#2
The Harvard Crimson
September 15, 1975
The Russian Collection
Hard Times at the Russian Research Center
By JAMES I. KAPLAN

It is not so much a center as a collection: from David E. Powell, who quit teaching Defense Department seminars largely because senior officers' talk of "nuking the Chinks" offended him; to Vladimir I. Toumanoff '46, the son of Russian nobility and author of the original SALT memorandum; to Gilbert S. Doctorow '67, who says that his present monograph on pre-revolutionary Russia may succeed in "reducing the tarnish" on the tsarist regime.

Adam B. Ulam, the center's director and professor of Government, has an office in 106, at the middle of a long corridor on the first floor of 1737 Cambridge Street. The room resembles the kind of scholar's study that would appear in a Victorian novel: papers are everywhere, ashtrays are full of the professor's pipe tobacco and cigarette butts and books lie in every manner of arrangement--books with fifteen bookmarks, books face-down on their binding, and books lying fallow--most of them with the dull dark red covers of the University libraries.

There is a rumor around the center that a couple of years ago, one of Ulam's research assistants found the documents and materials Ulam had used to wtite his first books, roughly 25 years before. At any rate, Ulam's den is heated like a greenhouse, with the windows closed and the director sweating it out in rolled-up sleeves and undone collar.

Ulam was one of the center's original members, finishing his Ph.D. dissertation on the British Labor Party in 1948, when the center was founded with anthropologist and Freudian Clyde Kluckhohn as its first director. (Even then, Ulam says now, the center was sensitive to charges that it was a Cold War front for U.S. imperialism. Thus, Kluckhohn--an expert on the Navajo Indians--was apparently chosen in part because he seemed so utterly non-political.)

Down the long corridor from Ulam, the center's premier figure, is Doctorow, who has yet to earn his academic spurs. Like most institutions, a favorite word describing many topics is used at the center--"deplorable--and Ulam, the veteran, and Doctorow assails the present Soviet regime as "deplorable." He claims that the recent inability of doctoral programs in history and Soviet studies to find jobs for their graduates is "morally deplorable." And when asked about the center's present financial condition, the director focuses on his pipe and responds "it's deplorable."

But Ulam is a European, old-world scholar, while Doctorow says he is typical of a new generation of academics. Contrasting his approach with that of graduate students of the 1960s, Doctorow says, "My generation is no longer so political. We didn't go into Russian studies to learn about revolution." He is severe: precisely dressed and pressed, with a neatly clipped dark beard and a habit of gnawing on the ends of his wire-rimmed glasses while thinking, his passion is "unearthing unknown documents" and his impressions of the present Soviet regime "unequivocably negative."

Doctorow is equally blunt about his own future: "I don't want to teach at a small college. I don't want to end up at some third-rate place in Mauritania." With a shortage of acceptable teaching jobs, however, Doctorow is understandably grateful to the center: it occasionally provides paper and shelter for young, unemployed scholars.

Doctorow is less intent than many other scholars at the center on praising the institution as a community of scholars. There are group seminars at the center, he says, but he doesn't participate. "I've been rather busy and the programs don't deal with my specialty"--the tsarist bureaucracy between 1905 and 1907. As far as attending infrequent meetings on the center's financial situation, Doctorow says, "They bore me."

Whether the problem is boring or not, the center is in financial trouble, and if something big is not quickly forthcoming, neither Ulam nor Doctorow nor any of the other 100 or so scholars affiliated with the center will have a spiritual or physical home next year. In July 1976 the Ford Foundation will cease to provide about 80 per cent of the center's annual operating budget--as Ford has since the '50s--and the center, consequently, is going public this year, with industries doing Soviet business and other foundations as the main foci of a $1 million fund-raising effort.

As in New York City and London, however, there are no visible signs of crisis at 1737 Cambridge--the phones still work, the paint isn't peeling and the mid-morning coffee hour, at which Ulam is said to regale fellow members with recitations of Polish poetry, is still going strong. Few of the center's members are familiar with the annual budget and its determination--it is in the vicinity of $150,000 and is worked out by Ulam and Edward Keenan '57, associate director and professor of History, then submitted for pro forma ratification to a group of Harvard senior faculty called the Executive Board.

One person who is concerned about the center's finances is Toumanoff, an owlish, genial and relaxed man who occupies an office set far back from the scholars' corridor that Ulam and Doctorow inhabit. On Toumanoff's desk and shelves there are no dusty volumes, but a clipped article from the New York Times Week in Review section called "Can the World Organize to Save Itself?" (on food and resources), the latest Club of Rome report on dwindling world resources, and a two volume policy-oriented study entitled Rapid Population Growth

The only research Toumanoff is involved in now is for the snaring of State Department contracts, and all those population and resources materials are feeding into grant proposals. This will be, says Toumanoff, "short-term stuff"--money to help tide the center over until an endowment can be built up with corporate and foundation support. Still, Toumanoff's future offers to State--if ultimately accepted--will mark something of a new direction for the center, involving some of its members in pragmatic research on Soviet environmental and urbanization problems.

Already there has been some success--but a steady trickle, not a deluge. In June 1974 State contracted with the center for a set of studies and Washington seminars to be prpared by five of the center's Scholars, Ulam and Keenan among them. This year, Toumanoff says, State has accepted a contract extension that will engage about five more scholars on issues like U.S.-Soviet trade, Soviet agriculture and long-range economic thinking, and guesses on Soviet succession (Kremlinology--who's sitting next to Brezhnev at what state dinners, and so on).

This hasn't brought in all that much money--$90,000 with the contract and its extension, but most of that, Toumanoff says, is absorbed by costs. The center's scholars seem hardly thrilled by the lure of government power Ulam seems to speak for the center's members when he says "We don't want to study for the twentieth time the Soviet succession." Doctorow, typically, puts it more harshly: "The center can't get money precisely because of their isolation from the 'evil' centers of power, which I don't think are particularly evil. We ought to be more plugged into the areas of power."

Toumanoff is perfectly suited to act as the go-between with the government. A clinical psychologist by training and a Foreign Service officer in Washington and Moscow for 25 years, he seems to express the reverence the practical, experienced man holds for intellectuals. He speaks of Harvard's research facilities, which have been the center's main bait in drawing Soviet scholars from most U.S. state universities and many European schools: "In terms of source material, it's better than anything outside of the Library of Congress--and it's more accessible."

But even without being substantially a scholar, Toumanoff is Olympian in a bureaucratic way. His parents were Russian nobles who left the country in 1919, and his father fought in the White army against the Bolsheviks. He is able to tick off his accomplishments in an oh-by-the-way manner: author of the SALT memo, an originator of the ban on nuclear arms in space, and the author of Ambassador Llewelyn Thompson's appeal to the Soviets, in 1967, for a collaborative effort" to solve "world problems of food, population and energy," as he puts it.

Most members of the center are neither Harvard faculty members or post-doctoral researchers or fund-raisers, however; many more or less permanent members are drawn from other Boston area social science faculties, while visitors for one or two-year periods come from other universities--usually during a paid sabbatical since the center's finances allow few stipends to visiting scholars, no matter how expert or promising. For their travelling the visitors are rewarded, occupying cubicles right down the corridor from luminaries such as Abram Bergson and Marshal Goldman, experts on the Soviet economy, and even Ulam himself.

Joseph Berliner, professor of Economics at Brandeis University, does not have to travel very far. He is able to make the trip from Waltham every Wednesday, to great benefit: all his work on a forthcoming study of economy and society is done at the center. A graduate of Harvard's first Soviet Union program in 1948, Berliner gravitated toward Soviet Studies in the 30s, searching for alternatives to capitalism. He attended the City College of New York at night and in the late 30s was an organizer for the shipping clerks union. White-haired, soft-spoken and reasonable, he seems the center's representative of the depression-bred Jewish radical, now gentled by time and more liberal: the Commentary intellectual, before those types talked against welfare and for invading the Arabs.

Studying the Soviet Union has moved him rightward, except he says it a different way, with a question: "The main problem for my generation was, 'How do you have socialism without falling into tyranny?' For me, acquaintance with the documents of Soviet society was a gradual process of disabuse."

And the professor still hopes, which makes him seem heroic, sitting back in a chair in a neat office at a new building in Brandeis called the "International Building," done in the I.M. Pei style and festooned with flags of different countries. Quietly, without wanting to make too much of it: "I am very strongly drawn toward decentralized, nontyrannical political systems like Yugoslavia"--although he later qualifies this, worrying about the resurgence of Stalinism and some lack of democratic institutions in Titoism.

Berliner is a scholar, with a distaste for power in politics. Do people at the center have power--what about Richard Pipes, professor of History, now engaged in advising Sen. Henry Jackson (D-Wash.) on Soviet policy? Berliner smiles at the question and is perhaps thinking of Ulam's last time in official Washington, testifying before the Senate Foreign Relations Committee about a year ago: "You get the ear of an important congressman--among fifty others." And his smile says more, something that other members say openly: Would we be in this financial shape if the centers of power really cared?

For David Powell the center is something of an escape from official power and its uses: "As an academic you have a great deal more freedom than in a bureacracy...My inclination is just to write more." Powell should know--he has taught courses to senior Pentagon officials and been consultant to the U.S. Information Agency. The "nuke the Chinks" expressions that led him to leave Defense were "obviously racist slogans." That opinion wasn't majority feeling even at the Pentagon, Powell says, but it made him more aware that "every bureaucracy has its share of lunatics"--and he chose, after 1966, to work in a bureaucracy where lunacy was at least isolated, and perhaps less dangerous.

Powell--voluble, light-haired, and looking like he just stepped out of a hotel barber shop--is now associate professor of Government at the University of Virginia, a tenured position. His inclination is to leave it and stay as long as he can get grants, as a research fellow at the center, which he describes as "exhilarating." Right now he is in the second and final year of work on alcoholic abuse in the Soviet Union--which has the highest per capita consumption rate in the world--courtesy of a National Institute of Health grant. A book will follow, with a companion volume written by Boris Segal, now a member of the center and an exiled dissident who was the Soviet Union's foremost expert on alcoholism, Powell says. (Every one at the center is said to be foremost in something by somebody, like Harvard's freshman class).

Along with Ulam and a possible majority of the center's members, Powell views detente as a "splendid idea," but so far a trading of something-for-very-little by Kissinger. Unlike more conservative center members like Doctorow, however, Powell can quickly respond to a question like "what's good about the Soviet Union": "a very extraordinary success in eradicating poverty and ignorance and disease--their infant mortality and life expectancy rank above the U.S."

Exhilaration aside, the money problems remain. Everyone is aware of them, if only uneasily--members constantly mention the center's financial crisis, usually attributed to the out-of-fashion intellectual character of Soviet studies, exacerbated by having to share a building with two other area-studies institutes now much in vogue and financially free-and-easy: Far-Eastern and Middle-Eastern Studies. "We don't have Japanese businessmen or sheiks to support us," Ulam says.

The foundation and industry fund-raising attempts are difficult. Industries doing business with the Soviet Union, the main recipients of center requests for support, may listen politely to arguments about needed information on Russia that only the center can provide. But corporate executives may not want to risk their profit lines by supporting an institution whose members have been labelled "bourgeois falsifiers of history" by Izvestia.

Foundations like to be "seed money"--the first supporters of a new field of study. Soviet research is hardly new, and it is time, say all the center's God-parents, from the Dean's office to the Ford Foundation, to walk on your own. The center, after 27 years, must go out into the world for itself.

If $750,000 can be raised between the center and Columbia's Russian Institute, says the Ford Foundation, it will grant an additional $250,000--all together, far more than enough for an endowment. Ulam says that the center may go under. If it does, everyone there knows, the pain will not be felt by an institution at all, but by an arrogant generous and above all, critical, collection of individual scholars.

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#3
Ukraine's grinding war stains innocence of childhood
March 13, 2015
By Nataliya Vasilyeva

KHARTSYZK, Ukraine (AP) - Seryozha colors in his drawing of a tank, lost in thought. Like many 7-year-olds in eastern Ukraine, he has trouble recalling a time before the war.

"They've always been shooting," he says, vigorously scratching with the brightest of pencils.

Yelena Nikulenko, the director of the children's home in the rebel-held town of Khartsyzk, says kids like Seryozha have been let down twice.

First orphaned or abandoned by their parents, they were then dumped by their new families when the Ukrainian government stopped paying benefits to foster families in separatist-controlled areas.

"On top of that, you have the war, the shelling, the fear," Nikulenko says. "It will be a scar for the rest of their lives, that's for sure."

The conflict that erupted in Ukraine last year between government troops and Russian-backed separatists has claimed at least 6,000 lives and displaced nearly 1.8 million people. The United Nations Children's Fund estimates that 1.7 million children on both sides of the front line have been harmed through lack of proper shelter, nutrition, medicine or schooling.

Children struggle to understand what is going on around them, and why. Fighting has abated drastically since a new cease-fire came into effect last month, but the suffering, loneliness and terror remain.

In the government-held town of Popasna, 70 kilometers (45 miles) north of the children's home, only a few people walk along deserted streets between apartments gutted by rocket fire, a grim contrast to the days when the town bustled with 30,000 people. One of those destroyed homes belongs to Tatyana Belash, who has now taken shelter in a basement with her 3-year old daughter, Zlata.

As the adults talk politics, Zlata, a shy girl with blonde pigtails, darts around the basement cluttered with battered mattresses. Asked about the shelling, Zlata shies away and seeks comfort in stroking her cat.

"When we first came here, she kept saying: 'Let's go home!'" Belash says. "I couldn't explain to her that we couldn't go home because there was fighting going on."

Children in the Ukraine-controlled village of Chermalyk play war and scuttle in and out of the craters made by falling Grad rockets.

As 11-year old Tolik Tokar shimmies into one crater, his head disappears from view. Then he raises his head and pretends to shoot at the baddies: the separatists.

The boys take aim with make-believe guns fashioned from sticks - but Tokar has seen shooting first-hand, not just in play.

"When shelling was raging, we went to check it out, and then they opened fire on me," Tokar says, stammering as he tells his tale. "The bullets tore through the cloth on my shoulder here and flew past."

A few dozen kilometers away on the rebel side, children play the same games - but with roles reversed. There, Ukrainian soldiers are the bogeymen, with "Nazi" one of the favorite slurs.

The 22 children under Nikulenko's tutelage, in Khartsyzk, are some of the most vulnerable anywhere in the war-wracked region, and she asks that they be identified only by their first names. Before fighting began, the home served as a shelter for children rescued from the streets, or seeking respite from dysfunctional families. More have been abandoned in recent months.

Veronika, a freckled and gap-toothed 6-year-old, smiles and pulls down on her red-checked dress as she recalls life before the war - the visits to the amusement park and zoo, her mother's home cooking. She even has fond memories of her father, who returned home after a stint in prison for slashing her mother's shoulder with a knife.

Since then, her father enlisted with the rebel army and her mother left her at the children's home. Veronika relies on her own inner strength to ward off the terror brought on by war.

"When they were doing boom-boom, it was so scary," she says, recalling a recent bout of shelling. "Once when they were shooting at night, I fell off the bed."

Veronika's mother visits Khartsyzk from time to time. The young girl hopes to go home when summer comes.

Nikulenko says children in her care have come under the spell of Russian television. They love watching programs that cast the rebels as valiant heroes of a popular uprising. Ukrainian government troops are treated as vicious occupiers.

"It's very dangerous, this black-and-white perception," Nikulenko says. "These children get information only from one side. They see that (government troops) shoot at us and that their fathers and brothers take arms and go to protect us."

As a group of girls huddles on a carpet in the games room, Yulya, a tall and unsmiling 12-year old, stands to one side.

Before the war began, Yulya lived with her grandparents in Rusko-Orlivka, a village that changed hands several times as fighting raged last summer for the nearby town of Ilovaysk.

Yulya's grandfather told her that when the rebel fighters captured Rusko-Orlivka, fighters found nine Ukrainian soldiers hiding out in a farm, marched them out to a forest and shot them. Yulya says she felt little pity.

"I understand they are people too, but they kill other people," she says in a whisper. "I know that, because my grandfather told me so."

For the very young, little is truly understood about who is fighting or why.

Drawing his tank in the children's home, Seryozha, in a moment of confusion, gets it into his head to decorate it with a blue-and-yellow Ukrainian flag.

"It was born in Ukraine. I was born in Ukraine, too," he says. Above the Ukrainian flag that sticks out from the side, he then draws the black, blue and red flag of the separatists.

Seryozha's own past is a blur even to those around him. A scar on his back shows where he was shot with an air-powered pistol before the war. Nobody quite knows what happened, beyond that his parents died of tuberculosis, leaving his sister and two brothers orphaned.

A bureaucratic oversight separated Seryozha from his siblings. As they were evacuated by Ukrainian authorities to a neighboring region, nobody remembered that Seryozha was lying in a hospital recovering from tuberculosis. He landed in the Khartsyzk home in January.

Children may have a hazy understanding of the events around them, but forgiveness appears to come more easily than to the adults.

Could Seryozha ever be friends with children from the other side?

"Yes," he says simply. "But only if they behave and don't fight."

Mstyslav Chernov contributed to this report.

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 #4
Voice of America
March 12, 2015
In E. Ukraine, Civilian Deaths Push Men to Join Rebels
by Patrick Wells

After months of fighting in eastern Ukraine, the presence of the Ukrainian military and the shelling of civilian neighborhoods seem to be pushing more men to join the rebellion.

New recruits for Ukraine's rebel army, part of a battalion of Don Cossacks, are on their way out of Donetsk to a piece of wasteland for weapons training.

Their targets are the faces of western-leaning Ukrainian politicians, including Prime Minister Arseniy Yatsenyuk and former Prime Minister Yulia Tymoshenko.

It's been months since the Ukrainian government launched a so-called "anti-terrorism operation" to retake the east of the country. But these Cossacks have a long tradition of defending the Russian empire. To them, the offensive felt like an armed invasion by a new government they were already suspicious of.

Sasha, their commander, was an economist and businessman before the war. He traveled to Kyiv and had friends there. But now, he said, no one there understands why he's fighting.

"They think that we are terrorists, and pro-Russian citizens. But I do not think like this. We were born as Russians in our blood, and we are living on our land. As a rule, we have no contact with 90 percent of our old friends on western Ukraine and there is a massive lack of comprehension between us and them," Sasha said.

Civilian deaths

The use of artillery and rockets in built-up areas by both sides has led to many civilian deaths and huge damage to property. And instead of discouraging the rebellion, these men say it has obligated them to join up.

One, who goes by the name "Spiker" worked as a miner until his village was largely destroyed by shelling.

"A lot of my neighbors were killed, a lot of my friends who I worked with before were killed. All the houses and church on my street were ruined. The children's playground and school were ruined," he said.

The men said they are most concerned about the volunteers coming east to fight for the government, some of whom are part of far-right political movements. It's here that one can see the lingering effect World War Two has had on the region.

"Many women and men were fighting on the side of the U.S.S.R. and the coalition. The western part of Ukraine was under [Adolf] Hitler's coalition and that is the reason why today we still have a lot of far-right nationalist organizations," Sasha said.

Weapons training ends with grenade launchers and a demonstration of explosives using old equipment from the coal mines.

Despite the cease-fire, these men say they expect the fighting will start again soon.

In this war, one side thinks they are fighting terrorists, the other thinks they are fighting the Nazis. And the longer the fighting continues, the more polarized this region will become.

 [return to Contents]

 #5
Australian Broadcasting Corporation
www.abc.net.au
March 12, 2015
Ukraine crisis: Inside the Mariupol base of the controversial Azov battalion
By Nicholas Lazaredes in Ukraine
[Photos here http://www.abc.net.au/news/2015-03-13/inside-the-mariupol-base-of-ukraines-azov-battalion/6306242]

The first thing you notice as you walk through the corridors of the Azov battalion's base in Mariupol are the swastikas.

There are many - painted on doors, adorning the walls and chalked onto the blackboards of this former school, now temporary headquarters for the Azov troops.

It is a confronting sight and when I query the young soldier assigned to show me around he is quick to correct me, pointing out that the symbol is in fact a "modified swastika" - more like the letter N crossed with a straight line.

When I point to another symbol of the Third Reich etched on the wall, that of Hitler's "SS", he simply shrugs and says: "We are nationalists, but we are not Nazis."

The Azov battalion is a highly controversial Ukrainian paramilitary group that has drawn much criticism for its links to the far right.

The imagery it has chosen to adopt hardly helps to allay concerns, but for my young guide it is a non-issue.

"Some journalists prefer to present us as Nazis. They look for any chance to discredit our regiment," he said.

After last month's rebel defeat of Ukrainian forces at Debaltseve in the north, attention has switched to the port city of Mariupol, less than 60 kilometres from the Russian border, which most believe is next in the separatists' sights.

I have been invited to tour the Azov base where new recruits are in training, preparing to defend the city from an attack which most here are predicting will come before the end of the Ukrainian spring.

Like pro-Russian rebels, Ukrainian soldiers rarely provide their real names when talking to journalists, using platoon nicknames instead.

We want to build a new independent and sovereign Ukraine. That's what makes us different from other military units.

A roads engineer graduate from Luhansk, Dancer joined the Azov battalion last year shortly after the armed conflict began in eastern Ukraine, attracted by the militia group's long-term goals.

"Our battalion is comprised of conscious people who have a much higher purpose than just winning the war," he said.

"We want to build a new independent and sovereign Ukraine. That's what makes us different from other military units."

The Azov battalion is a volunteer military brigade that was formed last year in Mariupol, named after the sea on which the city is located.

It is closely linked to the Social-National Assembly, an umbrella organisation to a collection of ultra-nationalist and neo-Nazi groups in Ukraine, and many of Azov's recruits are drawn by its perceived far right-wing ideology.

Currently under the auspices of Ukraine's interior ministry, there are deep concerns that arming right-wing paramilitary groups like Azov might backfire and present a future threat to the government, but Dancer says the fears are unfounded.

"The battalion operates as a professional military unit," he said.

"The commanders listen to you while you listen to your subordinates, and all the daily and military questions are solved in a democratic way.

"There is no violence against younger conscripts in Azov, no stupid orders and notations."

Azov volunteers fight alongside regular Ukrainian forces and were amongst the earliest to see action in the conflict last year and its troops have a fearless reputation.

"I wanted to join a battalion that would be on the frontline and participate in real action," Dancer said.

"I wanted to prove myself in combat and help Ukraine. That's why I joined Azov."

Dancer had his last "brush with the enemy" less than a month ago on the eastern outskirts of Mariupol, near the village of Shyrokine, when his unit came under attack by rebel forces who he claims were mostly Russian.

"I was deployed as a spotter and I saw Russian military equipment with Russian flags and Russian car tags through my binoculars," he said.

"There were T-72 tanks, Russian armoured vehicles and Russian troops.

"They were real professionals, not volunteers. Regular volunteers can't fight like that."

The Russian government has continued to deny that its troops or weapons are being sent over the border to bolster the rebel forces in eastern Ukraine.

Dancer says that while the Ukrainian military is largely holding its own, their weapons are vastly inferior and he hopes the US will soon agree to supply the hardware they need.

"We have people who could end the war, all we are missing are weapons," he said.

"If we had American Javelins, for example, we could easily destroy the enemy's tanks."

Achtung: Russian fighting his countrymen

As dusk approaches, Dancer leads me outside to watch the new recruits training as they simulate a sweep through a village.

He introduces me to another soldier nicknamed Achtung - a 23-year-old softly spoken Russian man from Moscow, who said he decided to fight for the Ukraine against his own government.

"I consider myself a true Russian nationalist, but I could not stand by and watch the Russian security service divide our fraternal neighbour," he said.

"So I came to Ukraine last August and went directly to the Azov battalion headquarters to sign up."

Considered a traitor back home, Achtung said his motives were purely ideological.

"People here are patriots, nationalists who are very close to me ideologically and in spirit," he said.

"I feel really comfortable here, as if I am home with my family."

Achtung considers himself as a new generation soldier, fighting the war on two fronts - both as an active combatant and through social media, writing about his experiences on blog sites aimed at young Russians.

"I publish photos and news from the frontline and Azov's role in this war," he said.

"All of my Russian friends see this and most express their support, but there are some who are completely sold on Putin."

Achtung has also seen plenty of action in this bitter conflict which has claimed more than 6,000 lives, and recently took part in an operation where a Russian soldier was captured.

"The prisoner kept yelling at me 'you are a Ukrainian fascist!'," he said.

"So I told him - buddy, I am from Russia. From Moscow."

Achtung chuckles: "He was speechless, in shock."

Achtung admits he has far-right leanings, expressing sympathy with Ukrainian neo-Nazi groups.

He said the choice for him on deserting Russia to take up arms against his own countrymen was clear.

"The Russian media talk constantly about Russophobia in Ukraine, so Russians go to war to fight for their country, but in fact they are fighting only for the personal interest of Putin," he said.

"Whereas Ukrainian soldiers defend and protect, not attack.

"They are defending their motherland - not fighting for some Tsar."

Natalya: Azov's unofficial poster girl

We are joined by a friendly young woman in uniform who introduces herself as the Azov battalion's media officer.

Natalya is 28 and turned her back on a blossoming career as a TV reporter in western Ukraine to join the Azov battalion on the frontline.

Her good looks and constant smiles have proven a hit with foreign journalists.

Natalya was recently named in the list of the top five most beautiful women in the Ukrainian military and has become the Azov's unofficial poster girl.

She said the transition was not easy.

"Honestly it was quite hard for me at first - the guys just didn't really perceive me as a part of the regiment," she said.

"But when they saw that I do my job as well as them, they treated me as an equal."

There are said to be thousands of young female volunteers in the Ukrainian military, and Natalya says they are not given preferential treatment.

"On New Year's Eve I was sent to a road block when it was -20 degrees Celsius," she said.

This road block was called "The Freezer" because the wind there blows from every side. It is the coldest spot in Mariupol.

She laughs as she recalls the night's hostilities.

"We knew the separatists would be drinking hard and firing their mortars, but they were so drunk they were missing constantly and firing into the void," she said.

She smiles and says: "It was my coolest New Year ever!"

Natalya is quick to defend the integrity of the right-wing Azov brigade.

"Russians think that we and the right sector are the scariest people in Ukraine," she said.

"But most of our fighters know foreign languages, have a higher education, are intelligent and extremely literate."

Like other Azov soldiers, Natalya is driven by her desire to protect the Ukrainian motherland but admits that the family and friends she left behind in her home city of Ivano-Frankivsk are worried for her safety.

"My older sister was really shocked when I left and demanded that I come back," she said.

"I had to lie to her for some time, but now she says that she's really proud of me, and so are my friends."

Fallen comrades remembered

Inside the battalion's briefing room, Dancer shows me a small shrine dedicated to the Azov's fallen comrades.

Already battle weary, Dancer has seen plenty of action on the front lines of this conflict and has lost seven mates since the fighting began.

Three of them - Champion, Homer and Kozak - were close friends.

He points to their photos on the wall, adorned with spent bullet casings.

"Champion was my fellow townsman from Luhansk," he said.

"He was the kindest, most honest and sympathetic man in this battalion. He was a true example for others to imitate.

"He drove onto the battlefield to rescue our injured fighters and died when a 120mm tank shell hit his car. It was a quick death.

"Homer threw himself on a grenade to save other soldiers from the blast shrapnel.

"Kozak also died saving a mate. He was bandaging his friend who had been wounded when the grenade landed nearby. His femoral artery was cut and he died of blood loss."

Dancer pauses and adds wistfully: "They are heroes of the Ukraine and we must never forget them."

#6
BBC
March 12, 2015
Yanukovych ally Peklushenko in new Ukraine mystery death

A former regional governor has been found dead in Ukraine, the latest in a series of deaths involving allies of deposed President Viktor Yanukovych.

Oleksandr Peklushenko, former head of Zaporizhzhya, had suffered a gunshot wound to the neck and authorities said initial inquiries pointed to suicide.

A member of Ukraine's Party of the Regions, he was being investigated over the dispersal of protesters last year.

Five other officials also died in mysterious circumstances this year.

All of them supposedly took their own lives in the past six weeks

    Stanislav Melnyk, 53, an ex-MP was found shot dead in his bathroom on 9 March
    Mykhaylo Chechetov, former party deputy chairman, died after apparently jumping from a window in his 17th-floor flat on 28 February; he had been accused of abuse of office and fraud
    Serhiy Valter, a mayor in the south-eastern city of Melitopol, was found hanged on 25 February; he too had been accused of abuse of office
    Oleksandr Bordyuh, a former police deputy chief in Melitopol linked to Mr Valter, was found dead at his home on 26 February
    Oleksiy Kolesnyk, ex-head of Kharkiv's regional government was found hanged on 29 January

An interior ministry source told Interfax Ukraine news agency Mr Peklushenko, 60, had committed suicide in the village of Sonyachne, near Zaporizhzhya city.

However officials said other theories were being investigated including murder.
Mr Yanukovych's ex-PM Mykola Azarov (Feb 2015) Mr Yanukovych's ex-PM Mykola Azarov, now in Russia, is wanted by Ukraine for alleged embezzlement

He had been governor of the southern Ukrainian region from 2011 to 2014.

Ukraine's Kanal 5 TV reported that he had been suspected of arranging for demonstrators to be dispersed by pro-government thugs at the height of the protests against Mr Yanukovych's rule in January 2014.

A month later, the president fled to neighbouring Russia, prompting the fall from power of his political party.

Russia then moved to annex the Ukrainian peninsula of Crimea and conflict broke out in eastern Ukraine, an area seen as a stronghold of Mr Yanukovych's party.
 

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 #7
Contact Group to review compliance with Minsk deal - Luhansk People's Republic negotiator

LUHANSK, Ukraine. March 13 (Interfax) - The Contact Group on Ukraine will chiefly focus on the first tree points of the Package of Measures for the Implementation of the Minsk Agreements in reviewing compliance with the agreements during a planned videoconference, the chief negotiator of the self-proclaimed Luhansk People's Republic said.

However, the group may also get down to other points of the package during the conference, the Luhansk Information Center cited Vladislav Deinego as saying.

"The main point for us is not to get stuck on individual positions but to move forward because the situation needs, moreover, the resolution of all other problems that are indicated in the Package of Measures," Deinego said.

"On some of them, the critical date is coming near. March 14 is the date before which the Verkhovna Rada [Ukrainian parliament] is due to pass a resolution listing [future self-ruled] territories. There is a decision by the [Ukrainian] National Security and Defense Council, but it doesn't contain a list of such territories. As far as I'm aware, the Verkhovna Rada is on vacation at the moment. It's unclear if they'll call an emergency session today or tomorrow. Just as it's unclear to me whether there is any draft resolution on this subject in the Verkhovna Rada," the negotiator said.

He said one issue to be raised during the videoconference was a proposal to set up working subgroups within the Contact Group.

"It's been a long time since we came up with a proposal for setting up subgroups in the format of the trilateral Contact Group to handle tasks that are set in the Package of Measures. We already put forward our proposals on this matter before the end of February," Deinego said.

"I very much hope that the dialogue that has begun will result in a possibility to monitor the process of implementation of the Package of Measures," he said.

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#8
Business New Europe
www.bne.eu
March 13, 2015
MOSCOW BLOG: Where is Putin?
Ben Aris in Moscow

Moscow is gripped by the disappearance of Russian President Vladimir Putin, who hasn't been seen in public for a week. Is he dead? Is there a palace coup underway? Perhaps he has sneaked off to marry his girlfriend, or he is just undergoing another round of Botox injections and his face is so swollen he won't go out in public. These are just some of the theories being put forward.

Kremlinologists have gone to town on the news (or lack of it in this case) with op-eds entitled "Putin's disappearance implies a Russian dictatorship" or "The Sick Man of Moscow: Vladimir Putin may well be seriously ill, or worse".

"Either he is fine and furiously working behind the scenes to calm the clan warfare that has emerged in the wake of the [Boris] Nemtsov assassination," wrote Brian Whitmore in a blog for Radio Free Europe/Radio Liberty. "Or Putin is truly sick and incapacitated and the recent turbulence we have witnessed - from the assassination to the muddled narratives in the investigation to the open conflict between the Federal Security Service (FSB) and Chechen leader Ramzan Kadyrov - are symptoms of a highly personalised system that has lost its head."

The speculation began earlier this week when Putin unexpectedly cancelled his trip to a summit in the Kazakh capital Astana, where he was due to meet fellow leaders of the newly minted Eurasian Economic Union (EEU) - Belarus President Alexander Lukashenko and Kazakh President Nursultan Nazarbayev.

The air of mystery was heightened by Putin's spokesman Dmitry Peskov's comment: "We are not giving any explanations as to the reasons. This was the decision of the leaders."

Pundits immediately assumed that there must be something wrong with Putin to cancel the meeting. However, relations between the members of the Customs Union, which was transformed into the EEU at the start of this year, have been bad, as the economic crisis that Russia is suffering spills over into its neighbouring markets. Both Nazarbayev and Lukashenko have publicly complained that the free trade agreement is a lot freer when it comes to letting Russian goods enter their countries than when their goods are trying to enter the Russian market.

Peskov has since been desperately trying to play the story down. "The president feels fine," he said in an attempt to quash the first reports that Putin's no-show was due to ill health, but without saying where Putin was, adding that the president's handshake was still so strong it could "break your hand".

Journalists got more suspicious when the Kremlin posted several pictures online that turned out to be more than a week old. Peskov only made matters worse by announcing that Putin would not be appearing at a meeting with the Federal Security Service on March 12, which he often attends. "I think Putin would rather miss his own wedding than skip a meeting with the FSB," said one well-known commentator.

Finally, on March 13 the Kremlin announced on the presidential website that Putin would meet with Kryrgyz President Almazbek Atambayev on the following Monday, March 16.

Chechen connection

All this talk has led to speculation that a palace coup is underway, which may have been sparked by the murder of opposition politician Boris Nemtsov on February 27.

While everyone is speculating on what is going on, as there are no hard facts available, I will add my two cents worth.

Firstly I don't believe there is a palace coup. The clique surrounding Putin has too much invested in his rule to want to oust him. If Putin were replaced, then all the oligarchs that have benefited the most from the last decade and a half of Putinism would be the first to be thrown in jail as the new guard coming in made a grab for their companies and cash.

Moreover, thanks to Putin's sky-high popularity, any replacement would spark widespread popular demonstrations and possibly even spark a the "coloured revolution" that many in the West still hope will eventually oust Putin. His personal popularity makes Putin more-or-less untouchable politically.

However, Nemtsov's killing clearly has created waves, and those have mainly been focused on Chechnya. The authorities have been quick to arrest five men from the Caucasus; a sixth killed himself during the arrest. The case against them has rapidly fallen apart. The most significant of the six was Zaur Dadayev, a friend and former lieutenant of Chechen leader Ramzan Kadyrov, who surprisingly publicly spoke out for Dadayev's character following his arrest. It now appears that Dadayev was tortured and he has since withdrawn his confession.

There have also been several reports of a clash between Kadyrov and the FSB, the successor agency to the KGB, and here there really does seems to be a power play in progress.

Putin recently awarded Kadyrov one of Russia's highest honours, the Medal of Honour, as he has been a loyal servant since he was appointed. Kadyrov was instrumental in bringing peace to the region following the Second Chechen War in the 1990s and more recently he delivered a 100% vote (actually 102% according to some reports) for both Putin's United Russia party in the 2011 parliamentary elections and for Putin personally in the 2012 presidential elections. These results were key, as especially in the Duma elections the Chechen votes allowed United Russia to just scrape over the 50% threshold and win an outright victory.

But Kadyrov is also clearly a brute and runs the region with an iron fist. Human rights groups have accused the former rebel of using death squads to enforce his authority. Also when a Kremlin aide visited Chechnya to see how $1bn sent to Grozny to finance its economic redevelopment was being spent, he said in a report leaked to the press at the time that he didn't see any evidence of the investment at all.

More ominously, the Chechens have been accused of the killing of opposition journalist Anna Politkovskaya in 2006 as well as several other gangland-style killings in Moscow. Politkovskaya was murdered at the same time as Kadyrov was suing her paper, Novaya Gazeta, for running a series of articles accusing him of kidnap and murder.

Kadyrov has been operating with impunity for most of the last decade, but just suppose, as a matter of pure speculation, that he is somehow connected with the Nemtsov slaying. If so, given that the Kremlin would almost certainly be enraged by this killing, then all the recent press surrounding him - in state-controlled media that usually have clear orders to write these sorts of political pieces - suggest that he is being sent a very clear warning: you are not untouchable and you can be replaced.

The Chechen "clan" remains extremely powerful in Moscow, as it could in theory turn the insurrection back on. And if Kadyrov is under attack, then he will push back with everything he has got. Putin's removal from circulation at this time would only add to Kadyrov's nervousness, as in Putin's Russia a direct appeal to the president is the only way to take the heat off.

As I said there is no evidence for this - or any other - theory. Nor is it clear in this hypothetical case how Kadyrov's removal would play out, if it came to that point. Chechnya is calm as it is repressed, but the constant attacks in towns like Nalchik suggest it is still seething under the surface. A change of guard could easily end up sparking a third Chechen war.

The bottom line is that this scenario is possible, and the fact that I can write a piece like this, or my colleagues can offer their own palace coup versions of the same, all testify to the central role that Putin plays in Russian politics and this is not a good way to run a country. Most likely, the real explanation is that he has simply run off to the Maldives for a week to recover from some more plastic surgery and to celebrate his honeymoon, after finally marrying former gymnast Alina Kabaeva.

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 #9
Putin's approval rating at 88% - poll

MOSCOW, March 13. /TASS/. Russian electors have placed President Vladimir Putin "on the peak of national confidence", winning 88% performance approval and the highest vote of confidence in his presidency recorded over 15 years, pollsters say.

This was announced at TASS headquarters on Friday as Russian Public Opinion Research Center head Valery Fedorov unveiled latest results from annual assessments carried out since Putin was first elected head of state.

Pollsters gathered views among 1,600 survey respondents in 130 Russian localities. Returns registered a continuing rise in support for the president since the last poll in 2014.

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 #10
Russia Beyond the Headlines
www.rbth.ru
March 12, 2015
New evidence sheds doubt on 'Islamic' motive in Nemtsov killing
Experts say that conflict between Russia's security services and the president of Chechnya, Ramzan Kadyrov, likely played a role in the murder.
Yekaterina Sinelschikova, RBTH

New details in the Feb. 27 murder of opposition leader Boris Nemtsov have cast doubt on the claim of the investigators that Nemtsov was killed by followers of radical Islam because of his support for the French magazine Charlie Hebdo.

Russian daily Moskovsky Komsomolets (MK) has obtained photographs from surveillance cameras showing that the car in which the killer fled, according to investigators, the killer fled, began to regularly appear near the politician's home as early as September 2014, before the Charlie Hebdo tragedy, which took place in January.  

Additionally, the primary suspect in the killing, Zaur Dadayev, has been described as "not very religious." Dadayev's mother told Russian news site RBC Daily: "Zaur was not an overtly religious man."

Dadayev, a former officer of Sever battalion of Russia's Ministry of Internal Affairs (MVD) forces plead guilty to organizing and committing the murder, but later retracted his confession. In his retraction, Dadayev said that he made his initial statement under pressure from the authorities, who promised to release his friend if Dadayev confessed. Dadayev has also filed a complaint saying he was beaten during his questioning.

According to Vasily Panchenkov, the head of the press service of the Russian Interior Ministry troops, Dadayev was dismissed from his position at his`own request on Feb. 28, the day after Nemtsov's murder. Dadayev was officially on vacation at the time of the murder and investigators are pursuing the possibility that Dadayev used his vacation time to prepare for the crime.

At the moment, four other men have also been named as defendants in the case - all of whom are Dadayev's relatives and friends. Three of the men were detained during a special operation in Chechnya, while the sixth man blew himself up with a grenade during detention.

Internal political conflict

Georgy Mirsky, an expert on Islam and a senior researcher at the Institute of World Economy and International Relations, told RBTH that investigators are pursuing the "Islamic" theory because it is the easiest explanation.

"This is the most convenient version - no commissioners, the motive is clear, and that's the end of it," MIrsky said. "But I do not believe that these people were so sensitive that could take offense for their religion. Nemtsov talked very little about it."

On his website Kashin.guru, investigative journalist Oleg Kashin said that the "Islamic" version of events as well as the information that Nemtsov was under long-term surveillance imply that the Federal Security Service (FSB) knew nothing. But, he writes, "it is difficult to imagine that the special services were not aware of such a long-term operation."

Rather, Kashin believes the murder was part of an ongoing conflict between Chechen leader Ramzan Kadyrov and the security services. Kadyrov, who became president of Chechnya in 2007, is considered close to Putin.

"It is easier to believe that their [FSB's] passive role was deliberately passive to allow Kadyrov to expose himself, and take action on him in a high-profile manner after that," Kashin wrote.

Political analyst Stanislav Belkovsky agrees with this assessment.

"For the first time during the entire period of Putin's rule there is a sharp and open systemic conflict between Ramzan Kadyrov and federal security forces," Belkovsky said. "The security forces are now trying to convince the public that the killers come from Kadyrov's inner circle," he said.

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#11
Carnegie Moscow Center
March 13, 2015
The Chechen Connection?
By Alexey Malashenko
Malashenko is the chair of the Carnegie Moscow Center's Religion, Society, and Security Program. He also taught at the Higher School of Economics from 2007 to 2008 and was a professor at the Moscow State Institute of International Relations from 2000 to 2006.

The Chechen connection has been made in connection to the murder of Boris Nemtsov, one of the leaders of the non-system liberal opposition. So far five suspects have been arrested in this case. The murder's organizer, Zaur Dadayev, has already admitted his guilt, while his accomplice, Beslan Shavanov, killed himself during his arrest. Dadayev explained that Nemtsov had insulted Islam in the past and was punished for it.

The story conjures up associations with the Charlie Hebdo incident in which the magazine's staff were shot and killed for publishing cartoons depicting the Prophet Muhammad. Afterwards, millions of outraged French citizens took to the street to protest the actions of the Islamist extremists and reassert Europeans' right to self-expression.

Shortly after these protests, an alternative rally in the Chechen capital of Grozny attracted approximately 700,000 people. The participants protested against insulting Islam, as well as the general atmosphere of permissiveness and the loss of true values in the West. In a sense, they were justifying the murderers. (On the other hand, in certain instances, authorities and clergy take the position that they don't even consider the terrorists Muslims, as was the case regarding the terrorist assault on Grozny in December 2014.)
Al Qaeda was behind the Paris murders-at least, that's what many analysts think. But who was behind Nemtsov's murder?

Although journalists often point to Ramzan Kadyrov, I find it hard to believe. I can't imagine the Chechen leader calling his subordinates and directly instructing them to commit this crime. He has nothing to gain from it.

But the xenophobia and fear of the West characteristic of some segments of Russia's Muslim community, including Muslims in the North Caucasus, creates a favorable climate for such acts. Islamic anti-Westernism matches the official Russian ideology, which focuses more on criticizing the tolerance and amorality of the West than on condemning terrorist attacks themselves. We have come full circle.

The actual mastermind of Nemstov's murder will never be found because, in all likelihood, such an individual doesn't exist. Incidentally, just a week after the Moscow tragedy, Ramzan Kadyrov was awarded the Order of Honor, once again proving the adage that "Caesar's wife must be above suspicion" (or Caesar's brother in this instance). The Kremlin continues to trust Kadyrov and is not about to distance itself from him as a result of his charges' actions.

Those responsible-the murderers, that is-will certainly be punished. They might get off relatively lightly, though-after all, they acted in the name of their faith. For their part, Russian liberals should be more careful now. From this point on, besides being punished by the regime, they will also be targeted by terrorists, whose views sometimes coincide with those of the regime.

This post addresses only the one, most-talked-about theory of the murder, but we shouldn't completely dismiss other possibilities. Besides, "the Chechen connection" does raise some questions. For instance, those that kill from behind usually don't kill for their faith-this is a sign of cowardice. Also, the case has been solved surprisingly quickly, given the usual sluggish pace of Russian investigations. Moreover, the North Caucasus's involvement in the killing may lead to the escalation of interethnic tensions. There are other holes in the Chechen story, but the investigators are unlikely to discard it at this point.

This publication originally appeared in Russian.

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 #12
Interfax
March 12, 2015
Nemtsov murder suspect was not tortured - lawyer

A lawyer for one of the men charged with the murder of Russian opposition politician Boris Nemtsov has dismissed suggestions that his client was tortured in order to force him to confess to the crime, the privately-owned Russian news agency Interfax reported on 12 March.

Ivan Gerasimov said that his client, Zaur Dadayev, had told him investigators had not subjected him to any "physical or psychological pressure". Gerasimov's remarks came the day after Andrey Babushkin, a member of Russia's presidential human rights council, said he had visited Dadayev in prison and seen wounds on Dadayev's body that suggested he had been tortured.

"My client did not complain of torture and said, including with respect to the investigative measures in which he was involved, that no physical or psychological pressure was exerted on him. During those investigative measures, no breaches were committed by employees of the Russian Investigations Committee," Interfax quoted Gerasimov as saying. He added that Dadayev had "given testimony in the criminal case" and had "actively cooperated with the investigation".

Russian state news agency RIA Novosti quoted Gerasimov as saying: "I didn't see any physical damage, except the marks left by the handcuffs."

Babushkin, however, has stuck to his version of events. "Dadayev told us five times that, had illicit methods not been used to influence him, the statements he made would have been different," he said at a news conference hosted by Interfax on 12 March.

"We found injuries on his legs, in the region of his ankles. He maintained that he was put in shackles. It should be said that shackles have been banned in our country since 1904," Babushkin added.

Nemtsov was shot dead a few hundred yards from the Kremlin on 27 February. Dadayev is one of two men to have been charged over the killing, along with Anzor Gubashev. Three other men - Shagid Gubashev, Khamzat Bakhayev and Tamerlan Eskerkhanov - have been remanded in custody.

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 #13
http://therealnews.com
March 12, 2015
The Murder of Boris Nemtsov in Moscow
Who killed Boris Nemtsov? He was neither a leader nor real opposition, according to Aleksandr Buzgalin, professor of political economy at Moscow State University
Aleksandr Buzgalin is a Professor of Political Economy at Moscow State University. He is also editor of the independent democratic left magazine Alternatives, and is a coordinator of the Russian social movement Alternatives, author of more then 20 books and hundreds of articles, translated into English, German and many other languages.

HARMINI PERIES, EXEC. PRODUCER, TRNN: Welcome to The Real News Network. I'm Sharmini Peries, coming to you from Baltimore.

The murder of Boris Nemtsov, one of the opposition leaders in Moscow, has the Western press buzzing with whodunit. It makes great television.

But who is Boris Nemtsov, and what did he stand for politically in Russia? This is the topic of our next discussion with Aleksandr Buzgalin. As you know, Aleksandr is a professor of political economy at Moscow State University. He's also a editor of the independent democratic left magazine Alternatives.
Aleksandr, thank you so much for joining us.

ALEKSANDR BUZGALIN, PROF. OF POLITICAL ECONOMY, MOSCOW STATE UNIV.: I'm very glad to talk with you every time.

PERIES: I know that there's been lots of speculations and arrests going on, and there's various stories in terms of what the media is speculating in terms of whodunit. But what is the more intelligent conversations going on in Moscow about this?

BUZGALIN: So it's a beautiful question, but, unfortunately, I'm not Sherlock Holmes, and I cannot give you the answer who killed Boris Nemtsov and who organized this crime.

But, as professor, I can discuss question why we have so long discussions around this person and this crime. And the question is not so simple, because when two years ago--even more now--a very important person, democratic left leader Stanislav Markelov, the defender of many minorities in our country, trade union leaders, immigrants, was killed in the center of Moscow, it was a few discussions, really no discussions in big news companies like CNN or something like that. And when Boris Nemtsov was killed, [incompr.] the whole speculation for--I hope it will be finished soon, but I am afraid that it will be for the whole month or maybe even more.

Why? This is big question mark. And this is not an accident. Boris Nemtsov was made by media. He was transferred to the leader of democratic opposition. He became so-called victim of bloody KGB and so on and so far. But in reality it's not so.

I don't know who killed this person, honestly. And I can comment a little bit what kind of ideas are discussing now in intellectual and political space in Russia. In Russia, he is associated not with democratic opposition, human rights, and so on; he is associated with a bloody economic policy. I told bloody, and that means bloody. It was war in Chechnya. It was collapse in economy, decline, 50 percent decline of gross national product, 30 percent and more decline of average incomes for majority of population, 50 percent decline of real incomes. He was one of the leaders of this shock therapy policy or so-called shock without therapy policy and Russia. He is still associated with these right-wing shock therapy politicians. And he had no support from ordinary Russians and from majority of intellectuals, only so-called glamour intelligentsia, part of bourgeoisie, part of pro-Western liberal political persons, and that's it--really minority.

We had two years ago even more big demonstrations in so-called Bolotnaya Square, so-called because in Russia Bolotnaya means swamp. And this is symbolic name. But it was really big demonstration, not one demonstration, demonstrations. And Nemtsov was among leaders. But for majority he was not their leader. We had different people--red social democrats, center leaders, some representatives of glamour intelligentsia, some persons from the past, like Nemtsov, and he was among these persons, and that was very big contradiction.

And, for example, Sergei [Udaltsov?], who is now in prison and who is in terrible conditions--he is on the border of death. I hope he is healthy in prison. But there is no big discussions, because he is communist and he is real leader of opposition, among others. And he really requires big changes in economic, social, and political life in our country. And I support big part of his requirements economic, social sphere, and the sphere of real democracy, and so on.

Nemtsov, he was symbol of necessity to change economic policy in favor of another type of corporations, not to change in favor of people. He was supporter of absolute democracy. But when he was a leader, it was less democracy--or maybe the same absence of democracy as now.

When he was a leader, it was a period of terrible corruption and bloody criminal atmosphere in our country. So he is not associated with opportunity chances for radical changes for 90 percent of Russians.

Why he became now so popular? Because, first of all, it's very beautiful opportunity to make from this playboy leader of democratic opposition. He is a right-winger, and this is very useful for many right-wing leaders in our country, and especially abroad. He can be also used as symbol of a terrible regime in our country.

Again, I am--I wasn't--I'm afraid I will be very critical about policy of our leaders, including president, ruling party, prime minister, and majority of ministers in my country. We have really very big economic, social, and political contradictions, and these contradictions must be discussed.

About different versions of this murder, this crime, first of all, I am afraid that behind this killing is money. It was with many leaders of so-called democratic opposition when they became victims not of political terror, not of political oppression, but victims of terrible contradictions inside their /roʊn/ groups. They could not divide money. They had been contradictions who will receive how big money.

Nemtsov, by the way, it was not businessman. He didn't have big status and he was very rich and spending a lot of money for everything. So this is one of the versions, that behind are simply big problems with money, division of money, and contradictions around this, and it was just people who were, how to say, anybody bought these people from caucus to kill Nemtsov because it was necessary to solve this contradiction. This is one of the versions.

Another version which is discussed by liberal so-called democrats--but they're not really democrats, by the way; that's another story. I can tell you then, if you [incompr.] like Pinochet, these fighters for democracy, so-called democracy in Russia, or so-called fighters for democracy in Russia. But they think that it was organized by Putin, KGB, or something like that. I think it's not true, because for Putin this is big, big, big, big headache, and of course for him it was not profitable at all to have this person killed. Alive, Nemtsov was nobody. Nemtsov, as victim became, a symbol of--I don't know what--of something terrible, beautiful, dangerous, and so on. A lot of people are now walking in the streets and with words next me, next I'll--next person who will be killed, it's me. So it's just symbolic game, and I don't think that this is Putin behind.

Also, there is strange versions that friends, colleagues of Nemtsov decided to kill him in order to have this victim, the symbol that it's a good person, beautiful person, he is killed, and now all opposition will be united and we'll make something very big and important to change the situation. I don't think this is true, but this version is also popular.

That's it, really. And generally speaking, for me the question is not who is the murderer, who killed Nemtsov, or who is behind. Main question is what kind of problems we have in my country, in Russia, and what is the international context for these questions, for these problems, for these contradictions. And this question I really want to discuss, but first of all I want to stress again and again we have very important questions, even interconnected with violence.

When (I want to repeat again) Stanislav Markelov was killed, it was a few new stations who commented this question. And, by the way, thank you very much dear Real News people that you had interview with me, with other people about Stanislav Markelov. If you come again to this topic, it's really great. He was real defender of human rights.

PERIES: Okay. Aleksandr, thank you so much for joining us and shedding light on this particular topic. And let's continue our discussion on the economy in our next segment.

BUZGALIN: Yes, I'll be very glad to discuss with you questions of my country and international context of our events.

PERIES: Thank you for joining us on The Real News Network.

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 #14
London Review of Books
www.lrb.co.uk
March 19, 2015
Remembering Boris Nemtsov
By Keith Gessen
Keith Gessen is a founding editor of n+1.

It would be hard to imagine a less likely political martyr than Boris Nemtsov. He was loud, brash, boastful, vain and a tireless womaniser. My favourite story about him came from a Moscow journalist who once shared a cab with Nemtsov and a photographer whom he'd been wooing to no avail. It was late at night and he fell asleep. The photographer was the first to be dropped off, and Nemtsov suddenly woke up. 'So what do you say?' he asked. Receiving another no, he went back to sleep.

Nemtsov was a young physicist in Nizhny Novgorod when perestroika began. He got involved in protest politics and was elected to the first democratic Supreme Soviet in 1990, associating himself with the anti-Soviet, 'democratic' wing. He caught Boris Yeltsin's eye and was appointed governor of Nizhny Novgorod. After six years with mixed results, he was called back to the Kremlin to join the cabinet of 'young reformers' who, it was claimed, would renew economic progress for Yeltsin's second term. Nemtsov was the most handsome among them, and a physicist, and Jewish! Looking at photos of him with Yeltsin, who sometimes presented Nemtsov as his successor, one couldn't help but be filled with hope. Then Nemtsov opened his mouth. The first time I saw him on TV was during a celebration of the ageing pop singer Alla Pugacheva; he reminded her that she'd once said she liked sleeping with her husband because he reminded her of Nemtsov. It was a strange performance for the future hope of Russian democracy.

I spent a week with Nemtsov many years later, in 2009, when he was running for mayor of Sochi. He was still amazing. It was early spring in Russia and yet Nemtsov had a full tan. Everywhere we went he wore blue jeans, a black jacket and a white shirt with the top three buttons undone. He addressed everyone he met with the familiar ty,which was rude, and he hit on all the women journalists. But he was totally committed to what he was doing, and bizarrely, bull-headedly, fearless. By this point he had started publishing short, well-researched reports about corruption in both the presidential administration and the Moscow mayoralty. Later he would publish one about construction of the various Olympic sites in Sochi. Whoever he was speaking to he would say: 'Have you read my book about that? You need to read my book about that.' And he would start making arrangements to send them a pamphlet.

His campaign in Sochi was quixotic. This former governor and deputy prime minister, ten years out of government, was travelling around in a rented yellow minivan, trying to get people on the street to talk to him. Most of them recognised him, he was a celebrity, but they weren't about to stick their necks out for him. His rallies were poorly attended. His volunteers put up posters with his handsome face only to find they'd been torn down overnight. (The Kremlin had agreed to let him register his candidacy but had no intention of letting him win.) He was subjected to relentless attacks on his character in the local and national media. A group of young men, who for some reason were wearing dresses, splashed ammonia on him before a press conference.

On my first night in Sochi, Nemtsov and the former chess champion turned oppositionist Garry Kasparov, who was helping him on the campaign trail, attended the birthday party of a local teenager. Then they spent hours drinking and kibitzing with her parents. Nemtsov was furious that the local governor, Alexander Tkachev, who was presumably in charge of most of the harassment directed at his campaign, could treat him so shabbily. 'You're from New York,' Nemtsov said at one point, turning to me. 'Who is more popular in New York, Nemtsov or Tkachev?' The answer was Nemtsov, but we weren't in New York.

Nemtsov's time as deputy prime minister in the cabinet of 'young reformers' had been a catastrophe. The main characteristics of Russia's post-Soviet system had been put in place by Yeltsin and the previous set of reformers: extraordinary powers for the president; a purely decorative parliament; much of the industrial and oil wealth of the country in the hands of a few well-connected businessmen. Nemtsov and the others declared that they were undertaking another round of 'shock therapy' and tried to raise the alarm about the oligarchs. It didn't work out well. After more than a year of chaos, Russia defaulted on its treasury bonds. The ruble collapsed and Nemtsov and the others were out. 'Russia needs to enter the 21st century with only young people,' Nemtsov had said shortly after coming to Moscow. On New Year's Eve 1999, Yeltsin would use almost exactly the same words to introduce his chosen successor, Vladimir Putin.

The terrible state of Russia's economy and its institutions wasn't entirely Nemtsov's fault, but he refused, along with almost all the rest of his cohort, to reflect on what had gone wrong in the 1990s. Asked if things should have been done differently, he would say that fixing the presidential election in 1996 had been a mistake, 'a bad omen'. But he didn't question the actual reforms, the haste and brutality with which they were undertaken, or the fact that they created a small class of successful post-Soviet winners (like Nemtsov) and a much larger underclass of forgotten and discarded losers. Instead he blamed everything that went wrong in the next 15 years on Putin. 'When is that bastard finally going to go away?' he said in Sochi in 2009. 'When?'

He was wrong to hold Putin responsible for all of Russia's problems, but the error kept him going. By the time of the Sochi election, most of the other 'young reformers' had either gone into academia or accepted technocratic positions in the Putin administration; later apostates assumed more or less quiet positions in the opposition. But Nemtsov not only remained active, he was tremendously outspoken. And most of his anger was directed squarely at Putin. The reports he wrote included Putin: A Summing-Up; Putin and Gazprom; Putin and the Financial Crisis; Putin and Corruption. The next report was going to be about Putin and the war in Ukraine.

The reports were neither groundbreaking nor particularly well written; they tended to rely on published accounts from open sources. But they were always well publicised, and their way of gathering the known facts, as well as their association with Nemtsov, meant they were useful as agit-prop tools. More than anything there was the incongruity of it. If you had asked in 1998 who of the 1990s politicians would 15 years later still be going out and protesting, getting arrested, publishing critical reports and putting himself in danger, I don't think anyone would have said Nemtsov. And yet Nemtsov was the one - the only one.

Russians have witnessed so many killings of regime opponents in the past twenty years that it's become one of their chief areas of expertise. When Putin's press secretary, the soft-spoken, bewhiskered Dmitry Peskov, said after the killing of Nemtsov that the Kremlin couldn't have had anything to do with it because Nemtsov wasn't an influential politician, people were reminded of what Putin had said immediately after the journalist Anna Politkovskaya was killed. 'Her influence over political life in Russia was minimal. Murdering such a person certainly does much greater damage from the authorities' point of view ... than her publications ever did.' Seven years later, Peskov on Nemtsov: 'In political terms he did not pose any threat to the current Russian leadership or Vladimir Putin. If we compare popularity levels, Putin's and the government's ratings and so on, in general Boris Nemtsov was just a little bit more than an average citizen.' This was grotesque. It made them sound guilty. And yet it almost made them sound innocent too. Wouldn't the cold-blooded murderers of a political opponent have the good sense simply to express their sadness at the loss and leave it at that? Maybe. But then again, if these guys had been geniuses, they'd have done a lot of things differently.

By comparison to the previous killings, a few things stand out. One is the bizarre proximity to the Kremlin: Nemtsov lived across the river from Red Square, so it wasn't a strange place for him to be, yet surely there were less obvious places where he could have been shot - places where no one would have been able to take photos of his body with St Basil's Cathedral looming in the background. Another was the remarkable level of efficiency. A security camera captured the entire event from a distance, and it happened with great speed. The killer fired six rounds, four of them on target, then jumped into a car which pulled up at that moment and whisked him away.

That the killing was a highly professional job doesn't necessarily mean it was ordered by the highest professional. We don't know much about the way the Kremlin works. We know that there are things Putin doesn't like to be asked about: they're too small-time. But we also seem to know that there are things Putin demands to be in charge of. It's just hard to know which category a thing falls into. The difficulty of telling the difference must account at least in part for the ineffectiveness of the Putin regime.

The biggest difference between this killing and the many others that preceded it was Nemtsov's prominence. The journalists Dmitry Kholodov, Paul Klebnikov, Politkovskaya, the human rights activist Natalia Estemirova, the Duma deputy Galina Starovoitova: none was so immediately recognisable to so many people; none had once been so high up in government. None had been labelled enemy number one by the nationalists and other pro-Kremlin activists who have emerged as if from a time warp to take up the banner of the war against Ukraine. That war was Nemtsov's finest moment. On 2 March 2014, when it first became clear what was happening, Nemtsov wrote a furious article which the liberal radio station Ekho Moskvy refused to post on its site unless he took out some of the more inflammatory language. So he posted it on Facebook instead:

"Putin has declared a war of brother against brother in Ukraine. This bloody folly by a crazed KGB man will cost Russia and Ukraine dear: once again the deaths of young boys on both sides, bereft mothers and wives, children turned into orphans. An empty Crimea, which tourists will never visit. Billions, tens of billions of rubles, taken from old people and children and thrown into the furnace of the war, and then after that even more money to prop up the thieving regime in Crimea ... The ghoul needs a war. He needs the blood of the people. Russia can look forward to international isolation, the impoverishment of its people, and repressions. God, why should we be cursed like this??? How much longer can we take it?!"

It was a remarkable performance from someone who could long since have retired from politics. Nemtsov enjoyed windsurfing and paragliding in places like Venezuela - hence his nice tan. He could have moved to New York like his friend Kasparov.

Ukraine has been the question hanging over the Putin administration since 2004. In the minds of Putin and his people, it's the final battle. If Ukraine can be kept out of the hands of the West, Russia wins. If it joins the EU and Nato, Russia is effectively reduced to borders not seen since the time of Peter the Great. What's puzzling is that Nemtsov's murder took place just two weeks after Russia to all intents and purposes won the war. At the negotiations in Minsk, Ukraine effectively surrendered. It had already fallen into chaos. The government is unpopular, the volunteer battalions have minds of their own, and the economy is in ruins: we've heard a lot from Western politicians about the collapse of the Russian currency (it's lost 50 per cent of its value over the last year), but less about the collapse of the hryvnia, which has gone from eight to the dollar before Maidan to 24 to the dollar today. If, as most believe, Putin's goal, if he couldn't have Ukraine, was to destabilise it, he's achieved it. But the price appears to have been Russia's domestic tranquillity. The general mobilisation in support of the president has taken increasingly ugly forms. In December, in the stadium in Grozny in front of thousands of armed men, Ramzan Kadyrov put himself and his troops forward as the president's special volunteer battalion. 'We know that the country has an army, a navy, an airforce and nuclear capabilities,' he said, 'but we also know that there are some missions that can only be accomplished by volunteers.' Two months later, a week before Nemtsov's murder, a biker gang called the Night Wolves led a big meeting in Moscow called Anti-Maidan, with the slogan, 'There won't be a Maidan in Russia.' Ukraine has lost the war, but what the war has done to Russia may be even worse.

For years now there has been speculation about a 'party of war', which periodically stages provocations in order to push the president into decisive action. The party of war was said to have manoeuvred Yeltsin into Chechnya and, more conspiratorially still, to have blown up the apartment buildings in Moscow in 1999 to push Putin into Chechnya in his turn. The party of war may also have sent Igor Strelkov and his merry band of murderers into eastern Ukraine last spring, to turn an inchoate set of local protests into the beginnings of a civil war. But does the party of war actually exist? We're unlikely ever to know, even after all the archives have been opened and all the email accounts hacked. It is, however, a useful concept, even if its only function is to describe one part of Putin's mind that's in dialogue or competition with another. It would explain why Putin sometimes goes forward and sometimes steps back. And it gives at least a small space for hope, since if there's a party of war there is also, presumably, a party of peace, and it might just win.

I always thought that Nemtsov would make it, that he would be shielded from the vengeance of the system in part because he was Nemtsov. He had a PhD in physics, but he wasn't a serious thinker, nor did he pretend to be one. You could never tell if he was speaking out because he believed what he was saying or because he couldn't stand being ignored. Or if he kept getting arrested at opposition rallies because he considered it an act of conscience or because he liked getting his picture taken (sometimes, when they arrested him, the police tore his shirt, and you could get an extra glimpse of his tan). Did he hate Putin because of what he'd done to the country, or because he felt cheated out of his birthright by their shared mercurial surrogate father, Boris Yeltsin? He was a narcissist, and there was his way with young women. On the last night of his life, he went with his girlfriend, a Ukrainian model called Anna Duritskaya, to a nice restaurant in the upscale mall just across Red Square from the Kremlin. Then they walked in the rain across the bridge towards his apartment.

Who knows why people do the things they do? Who knows why Nemtsov kept fighting for some kind of change in a country to which he himself had brought a lot of pain? And neither do we know exactly why they killed him. But it's clear that it wasn't for his human flaws, or for his contribution to the economic catastrophe of the 1990s. He was killed for his opposition to the war. Since the start, critics have been warning that the war in Ukraine would eventually come home to Moscow. No matter who pulled the trigger on the bridge, it has.

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 #15
Interfax
March 13, 2015
Charges dropped against Russian woman accused of treason

Russian prosecutors have dropped their charges against Svetlana Davydova, a mother of seven from the town of Vyazma accused of treason after calling the Ukrainian embassy about Russian troop movements in April 2014, due to the absence of any crime, the woman's lawyer Ivan Pavlov told Interfax on Friday.

"Davydova was cleared of all high treason charges," he said.

Interfax has so far been unable to obtain confirmation of the report from other sources.

The Kommersant newspaper reported on January 29 that a criminal inquiry had been opened against Davydova after she called the Ukrainian Embassy in Moscow to inform it that a military garrison located nearby her home had emptied, suggesting that the troops stationed there might have been sent to Ukraine. Moscow's Lefortovo District Court confirmed on the same day that Davydova had been arrested on high treason charges at least until March 19, 2015.

On February 3, investigators freed Davydova from custody with travel restrictions.

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#16
The Economist
March 12, 2015
Ukraine's media war
Battle of the memes
Russia has shown its mastery of the propaganda war. Ukraine is struggling to catch up

IN LATE 2013, early in the Maidan demonstrations, Savik Shuster, one of Ukraine's most influential television hosts, made the mistake of inviting opposition leaders onto his talk show. Mr Shuster's network, whose owners were aligned with Viktor Yanukovych, then the president, promptly dropped Mr Shuster's programme "Savik Live". It was picked up by Channel 5, a station owned by a western-leaning oligarch named Petro Poroshenko. Last month, Mr Shuster again found himself under pressure-this time, he says, from Mr Poroshenko, who is now Ukraine's president.

Mr Shuster's offence was to invite on air a Russian journalist who criticised the Ukrainian government for killing civilians in a "fratricidal war". Ukraine's National Council for Television and Radio Broadcasting issued him a warning for violating a law against war propaganda and incitement of hatred. In today's atmosphere, Mr Shuster says, his attempt at bringing balance to the discussion proved a step too far: "There are now people who shouldn't be on the air, and things that shouldn't be discussed." As one of his other guests, a deputy from Mr Poroshenko's party, remarked later in the show: "Today, an information war is being waged against Ukraine...Our task is to be united, to comment as one."

Information warfare, like the shooting kind, is a new art for Ukraine, and the learning curve is steep. Faced with a finely-tuned and well-funded Russian propaganda machine, truth and openness ought to be Ukraine's most powerful weapons. But truth-telling is slow and painful work, and Kiev often opts for misinformation of its own instead. The Ukrainian authorities gloss over military losses, so much so that domestic observers now interpret the government's daily situation briefings as a euphemistic code: "14 [killed] means there was lots of fighting, two means it was a relatively quiet day," says Vitaly Sych, editor of Novoe Vremya, a weekly.

Ukraine's leaders consistently and implausibly deny any responsibility for civilian deaths, further undermining trust, especially among the population in separatist-held territory. Criticism of the government is dismissed as mudslinging by Kremlin agents. Last month authorities jailed Ruslan Kotsaba, a western Ukrainian blogger who had spoken out against mobilisation. Ukrainian authorities accused him of working in Russia's interests; Amnesty International labeled him a prisoner of conscience. "We're becoming just like them," one senior Ukrainian official laments.

Tasked with bringing order to the information front is the newly-created Ministry of Information Politics, led by Yuriy Stets, a former producer at Channel 5 and a close personal friend of Mr Poroshenko. Journalists and civil-society activists derided the ministry's creation, dubbing it the "Ministry of Truth". Mr Stets says his critics "read Orwell but not Churchill," and compares his information ministry to the one Britain operated during the second world war. Mr Stets aims to fix poor coordination between often contradictory government agencies and develop tools for resisting Russian information warfare. "We must teach the authorities to tell the truth," he insists, promising not to engage in propaganda or censorship. Heavy censorship in Ukraine is, indeed, unlikely-not least because the media remains in the hands of powerful oligarchs.

Yet the ministry's first steps suggest it may be unwisely trying to imitate the better-funded, more professional Russians. "They see what Russia does and think they can bring it to Ukraine," says Oksana Romaniuk of Kiev's Institute of Mass Information. "We're battling propaganda with propaganda." The ministry has announced plans to create a worldwide television channel to counter Moscow's Russia Today network; it will be called Ukraine Tomorrow. Mr Stets has also launched the "Ukrainian Information Army", a volunteer force of internet commenters tasked with spreading government-approved content and combatting Russian trolls. A recent mission asked the troops to post a propagandistic Ukrainian response to a Russian-made propaganda video.

Meanwhile, Ukrainian journalists have been struggling with how to carry themselves in a war where the media plays an outsize role. Inside the newsroom of 1+1, one of Ukraine's top television stations, Ukrainian flags signed by soldiers hang on the walls. Spent shells rest on bookshelves, and on the floor lie fragments of the ruined Donetsk airport. Next to a target-practice mannequin dressed in a separatist uniform and labeled "Putin", a donation box calls out: "Help Protect Ukraine". Aleksander Tkachenko, chief executive of 1+1 Media, says journalists have found themselves "participants in a war. Not physically, but a new type of war."

Journalists constantly debate whether they can help Ukraine without contradicting their professional standards. "Ukrainian journalism is undergoing a crisis of values," says Olga Chervakova, a television journalist turned politician, who now sits on the parliamentary Committee for Freedom of Speech and Information. Threats to Ukrainian journalists from separatist forces have made traveling to Donetsk and Luhansk too dangerous for most. As a result, news reports are often one-sided, sometimes lumping together all residents of rebel-held areas as "terrorists". Such generalisations prevent Ukrainians from truly understanding the crisis, writes Nataliya Gumenyuk of Hromadske TV, one of the few Ukrainian journalists who travels to separatist-held territory.

Covering a conflict in one's own country raises complex moral dilemmas. "When you are being attacked, there is a natural human instinct to defend oneself," says Olexandr Martynenko, director of Interfax-Ukraine, the country's leading news wire. More often than not, Mr Martynenko notes, Ukrainian journalists are choosing patriotism over professional standards. For many, including Andrei Tsaplienko, a war correspondent at 1+1, remaining above the fray is close to impossible. Before the war, when Mr Tsaplienko covered conflicts in the Middle East, Africa and Latin America, he witnessed human suffering but could do nothing about it. In Ukraine, parallel with his journalism, he has begun collecting and delivering aid to the front: "Here, I understand that I can help." At one point Mr Tsaplienko considered joining the army, but was dissuaded when soldiers told him he could do more good as a journalist. How much Ukraine's journalists are aiding its cause by forgoing impartiality is debatable.

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 #17
RFE/RL
March 13, 2015
IMF Loan Package For Ukraine Promises Pain, Questionable Gain
by Mark Baker

From higher home heating costs to lower pensions, Ukrainians are about to feel the pinch from austerity measures attached to a newly approved International Monetary Fund (IMF) loan package.

The long-awaited $17.5 billion credit announced this week holds out hope of an eventual economic recovery for the country. But that comes down the road.
But the deal's success is contingent on the government making deep and immediate cutbacks that could scuttle the program long before it has a chance to work.

On March 11, the IMF announced approval of the assistance program, which -- along with other measures, such as restructuring the country's debt -- is hoped to inject around $40 billion into the ailing economy.

The IMF's mission chief for Ukraine, Thanos Arvanitis, praised the four-year bailout as both ambitious and comprehensive. The program "tries to bring immediate stabilization in the economy, as well as lay the basis for sustainable growth over the medium term," he said.

Heating Prices To Rise

Ukrainian citizens interviewed this week on the streets of the capital, Kyiv, however, were far gloomier about the accord's chances of success.

Among the IMF's requirements for the loan package is a dramatic reduction in subsidies the government pays for natural gas to allow people to afford to heat their homes. Gas prices for many consumers are expected to triple in the coming weeks.

"I won't pay," said one woman, who declined to be identified. "How am I going to pay? My pension is 1,200 [hryvnyas]. Have they lost their minds completely?"

Another woman was more sanguine but equally pessimistic. "[We will have to] save somehow, with clothes or food," she said. "We'll be surviving somehow, what else is there to do?"

The IMF is demanding an end to the subsidies as a way of cutting Ukraine's overall budget deficit, which last year came to whopping 7 percent of GDP. A lower deficit means the country has to borrow less money to pay its bills and, hence, has lower interest payments.

Pensions To Be Decreased

A higher heating bill is just one of many sacrifices average citizens are being asked to make, even as war threatens to engulf the far eastern part of the country. Retirement and unemployment benefits are set to be cut substantially.

All this comes amid a rapidly weakening economy. The IMF predicts Ukrainian GDP will shrink by 5.5 percent this year, after dropping nearly 7 percent last year.

The number of unemployed workers is expected to grow rapidly. The unemployment rate is now predicted to rise to 11.5 percent this year, compared with 7.3 percent in 2013.

Earlier this month, the Central Bank raised the main lending rate to a world-leading 30 percent. This virtually assures that local lending and investing, at least for the time being, will not propel any kind of meaningful recovery.

IMF Skeptical Too

Even the IMF itself has expressed serious doubts that the Ukrainian loan program can succeed. A report published on March 12, a day after the loan package was announced, says there are "exceptionally high risks" to the program ever succeeding.

The report says a positive outcome is contingent on at least a couple of factors outside the country's control.

The main factor is the ongoing conflict with Russia in the east of the country. While a shaky cease-fire continues to hold, the IMF has said in the past a return to major fighting would jeopardize future loan payments.

The report also says success depends on Ukraine's ability to renegotiate its existing loans with public and private creditors.

Ukrainian Finance Minister Natalie Jaresko said talks with creditors would start on March 13 and last two months. Russia holds around $3 billion in outstanding Ukrainian debt, and it's not yet clear how willing Russian negotiators might be to restructure payments to Kyiv's advantage.

Rays Of Hope

In spite of the difficulties, the long-awaited IMF program came as comparatively good news amid a sea of gloom.

In announcing the package on March 11, Ukrainian Prime Minister Arseniy Yatsenyuk emphasized the immense psychological benefits of the international support as the country remains locked in a struggle with Russia.

"Despite all attempts by the Russian Federation, we managed to convince the world that we are implementing reforms," he said. "[It was only] based on these reforms, [that] the International Monetary Fund made a decision to provide Ukraine with financial assistance."

International currency markets, too, seem to be cautiously optimistic. After going through near free fall on markets a couple of weeks ago, the hryvnya appears to have stabilized in value.

In late February, the hryvnya had fallen to a record of near 34 to the U.S. dollar. In recent days, the currency is trading at around 22 to the dollar.

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 #18
Business New Europe
www.bne.eu
March 13, 2015
IMF cash to do little to change grim reality for ordinary Ukrainians
Kateryna Killyashenko in Kyiv and Nick Allen in Berlin

After the International Monetary Fund's (IMF) approval on March 11 of its $17.5bn loan package to Ukraine, with $5bn due to flow immediately to bolster Kyiv's dwindling coffers, the population could be forgiven for thinking the material hardships of recent months will start to ease. Wrong, as President Petro Poroshenko made abundantly clear on March 10.

"Life won't improve shortly," Poroshenko warned in televised comments a day before IMF chief Christine Lagarde blessed the crucial injection of funds, as he spoke about the country's reforms unfolding in "tough wartime conditions".

"If someone understands the reforms as improvement of people's living, this is a mistake," added Poroshenko, also announcing a four-fold increase in defence spending that will inevitably impact already limited means for social welfare and pensions.

Those tough wartime conditions seem to secure - for now - the population's support for the defence spending hike to $3.8bn, or 5.2% of GDP. People are anxious about pro-Russian rebels in eastern Ukraine pushing westward in the fierce fighting of recent weeks, and fearful that they could take more ground if February's shaky ceasefire collapses. "In the current situation, [more defence spending] is a good thing," said 33-year-old Kyiv businessman Vitaliy Zanadvorov. "We will have to deal with the consequences later, but at the moment it is necessary. Our army has been neglected for more than a decade. It is time to renew the trust in it."

Grim reality

Renewing trust is a recurring theme at the moment: Following the IMF loan approval, former National Bank of Ukraine board member Vasyl Horbal said rebuilding confidence is the priority. "The IMF decision is definitely positive news for Ukraine," Horbal told Forbes. "The economy is in such a state that we need funds now, we need to return trust to our banking and financial system."

At the same time, the broader cost of the loan and another $7.5bn expected from other international organizations is sinking in hard to consumers. Under austerity measures demanded by the IMF, gas prices, for example, will be brought into line with EU levels, soaring 280% by 2017. "I didn't know they will increase, especially that much," said pensioner Valentina Podenko, 77. "I'll just have to stop eating I guess," she added with a gallows humour laugh that often accompanies such blows in the former Soviet republic.

Overall, the picture for Ukraine remains grim by a whole pile of yardsticks: rampant inflation - officially hitting 34.5% last month but likely much higher in reality - casualties from the fighting (more than 6,000 killed), endemic corruption and towering foreign debt, to name a few. Repayments on the latter in 2015 will effectively gobble up the first tranche of the IMF loan. Ukraine has to make some $5.4bn of foreign debt repayments this year, with central bank reserves down to just $5.6bn on March 1.

It all makes for the perfect storm for Poroshenko as he navigates his first months in power. Since the confectionary tycoon was elected last May, his initially healthy public support began to tail off from November. In February, his detractors overtook his supporters, 46% to 45%, according to a recent survey by R&G Group. But for now he is still going strong enough to have his government push through requisite austerity measures. "He is the best we have at the moment and we will not get anyone better in the near future. At least the world is talking to him," says Yelena Pazyna, 52, a housewife from western Ukraine.

Tough calls have had to be made at the top of other national institutions. Faced with looming hyperinflation, the central bank on March 4 hiked interest rates from 19.5% to 30%. It also kept in place the requirement for companies to sell about 75% of their foreign currency earnings. The moves helped strengthen the floundering hryvnia to UAH21 to the dollar from its all-time low of UAH32 hit on February 26. "I am confident we won't allow any panic in exchange offices or banks," Poroshenko said as the currency drew breath again.

But the population is under no illusions that large sums of loaned money won't go astray. Memories are fresh of the institutionalized kleptocracy that thrived under ousted president Viktor Yanukovych and a succession of leaders and governments before him, whether pro-Russian or pro-EU. Many people think the new authorities are as bad across the board, despite some visible efforts under the gaze of foreign lenders to combat corruption. And by some recent indications, they still are. In January, presidential advisor Yuriy Biriukov claimed that 20-25% of funds allocated to the Defence Ministry were still going astray, adding that "total corruption" exists in the ministry itself. In conditions of quadrupled defence spending, the opportunities for graft will only rise.

Day-to-day survival

Meanwhile, no one has really started talking about the sums that will be needed to restore the vast economic damage caused by the fighting in the east. "Around 25% of the country's industrial potential has stopped, around 10% has been physically destroyed," Poroshenko said in March.

For most Ukrainians, it's just about short-term survival now. The pensioner Podenko says it is only her children's support that keeps her going. "My pension is UAH1,300 [around $60], how am I supposed to live on this with this kind of inflation? After I pay my bills and buy all the necessary medicines, I'm left with UAH400 and how will that last me a month?"

But whether Ukrainians are for or against integration with Europe, Europe's prices are coming at them hard anyway. "It had to come sooner or later," says the businessman Zanadvorov. "Just as everybody in any EU country saves, we have to do the same. It's a normal path for every civilized nation."

"The prices [for energy] would be fair if we had European salaries," counters the housewife Pazyna. But she still supports the leadership's course, including the billions that will now go on defence. "We are at war now and I'm willing to save and suffer even more just to stop this madness."

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#19
Analysts say IMF money won't help Ukraine out of debt pit; peace will
By Tamara Zamyatin

MOSCOW, March 13. /TASS/. The five-billion-dollar tranche of the IMF's loan disbursed to Ukraine will be just enough to keep the economy going for a short while, but it will surely fail to help Ukraine out of the financial abyss, polled financial analysts have told TASS.

On Thursday, Ukraine received the first five-billion IMF loan tranche. In all, Kiev is to receive $10 billion this year, the chief of the IMF's mission in Ukraine, Nikolai Georgiyev, said.

Ukrainian Prime Minister Arseniy Yatsenyuk warned that the IMF money was not meant for social programs, and that about $2.7 billion from the first tranche would be spent to support the budget. Ukrainian Finance Minister Natalie Jaresko has confirmed the IMF loan will be used to replenish the gold and foreign exchange reserves and pay the foreign debt.

Says Vladimir Andrianov, the director of strategic analysis and research at Vneshekonombank: "The people of Ukraine will feel absolutely no effects. Moreover, under the government's decision the loan is to be accompanied by a sharp rise in electric power and heating prices, which is an outspokenly anti-social measure. Ukrainian tycoons will surely pocket part of the money. IMF specialists say for a good reason that Ukraine has a bad history of implementing agreed programs and the authorities' fine wishes often run against the interests of different groups of influence. There is absolutely no hope for a reform of the Ukrainian economy."

"The authorities in Kiev will spend the IMF money on financing the army, on purchasing military hardware, and in the final count on continuing the war in the east of Ukraine," Andrianov told TASS. Also, Kiev will have to settle the debt for Russian gas, and by the end of the year, the 3-billion-dollar debt on Russian eurobonds. In a word, the five billion dollars extended to Kiev and even the $17.5 billion promised over the four years to come is a meager amount, surely unable to help Ukraine out of the financial abyss," Andrianov said.

"Until just recently the IMF had refrained from giving a loan to Ukraine on the excuse of the continuing hostilities. But nevertheless the decision was made, although Kiev is in no hurry to comply with the Minsk Accords to pull back heavy weapons away from the line of disengagement. The IMF never grants loans to countries involved in ongoing military operations. This is evidence the loan was extended to Kiev under US pressures to spite Russia," Andrianov remarked.

An analyst at the Alpari company, Anna Kokoreva, believes that the IMF loan gives Kiev a chance to reschedule the existing $15-billion debts. But who of the lenders will agree to a rescheduling of Ukraine's debts? This year Kiev is to give away $11 billion. Russia and the IMF may agree to a rescheduling arrangement. But such a decision might follow only prolonged and no easy negotiations with each of the lenders."
Deutsche Bank's chief economist for Russia, Yaroslav Lissovolik agrees.

"It remains to be seen, though, if the IMF's loan is sufficient for resolving Ukraine's financial problems? The country has a huge budget imbalance. The economy has collapsed over the past year. And although the loan will give more room for maneuver, the bulk of the money will be spent on foreign debt settlements. True, the IMF's program for Ukraine might help Kiev draw more financial donors and more loans, but it is a vicious circle," Lissovolik told TASS.

"Amid financial instability and the economic slump one can hardly expect successful reforms or social programs. But the more the reforms are postponed, the harder they will be to accomplish," Lissovolik said.

Finally, an opinion from the chairman of Vneshtorgbank's observer council, Sergey Dubinin. No external financing will be able to substitute for structural measures to upgrade the economy, for which Ukraine over five coming years will need an estimated $40-50 billion , Dubinin told TASS.

"But if the authorities in Kiev fail to cope with the IMF's terms, they will not get the $17.5 billion promised for the next four years. Upgrading the Ukrainian economy would be possible only on the condition of a stop to the political crisis and to the armed conflict in the east. The current state of affairs as it is, Ukraine cannot hope for more loans. Kiev's top task now should be to comply with the Minsk Accords. Otherwise, a default will be the imminent outcome," Dubinin said.

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#20
The International New York Times
March 14, 2015
Ending Ukraine's Other War
By MARK MEDISH
Mark Medish served as a senior White House and Treasury official in the Clinton administration.

WASHINGTON - Twenty-five years after the Cold War's end, the struggle for Ukraine's survival as an independent nation has become a test of the character of our time. Since the protests last year on the Maidan, Kiev's main square, the country has faced two crippling wars: a hot one over its eastern provinces, and another one over efforts to prevent its political and economic disintegration.

The hot war in its rebellious, Russian-supported provinces is tentatively on hold, thanks to the latest Minsk cease-fire agreement. It has killed over 6,000 people and displaced a million more. Several major towns in the region look eerily like ruins of World War II.

The other war - less deadly but no less existential - is not about holding territory but about building a well-functioning state and economy. The months of euphoria on the Maidan have given way to awareness that Ukraine has been a quasi-failing state since the Soviet Union's collapse. Saddled with an unreconstructed Soviet-era bureaucracy and riven by corruption, Ukraine survives today largely on the good will of several oligarchs. More robbers than barons, these bosses control key provinces, fund private armies and finance divisive factions in Parliament.

The good news is that a free and fair general election last fall brought in a new government with solid competence in several key economic cabinet posts. Moreover, the International Monetary Fund has just approved a $17.5 billion, four-year program that will provide an essential financial lifeline. The I.M.F. deserves credit for boldness; this is a rare case in which the agency has lent financial support during an ongoing conflict.

In the near term, the first tranches of the aid package should be enough to stabilize the country's currency, the hryvnia, which has been in free fall. Yet overall it is likely to be underfunded - an estimated $40 billion in additional aid is needed, the sources of which are as yet uncertain. Moreover, the I.M.F. program requires Kiev to implement deeper structural reforms in just a few financial quarters than it has managed to achieve in two decades. No reform is more important than removing the distorting energy subsidies that have fueled corruption and dependence on Russia.

The West should be prepared to do more, applying the Colin Powell doctrine of "overwhelming force" to support Ukraine's economy, including substantial debt relief and more bilateral aid. This will require far more robust and creative activism from Western capitals, foremost Washington and Berlin, than we have seen so far.

The donors conference scheduled in April will be important. In addition to direct budget support, technical assistance and investment promotion, future reconstruction costs for the ruined provinces must be taken into account. Donors recall Ukraine's poor performance on several previous I.M.F. programs. They are also mindful of the hazard of throwing good money after bad, as occurred with the Russian bailout in 1998, when banks made out like bandits while the economy tanked.

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How could things be different this time? The practical but imperfect answer lies in a series of reforms aimed at reducing corruption and empowering citizens. The measures should include enhanced financial surveillance and safeguards in the banking system, transparency and public accountability, cutting red tape, downsizing the bloated bureaucracy, judicial reform, an independent ombudsman and whistle-blower laws. The direct involvement of an energized civil society in this transformation process will be crucial. After all, civil society started it on the Maidan - on Independence Square.

The wild card remains Russia. President Vladimir Putin veered in a supremely reckless direction by annexing Crimea and engaging in a thinly veiled irredentist war in Donetsk and Luhansk provinces. Where will the Kremlin's post-Cold War revisionism end? Other neighbors are understandably nervous and preparing for the worst. As the former Ukrainian president Viktor Yushchenko put it to me last week in Kiev, Mr. Putin's goal is "not territory but space," meaning a colonial sphere of influence.

Turning the Minsk cease-fire into a lasting peace will require rigorous diplomacy to resolve issues such as the rebel provinces' status and cultural autonomy within Ukraine, as well as the country's status within the European and Eurasian security context. A period of neutrality, respecting Russia's vaunted if misplaced geopolitical anxiety about "encirclement," seems a more plausible outcome than NATO membership.

Throughout the crisis, Mr. Putin has been careful to continue referring to Russia's "Western partners" and to hold the door open for a degree of cooperation on Ukraine's debt, energy supplies, trade relations and reconstruction. Philanthropy is certainly not his motive, but chaos in Ukraine is in nobody's interest.

To be clear: For national success, Ukraine must achieve both a durable political settlement in the east and an economic turnaround based on wholesale reinvention of the state. The work of Ukrainians themselves is essential, but without stronger Western support, the odds of progress will diminish.

Since 2004, the people of Ukraine have staged two Maidan protests expressing their aspiration for a modern country free of kleptocracy and allowed to associate with Europe. Social expectations - and discontent - remain high.

If there is a third Maidan, it could look more like a Ukrainian Weimar. Cynics in the Kremlin understand this, and so must the West.

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 #21
www.foreignpolicy.com
March 12, 2015
Ukraine's Rotten Front
Forget Russia -- if the new government wants to save the country, it needs to drum corruption out of its ranks.
BY COLIN CLEARY
Colin Cleary is an Interagency Professional in Residence at the U.S. Institute of Peace. He served as political counselor at the U.S. Embassy in Kiev from 2008-2012. The views expressed are those of the author and do not necessarily represent the views of the Department of State or the U.S. government.

Ukrainian leaders, it has been said, never miss an opportunity to miss an opportunity. Though it's still unclear whether the new government can break this pattern, the opportunity before it now is nothing less than to undo the system of institutionalized corruption that has held Ukraine down since independence, and made it vulnerable to aggression and dismemberment. Despite the enormous strains imposed by the conflict in the east, there is reason to hope that this year Ukraine can begin the shift from failing state to one where the rule of law prevails. If it can change the corruption equation, Ukraine may be able - at long last - to have a political system that mirrors its European neighbors.

There is popular support to run corruption out of the government. Revulsion at the corruption and impunity of Viktor Yanukovych's regime, even more than pro-EU sentiment, became the rallying cry of Maidan protesters as the movement expanded in late 2013. Indeed, the Maidan only became a mass movement after police beat the few hundred original, mostly student, protesters who had gathered to oppose Yanukovych's abrupt decision not to sign the EU Association Agreement. One year after Yanukovych's departure, the demand for institutional change remains, to a large degree, unrealized. Nothing would help cement national unity or spur resilience against the aggression in Donbass more than success in the fight against institutionalized corruption.

Systemic corruption in Ukraine predated the Yanukovych kleptocracy, and has lived on after its demise. Ukraine ranked 142nd out of 175 countries in Transparency International's Corruption Perceptions Index in 2014 - six places below Russia - and the worst in Europe. Yanukovych and his cohort shamelessly plundered the state budget, stealing billions - perhaps tens of billions - in a few short years. Insider deals on state procurement contracts were a favored method. But the habit of using public office for private gain is nothing new, and extends far into the civil service. In a 2011 Transparency International survey, Ukrainians identified the judiciary as their most corrupt institution, followed closely by the police and parliament. The combination of labyrinthine regulations and low pay for the civil service and law enforcement perpetuates widespread bribery.

If it is true that a fish rots from the head, then the only way to successfully combat corruption is to secure a firm commitment from the top leadership. Without such buy-in, anti-corruption efforts amount to little more than a kabuki dance. Yanukovych, after all, formally headed Ukrainian government anti-corruption efforts during his rule. This time, the buy-in from the leadership appears to be for real. Both President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk have repeatedly pledged their commitment to anti-corruption efforts, and stated that the push would come following the election of a reformist parliament. That parliament is now in place. They have also stressed that the conflict in Donbass is no excuse for postponing reform.

One sign that Poroshenko and Yatsenyuk might be the real deal is their selection of non-Ukrainian experts to serve in key ministries. American Natalie Jaresko is minister of finance; the minister of the economy is a Lithuanian and the minister of health is Georgian. This unprecedented step sent the signal that these portfolios were reserved for independent technocrats untainted by the entrenched patronage networks.

While the Orange Revolution failed in governance, it did succeed in removing constraints on civic activism and press freedom. Yanukovych's attempts to reverse these gains faltered. As a result, Ukraine today has a wealth of civic organizations, human rights groups, independent journalists, and other activists. Many of these individuals played important roles in the Maidan movement and can be counted on to hold the government's feet to the fire on anti-corruption efforts.

Last spring, civil society organizations helped frame the reform agenda through a "Reanimation Package of Reforms," which involved hundreds of independent experts who developed a comprehensive platform and lobbied the parliament (Rada) for the passage of reform bills. Some of the leaders of that effort are now themselves in the Rada. They are among a cadre of about 30 young Maidan activists elected in October from various parties who have united around a reformist, pro-EU agenda. The presence of such activists in the Rada represents a major change for that body. Civil society, previously at odds with the governing class, is now embedded in it.

In short, a window for reform is open this year. Failure to seize this opportunity could have dire consequences for Ukrainian statehood.

Still, old habits will be hard to break. Oligarch Igor Kolomoisky, appointed governor of Dnipropetrovsk, earned praise for his decisive actions to prevent pro-Russian agitators from gaining ground in his oblast and is on the rise. But he is widely suspected of using strong-arm tactics in his business practices over many years - no one's idea of a reformer. Similarly, many of those who have gotten rich in the civil service and judiciary by trading on their positions remain in place.

Weeding out corruption means overhauling institutions both large and small. Perhaps no institution is more in need of reform than Naftogaz, the state gas monopoly, for decades a wellspring of corruption.

The budgetary subsidies for energy - much of them for Naftogaz - amounted to a stunning 7 to 9 percent of GDP in 2014, several times Ukraine's defense budget. Economist Anders Aslund has observed that rent-seeking in the Ukrainian gas sector has been the main source of enrichment of oligarchs over the past two decades. With state prices fixed at $30 per thousand cubic meters of gas, connected individuals could buy at that rate and then sell to the market at over 10 times the price.

While presiding over huge losses, the former heads of Naftogaz nonetheless conspicuously enriched themselves under Yanukovych, as widely circulated images of their opulent riverfront palaces reminiscent of Yanukovych's infamous Mezhyhirya residence testified.

If the goal of Ukrainian energy policy was to keep Ukraine hooked on expensive Russian gas, discourage domestic production, enrich oligarchs, and encourage wasteful consumption, then it succeeded spectacularly. The cure for such distortions has long been known: Remove massive subsidies for gas consumers and end price controls on domestically produced gas.

Market pricing should be phased in, with social payments for the neediest consumers as compensation. With the right price signals, Ukraine, currently the most inefficient energy user in Europe, could cut energy consumption per unit of GDP by half, as Poland did. This, along with increased domestic production, could end the need for any gas imports from Russia.

Implementing these reforms requires more than buy-in from the Ukrainian leadership - it needs to be spurred by rigorous conditionality from the donor community. The Feb. 12 announcement by the IMF of an agreement on a $17.5 billion Extended Fund Facility stressed the importance of Ukraine's commitment to reach market levels in gas pricing by April 2017. On March 2, the Rada approved raising home heating and cooking gas prices by about three times, effective April 1 - a dramatic jump.

The IMF also underlined the importance of maintaining a safety net of targeted payments to the poorest consumers to compensate. The minister of the economy, Lithuanian-born Aivaras Abromavicius, has pledged to offset the rise in home gas prices with direct assistance to low-income consumers amounting to 2 percent of GDP.

With many Ukrainians suffering from the consequences of economic contraction, a vigorous public information campaign to explain the reforms to the public must be a priority to avert a backlash. In the past, Ukrainian leaders have agreed to initial IMF demands for price increases, only to back off on subsequent increases out of fear of the public reaction. While moving toward market pricing, Ukraine must also lower the high tax rates faced by independent operators in domestic energy production if it wants an increase in domestic supply.

The failing state Yanukovych left behind has necessitated the launching of a wide range of additional anti-corruption efforts, many of them involving fundamental change. In December, Yatsenyuk announced plans to reduce the number of regulatory agencies from 56 to 28, to be followed by additional reductions. The goal, he stated, is to "abolish the Soviet-time state standards" that burden businesses with an onerous system of permits and inspections and open up massive opportunities for bribery. Economy Minister Abromavicius defined the objective as "maximally deregulat[ing] all processes in the economy to enable ... business to breathe."

Another reform is the pending establishment of an Anti-Corruption Bureau with investigatory powers and a mandate to keep an eye on senior public officials. Such officials are now required to make full declarations of income, with the bureau on the lookout for lifestyles at variance with declared earnings.

Civil service reform will be a longer-term effort. In December, Yatsenyuk declared that the number of state officials would be cut by 10 percent in 2015, and committed the government to "reducing the quantity [of the civil service] and increasing efficiency and wages." In addition, a "lustration" law came into force in October to vet public servants for past corruption and illegal acts. The law responds to societal outrage over widespread corruption in the judiciary, prosecutor general's office, and other agencies, during and before the Yanukovych period. However, the Venice Commission has criticized the law for being too broad, and only minimal implementation has taken place to date.

Over the longer term, the harmonization of Ukrainian governmental systems to EU norms and structures via the Association Agreement and the Deep and Comprehensive Free Trade Agreement will be transformative for Ukraine. The Association Agreement is, in essence, a detailed blueprint for reform and transparency across all sectors and institutions. Large-scale EU mentoring and technical support will be crucial to helping the Ukrainian government accomplish this historic task.

It is said that nothing focuses the mind like the prospect of one's hanging. Only by getting its act together on governance can Ukraine hope to gain the strength it needs to overcome the challenge Russia is posing to its statehood. Viktor Yushchenko frittered away his opportunity to reform the crony capitalist system he inherited after the Orange Revolution. His failure paved the way for Yanukovych to install a system of unbridled kleptocracy. Ukraine may not be able to survive another governance failure.

The conflict in the east diverts attention from reform. But the sacrifice of so many thousands of lives also makes it imperative for the leadership to make good on the anti-corruption demands voiced at the Maidan. Major Western financial and technical assistance - and monitoring - is needed to support the reform effort. With its back against the wall, Ukraine nonetheless has the chance this year to demonstrate that it can move decisively to replace kleptocracy with rule of law. Success in this historic effort would not only shore up the imperiled Ukrainian state, but also reverberate throughout the post-Soviet realm.

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 #22
Business New Europe
www.bne.eu
March 13, 2015
Russian investigative paper Novaya Gazeta set to shutter print edition
bne IntelliNews

Novaya Gazeta, Russia's best known and most highly regarded investigative newspaper,  may end its print issue this summer or even close down entirely, the newspaper's editor said according to local reports.

"It is perfectly possible that after celebrating Victory Day in May with a special edition we will stop our print edition," editor-in-chief Dmitry Muratov told television station Dozhd, the Moscow Times reported on March 12. He did not comment on what would happen to the online edition.

Muratov said that the paper could not compete with the state-backed rivals. Ironically the Moscow Times ran its longest story ever on exactly this topic the same week, making the point that while the Kremlin didn't practice Soviet-era style censorship, its adroit use of threats and commercial support was crushing the spirit of independent journalism that sprang up during perestroika.

The campaigning title reports constantly on corruption and abuse of office in the government and several of its journalists have lost their lives. The most famous was the assassination in October 7, 2006 of high profile reporter Anna Politkovskaya,  who wrote regularly on corruption in the North Caucasus and was best known for her opposition to the second Chechen war.

Anastasia Baburova, a freelance journalist for Novaya Gazeta and a member of political opposition group Autonomous Action, was shot and killed  outside a Moscow court together with journalist and human rights lawyer Stanislav Markelov on 19 January, 2009. The pair were leaving a press conference about Markelov's last minute appeal against the early release of Yuri Budanov, a former Russian military officer convicted of the kidnapping and aggravated murder of a young Chechen woman.

The Kremlin has no love of the paper that is partly owned by former Soviet leader Mikhail Gorbachev and businessman and publisher of the Evening Standard in London Alexander Lebedev - both of whom have been openly critical of the Kremlin.

The paper's problems come in the context of a wider crackdown on independent print press, with a new foreign media law that goes into effect next year and limits the foreign ownership of print titles to 20%.

The paper that will be most noticeably affected is the widely respected (and widely read) Vedomosti daily that is jointly owned by the Financial Times, Wall Street Journal and Independent Media, a locally based company that publishes the English language Moscow Times as well as a wide variety of glossy magazines.

That said, US-based CNN is due to receive its licence to broadcast in Russia "within days or weeks", according to the channel, after it withdrew from the Russian market at the end of last year because of the new foreign media law.

"The [CNN's] application for a universal license is being processed," Roskomnadzor media watchdog chief Alexander Zharov said, news agency RIA Novosti reported. "I think it's a question of days or weeks."

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 #23
Christian Science Monitor
March 12, 2015
Putin's grab of Crimea still rankles West. How about Crimeans?
A new documentary to be aired on Russian state TV confirms a Kremlin plot to occupy Crimea, which has a Russian naval port. The annexation fueled a still-unresolved conflict in eastern Ukraine.
By Fred Weir, Correspondent  

MOSCOW - Russia's quick and dirty annexation of Crimea, carried out under the watchful gaze of barely disguised Russian special forces, remains a bitter bone of contention a year on.

By the West it is regarded as an act of unilateral Russian aggression that triggered a wider Ukrainian crisis. The Russian narrative remains that it was a justified reaction to the illegal overthrow of Ukraine's president by pro-Western mobs in Kiev, and the perceived threat that a new Ukrainian government could nationalize its historic naval base in the Crimean port of Sevastopol.

Moscow has paid a heavy price for its actions, with its economy sagging under the weight of Western sanctions, while Russia's image around the world has suffered a black eye over its actions in Ukraine.

A telephone poll conducted by a German firm among Crimeans in January found that over 80 percent of respondents were happy to be newly-minted Russians.

A far more rigorous survey, conducted on the ground in Crimea by two US professors working with the independent Levada Center in Moscow, arrived at nearly identical results. Despite the transitional troubles of the past year, 84 percent of Crimeans regard the annexation as "the right thing to do."

However, it also found that indigenous Crimean Tatars, who make up about 10 percent of the population, are much more opposed to joining Russia than ethnic Russians and Ukrainians. Tatars were far more likely to say that Crimea was moving in the wrong direction.  

Yet the world's view is that Russia violated Ukraine's territorial integrity - and therein lies the conundrum. "Russia's annexation of Crimea was an illegal act under international law [but] it is also an act that enjoys the widespread support of the peninsula's inhabitants," the survey's authors write.

That's exactly what Russian President Vladimir Putin says he knew for sure before he gave the go-ahead to annex Crimea last year.

"We found out that 75 percent of respondents in Crimea wanted to join Russia," after conducting a secret poll, he told a soon-to-be-broadcast TV documentary. The film reveals just how deeply Mr. Putin was involved in planning the rapid and casualty-free seizure of a Ukrainian province with a garrison of 18,000 troops.

Operational lies

Some of the fibs dispensed by the Kremlin at the time are disposed of. Russian media staunchly claimed that the "little green men" with modern arms and equipment who seized Crimea were local people, though Putin later admitted they were actually Russian troops. The Kremlin also insists to this day that Russian-speakers - a huge majority in Crimea - were under threat, although there is little evidence of that.

"I told my colleagues that the situation in Ukraine has evolved in such a way that we have to start work on returning Crimea to being a part of Russia. We couldn't abandon the territory and people who live there, couldn't just throw them under this nationalist bulldozer," Putin says he told an urgent Kremlin meeting on Feb. 22, 2014. Pro-Russian Ukrainian leader Viktor Yanukovych had just been overthrown.

"The ultimate goal was not to seize Crimea or annex it," Putin said. "The ultimate goal was to let people express their opinion on how they wanted to live further."

The operational lies told by the Kremlin at the time still divide experts.

"When the president of a country declares publicly that our army isn't behind certain events, and then we find out that our troops basically orchestrated a referendum in a foreign territory, it does tend to harm the reputation," says Alexander Konovalov, president of the independent Institute of Strategic Assessments in Moscow. "He told lies, and that led to serious violations of international law, how can that not hurt Russia's image?"

But Sergei Mikheyev, director of the independent Center of Political Technologies in Moscow, says it's no worse than former US Secretary of State Colin Powell offering false testimony about Iraqi weapons of mass destruction at the UN.

"Russia did what it had to do. It's international practice, and there's no reason to single Russia out. If we hadn't taken these steps, we might have lost our naval base at Sevastopol," he says.

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 #24
Sputnik
March 13, 2015
NATO Recon Missed Everything: Admiral Reveals Details of Crimea Operation

Retired Admiral Igor Kasatonov revealed details of the 2014 Crimean operation and gave insight into his role in the history of the Russian Black Sea Fleet.
The 2014 operation in which Ukrainian military bases were blocked was successful because NATO reconnaissance did not monitor it, the former commander of the Russian Black Sea Fleet, Admiral Igor Kasatonov, told RIA Novosti.

"In Crimea, NATO reconnaissance missed everything it could and couldn't have. One of the reasons for this is the policy of strict radio silence during the grouping's concentration, as well as the skilled use of the Sevastopol base, and the transportation which brought the Armed Forces to Crimea."

The Admiral, who headed the Russian Black Sea Fleet in 1991 and 1992, also revealed the scope of the Crimean operation:

"I was told that Ukrainians were given the information that in February in Kacha (Sevastopol), three helicopters would land, but six landed instead, at the Gvardeysky airfield one Il-76 would land, but three landed instead, 500 people. These were diversionary units, spotters and guides which acted together with the Fleet grouping."

In addition, Admiral Kasatonov talked about his historical role in the Black Sea Fleet in the early 1990s, when negotiations led to the demise of the Black Sea Fleet in comparison to what it was before:

"After August 3, 1992, the negotiation process led to catastrophic consequences: the Black Sea Fleet left everywhere except Crimea - Mykolaiv, Kherson, Odessa. Only Sevastopol, Feodosiya and Gvardeyskoye airfield near Simferopol were left. These were humongous mistakes."

Admiral Kasatonov also revealed what he knew about the operation, saying that the famous "polite people" were Army Spetsnaz and that the situation could have easily gone out of control if they hadn't disarmed the Ukrainian military bases in Crimea prior to blocking them in.

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 #25
Russia not to blame for loss of territorial integrity by Ukraine - Foreign Ministry

MOSCOW, March 12. /TASS/. Russia's reunification with Crimea did not violate the Budapest memorandum and has got nothing to do with the loss of territorial integrity by Ukraine, Russian Foreign Ministry spokesperson Alexander Lukashevich said on Thursday.

"I would like to recommend those who are speculating on Russia's alleged violations of the Budapest memorandum to read the text of this document at least," Lukashevich said.

"In fact, the memorandum has only one aspect related to the Nuclear Non-Proliferation Treaty (NPT) that concerns Russia's commitment with regards to Ukraine not to use or threaten to use nuclear weapons against any country-signatory to the NPT," Lukashevich said adding that Ukraine's former defense minister must have been the only person who had called the honest implementation of that commitment into question.

"It has not occurred to anybody else. "Any attempts to link the Ukrainian events to the NPT are pre-determinedly inconsistent and dishonest," Lukashevich said when asked to comment on whether Russia had violated its commitments under the Budapest memorandum the signing of which preconditioned Ukraine's accession to the Nuclear Non-Proliferation Treaty (NPT).

"Those who allow themselves to insinuate on this subject are practically undermining the regime established by the Treaty," the Russian diplomat stressed.
In the memorandum, Russia committed itself to "refrain from threatening to use force or from using force against the territorial integrity or political independence of Ukraine. This provision has fully been observed," Lukashevich said.

"Not a single shot was fired /in Crimea/ neither before nor after the populations of Crimea and Sevastopol had made crucial decisions on the peninsula's status. Crimea returned to Russia after the majority of people in Crimea and Sevastopol had realized their right to self-determination by expression of free will," the Russian diplomat said.

"As for incessant attempts to ascribe military interference in the events in southeast Ukraine to Russia, the authors of these speculations have not presented a single convincing piece of evidence as of yet," Lukashevich stressed.

He added that Russia had never undertaken any commitments, neither in the Budapest memorandum nor in any other document, to force part of Ukraine to remain an integral part of the Ukrainian state against the will of its population.

"Ukraine lost its territorial integrity due to complicated internal processes that are of no relation to Russia or its commitments on the Budapest memorandum," Lukashevich said.

Crimea's reunification with Russia

The Republic of Crimea and Sevastopol, a city with a special status on the Crimean Peninsula, where most residents are Russians, refused to recognize the legitimacy of authorities brought to power amid riots during a coup in Ukraine in February 2014.

Crimea and Sevastopol adopted declarations of independence on March 11, 2014. They held a referendum on March 16, 2014, in which 96.77% of Crimeans and 95.6% of Sevastopol voters chose to secede from Ukraine and join the Russian Federation. Russian President Vladimir Putin signed the reunification deals March 18, 2014.

Despite Moscow's repeated statements that the Crimean referendum on secession from Ukraine was in line with the international law and the UN Charter and in conformity with the precedent set by Kosovo's secession from Serbia in 2008, the West and Kiev have refused to recognize the legality of Crimea's reunification with Russia.

Crimea had joined the Russian Empire in 1783, when it was conquered by Russian Empress Catherine the Great.

In the Soviet Union, Crimea used to be part of Russia until 1954, when Nikita Khrushchev, the first secretary of the USSR's Communist Party, transferred it to Ukraine's jurisdiction as a gift.

With the collapse of the Soviet Union in 1991, Crimea became part of newly independent Ukraine and remained in that capacity until March 2014, when it reunified with Russia after some 60 years as part of Ukraine.

According to the Crimean and Ukrainian statistics bodies, as of early 2014, Crimea had a population of 1,959,000 people; Sevastopol has a population of 384,000 people.

Work to integrate the Crimean Peninsula into Russia's economic, financial, credit, legal, state power, military conscription and infrastructure systems has been actively underway since Crimea acceded to the Russian Federation.

Western nations have subjected Russia to sanctions over the situation in Ukraine. Russia has constantly dismissed accusations of "annexing" Crimea, because Crimea reunified with Russia voluntarily after the referendum in mid-March 2014, as well as allegations that Moscow could in any way be involved in hostilities in the southeast of Ukraine.

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#26
Center on Global Interest
http://globalinterests.org
March 12, 2015
Putin's Third Term: Assessments Amid Crisis
A new report examines the state of Russia's politics, security and economy halfway through Vladimir Putin's third term. Co-authored by Richard Sakwa, Mark Galeotti and Harley Balzer.
[Text of report here http://globalinterests.org/wp-content/uploads/2015/03/Putins-Third-Term_CGI.pdf]

In March 2012, Vladimir Putin was reelected to his third term as president of Russia. At the time, the country was on an upward economic trajectory, and few serious challenges were presented to the Putin regime. Three years later, the situation is quite different. Today Russia faces widespread condemnation abroad and a protracted economic crisis at home.
 
In Putin's Third Term: Assessments Amid Crisis, three leading experts examine the state of Russian politics, security and economy halfway through Putin's third term, and evaluate the extent to which his policies have made the country - and his own regime - more or less able to withstand the latest storm.
 
The authors' main points are presented below.
 
Politics  Richard Sakwa, University of Kent
 
The central goal of Putin's presidency is to recover Russia's losses from the period of the 1990s. This goal has been pursued through a systemic policy of state power and asset accumulation during Putin's first two terms, with the Medvedev presidency serving as a palliative interlude in the broader Putin project.

The methods of rule that worked during Putin's first two terms were not well-suited to his 3rd term, as Putin now had to respond to the new demands resulting from the rise in living standards over which he had presided. Instead, Putin abandoned the modernization track to focus on the twin projects of bolstering Russian security and pursuing Eurasian integration.

Today the regime has entered a phase of developed Putinism, analogous to the period of developed socialism during the mature phase of the Brezhnev era. The system is built to sustain inertia and operates by managing competing demands within Russian society. The current crisis presents an opportunity for the rejuvenation of the Putin model, if only it can shift from a recuperative to a developmental strategy.

Security │ Mark Galeotti, New York University

Russian security forces are significantly more sophisticated today than when Putin first assumed power. This is a result of a long-term program of defense spending and a more recent reform effort drawing on the lessons of the 2008 Russian-Georgian War. The new level of sophistication was brought home by Moscow's expert seizure of Crimea.

Despite significant reforms, the Russian military remains a work in progress. The modernization program has been applied unevenly across different branches of the security forces, effectively resulting in "two armies" of varying preparedness.  Russian security forces also continue to face significant problems with internal corruption, interethnic tension and public mistrust, though these have not prevented them from improving their response to domestic threats.

Paradoxically, the revamping of Russian security structures may have made Russia less secure overall.  Its own improved security capacities seem to have encouraged Moscow to adopt an increasingly assertive policy in its neighborhood, leading to a new era of hot peace with the West. Russia's decision to continue with expensive military reforms will come at the expense of increased confrontation abroad and underinvestment in other important domestic sectors.

Economics │ Harley Balzer, Georgetown University

The present economic crisis is a result of three major factors: the steep drop in oil prices in mid-2014; rising inflation and accelerating depreciation of the ruble brought about by Western sanctions over Ukraine; and existing structural problems in Russia's resource-based economy. The latter could have been corrected if Moscow had used the 2008 financial crisis as an impetus for economic reform.

The anti-crisis plan released by the Kremlin in early 2015 fails to address key problems or allocate sufficient funds for its stated goals. The plan offers a bleak prognosis for economic diversification, increased domestic and foreign investment, or the approach of import substitution advocated by the Russian government. The dearth of new ideas is partly a reflection of the increasingly narrow circle of officials involved in economic policy-making.

While the war in Ukraine is not a major financial burden on the Putin regime, the impact of sanctions combined with an outmoded growth model, low oil prices and pervasive corruption suggest that Russia faces a deep and protracted economic crisis. If public discontent continues to grow, the government will find it increasingly difficult to substitute rhetoric for reform.

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 #27
Forbes.com
March 12, 2015
Russia's Demography Just Took A Significant Turn For The Worse
By Mark Adomanis

One month does not make a conclusive trend, but Rosstat just released its preliminary demographic data for January 2015 and the results are ugly. Compared to the previous year, deaths were up and births were down by 2 and 4% respectively. This means that the overall natural movement in population for the month was -25,000, compared to only -15,000 the year before.

The uptick in mortality is particularly disconcerting as it was the result of increases in the cardiovascular diseases that have traditionally been most problematic for Russia. The death rate from external causes actually decreased by a full 5%, likely aided by a relatively mild winter, but this improvement wasn't nearly enough to overcome increases in deaths from diseases of the circulatory system, diseases of the digestive system, and lung disease (which increased by a whopping 12.6%).
 
The decline in births was strange in that a disproportionate share came from non ethically Russian regions that have traditionally had higher fertility, places like the North Caucasus and the other "autonomous republics." Indeed a few of the most ethically Russian areas, like the Central and Northwestern okrugs, actually recorded year-over-year increases in fertility. Births in Dagestan, a traditionally Muslim area that has long been one of the most fecund regions of the Russian Federation, were down by 6.7%. In Bashkortostan, a region where ethnic Russians make up only a third of the population, births were off by a full 10%. In Tatarstan, another region where ethnic Russians are a minority and where the fertility rate has traditionally been higher than the national average, they were off by 8%.

Now monthly data is noisy. In a nation of 143-odd million people there are going to be substantial fluctuations in the absolute number of births and deaths. However, considering that the data in November were also quite ugly, there is a very strong chance that the January numbers reflect not simply statistical "noise" but a genuine, and sharply negative, change in Russia's demographic trajectory. We won't know for sure for another few months, when there is additional data to look at, but the odds of this being simple happenstance are slim.

Nothing is written in stone. I've written widely about Russia's the, very real and very significant, improvements in Russia's demographic outlook that have taken place over the past several years, but these is no guarantee that these improvements will continue. They reflect no eternal truths about the "Russian soul" or the righteousness of Putin's cause, the are highly contingent on the performance of Russia's economy. And the economy isn't doing very well right now.

During the 1990's  Russians conclusively proved that, when they feel threatened by the economic environment, they will postpone or forgo family formation. What's happening now isn't nearly as serious as the 1990's  crisis, but it clearly is a come-down from the economic performance of recent years. Given that, the January 2015 data isn't a mystery or a puzzle: with rising inflation, slowing growth, and increasing unemployment we would expect to see a deterioration in the demographic fundamentals. Unless the Russian government can get a handle on the economic situation, experience would suggest that the hard-won gains of recent years will slowly melt away.

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 #28
Russia cuts interest rates as economy struggles
By Lidia Kelly, Jason Bush and Alexander Winning

MOSCOW, March 13 (Reuters) - The Russian central bank cut its main lending rate on Friday, sending a strong signal that it now sees the rapidly declining economy as a more serious worry than high inflation.

The bank reduced its one-week minimum auction repo rate by one percentage point to 14 percent, continuing an easing cycle that began in January when it unexpectedly cut the rate by two points.

This time economists had broadly expected Friday's move as the downturn gains pace due to the low international price of oil, Russia's main export, and Western sanctions imposed over Moscow's role in the Ukraine conflict. The rouble has stabilised since a panicky collapse late last year, giving the bank breathing room to continue easing.

Data over the past few weeks showed that consumer spending, investment, real wages and gross domestic product are all sinking even faster than many had expected, indicating that the economy is heading into a steep recession.

Shortly before the central bank announcement, Russia's second-largest bank, VTB, reported almost zero profit for 2014 and said it would suffer "significant losses" if official interest rates were not cut.

The central bank made clear that it was now more concerned about this economic slump than inflation, even though consumer prices are now rising 16.7 percent year-on-year, the highest level for 13 years.

"The balance of risks is still shifted towards a more significant cooling of the economy," it said in an accompanying statement, adding that the rate cut would help to mitigate these risks without creating the threat of stronger inflation.

"An attempt to lower inflation at any cost would be a short-sighted strategy," Central Bank Governor Elvira Nabiullina told a news conference. This comment marked a shift from her previous insistence that inflation should be on a clear downward trend before rates would be cut.

"It is obvious that the task of supporting the economy now prevails," said Raiffeisenbank economist Maria Pomelnikova. "In the central bank's eyes, inflation risks have now receded into the background."

MULTI-YEAR RECESSION

The bank predicted that gross domestic product would contract 3.5-4 percent this year, a more pessimistic view than the government's official forecast of a 3 percent decline, but still more optimistic than many analysts' projections.

Nabiullina said the bank also expects the economy to continue contracting, by 1-1.6 percent, in 2016. It expects a strong rebound only in 2017, when growth could exceed 6 percent, she added.

The refocusing of the bank's priorities may fuel speculation that recent changes in its management have played a role, with new monetary policy head Dmitry Tulin regarded as more dovish than his predecessor Ksenia Yudayeva.

It may also reinforce the impression that the bank is under pressure to ease up from the Kremlin and business lobbies, although the bank says it is independent. "This looks like the result of political pressure," Danske Bank economist Vladimir Miklashevsky said.

The cuts in borrowing costs contrast to last year, when the bank raised rates six times, including a dramatic 6.5 point increase at an emergency meeting in mid-December aimed at stemming a run on the rouble.

The rouble has lately been showing much greater stability, implying that ordinary depositors are no longer rushing to convert savings into dollars.

William Jackson, emerging markets economist at Capital Economics in London, noted that crude prices have pulled back from their lows in January.

"In practice the central bank is reacting to the rouble stabilising due to the rebound in oil prices. As long as the rouble remains stable, then we expect the bank to continue lowering rates," he said.

The rouble strengthened after the decision, as the rate cut was smaller than some analysts had expected.

At 1300 GMT it was at 60.92 against the dollar, up around 0.4 percent on the day, having been down around 0.5 percent before the cut.

In a notable contrast to last year's rhetoric, the central bank sounded relatively relaxed about inflation, saying the current high rate was due to short-term factors which would lose their effect by the end of 2015.

It predicted inflation would fall to around 9 percent in a year's time and was still on track to reach the bank's medium-term goal of 4 percent in 2017.
Nabuillina later said the bank expected inflation to end this year at 12-14 percent and "closer to 12 percent".

But the bank said that high inflationary expectations remained a risk, as well as budget loosening, a possible acceleration of nominal wage increases, and possible increases in state-regulated utility prices.

The bank signalled that the easing cycle would continue, but has left analysts guessing over the speed of future cuts.

"Depending on the reduction of the indicated risks the Bank of Russia will be ready to continue lowering the key rate," the bank said.

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 #29
Carnegie Moscow Center
March 12, 2015
Left Behind? Russia in the New Industrial Revolution
By Akio Kawato
Akio Kawato is a former Japanese diplomat and blogger. Over the course of his career, he has served in the former Soviet Union and Russia, West Germany, Sweden, the United States, and Uzbekistan.

The endless fighting in Ukraine, the Islamic State's brutal onslaught and Islamic terrorism in Europe, and the territorial disputes in the South China Sea-it is as if Armageddon were upon us. But amid all the turmoil, some very profound trends are quietly taking shape. That is the advent of a new Industrial Revolution, the impact of which is still difficult to determine; it may elevate human civilization to an unknown height or, on the contrary, destroy it.

In the coming age, automobiles will become truly automatic, drones will deliver pizzas, robots will replace manual labor, artificial intellect will replace intellectual labor, genetic engineering will create super humans and super animals, and nanotechnology will generate new materials. The list goes on.
Russia is working on some of these innovations, particularly in the nuclear, cosmonautical, and military spheres. However, most next-generation products are being developed and manufactured in the Pacific basin by ASEAN countries, China, India, Japan, South Korea, Taiwan, and the United States. The gap between the area producing and benefitting from technological innovation and the area embroiled in turmoil is likely to widen even more. Which area will Russia belong to?

I regularly visit one business school in Russia, telling the students there about how the world economy outside Russia functions. But the majority of the students are intent on finding cushy jobs in large state enterprises, where they will not need knowledge of crucial aspects of modern business like marketing, research and development, outsourcing, quality control, personnel management, and finance. The students think they know everything about the world: "It is dominated by the wicked and greedy United States."

As such, Russia will not be able to keep pace with the outside world. If Russia does not possess sufficient economic strength (I do not mean simply hard currency-I mean the capacity to create wealth by real production), surrounding countries will not willingly ally with it.

I know that some Russians are convinced of the unique status and mission of their nation in the world. But contrary to Leo Tolstoy's famous aphorism, men (and women) do not live with ideas alone. We need bread, too. If only the Russian elite understood this.

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 #30
Opendemocracy.net
March 9, 2015
Six steps to return Russia to economic growth
The Russian economy is under pressure: it's time for an alternative.
By Kirill Rodionov
Kirill Rodionov is an independent journalist. From 2008 to 2013, he was a Research Fellow at the Gaidar Institute for Economic Policy, Moscow. Follow him on Twitter: @k_rodionov
 
In late January 2015, the Russian government adopted an anti-crisis programme. The plan includes a number of measures intended to provide sustainable development of the economy, and social stability in 2015. The Cabinet of Ministers plans to substitute imports, remove barriers for business, and compensate inflationary costs for the country's poorest.

The document also proposes to support employment, optimise budget expenditures and restoring the banking sector to health. The government is preparing to put a series of legislative acts in place by the middle of March; and the coming months will show just how effective those measures will be. Right now, though, it's possible to draw up an alternative plan; in six steps.

Cancel the food embargo

The food import limitations implemented in August 2014 should be abandoned. The embargo has already resulted in price increases. According to Rosstat, the state statistical service, inflation rose to 11.4% in 2014, and the prices of products included in the sanctions list rose by 17.9%. In January 2015, consumer prices rose by 3.9% - the highest since February 1999 (4.1%).

16 years ago, Russia was in the midst of another currency devaluation, and currently the country is experiencing a similar situation: between June 2014 and January 2015, the rouble exchange rate declined from 33 to 68 roubles per dollar. In turn, this decline has led to a dramatic rise in import prices. At the same time, Russian manufacturers have used import limitations as an opportunity to raise prices on their products. The result is inflation that continues to rise and rise.

End the import substitution strategy

It is no secret that Russia is critically dependent on imports. Today, foreign products in the country's hi-tech and engineering sector have a 70%-90% market share. Indeed, there have always been voices within the expert community who support the raising of tariff barriers: this would prompt national businesses to take the lead and improve their operations.

The recent crisis has led to such a policy. In fact, import substitution has been one of the reasons behind the government's decision to launch the food embargo campaign. The Cabinet hopes to repeat the experience of the 1998 crisis, when a huge devaluation sparked a sharp rise in the economy's industrial sector - 8.4% of annual growth in 1999, which was much higher than in 1997 (1%) and 1998 (-4.8%). But that growth was possible thanks to the low absorption of idle capacity: according to the Sberbank Center for Macroeconomic Research, the coefficient of idle capacity usage amounted to 45% in 1998. In 2014, the coefficient calculated for extraction, processing and allocation was equal to the level of 66%, 64% and 56% respectively; at the same time, a significant share of capacity in these sectors is obsolete. It is thus impossible to use them in order to accelerate growth.

Improve the business climate

As Sberbank's experts note, the lack of idle capacity makes investment necessary for the economy to grow. But entrepreneurs put up their capital only when they feel confident in their property rights. And Russia has huge problems in this area.

During the last decade, the country has seen a number of illegal seizures of private companies - from Mikhail Khodorkovsky's Yukos in 2004 to Vladimir Yevtushenkov's Bashneft in 2014. To guarantee property rights, the government should ban security officials from interfering in business activity without a court decision. And given Russia's low ranking in the World Bank's 'Doing Business' Index (62) and the Heritage Foundation's Index of Economic Freedom (143), the Cabinet should also reduce the level of red-tape that entrepreneurs have to get through.

Resolve the corporate debt crisis

Improving the business climate will stimulate economic activity. But it will be impossible to achieve a high GDP growth rate without resolving the severe corporate debt crisis. Until recently, foreign loans had been the main driver of growth for Russian banks and companies. In July 2014, their debt amounted to $650 billion. But following Western sanctions, borrowers can no longer re-finance their loans. To avoid default, several Russian state companies began to demand money from the National Wealth Fund and from Central Bank reserves. This, in turn, may cause a further devaluation of the currency, as well as inflation and budget problems. That is why it is better to sell assets to clear corporate debts.

Cut budget expenditures

The corporate debt crisis has coincided with the fiscal instability caused by falling oil prices. The Treasury is critically dependent on revenues received from energy exports. In 2013, the share of oil and gas revenues within the federal budget came to 46%.

Therefore, the fall in oil prices will inevitably affect the sustainability of the fiscal system. The situation gets worse when you consider that the 2015 budget was calculated based on an oil price of $96 per barrel. Moreover, the rouble devaluation means the Cabinet runs the risk of a sharp budget crisis: energy revenues are received in dollars, while budget expenditures are nominated in roubles. However, to curb fiscal problems, the federal government should cut its expenditures on subsidising state companies (2.8% of GDP in 2013), law enforcement activities (3.1% of GDP) and national security (3.2% of GDP).

Stop confrontation with the world

Last, but not least: the government should stop its confrontation with the outside world. After the annexation of Crimea, foreign investors began reviewing the risks of doing business with Russia. The war in Donbas was followed by a series of Western sanctions, which deprived Russia's banks and companies from international financing. The downing of MH17 and the consequent reaction of EU and US leader in part triggered the rouble devaluation.

Unfortunately, there is a high risk of further escalation in the conflict, which, in turn, will bring about a new wave of sanctions. The latter will have a detrimental impact on the economy, which is already experiencing a recession. According to Anders Aslund, Russia's GDP will plummet by 10% in 2014.

Reform is unlikely

To combat the situation, the government should launch reforms aimed not only at restructuring the economy, but also at preventing a fall in real incomes. But this scenario is unlikely.

The only factor liable to affect the situation is the population's dissatisfaction with living conditions. As previous experience shows, massive protests take place only during federal election campaigns; otherwise, they occur mostly in the regions. That is why regional governors and city mayors will feel the people's pressure in 2015 and 2016. Meanwhile, the federal government will use its financial resources to support the status quo.

The evidence is the Cabinet's inability to introduce the reform programme developed by German Gref, Minister of Economy and Trade, in 2000. The only effective reform measure implemented under President Putin was the tax reform of the early 2000s. Soon after the oil price hike, the government stopped considering structural reforms, and instead continued to spend petro-dollars and nationalise the economy.

The 2008 crisis has not reversed this trend: since then, federal expenditures have risen from $6.5 trillion to $13 trillion, while the share of state property within the economy has reached 70%. Therefore, in all likelihood, significant changes will become reality only when the Treasury's coffers are empty. And Russia will find itself having to implement reforms without any money at all, just like in the early 1990s.

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 #31
EU unlikely to agree next week to prolong Russia sanctions
By Adrian Croft

BRUSSELS, March 13 (Reuters) - European Union leaders are unlikely to reach agreement at their summit next week to prolong economic sanctions on Russia that expire in July, a senior EU official said on Friday.

New sanctions on Russia are also off the table for now because EU governments want to give a chance to a fragile ceasefire in eastern Ukraine.

But some of the EU's 28 member states had pushed for an early decision on extending sanctions on Russia's financial, energy and defence sectors adopted in July last year over Russia's annexation of Crimea and support for separatists in eastern Ukraine.

While leaders will discuss sanctions at next week's summit, the senior EU official said a majority would probably want to hold over discussion of renewing the economic sanctions on Russia until July.

"I don't think there is unanimity at all for the rollover of sanctions, the sanctions that are due in July," the official, briefing reporters on condition of anonymity, said.

Slovak Prime Minister Robert Fico said on Friday that new or extended EU sanctions against Russia would not help the ceasefire in eastern Ukraine.

"The ceasefire needs to be supported and we will hardly support it by saying that we will bring some new and further and further sanctions," Fico said in Prague.

The EU is divided on sanctions and Fico has in the past called them "meaningless and counterproductive".

Slovak Foreign Minister Miroslav Lajcak said the prevailing view in the EU was that sanctions should remain in place in their current form for the time being.

"We have not gotten that far that we could talk about cancelling sanctions," Lajcak told reporters in Slovakia.

EU governments did agree on Friday to prolong sanctions on a list of Ukrainian and Russian individuals and companies accused of undermining Ukraine's sovereignty, territorial integrity and independence.

The asset freezes and travel bans on 150 people and 37 organisations were extended for a further six months, until Sept. 15. Details will be published in the EU's Official Journal on Saturday.

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 #32
Russia Direct
www.russia-direct.org
March 12, 2015
After a year of sanctions, Russia looks for a way out
The Russian economy will have to endure a difficult period of adaptation before it reaches a new equilibrium point, economists predict. For at least a year, economic growth rates will be negative while Russian officials search for a more effective "anti-crisis" plan.
By Ksenia Zubacheva
Ksenia Zubacheva is a Managing Editor at Russia Direct. Previously she worked as an editor at The Voice of Russia. Ksenia holds a BA (Honors) in Oriental and African Studies from the Institute of Practical Oriental Studies (Moscow) and an MSc in International Relations from the University of Bristol.
[Charts here http://www.russia-direct.org/analysis/after-year-sanctions-russia-looks-way-out]

Since March 2014, when the first round of sanctions was introduced, the Russian economy has had to face a number of serious challenges, including slumping oil prices, investment outflow and a devaluation of the national currency. Sanctions that mainly targeted the banking, energy and arms industries were designed to make the Kremlin refrain from supporting pro-Russian separatists in Ukraine.

A year later, it is yet hard to tell whether the West succeeded in its efforts, especially since the crisis in Ukraine is still far from being over. Another question is whether the external economic pressure from the European Union and the U.S. has indeed weakened Russia's economy.

As U.S. government officials continue to argue, financial penalties have contributed to Russia's major economic problems. "The combination of our [U.S.] sanctions, the uncertainty they've [the Kremlin] created for themselves with their international actions and the falling price of oil has put their economy on the brink of crisis," said Jason Furman, who chairs the U.S. President's Council of Economic Advisers.

Russian and international experts, on their part, also seem to acknowledge the role of sanctions in the crisis. However some of them, including Obama's former ambassador to Moscow, Michael McFaul, believe that the Western economic pressure had only a 'marginal' impact in Russia's case.

As Bernard Sucher, member of the board of UFG Asset Management, puts it: "Western sanctions didn't provoke a crisis in Russia. The country's economy has been slipping since 2012 and would likely have been stagnant in 2014 even if there were no shocks from Ukraine or oil. The real culprit has nothing to do with the rest of the world. Simply put, 'State capitalism' has been choking the dynamism out of Russia's economy."

Sergey Drobyshevsky, the Head of the Center for Macroeconomics and Finance at the Gaidar Institute for Economic Policy, agrees: "Sanctions and the fall of oil prices were not the main reasons for the eruption of the crisis. These factors only made it possible for the existing negative trends to become more apparent. Such development as the slowdown of economic growth and investment activity were evident since 2013. The decline in oil prices basically left the Russian economy without a 'shield,' so the crisis erupted."

"The crisis was coming no matter what, and it's not actually the sanctions to look at but Russia's actions," Christopher Hartwell, the president of the Center for Social and Economic Research in Warsaw (CASE), told Russia Direct. "If the West did absolutely nothing and business remained as usual, Russia would have still seen declining investment, oil prices still would have fallen, and the huge expenditures required to sustain Crimea and the Russian military would have continued to drain the budget," he insists.

The experience of the economic crises of 1991-1995, 1998 and 2008-2009 should have been a helpful start to tackle the new economic slowdown. However, a $35 billion "anti-crisis" spending plan that the government announced in January was actively criticized by the Russian expert community.

According to Igor Nikolaev, Director of the FBK Strategic Analysis Institute, the major mistake is that this is exactly the same strategy that was used six years ago - pumping money in until the crisis is over and hoping for oil prices to bounce back. "We need to take into account that this is a fundamentally different crisis - in its reasons and duration," he said.

Indeed, Russia is going through an extremely difficult period, which is even worse than the crisis of 2008-2009, according to First Deputy Prime Minister Igor Shuvalov. "On the face of it, we're getting indications that it's better than in 2008-2009," Shuvalov said. "But this only seems so. In fact, in terms of depth and difficulty, it looks to me like we've already spent a year on the verge of a longer and more difficult crisis."

And there are signs that can confirm this. According to the findings of the Institute for Economic Policy, Russia's activity on the global market is already in decline due to the influence of sanctions, reduction in investment and domestic demand and the deterioration of prices in key markets. At the same time, the country's trade with both the "far abroad" and the "near abroad" also experienced a serious cutback. Food imports from the sanctioned states are not yet substituted either by agricultural products from other states or by domestic ones.

The situation in industrial production seems to be quite ambiguous due to a number of factors that play against each other. It is, on the one hand, the devaluation of Russian national currency (and to a lesser extent, the food sanctions) that led to new opportunities for import-substitution, and, on the other hand, the decline in demand and the shock from the higher prices for import, components and equipment.

As a result, there was distinct growth in industries that saw new opportunities for growth (food industry, rubber and plastics production, chemical industry, production of non-metallic products and metallurgy) and a drop in other sectors (textile and clothing industry, production of leather and footwear as well as vehicles and equipment) that are highly dependent upon the income behavior and imported materials and components. In a sense, Russian industries are divided into those sectors that grow and others where the production is declining.

In this situation, it might be a good strategy to support Russian exports abroad. As Pavel Kadochnikov, Vice-Rector of the Russian Foreign Trade Academy, points out, at the current moment Russian authorities should make the most of new opportunities available to support Russian non-primary exports abroad. "They are very cheap - we need to make use of that ... There all necessary mechanisms for that but exporters still find it hard to get access to it. The government is working on it so it should start working quite soon," he said.

What is also important is that in order to sustain competitiveness of Russian products the economy needs investment. In the current situation "Russia hasn't been getting its share of that capital - or the technology and innovation that come with it - because investors were intimidated by the high political and governance risks that are inevitable when you don't have a level playing field for commerce," thinks Bernard Sucher. "And because they have been one of the few truly committed sources of private capital for Russia, even the first sanctions - which most people were deriding as "wimpy" - were significant," he says.

In response to Russia Direct's question of whether Russia could expect its former investors to come back, Pavel Kadochnikov said that, even though the devaluation of ruble made it very alluring for investors to come back, they will not do so until the political situation has stabilized. "The risks that still exist are seen by investors as too high to accept. Only if the situation in politics improves can we expect investors to find their way back," he explained.

The economic analysts see the year ahead as quite gloomy for Russia's economic development. According to the forecast by the Russian Ministry of Economic Development released in January, by the end of 2015, inflation might grow up to a point of about 12.2 percent while other indicators of economic activity are most likely to decrease: GDP - by 3 percent, investment in fixed assets - by 13.3 percent, and real disposable incomes - by 6.3 percent.

Taking as one of its prerequisites a $50 price for a barrel of crude oil, this forecast seems to be more optimistic than that of the experts from the Gaidar Institute for Economic Policy, RANEPA (the Russian Presidential Academy of National Economy and Public Administration) and the Russian Foreign Trade Academy. Assuming the oil price will be around $55 per barrel, their findings show that the figures will be higher during the course of the year: inflation will grow up to 17.1 percent, GDP might decrease by 6.8 percent, investment in fixed assets - by 19 percent, and real disposable incomes - by 8.5 percent.

The Russian economy will have to endure a difficult period of adaptation to the new environment, these economists say. For at least a year, economic growth rates will be negative while the possibility for a recovery will be highly dependent upon how soon a new equilibrium point is reached. If energy prices remain low while geopolitical instability and sanctions persist, negative economic dynamics will continue in the coming years.

What Russia could do to improve the situation is to "fire 20 percent of the civil administration, remove the long list of permissions/stamps/signatures needed to do business in the country, invest the money that should have been spent in education and stop sinking it in mega-projects like Sochi and the military, make it easier to trade across borders," Christopher Hartwell suggests. Intervening in Ukraine, from his perspective, is one of the major factors that is "draining Russia dry." If the authorities realize that there is a possibility to prevent further deterioration.

UPDATE: This article was updated on March 13, 2015 to include commentaries from Bernard Sucher, member of the board of UFG Asset Management, and Christopher Hartwell, the president of the Center for Social and Economic Research in Warsaw (CASE).

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 #33
Center on Global Interests
http://globalinterests.org
March 12, 2015
Sanctions One Year Later: Did They Even Matter?
By Sergey Aleksashenko, Former Deputy Finance Minister of Russia
Sergey Aleksashenko is former Deputy Minister of Finance of Russia and former Deputy Governor of the Russian Central Bank. A former scholar-in-residence in the Carnegie Moscow Center's Economic Policy Program, he is currently and independent consultant for Private Solutions LLC.

One year ago on March 6, the Western nations adopted the first targeted sanctions against Russian companies and citizens linked to the conflict in Ukraine. Today we can say those sanctions have been barely effective.

The main goal of the sanctions, which were introduced in stages, was to stop Russian aggression in Ukraine. Instead, Russia paid no attention to the sanctions and subsequently 1) annexed the Crimean peninsula; 2) unleashed an armed conflict in eastern Ukraine; 3) effectively transformed a significant part of the Donetsk and Luhansk regions into a territorial entity independent of Kiev by autumn of 2014 (the time of the first Minsk agreements); and 4) sharply expanded the territory under the separatist's control, including the logistically important Donetsk airport and the city of Debaltseve, in February 2015 (Minsk-2).

Thus, not only did each stage of sanctions fail to stop Russian aggression in Ukraine, but it didn't even prevent Russia from escalating the conflict in a "stop-and-go" manner. Moreover today neither Western politicians nor experts have a clear understanding of Russia's end goal in Ukraine.

President Obama has stated on several occasions that although the sanctions have failed to bring about the intended political outcome, their introduction had a significant impact on the Russian economy by significantly weakening its stability. This statement, however, is far from obvious not only in regard to the Russian economy as a whole, but also as it pertains to Vladimir Putin's cronies.

The individual sanctions that were imposed against the friends of the Russian president did not extend to their family members, who were either the legal owners of their assets, or became the legal owners once the sanctions were imposed. In addition, individual sanctions didn't take into account combined ownership, which relieved such companies as Gazprombank and SOGAZ (an insurance corporation) from their punitive effect.

Many Western officials believe the introduction of sectorial sanctions created the conditions for a sharp deterioration in the Russian economy and provoked the financial crisis of December 2014. This assertion also fails to pass the test, for the following reasons:

1. Sectorial sanctions against the Russian oil and gas industry apply to Arctic deep-sea and shale exploration. These projects are currently in the earliest stages of geological study and none of them is being developed at the moment, meaning sanctions have no impact on the current volume of Russian hydrocarbon production.

2. In the immediate aftermath of the sectorial sanctions, Western service companies refused to sign any new agreements with Russian oil and gas companies. If this scenario had continued, we would see a decline in Russian hydrocarbon production as early as by the end of this year. However, this threat disappeared in late-2014 when Western companies began to sign contracts with Russians through their daughter structures, or subsidiaries. The Houston-based Schlumberger went even further by purchasing a 45.65-percent stake in the Eurasia Drilling Company, the largest provider of drilling services in Russia.

3. Financial sanctions that prevent Russian state-controlled banks and companies from raising new capital in international markets turned out to be more effective, and practically resulted in the complete closing of the capital market to all Russian corporates. In these circumstances, scheduled foreign debt payments inevitably put pressure on the Russian balance of payments and led to the weakening of the ruble at the end of last year, when foreign debt repayments reached their peak. At the same time, the global price of oil began to fall in the middle of last year, dropping to less than half of its mid-summer level by the end of 2014. It is safe to say that the decrease in oil prices turned out to be a much stronger factor in sparking the Russian financial crisis in December: the drop in oil prices that month to $48/barrel meant the loss of approximately $200 billion in export revenues per year. By comparison, the amount of funds needed to pay off the foreign debt of Russian banks and companies scheduled in 2015 is about half that amount.

Yet while the direct effect of economic sanctions is limited, their ongoing indirect effects may turn out to be much more serious and long-lasting. First, the resulting sharp acceleration of inflation inflicted significant pain on the Russian economy. The embargo on Western food products imposed by the Russian government only exacerbated the growth in prices, which became uncontrollable in December 2014-January 2015 due to the sharp devaluation of the ruble.
Second, the combination of rising inflation, devaluation of the ruble and the drop in revenues from oil exports created the need for a radical rewriting of the Russian federal budget for the current year. This interfered with the normal functioning of many state-funded structures, which to this day remain in the dark about the amount and conditions of their future funding.

Third, the sudden drop in export revenues and the need to pay off foreign debts led to a significant decrease in imports. This will negatively affect the current consumption of Russian citizens and, more importantly, will lead to the freezing of many investment projects. The decline of investment in Russia has already continued for the third year in a row, and is expected to be the main driver of the current economic crisis.

Why did the sanctions have a weak effect? This may have been no accident. Most likely the West didn't want to use harsher measures to pressure Russia, in hopes that it would be able to move the conflict toward the stage of negotiations.

For Europe, large business projects in Russia are an important factor in its own development. Since European business clearly didn't want to lose its position in Russia, it didn't let up its lobbying pressure for a minute. For the United States, whose economic ties with Russia are negligible by comparison, Moscow is mainly important as a partner in resolving the conflicts in Afghanistan, Iran, North Korea, Syria, and cooperating in the battle with ISIS. Meanwhile, any new talk of tightening sanctions against Russia led to additional losses for European business, and was therefore viewed with suspicion in Europe.

Moreover, since hydrocarbons account for more than 2/3 of Russian exports -which the European economy is currently unable to refuse - then imposing any kind of sanctions that limited Russian exports would have been impossible from the outset.

In summing up the past year, we can draw the following conclusions:

1. The West doesn't have a clear strategy when it comes to adopting and/or expanding sanctions; each time, this question has been approached from scratch. This became obvious when the most punitive, sectorial sanctions were imposed after what was generally a localized episode - the downing of MH-17 - that had no effect on the military situation in the conflict region. On the other hand, despite numerous statements that it would do so, the West did not respond with any sanctions either to the summer offensive of pro-Russian separatists in Mariupol that fundamentally altered the balance of power in the region, or to their winter offensive in Debaltseve that had improved transportation links between Russia, Donetsk and Luhansk.

2. For various reasons, the West does not seek to increase the economic pressure on Russia and doesn't see sanctions as the main instrument through which to influence Russian policy. Instead, the West prefers traditional methods of diplomacy - an apparent mistake in the confrontation with the current Russian leadership, which has clearly decided to employ nontraditional forms of international relations.

3. Russia's "stop-and-go" politics in eastern Ukraine (characterized by the constant rotation of military operations and negotiations) is the optimal approach toward Russia's goal of minimizing the threat of additional sanctions.

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 #34
Moscow Times
March 13, 2015
U.S. Needs to Get Real, Sanctions Don't Work
By Mark Adomanis
Mark Adomanis is an MA/MBA candidate at the University of Pennsylvania's Lauder Institute.

What in the United States is called conservatism and in Europe is usually called classical liberalism, generally has a very astute awareness of the unintended consequences of government intervention in the economy. Every aspiring free marketer has read, or at least gives the impression that they have read, the parable of the broken window and has familiarized themselves with the unseen costs of taxes, regulations and bureaucratic fiat.

Efforts that at first glance might appear the very definition of simplicity, say the promotion of home ownership through the subsidization of mortgage interest payments, in practice have any number of unintended, and often perverse, consequences. It can be taken too far, of course, but conservatives tend to have a healthy degree of skepticism about the state's practical ability to achieve desirable social ends. Social policy, in their view, is never a simple tale of "the government wants to do X, so it passes a law mandating X." Things are never that simple.

The problem is that many of these same people, who as noted previously tend to inhabit the right side of the political spectrum, are remarkably trusting in the state's ability to successfully achieve a wide range of complicated policy goals in other countries. Their skepticism of government intervention somehow doesn't extend to foreign policy.

Thus you have the seemingly strange spectacle of people who, on the one hand, will argue that the provision of affordable health insurance is entirely beyond the state's capacity simultaneously arguing that, by imposing targeted financial sanctions, the United States can fundamentally change the Russian government's foreign policy.

But just as in domestic policy, foreign policy also has any number of unseen costs and unintended consequences. What may look very simple - sanction Russia so that it stops meddling in Ukraine - is, upon closer examination, not very simple at all.

This was exactly the point that Bernard Sucher and Samuel Charap made in an outstanding editorial they recently wrote for the New York Times. They astutely noted that even though Western sanctions were intended to target nasty state-owned firms like Rosoboronexport, Rosneft and Gazprom, in reality sanctions have most seriously impacted private enterprise.

It is easy to see why. Huge state-owned firms are politically connected and, in a crisis, will be able to leverage their political connections to get privileged access to resources. To simplify things just a bit: When Rosneft has a cash crunch it can go raid the National Welfare Fund. When a small privately owned Russian company has a cash crunch it goes bankrupt.

Thus a sanctions regime that was intended to punish the "bad" parts of the Russian economy and to "extract a cost" from Putin's cronies has, in the real world, had the practical impact of making the Russian economy even more reliant on its retrograde state-owned natural resource extractors. You could not find a more perfect example of the law of unintended consequences.

Does this mean that sanctions are necessarily a bad idea? No. You could still make a perfectly reasonable argument that the principles at stake, Ukraine's territorial integrity and the general sanctity of international borders, are of such overriding importance that they are worth almost any cost.

You could even argue that although in the short term Russia's economy will be more thoroughly dominated by the government, in the long term sanctions will eventually succeed in toppling the system. There are reasons to doubt that, particularly considering the experience of Iran under a much more comprehensive sanctions regime, but it is an argument worth having.

But what is clearly not true is that the West's, and particularly the United States', policy toward Russia is a simple matter of achieving desired ends through chosen means. Policy isn't created in a vacuum, it's created in a messy and complicated world where the other side inevitably readjusts and reacts and where we have limited insight into the consequences of our own decisions. We sanction Rosneft, the Russians subsidize it, and life goes on.

Consider, as another example, the idea of delivering weapons to Ukraine. Proponents of this policy argue that if we send Ukraine weapons then the Ukrainian army will become more competent. This increased competency and fighting strength will "increase the costs" of Russian intervention and therefore bring an end to the conflict. In other words: We give Ukraine weapons, Ukraine uses those weapons, more Russian troops die, and Russia changes its policy.

In domestic policy this is roughly the equivalent of arguing that the best way to raise average incomes is to pass an extremely high minimum wage. Any delivery of weapons to Ukraine would, quite obviously, cause a change in Russian strategy, likely one that the West wouldn't find very appealing. That's not an "apology" for Russian intervention, it's just stating the plain truth that, in the real world, there are always second- and third-order consequences.

Russia's strategy in Ukraine isn't a static entity that we can target from a safe distance, but is dynamic, adaptable, and constantly changing: If we give the Ukrainians weapons the Russians aren't just going to sit there.

There are any number of debates to be had about the proper way to approach Russia. Given Moscow's deplorable actions over the past year, many people will come to the decision that confrontation is the only acceptable strategy, and that the West must be much more hard-nosed in its policy.

That is all well and good. But as they formulate that policy, hawks would be well advised to keep in mind their skepticism about the government's ability to achieve its desired goals and the tendency of the real world to thwart our intentions.

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 #35
Brookings Institution
March 12, 2015
We may live in different worlds, but sanctions on Russia still make sense
By Steven Pifer
Former U.S. ambassador to Ukraine (1998-2000)

My colleague, Clifford Gaddy, wrote about sanctions on Russia on this blog on March 9. He notes that the West, on the one hand, and President Vladimir Putin and Russia, on the other, hold fundamentally different views of global and national security, and argues that U.S. and European Union sanctions on Russia are bound to fail. I hesitate to challenge Cliff-his knowledge of Russia and Russians is immense-but, as a supporter of sanctions, I will push back on four points. [http://www.brookings.edu/blogs/order-from-chaos/posts/2015/03/09-one-year-western-sanctions-against-russia-gaddy]

First, it is too early to tell whether sanctions will fail in their goal, which is, as Cliff noted, "to change Putin's calculus." There is no doubt that sanctions have contributed, along with the fall in the price of oil and Moscow's own failure to make needed structural reforms, to a Russian economy that is very troubled.

The Ministry of Economy in Moscow forecasts a three percent contraction in the Russian economy in 2015. Capital outflow from Russia in 2014 amounted to $150 billion. And Russia's international reserves fell from $510 billion in January 2014 to $360 billion this February.

True, the sanctions have not yet achieved their political objective of effecting a genuine shift in Russian policy toward Ukraine. Moscow still seeks destabilization of the government in Kyiv, in order to make it more difficult for that government to address its pressing economic reform agenda and draw closer to the European Union.

But the Russian president can hardly be indifferent to his falling international reserves or to the decline in the average Russian's purchasing power. Those trends will deepen over the course of the year if Russian troops remain in eastern Ukraine and the West maintains its sanctions.

For more than a decade, Russian economists have spoken of Putin's implicit social compact with the Russian people: they will get little political say but in return will enjoy economic security and rising living standards. If he cannot undo the sanctions and oil prices stay low, Putin may begin to get nervous that he is not holding up his side of the bargain. He might then look for a way out.

Second, Cliff argues that Putin and the Russians will not give in to sanctions because they see themselves as defending against an existential threat in Ukraine-that Russians are being asked to "accept a political and military situation that will threaten the survival of their nation" in order to end the sanctions. But is that really the choice that Russians face?

Russians might regard a Ukraine that is a member of NATO and the European Union as an existential threat. That, however, is not on offer. There is no interest within NATO in putting Ukraine on a membership track. The Obama administration has expressed no support for that, and key Alliance members such as Germany and France have made clear their opposition to Ukraine joining NATO. For its part, the European Union has resolutely resisted even offering Kyiv a prospect of membership.

Putin may worry that if-and this is a big if-Ukraine builds a modern, democratic, market economy outside of NATO and the European Union, the Russian people might see Maidan-like demonstrations as a vehicle for venting their discontent. If they did, that would result from Russia's internal disfunctionality. So Putin might see that kind of Ukraine as an existential threat to his hold on power, but would the Russian people regard it as a danger?

Third, Cliff argues that, for the West, "winning" in the current stand-off with Moscow could mean that Russia must collapse. No Western leader seeks that. A Russian collapse-which Putin's policies may make more likely-would pose a series of nightmares for the United States and Europe: a complex set of division issues that would invariably impact Western interests, a huge power vacuum in Eurasia, and who wants to deal with a nuclear-armed Saratov or Irkutsk?

The goal behind Western sanctions is far more modest: persuading the Kremlin that it should not use military force to seize territory or to undermine a neighboring state for its domestic policy choices. This gets back to the West's view of a rules-based security order in Europe, the most fundamental rule of which is that states should not use force to change borders. That, by the way, was enshrined in the 1975 Helsinki Final Act at the insistence of the Soviet Union.

Fourth, Cliff argues that differences between the West and Russia can only be resolved by negotiation. If the West casts aside sanctions, what tools in their place would encourage the Russian leader to abandon his current course of dismembering Ukraine in favor of a genuine negotiation?

If the West's sanctions were truly aimed at securing NATO missile bases in Ukraine or the collapse of Russia, it would be understandable that Russians would regard those demands as unacceptable, and Western sanctions policy would fail. The West's objective, however, is to get Russia to stop using force against Ukraine, to engage in a real negotiation, and to then implement the agreements reached.

Assuming that Putin has not fallen completely under the spell of the propaganda that his government spews out, there should be an acceptable middle ground. Sanctions can play a role in steering the Kremlin toward that. And even if in the end they do not, sanctions nevertheless will make clear to Moscow that egregious misbehavior has costs.

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 #36
Sputnik
March 10, 2015
NATO's New Lease on Life: Confronting Foes of Its Own Creation
West is sleepwalking into a confrontation which it won't know how to handle.
By Dmitry Linnik

In his speech at the Royal United Services Institute looking at the 'changing nature of threats faced by the UK', Foreign Secretary Philip Hammond described Russia as a principal threat and geopolitical foe.

In explaining the reasoning, Philip Hammond said that for two decades since the end of the Cold War, "we and our allies sought to draw our old adversary [Russia] into the rules-based international system...

"We now have to accept that those efforts have been rebuffed. We are now faced with a Russian leader bent not on joining the international rules-based system which keeps the peace between nations, but on subverting it."

Now that's rich coming from a leading politician of a country that took a direct part in a patently illegal war in Iraq and was involved in other similarly illegal pursuits with tragic consequences - in Libya, Syria and Egypt to mention but a few. Provoking and enabling a coup in Ukraine a year ago is probably another example of the West's adherence to international law, if one tries to follow Hammond's logic.

In fact let's recall that in the early 2000s President Putin suggested that Russia would be willing to join both the EU and NATO - but was never taken seriously. The response was that Russia was not up to certain European or NATO standards on a number of fronts. Incidentally, neither were any of the Central and East European countries that were nevertheless rushed through the process of accession to the two blocs. With Russia the choice was different.

When Ukraine was offered an Association agreement with the EU, was it ever ready - under the deposed president, allegedly pro-Russian? When there was a push for Ukraine to join NATO under his predecessor - how ready was Ukraine for that?

Or has anyone in the EU or NATO ever been serious about the offer of membership to Ukraine? Apparently, Ukraine is needed only as a military outpost for confronting Russia.

Back in 2007 at the Munich security conference - and on several occasions later - Putin spoke about Russia's grievances over the US claim to global dominance and stated Russia's refusal to accept it. No note was taken of Russia's serious concerns; instead Putin was vilified for his anti-Americanism.

In fact, what Putin said then and repeated many times since is that Russia is unhappy with the philosophy and practice of US global domination. It is a feeling certainly shared by many countries, including a fair number of US allies, but Russia happens to be one that has the attitude and the fortitude to say it out loud.

That is precisely the reason for the escalating demonisation of the Russian president and, increasingly, of Russia and its people.

In 2011 Vice-President Joe Biden came to Moscow to tell Putin not to run for president again. After which Washington effectively adopted a course towards regime change in Russia. That's how the situation is viewed not only by the Kremlin but by a vast majority of the Russian public.

And now, alongside international terrorism, Russia is defined as the principal single threat to the West.

As Foreign Secretary Philip Hammond put it in his speech at RUSI "we are in familiar territory for anyone over the age of about 50: with Russia's aggressive behaviour a stark reminder that it has the potential to pose the greatest single threat to our security".

To any Russian over the age of 50 the greatest threat to the world's security were the American nuclear missiles across the border in Turkey, capable of hitting Moscow within 15 minutes (a much more real 15 minutes than in Tony Blair's infamous claim about Iraqi WMD); or Dropshot: The American Plan for World War III Against Russia in 1957.

The agenda that is taking centre stage these days in the western political discourse is - again - pushing things dangerously close to an open military conflagration.

To the clamour of Russia bashing the West is sleepwalking into a confrontation which it won't know how to handle.

European security in the post-Cold War period has been defined by a dichotomy of conflict and cooperation. Over the past few years, starting well before the turbulent events in Ukraine, a push towards conflict has been gaining the upper hand. US neocons and their proxies in Europe have been allowed to hijack western policies towards Russia.

On Ukraine, the routine argument is that it is up to the countries on Russia's borders to determine who they ally with and what international organisations they want to join and that Russia has no say in this.

But it is a profoundly flawed argument. Kiev's seemingly free choice to turn West and away from Russia was taken under enormous pressure from Washington, Brussels and other western capitals - and some false promises too, as the ordinary Ukrainians were led to believe that with closer ties to the EU, visa-free travel and jobs in the West would come immediately.

The latest news from Brussels is that a visa-free regime for Ukraine is not on the agenda.

As for Russia, when the geopolitical and military situation in its vicinity changes, would it not be proper, indeed simply practical, to take her interests into account or, at the very least, try to calculate what her reaction is likely to be. Russia's response to Georgia's military attack on South Ossetia in 2008 should have provided some clues.

The question for NATO, particularly for Europe and Britain, stands as such: is there a different way of managing relations with Russia besides extremely risky confrontation?

The mood at the recent NATO summit in Wales was one of almost jubilation: the military alliance, apparently destined for irrelevance, has rediscovered a sense of purpose: it has now got a worthy foe in Russia. The biggest military alliance in the world which outspends Russia 11 times over has designated Russia as the paramount threat.

Atlanticist thinking and political agenda have scored a major victory, a victory over reason and common sense. Besides political hawks, this victory will undoubtedly benefit the NATO brass and the military industrial sector.

US prevalence in shaping this course of events has at least for now trounced any dissenting voices in Europe. Leading EU nations appear to be increasingly uncomfortable with how this confrontation has been snowballing but not finding the strength to oppose it.

And what is the point of a European Union if questions of war and peace on the continent are decided overseas?

NATO has received a new lease on life. A military alliance meant to serve, to protect and defend the western community of nations has grabbed the lead in shaping its policies - something that by definition should not be allowed. In the circumstances it looks very much like another case of a tail wagging the dog.

Ever since the end of the Cold War the US has virtually had a free hand in meddling anywhere it fancied. All of its interventions have been abysmal and none have been to the benefit of the countries concerned. It is hard to see how with this kind of record Washington should be trusted to shape the future of Europe.

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 #37
Russia Beyond the Headlines
www.rbth.ru
March 13, 2015
Experts: Russia's withdrawal from the CFE Treaty is a signal to the West
Russian experts say the decision to abandon cooperation with NATO on conventional forces must be considered in the broader geopolitical and historical context.
Alexei Timofeichev, RBTH

Moscow has announced its withdrawal from the Conventional Armed Forces in Europe (CFE) Treaty, as of March 11, stating that the agreement had became "pointless from political and practical points of view." NATO Secretary General Jens Stoltenberg said that the alliance was disappointed by Russia's decision, but Russian experts did not find the move surprising.

Alexei Arbatov, head of the Center for International Security at the Institute of World Economy, described Russia's move as a "demonstrative gesture in response to the build-up of NATO forces near the Russian borders."

According to Arbatov, after the deployment of an American tank unit in Latvia last week, Russia wanted to "once again remind" NATO that it is no longer bound by this agreement.

In Arbatov's opinion, the move was a provocation on the part of the U.S. "The transfer of the unit cannot be regarded as anything but a violation of at least the spirit of the agreement, if not its letter," Arbatov said.

The Baltic States, which joined NATO in 2004, were not covered either by the initial agreement, signed in 1990 or the updated version, written in 1999, but according to Arbatov, it was assumed that the agreement would eventually apply to them.

Andrei Kortunov, head of the Russian Council on Foreign Affairs, also said that he considers Russia's withdrawal from the treaty a signal to the West that NATO military activity on its borders is unacceptable. In Kortunov's opinion, the fact that Russia's withdrawal was not accompanied by specific requests for NATO is significant.

"If you refuse from something, even fairly, it is necessary to propose new solutions to the problem," said Kortunov, adding that Russia's unilateral withdrawal will contribute to the further rise of anti-Russian sentiments and new suspicions on the part of Western countries.
 
A decision long in the making

When Russia ratified the adapted CFE Treaty, the agreement's weapons limit for NATO was three times that established for the Russian army. However, NATO required the withdrawal of Russian troops from Georgia, Abkhazia, South Ossetia and Transdnistria as a condition for the ratification of the treaty.

"NATO countries were not in a hurry to ratify the adapted treaty," Alexei Arbatov said. "Although Russia had withdrawn almost all its troops, there remained some absolutely insignificant contingents and objects. The West sought to pursue its line. On the part of NATO, I think it was extremely short-sighted, it was a big mistake."

In Arbatov's view, this decision by NATO was what "finished off" conventional arms control in Europe.

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 #38
Russian Ministry of Foreign Affairs
Russian top diplomat interviewed on CFE arms treaty - transcript
Director of the Department for Non-Proliferation and Arms Control Mikhail Ulyanov's interview with Interfax, March 11, 2015

Question: It was reported just the day before that Russia has decided to suspend its participation in meetings of the CFE Joint Consultative Group effective March 11, 2015. What prompted this decision?

Mikhail Ulyanov: Between 2006 and 2011, I was the head of our delegation in Vienna on military security and arms control. Our participation in the CFE Treaty was suspended at that time, in December 2007, and in taking the decision to suspend our participation we decided to make an exception for the Joint Consultative Group (JCG) as a dialogue platform. Indeed, at that time we hoped that efforts would be made to restore an effective new conventional arms control regime on the continent. Unfortunately this did not happen. Consultations on the issue were moved outside the JCG. They were conducted in a Russia-US format although this Treaty has always been described as a "cornerstone" of European security. West European NATO members essentially stepped back and farmed everything out to Russia and the US. Unfortunately, while they seemed to value this Treaty, they de facto recognised that their role in salvaging the conventional arms control regime in Europe is minimal.

The Wikileaks publication of classified documents, State Department materials, confirmed what we were already seeing at that time: The US had forbidden its allies to discuss any substantive issues at the JCG. In those conditions there was not much sense in continuing our participation in the JCG. That was becoming increasingly obvious and now we have made the decision to suspend our participation in this group.

It should be noted that even though Russia does not participate, the Treaty is still in force and is applicable to 29 other signatory states, which comply with corresponding procedures, functions and targets. Naturally, however, the Treaty is essentially hollow without Russia, which is de facto a key player and is perceived as such by all.

Question: Why did the decision to suspend participation in the JCG come now? Does this have to do with our worsening relations with the West or is it a simple coincidence?

Mikhail Ulyanov: The issue was long overdue, long before the Ukraine crisis, before the current state of affairs in our relations with the West. I would not directly connect these things.

Question: While suspending our participation in the JCG, we have declared our willingness to continue the dialogue on conventional arms control in Europe. In what form is this dialogue possible in the current conditions?

Mikhail Ulyanov: I can say with confidence that in any event there would be no dialogue on this issue within the JCG framework. We have insisted on this since 2007 and achieved nothing because a large number of countries believed that such issues cannot be discussed at the JCG. Where they can be discussed is another matter.

In 2010-2011, for example, the time was ripe for our NATO colleagues to appreciate the need for dialogue in order to overcome the crisis in conventional arms control in Europe. At that time they launched a 36-state format. These are the 30 original CFE member states plus six NATO countries that joined the alliance after the Treaty was signed. At the time, talks on the US side were conducted by none other than Victoria Nuland. We had a total of 10 rounds with her and other participants. After that, the talks reached an impasse. Through no fault of ours, I believe.

Where could such talks be conducted now? I believe that if such consultations or talks were to begin, all countries planning to join a future conventional arms control treaty should participate in them, regardless of whether they are members of the alliance. In 2010, a large number of countries showed interest in talks, in particular Serbia and Switzerland. If they are still interested, I believe that they should be able to participate like any other state.

However, it is not clear when talks will begin or whether they will begin in the first place. Generally, our NATO partners have repeatedly stated, both in private contacts and in public, that they are preparing corresponding proposals. We have received no proposals yet. There are no consultations, nor are there any plans for consultations.

Question: Under what conditions can we restore our participation in the CFE?

Mikhail Ulyanov: I don't think we will return to the CFE under any circumstances. It is absolutely out of sync with the present realities. It is totally anachronistic. This Treaty was worked out way back when the Soviet Union and the Warsaw Treaty were still around and set equal ceilings for each bloc (NATO and the Warsaw Treaty) on key armaments. Under this Treaty, together with the East European countries, which are now NATO members, we are representatives of the same group, which politically is utter nonsense.

So we will not return to the CFE, but we are willing to consider the possibility and hold corresponding talks on a new agreement, which would accurately reflect the new reality, would not be very costly, would be well thought out, well balanced and, naturally, take Russian interests into account.

Question: Why then did we simply suspend our participation in the CFE, rather than withdraw from it completely?

Mikhail Ulyanov: Because we did not want to burn all bridges. By the way, our decision to stay in the JCG at that time underscored our willingness for dialogue, the reanimation of a conventional arms control regime on a new basis.

Of course, we could have withdrawn, but we acknowledge that a conventional arms control regime can be useful and we are not prepared to act as a "grave digger" for this regime. Quite the contrary, we are willing to engage in dialogue and we will see what will come of it, if it ever begins. Unfortunately, there are a lot of disagreements here, not necessarily related to Russia. There are disagreements among other states, including members of the alliance.

Question: Can we in the foreseeable future legally formalise our withdrawal from the CFE?

Mikhail Ulyanov: What's the point? Even at the legal level, it is a rather complicated procedure. I don't think it's sensible to divert efforts, resources, and time to formally withdraw from the CFE.

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 #39
www.rt.com
March 12, 2015
Making NATO defunct: Is EU Army intended to reduce US influence in Europe?
By Mahdi Darius Nazemroaya
Mahdi Darius Nazemroaya is a sociologist, award-winning author and geopolitical analyst.

An EU military force is being justified as protection from Russia, but it may also be a way of reducing US influence as the EU and Germany come to loggerheads with the US and NATO over Ukraine.

While speaking to the German newspaper Welt am Sonntag, European Commission President Jean-Claude Juncker announced the time has come for the creation of a unified EU military force. Juncker used rhetoric about "defending the values of the European Union" and nuanced anti-Russian polemics to promote the creation of European army, which would convey a message to Moscow.

The polemics and arguments for an EU Army may be based around Russia, but the idea is really directed against the US. The underlying story here is the tensions that are developing between the US, on one side, and the EU and Germany, on the other side. This is why Germany reacted enthusiastically to the proposal, putting its support behind a joint EU armed force.

Previously, the EU military force was seriously mulled over was during the buildup to the illegal Anglo-American invasion of Iraq in 2003 when Germany, France, Belgium, and Luxembourg met to discuss it as an alternative to US-dominated NATO. The idea has been resurrected again under similar circumstances. In 2003, the friction was over the US-led invasion of Iraq. In 2015, it is because of the mounting friction between Germany and the US over the crisis in Ukraine.

Re-think in Berlin and Paris?

To understand the events behind the call for a common EU military, we have to look at the events stretching from November 2014 until March 2015. They started when Germany and France began showing signs that they were having second thoughts about the warpath that the US and NATO were taking them down in Ukraine and Eastern Europe.

Franco-German differences with the US began to emerge after Tony Blinken, US President Barak Obama's former Deputy National Security Advisor and current Deputy Secretary of State and the number two diplomat at the US Department of State, announced that the Pentagon was going to send arms into Ukraine at a hearing of the US Congress about his nomination, that was held on November 19, 2014. As the Fiscal Times put it, "Washington treated Russia and the Europeans to a one-two punch when it revealed its thinking about arming Ukraine."

The Russian Foreign Ministry responded to Blinken by announcing that if the Pentagon poured weapons into Ukraine, Washington would not only seriously escalate the conflict, but it would be a serious signal from the US that will change the dynamics of the conflict inside Ukraine.

Realizing that things could escalate out of control, the French and German response was to initiate a peace offence through diplomatic talks that would eventually lead to a new ceasefire agreement in Minsk, Belarus under the "Normandy Format" consisting of the representatives of France, Germany, Russia, and Ukraine.

Pessimists may argue that France and Germany opted for diplomacy in February 2015, because the rebels in East Ukraine or Novorossiya, as they call it, were beating Kiev's forces. In other words, the primary motivation of diplomacy was to save the government in Kiev from collapsing without a fair settlement in the East. This may be true to an extent, but the Franco-German pair also does not want to see Europe turned into an inferno that reduces everyone in it to ashes.

Trans-Atlantic differences were visible at the Munich Security Conference in February. US Senator Robert Corker, the chair of the US Senate Committee on Foreign Relations, commented during a question-and-answer session with German Federal Chancellor Angela Merkel that it was believed in the US Congress that Berlin was preventing Washington from publicly ratcheting up US and NATO military aid to the authorities in Kiev.

Chancellor Merkel was explicit in her response when she told Senator Corker that the simmering crisis in Ukraine could not be resolved by military means and the US approach would go nowhere and make the situation in Ukraine much worse. When Merkel was pressed on militarizing the conflict in Ukraine by the British MP Malcolm Rifkind, the chair of the Intelligence and Security Committee of the British Parliament, she said that sending more arms to Kiev was useless and unrealistic. Merkel told the British MP "to look reality in the eye." The German Chancellor also pointed out that there cannot be security in Europe without Russia.

Germany's public position at the Munich Security Conference flew in the face of US demands to get its European allies to militarize the conflict in Ukraine. While US Secretary of State John Kerry went out of his way at the gathering to reassure the media and the public that there was no rift between Washington and the Franco-German side, it was widely reported that the warmonger Senator John McCain lost his cool while he was in Bavaria. Reportedly, he called the Franco-German peace initiative "Moscow bullshit." He would then criticize Angela Merkel in an interview with the German channel Zweites Deutsches Fernsehen (ZDF), which would prompt calls by German MP Peter Tauber, the secretary-general of the Christian Democratic Union (CDU), for an apology from Senator McCain.

German resentment of US control of NATO

Back in February, Bloomberg wrote: "For all the alarmist rhetoric about Russian barbarians at the gate, NATO countries are reluctant to put their money where their mouth is. Only the countries closest to Russia's borders are increasing their military spending this year, while other, bigger ones are making cuts. Regardless of what their leaders say about Vladimir Putin, they don't seem to believe he's a real threat to the West."

Washington, however, did not give up. When the Franco-German peace offensive began in February, General Philip Breedlove - who is the supreme commander of NATO's military forces -said in Munich that "I don't think that we should preclude out of hand the possibility of the military option" in Ukraine. General Breedlove is a US Air Force flag officer who takes his orders from the US government, thus subordinating NATO's military structure to US command. While Berlin and Paris were trying to deescalate, Washington was upping the ante using Breedlove and NATO Secretary-General Jens Stoltenberg.

After speaking to the Armed Services Committee of the US House of Representatives, General Breedlove would claim that Russian aggression was increasing in Ukraine. Germany, however, would rebut Breedlove's statements calling them "dangerous propaganda."

"German leaders in Berlin were stunned. They didn't understand what Breedlove was talking about. And it wasn't the first time. Once again, the German government, supported by intelligence gathered by the Bundesnachrichtendienst (BND), Germany's foreign intelligence agency, did not share the view of NATO's Supreme Allied Commander Europe (SACEUR)," Der Spiegel reported on March 6.

While Berlin has tried to downplay the reports about a rift with NATO over General Breedlove's misleading comments, German Foreign Minister Steinmeier candidly admitted that it was true that the Germans disagreed with the US and NATO while he was in Latvia on March 7. What Steinmeier actually did was diplomatically rebuked and dismissed both the US and NATO statements about the 'Russian aggression' in Ukraine.

In Latvia, High Representative of the European Union for Foreign Affairs and Security Policy Federica Mogherini added her voice to Steinmeier's. She told reporters in Riga that the EU will pursue a realistic approach with Moscow and will not be pushed or pulled by anyone into a confrontational relationship with Russia. This was a tacit message to Washington: the EU realizes that there can be no peace in Europe without Russia and does not want to be positioned as a US pawn against Moscow.

Destabilizing Eurasia

Germany itself is the ultimate prize for the US in the conflict in Ukraine, because Berlin has huge sway in the direction that the EU turns. The US will continue to stoke the flames in Ukraine to destabilize Europe and Eurasia. It will do what it can to prevent the EU and Russia from coming together and forming a "Common Economic Space" from Lisbon to Vladivostok, which is dismissed as some type of alternative universe in the Washington Beltway.

The Fiscal Times put it best about the different announcements by US officials to send arms to Ukraine. "Given the choreographed rollout, Washington analysts say, in all likelihood this is a public-opinion exercise intended to assure support for a weapons program that is already well into the planning stages," the news outlet wrote on February 9.

After the Munich Security Conference it was actually revealed that clandestine arms shipments were already being made to Kiev. Russian President Vladimir Putin would let this be publicly known at a joint press conference with Hungarian Prime Minister Viktor Orban in Budapest when he said that weapons were already secretly being sent to the Kiev authorities.

In the same month a report, named Preserving Ukraine's Independence, Resisting Russian Aggression: What the United States and NATO Must Do, was released arguing for the need to send arms to Ukraine - ranging from spare parts and missiles to heavy personnel - as a means of ultimately fighting Russia. This report was authored by a triumvirate of leading US think-tanks, the Brookings Institute, the Atlantic Council, and the Chicago Council on Global Affairs - the two former being from the detached ivory tower "think-tankistan" that is the Washington Beltway. This is the same clique that has advocated for the invasions of Iraq, Libya, Syria, and Iran.

Watch out NATO! United EU military in the horizon?

It is in the context of divisions between the EU and Washington that the calls for an EU military force are being made by both the European Commission and Germany.

The EU and Germans realize there is not much they can do to hamper Washington as long as it has a say in EU and European security. Both Berlin and a cross-section of the EU have been resentful of how Washington is using NATO to advance its interests and to influence the events inside Europe. If not a form of pressure in behind the door negotiations with Washington, the calls for an EU military are designed to reduce Washington's influence in Europe and possibly make NATO defunct.

An EU army that would cancel out NATO would have a heavy strategic cost for the US. In this context, Washington would lose its western perch in Eurasia. It "would automatically spell the end of America's participation in the game on the Eurasian chessboard," in the words of former US national security advisor Zbigniew Brzezinski.

The intelligentsias in the US are already alarmed at the risks that an EU military would pose to American influence. The American Jewish Committee's influential Commentary Magazine, which is affiliated to the neo-cons in the Washington Beltway, has asked, as the title of the article by Seth Mandel illustrates, "Why Is Germany Undermining NATO?" This is while the Washington Examiner has asked, as the title of the article by Hoskingson says, "Whatever happened to US influence?"

This is why Washington's vassals in the EU - specifically Britain, Poland, and the three Baltic states - have all been very vocal in their opposition to the idea of a common EU military force. While Paris has been reluctant to join the calls for an EU army, French opposition politician Marine Le Pen has announced that the time has come for France to come out of the shadow of the United States.

British Prime Minister David Cameron's government responded to Jean-Claude Juncker by slamming his idea as an outrageous fantasy, declaring that the military is a national responsibility and not an EU responsibility. Poland and Latvia also reacted skeptically towards the proposal. These statements all serve US interests in preserving NATO as a tool for its influence in Europe and Eurasia.

10 Downing Street has contradicted itself about the military being a national issue and not a collective issue. Just as recently as 2010, London signed treaties to essentially create joint naval units with France and to share aircraft carriers in what is an amalgamation of military. Moreover, the British military and military-industrial sectors are all integrated to varying degrees with the US.

There are some very important questions here. Are the calls for an EU military, meant to pressure the US or is there a real attempt to curb Washington's influence inside Europe? And are moves being made by Berlin and its partners to evict Washington from Europe by deactivating NATO through a common EU military?

 [return to Contents] 

 
#40
Moscow Times/Svoboda.org
March 12, 2015
How the Kremlin and the Media Ended Up in Bed Together
By Vasily Gatov
Vasily Gatov is a media researcher, analyst and media investment expert.

This is the first installment in a series of articles on the Russian media. An abridged version of this article was published in Russian at svoboda.org.

Editor's note: This is the longest text ever published by The Moscow Times. We've decided to publish it because it describes in detail a key Russian narrative, of how the Kremlin rules the country with the help of the controlled media. It is a bitter story of how the Russian media, with very few exceptions, have abandoned, sometimes through coercion, but mostly voluntarily and even eagerly, their mission of informing the public and have turned into creators of the Matrix-like artificial reality where imaginary heroes and villains battle tooth and nail in Russia's Armageddon.

After enjoying a brief interval of freedom, it seems that Russian media are now returning to the conditions of the late 1980s, when editors stood outside the door of the censorship office waiting for approval to go to press.

However, the "new censorship" that has emerged in Russia is not merely a tool for controlling the media from the outside. The new censorship is like a cancerous tumor that attacks the not-so-healthy body of the media from the inside and supplants everything of value or vitality with diseased tissue.

Like communist propaganda, the principles of this new censorship draw on the Orwellian concept of "doublethink," form the basis of state policy and, by definition, completely reject the idea of democracy.  

The president and senior officials now use the media as a tool for forming public opinion, forcing citizens to accept a false agenda in place of the real one.

The degradation of Russian media is evidenced by the fact that they implicitly agree to compromise themselves in this way. Many corporate or private media entities simply agree to these terms as a matter of survival, but a surprising number not only agree to the state's manipulations, but go one step further by offering creative ideas for advancing the Kremlin's official line.

The new censorship significantly expands on the classic, encyclopedic definition of the term by permeating not only news and information services, but since the mid-2000s, actively interfering in the arts and academia as well.

Another important feature of Russian censorship is that it is not all-embracing, but permits alternative points of view and even criticisms of itself. However, any journalist or media outlet taking advantage of that opportunity is walking on a minefield.

The Censorship Toolkit

The most important tool of the new censorship is the state budget as a resource for determining which media thrive or survive.

Access to federal budgetary funds remains a key tool for creating a system whereby the authorities can manage media content and media outlets themselves. Those publications and individual journalists for whom survival or personal enrichment is of primary importance are vulnerable to manipulation by the granting or denial of state subsidies, benefits, increases or decreases in financing for state-controlled media and access to capital provided by oligarchs with close ties to the Kremlin and Putin.

Managing the agenda. These practices include both "political briefings" in which chief editors of various media are called in to the presidential administration, and telephone "hotlines" that directly connect the chief editors of key media outlets with the Kremlin. The presidential administration can make use of such methods as directly substituting material produced by its own staff for journalistic reports and manipulating the underlying fears of the masses or otherwise manipulating the emotions of media consumers.

The effective (for the media or their owners) building of a pseudo-reality. Whoever fashions the news agenda also receives the profit, financial or political.

The introduction of "plants" or "observers" from media outlet owners and directly from the presidential administration and other key government structures such as the FSB, the Investigative Committee and even the Federal Drug Control Service. A degradation of editorial integrity is the inevitable byproduct of this practice.

The effective use of networks of staff informers. At the heart of the new censorship is a network of paid and voluntary informants. This "new" network - that arose on the basis of the new, post-party loyalty of key editors and journalists - is maintained with access to illicit money connected with journalism for bribes. Without exception, all of these "cooperative" (from the viewpoint of the Kremlin) editors and journalists involved in the scandalous practice of publishing outside material as their own editorial comments have, at the very least, aroused the suspicions of their colleagues.

Turning all news into a show. Those who understood the creation and reporting of news as "one more ratings-based entertainment product" played a role in creating and disseminating the government's "false agenda," and those who contributed most to its "artificial" content received rewards and encouragement.

In this way, leaders ensure that the Russian audience sees and hears - down to the smallest detail - only the picture of the world that the Kremlin wants it to see and hear.

The real issues have not disappeared, but it is forbidden to show that reality to the Russian people.

Centrality of Putin

The essence of the new censorship can be described as follows:

Russia - as Putin and his loyal (for now) lieutenants understand it - does not need an agenda based on real information.

To the contrary, the only necessary tool for managing Russia's imperfect society is an artificially constructed agenda that is "imprinted" on society by television channels that are fully controlled by the state. Not only news and analytical programs serve as tools for applying this pressure, but also broadcasts of the arts and even entertainment.

A key element in this artificial agenda is an exaggerated role for the central character in Russia's information milieu - the president of the Russian Federation.

For example, when Putin was once again experiencing strained relations with Moscow protestors in late May 2013, the main weekly program on Channel One, "Vremya," ran 11 pieces on Putin's various activities and only two covering other recent events. What's more, every mention or depiction of Putin was not only positive, but slavishly complimentary.

The new censorship does not only exclude real events from the agenda, but replaces them with false messages designed to make viewers feel dependent on the main hero of the stories - Vladimir Putin.

That model did not change during the Ukrainian crisis.

Those broadcasts focused on the idea of "fascist Banderovite" Ukrainians and how they were teaming up with those who had "spawned" them in order to attack Russia or its interests. In any case, the propaganda had to assert that such a war had already almost begun.

This manufactured agenda reached a peak in early summer when Russia's state-controlled television channels began portraying pro-Russian separatist leader Igor Girkin (aka Igor Strelkov) as "the savior of the Donbass Russians" and falsely reported that Ukrainian forces had crucified a young boy in Slavyansk.

These distortions of reality were no mere improvisations by presidential administration staff who were instructed to manage the news on Channel One or the All-Russia State Television and Radio Broadcasting Company (VGTRK). Senior officials undoubtedly issued clear instructions in this regard and much of the text broadcast on the Vesti television channel and "Vremya" news show and their websites has been introduced from above without any input from editors.

The primary characteristic of the new censorship is that it motivates so-called "journalists" to not only serve the Kremlin agenda, but to creatively advance it.

The "crucified boy in Slavyansk" is just the most superficial example of that. A far more insidious and potentially dangerous phenomenon is the frequent and barely perceptible distortions to reports from previously neutral programs and writers.

For example, by simply inserting promo shorts for the forthcoming "Vremya" news show during the vastly popular primetime women's talk show "Pust govoryat" ("Let Them Speak"), viewers without intention to watch the newscast are gradually infected and become carriers of the virus of lies and aggressiveness.

In this way, masses of television viewers become not only victims of deliberate manipulation, but also strong supporters of a policy of hatred directed toward Ukrainians whom they know only through state-controlled television reports.

This is a world that has been constructed especially for their consumption. It contains enemies and the one person who can effectively oppose them: Vladimir Putin. The greater their hatred for the enemy, the deeper is their love for Putin, and vice versa.

With this false agenda filling the airwaves so thoroughly and constantly, the average Russian cannot but respond to surveys with the conviction that Putin is the mainstay of his life.

That Bittersweet Word - Freedom

Soviet media was first freed from censorship in August 1990 when printing houses stopped requiring publishers to present a stamp of approval from the Main Administration for Safeguarding State Secrets in the Press.

That launched a brief period in which the media enjoyed nearly total freedom. Society began a sober examination of its ideological heritage, retrieved important documents previously classified by the authorities and resurrected episodes from Russian history that censors had previously either ignored or eliminated.

The relative ease of the transition from a totalitarian media model to the new Russian model is due to the fact that former Soviet leader Mikhail Gorbachev's policy of "glasnost" greatly undermined the status and capabilities of the Communist Party Central Committee with regard to political and ideological censorship.

In addition, Alexander Yakovlev, one of the architects of perestroika, headed the ideological department of the central committee for several years, and it was his support that made possible the appearance of the Moskovskiye Novosti newspaper with its more progressive civil and political reporting.

Party leadership of the media practically ceased in 1991, and it was the disappearance of that control during the final months of the Soviet Union - first in the Baltic states and later in the Caucasus - that made it possible for the republics to rapidly separate and form their own political class.

The journalistic community was caught up in the euphoria of freedom of the press, the freedom to express political views and the freedom to criticize the ruling authorities.

Because the number of "free" media outlets was continually growing, the leaders of the anti-democratic putsch of Aug. 19, 1991 suspended the publication of all newspapers and effectively instituted a wartime censorship regime on television and radio.

However, the ban did not work: A number of printers released the "Obshchaya Gazeta" on Aug. 21, and by the morning of Aug. 23 when the putsch collapsed, both formal and informal structures of party control over the media no longer existed.

When they were first freed from party control, most media had no idea how to view themselves as separate entities with the duty of reporting the truth to the people and earning money at the same time.

The events of August 1991 were probably not only the final chord in the activities of the Communist Party as a political organization, but also the final stage in the existence of the Soviet media in their classical form.

Most editors and journalists had no market understanding of the economics of the media. The situation was easier for television and radio as both received funding from the Finance Ministry.

The economic problems of the transition period affected the entire system of Soviet media: Newspapers and other print publications faced runaway inflation - the money collected in early 1991 from subscriptions ran out long before those subscriptions had ended.

Retail sales were very high, but Soyuzpechat, the state's monopolistic distributor of newspapers and magazines, began suffering from problems caused by inflation and failed to make timely payments for the publications it delivered to its vast network of newsstands.

At that time, no advertising or sales professionals existed.

Many publications declared their "independence" in the belief that they could earn a great deal of money in the emerging market economy.

However, that turned out to be an illusion. The deregulation of prices and the flourishing barter economy, along with the freeing up of foreign trade from state controls led to an acute shortage of money and newsprint.

Faced with economic hardship, the former Soviet newspapers rushed to ask for help from President Boris Yeltsin and the government that they had been mercilessly criticizing - some for its lack of radical reforms, and others for its infatuation with liberal policies.

As the "stewards of perestroika," Izvestia, Komsomolskaya Pravda, Trud, Argumenty i Fakty and other publications argued that the state had "an obligation to support freedom of speech," they also demanded that leaders "pay for the support" those publications had given them during the dramatic events of those years.

Many of those editors, along with a number of their journalists, were State Duma deputies, and the Yeltsin administration agreed to extend assistance to them, in some case by providing free premises for their publications.

Those premises were not only a lifesaver during the economic turmoil of the early 1990s, but also a source of rental income in later periods, as well as a reason that some oligarchs considered the publications attractive investment opportunities.

And despite the market-oriented reforms the state was adopting, in 1993 it decided to subsidize postal fees for Russia's press and provide tax breaks for media.

The state also funded television. The federal budget paid, albeit only modestly, to transform the Soviet Union's State Committee for Television and Radio Broadcasting into several separate companies - primarily Ostankino, that later became Channel One, and to establish and develop VGTRK. The management of those new channels also made use of the spacious, Soviet-era buildings housing their operations to rent out retail space and to engage in free, often unregulated business activities.

Another significant event deserves attention here. The election of the Congress of People's Deputies in 1989 - that opened the last stage of the Soviet Union - brought a large number of editors and journalists into the ranks of first the legislative, and later the executive branches of government.

That process was fast but short-lived: As early as 1993, not a single prominent media name remained among Duma deputies, and only the rare controversial figure appeared on party lists - individuals such as Alexander Nevzorov from St. Petersburg television, or later, Alexander Khinshtein from the Moskovsky Komsomolets newspaper.

However, that initial "integration" into the halls of power established ongoing backroom ties between a number of media outlets and Yeltsin-era government institutions.

Those connections will play a significant role later in this story, but for now it is enough to point out that the groundwork for the future adverse changes in the Russian media was already laid during the early years of "free Russia."

The state subsidies for media and their "long working relationship" with government agencies that began during the very first years of the modern Russian state subsequently became one of the cornerstones of the new censorship.

A Loud Bell Opens the First Act

The winter of 1995 was a very difficult time for the Russian authorities. The main problem was the extremely low voter approval ratings held by the aging Yeltsin.

The unrestrained political debate in the media was also damaging for Yeltsin and his government: Newspapers and television channels criticized the country's leadership for everything they did or did not do, sometimes for no reason at all.

Newspapers and television stations managed to somehow adapt to life under free market conditions. Advertising appeared, and the barter economy was replaced by first illicit, and later ordinary contracts.

Bankers and the country's few industrialists took an interest in the media. They saw their ability to influence newspapers as an opportunity to help friendly government officials or to intimidate competitors. Despite the fact that by 1991, media outlets that published criticisms were no longer subjected to organized repression and criminal charges as they had been under the Soviet system, the fear of publicly expressing criticism continued.

It is important to understand that once the Russian media broke free from their organizational, economic and political fetters in the 1990s, they set out to become independent players in the public sphere - that is, to occupy the same position as media do in democratic and liberal societies. Russian editors and journalists learned from their Western colleagues.

The Chechen War from 1994-96 began with journalists enjoying almost complete freedom. As someone who covered the storming of Grozny in the winter of 1994-95 and many other events of those years, I saw that the only problems journalists and film crews faced were actually reaching the conflict zone and trying to stay alive once they were there. But by the fall of 1995, the army brass, and especially the Federal Security Service units attached to the military forces, began to actively oppose the independent activities of the journalists in Chechnya and the surrounding area.

Russian television channels were divided between those assigned to "ride on an armor" with military units (primarily RTR, and occasionally Channel One and ORT), and those that preferred to work independently of the military (NTV, TV-6 and others).

Journalists unwittingly played a significant role in one of the first major terrorist attacks in modern Russia: the seizure of a hospital in Budyonnovsk in 1995 by Chechen commander Shamil Basayev.

As Basayev and his militants left the hospital, they replaced hostages with journalists, taking them onto the buses that they used to escape the scene as live shields. It was those journalists who witnessed firsthand how badly the Russian special forces performed and how Basayev and his men managed to escape with minimal losses.

However, that situation changed when it was decided to help Yeltsin win re-election in 1996.

When the most powerful Russian oligarchs supported the idea of a second term for Yeltsin, it meant that not only would NTV, owned by Vladimir Gusinsky, and ORT, controlled by Boris Berezovsky, come on board, but that a whole group of publications receiving funding in one way or another from these and other oligarchs would have to get involved in the campaign.

Although the goal of keeping power in the hands of Yeltsin's inner circle was originally an organizational and political task, it now shifted into the hands of the media. It was decided to actively use informational pressure, manipulation of the agenda and informational priming to convince the Russian people to re-elect their first president.

Thus, the presidential administration held "media planning meetings" every Friday starting in the summer of 1996.

As former Deputy Chief of the Presidential Administration Sergei Zverev recalls, they were "political meetings where we discussed the agenda of the coming week and developed proposals on how to cover those topics in the media, primarily on television."

Following those meetings, either the chief of the administration or authorized deputies would deliver "assignments from the authorities" to the heads of the main television channels.

It was during those months that government public relations people began playing a direct role in how information was presented to the public. Television channel editors and chiefs were generally willing to play their part. For example, TV-6 founder and VGTRK head Eduard Sagalayev was even a member of Yeltsin's campaign staff.

Longtime Kremlin spin doctor Gleb Pavlovsky claims that his Foundation for Effective Politics first proposed the concept of "media management" back in 1996, and not as a short-term measure to help win the elections, but as a permanent policy model of the presidential administration.

After those elections, spin doctors became regular participants in formulating and implementing the government's "official line."

Dollar, the Censor

A handful of financial and industrial groups controlled most of Russia's mass media in the 1990s and into the early 2000s.

Vladimir Gusinsky's Media-Most, with NTV at its center, also held popular newspapers, magazines, publishing houses and film companies.

Boris Berezovsky controlled not only ORT (Channel One), but also owned a number of primarily "independent" newspapers through a complex ownership structure.

Other major players such as LUKoil, the Unified Energy System of Russia (RAO UES), Vladimir Potanin's Interros and Mikhail Khodorkovsky's Menatap all had their own media holdings as well.

For its part, Gazprom lent money for the Media-Most project.

After the election miracle of 1996, when the concerted use of political and media resources helped reinstate the unpopular Yeltsin, it became clear to the major financial and political players in Russia that the creation of a pseudo-reality for the public's consumption does yield fruit.

Those who build the media construct reap the profits - whether commercial or political.

It was in the period from 1996 to 2000 that the second element formed that would later transform into the new censorship under the rule of President Vladimir Putin.

One of the features of the current model of media and media communications in Russia is that the manner and extent to which editorial boards are controlled depends on who owns the particular media outlet, their ties to this or that political group and whether the government has levers by which it can directly influence those owners.

Despite the fact that some media were relatively successful commercially, almost no one viewed the media as a business per se. What made certain media assets attractive was their ability to influence politics and the state's regulatory stance toward specific sectors, as well as their usefulness as a tool for defending against competitors or taking action against them.

Media owners preferred to appoint obedient and servile chief editors whom they could easily circumvent whenever they needed to take matters into their own hands.

The oligarchs who owned various media were the first to install "plants" on their staffs, individuals who had the "authority" from the owner to not only control the editorial process, but also to influence overall content.

These "plants" were originally charged with security-related tasks such as ensuring that "articles for hire" did not embarrass the owner and his business partners or, conversely, to explain the best methods for targeted mud-slinging on behalf of the owner. However, later, their job duties became heavily politicized.

Even the Kremlin loyalist publisher Aram Gabrelyanov has had to deal with such "plants." In the following interview from Lenta.ru in May 2012, he describes such an incident at Izvestia.

"A man was standing there when I arrived at the newspaper office. I will not give his name because he happens to be sick now. He approached me holding out a business card and said: 'I was appointed here by the presidential administration. Aram Ashotovich, after you have read the material submitted for publication, you will give it to me.' I said, 'You must be joking - or crazy.' He said, 'Have you looked at the business card?' I said, 'You're fired, dismissed.' He told me, 'Do you even understand who appointed me to this job?' I said, 'I don't give a damn who appointed you.' I really did fire him."

Interestingly, some of the "old" media that changed ownership between the late Yeltsin and early Putin years, had at that time already begun to show signs of readiness for their owners to censor the publications for political and thematic content.

For example, the Argumenty i Fakty newspaper gained its unprecedented, Guinness Book of World Records-breaking circulation of 33.5 million copies in 1990 after emerging from the perestroika process as an ultra-liberal and progressive publication headed by its founder and chief editor Vladislav Starkov.

After Starkov sold his controlling stake to the PromSvyazKapital group, Argumenty i Fakty began conforming to the views of its new owners, the Ananyev brothers. Alexei and Dmitry Ananyev are Russian Orthodox and openly declare it, but they do not require the same from the editors of the media they own.

However, within only a few months after the change of ownership, editors at the newspaper - who had previously been strictly atheistic and critical of the Church - became pro-Orthodox and began inviting writers whom the owners found "pleasing," including the influential priest Tikhon Shevkunov, often referred to as Vladimir Putin's spiritual father.

Cooperative and Not-So-Cooperative

Soviet-era censorship was the outward manifestation of the Communist Party's more basic policy of filtering and controlling its membership and bureaucratic elite.

Political loyalty ensured party control over editorial boards and the "cooperativeness" of their chiefs, who were only very rarely true professionals. In the final years of the Soviet Union, the chief editors of the largest newspapers were, almost without exception, former secretaries of regional or city party committees or else former heads of the party's ideological department. They might have had some form of specialized education, or even no education at all.

For example, in 1983 Pavel Gusev left the position of secretary of the Moscow Krasnaya Presnya District Party Committee to head Moskovsky Komsomolets. And after serving as deputy head of the ideological department of the central committee and overseeing the Main Administration for Safeguarding State Secrets in the Press, Alexander Potapov served as chief editor of the Trud newspaper in the 1990s. These weren't rare examples - it was a common practice.

Meanwhile, Vladimir Putin's arrival in the Kremlin in the summer of 1999 required another mobilization of media resources. Yeltsin's chosen successor and former FSB chief was not a public politician and began his leadership as a virtual unknown.

At the same time, the worsening situation in the North Caucasus and the apartment bombings in 1999 in Moscow, Volgodonsk and Buynaksk once again raised the question of how much media coverage was permissible for such tragedies.

In 1999, Alexei Gromov became Putin's press secretary and Mikhail Lesin became Communications and Press Minister.

The combination of these two officials in one form or another would come to dominate the eventual emergence of the new censorship.

In addition to "political planning meetings" every Friday, media bosses now also met regularly with Vladislav Surkov, the deputy head of the presidential administration responsible for domestic policy.

While the meetings with Gromov set the official agenda and determined which television channels would have responsibility for which part of it, the latter briefings with Surkov formulated the specific content of the message.

Over time, the Gromov meetings increasingly took on the format of a "situation room" in which the heads of the federal television channels helped formulate the message of the new Russian leader and the tactics needed for dealing with the resources of the "opposition."

The term "opposition" primarily meant Vladimir Gusinsky and his NTV channel, which had taken an openly critical stance toward Putin's appointment.

After the "taming" of NTV in 2001, the channel's new chiefs were invited to the Friday briefings, and by 2006, the attendees included Russia Today director Margarita Simonyan and the heads of Ren-TV and TV Center.

At the heart of the new censorship lies a specific type of post-party loyalty on the part of editors, key journalists and professional groups. A "cooperative" editor is one who puts the interests of the Kremlin and relations with the authorities above the interests of his audience. The Communist Party achieved exactly the same thing by making the editor dependent on the party "vertical," and not on the whether the publication succeeded with audiences.

Version Number Six

The story of how the authorities cracked down on Vladimir Gusinsky's Media-Most is definitely a key event in the development of the new censorship. It demonstrated how the new Russian authorities would ensure - if not enforce - media neutrality toward the government.

Gusinsky's primary dispute with the authorities evolved around certain business interests and, of course, around the right to set the information agenda independently.  

The attack against Media-Most undoubtedly also had the goal of excluding topics and events, individuals and opinions from the mass media agenda that ran counter to the interests of the Kremlin groups.

By distancing ourselves from the events of the last 14 years, we can say with reasonable certainty that the establishment of control over NTV became the main turning point that led toward the emergence of the new censorship.

Whether they planned it or not, those who organized and carried out the attack on NTV's "unique journalistic team" on April 14, 2001 suddenly found themselves with something new: the scary example they could hold up to intimidate other "uncooperative media."

The authorities then blacklisted anyone who chose the path of resistance and criticism, barring them from senior positions as journalists and managers or from working as the "public face" of media outlets owned by the state or with close ties to the Kremlin.

In late April 2000, Kommersant Vlast newspaper political department head Veronika Kutsyllo came into the possession of a document later called "Version Number Six." The source for this was never identified, but nobody ever challenged its authenticity as one of the new ruling administration's "political documents."

"Version Number Six" suggested that Putin's future administration would have to make a division between "open" and "secret" policy.

In particular, the policy paper openly calls for the presidential administration to act as a "two-faced Janus." The anonymous authors directly state that, on the one hand, leaders should outwardly adhere to a strictly liberal, law-abiding and constitutional approach, but that, on the other hand, their policy should also contain a "secret component" that, by remaining secret, could and should be used as needed in order to consolidate and retain power.

Among the "secret" tasks that the document lists is the need to establish control over the media and journalists. For example, as part of the presidential administration's policy on political management, it recommends that the authorities:

- Influence the activity of media at the federal, regional and local levels through the collection and use of specific information on the commercial and political activity of each media, its personnel and management, sources of financing, its financial, economic, material and technical resources.

- Influence the work of journalists at the federal, regional and local levels through the collection and use of specific information concerning the commercial and political activity of professional journalists, their sources of financing, their places of employment (at which media outlet they work) ... financial and personal partnerships, etc.

The two mechanisms the paper recommends for working with the media are even bolder.

According to the authors, the first mechanism involves monitoring, collecting and processing the information obtained and then "throwing it back" into society, now cast in "the proper light."

The second proposed mechanism involves "taking control of various media by using specific information gathered for that purpose, including information of a compromising nature. Also, by driving opposition media and media sympathetic to the opposition into financial crisis by revoking their licenses and certifications and by creating conditions under which the activities of each individual opposition media outlet become either controlled or impossible to continue."

Only a few months later and as a result of the legal crackdown, the presidential administration took control over NTV and other Media-Most assets, pushed Boris Berezovsky out of ORT and gradually moved closer to fully implementing the system described by the anonymous authors of "Version Number Six."

Terrorism, Extremism and Voluntary Castration
A second wave of terrorism struck Russia in 2002-04 when Chechen militants, hard hit by Russian military and police operations in that republic, took a page from the al-Qaida playbook by shifting part of its war to target civilians in enemy cities.

The tragic terrorist seizures of the Dubrovka Theater in Moscow in 2002 and the school in Beslan in 2004 led to the placement of another foundation stone in the new censorship - the idea that information organizations would voluntarily practice self-restraint and even self-censorship.

A new "player" appeared on the scene during the Dubrovka Theater siege. Social networks and blogs provided eyewitness accounts and commentary in addition to traditional media reports.

The main such resource was social networking service Live Journal, where several accounts functioned together as a sort of news agency, collecting and distributing as much information as possible - though often of inferior quality, accuracy and relevance.

The Dubrovka terrorists made direct use of the media as a way to communicate their demands, ideas and threats as live television cameras surrounded the site of the tragedy. This was similar to the way Basayev had taken a busload of journalists hostage in Budyonnovsk. However, it is one thing to carry out an attack in a remote town with bad roads and limited communications, and quite another to do it in the center of Moscow.

It was impossible to bar journalists from capturing the most important footage - but that does not mean the Kremlin did not want to do so.

It was at this point that the presidential administration took another step toward creating its new censorship, clearly installing individuals loyal to Alexei Gromov in key positions in all of the major media - VGTRK, Channel One, NTV and various news agencies.

Sergei Goryachev, who began his career with the Main Administration for Safeguarding State Secrets in the Press, acted as the symbolic chief of news broadcasting for Channel One in 2000-04. His successor in that duty, if not in job description, was Andrei Pisarev, who served as both deputy director of social and political programs for the channel and as head of the political department for the Central Executive Committee of United Russia, the ruling party then led by Putin.

Oleg Dobrodeyev was given responsibility for keeping VGTRK within the "power vertical." He not only attended briefings with Gromov, but also met directly with Putin.

The only thing lacking in this new system was one element found in the "old" system - ideology.

Putin's first presidential term was decidedly non-ideological and purely pragmatic. Now in hindsight, that was clearly no accident.

Although Putin's think tank at that time, the Center for Strategic Research, led then by German Gref, had formulated long-term plans for reforming Russia, those plans were not based on any ideology. They were a classic example of "institutional economics" that sought to create standard and universal conditions for growth and development.

The purpose of the country's existence, an ideological description of the future and other elements necessary to a genuine strategic plan were either lacking or, after 2000, assigned to Vladislav Surkov for development.  

Surkov launched an ambitious ideological search, and in addition to his wealth of ideas, countless hordes of "political consultants" and "political centers" serving the Kremlin made their contribution as well.

While Alexei Gromov and Mikhail Lesin were charged with controlling and managing the media, Vladislav Surkov and his associates from numerous "political centers" were tasked with creating a second important component of the system: an "alternate reality" in which the authorities could fully immerse the country.

The Last Traces of Freedom

The system for controlling the media stabilized by 2005 and has continued almost unchanged until the present. At the same time, it has undergone an inevitable evolution: Having taken firm hold on control over the media, the authorities ventured even further and began manipulating the structure of the public discourse.

Having achieved certain results in managing the public agenda, along with the desired shift in public opinion that resulted, the Kremlin decided to expand its zone of influence beyond traditional media into "new media" - from the broadcasting sector into interactive media, and from manipulating the domestic agenda into influencing the international agenda.

The "new system" is based on new principles. As the Soviet past recedes, today's leaders have stripped the Leninist and Stalinist propaganda of its ideology and improved it with techniques that produce even better results.

Of course, many similarities between the Soviet and the new Russian system remain, but in the absence of the Communist Party and the many privileges and "persuasions" it could employ, the ruling authorities must now rely on other sticks and carrots such as property, money - primarily budgetary funds - job postings, government "plants" to control operations and so on.

The authorities are forced to operate in a situation in which, at least on paper, censorship is forbidden.

The new "system" is primarily designed to make the media effective in publicly presenting the agenda - whether real or imagined - which, in turn, helps the president govern the country.

Over time, everything that does not help achieve this goal is considered an "obstacle" or "inimical" to the plan.

The task of the new censorship is to produce an agenda for the public discourse that the greater part of society will support, regardless of what it thought yesterday about those ideas or of how it feels now about more personally pressing issues concerning the local situation, jobs and social conditions.

Yellow Telephone and Other Links in the Infernal Chain

When Vladimir Putin was triumphantly elected to a second term in 2004, the basic features of the new system were already in place: The state held organizational control over the three major television broadcasters - Channel One, VGTRK and NTV - and could use various mechanisms to, if not dictate, then at least "adjust" the news agenda.

The situation with print media was problematic: Many publications retained a high degree of editorial sovereignty, sympathized with the opposition and sought to provide objective coverage of events within Russia.

Following 2005, the system for managing the media succeeded primarily in producing a stable image of Putin and his messages. Television channels and other media controlled by the state gave a "green light" to Vladislav Surkov and his active efforts to "consolidate" various groups such as Nashi, Young Guards and others around President Putin and United Russia. However, at that time at least, those media viewed their support as a form of "payment" in return for the right to continue operations.

Meanwhile, preparations for the second phase of the new censorship began during this period of 2005-08.

In 2004 Mikhail Lesin left his post as Communications and Press Minister to become an adviser to President Putin and, after forming a close alliance with Alexei Gromov, begin working on a system for creating and controlling the public agenda.

Svetlana Mironyuk, who served as chief editor of the RIA Novosti state-owned news agency from 2003 to 2013, explained how that new format worked and how the authorities "tightened the screws" during her final years at that post. In her opinion, officials had no need to systematically intimidate editors, much less the media owners.

Relations between the authorities and media changed gradually, step by step, in roundabout ways and, most frequently, in connection with specific individuals.

According to Mironyuk, beginning in the early 2000s the authorities divided the media into three categories. (Gromov and Lesin began the task, and later they were joined by first Surkov, and then his replacement: Vyacheslav Volodin.) The three categories are:

- "Outsiders," or those with views alien to the official line. These include Vedomosti newspaper, Forbes magazine, Novaya Gazeta newspaper, the Lenta.ru website (until March 2014) and several others such as Dozhd television. As with Western media, the authorities either have strictly business relations with them or no relationship at all. They cannot be bought, sold or manipulated.

- "Our guys." These are primarily state media. Since the mid-2000s, this group included the Komsomolskaya Pravda newspaper, and the group of publications and media owned by Aram Gabrelyanov - Zhizn, Lifenews.ru and Izvestia. According to Mironyuk, this category primarily includes editors with whom Alexei Gromov has long had good personal relations, and with whom he can strike "deals" for informational barter: The Kremlin organizes exclusive interviews for the publications but expects certain "services" in return.

- "In-betweeners." These are either semi-outsiders or semi-locals with whom the authorities can sometimes strike deals, but not always. Radio station Ekho Moskvy and news agency Interfax are the most notable examples.

Of course, one important tool for manipulating the public agenda is the "media hotline" that the authorities created in the mid-2000s. This is a system of direct communication between Kremlin "handlers" and chief editors at state-controlled media. Later, special yellow telephones were installed on the desks of their news editors that linked them directly to the Kremlin.

Alexander Orlov, who served as deputy editor-in-chief of the Rossia-24 television channel from 2008 to 2012 explained that VGTRK Deputy Chairman Dmitry Mednikov and Rossia-24 chief editor Yevgeny Bekasov frequently take calls on their yellow phones - not so much to receive their latest orders as to consult with Kremlin staff on how best to present this or that news story.

For example, Orlov recalls that during the economic crisis of 2008, the caller on the yellow phone prohibited VGTRK channels from using the word "crisis" in their broadcasts, even while simultaneously requiring that they report on the crisis.

Restricting the Agenda

The existence of the new censorship has been an open secret for the last five years already.

Although Dmitry Medvedev acted as president from 2008 to 2012, Alexei Gromov remained in charge of state-controlled media exactly as before.

The economic crisis of 2008-2010 dealt a major blow to Russia media.

Although a media market ostensibly continued to exist, government subsidies - especially in the form of contracts for "information services" - became increasingly important for any firm's continued existence. Originally used by governors as a way to control the local media, the practice gradually spread to the capital.

Of course, the main innovation of the new censorship in recent years is the unofficial but complete ban on state-controlled media from formulating their own news agenda.

State-controlled television and radio news stations are now highly dependent on their "yellow phones" and federal funding. And newspapers were compelled to follow the agenda presented on television. Otherwise, they would find themselves at odds not only with Kremlin handlers, but also with their audiences, who get most of their news from television.

Information agencies were an exception, enjoying some - and, at times, complete - freedom in setting their own news agendas, even during the mass protests from winter 2011 to spring 2012.

However, the restructuring of RIA Novosti in 2013-14 put an end to that relative freedom.

--
Alexei Gromov

First deputy head of the Presidential Administration

Alexei Gromov is a career diplomat who left his post as an ambassador back in the 1990s to work at the Kremlin. He first headed the Kremlin press service and created the "presidential pool." He became Vladimir Putin's press secretary in 1999 and a deputy head of the presidential administration in 2008.

Gromov is a key manager of public policy for mass media. In addition to serving as a member of the board of directors for Channel One, he regularly holds "briefings" with the heads of state-controlled media and determines the public agenda as well as the political and personal guidelines for acceptable content. Gromov is primarily responsible for television and traditional print media. Since 2012, Chief of Presidential Administration Sergei Ivanov has enlisted another deputy head, Vyacheslav Volodin, to oversee the Internet. Volodin and Gromov regularly lock horns over the scope of their authority.

Gromov functions as a personal liaison between Putin and Russia's largest media outlets. To a great extent, his personal connections and knowledge of the "ins and outs" of the work of journalists and editors ensures their loyalty and the government's control over the industry.
--

Mikhail Lesin

Served as chairman of the board of Gazprom-Media until January 2015

Mikhail Lesin was one of the key figures in Russia's media policy in the mid-1990s. A civil engineer by training, Lesin began his career producing comedy programs featuring student performances. He was the co-founder of Video International, Russia's first advertising company. Together with fellow co-founder Yury Zapol, Lesin played a key role in forming the Russian advertising market. This laid the groundwork for his extensive media contacts and influence, especially in television and radio.

Seeing a use for his connections and abilities, the Kremlin appointed Lesin head of the Office of Public Affairs for the administration, where he served in 1996-97. He provided information support during former President Boris Yeltsin's successful election bid and the difficult subsequent period of his heart surgery and recovery.

After briefly heading the All-Russia State Television and Radio Broadcasting Company, Lesin became the Communications and Press Minister in 1999. During his five years in that post, he earned the nickname "Minister of Sorrow" (sorrow, or "pechal" in Russian, sounds like press, or "pechat") in part because of his role in establishing control over the NTV media holding owned by Vladimir Gusinsky.

Mikhail Lesin "withdrew into the shadows" after 2004, serving as an adviser to the Russian president and becoming one of the most influential people in the media market. Largely due to his advice, the National Media Group holding held by the Putin's friends, the Kovalchuk brothers, was purchased. Lesin arranged the appointments of many of the current directors of state-controlled media.

Lesin was dismissed from his post in the fall of 2009 with the scandalously worded verdict of "systematic disciplinary violations and failure to comply with the rules of civil service and the ethical behavior of civil servants." The industry interpreted his "fall" as a victory for then-President Dmitry Medvedev's inner circle as it sought to establish its own relations with media heads.

Alexei Gromov was responsible for Lesin's return to Russia's top echelons of media power in 2013 as the new head of Gazprom-Media. Gromov, who at that time was locked in a heated confrontation with Vyacheslav Volodin, needed a strong, competent and cynical "market player" such as Mikhail Lesin was then and still remains. Lesin managed to again reshape the Russian advertising market and to re-establish Gromov's influence at RIA Novosti after the dismissal of Svetlana Mironyuk.

Mikhail Lesin was repeatedly implicated in various scandalous moves to consolidate Russian media that are fully or partially controlled by the state. Also, in 2014 U.S. Senator Roger Wicker called for an investigation into possible money laundering in connection with several multimillion-dollar homes that Lesin purchased in Beverly Hills, California.
--

Vladislav Surkov

Currently serves as presidential aide responsible for relations with Abkhazia and South Ossetia
Surkov began his career as a public relations specialist with the Menatep bank, which was created by Mikhail Khodorkovsky. Over the past 20 years, Surkov has held almost every post in the hierarchy of the Putin administration.

Surkov did his most significant work in developing the "new censorship" when he served as deputy head of the presidential administration from 1999 to 2008.
He played a leading role in shaping domestic policy and the structure of the Russian political system while also continually experimenting with social initiatives and movements that would provide support for the ruling regime - organizations such as Walking Together, Nashi and the Young Guard of United Russia.

It is Surkov who probably created the concept of "sovereign democracy," used to describe how Russia's democracy differs from democracy in the West and how the West should not intervene in Russia's domestic affairs. The concept served as the political underpinning of Vladimir Putin's first two terms as president. It was apparently during the process of formulating that concept that he also created his "theories of how the world works" that state-controlled media have since imposed on the Russian people with the illusory and fanciful agenda that dominates today's media environment.

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 #41
Consortiumnews.com
March 12, 2015
Nuland's Mastery of Ukraine Propaganda
By Robert Parry
Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s.

Exclusive: In House testimony, Assistant Secretary of State Victoria Nuland blamed Russia and ethnic-Russian rebels for last summer's shoot-down of MH-17 over Ukraine, but the U.S. government has not substantiated that charge. So, did Nuland mislead Congress or just play a propaganda game, asks Robert Parry.

An early skill learned by Official Washington's neoconservatives, when they were cutting their teeth inside the U.S. government in the 1980s, was how to frame their arguments in the most propagandistic way, so anyone who dared to disagree with any aspect of the presentation seemed unpatriotic or crazy.

During my years at The Associated Press and Newsweek, I dealt with a number of now prominent neocons who were just starting out and mastering these techniques at the knee of top CIA psychological warfare specialist Walter Raymond Jr., who had been transferred to President Ronald Reagan's National Security Council staff where Raymond oversaw inter-agency task forces that pushed Reagan's hard-line agenda in Central America and elsewhere. [See Consortiumnews.com's "The Victory of 'Perception Management.'"]

One of those quick learners was Robert Kagan, who was then a protégé of Assistant Secretary of State Elliott Abrams. Kagan got his first big chance when he became director of the State Department's public diplomacy office for Latin America, a key outlet for Raymond's propaganda schemes.

Though always personable in his dealings with me, Kagan grew frustrated when I wouldn't swallow the propaganda that I was being fed. At one point, Kagan warned me that I might have to be "controversialized," i.e. targeted for public attack by Reagan's right-wing media allies and anti-journalism attack groups, like Accuracy in Media, a process that did indeed occur.

Years later, Kagan emerged as one of America's top neocons, a co-founder of the Project for the New American Century, which opened in 1998 to advocate for the U.S. invasion of Iraq, ultimately gaining the backing of a large swath of the U.S. national security establishment in support of that bloody endeavor.

Despite the Iraq disaster, Kagan continued to rise in influence, now a senior fellow at the Brookings Institution, a columnist at the Washington Post, and someone whose published criticism so alarmed President Barack Obama last year that he invited Kagan to a White House lunch. [See Consortiumnews.com's "Obama's True Foreign Policy Weakness."]

Kagan's Wife's Coup

But Kagan is perhaps best known these days as the husband of neocon Assistant Secretary of State for European Affairs Victoria Nuland, one of Vice President Dick Cheney's former advisers and a key architect of last year's coup in Ukraine, a "regime change" that toppled an elected president and touched off a civil war, which now has become a proxy fight involving nuclear-armed United States and Russia.

In an interview last year with the New York Times, Nuland indicated that she shared her husband's criticism of President Obama for his hesitancy to use American power more assertively. Referring to Kagan's public attacks on Obama's more restrained "realist" foreign policy, Nuland said, "suffice to say ... that nothing goes out of the house that I don't think is worthy of his talents. Let's put it that way."

But Nuland also seems to have mastered her husband's skill with propaganda, presenting an extreme version of the situation in Ukraine, such that no one would dare quibble with the details. In prepared testimony to the House Foreign Affairs Committee last week, Nuland even slipped in an accusation blaming Russia for the July 17 shoot-down of Malaysia Airlines Flight 17 though the U.S. government has not presented any proof.

Nuland testified, "In eastern Ukraine, Russia and its separatist puppets unleashed unspeakable violence and pillage; MH-17 was shot down."

Now, it's true that if one parses Nuland's testimony, she's not exactly saying the Russians or the ethnic Russian rebels in eastern Ukraine shot down the plane. There is a semi-colon between the "unspeakable violence and pillage" and the passive verb structure "MH-17 was shot down." But anyone seeing her testimony would have understood that the Russians and their "puppets" shot down the plane, killing all 298 people onboard.

When I submitted a formal query to the State Department asking if Nuland's testimony meant that the U.S. government had developed new evidence that the rebels shot down the plane and that the Russians shared complicity, I received no answer.

Perhaps significantly or perhaps not, Nuland presented similarly phrased testimony to the Senate Foreign Relations Committee on Tuesday but made no reference to MH-17. So, I submitted a new inquiry asking whether the omission reflected second thoughts by Nuland about making the claim before the House. Again, I have not received a reply.

However, both of Nuland's appearances place all the blame for the chaos in Ukraine on Russia, including the 6,000 or more deaths. Nuland offered not a single word of self-criticism about how she contributed to these violent events by encouraging last year's coup, nor did she express the slightest concern about the actions of the coup regime in Kiev, including its dispatch of neo-Nazi militias to carry out "anti-terrorist" and "death squad" operations against ethnic Russians in eastern Ukraine. [See Consortiumnews.com's "Nuclear War and Clashing Ukraine Narratives."]

Russia's Fault

Everything was Russia's fault - or as Nuland phrased it: "This manufactured conflict - controlled by the Kremlin; fueled by Russian tanks and heavy weapons; financed at Russian taxpayers' expense - has cost the lives of more than 6,000 Ukrainians, but also of hundreds of young Russians sent to fight and die there by the Kremlin, in a war their government denies."

Nuland was doing her husband proud. As every good propagandist knows, you don't present events with any gray areas; your side is always perfect and the other side is the epitome of evil. And, today, Nuland faces almost no risk that some mainstream journalist will dare contradict this black-and-white storyline; they simply parrot it.

Besides heaping all the blame on the Russians, Nuland cited - in her Senate testimony - some of the new "reforms" that the Kiev authorities have just implemented as they build a "free-market state." She said, "They made tough choices to reduce and cap pension benefits, increase work requirements and phase in a higher retirement age; ... they passed laws cutting wasteful gas subsidies."

In other words, many of the "free-market reforms" are aimed at making the hard lives of average Ukrainians even harder - by cutting pensions, removing work protections, forcing people to work into their old age and making them pay more for heat during the winter.

Nuland also hailed some of the regime's stated commitments to fighting corruption. But Kiev seems to have simply installed a new cast of bureaucrats looking to enrich themselves. For instance, Ukraine's Finance Minister Natalie Jaresko is an expatriate American who - before becoming an instant Ukrainian citizen last December - ran a U.S. taxpayer-financed investment fund for Ukraine that was drained of money as she engaged in lucrative insider deals, which she has fought to keep secret. [See Consortiumnews.com's "Ukraine's Finance Minister's American 'Values.'"]

Yet, none of these concerns were mentioned in Nuland's propagandistic testimony to the House and Senate - not that any of the committee members or the mainstream press corps seemed to care that they were being spun and even misled. The hearings were mostly opportunities for members of Congress to engage in chest-beating as they demanded that President Obama send U.S. arms to Ukraine for a hot war with Russia.

Regarding the MH-17 disaster, one reason that I was inquisitive about Nuland's insinuation in her House testimony that the Russians and the ethnic Russian rebels were responsible was that some U.S. intelligence analysts have reached a contrary conclusion, according to a source briefed on their findings. According to that information, the analysts found no proof that the Russians had delivered a BUK anti-aircraft system to the rebels and concluded that the attack was apparently carried out by a rogue element of the Ukrainian military.

After I published that account last summer, the Obama administration went silent about the MH-17 shoot-down, letting stand some initial speculation that had blamed the Russians and the rebels. In the nearly eight months since the tragedy, the U.S. government has failed to make public any intelligence information on the crash. [See Consortiumnews.com's "The Danger of an MH-17 'Cold Case.'"]

So, Nuland may have been a bit duplicitous when she phrased her testimony so that anyone hearing it would jump to the conclusion that the Russians and the rebels were to blame. It's true she didn't exactly say so but she surely knew what impression she was leaving.

In that, Nuland appears to have taken a page from the playbook of her husband's old mentor, Elliott Abrams, who provided misleading testimony to Congress on the Iran-Contra Affair in the 1980s - and even though he was convicted of that offense, Abrams was pardoned by President George H.W. Bush and thus was able to return to government last decade to oversee the selling of the Iraq War.

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