israel cut Georgia off after the Ossetia war. The company had sold UAVs and, in all likelihood, many or most have been destroyed already.

MINSK BOMB. A bomb in a Metro station in Minsk on Monday killed and wounded many. Yesterday Lukashenka claimed the crime solved and the perpetrators caught: three are said to have confessed and another two were arrested today. He intimates there is a connection with another explosion in July 2008. Seems a rather suspiciously quick solution.

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

TWO HATS OR ONE? In 2001 Putin appointed Aleksey Miller CEO of Gazprom. Always a state controlled company, the previous CEO had run Gazprom as if he personally owned it. Putin explained Miller’s appointment: “The first task is to safeguard the state’s interests in this company, to collect everything which by rights belongs to the state, and to make the company’s activity and primarily its financial activity absolutely transparent to all shareholders, including minority shareholders”. As a further measure of control, one Dmitriy Medvedev, then Chief of the Presidential Administration, was made board chairman. This pattern was followed in many other state companies. Putin’s actions made sense to me at the time: it was important for the state to get control of what it owned; many feared Russia was collapsing and a notable characteristic of the Yeltsin period had been how poorly state interests had been “safeguarded”. But this had disadvantages: was Ivan Ivanovich a Minister or one of the chief officers of a wealthy company? He was supposed to regulate the company of which he was an officer; how did that work? Was the company a company, or a branch of the ministry? But the time for this is over: Medvedev has published a list of government officials who are to be removed from the boards of state companies: this is to be done by 1 July. More are expected. Note that transparency was the reason given for each plan: for Putin the transparency was for the government so it wouldn’t be looted; for Medvedev it is for investors. Not a dispute with Putin but the fact that different times require different ideas.

BUSINESS CLIMATE. Medvedev gave an important speech on modernisation and the business climate (“very bad, very bad”) in Magnitogorsk. As usual, corruption and bureaucracy were the chief obstacles. He laid out his demands. Work has started: Putin gave orders to cut the payroll tax from 1 Jan 2012 and to prepare a bill to require all officials and parliamentary members to declare expenses. The airport and airline sectors may be opened up. There has been some progress in one important area: see below.

SHADOW ECONOMY. The head of RosStat estimates Russia’s grey economy to amount to about 16% of GDP. This is way down from some previous estimates (45% in 1999). To put this figure into context (something almost never done in reporting about Russia) it is estimated that the grey economy in Europe ranges from 10% in the UK, 12% in Germany(!) and France, 20% in Spain and up to 40% in the eastern countries. Russia, now roughly at the European median (page 4), is hardly an outlier.

OPPOSITION. As I never tired of pointing out, the “liberal opposition”, when it paired with Limonov’s NatBols, accepted a contradiction into its core: whatever the former may have been, the latter had nothing to do with democracy or liberty. Now that Moscow City permits protests (but not Limonov’s), the contradiction has matured. All this played out on 31 March. Lyudmilla Alekseyeva’s group (she refuses to partner with Limonov now) was given a permit, three or four hundred appeared and it was all peaceful. Limonov, refused permission, held a rally anyway, a hundred or so showed up and there were arrests. Added to which, there is no point in holding protests against not being allowed to protest when you are allowed to protest. And so, the leaders announced that that would be the last “31” protest. But they say they will continue their demos. We’ll see: the protests, aided by the Western media’s resolute incuriosity about the NatBols, always seemed to be aimed at a Western audience. So who won? The protesters for carrying their point? Or the authorities for neutering them?

KHODORKOVSKIY. The judge’s aide who said in February that the verdict was fixed “from above” has resigned; her own decision she says.

LUZHKOVSHCHINA. Apparently in advance of his arrest, the President of the Bank of Moscow got out to London. The police are ready to charge him with illegally granting a US$444 million loan to Luzhkov’s wife.

ISS. With the US shuttle program ending, resupply is now up to Russia.

ELECTORAL CHANGES. Medvedev signed a law mandating greater use of party list voting in regions. He is trying, he says, to strengthen political parties. For a discussion of the party system see here (probably up tomorrow).

POLICE REFORM. As the results of the tests come in, Medvedev is making many appointments in the senior ranks of the police. Someone who follows this more closely than I should analyse them to see what changes are happening. We would want to see quite a few positional changes (>33%?) to believe that the effort is real.

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