NGOs. The new law was overwhelmingly passed by the Duma and the Federation Council. (a real all-party effort – it’s a popular provision: 60% plus). In essence, NGOs that are foreign-funded and operate in the political sphere must report on the extent of foreign funding and label themselves as foreign agents. Here is what has changed. The law is somewhat modelled on the US FARA law of 1938 that “requires persons acting as agents of foreign principals in a political or quasi-political capacity to make periodic public disclosure of their relationship with the foreign principal” (something seldom mentioned in much of the commentary on the Russian law). Much flapdoodle from those whose oxen will be gored and livelihoods will be affected. Application is, of course the key, but I have no problem with the law: I think Canada, which has a similar problem, should have a similar law. People should be able to know what interests are trying to influence them.

STATE COUNCIL. Leaders of the parliamentary opposition have been added to this advisory group which held its first meeting in this new format on Tuesday. Usual response: either an opening to or cooption of.

INTERNET. The Duma and the Federation Council have passed a law allowing websites “promoting illegal drugs, child abuse or suicide” to be shut down. Not uncommon elsewhere.

POLITKOVSKAYA MURDER. Back at the beginning of the investigation, a senior policeman, Dmitriy Pavlyuchenkov, was suspected of having set up the killing. Then something happened and this line was not pursued. But he was re-arrested and has apparently pleaded guilty to tracking her whereabouts and giving weapons to the actual killers. In what may be a plea-bargain, the Investigative Committee has formally charged him with involvement, but not doing the actual killing. From the beginning the official theory has been the man who ordered the killing (suspicions but no names – thought to be in the West somewhere), the sub-contractor (a Chechen “biznesman”), the spotter (Pavlyuchenkov) and the actual killers (people were tried but found not guilty). (The Wikipedia article isn’t much use, being mostly a collection of rumours.) I have always believed that she found out something (perhaps without knowing that she had) that some player in Chechnya didn’t want known and she was killed. (By the way if, as many still believe, Putin had her killed, we would not be hearing about a senior policeman’s involvement.)

ECONOMY. Putin is smart enough to know that Russia Inc is too dependent on energy sales and that the coming North American domination of production will seriously change the oil and gas business. He has spoken of the first many times, as did Medvedev in his time. His latest move in what I think will be the predominant issue of his current term, is the creation of a President’s Economic Council to guide diversification of the economy. Easier to say than to do of course.

FLOODS. There are serious floods in Krasnodar Region, and many have died. Udaltsov says the problems are a direct result of corruption. No doubt corruption has played a part, but, typically, he gets all absolutist: “Nothing is invested in infrastructure, everything is being stolen”. No it’s not all stolen and there is much investment. Of more interest, there has been, as with the forest fires a couple of years ago, much civil society involvement.

SYRIA. The deputy head of the Federal Service for Military-Technical Cooperation, is quoted as saying Russia will not deliver any new types of weapons or sign military contracts with Syria until the situation stabilises. This especially affects the 36 Yak 130 trainer/light ground attack aircraft.

BORDERS. Putin and Yanukovych at their meeting last week signed a preliminary agreement on the delimitation of the border in the Kerch Strait. This agreement (which one assumes will stand) two decades after the breakup of the USSR is an example of how difficult these issues are. In the Soviet days it didn’t matter where the line was because it was all in the same country and was a federal responsibility anyway. But navigation and access matter between independent countries. And that took a lot of back and forth to get to. The details aren’t out but it appears that Russian ships can freely pass through to the Sea of Azov and Tuzla Island is part of Ukraine. There was also some agreement about Russian Black Sea Fleet basing in Ukraine. Novorossiysk is supposedly being built up to be a major – maybe the major – base for the Fleet, but it’s not clear what has actually been done and Google Earth doesn’t suggest that much has.

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

PUTIN SPEECH. At the St Petersburg Forum. On a recurrent theme, he said that the economy must reduce its dependence on hydrocarbons and that foreign investment was necessary: “This is why we feel that creating an investment climate that is not just favourable, but truly better and more competitive, is a key issue in state policy.” A commissioner for entrepreneurs’ rights, Boris Titov, has been named (he immediately said he would press for pardons for the many in jail for economic crimes – including Khodorkovskiy. I wonder how that will play out). The government will reduce its holdings in state-owned companies. Medvedev received much attention at the start of his presidency for talking about Russia’s “legal nihilism”; well, here’s Putin: “Unfortunately corruption is without exaggeration the biggest threat to our development”. Same team, same program. In fact there are those who think Putin came back as President because only he has the muscle to take on corruption. There is a hint in the speech that he takes the G20 more seriously than the G8. An important speech to read and not read about: making Russia a more attractive place for foreign investment will be a high priority. He’s not naïve: “a fairly difficult and ambitious goal, given our position today”.

TODAY’S VIDEO. Putin is a believing Christian. I heard that a long time ago and here’s a video collection.

PARTIES. The 1995 Duma election had 43 parties contending and 4 crossed the 5% threshold (I was an official observer and well remember the gigantic ballots – size of a newspaper sheet). In 1999 there were “only” 30 and five made it over the barrier (two merged into today’s United Russia pedestal party). Putin’s new rules made it harder to register and raised the barrier, Medvedev’s rules made it easier and lowered the barrier. So we’re back to the 1990s. 23 new parties have been registered and there are more on the waiting list. But, over these elections and different rules, one thing stands out: only four tendencies get into the Duma, whatever number of parties there may be. The Communists and Zhirinovskiy (who have some overlap of appeal) make it and so does the pedestal party (gone through several iterations but the same in essence). Then there is a “liberalish” party (used to be Yabloko – and probably could be today if Russian liberals had cooperated with each other) but today the United Russia-lite Just Russia fills the position (will it carve a place for itself? Seems to be doing so). I would be surprised if the addition of other 20 – or 200 – parties will make much difference to this breakdown which well reflects political opinion in the country. One of the great defects of Russian politics to my mind is the refusal of the “liberal” tendency (which probably has 10-15% of the electorate) to unite. Good piece on their failures here. As an observer of the 20 years, I find it interesting just how long it takes a real party system to evolve. We’re not there yet and I have no idea when we will be.

FEDERATION COUNCIL. Yet another re-arrangement. Now gubernatorial candidates (again to be directly elected) must nominate their representative on the Federation Council (and 2 spares) as part of their campaign. Russia’s upper house therefore resembles the US Senate before 1913 – direct representatives sent by the regions.

POLL. For those who think Russian polls that show Putin is popular are fixed and that they can therefore make up their own numbers, here’s a German/US one that shows the same thing (graphic). By the way Navalniy, the West’s current darling, is not especially popular. I also notice that 43% say they have 2 or more children.

NATO. Moscow has given approval for NATO to use a base in Ulyanovsk as a transit hub to Afghanistan. This is not going to be a popular decision.

THE EMPTINESS OF FORMER FLAPS. A DND study says that Russia’s activities in the Arctic pose no threat to Canada: “Russia is following the same process prescribed by the United Nations Convention on the Law of the Sea to define its outer jurisdictional limits as other coastal states”. (See this) That’s not what we heard at the time: Russia claims North Pole. But the damage was done and it was affixed to the “charge sheet”. And another: one of the Russian amphibious ships supposedly enroute to Syria never went anywhere near it.

ISRAEL. Putin’s trip to Israel is a reminder that Russian-Israeli relations are actually pretty good. Gas too maybe.

GEORGIA. Shevardnadze is reported to have said his “biggest sin to the people and the country was the fact that he had transmitted power to Saakashvili” whom he calls a dictator, Apparently Ivanishvili has hired his own PR firm in Washington. I foresee the amusing scene of Lobbyist A entering a US Congressman’s office and saying “Saakashvili is a great democrat and should be supported” to be immediately followed by Lobbyist B saying “Saakashvili is a great dictator and should be opposed”. Cognitive dissonance indeed.

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

SYRIA ET AL. Whenever something horrible happens in the world that Western governments and media outlets actually notice, we find two different reactions from Moscow and Washington. Moscow confines itself to anodyne statements about constitutional agreement, peace and so forth – admirable sentiments which do nothing. Washington, on the other hand, feels it has to pick a side and blame those that don’t. US media outlets either create this judgement or follow along (which comes first?). Washington then accuses Moscow (and others) of preventing it “doing something”; the media picks up this line and fills up with stories (many of which don’t prove to be true: this one again, for example). When the crisis ends, interest and coverage do too. The collective memory is wiped clean and attention moves to the next CNN crisis. Since the end of the Cold War I recall four of these “humanitarian interventions” that exemplify this pattern. No one today ever mentions Somalia (1992) or Haiti (1994); the first being an utter disaster and the second ineffective. As to Kosovo (1999) we never heard about the KLA and organ harvesting at the time or much else about the people NATO put into power today; as to Libya (2011) mention of gunmen fighting it out or knock-on effects in Chad or Mali stays far in the back pages. The reality is that these “humanitarian interventions” aren’t such big successes that anyone should lightly proceed to the next one. So, if Putin “lectured” Obama, whose knowledge of the world is a bit shaky, I have some sympathy with him. Their bland joint statement here.

PROTESTS. New fines for unauthorised protests have been passed. Putin’s press secretary said he would not sign until he had looked at European norms and carefully considered. Didn’t take him long – he signed 2 days later. Much flapdoodle – this ever-reliable hater of all things Putin manages, in the same piece, both to suggest Putin is weakened by continual large-scale protests and that he is cracking down on them. Alas for his thesis, there was another large anti-Putin protest on Tuesday that passed off without incident. (And a very mixed bag turn out these days). Russia has rules, the same as everyone else: ask for a permit, where, when and how many, negotiate with the city, get agreement and go ahead. Stick to the permit and nothing happens. Break the rules, and the cops move in. And, even in such exemplars of democracy as Canada, the rules can be changed. I am amused to see that VTsIOM finds that Putin’s and Medvedev’s ratings have improved since the protests began, Levada agrees. I leave it to you, Dear Readers, to speculate on how this could be. Given all the hoohah in Western news outlets.

CORRUPTION. A former senior policemen was sentenced to 9 years for a swindle; several senior officials in Kabardin-Balkaria were arrested for involvement in a property swindle; a former village council head got 9 years for taking a bribe. A very senior military medical officer arrested for bribe-taking. 4 policemen in Ufa were fired for negligence that led to murder. And, probably related to corruption, a newly-built road in Vladivostok collapsed.

MODERNISATION. This is going to be the big push I think. Both Putin and Medvedev have often spoken of the dangers of Russia’s economy being so dependent on oil prices, presently declining. Putin has created a council and has called for big investments.

MAGNITSKIY. After investigation, a case for negligence against the former head of the prison in which he died has been sent to the prosecutors. Not the least of the idiocies of the Magnitskiy Bill is that, logically, it must rely on Russian descriptions of the crime and the Russian investigation to determine the guilty.

UNEMPLOYMENT. Dropped, we are told to a 4-year low of 5.4%. No one in 2000 would have expected this; few in 2008 come to think of it either.

POZNER. Medvedev took the dare and appeared but Pozner’s questions were pretty bland. Opportunity missed.

CHINA. Lots of deals signed when the two presidents met. Well, given the Magnitskiy Bill and Jackson-Vanik, when one door closes, another opens.

KARABAKH. Karabakh sources say an Azerbaijani probe was repulsed with casualties. Azerbaijan’s Deputy PM says Baku is ready to clear Karabakh of its “Armenian occupiers”. Russia, USA and France make a joint statement. A long-held concern is that, when Azerbaijan feels it has bought enough military power with its oil money, it will attack. If so, I confidently predict another defeat for Azerbaijanian forces.

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

THE CARDS ARE RE-DEALT. After the usual considerations, negotiations and calculations, the re-shuffle is probably complete. There is a new government with many new faces. A new Security Council – most positions ex-officio. Defence is unchanged (many thought Serdyukov was going to go) but there is a new Interior Minister (police reform has proved to be somewhat unfinished). Sergey Lavrov continues as Foreign Minister. True to his habit, Putin has sent no one into the darkness; many of the old faces being “kicked upstairs”. Neo-Kremlinologists are scrying the auguries but as far as I can see, we have the same Team, with new people moved up from the “farm teams”. What ought to be apparent, after more than a decade’s observation, is that Putin has created a remarkably collegial, discreet and effective team. He’s had a few former insiders join the opposition but (I can’t resist) nothing like Saakashvili who has seen almost every former minister, associate and ambassador go into the opposition. Further thoughts coming Friday here.

DEMOGRAPHICS. More good numbers: births up and deaths down and a fertility rate that is rising into the middle of developed countries. Anatoly Karlin has a discussion and summary of the first quarter’s numbers. The improvement is clearly not a “blip” but it’s not yet clear whether it is long-term. I have a question. We know that fertility rates can change suddenly (vide the “baby boom” in Canada and the USA after the war and the dramatic drop in Quebec in a few generations). All kind of personal factors come into play: national pride, hope (or not) for the future, affluence, education, religious beliefs and many more – millions of individual decisions that are mysteriously in step. My speculative question is this: might it be possible that positive factors are coming together in Russia and that its fertility rate might continue to grow? A few generations of Europe with negative fertility and Russia with positive would make a different world Something to watch.

THE NEW WANDERERS. Various “Occupy” wannabes are wandering around Moscow, chased by the police, trying to set up a protest camp. And why not? The originals were such successes. A world-wide phenomenon, come to think of it, that we will likely see more of.

MOSCOW MURDERS. Businessman Mikhail Kravchenko was murdered last week; the police claim to have the organiser in custody and are looking for the buttonmen. The next day a former Georgian general, who turned against Saakashvili, was assassinated.

CORRUPTION. A Moscow traffic policeman is charged with large-scale theft and a case has been opened against two Krasnodar entrepreneurs for fraud.

GDP GROWTH. RosStat gives 4.9% year-on-year growth for the first quarter; the EBRD predicts 4.2% for the year. Pretty good by today’s standards; number two in the G8 I believe.

UNITED RUSSIA. Four days after joining it, Medvedev was unanimously elected head of United Russia. Vladimir Pozner observed that this reminded him too much of CPSU congresses and challenged Medvedev to appear on his program and explain himself. Will he take up the challenge? I wouldn’t rule it out.

POLICE. More brutalities in Kalmykia. Tatarstan and elsewhere. We will see if the new Minister can do better.

PARTIES. A party I expected to do better than it did in the 1990s, Women of Russia, has just been registered.

SANCTIMONY FLAME WARS. The Foreign Ministry, no doubt enjoying every moment, expressed its concern about “aggressive arrests of peaceful demonstrators in Chicago and in Montreal”. The US State Department huffed about human rights in Russia. I wish this nonsense would stop. But it won’t.

NOT RUSSIA BUT SIGNIFICANT NONETHELESS. A consortium (24% LUKoil) has discovered a major oilfield in Egypt, which previously didn’t have much. Something that may have some significant effects in time.

G8 AND NATO. Summits were held and everything is Just Fine. First prize goes to the G8: “We recognize the particular sacrifices made by the Libyan people in their transition to create a peaceful, democratic, and stable Libya.” I sometimes think that they have hired former Warsaw Pact staff to write their communiqués. The ability to bludgeon reality into silence with hundreds of wooden words takes skill and practice.

GEORGIA. Maybe (maybe) the opposition to Saakashvili has found a focus. Bidzina Ivanishvili has been working away to create an opposition force and it held its first rally on Sunday attracting a large crowd

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

VORSTAND RESHUFFLE. Putin was inaugurated on Monday and, as promised, immediately nominated Medvedev as PM. He was confirmed by the Duma the next day (Communists and Just Russia voting against). I was intrigued by their first reported actions: Putin ordered the creation of a business ombudsman to defend “the rights of entrepreneurs” showing that improvement of Russia’s business climate is a high priority. Medvedev called for a new system of state defence orders. This last has been notoriously opaque; many complain the money is not wisely spent and Russian-made weapons are over priced and not modern. Note that each of these touches on corruption: there are those who think that Putin returned to the Presidency because only he has the political muscle to attack this pervasive problem. Perhaps so, we will see. I still think that we need to see someone in an office close to the two led away in handcuffs for an anti-corruption drive to really bite.

FOREIGN POLICY. Putin quickly issued a host of decrees, one on foreign policy. The first priority is “to assist in creating favourable external conditions for the Russian Federation’s long-term development, modernisation of its economy, and strengthening its positions as an equal partner on global markets.” The second is “to seek to assert the rule of law in international relations, to advocate the leading role of the UN in global affairs and the fundamental principles of the UN Charter that require the development of friendly relations between nations on the basis of equality, respect for each others’ sovereignty and territorial integrity…” This is a country that wants a quiet life so it can develop its economy.

DEMOS. The “March of Millions” on the 6th was nowhere near “millions”; more like 20K. That day a similar number turned out on behalf of Putin. Clearly the steam has gone out of the protests and they are returning to the usual immiscible assemblage of communists, ultra-nationalists and former politicians with an element ready to play to the biases of the ever-gullible Western press corps. As they were intended to, Western headlines focussed on the attempt to rush the Kremlin and the police response rather than the peaceful protest. But it’s not news: tens, hundreds, of thousands can protest against Putin so long as they follow the rules that they agree to. Yavlinskiy, on the other hand, knows it was a stunt; now is the time to “to start serious politics, winning elections and taking power” (not that he’s shown much skill…).

LITVINENKO. Read this. The West was fed a line and swallowed it whole.

POLITICAL CHANGES. Medvedev’s last act as President was to sign into law some of the political changes that have been in the works for a while. Direct election of regional heads returns in June and it will now be much easier for political parties to be registered. The Republican Party was just re-registered: there are now 8 registered parties and another 171 in application. I remember the giant ballots of the 1995 Duma election; I guess we’ll be seeing them again. Only the dimmest would attempt to argue that Putin does not support these changes.

MISSILE DEFENCE. Moscow reiterated all its points at a conference in Moscow: in extremis, Moscow could see it as such a threat that it might have to attack the sites; the refusal to give “legal binding guarantees” makes Moscow more mistrustful of the ultimate purpose. Predictably the Western media stripped the context out and reported it as a threat. No: Moscow is the side that feels threatened. And, having been burned before, it no longer trusts mere assurances. It’s not that complicated.

RUSSIAN SHELF. In another result from the new tax regime, Rosneft and Norway’s Statoil have formed a JV to explore Russia’s offshore reserves in the Barents and Okhotsk Seas.

PUTIN DERANGEMENT SYNDROME. The newest victim is Miriam Elder in The Guardian. Her loss of her dry-cleaning receipt illustrates the essential evilness of Putin as does a blog on RT. No matter how apparently unconnected some event may be, the afflicted can always twist it into an anti-Putin rant. PDS is gradually becoming the sole content of Western reporting; Stephen Cohen points out the cost to us here. If only, in 1999, Western reporters had bothered to go to St Petersburg rather than asking their usual Moscow contacts who Putin was, we might have a more balanced view today.

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

CHANGE. More change working away. Last Sitrep I reported about a quarter of Russians had travelled outside the former USSR. Now we find that about 90% have cell phones and about 40% of adults use the Internet daily. ROMIR tells us that 70% of Russians have savings, the overwhelming majority in Rubles, many in banks. And a per-capita GDP is getting on for half that of Japan. I believe that easy communication, travel, access to the New Media and savings accounts are the outward signs of internal change: “middle class” things. I think it’s fair to say that Russia has never been a “middle class country” before: it’s not there yet but getting there.

POLICE. More police outrages: more torture cases revealed; a conviction for same; a conviction for murder. There is some pressure building to have the Interior Minister dismissed.

CORRUPTION. Medvedev admitted his campaign had yielded only modest results. Putin said much the same thing at the end of his second term. For my money it’s Russia’s worst problem.

THE EMPTINESS OF FORMER FLAPS. Lugovoy has passed a lie detector test administered by people from the UK over the Litvinenko death. The standard view, re-typed by thousands of outlets, takes a hit.

PUTIN. Putin is stepping down as head of United Russia, because, “The president should be a non-party figure.” This is a common sentiment in the former USSR where the word “party” still has some bad connotations.

INVESTMENT CLIMATE. Putin and Medvedev have both spoken about Russia’s bad investment climate. It appears that improvements are on the agenda. Putin announced that there would be no export duties for new hydrocarbon projects on the Russian shelf and, lo! a few days later Rosneft and ExxonMobil announced a deal. He then proposed tax holidays for new production facilities in special economic zones.

NONSENSE. SIPRI claims that Russia is the 3rd largest military spender in the world after the USA and China at US$71.9 billion. That kind of money would buy a lot more than 6 Su-35s and 30 Su-30s between now and 2015. NATO used similar PPP cooking in the past to claim Russia was Number 2.

MISSILE DEFENCE. The Chief of the General Staff agreed that there is a potential threat of nuclear weapons acquisition by Iran and North Korea and that it should be jointly defended against. Earlier the Director of the (US) Missile Defense Agency told a US Senate panel that cooperation with Russia could benefit the USA. There is to be a conference on the subject in Moscow next week: maybe something will be done about this unnecessary impasse.

POLITICAL PARTIES. The rules for registering political parties have been relaxed and no fewer than 143 have applied. I’ll bet at least half are parties claiming to unite the liberals under a single leader.

ASSUMPTIONS. A commonplace of comment, inside and outside Russia, is that every time a Western power(s) overthrows a government, Russia loses business there. Doesn’t actually seem to work that way: LUKoil has started work on the West Qurna-2 oilfield in Iraq.

ARROGANCE. The US State Department’s spokesman says that the investigation into the death of Sergey Magnitskiy has been “inadequate”. Maybe it’s time for Moscow to take up Conrad Black’s incarceration. But really, what arrogance: are we to presume that Washington knows the correct answer? there is an investigation in Russia, actually.

ABKHAZIA. There was an assassination attempt against President Ankvab of Abkhazia in February. Arrests have been made and two suspects are reported to have killed themselves. One theory is that it’s connected to corruption. I haven’t heard anyone suggest that it was Tbilisi.

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