RUSSIA INC. A growing nervousness about the economy: the Economics Ministry has substantially dropped its forecast of GDP growth to 2.4% from 3.6% and the Minister warns of a possible recession this autumn; the outgoing and incoming heads of the Central Bank of Russia are concerned and so is Putin. Russia is still too dependent on energy exports and, as Europe sags, so do they. Coming over the horizon is North American energy production; dominance, some predictthe USA is close on Russia’s gas output already and, together with Canada, exceeds it. Diversifying its economy will not be easy for Russia Inc – perhaps desperately, Medvedev has offered a state prize to anyone who can solve the conundrum. As one strategy, Russia is more and more looking to China as a customer for energy but, while that gives Russia a growing market, it doesn’t do much for diversification.

CORRUPTION. And still more cases opened, arrests and sentences – too many to keep listing. The Prosecutor General told the Duma that recorded corruption crimes were up nearly 25% to 49,513 and that more than 13,500 individuals had been prosecuted. I imagine the number is up because the pace of investigation has stepped up. Fraud, misappropriation of budget funds (defence contracts especially) and embezzlement involving abuse of office predominate: in short, officials are the greatest thieves. There can be no doubt that an effort much bigger than anything we have seen in twenty years (ever in Russian history?) is under way. One may wonder, however, given the slowness with which these sorts of crimes are investigated and prosecuted, whether the prosecutors have bitten off more than they can digest.

NGOs. Moscow believes many Western-supported (especially Washington) “human rights” NGOs are actually state-sponsored operations to weaken or discredit Putin. I am more and more coming to agree; see this for my reasons. In order to get a grip on this, foreign-funded NGOs engaged in political activities must register as “foreign agents”. Despite the fact that this is simply an imitation of long-standing American legislation, the anti-Russia crowd is in full cry is if this were a world first, but only a simpleton would believe that foreign government funding is disinterested just because it says it is. We will hear much about brave and innocent NGOs being persecuted. Already GOLOS is complaining (but it hasn’t registered, it is political and it does take money from Washington). Washington huffs away, Moscow huffs back. Meanwhile the Russian government is giving money to NGOs which, of course, puts the G into the O. Including this potentially interesting scheme: an online portal to promote public petitions (site).

DUELLING LISTS. The Americans named 18 on their “Magnitskiy List”. Russia responded with its 18, mostly connected with Guantanamo (they’re sooooo yesterday to mention that). Those naïve enough to believe Washington really means human rights when it talks about them should read the last paragraph of this from the Washington Post. “Human rights” are an arrow in the quiver to be fired at some targets and not at others.

Navalniy. He is on trial for embezzlement; he insists he is innocent. Readers of the Western media are told that Putin’s opponents are always innocent, but for those who want a more informed discussion, Karlin summarises what is known and Mercouris analyses it. While the timing is admitted to not be a coincidence (see Markin’s statement), there does appear to be some smoke here.

PUTINOLOGY. A Levada poll finds that, while his approval rate is still very high at 64% and he by far leads all others as a potential President, over half of the respondents do not want him to run again. Perhaps not coincidentally, he earlier said that upon retirement he will take up literature, sports, jurisprudence and public projects. Well, there goes my bet that he would open a fishing camp (presumably not inviting Medvedev to it).

CYPRUS. No doubt weary of years of Western moralistic grandstanding, Putin could not resist pointing out that the confiscations show how risky investments in Western financial institutions can be. By the way, Jon Hellevig reports that in 2002 Putin actually warned of this possibility.

GEORGIA. Ivanishvili says the August 2008 war should be investigated, Saakashvili says he will not cooperate. Perhaps he doesn’t want to remind people how often he changed his story or that Saakashvili lied 100 percent to all of us”.

© Patrick Armstrong Analysis, Ottawa, Canada (