Johnson's Russia List
2015-#97
15 May 2015
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"We don't see things as they are, but as we are"

"Don't believe everything you think"

In this issue
 
  #1
Russia Insider/Adme.ru
www.russia-insider.com
May 15, 2015
Why Don't Russians Smile?
Famous linguist reveals the reasons
BY Iosif Sternin
http://www.adme.ru/svoboda-psihologiya/pochemu-russkie-ne-ulybayutsya-591505/
This article originally appeared at Adme.ru/ It was translated by Sergey Turgenev

Foreigners regularly say that Russians are astonishingly unsmiling people. This fact is widely mentioned in the blogs, tour-guides, discussed in personal conversations and shared with friends and acquintances. Indeed, we Russians smile more rarely than other nationalities, but, as explained below, we have our own reasons for this.

Famous scientist, professor Iosif Sternin, names one of the specific parts of the Russian national character - everyday unsmiliness and explains it with several reasons. AdMe.ru quotes extracts from the article of the professor, which bring a light to some of the peculiarities of the mysterious Russian soul.

1. A smile in the Russian communication is not equal to politeness. Western smiles during greetings mean pure politeness. The more a person smiles, the more friendliness he or she wants to demonstrate to his partner. The constant polite smile are called by Russians as the - "duty smile"  and is considered as a bad feature of a person, indicating his insincerity, secrecy, unwilingness to reveal his true emotions. The geniune Russian smile - is the sign of personal sympathy, but not politeness.

2. Russians do not smile to strangers. A smile in Russian communication is mainly adressed to acquintances. That is why the sales-assistances in Russia are not smiling to the customers - simply because they do not know them. If the customer is already known in the shop, the sales assistant will often smile.

3. It is not typical for Russians to smile back. If a Russian person sees someone he doesn't know smiling to him/her, he will, undoubtedly, try to guess a reason for this smile. He would probably think that it might be something in his clothes or haircut made that smiling fellow to have fun.

4. A Russian has to have a sufficient reason to smile, which will be obvious to the others. This gives a person the right to smile - from the point of view of the other people. Russian language contains an unique proverb, which is not presented in the other languages: "The laugh without reason - is the sign of stupidity" ("Smeh bez prichiny - priznak durachiny")

5. Unsmiliness of a Russian person (exact unsmiliness, but not gloominess - most Russians are cheerful, joyful and witty people) is supported by Russian folklore, where we find a mass of proverbs and sayings "against" laughter and jokes.

6. It is not common among Russians to smile during the execution of their professional duties or during the performance of any serious action whatsoever. For example the customs officials in the airports are never smiling as they are busy with serious business.

7. The true Russian smile exist only as a sincere smile, and is regarded as the sincere expression of the good mood or a favour to interlocutor.

 #2
Russia Beyond the Headlines
www.rbth.ru
May 15, 2015
Citizens and advocates split over Russia's human rights situation
According to the annual report by Russia's human rights ombudswoman Ella Pamfilova, Russians believe that respect for human rights is improving, though human rights organizations say that the situation in the country remains concerning, with government attempts to "stifle civic society" by passing restrictive laws a serious concern.
Yekaterina Sinelschikova, RBTH
 
Russia's human rights ombudswoman Ella Pamfilova has presented her annual report on the human rights situation in the country to Russian President Vladimir Putin. The document, which Pamfilova unveiled on May 7, concludes that public opinion on the matter is significantly different from assessments by human rights advocates.

As recent surveys by the Obshchestvennoe Mnenie (Public Opinion) polling organization have indicated, 45 percent of respondents in Russia believe the human rights situation in the country has been improving over the past years, with only 14 percent acknowledging a change for the worse. In contrast, Russian human rights defenders say that the situation has deteriorated.
 
'Russians consider themselves free'

The report reveals that over the past year, the ombudswoman's office received 59,000 complaints, which represents a 44 percent increase from last year, while the number of Russians who complained of their rights being violated overseas went up by 30 percent. At the same time, the number of cases in which the violations were recognized as having occurred increased by 2.5 times.

"Despite rebukes about 'curtailing democracy' coming from outside the [country's] borders, 69 percent of Russians consider themselves free people, and 64 percent of them believe Russia is better than other states in that respect," Pamfilova notes in her report. She could not be reached for further comment by RBTH.

In fact, Russians seem to be so optimistic about their rights that they do not even mind the fact that in the event that their rights do get violated it is pointless to take action (an opinion shared by 33 percent of Russian respondents).

However, according to the report, about 60 percent of people who asked for assistance in dealing with human rights transgressions say that a satisfactory outcome was achieved. In the end, it appears that the main problem the country faces is so-called "legal nihilism," described as "not knowing about one's rights and not being able to protect them, combined with indecisiveness," Pamfilova reports.
 
Activists beg to differ

"The human rights situation in Russia is still unfortunate - it has not got better or worse. Still, we see human rights issues discussed more often in various media," director of Moscow's Human Rights Bureau and member of the Presidential Council for Civil Society and Human Rights Alexander Brod told RBTH.

Lyudmila Alexeyeva, head of Moscow Helsinki Group, Russia's oldest human rights monitoring NGO, says the situation has been worsening for three years. "The State Duma [the lower house of the Russian parliament] is constantly passing laws that limit citizens' rights and are unconstitutional," she told RBTH.

Alexeyeva gives the example of the law forbidding "gay propaganda among minors," which is considered discriminatory by Moscow Helsinki Group, or the "vaguely formulated" law against insulting the feelings of religious believers, which "is used by Russian officials to curtail artistic freedom, as was the case with the production of Wagner's Tannhauser in Novosibirsk" (the production was canceled after complaints from local Orthodox activists, while both the director of the opera and the theater's managing director face charges).

Several international human rights organisations, including Amnesty International and Human Rights Watch, have recently voiced their concerns about the attempts to "stifle civic society" by the Russian government. However, in an interview with Rossiyskaya Gazeta, Ella Pamfilova said the Western organizations are mostly concerned with the problems of the country's LGBT community and NGOs, claiming that "these are issues that are not paramount for Russia's citizens."
 
Progress since Soviet times

Indeed, according to Pamfilova's report, the majority of Russians (52 percent) care more about their social and economic rights, civil rights being a priority for 39 percent of citizens, and political rights only for 9 percent. Lyudmila Alexeyeva says the 39 percent is a decent percentage for Russia.

"In Soviet Union, people didn't even know they had civil rights," she told RBTH, adding that during the 1990s, most Russians who got fired considered it shameful to try and challenge a wrongful dismissal in court. According to Alexeyeva, the situation has now changed. "In the short time since then, the legal awareness of our people has increased significantly. However, the country still has no political culture; too little time has passed," she said.

As Alexander Brod noted, Russians still prefer to solve their problems using the method known in the country as "manual control" - for instance, they would rather call the president during his annual live televised Q&A session than bring their problem before a court. This distrust of the executive hierarchy can be explained by "the fact that there is a clear refusal by officials to solve ordinary citizens' problems and an inability to solve them," said Brod.
 
 
#3
Russia Direct
www.russia-direct.org
May 14, 2015
Putin's Victory Day speeches as clues to Russia's foreign policy
The "Cult of Victory" in Russia is an objective fact, not fictitious state propaganda, and must be taken into account by anyone who wants to understand modern Russia's domestic and foreign policy.
By Ivan Tsvetkov
Dr. Ivan Tsvetkov is an associate professor at the School of International Relations of St. Petersburg State University. He is an expert in U.S. policy in the Asia Pacific Region, US history and contemporary US society.

The lavish nationwide celebrations to mark the 70th anniversary of the end of the Second World War, and the genuinely positive sentiment surrounding this spring holiday, once again confirmed Victory Day as a key element of Russia's national psyche. The fact that the state propaganda around the "Cult of Victory" is starting to usurp the symbolic content of May 9 is less the cause and more the consequence of the raw human emotion that remains firmly attached to this date.

The memory of Victory Day in Russia is not only a source of the basic values (patriotism, respect for the older generation, distinguishing between good and evil) that define the national identity, but also influences to a large extent the Russian people's view of the wider world. It is no exaggeration to say that books, films and TV programs about the Second World War serve as reference points for many Russians in their understanding of modern politics and international relations.

Last year, when fighting broke out in eastern Ukraine, the events were perceived in Russia (with a helping hand from state television) along lines familiar to all Russians since primary school: fascists attacking peaceful Donbas, a popular resistance, tanks from the Great Patriotic War removed from their pedestals, reconditioned and sent to defend the motherland.

There was no need for propagandists to come up with images of their own and implant them into the uncluttered national consciousness, since that consciousness already contained everything required and simply needed to be adapted to the realities of the 21st century.

Russian politicians actively exploit both the memory of World War II and the "Cult of Victory" phenomenon, but it should be remembered that they themselves often view the world through the prism of this terrible national tragedy and the subsequent triumph. The chronic lack of great achievements in Russia's recent history imparts added significance to the Great Patriotic War and prevents it from becoming a mere chapter in the history books.

For Russian President Vladimir Putin, the Victory Day celebration has been a special ritual ever since he took office. The president's speeches on this day belong to the genre of "secular prayer." Addressed to the country's heroic fallen ancestors and living veterans, they are intended to provide relief from present-day woes with the help of ritual formulas and political recitatives.

Despite all the predictability and reiteration of the phrases uttered by Putin on Red Square on May 9 (this year marked his twelfth appearance as president on the occasion of Victory Day), they have always managed somehow to deviate from the traditional canon, and in these deviations there lies a deeper meaning that, when deciphered, offers a glimpse into the mind and soul of one of the most influential politicians in the world today.

Putin's reflections on the "lessons of the Second World War" have always been the most substantive part of his Victory Day speeches.

These "lessons" usually contain an assessment of what can be considered as the modern equivalent of the fascist threat (in nine of his twelve speeches Putin has found an equivalent), what mistakes should not be repeated (Putin usually mentions the laissez-faire approach of the international community in the face of the rising fascist threat), and what methods should be employed to combat evil (various alliances - from internal Russian political unity to solidarity with the countries of the former Soviet Union and the entire international community).

On occasion the Russian president has allowed himself to digress from purely military matters and reflect upon what modern humanity needs, besides combating evil, for its wellbeing and prosperity.

Putin's definition of the modern equivalent of the fascist threat has undergone some important changes over the past 15 years. Terrorism was a staple of Putin's speeches from 2000 until 2005. Then, in 2006 the threat morphed into "hatred, extremism and xenophobia," before vanishing completely from his ceremonial addresses.

But it was back in 2003 that Putin first stated his belief that those who "arrogate the right to decide the fate of the world" are no less dangerous than Hitler. It was, of course, a thinly veiled reference to the U.S. government, which had recently gone to war in Iraq without UN backing.

Awareness of the fact that World War II imagery and the process of mapping it to the modern world lie at the heart of the ideological designs of the Russian leader (and many of his compatriots) would have helped Western observers back in 2003 sound the alarm and treat such comparisons with the seriousness they deserved. However, it was all deemed to be empty rhetoric.

In 2004 Putin again referred to the "ideas of fascisim stalking the world" as the modern equivalent of bygone threats, and in 2007 added "claims to global exceptionalism and diktat" to this category. Having returned to the Kremlin in 2012, for three years (2012-2014) Putin made no mention of modern day threats on Victory Day.

With hindsight this silence looks ominous, since we now know that during this period all of Putin's verbal formulations of 2003-2007 were gradually implemented in practical steps aimed at winding up relations with "those who have arrogated the right to decide the fate of the world."

In his 2015 speech, Putin highlighted "disregard of the basic principles of international cooperation" and "power bloc thinking" as the core problems in international politics. The culprits in his mind's eye are not hard to guess, and the Russian president intends to deal with them with the same resoluteness with which his forebears fought fascism.

On May 9, whenever Putin broaches the topic of how to overcome present-day threats through the experience of the Second World War, it almost always signifies that he wants to appeal to the "benevolent gods" of the "Cult of Victory" and to remember the anti-Hitler coalition, without which good would not have triumphed over evil 70 years ago.

It is interesting that after two years of effectively ignoring the subject, in 2015 Putin decided once again to call to mind the contribution of the United States and Britain in the victory effort, despite the sanctions against Russia and the leaders of the former allies snubbing the anniversary celebrations in Moscow. Perhaps the Russian president wanted to shame his Western counterparts by appealing to the most sacred element of global historical memory.

Putin's speeches on Victory Day perfectly illustrate his ongoing disillusionment with Western values. The traditional sound bite of "freedom, democracy and prosperity," voiced in 2000 and shared by most Western countries, was first stripped of "democracy" and "prosperity," whereupon "freedom" began to imply not individual liberty, but national sovereignty, and Putin's core values became "love for one's home and patriotism."

Despite the fact that each Victory Day celebration is remoter in time than the last, the cult is becoming more and more obvious in Russia. Today it represents nothing less than a secular religion, with all the necessary trappings: creed, rituals, temples, holy relics, even a High Priest. Like American secular religion with its "cult of democracy, the constitution and the founding fathers," Russia's extolment of Victory appears at times archaic and inappropriate.

However, the "Cult of Victory" in Russia is an objective fact, not fictitious state propaganda, and must be taken into account by anyone who wants to understand modern Russia's domestic and foreign policy.
 
 #4
Russia Insider
www.russia-insider.com
May 14, 2015
Russophobe Liberals Are Wrong: V-Day Is About the Russian People, Not Putin
First and foremost V-Day honors the Soviet people which fought and won against the Nazis. The worst of the pro-western Russian liberals deliberately miss the point and instead pretend it is foremost a celebration of Putin's state
By Vladimir Golstein
Vladimir Golstein is a professor of Slavic studies at Brown University, Rhode Island, USA. He was born in Moscow and emigrated to the United States in 1979.

New Yorker has recently ran two provocative articles on the subject of Russia's celebration of Victory Day -by Masha Gessen and Masha Lipman -both "exposing" Russian militarism, fixation on the State and its leaders, parado-mania, Putinomania and other topics that Russian liberal intelligentsia finds irresistible.

"Putin's Victory day, not my Grandmother's" - the title of Masha Gessen's essay clearly summarizes her position, while Masha Lipman's "Victory Day in Moscow" provides historical background to various phases that Soviet commemorations of WWII went through, suggesting, that it has always been politicized, always depended on the whim of a leader, be it Stalin, Khruschev, Yeltsin, or Putin.

These articles and similar Russia- and Putin-bashing essay provocatively titled, "How Russia Lost The War" penned by a well known contemporary writer, Mikhail Shishkin, for NYT (and insightfully deconstructed by Paul Robinson)  - deliberately miss the point on what is actually being celebrated - by relativizing, politicizing, and obscuring the real message behind the Great Patriotic War, as WWII known in Russia.  

In other words, these critics are doing exactly what they blame Putin for: Putin, according to Lipman, "reduced the holiday to a celebration of state glory"; these critics however, blatantly reduce the holiday to the attack on Putin's empirical ambitions, on his glorification of the state power, on the state-sponsored pageantry and nationalistic symbolism of the celebration. Speaking on behalf of her late grandmother, Gessen comments that even though her grandma always celebrated the holiday despite the regime's attempts to appropriate it, she would have had difficulty doing it this time.

"The holiday, which has taken a variety of shapes and sizes in the last seventy years, has finally turned into a war-mongering orgy of such proportions that even the memory of triumphing over Hitler might pale in comparison," declares Gessen triumphantly. This bombast accomplishes what, in fact, it pretends to expose: the attacks on Putin and his political moves reaches such proportions that the triumph over Hitler, the heroism of Soviet soldiers, and the magnitude of their sacrifice and commitment, clearly pale in comparison.   

Already from the early church fathers, we know that the fallibility of the priest does not diminish the holy nature of sacrament. As St. Augustine put it, "As for the proud minister, he is to be ranked with the devil. Christ's gift is not thereby profaned: what flows through him keeps its purity, and what passes through him remains dear and reaches the fertile earth... . The spiritual power of the sacrament is indeed comparable to light: those to be enlightened receive it in its purity, and if it should pass through defiled beings, it is not itself defiled."

So, frankly, one can spend a lot of time, exposing Putin, Stalin, and other Soviet leaders, their stupid and destructive orders, their propaganda and pageantry. But the light of people's sacrifice, their serious commitment to die for their land, is hardly diminished by any pageantry.

It is the common Soviet people who won the war. They dug their heels, they were slaughtered in unprecedented numbers - by Germans, by friendly fire, by Stalin's henchmen, and yet, they won it by killing Nazis - also in unprecedented numbers. And that's what stops wars. When you take out five million of the enemy soldiers, as opposed to half a million taken out by Americans and British.

People can complain about this two hour parade as much as they want, but as somebody calculated recently, if one can imagine all the regiments of all fallen Soviet soldiers marching through the Red Square, it will take nineteen days for all of them to pass through. And each of them deserves to be seen, remembered, and honored.

So surely, Western leaders could have spent a few hours on Red Square honoring these nameless and faceless divisions, even if they don't agree with Putin on how to conduct military parades or how to treat a neighboring country.

Discussing one of Chekhov's wonderful heroines, Tolstoy writes, referring to the objects of her love and devotion: "Kukin's surname is absurd... the timber merchant with his respectability, the vet, even the boy - all are absurd, but the soul of the Darling, with her faculty of devoting herself with her whole being to any one she loves, is not absurd, but marvelous and holy."

So no matter how much fault these critics can find with the absurdities of modern day parades, what they should have stressed from the beginning, is the marvelous and holy nature of Russian suffering, the mind-boggling scope of Soviet losses, and that strength of people's devotion to their land and their loved ones, that led them to victory.

So frankly, Russians can celebrate this day in any way they want: with pompous parades, with getting drunk, with visiting the graves of the fallen and leaving a peace of bread and a shot of vodka on the ground there. It is their day and they deserve to celebrate it or cry over it without snide remarks pronounced by petty politicians and even pettier journalists.
 
 #5
Daily Bruin (UCLA)
http://dailybruin.com
May 13, 2015   
Former ambassador speaks at Anderson as part of lecture series
BY KAT BOCANEGRA SPEED

A former U.S. ambassador to the Russian Federation argued domestic Russian politics are the main cause of renewed tensions between the United States and the Russian Federation at a lecture at the Anderson School of Management Tuesday.

Michael McFaul served as the U.S. ambassador to the Russian Federation between 2012 and 2014. McFaul was also a special assistant to President Barack Obama and the senior director for Russian and Eurasian Affairs at the National Security Council between 2009 and 2012.

McFaul's presentation was part of the Bernard Brodie Distinguished Lecture on the Conditions of Peace, a lecture series hosted by the Burkle Center for International Relations. The series allows scholars and dignitaries to share their views on topics such as politics and war strategy.

Alexandra Lieben, the deputy director of the Burkle Center, said the organizers decided to host the lecture because renewed aggression between Russia and the West is an important topic in global affairs.

Lieben said McFaul was invited to speak because she thinks McFaul's experience as an ambassador can provide valuable insight into what Russian President Vladimir Putin is thinking and how Americans should interpret Russia's actions and policies.

McFaul said he thinks U.S. policy was not the main cause of the increased tensions. He added the ability of Russia and the U.S. to cooperate during the "reset" in 2009, which was an attempt to increase cooperation between the two states, showed that it wasn't U.S. policy that led to the change in relations.

Russian citizens protested in 2011 against the ruling party, United Russia, which Putin led at the time. McFaul said he thinks the demonstrations led Putin to take a confrontational stance toward the U.S. and claim that the opposition forces within Russia were the U.S. government's puppets.

He added he did not think Putin's reactions to the demonstrations were the only viable course of action because a previous president met with the opposition. He said the overthrow of then-President of Ukraine Viktor Yanukovych was the point at which Putin decided he would no longer cooperate with the U.S and the West.

Georgy Zaytsev, a first-year business economics student, said he was excited to see McFaul speak because he thinks McFaul has an interesting perspective on international and internal Russian politics.

"I remember hearing his name being brought up by my parents and family members," Zaytsev said. "He has been prominent in Russian politics, so I think his ideas are worth listening to."

Sandra Lopez, a third-year political science student, said she enjoyed McFaul's lecture but did not agree with his statement that Russia was one of the biggest threats that the U.S. faces. She said she does not think Russia has the capabilities to be a serious threat to the U.S.

"I don't think there is going to be another Cold War or anything like that between the U.S. and Russia," Lopez said. "If anything I think China is the bigger threat."

McFaul said Putin's change in strategy after the protests against his government also reflects a change in ideology.

"Putin talks about this issue as a struggle between good and evil," McFaul said. "He views the U.S. as a competitor who is willing to use covert and overt power to undermine regimes it doesn't like."
 
 #6
Business New Europe
www.bne.eu
May 14, 2015
EBRD sees Russia's GDP contracting by 4.5% in 2015

The European Bank for Reconstruction and Development (EBRD) expects deep recession in Russia to have a larger-than-expected negative spill-over effect on countries with strong ties with its economy, the bank says in its latest Regional Economic Prospects report published on May 14.

Russia's GDP is seen contracting by 4.5% in 2015, with the recession easing to 1.8% decline in 2016, attributed to oil prices stabilising at $60 per barrel and prudent macroeconomic management. But GDP will remain affected by unsolved deep-rooted structural issues and economic sanctions.

This is much less optimistic then the official forecast of 3% GDP decline in 2015 by the Ministry of Economic Development, which recently argued the recession would not last until the fourth quarter of 2015. In its latest outlook, the European Commission expected Russia's GDP to contract by 3.5% in 2015, with some stabilisation to follow in 2016 with 0.2% economic growth.

Despite the deepening recession, Russia is seen by the EBRD as having significant reserves to mitigate it. While retail sales and incomes have been in decline, pressure on the ruble has subsided because of the recovering oil price. The country's current account is also in surplus due to shrinking imports.

While capital outflows continue, the decline of Russia's international reserves evened out after losing 30% to about $353bn by end-April. Fiscal policy is set to loosen, having a widening 3.7% of GDP deficit in 2015.

Economic policy of the Russian authorities is balancing several objectives, in the bank's view: preventing a large drop in international reserves through a flexible exchange rate, allowing a cautious fiscal easing without risking remaining fiscal buffers, and supporting key banking sector players in the face of the worsening balance sheets.

Despite the large depreciation of the real exchange rate, a stated policy goal of import substitution has proved challenging. Agriculture is suffering and industrial production has failed to pick up the slack of declining imports. Recent strengthening of the ruble and fast adjustment of ruble prices may discourage investment in import substitution projects, although real wage drops could support its profitability, the EBRD believes.

The swift stabilisation of the ruble to RUB50 to the US dollar as of the end of April is driven by several factors identified in the bank's report. As well as increased oil prices, stabilisation of the geopolitical crisis has significantly reduced Russia's risk premiums, with the spread of credit default swaps almost halving to 350bp; the decision of Russia's central bank to extend $30bn in Fx repos to banks helped them to deal with foreign debt repayment, and the stabilisation of the ruble prompted households and corporations to reconvert some of the Fx purchases made in December.

Financing conditions will remain tight, however, as indicated by weak syndicated lending. "The market is basically closed," reads the EBRD report. At the same time, the Russian Ministry of Finance began considering a Eurobond placement in 2015, given the recent decline in yields on sovereign bonds.

The EBRD finds it hard to see a rebound in the Russian economy going forward without the reversal of its ongoing de-coupling from the rest of the world, and the introduction of major structural reforms. The economy may therefore face a protracted period of slow growth and stagnation.

Overall, the bank notes, the positive sign for the whole region is that risks related to the Ukraine crisis appear to have been contained at a higher level, with the February 'Minsk 2' peace accords so far generally holding. The situation is still seen as volatile, with EU and US sanctions against Russia remaining in place.

 #7
Moscow Times
May 15, 2015
As Inflation Soars, One in Five Russians Can Only Afford Bare Necessities
By Delphine d'Amora

Many Russians flocked to stores late last year as the ruble plummeted against the euro and dollar, eager to get the most out of their savings before the prices of imported goods rose.
Nearly 20 percent of Russians can now afford nothing more than the absolute necessities as double-digit inflation erodes their spending power, a survey by consumer research firm Nielsen found.

The figure is a record high for the survey, which has been conducted regularly since 2005. Even in the first quarter of 2009, in the depths of the previous financial crisis, only 4 to 7 percent of Russians reported having no spare income after paying for basic items such as food and accommodation.

Runaway price rises are making it harder to make ends meet. Consumer price inflation was running at 16.4 percent in April this year after hitting a 13-year high of 16.9 percent in March, according to state statistics service Rosstat. Prices have been driven up by Russia's ban on a range of food imports from the West - a response to Western sanctions over Ukraine - and a steep devaluation of the Russian currency.

High inflation has depressed real wages, which fell 9.3 percent year-on-year in March, according to Rosstat. It has also encouraged some unwise behavior - Many Russians flocked to stores late last year as the ruble plummeted against the euro and dollar, eager to get the most out of their savings before the prices of imported goods rose.

This wave of spending is now coming back to haunt consumers, Ilona Lepp, Nielsen's commercial director for Russia, said in a statement.

"After spending a lot at the end of 2014, Russians ran up against a significant rise in prices on the most essential goods in the beginning of the year, which means the drop in real wages was felt particularly hard," Lepp said.

Russians' consumer confidence fell to a record low of 72 points in the first quarter on Nielsen's Consumer Confidence Index, a seven-point dip from the previous quarter.

With falling real wages forcing Russians to reduce spending, 55 percent of respondents to the survey said they would cut back on entertainment outside the home. Fifty percent said they would save on clothing purchases and 48 percent planned to switch to cheaper food brands.

Such cutbacks brought overall consumer spending in Russia down 8.7 percent year-on-year in March, damaging a key sector of the economy and deepening an economic slowdown that is expected to shrink the country's gross domestic product by up to 5 percent this year.

The survey, part of Nielsen's global consumer confidence study, was carried out among Internet users between Feb. 23 and March 13 of this year. The margin of error did not exceed 0.6 percent.
 #8
New York Times
May 15, 2015
Changing Course, Russia Will Sell Rubles Instead of Buying
By ANDREW E. KRAMER

MOSCOW - The Russian economy is sliding into a recession. Consumers are retreating. Corporate profits are suffering.

But the ruble is having a strangely successful year. Since January, the ruble has been the best performer of any currency, up 21 percent.

The ruble has risen so robustly that the central bank on Thursday reversed a long-running policy of propping it up. Under a new plan, the central bank will buy foreign currencies to replenish its reserves, a move that will effectively weaken the ruble.

It represents a stark turnabout.

Last year, the central bank spent billions defending the currency, which sank to a post-Soviet low as Russia was hit with the dual blow of sanctions over the Ukraine crisis and the weakness in oil prices. The ruble was the second-worst-performing currency in 2014, just behind the Ukrainian hryvnia.

The underlying economic prospects for the country have not changed. Russia is headed into a deep recession, and Western trade and financial sanctions are still biting into consumer confidence. But the markets, at least, are finding a glimmer of hope.

"Certainly sentiment has improved for Russia," said Boris Erenburg, a portfolio manager with the Spinnaker Capital Group in London. "A lot of things have been working so far this year."

Oil prices have bounced off their lows. Russia's economy is heavily dependent on energy exports, and the fate of the ruble has historically followed the price of a barrel.

Tensions, too, are easing over the Ukraine crisis, even if sanctions have not. The threat that the crisis will blow up into a major war in Europe seems to be diminishing.

Even a diplomatic thaw now looks possible. Secretary of State John Kerry met with President Vladimir V. Putin of Russia this week.

It also helps that the United States dollar is weakening on worries that the American economy is losing momentum. As the dollar's rally has faded, currencies around the world have surged. The euro, which early this year was flirting with parity to the dollar, reached a three-month high on Thursday.

"It's a broader dollar move that we're seeing in the light of the disappointing data out of the U.S.," said Phyllis Papadavid, a senior foreign exchange strategist at BNP Paribas in London. "This isn't a euro move."

Given the confluence of events, investors have been broadly more optimistic about the opportunities in Russia.

The benchmark Russia index, the Micex, is up more than 20 percent this year, although it has given up some of its gains in recent weeks. Yields on Russian bonds have been falling over the last few months, reflecting increased demand from investors.

On Thursday, the ruble hit 50 against the dollar. At its lowest point last year, it traded briefly around 80.

"Everyone is saying it has been developing surprisingly better than expected," Vladimir Miklashevsky, an economist at Danske Bank, said of the ruble's rise. "You have a better equation for your profits."

So far this year, Danske Bank's two Russian stock funds are the best in the bank's portfolio, taking into account the appreciation of the ruble. The bank's broad stock fund is up 47 percent year to date, and the small capitalization fund is up 45 percent.

Russia's central bank's new plan, though, may put a crimp in the currency. The central bank said it intended to buy $100 million to $200 million a day on Russia's currency market.

In doing so, Russia will restock its foreign currency reserves. Since the start of the Ukraine crisis in January 2014, those reserves have dropped by $143 billion, as the central bank tried to prop up the ruble.

While not the central bank's stated goal, the move will also limit the ruble's rise. It has good reason to do so.

An overly strong currency hurts exports and could tip the budget into a deficit. Revenue from its biggest export, oil, is taxed in rubles, while the commodity is priced in dollars.

Weakening the currency, said Mr. Miklashevsky, ensures that the government will have sufficient revenue to avoid cuts to pensions and the military this year. If the ruble were allowed to appreciate, both outlays might have been reduced in ruble terms.

Yaroslav Lissovolik, chief economist for Russia at Deutsche Bank, said the weak ruble policy was also intended to prop up domestic industry and agriculture in these geopolitically uncertain times, albeit at the cost of leaving inflation high.

"There's still the hope a weaker ruble will still deliver import substitution" - a switch to buying domestic products from some imports - she said. "The weaker ruble creates these conditions for an easy life for local enterprises, so they don't have to engage in active restructuring and actively try to increase productivity and efficiency."

The ruble's value - and helping to stabilize those industries - is especially critical at this economic juncture.

The European Bank for Reconstruction and Development predicts that Russia's economy will contract 4.5 percent this year. The World Bank predicts a 3.5 percent drop.

In short, Russia is facing a recession. Although the Russian government predicts that the economy will return to growth in 2016, both groups expect the downturn to continue next year.

"We're not at the bottom of the crisis," Mr. Miklashevsky said of the central bank's shift on Thursday. High inflation and interest rates, only now made worse by the bank's intervention, are still "murder for the real economy."
 #9
Moscow Times
May 15, 2015
Russia's Offshore Money Looks Set to Stay There
By Kristen Blyth
Kristen Blyth is an analyst at Salamanca Group. She specializes in due diligence and risk consulting projects across Russia and the former Soviet Union

Russia is set to enact an amnesty on offshore assets next month, but disagreement and lack of clarity over the terms of the pardon threaten not only to render the measure impotent, but undermine the government's very drive to lure overseas money back home.

The capital amnesty, part of a long-term initiative by President Vladimir Putin to "de-offshorize" the Russian economy, was ordered by the president in December during his annual address to the Federal Assembly.

At the end of a year in which Russia's net capital outflow reportedly more than doubled to $151.5 billion, Putin spoke during the meeting of a "full amnesty" on all offshore assets from criminal culpability.

"Let's do it now, but [only] once," he said, according the state news channel Channel One.

Initially scheduled to take effect in April, the start of the amnesty has now been delayed until June as the State Duma struggles to hammer out terms without violating international anti-money laundering regulations.

A draft of the pardon submitted to the Duma at the end of March envisions a full excuse from criminal, administrative and tax responsibility for Russians voluntarily declaring offshore property, bank accounts and foreign companies controlled by him or her. The opportunity to declare foreign holdings will be open until Dec. 31.

The assets won't be subject to a one-time tax, according to the draft, and cannot be used as evidence in any investigation against the declarant. The origin of the funds and property won't be questioned.

In fact, Russians won't even be required to move them back home, Prime Minister Dmitry Medvedev told the government in a meeting at the end of March, according to newspaper Vedomosti.

The assets must only be registered in a "transparent" jurisdiction that has a double-tax treaty in place with Russia and is not blacklisted by the Financial Action Task Force (FATF), a global money laundering watchdog, Vedomosti reported.

As the currently drafted rules of the amnesty stand, however, questions remain about the measure's efficacy and implications.

For one, there are only five countries on the FATF blacklist: Iran, North Korea, Algeria, Ecuador and Myanmar. Russia is also party to double-taxation agreements with many countries around the world.

According to the conditions described by Medvedev, therefore, the amnesty would effectively pardon assets in countries like Cyprus, an offshore jurisdiction well-known to be an investment favorite for Russians, while providing no incentive to transfer them back to Russia: the basis for the de-offshorization drive in the first place.

The Duma noted this apparent contradiction with Putin's initial order, which proposed the return of foreign assets back to Russian territory, when discussing the first draft of the bill. However, the conflict between what Putin wants and what he may apparently be getting has not yet been addressed in the language of the legislation.

Also, though various government officials have assured Russian media that the amnesty will not pardon assets linked to fraud, corruption or financial crimes, the law as written so far provides no method for identifying these genuinely criminal funds.

If it will not conduct even a cursory examination of where declared offshore money came from, the Russian government has no grounds for determining its legality.

Medvedev indicated in the March meeting that the amnesty terms would not preclude potential criminal prosecution, according to the Vedomosti article, but did not specify where the line between a full and partial pardon for financial crimes may fall.

The prospect of a full Russian amnesty on questionable cash has meanwhile raised some concerns with FATF, with Russian media quoting some experts as saying such a move could risk Russia itself landing on the watchdog's blacklist.

Weaknesses of the capital amnesty, however, reach far beyond the terms of the proposed pardon.

First, this strategy fails to address the catalysts for why many wealthy Russians move assets abroad in the first place. In contrast to many developed countries, where use of offshore structures may be driven by a desire for greater tax efficiency, Russian companies and individuals often hold assets offshore to avoid the risks associated with keeping them in Russia.

High levels of bureaucracy, the threat of hostile corporate takeovers, widespread corruption and lack of trust in a government with a demonstrated propensity for appropriating private assets have all been cited as motivations for Russian businessmen to keep their holdings outside national borders.

Economic crime, manifested in forms from bribe-taking to accounting fraud, is pervasive and a leading barrier to doing business in Russia. Last year, Russia was the world leader in economic crime in a survey conducted by professional services firm PricewaterhouseCoopers, with 60 percent of companies polled in the country reporting that they had experienced the problem in the last two years.

Several major Russian conglomerates, some of them headed by friends of Putin, have announced the repatriation of their business activities since the president's de-offshorization drive has intensified.

In general, however, Russians have a low incentive for participating in the amnesty, partly because there is no great punishment for neglecting to do so. The country has a reputation for being lax on corruption and money laundering - an image that Putin has taken steps to amend, but with arguably sparse results so far.

By way of example, an ex-Defense Ministry official accused of stealing 3 billion rubles ($59 million) was recently found guilty of fraud - but prosecutors asked for just a 1 million ruble fine ($19,500) and a suspended sentence as punishment. Putin joked in 2011 that the positive side of bribery in Russia was that it showed people had money to spend.

These days, though, Russians have less money to spend. In a carrot-or-stick proposal to convince businessmen to move their assets and corporate holdings back home, the government wields only a small stick, and even less of a carrot - and until that dynamic changes, a great deal of Russian cash can be expected to remain firmly offshore.
 
 #10
Emerging Markets
www.emergingmarkets.org
May 13, 2015
Russia summons up the energy to diversify
Russia is finally diversifying its economy - but not in the way anyone expected
By Elliot Wilson
 
In the face of biting Western sanctions and an unforeseen and rapid fall in the price of oil, Russia has been forced to acknowledge some unpalatable truths about its creaking, energy-dependent economy.

However, it was only at the eleventh hour, facing a shrinking economy, record capital flight, rising inflation and a new rouble crisis, that Russia's leaders decided that the world's ninth-largest economy needed a new energy and economic policy. Over the past year president Vladimir Putin and his premier, Dmitry Medvedev, have criss-crossed the world, visiting global leaders and potentates in the quest to foment and cement major new energy deals.

Few emerging markets have been overlooked during their grand tour. In Latin America, they visited Argentina and Venezuela, troubled economies hamstrung by poor relations with the US; in south Asia, India and Pakistan, energy-poor nations seeking new allies in an uncertain world; in Europe, Hungary and Greece, struggling states run by

populist leaders long admiring Putin's strongman style. Beyond that lies a diverse grouping of countries either amenable to Russia's approaches or lacking a specific resource or technology in which Russia excels or abounds, from Thailand to Argentina and Turkey to South Africa.

And then there's China. When the two countries signed a $400bn gas deal in May 2014, it was widely viewed as a breakthrough deal between the two nations and the first sign in the post-Soviet era that Russia was willing to pivot away from its traditional economic allies in Washington, London and Berlin.

Each side had something to offer: Russia had the hydrocarbons; China, the cash. For more than a decade the two had flirted with one another without quite committing.

SMILING PUTIN

Only after Western sanctions began to bite, hampering the ability of Russian lenders and energy groups to raise fresh US dollar financing, did Moscow finally come to the table, pledging to pipe 38 billion cubic metres (bcm) of Siberian gas each year to mainland China from 2018. Putin smiled and announced a glorious new dawn for Russia's economy and energy apparatus.

But for all the topline glamour, those tie-ups also camouflage the nature, scale and nuance of the challenge now facing Russia's shifting, energy heavy economy. For one thing, while written up as a game changer, Russia's pivot toward Asia in general, and China in particular, is merely the continuation of a long term trend. Russia has been quietly diversifying away from Europe for years. In the third quarter of 2011, Germany and the Netherlands consumed around 30% of all exported Russian oil, according to data from economic provider CEIC. By the third quarter of 2014, that share had fallen to 22%. Over the same period, China's share of Russian oil rose to 14% from 9%, with combined exports to Japan and Korea doubling, to 10%.

Vladimir Sklyar, head of research at investment bank Renaissance Capital, sees this as a long term process, as a rising Asia replaces a sluggish and directionless Europe in Moscow's affections. "Russia is changing its partners," he says. "It's a slow and gradual process that isn't happening overnight, but you are seeing a shift away from Europe and the West and a simultaneous rapid development and build-out of ties with new Asian partners."

Adds Tatiana Orlova, strategist, Russia & the CIS at RBS Markets & International Banking: "Major domestic oil and gas producers like Rosneft and Gazprom are reorienting themselves toward the eastward shipment of more Russian oil and gas production. China is the clear target, the biggest game in town. But Russia is also keen to use the country as a gateway into other markets across the region, [including] Korea to southeast Asia. This marks a clear change in the long term direction of Moscow's energy trade."

LOOKING SOUTH AND EAST

Russia is also looking south and east at new options. In February, deputy premier Dmitry Rogozin announced that Russia and India were looking to build a pipeline between the two countries. Two months later, Pakistani petroleum minister Shahid Khaqan Abbasi said Russia and his country had inked a $2bn deal to build a 1,100 kilometre-long gas pipeline stretching from central Siberia to the port city of Karachi.

The Russian president is also stepping up efforts to secure new routes into Europe, a market that will continue to remain, notes Liza Ermolenko, emerging Europe economist at London-based Capital Economics, "a vastly important market for Russian gas producers for years if not decades to come".

Stymied by Brussels in his attempts to finalise the South Stream pipeline, which would have involved the transmission of Russian gas into Austria and Italy via the Black Sea and Bulgaria, Putin in December abruptly switched tack.

During a state visit to Ankara, he signed a memorandum of understanding with his Turkish counterpart Recep Tayyip Erdogan. Scrapping South Stream, Putin said Turkey would become a key buyer of Russian gas and also a regional hub, serving markets in southeastern Europe.

A determination to secure new energy pacts is also forcing Russia to reach far back into the Soviet playbook and to accept some unusual deal structures. Over the past three decades, Russia has eschewed import substitution deals that involve the exchange of oil and gas for other commodities, preferring to sell energy directly to wealthy European sovereigns.

Yet in April, Putin again showed his willingness to compromise and adapt, confirming a longstanding oil-for-assets barter programme that would see Russia buy up to 500,000 barrels of sour Iranian crude per day, in exchange for Russian grain, equipment, steel and construction materials. Analysts said Russia was likely to consume the Iranian oil internally, allowing it to earn marginally more in 2015 and 2016 from its own oil exports.

CHINESE MEGADEALS

Then there are last year's China megadeals. Russia made much of the simplistic nature of these transactions, which, it said, would involve gas being piped from Gazprom to its mainland peer, China National Petroleum Corporation. Not so, some analysts say. Neither of the deals has been finalised and no price has yet been set. Charles Robertson, global chief economist at Renaissance Capital in London, warns that Russia might wind up earning far less than it expects or hopes. "The aim is for China to take the oil, but to offset the cost by shipping Chinese-made goods in the other direction and by building major infrastructure projects using Chinese engineers, technology and knowhow." Adds RenCap's Sklyar: "It may seem funny to see Moscow suddenly embracing the import substitution theme, as Putin had 15 years to make it work. But however long they waited, they are taking it seriously now."

Perhaps more jarringly, Russia has attempted to inject renewed vigour into its faded alliance with North Korea, another unpopular regime. Russian mining groups were recently handed licences to exploit the Hermit Kingdom's copper reserves in return for building much needed road and rail infrastructure. Russia, analysts said, also had its eye on building natural gas terminals on the country's east coast, giving it another route into the lucrative east Asian market.

NUCLEAR OPTION

Perhaps the only area in which Russia has shown a willingness to formulate a clear and diverse global energy footprint is in nuclear power. The state owned nuclear energy firm Rosatom now has 29 nuclear reactors in various stages of production around the world, from the Middle East to Latin America to south and east Asia, more than its chief rivals, France's Areva and Westinghouse of the United States.

Nuclear power has long been a quiet domestic success story. Even during the dog days of the 1990s, the Russian leadership remained committed to the industry, ensuring that it retained the best engineers and taking Rosatom and its suppliers on key state visits to emerging markets. "Despite the industrial malaise of the post-Soviet era, Moscow continued to take the nuclear sector seriously," notes RenCap's Sklyar. "It still boasts technology that's as good and as cheap - if not cheaper - than any rival can hope to offer."

He says Russia remains financially committed to supporting new, overseas nuclear power projects, despite the rising pressure of sanctions, noting: "If this is a national project, Putin will make the money available," whether directly or via leading lenders such as Sberbank.

In comparison with Areva, which hasn't struck a deal outside France since 2007, Rosatom has worked furiously in recent years to conclude billion dollar deals. It is building two nuclear power reactors in landlocked Jordan, set to be completed by 2022, and in Egypt, where it is building the country's first nuclear plant in the northern port city of Alexandria.

In March, Putin inked a $10.8bn deal with his Hungarian counterpart, Viktor Orban, to build and install two reactors in the south of the country, a deal that raised Europe's regulatory hackles.

Other countries in which Rosatom is working to boost its presence include Iran, where it is building two new reactors at the Bushehr site, and India, which in December signed an agreement to let the Russian state firm build 10 nuclear power generating facilities over the next two decades. Rosatom is also looking to peel open markets including Kenya, Ethiopia, South Africa, Brazil and Argentina.

ECONOMIC CONTROL

Rosatom allows Russia to work to its core strengths, notably harnessing the power and asserting political and economic control over its customers. The first point is easy to explain. Since ascending to the presidency in 2000, Putin has yoked leading corporates to the state, creating globalised firms, from Gazprom to Rosneft to Sberbank, that conform to the government's policy.

The second factor is more compellin and curious. Few sovereign governments obsess about control quite so much as Russia's. Gazprom's falling out with Europe over South Stream occurred largely because Europe feared a single, Russia-controlled firm having such a chokehold over the regional delivery of gas.

Even in the nuclear power sector, Russia is keen to maintain control over its customers. Long after Rosatom has installed its plants, sovereign clients will still be wedded to Moscow, as Russian nuclear plants are powered by a specific type of molybdenum only produced at home. "Russian nuclear technology is built to ensure that it can only use Russian nuclear fuel," says RenCap's Sklyar. "You cannot switch to non-Russian uranium, and this ensures that customers have to buy Russian fuel for at least 20 years." And why? "Because Russia likes to wield influence over the countries it does deal with."
 
 #11
Reuters
May 14, 2015
Russia plans detailed discussion on raising retirement age: document

The Russian government has for the first time said officially it will hold discussions on raising the retirement age, a step whose supporters say is vital because the country's workforce is shrinking.

A document setting out the government's main priorities until 2018 envisages detailed talks with experts and civil society groups about if and when the retirement age should be increased, authorities said on Thursday.

Senior officials including Finance Minister Anton Siluanov have recently expressed support for the idea.

"It is planned to hold a detailed analysis and on its basis a wide discussion involving civil society institutions, including labor unions, employers' groups, social organizations and experts, on the expediency of raising the pension age," the document published on the government's official website said.

Supporters of the move say it is unavoidable due to the shrinkage of the workforce. Pushing back the retirement age would also ease pressure on the state budget, which is expected to run a big deficit this year as weak oil prices depress the export earnings.

President Vladimir Putin last month said Russia was not ready to sharply hike the retirement age but did not rule out gradually raising it.

Russian women can currently start drawing their pensions at 55 and men at 60.
 
 #12
Bloomberg
May 14, 2015
Putin Declares War on Russians' Health
By Marc Champion

At what point will Russians begin to question the choices being made by their government? Maybe when those choices start killing them.

As Bloomberg's Ilya Arkhipov and Henry Meyer report, Russia's health system has suffered a severe reversal as a lower oil price has reduced government revenue and spending. Forced to pick between budget priorities, the government is trying to get more Russians to pay for health services and is cutting the number of doctors and nurses it employs.

The system was inefficient and badly needed reform, yet treatment delays are up and people are dying for lack of transplants and other care they would have received just two years ago. The story of Marif Alekberov, a 27-year-old fireman who can't afford the $23,000 for a bone marrow transplant he needs after exposure to a toxic spill, makes the brutal point.

At the same time, Russian President Vladimir Putin has stuck with his expansion in defense spending, digging even deeper into the budget than expected as Western sanctions have made it harder to borrow. In the three years from 2013 to 2015, Russia's defense budget will have increased by more than 36 percent (20 percent in dollar terms), according to data from the London-based International Institute for Strategic Studies. By contrast, inflation-adjusted health spending is 9 percent lower than it was two years ago.

Addressing military brass in Sochi this week, Putin told them the military expansion program remained on track. Or, in Putin's words: "All questions relating to the allocation of adequate resources have been resolved."

European nations such as Germany and Italy, which spend 1.5 percent or less of their economic output on defense, are often ridiculed for this "postmodern" approach to a still dangerous world, and rightly so. Russia plans to spend 4.2 percent of gross domestic product on defense this year. But what is the danger Russia faces that justifies sacrificing the health of the nation to buy more tanks?

In Ukraine, Russia is engaged in a war of choice: Putin's determination to ensure that the country's ex-Soviet neighbors accept a Russian sphere of dominance -- his nascent Eurasian Union -- was a strategic decision, not an existential one. Before Russia's intervention, ethnic Russians in Ukraine were under no threat of attack.

Standoff in Ukraine

Nor did the association agreement with the European Union that triggered the Ukraine crisis presage a NATO takeover of Russia's leased naval base in Crimea, let alone an invasion of Russia. These were all convenient fictions designed to justify Putin's policy.

Russians certainly welcomed the annexation of Crimea, and TV propaganda on the war in Ukraine is effective in part because it reflects what viewers want to believe: They share with Putin a sense of victimhood and national hurt that they want to redress. So far, there is very little sign of this patriotic fervor wavering.

Most Russians were no doubt also proud of the new model army Putin put on display in Saturday's Victory Day parade, including the new T-14 Armata tank now due for an estimated $9 billion rollout. Yet they know, too, that Russian soldiers are fighting in Ukraine and are ambivalent about the value of deeper involvement, which is why Putin denies his troops are present. That doesn't suggest a blank check.

For a long time, Russia didn't have to choose between funding priorities such as health and security. Oil's rise from $20 a barrel or less in the late 1990s to more than $100 a barrel ensured the government could deliver improvements pretty much anywhere. From 2000 to 2013, per-capita health spending rose 10-fold.

Those days are past. Of course, Russians' capacity for suffering is legendary, and they have a near memory of when living standards were substantially worse. Most are prepared to accept a great deal of economic pain in exchange for national pride. But how much?
 
 #13
www.opendemocracy.net
May 12, 2015
Looking after yourself in Siberia
The 'rationalisation' of medical and social services in rural Russia has compelled people to acquire new skills in order to survive, but life for the weakest is very hard - and very expensive.
By Georgy Borodyansky
Georgy Borodyansky is an Omsk-based correspondent for Novaya Gazeta.
 
Circumstance has forced the inhabitants of Kurganka, a village in Russia's Omsk Region, to become their own medical service. They have worked out how to give one another injections, avoiding the need for a doctor's' prescription. For a prescription you have to go to Muromtsevo, the district centre, 50km away - an expensive exercise and risky as well; it never rains here but it pours, literally, and even if you get though the deluge there's no guarantee a doctor will see you. The queue starts forming at 8am, and if you're a bit late, tough! And the bus from the outlying villages only arrives after 9am.

'There have been so many times when I've arrived too late to get an appointment', says pensioner Lyudmila Afinogenova, 'and then you lose the whole day: the bus doesn't go back until the evening. I gave up going there ages ago. I went just once last year with my granddaughters; the older one was starting school and the school health worker said all the children needed to have various jabs first. So off we went, taking her little two-month-old sister along as well. A friend agreed to drive us there and back, for 1,600 roubles [the average monthly pension is 10,000 roubles]. But when we got to the hospital they said we weren't on their lists; according to their information, we'd moved out of the area. So we had to go home without the jabs.'

This February, medics from the Central District Hospital deigned to come to Kurganka to do the immunisations. The baby was then 15 months old, and it was the first time anyone from the medical profession had shown any interest in her.

Lyudmila herself has diabetes, for which she needs regular insulin injections. 'If your blood pressure goes up to 220, you need insulin or you'll die', she says. 'Mind you, if you do die that's not so bad, but you might have a stroke instead and that's such a pain for your family.'

Life without medics

Sometimes Lyudmila does her own injections, sometimes, family members do it for her. Many people in Kurganka and the other settlements in the area have learned this skill; after the First Aid station that served four villages closed down, medical services have turned into a cross between volunteering and small business. There's no other way to earn any money here: back in the 80s the prize-winning local collective farm was never out of the newspapers, but by the mid-2000s agricultural activity was reduced to a cooperative with 200 head of cattle that is now in receivership. And even while it was running, employees were mostly paid in hay and firewood - cash only appeared on special occasions.

The Kurganka First Aid Station effectively closed down at the start of the 2000s, but it was still officially listed as a medical facility until 2009, when the Novaya Gazeta daily published an article exposing this anomaly. The mythical facility was resurrected soon afterwards, but not for long: the nurse practitioner appointed to run it went back home after a year and a half, without waiting for the 500,000 roubles he had been promised under the 'Governor's Medical Programme.'

'It was such a pity', says pensioner Lyubov Znayeva. 'Our Aleksandr was such a good nurse. He was kind and sensitive; you could turn to him any time - evenings, Sundays, he would always be ready to help.'

Lyubov is 77 and is registered disabled: she had a stroke 19 years ago and now she says she relies on injections to keep her heart and brain going. 'We give them to each other - not for free, of course, but for a lot less than you'd pay if you went into Muromstsevo. I have an arrangement with a neighbour who used to work as a nursing assistant: she gives me 20 injections for 200 roubles.'

The residents of Kurganka can't survive entirely on their own efforts, of course; they still need qualified medical help from time to time, not to mention emergency treatment. They tell me about how, three years ago, Maria Kuklina, a young woman of 36, had a heart attack. They phoned for an ambulance but were told there was none available: they would have to get her to the hospital in Muromtsevo themselves.

It took them two hours to find a car in the village, and they had gone only six kilometres when Maria's heart stopped.

The rationalisation of rural life

In 2001 the Znamya Truda (Banner of Labour) newspaper wrote that the Muromtsevo district (with 24,000 inhabitants) contained four hospitals, six polyclinics and more than 40 village First Aid stations.

That was in the turbulent, poverty-stricken 90s. In the following period, when Russia was getting up off its knees, big changes took place in local healthcare; and, as I have now learned from Dmitry Shchekotov, a member of the district council who has a visual impairment himself, there are now only three hospitals, one polyclinic and ten village First Aid stations.

The district is no better, and no worse, off than the rest of the Omsk Region. In the neighbouring Sargatskoye district, for example, many villages have not only no First Aid station or school, but no water fit for washing and other household needs, let alone for drinking. The locals use water from a lake, at some risk to their health. Pyotr Plesovskikh, a farmer and social activist, told me that many villagers had had enough and that 'it could all get out of control.'

Last October, 40 people from Novotroitskoye, where he lives, and the neighbouring village of Despozinovka blocked the local highway in protest, demanding repairs to the road along which their children have to travel to school. Some of the potholes, says Plesovskikh, are half a metre deep, and it takes the bus over two hours, and longer in bad weather, to cover 40km. So the children spend five to six hours a day shaking about in the bus, while their parents wait for them at home with their hearts in their mouths.

The protest could be described as successful: the regional highways department found one million roubles for repairs to the road, a small sum considering it had had no repairs for 20 years, but something at least - the most dangerous potholes were filled in with clay.

This is, however, the farmer points out, a temporary measure: 'Come spring, we'll be up to our ears in mud.' However, he and three other organisers of the blockade were fined 30,000 roubles and given 50 hours of community service, but considered it was worth it.

Last year the Omsk Region website announced that in-patient facilities were to be closed at two rural hospitals in the Cherlaksky district. The nearest hospital beds would now be in the district centre, 57km away from one of the villages served.

Medical facilities are also being 'rationalised' in the area around Omsk, with in-patient services closed at a hospital serving seven residential areas, and also in Omsk itself; in February, the city's Hospital No.2 closed its in-patient department, losing 200 beds.

None of this is the fault of the regional authorities: neighbouring regions, and those further afield, are facing the same cuts. In the Sverdlovsk Region, for example, the number of village First Aid stations has fallen from 248 to 177 in the space of four years, and in the Orenburg Region, 54 have closed down over two years.

The cost of survival

All health, education, social services, and benefits in the Omsk region have been 'rationalised' since the beginning of the year. Free school meals, for example, are now available only to children in low-income families, those earning under 1.5 times the living wage; in some other regions it is only families with an income lower than the living wage whose children are entitled to a free school meal.

Meanwhile the 'Social Assistance Standards' for the elderly and disabled, also introduced on 1 January, have effectively reduced this assistance to nil. Previously, home care workers visited four clients a day; now their workload has doubled and they need to get round eight people in the same eight-hour shift. 'There's usually a 15-20 minute walk between clients' houses in the villages', says Dmitry Shchekotov, 'and if you take that out of the hour, there's not much time left for actual care. And the fees the old people now have to pay for the service are often beyond their means.'  

The rise in social service charges over the last decade (until 2006 all these services were free) is a good indicator of the humanitarian concerns of the state. Even ignoring inflation, they have increased by several times and are now exorbitant; and now disabled people and war veterans have even lost their 50% discount on service charges. Here are just a few of the new rates:

Wood cutting: 165 roubles per m3
Snow clearing: 82.5 roubles per m3
Bringing fuel (wood or coal) into the house from the yard: 13 roubles 76 kopecks
Starting a fire in the stove: 12 roubles14 kopecks
Clearing out ashes: 8 roubles 26 kopecks
Fetching 13 litres of water from the well: 26 roubles 14 kopecks
Bringing bread from the shop: 23 roubles 39 kopecks a loaf (on top of the 37 roubles for the bread itself).

Lyubov Znayeva has reason to be cheerful: 'It's a good thing that, although I'm registered disabled, I can still do a lot for myself. But if someone is frail and living on a miserly pension of 8000 - 9000 roubles a month, how are they supposed to manage? I ask the social service workers, "What kind of service is this? You're fleecing helpless old people". And they say, "We have to live as well - if we don't fulfil our quotas we don't get a bonus."'

Varvara Klyuchkina, another elderly resident of Kurganka, also tried to do everything for herself. She was 85. One day she was trying to light a fire in her stove when some sparks fell on her clothes. She burned to death and her house burned down.

Dmitry Shchekotov believes that the new legislation on 'The social welfare of the elderly and disabled' is unconstitutional, since the Constitution states that laws may not be passed, which worsen the conditions in which people live.

He is taking the matter to court, and is prepared to go all the way to Strasbourg with it.   

 
 #14
Russia Insider
www.russia-insider.com
May 15, 2015
The West's Education Crisis: Can Russia Avoid a Similar Fate?
Russia faces the same problems that are chipping away at Western education. What can be done?
By Yury Nickulichev
Yury Nickulichev is a professor at the Russian Academy for National Economy and Civil Service

There are many wonderful occupations in this world; as far as I'm concerned, mine is teaching. It's a noble profession. Poorly paid, too. That's because the education bureaucrats who decide on teachers' salaries are people, I am guessing, who didn't get top marks at school. After which, in subsequent years, they en masse, the Lord working in mysterious ways, proved to be, in terms of career, much more successful than those who tried harder; it's only logical that now, holding high positions, they are kind of taking revenge on those who were ruining their otherwise happy and carefree childhoods.

But, well, all kidding aside; it's a serious matter. Low salaries in teaching are not the whole story; far from it. I'd even say this aspect is only a tiny spot on the tip of the iceberg. Under the line, deep in the water and practically invisible, are questions of much greater importance. How does our education relate to development (and what is development in the first place?)? How does it keep pace with advancing scientific knowledge? Does it fit into the current and evolving employment models (and how do you explain this sharp rise in youth unemployment throughout the world?) Can educators by themselves fix everything right in what they are doing? In a word, how does education stand in relation to the society - and the society, to education?

This is, obviously, not the place to expand on any of these puzzles, the task, as a whole, being worthy of a good dissertation or two. So, what's below is a couple of thoughts or, better, a specific angle of the problem.

To illustrate my main point, this is how the American "Counterpunch" ("Our Education Crisis" by Jeanine Russaw; Aug. 06, 2014) describes what's happening at the schools in the predominantly black neighborhoods: "Some children are afraid to learn. Yes, afraid.  This fear is brought on by the taunting many well-educated black individuals receive because their peers believe that being well read and articulate constitutes 'acting white.'...

What does "acting white" look like?  In mainstream America, this is going to a quality school, actually paying attention and being able to provide a well thought-out answer when questioned by the teacher in class.

What does "acting black" look like? On the other end of the spectrum, there is blackness: Cutting classes whenever possible, looking like a fool when called on by the teacher, consequently serving - and cutting - detention, blowing off all homework assignments and failing and repeating your current grade".

"A fear of succeeding..." This is, of course, too much of a bad thing and it's in America; but you know what, switching to the Russian students, I have often discerned something of this kind in them, too. It's exactly the same predisposition to purposely make yourself "a little worse" (and never ever a little better) to keep pace with what's expected from them by their immediate company. Is it part of a new youth culture? As for cutting classes and by that blowing off each and every assignment, this is so widespread you'd never believe. For some of them it looks like this: the semester comes to an end but he or she has as yet never appeared on the horizon. The majority of such students have, of course, a natural capacity to learn and are not at all semi-retarded, but - this thought haunts me all the time - a good many of them, for a variety of reasons, psychological or behavioral, are already totally and irreversibly lost to the systematized formal schooling. I hate to say it, but it's just this - an already deeply-rooted inability. Poor concentration, short attention span, a zero motivation to learn, an almost addictive need for having fun here and now - this kind of thing. When did it happen to them - at elementary, at secondary school? Or much earlier in the kindergarten? (I wonder what other teachers will say). Much worse yet, you cannot leave these guys to their own devices like isolating them and thereby alleviate the problem. "One rotten apple spoils the barrel"; ten or such will spoil you a class, with the "quality of education" spiraling down and down year after year.

But, leaving Russia, here's France for you, the country famous for its legendary universities. Says the press: "An alarming 150,000 high school students - about 15 percent - drop out of school each year with no academic qualifications whatsoever. And, of those who do graduate, only 25 percent have mastered basic skills in reading, writing and mathematics," this with the French government boosting its increased spending on education by 23 percent in the last decade.

You think it's much better, say, in Great Britain? Just a minute... "Young people in the UK lag behind most of the Western world in their mastering of the basic skills of literacy, numeracy and IT." And here comes something really interesting. "In England, adults aged 55 to 65 perform better than 16 to 24-year-olds in both literacy and numeracy. In fact, England is the only country where the oldest age group has higher proficiency in both literacy and numeracy than the youngest age group." Is the British education system going backwards? And did you notice how in the Moscow subway older people (still) read books, while teens play with their mobiles? In the meantime, McKinsey, a consultancy, reports that 67% of employers in the nine countries that they studied, including USA, Britain, and Germany, complain that they cannot find enough entry-level workers with the right skills or abilities, the most apparent reason being poor education.

All told, it looks like this. Never in the history of mankind has education been so important - and never have its institutions been so poorly performing, economically, culturally or socially, as in our days.

In assessing the performance of educational systems, most people tend to address mainly, if not exclusively, the so called internal school factors, which are, of course, important with regard to such things as educational technologies and equipment, curricula matters, the training and competence of the teachers, and the like. These are to be periodically reformed in pursuit of higher efficiency, or so they say in Education Ministries. Now comes a question: "Does it all exist in a social vacuum?" Evidently, it does not. If so, in explaining the performance of our education, shouldn't we, at last, take into account the forces outside the classroom?

What exactly is happening over there - outside a school, a college or a university? Here's a little theory on that. To make it "academically more respectable," I'll start with John Dewey, the American philosopher and psychologist best known for his works on education. This is what we read in his various publications.

"We are apt to look at the school from an individualistic standpoint, as something between teacher and pupil, or between teacher and parent". Yet this is too narrow a concept; acted upon, it destroys our society. "Education fails because it neglects this fundamental principle of the school as a form of community life. It conceives the school as a place where certain information is to be given, where certain lessons are to be learned, or where certain habits are to be formed". But, being a part of society, education reflects the community. As far as the people are concerned, "this process begins unconsciously almost at birth, and is continually shaping the individual's powers, saturating his consciousness, forming his habits, training his ideas, and arousing his feelings and emotions."

Thus, there is a sphere of formal education and there are societal processes and forces that constantly produce a kind of "another education", "continually forming the individual's habits, ideas, feelings and emotions". This is not at all, mind you please, the traditional and always clear-cut divide between formal and informal education; rather, we are looking at a very broad range of "invisible" (or always elusive) forces such as the family, media, peer groupings in school, in the neighborhood, online, etc. It's this environment that gave such a powerful rise to what we now call edutainment and infotainment, that is when presented material is more amusing that it is educational or having a real public interest. Both "... tainments" are absolutely omnipresent - on your TV, in computers and the press, on the Internet, in mobile phones. Here's an interesting statistics on how this impacts kids and teens in the USA. At 2 years more than 90% of all American children have an online history. At 5 more than 50% regularly interact with a computer or tablet device. (Here's when a child, as a parent says with a grain of humor, might be bitterly disappointed upon discovery "that the letters of the alphabet do not leap up out of books and dance around the room with royal-blue chickens."). At 7 or 8 many children regularly play video games. American teenagers text an average 3,400 times a month. By middle school children spend more time with media than with their parents or teachers or other activities.

My drift - and the reader has already caught on it - is that the two "educations" have come to a terrible mismatch. This is, again, a topic for your good bulky research paper; but if you ask me, I think changing in the recent decades was the very "anthropology" of young generations, i.e. their ways of thinking, feeling and acting; most probably, the chemistry of their brains, too. In the more or less affluent post-War II years, the very fabric of our society and culture has gone... Would you agree that it's gone immensely hedonistic, with "pleasure minus pain" becoming a social norm for too many of us? Then there's that edutainment which trains our cognitive processes to look for quick and juicy bites in the "multi-media society". Now, with this habit of mind, a kid or a student comes to class, an iPad in the schoolbag and a mobile in the hand. Those are wonderful and indispensable devices, but not if you can't sit five minutes without checking for updates, new messages or photos and then sharing it all with your neighbors right and left. With habits like this, Chemistry or History will always be dead boring for you, because what constitutes a "real life" at any given moment is a picture of your best friend in the mobile or the latest sports stats online. (Am I exaggerating and, again, what will other teachers say?).

Actually, I think we all, most of us, if in varying degrees, suffer from Attention Deficit Disorder, this being the consequence of exposure to excessively stimulating media around us. But the behavioral difficulties common to contemporary schools are, evidently, have more to do with sociological influences than anything else (even if the rates of neuropsychiatric disorders among teens are, in fact, skyrocketing everywhere in the world, reaching as high as 11 percent). No, it's a "learned behavior", the situation pleading for some very special studies into the matter. At present, we are absolutely ill-prepared to tackle the problem. Is it the domain of sociology of education, of psychology and pedagogics or an area to be filled with some new direction of research, various disciplines combined?

I am lingering over this conundrum because at stake is what experts define as the educational capital of the country (something that, according to American anthropologist Clifford Geertz, embraces, at its broadest, such vast areas as "science, art, ideology, law, religion, technology, mathematics, even nowadays ethics and epistemology".) But there are even much wider topics, some of which were indicated at the beginning of this piece. Education is about creating a presumably better future, so how does it relate to development? That's where it should be crystal clear that we can no longer act upon the assumption that the goal of schooling, at any given level, is just "graduate students", without having some overarching aims down the road. It's an absolutely "brave new world" that's come or coming, with education as a new battlefield and the government having to play a crucial role in shaping the future of the country. "The winners take it all"...

The question of what exactly the government should do in this area, besides being a major source of budgeting, is open to debate, in which academia and businesses ought to take a most active part. Could a "trilateral commission" of sorts, teachers included, be a decent start? To my sense, the educational policies must, first and foremost, nurture talents and encourage achievement, by that gradually pulling the whole of the schooling pyramid upwards. But the first thing to realize is, again, that the schoolhouse is part of the neighborhood, part of the society, - part of life, and what our kids, with all their school problems and achievements, clearly expose to view, as if through a magnifying glass, is who we actually are. Shall we start with ourselves?
 
 #15
Moscow Times
May 15, 2015
McCain Nixes Pentagon Plan to Use More Russian Rocket Engines

The United States will not allow domestic space companies to use more Russian rocket engines despite requests from the Pentagon, news agency Reuters reported, citing a letter written by U.S. Senator and Chairman of the Armed Services Committee John McCain.

In a response to a letter from U.S. Defense Secretary Ash Carter requesting that federal law be amended to allow in more Russian engines, McCain said the very point was to prevent "over $300 million of precious U.S. defense resources from subsidizing [Russian President] Vladimir Putin and the Russian military industrial base," Reuters reported.  

Under the ban, U.S. companies are forbidden from using Russian RD-180 rocket engines paid for after Russia annexed Ukraine's Crimean Peninsula in March last year. The rocket engines are used to launch U.S. military and spy satellites.

This is a big problem for United Launch Alliance, a joint venture of aerospace giants Lockheed Martin and Boeing that lists the Department of Defense and NASA among its customers.

ULA is in the process of phasing out its Delta 4 rocket, which uses U.S-built engines, leaving only the Russian-powered Atlas 5 rocket - for which its engine supplies are limited.

The air force and now top Pentagon officials want Congress to modify the law to allow ULA to acquire Russian rocket engines that it had ordered but not yet paid for at the time of the annexation.

The Pentagon argues that unless ULA receives more rocket engines, the U.S. military will soon no longer have the two satellite launch vehicles that it is legally required to have.

The U.S. Air Force is expected to certify ULA's rival SpaceX to perform some military satellite launches by June.

However, Carter and Director of National Intelligence James Clapper said in their letter that even if SpaceX is certified soon, losing access to both the Delta 4 and Atlas 5 would create "a multi-year gap where we have neither assured access to space nor an environment where price-based competition is possible," Reuters reported.

McCain, whose committee is currently reviewing budget material for 2016 defense spending, retorted that rocket engines used by federal space agency NASA could be used in a crisis. NASA's rocket engines are also produced in Russia.
 
 #16
Russia Beyond the Headlines
www.rbth.ru
May 15, 2015
Russia-China talks: Silk Road leads to Eurasia
Talks between Russian President Vladimir Putin and Chinese President Xi Jinping last week ended with the signing of several deals. Perhaps the most important document concerns the leaders' joint declaration on their readiness to unite the Moscow-backed Eurasian Economic Union with the Chinese Silk Road Economic Belt.
Alexander Gabuev, special to RBTH
The writer is Director of the 'Russia in the Pacific Rim Program' at the Moscow Carnegie Center

Besides the photographs taken during the Victory Day Parade on May 9 of Vladimir Putin with Xi Jinping sitting next to him, besides the Chinese soldiers marching on Red Square, which became the most important symbol of the Chinese leader's visit to Moscow, the talks between the two leaders also resulted in many commercial agreements. Beginning in May 2014, when due to the crisis in Ukraine and western sanctions China started playing a major role for Russia, the signing of a large number of documents each time the two leaders meet has become a tradition.

On May 8, the two countries signed 32 agreements in the Kremlin. The most significant block concerns the access for Russian companies to Chinese financial platforms and instruments, first of all credit lines in yuan.

Moscow and Beijing have been planning to leave the dollar and euro in mutual payments since the middle of the 2000s. Against the backdrop of western sanctions and Washington's talk of possibly denying Russia's largest banks correspondent accounts in the US and the EU, in the event of escalation in Ukraine. This has made transactions in alternative currencies a vital necessity. Therefore, even though China's currency is not freely convertible, Russia is still moving towards an increased use of the yuan.

According to Vladimir Putin, as of the beginning of 2015 the share of transactions in national currencies makes up seven percent of the trade volume (in 2014 it was about $89 billion, according to data from Russian customs agencies, and according to the Chinese, $95 billion). Agreements on loans in yuan were signed by Sberbank (6 billion yuan from the State Development Bank of China), VTB (12 billion yuan from the State Development Bank of China and 3 billion from the Export-Import Bank of China) and VEB (3.9 billion from the Export-Import Bank of China for the metallurgical project in the Kemerovsky Region).

Moreover, the Russian Direct Investment Fund signed agreements on the creation of a joint investment bank with structures from the CITIC group for bringing Russian companies to Chinese platforms, while with the China Construction Bank it signed an agreement on a joint credit mechanism that will facilitate Chinese investments in projects on Russian territory.

Unlike previous agreements, the countries did not sign anything serious in the field of energy. Gazprom and CNPC signed an agreement on the main conditions for supplying gas to China along the "western route." On November 10, 2014, the sides had already signed framework agreements on gas supplies along the "western route." The history of the "eastern route" (the Power of Siberia gas pipeline with the resource base in the Chyandinsky and Kovyktinsky deposits) has shown that several years can pass before the commercial gas contract is signed.

Obviously the aim of the new document is to send a signal to European Gazprom gas consumers. On April 13 in Berlin, Gazprom Chief Executive Alexei Miller talked about a new "Eurasian strategy" monopoly and called on the EU to decide if the European market will need the Russian resource base and infrastructure, alluding to the possibility of redirecting supplies to China.

However, in the foreseeable future China will not replace the European gas market for Russia. Even if the "western" and "eastern" gas supply routes are built in China, their total power capacity after 2020 (and these scenarios are the most optimistic) will be 78 billion cubic meters a year, compared to the 146 billion cubic meters that Gazprom sold Europe and Turkey in 2014. Not to mention the price: while the price of gas through the "eastern route" is equal to that which Germany pays (although the price formula is not transparent and can change depending on whether Gazprom will need Chinese credit to finish the Power of Siberia), the Chinese are still not ready to pay more for gas coming through the "western route" than they already pay for cheap Turkmenistan gas (about $150 per 1,000 cubic meters less than what Gazprom wants for gas from Western Siberian deposits).

Under these conditions, the most important document has proven to be Russia and China's joint declaration on the unification of the Eurasian Economic Union (EAEU) and the Silk Road Economic Belt (SREB). The document points to the Shanghai Cooperation Organization as a coordinating platform for dialogue between the two initiatives and also mentions "the review of the long-term objective for promoting the free trade zone between the EAEU and China." Thus, for now Moscow and Beijing have reached their tactical objectives: both integration initiatives are reciprocally recognized as partners, while the delicate issue of the free trade zone will be left for the future.

The unification of the two projects could be advantageous for both Moscow and Beijing. Russia will receive access to resources from the Silk Road Construction Fund ($40 billion) for the development of its agriculture, while China will obtain a reliable transit route to Europe, one that has no political risks and is supplied with instruments from the Customs Union (there are only two customs borders between China and the EU). If the countries realize these initiatives, Moscow and Beijing will create a condominium in Central Asia in which Russia will be the guarantor of security and China - the largest economic player.
 
 
 #17
Moscow Times
May 15, 2015
30 Years On, Gorbachev Rues Running of His Soviet Anti-Alcohol Campaign
By Anna Dolgov

Former Soviet President Mikhail Gorbachev said that his massive anti-alcohol campaign in the 1980s was too swift and sweeping, and combating heavy drinking - which remains a major problem as Russia's problem 30 years later - should have been handled more patiently, according to a recent interview.

Speaking on the anniversary of the May 1985 start of the large-scale - and largely failed - anti-alcohol campaign, Gorbachev said that it "was after all a mistake in the form in which it was conducted," according to an interview with daily Komsomolskaya Pravda published Thursday.

"All those excesses with shutting down [liquor] shops, especially in Moscow. Huge lines. The increase of moonshine production," Gorbachev said, ticking off some of the side effects of his efforts. "Sugar disappeared from stores."

Sugar is the main ingredient for moonshine production, and although owning a still was illegal in the Soviet Union, many citizens defied the ban when Gorbachev's anti-alcohol measures caused vodka to disappear from stores.

The anniversary of the campaign comes at a time when Russia's heavy drinkers once again are turning to moonshine and even cleansing products as wage cuts and price increases have made store-bought drinks pricey.

"The sobering up of society cannot be done in one swing," Gorbachev was quoted by Komsomolskaya Pravda as saying. "It takes years. And the fight must go on incessantly, constantly."

"We should not have shut down trade, provoking moonshine production," he said. "Everything should have been done gradually. Not by [putting] an axe to the head."

The campaign, which Gorbachev launched within a couple of months after coming to power in 1985 and continued for two years, did produce a number of benefits, such as a decline in mortality rates, a drop in alcohol-related accidents at factories and on the roads, an increased number of births and improvements in the health of newborns.

But the state lost 20 billion rubles, according to Komsomolskaya Pravda, by reducing down its lucrative vodka trade to a mere trickle, and the campaign was unpopular among Russian men.

"When I traveled around the country, I noticed: Women supported me everywhere, but men did the opposite," Gorbachev said. "The picture was clear."

Meanwhile, Soviet Cabinet head Nikolai Ryzhkov was "shedding tears - we are losing so much money," Gorbachev told Komsomolskaya Pravda.

The displeasure both from the male population and from Kremlin insiders prompted him to wrap up the campaign, Gorbachev was quoted as saying.

In a study released this week - 30 years after the start of the campaign -the Organization for Economic Cooperation and Development said that Russia had emerged as the world's leader in alcohol-related deaths as well as in the growth of drinking rates among young people in recent years.

About 30 percent of all deaths in Russia are related to some extent to alcohol consumption, the study was quoted by media reports as saying.
 
 #18
American Enterprise Insitute
www.aei.org
Publication: Putin's Russia: How it rose, how it is maintained, and how it might end
Leon Aron
[Full report here https://www.aei.org/wp-content/uploads/2015/05/Putins-Russia.pdf]

Key Points

    As the steady economic growth characteristic of Russian President Vladimir Putin's first years in office has dissipated, he has relied on the rally-around-the-flag effect produced by the wars in Chechnya, Georgia, and, most recently, Ukraine to maintain his favorable approval ratings-a hardly sustainable strategy in the long run.
    The root cause of Russia's economic problems is not international sanctions or oil prices, but rather the Putin regime's failure to modernize its economic and financial institutions, which has left the economy in a fragile, hydrocarbon-dependent state.
    The regime's efforts to centralize power have resulted in poor governance in the provinces, increasing the likelihood of discontent among the rural residents that form Putin's conservative political base.
    While the development of civil society in Russia still faces formidable obstacles, the growth of Russia's middle class and the resulting spread of Western-like values are causes for optimism in the long run.
    Growing links between Russian Muslims and international Islamist groups have been fortified by Russia's annexation of Crimea and are becoming more prevalent not only in the North Caucasus but also across Russia as a whole.
 
Contents
Introduction
I. POLITICAL ECONOMY, POLITICAL GEOGRAPHY, AND THE POLITICS OF FEDERALISM
Political Origins and Implications of the Economic Crisis in Russia
Sergei Guriev
Four Russias and a New Political Reality
Natalia Zubarevich
Russian Federalism: Reality of Myth?
Evgeny Gontmakher
II. REGIME, IDEOLOGY, PUBLIC OPINION, AND LEGITIMACY
Resources of Putin's Conservatism
Lev Gudkov
Evolution of Values and Political Sentiment in Moscow and the Provinces
Mikhail Dmitriev
Triumphs and Crises of Plebiscitary Presidentialism
Kirill Rogov
III. CIVIL SOCIETY: DEFEAT AND RADICALIZATION?
The Difficult Birth of Civic Culture
Boris Makarenko
Moscow to Swallow Putin: The Rise of Civil Society in Russia's Capital
Dmitry Oreshkin
Islamic Challenges to Russia, from the Caucasus to the Volga and the Urals
Alexey Malashenko
Conclusion
Acknowledgments
About the Authors

Introduction

With an intellectual feast awaiting, I promise not to detain the readers of this compilation a minute longer than necessary and will use the introduction merely to whet their appetite.

At the outset of this project, my hope was to assemble a dream team of Russia's top-and most of my favorite-political sociologists, political geographers, and political economists; ask them to write about what they think are the most significant trends in their field of study; and have them project three to four years ahead. To my surprise and delight, every one of the nine authors I sought out agreed. The result is a collection of essays unmatched, I believe, in Russian studies today in depth and breadth.

Caveat emptor: a reader looking for an elaboration of today's headlines might be disappointed. While the annexation of Crimea and the war in Ukraine are definitely part of the conceptual framework for most of these essays, these events (as well as plunging oil prices and the economic sanctions against Russia) are not what this book is about. Instead, it is designed to describe and analyze some of the regime's key structural strengths and weaknesses that are obscured by what Russian journalists call "the smoke" of the battle for Ukraine. As far as the regime's fault lines are concerned, the evidence presented by the authors shows no reversal, or even narrowing, of these structural dysfunctions in Putin's third presidential term.

Indeed, most of the problems-or perhaps more precisely, potential political, social, and economic crises-have been exacerbated since March 2014. To quote Boris Makarenko, "The rallying around the flag buys time for the regime but does not resolve a single socioeconomic problem." It is these postponed crises-their causes and their impact, on the one hand, and the regime's engagement with them, on the other-that this book is about.

To elucidate the antecedents and political implications of the unfolding economic crisis, Sergei Guriev opens by retracing Russia's macroeconomic dynamics of the past 14 years. Guriev dates the start of the current economic crisis to early 2014, before international sanctions were imposed against Moscow and before oil prices fell. Instead, he lays blame mostly at the regime's door for rejecting the institutional reforms needed to radically modernize the country's economy and end its reliance on hydrocarbons.

The shrinking of the national economic pie is bound to aggravate the structural dysfunctions in the relationship between the Russian center and provinces, described by Evgeny Gontmakher, and extend the rifts between what Natalia Zubarevich calls "the four Russias": segments of society sharply varied in their income, urbanization, education, upward mobility, and, as a result, modalities of their political attitudes and loyalty to Putin's regime.

Like the United States, Brazil, or Germany, Russia is too big and too diverse to be both unitary and democratic. Instead, again and again throughout the country's history, liberalizations have almost invariably been accompanied by greater self-rule at the local level, while authoritarian consolidations have inevitably led to a more rigid subjugation of the country to the center. Small wonder, then, that-as Gontmakher demonstrates-Putin has chosen and systematically pursued the latter path.

Already in Putin's first presidential term (2000-04), the march toward "the vertical of power" (as Putin called the central government's complete control over regions) included abolishing the direct election of regional governors, denying both an independent political base and loyalty to local leaders. Another blow to regional autonomy was the change in the composition of the Federation Council (the upper chamber of the Federal Assembly, or Russian parliament), where governors used to be ex officio members ("senators") and thus had a say in national politics.

Yet, while the vertical of power has made a sham of constitutionally mandated federalism, Gontmakher points out the unintended consequences eroding the center's rigid control of the unitary state. The quality of the center's decision making is being compromised by distorted feedback from the regions and increasingly selective implementation of the center's decisions as local authorities increasingly deviate from its control. In the end, the relations between the center and provinces amount to what Gontmakher calls a "systemic crisis" in Moscow's ability to govern Russia.

Examining some of the similar problems from the opposite end of the vertical of power, Zubarevich further develops her four Russias theory, increasingly recognized as one of the most useful tools for assessing and predicting the country's political dynamic. Based on the economic geography and demography, she maps out in fascinating detail population clusters ranging from those engaged in "postmodern" economic activity to Russian citizens with the "lowest levels of education and upward mobility," higlighting the "pronounced differences" in these groups' "quality and way of life" and values.

Trends in ideology, public opinion, and legitimacy are taken up by Lev Gudkov, Mikhail Dmitriev, and Kirill Rogov, who agree that it was the constant and significant economic growth in household income between 2000 and 2008 that secured Putin's high approval ratings and, with them, the regime's legitimacy and what Dmitriev calls a "political equilibrium," responsible for the relative stability of the regime during that period.

Delving into the causes of Putin's personal popularity within the current political system of "plebiscitary presidentialism" (in essence, authoritarianism with elections that do not change the head of state), Rogov does not attribute the Russian president's appeal to some extraordinary charismatic qualities. Rather, he attributes it to a "systemic phenomenon deeply connected" to both the needs of society, on the one hand, and the "institutional environment," on the other-that is, the regime's almost total control or manipulation of key political, legal, and social institutions.

Rogov diagnoses the key to the regime's stability as Putin's "supermajority" (overwhelming political support), which is held together by a combination of economic and mobilization factors. The former category is predicated on economic growth, while the latter derives largely from the effects of a "value-centered rallying around the leader," who is perceived as both an effective "wealth manager" and the "savior and protector of the nation." Some examples of the mobilizing trends are the 2000 war in Chechnya, the 2003-04 war on the oligarchs, and the 2008 war on Georgia. (The 2014 annexation of Crimea and the war on Ukraine also fit well into this paradigm, as evinced by the 20-25-point upswing in Putin's ratings.)

By contrast, Dmitriev investigates the economic, demographic, and, especially, value-related causes of the discontinuity in Putin's approval ratings. He traces the first cracks in the supermajority's foundation to the aftermath of the 2008-09 world financial crisis, with both the number of public protests and their provenance belying the Moscow-centric stereotype.

Still, even at the lower end of his ratings, Putin scored far better than the government bureaucracies at all levels, thus making the president's personal popularity the key to the regime's legitimacy. Gudkov explores some of the legitimizing themes (myths) of the Putin regime and the reasons for their resonance and appeal (in addition to the censorship and propaganda), including the allure of a "strong leader" at home and abroad.

Of all the fault lines explored in this volume, the one that has been the furthest from public view in the past few years of authoritarian consolidation is the disconnect between the regime and civil society, manifested by the 2011-12 mass protest rallies, which were spearheaded by the middle class throughout Russia.

Makarenko details the tall barriers impeding the development of Russian civil society. There is a historical tradition of top-down modernization in Russia, which from Peter the Great to Putin placed civil society under the state's supervision and control, with private actors accorded, at best, the roles of what Stalin called "cogs" (vintiki) in a "huge and all-knowing," in Makarenko's words, state machine. Another factor is the political, or rather apolitical, national culture, in which mistrust of any authority translates into mistrust of politics. Finally, cemented in large measure by the "power-property alliance," the regime does its best to "retain its power monopoly at the cost of sabotaging modern political institutions."

Yet, while very formidable, the obstacles to Russian civil society were and are not insurmountable. Makarenko reminds us that the "perennial subject," the Russian people, did rise against the existing order in 1905, 1917, and 1991. There has also been a perceptible accumulation of what might be called "initial social capital," also described by Dmitriev and Zubarevich. This term refers to the growing number of Russian men and women who "owe their prosperity to their own efforts rather than government paternalism," resulting in values and attitudes "comparable to those of Western societies." These and other precedents and trends amount to what Makarenko sees as structural factors "conducive to the emergence of a Russian culture of citizenship."

It is this culture, along with the values and behavior of its main bearer, the middle class, that Makarenko and Dmitri Oreshkin portray in fine detail, correcting, along the way, a few stereotypes about the demographics of the Russian protesters, civil society's ability to organize political actions, and the attitudes of society at large toward the public protests.

To Oreshkin, the most significant trend within Russian civil society has been the emergence of "self-governing" civil society groups that fill the vacuum left by the state, which is inefficient, corrupt, "free from any responsibility to the electorate," and unable or unwilling to provide services and protect "the rights of the public." Pragmatic and nonideological (or, one might say, ideologically inclusive), these nongovernmental organizations are involved in activities ranging from charity to traffic safety to exposing corruption, including falsification of educational certification, especially doctorate degrees.

One of the most impressive tests of civil society's ability to self-organize was the monitoring of the 2011 Duma campaign in Moscow. Because of the monitoring, the authorities felt more constrained in their falsification methods during the 2012 presidential election; as a result, Putin received less than half of Moscow's vote, according to the official count-and probably closer to 40 percent in reality. During the September 2013 Moscow mayoral election, even more divergent were the tallies from polling stations monitored by volunteers versus those where authorities were in complete control.

By contrast, Alexey Malashenko delves into a segment of Russian civil society that is in many regards opposite to the one analyzed by Makarenko and Oreshkin. He details the symptoms and causes of the radicalization of Russian Muslims outside the North Caucasus, most notably in Tatarstan, "the heart of the Russian Muslim community." Despite terrorist acts in Tatarstan and the neighboring Bashkortostan, the spread of Islamic fundamentalism in Europe's oldest continuously Muslim community-5 million strong and predating the Christianization of Russia and the emergence of Russian state-has gone largely unnoticed. Yet it fits well within the pan-European trend of the radicalization of younger and seemingly assimilated Muslims.

The appeal of "nontraditional" Islam, especially to young Russian Muslims, is undeniable and has been growing since the early 2000s. The Arab Spring and the war in Syria have further radicalized the Salafist (Wahhabist) movement in Russia. Unfolding in parallel have been fundamentalist trends among Russia's estimated 2.5 to 3 million migrant workers from Muslim Central Asia.

In the end-whether in the precarious state of the Russian economy, the relationship between Russia's center and periphery, the divergent paths of the "four Russias," public opinion trends, or the state of civil society-emerging in these pages is a finely textured portrait of a society rife in complexities, contradictions, and postponed but looming crises.

Now that your appetites are thus sufficiently whetted, I invite you to be edified and stimulated by the original, searching, and powerful chapters that follow.
 
 #19
American Enterprise Institute
www.aei.org
May 12, 2015
Political values in 'Putin's Russia': A Q&A with Mikhail Dmitriev

AEI's director of Russian studies, Leon Aron, has edited a new volume- to be released at a conference on May 14- on the dynamics of Russian domestic politics titled "Putin's Russia: How it rose, how it is maintained, and how it might end." This work looks beyond international sanctions and the war in Ukraine to examine underlying crises in Russia's political and economic systems that will determine the stability of the Putin regime in the years ahead.  Below, Dr. Aron interviews one of the nine leading Russian experts that contributed to the volume, Mikhail Dmitriev, president of the consulting firm New Economic Growth, about his chapter on the evolving social values and political attitudes of Russian citizens. For additional information about the volume and the conference where the authors will discuss their findings, check out the event page here.

Q: Unlike most observers, both Russian and foreign, you emphasize in your essay that it was not the middle class but other demographic groups that were "becoming the key engine of democratization demand" in Russia. Could you, briefly, explain?

In 2013, the demand for political change began to shift from Moscow to other regions. At times, other regions even surpassed Moscow in their aspirations. Thus, a political system other than  liberal democracy was the preferred option for 46% of Moscow's residents, but for only 32% nationwide. The greatest demand for  democracy was  in St. Petersburg (69%) and other cities with more than one million people (59%). Even in smaller cities and rural areas where the modern middle class comprises an insignificant proportion of the population, the demand for democracy reached 38-39%, thus exceeding the national capital's level. Similarly, the share of Muscovites who voted for United Russia stood at 74%, compared to 67% across Russia.

By 2013, similar trends also affected attitudes toward public protests. While in 2011 Moscow led the protests against unfair elections, in mid-2013 only 21% of Moscow's residents were willing to protest an unfair election as compared to 26-30% of residents in cities with less than one million people, and 25% of rural residents. The gap in willingness to take part in economic protests was even more drastic, with 15% in Moscow versus a 43% nationwide average and 63% in cities with more than one million people. Moreover, as the share of Muscovites supporting legislative restrictions on street protests exceeded the percentage opposing such restrictions, three-quarters of all respondents across Russia opposed the law. Thus, in a brief span of time Moscow appeared to have lost its role as leader of the campaign for political change, while its middle class morphed into a kind of anchor for the political status quo.

If this demand for democracy has really grown outside of Moscow, as our data suggests, then its source is definitely not the middle class alone. The share of the middle class outside Moscow was about one third of adults, and that in rural areas is about one quarter. Meanwhile polling shows that more than two thirds of Russians outside Moscow demand  liberal ("free") or limited democracy. This means that mass demand for democracy outside Moscow stems not only from the middle class but from the less well-to-do and socially developed strata of society.

These results support an opinion already widespread among scholars: demand for democracy is not an immanent feature of the middle class; it is strongly affected by specific socio-economic and political circumstances. For example, a sizeable part of the Russian middle class is employed by the public sector. Advantages that such employment offers them can be closely related to the absence of political competition, and that may weaken the demand for democracy on their part.

Q: In the same essay, you predicted that "a deteriorating economy will trigger protest waves." So far, this appears not to be the case. Why?   

By the end of 2014, the priorities of Russians shifted towards current consumption and risk minimization. This shift was influenced by the conflict in Ukraine, the economic crisis and a widespread perception of external threats. It was also accompanied by a weakened interest in the mass public protest characteristic of 2011-2012 and even by an increasingly negative attitude towards the protest events of that period. According to the Public Opinion Fund (FOM) poll conducted in October of last year, the general propensity to protest was low at 2%-a figure that was 6 times lower than the 2011 level.

At the same time, however, the willingness to participate in protests for economic reasons (low wages and pensions, high prices and utilities tariffs) was found in the red (danger) zone according to the FOM classification - 18-20%, which is 9 to 10 times higher than the propensity for political protests.

A survey by the Levada Center conducted on February 20-23, 2015 showed that residents of Moscow considered the likelihood of economic protests in their city more probable than other Russian citizens. According to survey,  48% of Muscovites thought economic protests were possible, that is, 1.5-2 times higher than the estimates in other localities. Meanwhile, in February 2015 among Muscovites the Sberbank index of financial sentiments, dropped well below the historic minimum and was significantly lower than that of the residents of other regions (respectively 54.7 and 74.6 percentage points, with the normal level around 100 points. (The index includes assessment of the current and future economic situation as well as demand for foreign exchange and preference for bank deposits as opposed for keeping cash at home.)

These data indicate that the economic protests related to the current recession are likely to intensify. Usually economic protests begin with a lag and reach the peak of intensity near the exit from recession. This is  what  happened during the crisis of 1990s and during the recent recession of 2008-2009. Then the largest wave of economic protest occurred in May-June 2010 when the economy was already in a state of recovery. There were  22,176 largely economic protests in those two months, the vast majority of which were held outside Moscow.

So, economic protests are likely to intensify once again, but this will probably happen with some delay, not before autumn this year.

Q: If you were to name, say, the three most fateful (significant) processes in Russian politics and society today, what would they be?

The Ukrainian conflict, economic crisis, and shift of priorities from development issues, (that is, demand for better health, education, housing, and efficient government), to current consumption (incomes, social transfers, like government pensions, subsidies and other benefits, and inflation) and domestic threats (economic crisis, income decline, currency devaluation, and unemployment).

Q: Could you outline, very briefly, how each of them might be shaping Russia's future in short or medium term?

Two fundamental factors that predetermined the latest backward shift of Russians' social priorities and political preferences are the international conflict in Ukraine and the economic crisis.

They are both temporary, even if in the worst-case scenario they can go beyond the medium term. As to achieving a sustainable solution to the armed conflict in Ukraine, the probability of this seems significant. By contrast, the quick recovery from the economic crisis appears less likely, though its progress will depend on the evolution of the Ukrainian conflict.

In the end, the outcome of the Ukrainian conflict can be considered the main variable  that will determine which of the two diverging medium-term scenarios will take place in Russia. The first scenario implies an eventual return of Russian society to the mainstream development agenda. It assumes an irrevocable cessation of hostilities in Ukraine that will reduce the relevance of factors related to external threats and increase the likelihood of a gradual lifting of economic sanctions against Russia.

In this case, the factor of defensive patriotism will be deactivated and return to a latent state. The support it gives to political ratings will weaken, while deteriorating  perceptions of the economic  situation will push political ratings down and reduce the influence of the state-sponsored media. With time, this can recreate the social and political environment which in many respects will be similar to the period of 2011-2012. The evolution of the socio-political situation prior to the next presidential election will largely depend on the ability of the political system to adapt and formulate a credible development agenda in response to public expectations.

The second scenario leads to the conservation of the survival agenda. It assumes that the extended armed conflict in Ukraine will perpetuate the economic crisis in Russia and prolong post-crisis stagnation. This will effectively lock up Russian society in an anti-modernization trap, by fostering a vicious circle of prolonged international conflict and economic underperformance. This environment will feed survivalist attitudes, a focus on current consumption and a besieged fortress mentality. It will also suppress the development agenda.  Intense concerns  about  external threats combined with negative economic sentiments will support aggression towards foreign adversaries. Society will favor the country's self-isolation.  Supported by defensive patriotism, high presidential approval ratings may be sustained, while the influence of the official media could be maintained despite the downward pressure of negative economic sentiments. At the same time, dissatisfaction with the economic situation will boost protests.

Further into the future, the conflict fatigue and protracted economic depression could lead to the gradual erosion of support for the government and trust of the official media. The  anger of the population will start to be more evenly distributed between external enemies and internal targets, such as officials and ethnic migrants. Opportunities for continued economic growth will be limited due to both continued economic sanctions and restricted technology transfer from advanced economies. This scenario raises the risk that Russia will be locked in a middle income trap with slow economic growth and social stagnation.

Q: Should the West care about these developments (after all, they are Russia's "internal affairs") and if so, why?

The important point is that the recent developments in Russia need not be interpreted as proof of a fundamental value divide between Russia and the West which cannot be bridged over time through economic and social development. On the contrary, the current state of Russian society may be considered  a sort of detour on the mainstream path of convergence with the advanced economies. The peaceful resolution of the Ukrainian crisis and exit from economic recession will facilitate the refocusing of Russian society on the mainstream modernization agenda and will allow it to resume convergence with the advanced economies.

Q: Is there anything the global community can do to facilitate Russia's progress?

The West need not be tempted to slide into a confrontational mentality towards Russia. Such an attitude will only invigorate isolationist and counter-modernization forces inside Russia and will complicate the resumption of economic and social convergence with the advanced economies.

It is also essential to remain as open as possible to intense human contact at a grass roots level
 
 #20
The Times Literary Supplement (UK)
www.the-tls.co.uk
May 13, 2015
New Eurasians
By Lesley Chamberlain
[Lesley Chamberlai is a British journalist, travel writer and historian of Russian and German culture and has published short stories and novels and written about food.]

It is a Western question to wonder what is in Vladimir Putin's mind, just as it is a lazy Western habit to talk of Russia as a "riddle, wrapped in a mystery, inside an enigma". Present Russian ambition seems to emanate from a profoundly conservative imperialism, neither individualized according to the particular leader at the helm, nor particularly mysterious. We know full well that the power that rules in Russia is tradition. This has been demonstrated in three great upheavals over the past two-and-a-quarter centuries. The first was the French Revolution, still inspiring fear in St Petersburg fifty years later; the second was the overthrow of the Tsar in 1917; and the third was the collapse of the Soviet Union in 1991. In each case a revolutionary situation, or threat, eventually led to a nationalist reaction.

The conservative response to the execution of Louis XVI was to welcome the fugitive French priesthood and for Catherine the Great to declare that Russia would take the place of France as the home of the aristocracy. The ideological wobble towards liberalism that was the early reign of Alexander I was soon replaced by a more repressive course after 1817. In particular, since all philosophy was associated with the Enlightenment, and French Enlightenment with secularism and revolution, the few university departments of philosophy that had recently come into existence were closed down in a famous purge of 1819-22. Once the aristocrat and polymath Sergei Uvarov arrived as Minister for National Enlightenment in 1833, he was clear what Russian conservatism meant: Pravoslavie, Samoderzhavie, Narodnost'. Those terms, which translated as Orthodoxy, Autocracy and Nationality, formed a tripartite slogan to match, and keep at bay, the Liberty, Equality and Fraternity of the neonatal free world. Russia needed absolute rule, supported by the Church, which would provide sacred justification and ritual, and the compliance of the people.

If the whole doctrine is generally referred to as Official Nationality, it is worth bearing in mind what the "nationalist" component of autocratic Russian government loosely included from that moment on. It was an invitation to accept what the state, but also quasi-independent Slavophile writers and journalists, decided belonging to the Russian People meant. The term was sufficiently flexible to contain, without quite denying, the popular liberationist impulses spreading from the West that had helped undo French absolutism and were straining the coherence of the neighbouring Austrian empire. Narodnost' might retrospectively be called a managed nationalism. Second, narodnost' meant patriotism. It meant supporting the status quo and Russian great-power status. Thirdly, most thoughtfully, it expressed pride in Russian philosophy, theology, folklore and history, as pointing to the true Russian way in all things, whether social, political or religious. The choice of this term, as his biographer Cynthia Whittaker put it thirty years ago, "displayed astute tactics" on Uvarov's part - and, we might regretfully add, vision. The tripartite slogan remains a key to understanding the several Russias that have followed since Uvarov's death in 1855.

Of course this conservative tsarist mantra is not what Bolshevism advertised itself as perpetuating. But it has long been obvious that the revolutionaries who built Soviet Russia were never, even on paper, advocates of individual liberty at the cost of the coherence of the state. Liberation from the "oppression" of non-Marxist-Leninist forms of political organization was certainly an article of faith, but not the liberty of most twentieth-century Anglo-American political philosophers. The distinction Isaiah Berlin made in 1958, between positive and negative liberty, clarified the difference between Soviet Russia and the West above all. It was his contribution to the West's self-knowledge during the Cold War.

The Russian tradition had other distinctive traits in which the political either merged with religious concerns, or with a morality of duty to the nation. Philosophy was either in favour of a kind of individualism amounting to a Western-influenced answerability to God (which with its religious basis was largely an �migr� philosophy in Cold War days); or it accepted a duty towards a country that always inclined to schism. Russian philosophy, politics, religion, culture: all must hold the country together. With the cause of the nation supervening, those independent realms of inquiry, creativity and moral engagement all began to resemble each other, just as Uvarov's three terms did. Each implicated the other, and each applied with equal force.

If you think of how mature Soviet Communism managed an essentially conservative agenda, despite the worship of technological progress and the internationalism of Marxism, you can see the same three-pronged policy at work in Soviet Russia as, a century before, under Tsar Nicholas I. The Official Ideology, the Party and the People held the political entity together. Here was an absolute structure to which millions of that People gave their more or less loyal service, encouraged by a camouflaged nationalism that became more and more obvious after "The Great Patriotic War" of 1941-5.

If, after 1792 and 1917, absolutism was imposed, with this kind of face, no more than twenty years later, then should we wonder that it is happening again after 1991? It's only a question of the form that absolutism might now take, with both tsarism and Communism dead and buried.

The widely held answer is some kind of "Eurasianism". When in October 2011 Putin proposed a "Eurasian Union . . . as an essential part of Greater Europe united by shared values of freedom, democracy and market laws", political scientists began to understand Russia's "pivot to the east" as a puzzling weave of economic and national interests whose goal was to ensure that globalization did not happen solely on Western terms. In the intervening years the move has become more anti-Western and more ideological than its founding co-members Belarus and Kazakhstan probably ever foresaw. Although various theorists have been named, Putin does not seem to be influenced by anyone in particular, nor to be a theorist himself. Eurasianism, if not the Eurasian Union as originally intended, is also flexible. Above all it seems to be about Russia living up to an idea of itself distinct from what it perceives the West to be. It is, in that sense, a return to a parallel existence: the creation of an alternative version of the contemporary Christian, or post-Christian, world, contiguous with the West but distinct.

Eurasianism was worked out in the 1920s as an alternative to Russian modernity by conservative Russians who were exiled from their country by their class origins. Being members of the wrong social class caused them to fall foul of the new Marxist-Leninist diktat, but it didn't stop their patriotism. They regretted finding themselves abroad. The thought that encouraged them was that Bolshevism wouldn't last. So they began to cast around in their dreams for an alternative vision of a powerful twentieth-century Russia - and came up with Eurasia.

The movement began in Prague in 1921 when Nikolai Savitsky responded to ideas floated by his fellow �migr� Prince Nikolai Trubetskoy. The aristocratic Trubetskoy, who was teaching Russian literature in the Bulgarian capital Sofia, was passionately attached to the Russian language and the Russian Orthodox Church of his family and upbringing. Trubetskoy and Savitsky contributed essays to a book called Iskhod k vostoku, which could be translated (though it rarely is) as "A Solution to the East".

Eurasianism asserted Russia's non-Western essence and unique geo-cultural position. But the Savitsky/Trubetskoy title also meant "Exodus to the East". Gravity itself seemed to be pulling Russia eastwards, away from the tiresome and feeble liberal West. The geography of the proposed Eurasia was roughly that of the Russian Empire before 1914, including the Baltic States in the West and Central Asia in the East. The basis of cultural unity was not racial - neither Russian nor pan-Slav - but a matter of envisaging Eurasia as a unique, economically self-sufficient continent dominated by Russia. With a confidence based on the recent history of the Russian Empire, Savitsky wrote in 1921 of Orthodox-Muslim and Orthodox-Buddhist cultures playing their part in the Eurasian whole (which puts one in mind of how the Central Asian states were contained in the Soviet whole.) Trubetskoy added a fierce ideological argument against Eurocentrism, the ultimate enemy.

One of the most interesting features of Eurasianism was its anti-Westernism. The impulse to consign the West qua Europe to history had been strong in Russia throughout the nineteenth century and anticipated the West's sense of its own downfall at the beginning of the twentieth century. When it emerged in new packaging in the 1920s, therefore, Russian anti-Westernism had Spengler's Decline of the West written all over it. Like Spengler, the Eurasians looked to a changed balance of global power. They predicted that Russia and America, but not Europe, would play the major parts in the twentieth-century order. Now, post-1991, one might equally see a resurgent conservative Russia desperate to avoid the cultural relativism of a postmodern, no longer Enlightened West. Restrictive attitudes towards gay sexuality and restored state control of much of the media show this Putinesque Russia, if it must be somehow named after its present leader, restoring its own norms in the face of Western decadence; and being proud of that achievement. Even morally proud.

Eurasianism required Russia to adopt a non-Western conception of itself as a prerequisite of its emerging twentieth-century greatness. It was to disdain "Romano-Germanic ethnocentricity" and reject Western claims to speak for a universal humanity. The idea, harking back to a late-medieval image of Moscow as the "third Rome", was to promote a non-Western Christian civilization centred on Russia.

Eurasianism's anti-Western project interpreted the Marxist internationalist project of the Revolution as a disaster. Trubetskoy saw 1917 as Russia's moment of self-destruction, under pernicious Western influence, before a new Eurasian start. He said that Russia's tendency to measure itself against Europe had always been to its own detriment and produced derogatory notions of Russian backwardness and imitativeness. Eurasianism's rethinking of Russia's achievement would underscore its uniqueness and strength. Because Eurasianism would change the balance of the world, Savitsky claimed that the Russian Revolution was not just a Russian event, nor just a European one, but a moment of global shift. "After the Bolshevik Revolution, Russia in a certain sense becomes the ideological centre-point of the world", he wrote.

Himself forced abroad by Bolshevism, the philosopher Nicholas Berdyaev noted that the Eurasianism of the 1920s was "the only post-revolutionary intellectual movement to arise out of the �migr� milieu". It landed a rich catch of �migr�s and exiles in its net, though as the decade progressed and extremism increased, almost as many jumped out again. They included the movement's founding father Trubetskoy, and his friend the patriotic, unhappily exiled philologist Roman Jakobson.

The evident problem with Eurasianism from the start was the encouragement it gave to political extremism. Liberals labelled it a fascist movement, while for Berdyaev it confirmed his feeling that Russia was forever bound to lurch between the Red (Communism) and the Black (fascism). Berdyaev, though not a conservative, warned that Eurasianism could turn into a rival Russian fascism. In practice it showed another native weakness before it got anywhere near power. The Paris left-Eurasians pitched themselves against the right-wing Eurasians in Prague, while the nascent Soviet authorities encouraged this disarray. The political absolutists and philosophers over two centuries of modern Russia were entirely right when they said the first thing to contend with was always the risk that the country and its institutions would fall apart, if granted too much freedom. The Russian centre never held voluntarily. That was another way of making Berdyaev's point about the Red and the Black.

Eurasianism was, like Nazism, a product of the immediate years after the First World War, to which Russia added revolution and civil war and Germany added defeat and the end of its empire, as well as its own failed attempt at a Communist revolution. Golo Mann wrote of Germany after 1918 that "By its very existence Berlin raised the question of how an undisciplined society, estranged from its own past, should live". The same question confronted the Russian exiles, patriots who rejected the "Red", Marxist-Leninist solution.

While the world-famous Tamara Karsavina was dancing on the London ballet stage, her brother Lev, forcibly exiled in Paris - he was one of the seventy or so alternative thinkers that Lenin deported on the famous "philosophy steamers" - became a Eurasian figurehead. A religious philosopher, Lev Karsavin entrenched himself in a spiritual vision for Russia, and after Eurasianism migrated from its first days in Prague, his Paris home became its headquarters. The movement around Karsavin believed itself to be above politics. It set out its views in a journal financed by an English former civil servant, Henry Norman Spalding (1877-1953), who with his wife also co-founded a chair of Eastern Religions and Ethics, a university lectureship in Eastern Orthodox Culture, and other related posts at Oxford between the wars. Spalding's very existence reminds us that Western observers of Russia can be just as captivated by the grandiose and authoritarian as the Russians themselves.

The core Eurasian doctrine was succinctly expressed by Nikolai Alekseev, one of Karsavin's colleagues, in 1927 in the journal Put' (The Way): "The future of Russia belongs to a lawful Orthodox state, which will be able to combine unshakeable power (the principle of dictatorship) with the people's self-government (the principle of freemen) and service to social justice". Thus the tripartite solution surfaced once more, remarkably close in its formulation to what Uvarov had come up with a century before. It stressed an autocratic legitimacy derived from God, which allowed the people to follow an idea of their national calling. It is what now, in Russia's third moment of restoration after a period of chaos in the past two centuries, we should expect again. What is probably hardest for Westerners to understand is that grain of freedom that seems from the other side to be enshrined in the notion of "the people": the Russian People, their country.

Dmitri Trenin, director of the Carnegie Moscow Center, has said in regard to the present Russian regime that it is a neo-tsarism in which "power is personalised as in a monarchy but legitimacy is derived not from God, as in traditional tsarism, but rather from the consent of the majority of the governed" ("Drivers of Russia's Foreign Policy" in Kadri Liik, ed., Russia's "Pivot" to Eurasia, published by the European Council on Foreign Relations, May 2014). That majority are today's "people". Eighty per cent of them do not have passports, have never been abroad and do not intend to go, according to Pavel Salin (ibid.). They are intensely conservative.

One has to think of a notion of freedom contested by Western individualism for as long as it has been in existence, namely Rousseau's General Will. On one view Hegel's Idealism took much of its political inspiration from Rousseau. Marxism turned Hegelianism into a socialist progressivism. These were for Isaiah Berlin the named enemies of "negative liberty", not least because they assumed an assent where it was not actively given, whether out of dissent, ignorance or apathy. With the old names now discredited in Russia, too, the old vision of a positive liberty maintaining the integrity of an otherwise threatened country finds a new home in some vague Eurasianism.

Berlin probably underestimated the threat of schism as the major force in Russian politics. He did, however, take a step in that direction in 1960 when in his essay "Russian Populism" he explained how Rousseau inspired even the liberal Herzen to believe, for Russia, in the "natural socialism of the peasant mir" ("a free association of peasants", in Berlin's words, "which periodically redistributed the agricultural land to be tilled"). Along with Herzen there were perhaps moments when even Berlin accepted Russian exceptionalism as inevitable.

Compare again the Eurasian doctrine with both the conservatism of the tsars and the ideology of the Soviet Union. In both the late eighteenth and the early twentieth centuries Russia had to redefine itself after a crisis of order and identity. In 1833, when Uvarov set down Russia's aims as Orthodoxy, Autocracy and Nationality, the threat of the French Revolution still hung over Russian absolutism. For the conservatives of just under a century later, their own Revolution had displaced them and threatened to destroy the meaning of their lives. So Russia should recover its Church, restore its Dictatorship and revivify the cult of the People. In fact, when the aims of the Eurasianists are set alongside what the Soviet Union did create in Russia, that is rule by Party, Dictatorship and People, it seems as if an anti-Western, anti-Eurocentric illiberal Russia could readily have developed without the Marxist veneer a century ago. Where the Party held the people in check, the Church could equally well have inspired and oppressed them - or held them together - backed by the force of the state.

That near identity of ideology, far more than just an affinity, is one reason why Eurasianism has so quickly stepped into the shoes of Marxist-Leninism in the twenty-first century. It readily expresses the extremism of a country tending to lawlessness, but bolstered and even steadied by self-glorification. The Putin-era concept of "managed democracy" seems to contain layers of history and meaning. Political scientists were on the wrong track when they looked for a transition to Western democracy after the end of the Soviet Union in 1991, at a time when Russia, like Germany in 1918, was "an undisciplined country estranged from its own past". Russia was never comfortable with "Liberty, Equality, Fraternity" and those now in power see their country emerging from the same kind of crisis as that which provoked their predecessors to reject the West in 1833 and again, among the Eurasians, after 1917. This, however, leaves the West to cope with an alien ideology, powerfully reborn in the reckless 1920s and recently renewed.

 
 #21
http://usforeignpolicy.blogs.lalibre.be
May 12, 2015
2015 Schlangenbad Dialogue: the East-West Confrontation in Microcosm
By Gilbert Doctorow, Ph.D.
G. Doctorow is the European Coordinator, American Committee for East West Accord, Ltd. He is a Research Fellow of the American University in Moscow. Doctorow's latest book, Stepping Out of Line: Collected (Nonconformist) Essays on Russian-American Relations, 2008-12, is available in paperback and e-book from Amazon.com and affiliated websites.
 
One of the key annual events in bilateral German-Russian strategic brainstorming is the traditional Schlangenbader Gespr�ch, best translated as "the Schlangenbad Dialogue," held over the course of three intensely filled days of panel discussions, free-seating shared meals and ending in a half day's cultural excursion. The venue is a Taunus hills resort town 40 km from Frankfurt. The organizer is the Friedrich Ebert Foundation, the think tank of Germany's second largest political party, the Social Democrats (SPD), which has an international footprint via its offices abroad, including Moscow, Washington and Brussels.

The theme for this year was inescapable and thought provoking:  "The End of the European Home:  What Comes Next?"  There was every reason to expect big things. The punctuation emphasized the passing of an era, the abandonment of the dream of the days immediately following the end of the original Cold War in 1989. The placement of the question mark over the future put the participants on notice that they should think outside the box. Der Spiegel sent a correspondent.  Reporters from two other mainstream German dailies also sent reporters, at least to day one.

The conference came at the end of April and was the 18th edition since the founding of the Dialogue. Some 15 Russians and 65 Germans were in attendance.  A majority of them have participated year after year. Some have been in it from the very beginning. A small number, perhaps 10%, myself included, were newcomers.

The continuity of invitations is an important contributing factor to the atmosphere of the event.  The same attendees from both German and Russian sides have met together both in good times and in bad times and they come to the conference with a store of good will.  In addition, the warm hospitality of the organizers and the delightful surroundings in the midst of prime German wine country create an atmosphere of relaxation that is propitious to reflection. The proof in this instance was that the highest ranking Russian government official, a deputy minister of foreign affairs, came with his wife and stayed for the entire duration. Moreover, there were no walk-outs, no shows of discourtesy or personal rancor even when two of the "dissidents" in the Russian delegation made programmatic statements from the floor which were meant to deal body blows to the 'Putin regime.'

As I have just said, journalists were admitted. In that sense my essay today is in line with the policies of the organizers that the Dialogue is not a closed shop.  But it is held under Chatham House rules, meaning that no direct attribution of remarks made is allowed, rules which I intend to honor in full.

That said, the sad reality of the 2015 Schlangenbad Dialogue is that the prepared speeches and even the spontaneous remarks of participants in Q&A hardly strayed from what the same speakers say to the general public and to journalists for attribution.  This is not a reproach to the Friedrich Ebert Foundation. It is merely a frank acknowledgement that in present circumstances of the New Cold War and diametrically contradictory narratives of the Ukraine crisis in the mainstream media on both sides, we have an ideational if not ideological divide between Russia and the West so great that a gathering like the Schlangenbad Dialogue becomes a microcosm of the world outside its doors whatever its hosts may have hoped for.

Of course, private side discussions always leave more room to step back from hardened positions. As I discovered in the corridors, at the dinner table, in shared taxi rides with other participants, there are ways to break the ice, to go beyond frozen conflict and grandstanding rhetoric and to begin more constructive discussions. Uncovering that secret will be the main point of this essay.

During the first plenary session, one of the participants asked why the two delegations are so unbalanced in numbers if the objective is full and equal dialogue. The answer to that one was easy enough: the consideration of distance to travel and expense. However, a deeper question was not asked:  why there was much more diversity of positions in the small Russian contingent than in the large German group? As regards the Russians, the reason surely lies with the invitation policy of our hosts. As regards the Germans, it may be a sign of the times, as I explain further on.

Apart from the deputy minister and one or two officials, the Russians were mostly academics, think tank administrators representing 'civil society.'  As such, they were positioned along a continuum from Kremlin loyalists to Opposition.  At the far end there were two certified "dissidents," both of whom were carrying visiting cards with self-descriptions as "publicists," by which is meant "political observers" or "commentators."  One was a professor who attracted media attention a year ago when he was fired from his post at the prestigious Moscow university specializing in international relations that has trained generations of Russian diplomats. He was let go for publishing an article likening his country's 'annexation' of Crimea (officially considered a "reunification'' with Russia)  with Hitler's seizure of the Sudetenland. He demonstrated in the plenary sessions that his views of the regime have not mellowed in his forced retirement.  The other "dissident" was a former Duma deputy and leader of the systemic Liberal Opposition alongside Boris Nemtsov and Mikhail Kasyanov.  Though silent for most of the conference, in the last day he weighed in against the regime in no uncertain terms.

The academics on the Russian side performed well in Schlangenbad.  They were entertaining, at times sparkling in the panel devoted to conceptualizing the coming post-Cold War period architecture of international relations in terms of the 19th century Concert of Powers.  The middle level Russian functionaries were informative and constructive in their presentations to a panel devoted to the present and future role of the OSCE in peacekeeping in Donbas and facilitating the implementation of the Minsk-2 accords.  The problem was with the highest ranking members of the delegation, who should have been the main beneficiaries of exposure to diverse opinions from their compatriots and German interlocutors.

There is no need nor would it be in keeping with the ground rules for me to go into the specifics of what the Russian deputy foreign minister said in the keynote speech which opened the conference or in his remarks during Q&A in plenary sessions.  But the specific words do not count. Generally his arguments and approach to defending his country's foreign policy with respect to Ukraine  did not differ from what I have heard from another Russian deputy foreign minister speaking to an EU-Russian conference in Brussels in December or from the Russian ambassador to NATO during a debate  with Elmar Brok, chair of the European Parliament committee on foreign relations, held in Brussels in April under the aegis of another German think tank, this one serving the Bavarian wing of Merkel's party.

As individuals, the top Russian diplomats I have encountered are well educated, sophisticated in dress and demeanor and have good communication skills, meaning fluency in one or more foreign languages. But the script they are being given from headquarters on Smolenskaya Square in Moscow exposes them and their government to derision, as also occurred in Schlangenbad. The blame lies in the chain of command rising through Sergei Lavrov  to President Putin, who clearly does not trust his diplomats to argue the Russian case with their own innate skills and in keeping with the circumstances before them. It is symptomatic of this problem that Moscow sent to Schlangenbad a deputy minister of foreign affairs whose background in the ministry meant that he knows virtually nothing about Germany by his own admission.  This was not a mistake; it ensured he could only deliver the message he had been given at a very high level event in German-Russian relations.

The official Kremlin script denies there is a Cold War going on, since there is, we are told, no ideological divide.  No divide, the officials say, because Russia adopted Western values back in the early 1990s.  Similarly the concept of a European Home stretching from Lisbon to Vladivostok remains valid; we must just fix the plumbing, repair the tears in the roof, do some redecorating, and everything will be fine.  Russia has a very different interpretation from the West on what happened in Kiev on 22 February. The secession of Crimea through a referendum and its decision to join the Russian Federation came about as a result of the refusal of the local population of Russian speakers to accept the authority of the illegitimate regime installed in Kiev by the Maidan and its Western backers.  The process of reunification with Russia conformed to international law and to the guiding principles of the United Nations which stress the right of all peoples to self-determination. The civil war which broke out in Donetsk and Lugansk similarly was a Ukrainian matter reflecting the demand of the Donbas population for autonomy in a federalized constitution as their response to the nationalists now in control of the capital.  Russia did not send troops or materiel into the Donbas.  There is no reason for us not to be friends.

This policy line evoked in Schlangenbad the same derision as it did at the Munich Security Conference in February and as I have seen arise elsewhere.  The Russian official line takes the dishonest legalistic arguments over Russia's alleged violations of international norms put forward by its detractors in the West and responds in kind with dishonest bluster.

The problem is not that the Russian position over Ukraine is indefensible.  It is that the defenses being invoked are the wrong ones.

I firmly believe the truth is always or nearly always the best line of argumentation.  America incited a coup d'etat in Kiev to effectively take control of the country in pursuit of its geopolitical interests in compromising Russian national security and diminishing its threat to American hegemony.  Russia intervened in Ukraine firstly and foremost to ensure that its key naval installations in Sevastopol would not fall victim to the regime change in Ukraine and come under NATO control.  Secondly, Russia was concerned at the possibility of Ukraine being put on a path to NATO accession, thereby giving an increasingly hostile state on its border with potentially strong military chapter 5 protection. In these issues, Ukraine and its Western backers were crossing red lines of existential security concerns which Russia had declared repeatedly going back a decade or more.

Instead of pussy-footing about its own interpretation of international law and kindly intentions, Moscow's diplomats would do much better stating that the country will take all measures necessary to safeguard its national security. Full stop. That kind of forceful statement of intent would wipe the smiles off the faces of  Western interlocutors and focus minds on what can be done to find compromises and move on.

By insisting too heatedly there is no proof behind Western accusations it has troops in Donbas, Russian diplomacy is willfully ignoring the greater truth that rankles. It is undeniable that from the beginning it has inspired and given moral encouragement to the separatist movement in Donbas.

 In fact, Moscow has acted in this matter as a mirror image of the policy made in Kiev, whereby war is a calculated instrument of identity politics.  From the first days when the Maidan regime came to power, Arseniy Yatsenyuk was spoiling for a war with Russia for the sake of building a Ukrainian nation.   The concept is very simple: nationhood through battle and shared hardship.

 Putin understood this perfectly and did not oblige.  Indeed Russia had the capability of sweeping across Ukraine if it had so desired.  The time to strike would have been just after securing Crimea militarily, just to move on down the coast and across into the Ukrainian heartland. But Putin made no preparations for such a campaign. He had no field hospitals ready, no supplies in place, none of the prerequisites to support such an invasion force.  Indeed the whole time that the West was shouting about Russian forces concentrated on the border, Putin did not ready the logistics to support an invading army.  There were no clusters of helicopters ready to direct fire.

As the Kremlin freely acknowledged at the start of the conflict, their own intelligence made plain to the Russians that Donbas, not to mention areas further to the west in Ukraine, had no majorities in favor of seceding from Ukraine and uniting with Russia.  Had he made a move to take these areas, he would have occupied territories where a resistance movement could break out, all the while earning drastic punishment from the West.

 Instead he paid Kiev back with in its own coin. He encouraged the separatists in Donbas to fight for their own freedom without Russian participation.  They did so, Kiev responded with its vicious anti-terrorist campaign which created a real independence movement in Donbas and brought the majority of the population out against Kiev. The result was the creation of a civil war with Russian encouragement that served the purpose of building nationhood in Donbas while fracturing the identity politics of Kiev.   

 I was told that in past editions of the Schlagenbad Dialogue there were differences of views among the German participants. In that case, the spirit of the times, the New Cold War, has been all the more an enforcer of conformism on the German side than one might have supposed, because there did not appear to be much daylight between the positions defended in the plenary sessions by German academics, Bundestag deputies, present/retired ambassadors and foreign ministry staff. Bringing Germans from different career lines together did not broaden their horizons, at least on the subject of Russia.

A couple of times synchronous applause (rapping on the table, German style) broke out among German participants around the hall in support of harsh words about Russian policy from one or another speaker. This kind of emotional display suggests confidence there is a general consensus. What this intellectual consensus is we shall now examine in detail.

In the broad audience I identified a number of mental blocks on the German side preventing them from conceptualizing the East-West conflict in ways that can lead to resolution.  They come from a Political Correctness that none of us can afford under present crisis conditions.

First there is denial among Germans that they have a foreign policy.  Whereas in the last century Germany hid behind France, its partner "locomotive" of the European Economic Community, then European Union, today it hides behind Brussels and collective decisions of the 28 member states. The problem with this is that it is a carefully constructed fiction. The European Union Institutions - Parliament, Council and Commission - are all controlled from Berlin which engineered the appointment/election of all the top officials over the past year.

Second there is what I call the "bunny rabbit" self-image, the pretended innocence of Germany as a country that virtually disarmed after the Cold War ended and is now facing a belligerent Russia which can overrun the Baltics and possibly Poland at its choosing. There is professed amazement that Russia could see a threat in themselves or in NATO given the paltry forces and materiel at German disposal.  However, this is disingenuous.  Behind Germany stands the United States which has considerably more military might than Russia.

Lastly, in the spirit of virtuous innocence, my German colleagues insisted that they, unlike the Americans, never practiced regime change and so reject Russian ire over the coup d'etat of 22 February in Kiev. But Germans were undeniably active in supporting the Maidan from its first emergence in the weeks following President Yanukovich's refusal to sign the Association Agreement with the EU. It was not just the American Victoria Nuland who was out on the square giving encouragement to protesters.  German Minister of Foreign Affairs at the time Guido Westerwelle was also on the square intervening in Ukrainian internal affairs, as were some German Bundestag members, all to the detriment of the existing legally elected president of Ukraine.

Listening to my fellow participants during the plenary sessions and in quiet conversation over meals, I was left in no doubt that the great majority of the Germans present fully believe in the new secular religion that also holds sway in the European Institutions in Brussels. I call it a religion because it is based on articles of faith. None of the postulates can be proven though they are accepted as ultimate truth by all believers.

The first article of this modern day catechism is that authoritarian regimes cannot live in peace with democratic nations.  This overarching principle is used to explain Kremlin behavior and the logic of the present confrontation over Ukraine.  Authoritarian regimes do not enjoy the support of their people. For that reason they must divert attention to bogus foreign threats, by creating enemies and seeking to isolate their people from the outside world. Hence Vladimir Putin after the mass street demonstrations in December 2011 protesting the falsified Duma elections had to invent the American threat to hold onto power, and this policy led ultimately to the showdown over Ukraine.

Another key article of faith which I heard repeatedly from my German colleagues in Schlangenbad is that foreign policy must be built on universal values of democracy and protection of human rights plus rule of law.  Russia is deemed to be failing in these fundamental areas of governance and so deserves heightened attention; it is not a country with which one can do business as usual.

The combined effect of both the foregoing postulates is democracy promotion and a moral obligation to intervene in the affairs of sovereign states for the sake of just values.  A host of problems arise from this of which the believers around me seemed not to have a clue.

It is both ironic and tragic that such views should prevail precisely in Germany.  Political science texts commonly make reference to the Westphalia system of nation states and to balance of power considerations guiding international politics.  It is more common to ignore on what basis this system came into being, which was precisely the resolution of the terribly destructive Thirty Years War fought on German lands over the issue of furthering universal values, represented at the time by the Counter-Reformation Catholic Church. In essence international relations have now been pushed back to the ways of 1618 before the lessons enshrined in the Treaty of Westphalia were made to prevail for reasons of self-preservation.

Universal values allow of no compromises, they deny the art of diplomacy and work through Diktat. In our modern day, when used as a cudgel against a nuclear power like Russia, they are a formula for Armageddon.

And it was precisely this insight that guided my conversations at Schlangenbad with my otherwise stiff-necked interlocutors.  After listening patiently to the inevitable snide remarks about Kremlin positions, I followed the American folk wisdom for getting the attention of a mule: you first whack him with a 2 by 4 beam.  The beam at my disposal was the remark: "Gentlemen if we continue in this tone with the Russians, we will all be dead."  It was amazing and heartening how the conversation did not end at that point but actually came alive.  In these side conversations, the German officials I spoke to cast off the Teflon persona associated with their rank and we began to talk in earnest about the real threats from the present nadir in communications with Russia amidst muscle flexing by the armies of all sides.

I was not surprised to hear one of the more prominent German colleagues go up to our Opposition politician and shake his hand warmly, saying:  "Ah, I was hoping by now you would already be President."  All in all, the German participants were paying too much attention to the Russian 'dissidents' at the conference who said what Westerners like to hear about the 'regime.'  But the power is not there and will not be there for the foreseeable future. Nor is it with the Russian academics at the conference.

Any regime change in Russia will not lead to formation of a government that is kinder to the West. On the contrary, it would likely bring to power fervent nationalists who have been impatient with the restrained Realpolitik of Putin which always makes moves within the bounds of feasible even if they fall well short of the desirable.

Our German colleagues have to be brought back down to earth before it is too late.
 

 #22
Interfax-Ukraine
May 15, 2015
Nuland, Yatseniuk discuss ways to overcome Russian aggression, carry out Minsk accords
 
Ukrainian Prime Minister Arseniy Yatseniuk during his meeting with U.S. Assistant Secretary of State Victoria Nuland in Kyiv discussed the implementation of the Minsk agreements, the ways to overcome the Russian aggression and the United States' assistance in these maters, the press service of the Ukrainian Cabinet reported.

"The key topics of discussion were the issues of overcoming the Russian aggression, the fulfillment of the Minsk agreements, the implementation of economic reforms and the fight against corruption, as well as the assistance from the United States in these processes," the government said in a statement.

In addition, Yatseniuk and Nuland discussed the progress of the implementation of the program of cooperation with the International Monetary Fund, as well as the preparations to apply a free trade area agreement between Ukraine and the European Union on January 1, 2016.

Another topic addressed on Thursday was cooperation in investigating transfers of former Ukrainian officials' illegally acquired assets abroad.
 
 #23
www.rt.com
May 15, 2015
'Great Ukrainian Wall': Kiev plans to spend $200mn on Russian border defenses

Kiev authorities have approved a major new program to isolate the country from Russia by constructing an enormous barrier, equipped with anti-tank ditches and remote controlled weapons stations. They intend to spend $200 million on the grand plan.

On April 14, the Ukrainian cabinet approved a plan for technical arrangements on the Russian-Ukrainian border for 2015-2018.

The plan includes a project initially called 'The Wall' or 'European bulwark'. It's estimated to be worth 4 billion hryvnias (about $US200 million) and involves the construction of a barbed-wire fence with 17-meter high steelwork turrets. There will also be four-meter wide, two-meter deep antitank ditches, a lateral route and a drag road, remote combat modules, fortified sectors, observation posts, CCTV cameras, communication towers and alarm systems.

The plan is to complete construction within three years, yet previous intentions to erect a barrier on the Russian border floundered due to Ukraine's lack of cash.

Initially, the idea of digging a ditch on the Russian-Ukrainian border was voiced by the former governor of Dnepropetrovsk region, Ukrainian oligarch Igor Kolomoysky. He even funded a military field engineering vehicle that created a ditch on the border with Russia.

The idea was backed by President Petro Poroshenko and Prime Minister Arseny Yatsenyuk.

In September 2014, Yatsenuk announced plans to build a 2,295-kilometer long "real border" with Russia. The ground section of the border is set to feature a ditch at least four meters wide and two meters deep, equipped with electronic surveillance systems, towers and other structures. The cost of the project, according to Yatsenyuk, was estimated at the time at €66 million (nearly $86 million).

The length of the Russian-Ukrainian border is nearly 2,500 kilometers, which is comparable to the US-Mexican 3,141 kilometer border that is secured with a metal fence and intruder detection sensors. Washington has spent billions of dollars on the Mexican border barrier, and will spend tens of billions on its maintenance over the next two decades.

Even if Kiev authorities manage to allocate funds for the construction of the 'great fence', the costs of its maintenance and border patrols will be prohibitive.
 

#24
5 Kanal TV (Kyiv)
May 14, 2015
Ukraine military says almost 9,000 Russian troops in country's east

[Presenter] There are over 8,000 Russian military men staying in the territory of Ukraine, while illegal armed groups of the terrorist DPR and LPR [self-proclaimed Donetsk and Luhansk People's Republics] consist of more than 33,000 people, according to the deputy head of the ATO [antiterrorist operation] staff, Col Serhiy Halushko. He tells how much equipment militants have in their arsenal.

[Halushko, in Russian] In Luhansk and Donetsk regions, we have recorded the presence of Russian grouping 8,760 people strong, including four Tochka-U tactical missile systems, 190 tanks, 520 armoured combat vehicles, eight Buratino flame thrower systems, 149 artillery systems, 89 multiple rocket launchers. This is not including illegal armed groupings of the so-called DPR and LPR.
 
 
#25
Russia Insider
www.russia-insider.com
May 14, 2015
How the Media Spins Story of Russian Soldiers In Ukraine
Report published by Russian liberal opposition fails to substantiate allegation of large Russian military presence in Ukraine, but still treated by Western media as doing so
By Alexander Mercouris

Attempts to prove the presence of Russian soldiers in Ukraine are reaching surreal levels.

The Russian liberal opposition has released a report to that effect, which it seems was largely prepared by the murdered Russian liberal politician Boris Nemtsov before his death.

Reuters has also published a dispatch under the incendiary title Special Report - Russian soldiers quit over Ukraine, to essentially the same effect.

Before discussing these reports a point needs to be made.

No one including the Russian government denies there are people from Russia fighting with the militias in the Donbass.  

What the Russian government says is that these are not serving soldiers sent to fight there by the Russian government. Rather, they are volunteers who have gone there to fight of their own will.

The Russian government admits some of these volunteers are serving soldiers in the Russian army. However it says they have gone to fight there during their leave (a by no means absurd idea, despite the derision this claim has met from some western commentators).

What the Ukrainian and Western governments by contrast say, and what the Nemtsov Report and the Reuters despatch set out to prove, is that the people from Russia fighting with the militias in the Donbass are not volunteers at all, but are serving Russian soldiers, sent to fight there by the Russian government.

Do the Nemtsov Report and the Reuters despatch prove that what the Ukrainian and Western governments say is right, and what the Russian government says is wrong?

The short answer is no.

The Nemtsov Report has been ably deconstructed by RT's Anissa Naouai, whose points I shall follow.  

Briefly:

The report claims Russian soldiers have been ordered to resign from the army in order to preserve "deniability" if they are killed or captured.  

The source turns out to be a story in a Russian newspaper (Kommersant) and information supposedly given to Nemtsov by various citizens' groups. No names or details that could substantiate this claim are provided.

Ordering soldiers to resign so as to preserve deniability anyway hardly seems like a good idea. The moment soldiers resign they cease to be under military discipline and are no longer subject to orders. It seems unlikely a military would send soldiers into battle that way.

Frankly it seems far more likely the soldiers who have resigned from the army to go and fight in the Donbass are volunteers. What the report proposes looks like the sort of idea civilians like Nemtsov (who do not know the military well) might come up with, rather than being the sort of thing actual militaries do.

The report says 150 Russian soldiers were killed in the Donbass in 2014 and 70 were killed in 2015. No source is cited. A claim 17 paratroopers from Ivanovo were killed turns out to originate in a note Nemtsov scribbled to himself.

The report says Russia has spent 53 billion roubles (around $1 billion) on the war.

No source is given. It turns out this figure is nothing more than a guess based on the calculations of the authors.

Anissa Naouai says the balance of the report consists of stories culled from the news media and from social media. This has also been admitted by the BBC: "Most of the report is based on facts that have already appeared in Russian and foreign media during a year of conflict in Crimea and eastern Ukraine."

What of the Reuters dispatch?  It turns out to be no better.

Though the despatch purports to provide proof of the presence of Russian soldiers in the Donbass, and of their growing disaffection with the war, in the end it all boils down to a single interview with a single individual who says he was a soldier serving with the famous Kantemirovskaya division when he resigned rather be sent to Ukraine.

This person claims that he did actually fight in the Donbass as a tank driver in the summer of 2014, but that he resigned from the division with 13 other soldiers when ordered to do so again during the winter.

He gives contradictory reasons for his refusal. At one point he says the war in Ukraine has nothing to do with him and that he does not feel he should be sent to fight there in a non official capacity. At another point however he says he and his comrades resigned because they were not given the medals and benefits they were promised  

Reuters says this individual was one of five soldiers who contacted Reuters out of group of 14 who resigned. However all the quotes in the despatch come from this one individual.  If the other four said anything to Reuters, then Reuters is not reporting it.

Reuters says it knows this individual's name and details.  However it refuses to disclose his identity in order to protect him from reprisals.

Since this individual has done nothing illegal by talking to Reuters, it is not obvious what reprisals he has to fear. Given that Reuters says he was one of 14 soldiers who resigned from the Kantemirovksaya division rather than be sent to Ukraine, it would be very easy for the Russian authorities to identify him, and they surely have already done so by now.

Frankly, the refusal to disclose this person's identity looks more like an excuse to shield him from further questions because of doubts about his story.  

Regardless of that, since we know nothing about this person, his story is impossible to corroborate or verify, and cannot be taken seriously.  

On the basis of his account, as Reuters provides it, he comes across as a rather aggrieved individual, annoyed because he did not get the medals and benefits he believes he is entitled to for fighting in the Donbass in the summer.

That points if anything to him being a volunteer.

The rest of the dispatch turns out to be simply padding.

We learn of official records of nine soldiers (not 14) who resigned from the Kantemirovskaya division in December supposedly because they did not want to go and fight in Ukraine as they were ordered to.

Reuters however admits none of the documentation connected to these resignations mentions Ukraine. Reuters was able to contact three of these soldiers.  All refused to give interviews.

An operator of a Grad missile system claims to have been involved in an exercise in the Rostov Region during which he had to remove identifying marks and insignia from his uniform. Supposedly he resigned in March with some of his comrades because of fears he might be sent to Ukraine.

Rostov Region however is in Russia.  It is clear from his account he was never in Ukraine and that he was never asked or ordered to go there.

Reuters says this person "fears" rockets he launched during the exercise "may have hit" targets in Ukraine. He speaks of rumours of other artillery units crossing into Ukraine.

This mix of gossip, imagination and hearsay, is evidence of nothing.

Reuters says it was told by an activist called Krivenko that soldiers had been pressured to go to the Donbass by bribes and threats of dismissal from the army, disguised as "resignation". This is yet another, this time rather different, take on the "resignation" phenomenon. Regardless, Reuters admits it cannot verify his claims.

Reuters says some Buryat soldiers from Siberia have been seen in the Donbass. The militia admits their presence but claims they are volunteers.  Reuters contacted the mother of one of these soldiers.  She however "declined to say whether he had been ordered to go or had volunteered" to go.

That's it.  

We at Russia Insider make no claim to know the complete truth of this matter.   

We are sure the Russian military is present in the Donbass in some form. We do not believe it is there in anything like the numbers the Ukrainian government and some Western officials say. We say this is a civil war and that the great majority of those fighting in the Donbass are Ukrainians.

Recently Der Spiegel published a story that says the German intelligence agency the BND is of the same view (see our discussion of the conflicting intelligence assessments in Ukraine Conflict Has Strained US-German Relations, Russia Insider, 9th March 2015)

What we do not however do is pretend our guesses are facts. Nor do we try to substantiate our guesses by passing off unverified gossip and speculation as evidence that makes them facts.

What is amazing to us is how easily parts of the Western media do that very thing.

The Nemtsov report is now being widely cited and treated as "proof" of what the Ukrainians and some Western governments and officials say about the presence of Russian troops in Ukraine. The BBC, despite admitting that the report is largely based "on facts that have already appeared in Russian and foreign media" still says it makes a "compelling case". As we have seen, it does nothing of the sort.

The Reuters dispatch has been republished, for example by Business Insider and Moscow Times,  and is being treated as an authoritative report on the subject, though reading it with a critical eye quickly exposes its many obvious flaws.

When it comes to the Ukrainian conflict, or indeed to any subject that concerns Russia, it is clear that facts matter little to some people.  Certainly they must not be allowed to get in the way of the story.
 
 
 #26
Russian human rights activist says has proof of Kiev's extrajudicial killings of militias

MOSCOW, May 15. /TASS/. A member of Russia's Civic Chamber Maksim Grigoryev said on Friday he has evidence that Kiev forces have carried out extrajudicial killings of captured militias.

At a press conference hosted by TASS, the human rights activist unveiled a video on a mobile phone believed to show a solider of Ukraine's army throwing a grenade on the alleged Donetsk militias taken hostage by Kiev.

Grigoryev said he received this phone during his recent trip to Donbas and it is said to belong to one of the soldiers of Ukraine's army taking part in the military operation in Ukraine's south-east.

"This is called extrajudicial killing in an international language of law," Grigoryev stressed.

In his turn, Deputy Chairman of Russia's State Duma, the lower house of parliament, Sergey Zheleznyak, has called for the investigation into the crimes committed by the Ukrainian military near the southern port city of Mariupol.

"I once again ask to investigate those awful circumstances linked to detention, tortures and killings of people near Mariupol," he told the press conference. "Dozens of citizens of Mariupol and other regions of the south-east are buried there following murders and tortures," Zheleznyak said.

"A concentration camp is located there housing people who are not loyal to the Kiev authorities," the MP said.
 
 
#27
Sputnik
May 14, 2015
Poroshenko Snubs Minsk Accords, Vows to Fight 'Till Last Drop of Blood'

Ukrainian President Petro Poroshenko has accused Russia of increasing its military presence in his country, something Moscow firmly denies, and said that Ukraine would fight "Russian aggression" "until the last drop of blood."

In an interview with German broadcaster ZDF, Ukrainian President Petro Poroshenko said Russia has deployed 11,000 troops in the war-torn Eastern Ukraine, adding that they can fuel separatists in the region and make them create a land bridge to the Crimean peninsula.

This claim sparked harsh reaction from Moscow, with Kremlin spokesman Dmitry Peskov saying Thursday that: "such baseless, vague and ungrounded accusations will never produce a positive result, to put it mildly."

Poroshenko also criticized the Minsk agreement and called it a "pseudo-peace", which does not guarantee any security for his country. At the same time, his French and German counterparts consider its implementation a key aspect for maintaining security in Europe and the best option for overcoming the current crisis.

"The Minsk provisions are what we have. They are [...] fundamental to trying to find a peaceful solution. We cannot say for sure that this will be successful, but we have no choice. That is why we should continue our work in this direction," German Chancellor Angela Merkel said earlier.

"The best way to get out of this situation is to move towards implementation of the Minsk Agreement," echoed French President Francois Hollande.

During his interview, Poroshenko compared the current situation to World War II, with the only difference being that the threat comes not from the West, but from the East. He claimed that there are about 11,000 Russian soldiers currently present in Ukraine. "We will fight for our country to the last drop of blood," said Poroshenko.

Ordinary Ukrainians, however, do not to support his warlike spirit. According to recent surveys, 95% of working-age men in Kiev alone are evading military service, using a variety of methods from bribery to fleeing to other countries.

Kiev has repeatedly accused Moscow of supporting separatists in Eastern Ukraine and fuelling the situation in the country, while Moscow has denied Kiev's allegations about its involvement in the conflict.
 
 #28
Russia takes steps to establish interaction with Ukraine on issue of humanitarian aid - Russian Foreign Ministry

MOSCOW. May 15 (Interfax) - Russia is ready for cooperation with Ukraine on the issue of humanitarian assistance supplies and is already taking steps in this direction, the Russian Foreign Ministry said.

"Moscow is ready for close constructive cooperation with the Ukrainian authorities on issues relating to the supply of humanitarian assistance to civilians who are suffering from the acute conflict in Ukraine," the ministry said in a report posted on its website on Friday.

The Foreign Ministry pointed out the recent steps to establish such interaction.

Specifically, the Russian Foreign Ministry on April 6 and 7 sent a letter written by Russian Emergency Situations Minister Vladimir Puchkov to Zoryan Shkiryak, who was then acting head of the Ukrainian Emergency Situations Service, asking him to promptly send Ukraine's proposals on improvements in the humanitarian assistance work.

"In its note of April 9, 2015, the Ukrainian Foreign Ministry stated some proposals and suggested holding in mid April 2015 working consultations between representatives of the sides' relevant agencies to develop an algorithm of interaction in the delivery of humanitarian assistance," the report says.
 
 #29
Fort Ross/Rusvesna
http://fortruss.blogspot.com
May 14, 2015
IMF demands will make most Ukrainians homeless - Finance Minister of Ukraine
Rusvesna [http://rusvesna.su/news/1431617362]
Translated by Kristina Rus

Fulfilling the requirements of the IMF will make the majority of Ukrainians homeless - said the Minister of Finance of Ukraine, according to Ukrainian portal MIGnews.

The International Monetary Fund expects the Ukrainian authorities to adopt such laws which will make the majority of the population in the country homeless, said the Finance Minister of American origin Natalie Jaresko.

According to her, one of the outstanding issues before the transfer to the Ukrainian authorities of the next IMF loan is the failure of the Verkhovna Rada to pass some bills.

In particular, the following: "The bills related to improving the capabilities of "Naftogaz" to collect their receivables. We are talking about the removal of various existing barriers, which currently do not allow this," - said Jaresko.

According to her, there are two such problem bills. "One of these bills, I know, is on the agenda of the Verkhovna Rada on Thursday, and the second one the government will have to submit a second time, since it failed to pass", - said the Minister of Finance.

Currently in Ukraine there is a moratorium on forced evictions of debtors. This is justified under conditions of a severe economic crisis in Ukraine, frozen wages and social benefits.

The consequence of the crisis was the rise in unemployment and a sharp fall in real incomes. People are objectively unable to pay the utility bills, which the government of Arseniy Yatsenyuk raised several times.

The second bill will make the rates profitable for the utility companies. Currently the utility companies are mostly municipal and are subsidized from the budget, operating without profit or at low profit.

The adoption of the law, rejected by Parliament, will allow to raise utility prices several more times - now by decisions of the enterprises themselves, which will be granted such a right.

The adoption of this law will make Ukrainian housing and utility services attractive for foreign companies, emphasized earlier Prime Minister of Ukraine Yatsenyuk.

In case of adoption of these IMF bills the utility rates will increase several more times, the housing sector will pass to foreign companies, which will begin evicting Ukrainians from their homes for non-payment.

Ukraine in the framework of the joint program with the International Monetary Fund expects to receive a second tranche of approximately $1.7 billion.
 
 #30
Interfax-Ukraine
May 15, 2015
GDP decline in Ukraine accelerates to 17.6% in Q1, 2015 - statistics
 
Ukraine's real gross domestic product (GDP) in the first quarter of 2015 dropped by 17.6% compared to the same period in 2014, whereas in the fourth quarter of 2014 the fall was 14.8%, in the third - 5.4%, in the second - 4.5%, and in the first - 1.2%.

According to live data published by the State Statistics Service, compared to the fourth quarter of 2014, GDP in the first quarter of 2015 slumped by 6.5%, given the seasonal factor.

The service has not provided other data, in particular on nominal GDP.

The national budget of Ukraine for 2015 is built on the optimistic scenario, providing for a fall in GDP of 5.5% with inflation being 26.7% and an average annual rate of UAH 21.7 per $1, while the government's other two scenarios assume a fall in GDP of 8.6% and 11.9% with inflation being 38.1% and 42.8% respectively.

The National Bank of Ukraine in late April estimated the decline in GDP in the first quarter of 2015 at 15%, while in general over the year it worsened the forecast decline to 7.5%.

According to its data, the decline in the second quarter of 2015 compared to the same quarter of 2014 will slow down to 10.2%, in the third quarter - to 5.7%, while in the fourth quarter growth will reach 2%.

According to the State Statistics Service, Ukraine's GDP in 2014 declined by 6.8%.
 
 #31
Interfax-Ukraine
May 15, 2015
Shadow economy in Ukraine in 2014 up to record high since 2007, to 42% of GDP - Trade Ministry
 
The level of the shadow economy in Ukraine in 2014 increased by 7 percentage points compared to 2013, to 42% of GDP, reaching a record high since 2007, the Ministry of Economic Development and Trade has reported in its study.

As noted in the study, the level of shadow economy last year was extremely high and was caused by the military conflict in the country, financial destabilization (the significant deficit of the balance of payments, price and exchange rate shocks, the increased loss of production), the increasing panic of economic agents, and the increased administrative burden.

According to the ministry, in 2014 all methods for calculating the shadow economy uncovered growth in comparison with 2013. In particular, the "electric" method (the comparison of the growth in electricity consumption to GDP growth) exhibited an increase of 9 percentage points, to 39% of official GDP, the monetary method - by 8 percentage points, to 32%, the "public expenses-retail turnover" method - 7 percentage points, to 57%, and the loss-making enterprises method - 5 percentage points, to 34%.
 
 #32
Atlantic Council
May 14, 2015
Four Reasons to Be Hopeful About Ukraine's Economy
By Yuriy Gorodnichenko
Yuriy Gorodnichenko is an Associate Professor of economics at the University of California at Berkeley.
[Figures here http://www.atlanticcouncil.org/blogs/new-atlanticist/four-reasons-to-be-hopeful-about-ukraine-s-economy]

Ukraine's current economic crisis was years in the making. Former President Viktor Yanukovych grossly mismanaged and looted the country. And it may take years for the country to fully recover. But there are signs that the economy has reached the lowest point and its prospects are brighter than commonly portrayed in the press.

First, the International Monetary Fund's (IMF) massive, front-loaded aid package gave much-needed breathing space to the Ukrainian government. The IMF deal gave the government resources to cover the deficit and foreign reserves to defend the hryvnia. Most visibly, the hryvnia appreciated by a third relative to the levels it reached in the heat of the panic in February 2015.

Second, the country's fiscal position has tangibly improved. While Naftogaz, the state-owned gas monopoly, continues to be a black hole in public finances, the central and local governments had a fiscal surplus in the first quarter of 2015. The government also tripled the price of gas, putting it closer to market levels, thus closing a source of major fiscal problems. Consumers did not complain about the spike in gas prices as much as many had expected. The public perceived that the previous subsidy was not sustainable, and it was widely understood that everyone has to make sacrifices during wartime. In addition, the government provided a transparent and targeted subsidy to the least-protected households, which lessened criticism.

Third, inflation spiked in recent months reaching 60 percent at the estimated rate of annual return. While high, the spike is mostly due to the depreciation of hryvnia in 2014-2015 and a large increase in gas tariffs. Furthermore, a careful analysis suggests that actual inflation may be lower because of biases in the way inflation is calculated by the government. In any case, the National Bank of Ukraine (NBU) has implemented a tight monetary policy and projects inflation to subside by the end of the year. Valeriya Gontareva, the head of the NBU, has reiterated the central bank's commitment to achieving stable and low inflation.

Fourth, the pace of reforms has accelerated in 2015. The government passed and implemented a number of crucial laws to change the institutional environment of the economy. It opened the energy market to more competition, enhanced protection for minority shareholders, cut red tape and regulation, and increased access to public records. Index for Monitoring Reforms, a survey-based index that tracks regulatory changes and is calculated bimonthly based on an expert survey, suggests that the government is serious about reform (see Figure 1).

The government and the IMF expect Ukraine's economy to recover in the second half of 2015. Obviously, such a forecast is subject to many caveats and risks-most importantly, the recovery depends on reduced tension in the Donbas. There are others signs that things may be turning around: the deeply depreciated hryvnia makes Ukrainian goods competitive; the current account deficit-that is, how much imports exceed exports-fell from $630 million in March 2014 to $13 million in March 2015. The initial shock from increased energy prices and economic collapse in eastern Ukraine is wearing out. And government spending on the military has had a stimulatory effect on the economy.

But significant challenges lie ahead. Restructuring the government's sovereign debt won't be easy. The IMF package requires the government to reach a deal with its creditors so that the country can reduce its outstanding debt, increase its maturity, and reduce the interest rate. Ukraine doesn't have much time; the deadline is the end of May. So far the government is not satisfied with the negotiations with its creditors. In 2014 and early 2015, the Ukrainian government could not credibly threaten to default because it did not have the resources to cover a fiscal deficit, but now with a fiscal surplus, the government's position is considerably stronger. Indeed, the market perceives that some restructuring is imminent: Figure 2 shows that the private market assigns a 20 percent probability of default on Ukraine's public debt. One may interpret this probability as suggesting that creditors are expected to lose 20 percent in the process of writing down debt. This haircut is in line with the rates observed in previous cases of sovereign debt defaults. Negotiations may be thorny, but the likelihood of a deal is high. State-owned companies have already started to default and restructure their debts thus paving the way for a larger restructuring.

Figure 2. Probability of default implied by credit default spreads on Ukraine's public debt.

In summary, an economic recovery in Ukraine may be just around the corner. Of course, there is a great deal of uncertainty and the war in the Donbas weighs heavily on the future of the country and its finances. But some economic growth in Ukraine is entirely possible this year.
 
 #33
Ukraine's creditors must accept Kiev's debt proposals - Yatseniuk

KIEV, May 15 (Reuters) - Foreign creditors must agree to the "legitimate" deal offered by Ukraine in talks on restructuring around $23 billion worth of its debt, Prime Minister Arseny Yatseniuk said on Friday.

Negotiations turned sour this week after a group of Ukraine's largest bondholders repeated objections to any writedown on the principal owed, while the Finance Ministry accused creditors of being unwilling to negotiate in good faith.

Speaking to parliament on Friday, Yatseniuk said that bondholders should appreciate the parlous state of Ukraine's finances.

"The country is at war. We have lost 20 percent of our economy. We approached creditors with a clear position on the procedure and terms of restructuring," he said.

"We ask, appeal and insist that external creditors appreciate the current situation and accept Ukraine's offer, which is legitimate and a way to help Ukraine."

The deal put forward by Kiev foresees a maturity extension and a coupon and principal reduction or "haircut."

On Tuesday the creditor committee, which includes investment firm Franklin Templeton and represents investors holding bonds worth about $10 billion, said it had submitted new detailed restructuring proposals, but the plan still rejects any haircut.

Ukraine is under pressure to reach a deal.

The International Monetary Fund says it wants an agreement in place before it concludes its latest review of Ukraine's $17.5 billion bailout programme, which is slated to go to the IMF board in June.

A second tranche of about $2.5 billion hinges on the outcome of the IMF review. Ukraine sorely needs the cash to shore up foreign currency reserves.

Concluding restructuring talks by June was always considered optimistic, but the divisions that emerged this week further undermine prospects for a quick deal.

Ukraine has accused bondholders of not being constructive, while the bondholder committee said neither Kiev nor its advisers had shown substantive engagement with its initial plans delivered four weeks ago.
 
 #34
Bloomberg
May 13, 2015
Ukraine Shouldn't Hold Out for Haircuts
By Leonid Bershidsky

With Greece missing one deadline after another to reach agreement with its creditors, it's easy to forget that a day of reckoning is also nearing for Ukraine. The government is supposed to reach a debt restructuring deal with private bondholders by June, but is no closer than when talks began in mid-March.

As in the Greek case, the parties seem to be speaking different languages. Both the ad-hoc creditors committee and the Ukrainian finance ministry issued harsh statements yesterday, accusing each other of various things that amount to an unwillingness to compromise.

The committee said in an e-mail it had not seen "substantive engagement" with its first proposal, made a month ago, and had submitted a new one that "balances the stated debt reduction interests of Ukraine and one of the investors' objectives of avoiding a principal reduction." That's a lengthy euphemism for "no haircut."

Ukraine's finance ministry, in turn, accused the creditors of trying to negotiate through the media rather than directly. It said the bondholders  were focusing "exclusively on the liquidity aspect" rather than "the debt sustainability objective."

This is a predictable deadlock and seems likely to persist. The problem is that for U.S. asset management company Franklin Templeton, which holds some $8 billion of Ukrainian debt, or about 80 percent of the total amount represented by the committee, agreeing to a haircut would be a reputational disaster.

Templeton's bond guru, Michael Hasenstab, made the big investment in Ukrainian debt at about 80 cents to the dollar, back when President Viktor Yanukovych was still in power. Hasenstab was hardly alone in failing to predict Russia's annexation of Crimea and the war in the east that followed, but even 13 months ago he went to Kiev to record a glowing video about Ukraine's prospects. It should be watched in its entirety as an example of how clueless top financial investors can be about the exotic bets they make.

In the video, Hasenstab praises the Ukrainian provisional government, which had just given up Crimea without a shot and was facing rebellion throughout the country's east, for doing "an exceptional job of tackling not just the short-term issues but really setting the stage for Ukraine to flourish over the next five to ten years." He also says this:

"What attracted us was the universal consensus that it was not going to work. Now, just because the market doesn't like it doesn't necessitate that we do like it, but we do look for situations that are out of favor. When we go to the country, when we're on the ground like we are right now here in Kiev, it's a very different story that maybe is portrayed in the Western media or the conventional wisdom in the market. Being on the ground, understanding the situation, seeing the long-term potential -- that's why we invested in Ukraine."

That statement went well with footage of Kiev's pretty buildings and women in high heels, walking the streets as though they were part of a fashion show. It was also dead wrong. Ukraine was plunging into a vicious recession that still shows no sign of ending. Besides, the government that succeeded the one Hasenstab liked so much a year ago didn't take kindly to paying back debt. The international support it received -- a three-year International Monetary Fund bailout -- came with the condition that it should secure some form of  relief from Ukraine's  private creditors.

The bailout terms call for $15 billion in savings on private debt in the four years through 2018. They also require the government to bring the ratio between public debt and gross domestic product below 71 percent by 2020, and to keep its gross financing needs to an average of 10 percent of GDP through 2025.

Herein lies a chance for Hasenstab to save face: He can argue that the terms don't directly call for a haircut. Sure, he and other bondholders can take a maturity extension. Last month, investors in the debt of state-owned Ukreximbank agreed to put off the redemption of its bonds by seven years, though in exchange for a coupon increase of 1.25 percent. A similar deal on its other bonds could allow Ukraine to make the required savings in the next few years, effectively freezing payments until it can get back on its feet. In the meantime, growth might restart and change the debt-GDP ratio. By 2020 a smaller haircut might be required.

From Hasenstab's point of view, Ukraine shouldn't be pushing for a haircut now. The Ukreximbank deal lifted the price of the bank's bonds above 70 cents on the dollar. If Ukraine agrees to scrap its demands for a haircut, at least for now, the same might happen to the sovereign debt (the five-year bond now trades at 48 cents to the dollar). Hasenstab may then be able to recoup more of Templeton's investment without waiting for the next round of haircut talks, whenever that comes.

Ukraine could hold firm, in which case it will almost certainly have to tell the IMF mission in Kiev that it can't have a deal by June. The IMF could then decide to disburse the next $5 billion tranche of aid in June, or it could pass, figuring the Ukrainian government has to show its competence first -- if only by successfully negotiating a settlement with creditors.

Alternatively, Ukraine could help Hasenstab extricate himself from the mess he got Templeton into. Then, the IMF would happily release the $5 billion and life would go on. By 2020, no one may care too much about the IMF's excessive debt level requirements, and Ukraine may be a totally different country -- much better or much worse than today. It's probably wrong to reward Hasenstab for his hubris, but that may be the best option for Ukraine's chief negotiator, Finance Minister Natalie Jaresko. She needs breathing space more than she needs principal reduction.

Still, I believe the Ukrainian government will keep pushing, because the international support it has enjoyed in the past year has given it a strong sense of entitlement. And that's likely to lead to quite a number of missed deadlines.
 
 #35
Ukraine objects to further delay of trade deal with EU

KIEV, May 14 (Xinhua) -- Ukrainian Prime Minister Arseny Yatsenyuk said Thursday that Kiev will not agree to further delay implementing the Association Agreement with the European Union (EU) , which includes a comprehensive free trade deal, despite concerns raised by Russia.

"The free trade pact will take effect on Jan. 1, 2016," Yatsenyuk told a cabinet meeting.

He added that Ukraine is already getting prepared for functioning of the deal through implementing reforms in the agricultural sector.

"We do our utmost to bring the quality of our agricultural products in line with European standards. This is our commitment in the framework of the free trade pact," Yatsenyuk said.

The Association Agreement, which removes tariffs on around 90 percent of the goods traded between Ukraine and the EU, was signed in June last year.

In September 2014, the 28-member block has postponed implementation of the deal till Dec. 31, 2015, saying it needs time to discuss "whatever problem may arise" with Kiev and Moscow.

Russia has warned that the Ukraine-EU pact would allow European products to flood Russia via Ukraine without import duties as Kiev and Moscow have a free trade area within the Commonwealth of Independent States (CIS).

Last week, Russian ambassador to the EU Vladimir Chizov appealed to the leadership of the 28-member block asking to postpone the deal with Ukraine for another year as controversial issues over its effect were not fully settled.
 
 #36
www.rt.com
May 15, 2015
'Gap now opening up between Kiev & US, Kiev & EU'

The US, initially strongly behind Kiev, is now telling it to wind down the armed conflict, while the EU also wants the Ukrainian problem to be solved and the sanctions to be gradually lifted, said Martin McCauley, Author and current affairs commentator.

In an interview with German broadcaster ZDF [Zweites Deutsches Fernsehen],Ukrainian President Petro Poroshenko has accused Russia of deploying 11,000 troops in Donbass region. He also made some strong statements saying that "Ukraine is paying a 'high price' for this pseudo truce" and that Kiev will be fighting to the "last drop of blood."

RT: The Ukrainian president claims Russia's increasing its military presence. But again Moscow just says "where's the proof?"

Martin McCauley: President Poroshenko is in difficult position because John Kerry has just been in Sochi talking to Sergey Lavrov about the ending of sanctions given the fact that the Ukrainian conflict can be resolved. Also he has been in Berlin talking to Angela Merkel. The Germans would like to see the sanctions wind down - they've got something like 6,000 German companies in Russia [that] are all losing money. They would like those sanctions to gradually disappear so they can get back to normal economic relations. Poroshenko's position is difficult because he's got to wind up the conflict and present it as one which is escalating, so that the sanctions will continue, that the US will continue to support Ukraine and so on. He is a one who is trying to tell Kerry and Merkel: "The situation is much more difficult than you think it is."

RT: Just a few days ago during a joint press conference with Sergey Lavrov in Sochi John Kerry said that "President Poroshenko is advocating an engagement in a forcible effort at this time, we would strongly urge him to think twice not to engage in that kind of activity. That would put Minsk in serious jeopardy and we would be very, very concerned of the consequences of what that kind of action would be." Does this suggest a division between the US and Ukraine?

MM: There is one opening up now because in the past America was strongly behind Kiev and Poroshenko, and the military conflict. They were talking about arming the Ukrainian regime, training soldiers, and so on. And now we've got Kerry saying: "Wind it down, don't get involved in an armed conflict. We're trying to work out according to the Minsk accord, some type of peace settlement."

Therefore, there is a gap now opening up between Kiev and Washington; and there is also one between Kiev and Berlin and other members of the EU who would like to see the sanctions wind down especially France and Italy.

RT: We heard vows to fight to the end, and a 'pseudo-truce' from Poroshenko. These comments don't play well for the peace process, do they? Who do you think have the power here? Do you think it's the US that has the main lever, or is it Kiev?

MM: In the end Poroshenko cannot fall out with Washington, he can't fall out with Americans because they are his main backers; he can't fall out with the EU because he relies on them for economic aid, diplomatic aid, and so on.

So he is in a difficult position. If he goes against Washington, Berlin, Paris - he is going to find himself gradually isolated. They would say to him: "Right, we wanted end to this conflict, and unless we all get together it can't be solved by military action, it can't be solved by a conflict between Kiev and Moscow. It has to be Moscow, Kiev, Washington, Paris, Berlin- it has to be an international settlement and an end to fighting; and you have to get all sides to agree on an end to the fighting." Poroshenko is in fact upping the ante at present - he is giving impression perhaps out of weakness that Ukraine is very, very strong and would resist "to the last drop of blood"... That sounds warlike but in the end Washington will have the major say.

RT: Do you think Washington finds it quite difficult to follow Poroshenko's train of thought as the Ukrainian leader has also accused the Russian media of lying saying that he would never trying to retake Donetsk airport. But just days ago he said that he had no doubt that Ukraine would free the airports because it is their land. Why such inconsistency? It poses the problems for all sides, doesn't it?

MM: It certainly does because what Washington, Berlin, Paris, and Rome would like would be coming together, finding a peace settlement at least starting with Minsk, or something that is after Minsk, but it has to be done with Russia, it has to be done with Vladimir Putin - it can't be done by Kiev alone, by Ukraine alone.

You have a situation in which the Ukraine is saying that the conflict is going to continue, or should continue, "We're going to take Donetsk, it's our territory..." Basically the Americans and the EU are saying: "We've had enough of this conflict, there are other conflicts in the world which are much more important: IS, the problem of Iran, the nuclear deal..." Those are much higher up the agenda of the US and the EU than Ukraine. And they would like the Ukrainian problem solved- some type of settlement agreed as quickly as possible.
 
 #37
Business New Europe
www.bne.eu
May 15, 2015
Russia-Ukraine conflict overshadows EBRD meeting
Ben Aris in Tbilisi

The conflict between Russia and Ukraine has overshadowed the European Bank for Reconstruction and Development's (EBRD) annual general meeting in Tbilisi this week, with Russian Deputy Finance Minister Sergei Storchak accusing the bank of a "political motivated" decision to suspend lending to Russia.

The development bank's economic forecast released on May 14 was heavily coloured by the conflict. While the start of a quantitative easing programme by the European Central Bank is already giving the countries of Central and Southeast Europe a boost, the conflict in the east is dragging down the rest of its region in the former Soviet Union.

Russia's GDP is seen contracting by 4.5% in 2015, with the recession easing to 1.8% decline in 2016, attributed to oil prices stabilising at $60 per barrel and prudent macroeconomic management. But GDP will remain affected by unsolved deep-rooted structural issues and economic sanctions. This is worse than the 3.5% predicted by most economists.

Russia's slide into recession and the associated collapse of the Ukrainian economy are having a "serious spill-over" effect on the rest of the region, as so many countries in the Commonwealth of Independent States (CIS) are dependent on Russia for both trade and remittances from migrants working there.

The conflict also flared in the country sessions. Russia has been barely present at this year's annual meeting, as the EBRD froze all its programmes in the country and is not making any new loans. Previously, the EBRD was the single largest foreign investor in Russia, disbursing $1bn-2bn a year. Russia is hopping mad at what it sees as an insult by the development bank. "We are surprised and disappointed that the EBRD, being a major and prestigious international financial institution, found itself involved in the sanctions polemics that was used to ramp up political and economic pressure on our country," Deputy Finance Minister Storchak told the EBRD board of governors in Tbilisi. "It is essential that the EBRD remains a depoliticised transition institution... We hope that the bank will not be guided by temporary political trends."

Ashes to ashes

Ukraine, on the other hand, has been front and centre at the EBRD, and its "Phoenix arising" session was packed with press and delegates. "The Phoenix has already started to rise," said US-born Finance Minister Natalie Jaresko. "We have accomplished a lot already."

Together with Economics Minister Aivaras Abromavicius, who recently gave an interview to bne IntelliNews on his ministry's plans, the two ministers reeled off a long and impressive list of reforms that are in place or in the works. But the government's main achievement so far has been to stem the meltdown and stabilise the economy. Now the real work begins, but with a new anti-corruption agency chief starting this week and a new head of the federal property agency due to be appointed in the next two weeks, most of the team needed to push through the far-ranging and radical reforms is in place and work can start in earnest.

However, Jaresko shied away from the biggest issue hanging over Ukraine now: what to do about its debt. The negotiations over imposing a haircut on the foreign holders of Ukraine's bonds are unravelling, with the two sides trading barbs in the press over the past week. "Despite numerous requests from the [finance] Ministry's side, the [creditors'] committee refuses to reveal its membership, a highly unusual departure from standard practice in similar situations, and in stark contrast with IIF transparency and disclosure principles," Ukraine's finance ministry said in a statement posted on its website this week.

According to analysts at the brokerage Investment Capital Ukraine, "this media outburst inflames unnecessary controversy, muddling both sides' positions. Even more damaging, this news was sparked precisely on the day that the IMF mission convenes in Kyiv to assess the program's progress." Pressure is growing on the government in Kyiv to restructure its debts before the International Monetary Fund reviews a $17.5bn financial aid deal on June 15.

More difficult still will be that Russia has reiterated that the repayment of a $3bn Eurobond issued by Ukraine and bought by Russia is not up for negotiation and must be repaid when it matures in December. "We are not participating in this debt operation and have no plans to participate," Storchak said at the EBRD meeting about the talks with Ukraine's creditors. This followed remarks from Russian Finance Minister Anton Siluanov earlier in the week that Russia might sue if Ukraine failed to repay the loan on time. Storchak's statement comes a day after Moscow agreed to change the terms on a $1.55bn loan to Belarus.

With two of Ukraine's main creditors - Russia and private bondholders - not prepared to budge on the debt issue, it seems a nasty clash is in the offing, first ahead of the deadline of mid-June set by the IMF, and then again in December when Russia's debt comes due.

The issue of the Russian debt is especially tricky, because if it's classified as a sovereign bond and Ukraine defaults on it, then under the IMF's own rules it would not be allowed to make any more loans to Ukraine (it is, however, allowed to lend to countries that have defaulted on commercial debt). The status of the Russian bonds is being hotly disputed, so despite the optimism in Tbilisi the hurdles that Ukraine needs to clear remain formidable.
 
 
#38
The Economist
May 16, 2015
Ukraine and history
Fighting with ghosts
As well as shells and rockets, Ukraine is afflicted by the struggle over its past

WHILE the world marked the 70th anniversary of Hitler's defeat, Ukraine's president, Petro Poroshenko, sent his embattled compatriots a mixture of messages about the past and their identity. His words and gestures had to be carefully crafted because of his country's role as a battleground between Nazis and Soviet forces, with Ukrainians fighting on both sides and suffering terribly. Sensitivity was running extra-high because, in today's war between his government and separatist rebels, many combatants feel those old battles are still in progress.

So on May 8th, the date when the Western world remembers the Allied victory, he ceremonially addressed parliament and stressed the vital role of Ukrainian soldiers (albeit in Red Army uniform) in quashing Germany. The following day, the date for Soviet victory festivities, there were further official commemorations in Kiev, the capital. They included a march past the Motherland monument, which looms over the city and is communist in style: the silver maiden holds a shield emblazoned with a hammer and sickle. But the stolid statue was adorned with poppies, a Western way of remembering war.

As Mr Poroshenko told parliament, "Ukrainians were the first to feel the effects of two totalitarian regimes, Nazi and Communist." In other words, he was rejecting attempts by Russia's president, Vladimir Putin, and his supporters in Ukraine's rebellious east, to paint all patriotic Ukrainians as "fascists", insisting instead that his nation had a place among the democracies which rejected tyranny of all kinds.

As shelling still rumbles across areas of eastern Ukraine that are held by pro-Russian rebels, Mr Poroshenko sounds a bit too hopeful when he claims that Ukraine is at last "looking at its history with its own eyes, not through the glasses of Moscow". Nothing he can say about his land's terrible travails in the mid-20th century will please everybody.

Ukraine is often presented as a country split by language, with Ukrainian predominant in the far west, Russian in the south and east and both tongues widely spoken in the centre. But in many ways ideological rifts over the past run even deeper-and have implications for the future.

Ever since Ukraine gained independence from a collapsing Soviet Union in 1991, it has been torn apart by contrasting memories, says Georgiy Kasianov, a professor at the Ukrainian Academy of Science. People in western cities like Lviv, which came under Soviet rule only in 1939, have accepted a "national" narrative that stresses the distinctiveness of Ukraine. Meanwhile nostalgia for the Soviet epoch lingered in the south and east. That does not mean that Ukrainians are obsessed by history; most are more concerned with earning a living. But Russia's propaganda, portraying last year's overthrow of an authoritarian government as a "fascist coup", has reopened historical wounds.

And although many Ukrainians played a gallant role in the second world war, it is also a fact that the country was divided. There were nationalist fighters in western Ukraine who joined the Nazis, hoping to advance their dream of independence; they often battled countrymen in the Red Army. This led to rival mythologies, says Timothy Snyder, a Yale University professor. One side stressed the Soviet-led fight against fascism, and the other a struggle for Ukrainian independence that was sometimes careless in choosing friends.

On both sides of today's front line, the fighting is presented as an extension of those 20th-century struggles. Ukrainian nationalist battalions, some of which have an arm's length relationship with the government in Kiev, see their war as the latest phase of a long campaign for freedom from Russia. Meanwhile the pro-Russian separatists call their campaign a battle against resurgent neo-Nazis and fascists.

That has troubling implications for the remaking of Ukraine as a single land. In theory, the Minsk peace plan lays down that the rebel-controlled Donbas region, of which Donetsk is the capital, will remain part of Ukraine and, eventually, be reintegrated with the whole country.

But in the separatist "republics" built round the cities of Donetsk and Luhansk, local leaders have not only renounced Kiev's political authority, they are also rewriting history in a way diametrically opposed to the story now told in the capital.

For example, in the so-called Donetsk People's Republic, teachers have been told not to term as genocide the Holodomor, the famine induced by Soviet policies in the 1930s that killed millions. The rebel republics marked May 9th in neo-Soviet style with a pompous military parade and orange and black ribbons filling the streets. Donetsk also celebrated 70 years of victory (over the Nazis) and one year of independence (from the "neo-Nazis" who supposedly dominate Kiev).

In Kiev, though, the politicians who swept into office after last year's uprising have shown two different approaches to history. Some have wisely pushed for inclusive gestures, such as celebrating both May 8th and 9th, and holding joint events with veterans from the Soviet Red Army and Ukrainian nationalist groups. But there is also a divisive faction at work. One of its successes was the passage last month of a series of "decommunisation" laws.

Two laws stand out. One officially recognises those who fought for Ukrainian independence in the 20th century, including controversial groups that are tainted in many people's eyes with fascist links. The law describes groups like the Organisation of Ukrainian Nationalists (OUN) and the Ukrainian Insurgent Army (UPA) as "independence fighters" and makes it illegal to deny their role in battling for statehood. Another law threatens jail time for publicly denying the "criminal nature" of the Soviet regime. Soviet-era names of streets and cities would have to be changed and statues of Soviet leaders torn down.

A human impulse

In some ways, this is understandable. The impulse to destroy symbols of a hated and discredited regime is deep-seated. In Kharkiv, where activists felled the country's largest Lenin statue last autumn, Sergei Yangolenko, a local pro-Kiev commander, says bringing down the monument "made it easier to breathe".

Yet if Mr Poroshenko signs them, the decommunisation laws will exacerbate tensions, not unite the country. Even as support for Ukraine's political turn to the West has consolidated, contrasting historical convictions have proved resilient. A recent poll by the the Democratic Initiatives Foundation in Kiev showed that across much of the south-east, even in regions under central-government control, the Soviet collapse is perceived in a negative light.

"We can't build a new Ukrainian nation on divisive old historical figures," Vasyl Rasevych of the Institute of Ukrainian Studies in Lviv argues. The glorification of OUN and UPA has dismayed many Jews and Poles. By elevating these groups, Ukraine "turns Hitler's henchmen into heroes", says Efraim Zuroff of the Simon Wiesenthal Centre, a Jewish Nazi-hunting group.

The irony is that the decommunisation laws remind many of the communist approach to solving problems. "They are fighting the Soviet remains with Soviet methods," says Mr Kasianov. He has a point. In 1918 Lenin issued a decree that statues "erected in honour of the tsars and their minions" be torn down, and the "old inscriptions, emblems, names of streets" be changed to reflect the "ideas and sentiments" of the revolution.

By using laws and punishments to change people's ideas about history, "we are repeating the mistakes of the past," says Mikhail Minakov, a political philosopher in Kiev. As he see things, "we are fighting with a ghost" of totalitarianism. It is a battle that can only be won with openness, free argument and light.
 
 #39
Valdai Discussion Club
http://valdaiclub.com
May 15, 2015
Absurdity of Anti-Russian Sanctions
By Ivan Blot
Ivan Blot is Member of the executive committee of UMP, Nicolas Sarkozy's adviser for Eastern Europe and Professor of Economics at the University of Nice

The Romans said: Whom Jupiter wishes to destroy, he first makes mad. The same we can say about anti-Russian sanctions advocated by the Americans and their allies in the European Union. Aristotle determined that every human institution had four causes: the final cause, the material cause, the moving cause and the formal cause.

The final cause is to weaken Russia and to create an unbridgeable gap between Ukraine and Russia. It means to separate one people with a quarter of the population from other three quarters. What would the Americans say if a foreign country organized the secession of the Southern States from the rest of the country? When such a secession occurred in 1861, it lead to a violent civil war that destroyed the southern United States. Now we observe a situation of the same kind. The war between Kiev and the rebels of Donbass is a real Civil War, but inside of the Ukrainian state.

The objective of this war was defined by the American geo-strategist Zbigniew Brzezinski: to create a definitive gap between Russia and Ukraine. But Russia did not fall into this trap. With unprecedented cynicism, Americans and some of their allies in Europe have accused Russia of being guilty of this conflict. The people of Donbass wanted referendums to gain at least some autonomy: the Kiev government called them terrorists. Where is the responsibility of Russia? The Americans and the European Commission accused Russia of interference and decided to introduce sanctions against the Russian Federation after destruction of a Malaysian Airlines plane whose causes are still unknown. But the real untold reason is to weaken Russia at the cost of the ruined Ukraine.

The material cause of the sanctions is primarily of the economic nature.

The material cause of the sanctions is the desire to prevent Russians to have visas to come to the West, to block their assets and certain financial transactions. The first sanctions are arbitrary and violate freedom of movement and property rights of sanctioned individuals: they violate western "human rights" but no court has pronounced about the sanctions. We are in full breach of the general principles of law.

Economically, the sanctions are absurd. Partners are losing money. Economic relations are based on reciprocity: one provides a service and the other pays. If you sanction a partner, you sanction the other one! If a buyer has no right to buy, the seller will lose his opportunity. Sanctions against Russia have a high cost for European countries. The volume of trade with Russia is the fourth in the European Union. According to the Spanish Foreign Minister Jose Miguel Garcia Margallo, in 2014 because of these sanctions the countries of the European Union have lost 21 billion dollars. Germany is closely linked to the Russian economy, Great Britain has significant financial ties with Russia, France has various business interests, even including the defense industries. The US trading with Russia is low, so Europeans are the first victims. Russia took retaliatory measures in the agri-food sector that penalized severely, for example, producers of pork and vegetables in France. Russia has the potential to overcome these obstacles by increasing trade with the Far Eastern or Latin America countries.

According to the unanimous view of economists, economic sanctions are always absurd because the economy is the domain of interdependence. We remember the Napoleon's continental blockade against England, which was a complete failure. Moreover, the desire to separate Ukraine from Russia will ruin the Ukrainian economy, deprived of its natural markets in the Customs Union, including Russia, Belarus, Kazakhstan and Armenia.

The moving cause are the States that introduce sanctions.

From the perspective of moving cause, the USA managed only to divide Europe. The European Union is split up into three categories of countries: the countries supporting sanctions without any nuance, hesitant countries and reluctant ones. Among 28 members of the European Union, only six countries can be considered as hardliners: the United Kingdom, steadfast US ally, Poland, Romania and three Baltic countries - Estonia, Latvia and Lithuania. The hesitant are especially Germany and France, torn between the US pressure and pressure from their CEOs. Germany is ridden between the Russian markets and the unspoken idea to make Ukraine a colony with cheap labor force. Reluctant countries are Italy, Austria, Czech Republic, Slovakia, Hungary, Greece, Cyprus, Spain.

Europe is far from unanimity. The sanctions are economically counterproductive. Just look at the map to understand the complementarity between the Western Europe and Russia. To integrate Europe and the United States into the so-called Atlantic economic union at all costs goes against the elementary geographical sense. Politically the sanctions mean a neo-colonialism, which is contrary to the principles of national independence and self-determination. A Gallup poll conducted in early 2013 in 65 countries has shown that the USA is regarded worldwide as the greatest threat to peace, Pakistan in second place. (source: Le Point, March 24, 2015). According to the French weekly, "Latin American respondents are unanimous. Argentina, Peru, Colombia, Mexico, Brazil agree that the main threat comes from their powerful northern neighbor. A sentiment is shared by some US allies such as Australia, Germany, Sweden and Finland, and not surprisingly, China and Russia." India fears Pakistan, the USA and Canada consider that Iran is the main threat. Russia is considered as the main threat in Poland and the Baltic States.

The formal cause means law enforcement.

From the point of view of the formal cause, sanctions are real monstrosity. The UN Charter in its first Article says that the UN aims are peace and security, and in Article 2 declares the right of peoples for self-determination. It is this right that is denied to Ukrainians of the East and South by the Kiev government. The US administration justified the anti-Russian sanctions by the so-called "illegal actions" in Ukraine (sic). No details are given. Moreover, the US government acts as if it were an international tribunal. There is even "usurpation of judicial authority", which should lead to sanctions against the USA.

Meanwhile the EU has no legal competence to sanction foreign countries and therefore punishes Russia without serious legal base.

The anti-Russian sanctions, dangerous in terms of their purpose, absurd economically, dividing Europeans politically, legally are unfounded because they are against the international order and introduce an element of serious arbitrariness. Sanctions attack property rights and economic freedom and are contrary to the spirit of the World Trade Organization.

The conclusion is clear: from the point of view of the four causes, the sanctions against Russia are not justified. Russia does not threaten world peace. Economically, the sanctions turned against European countries for the sole benefit of the United States. Politically, they divide Europe more and more. Legally, they have no real basis and are destroying the world order.

On May 9, 2015 President of Russia Vladimir Putin said in his speech at the military parade on Red Square in Moscow to mark the 70th anniversary of Russia's victory over Nazism: "The creation of a system of equal security for all states should become our common task. Such system should be an adequate match to modern threats, and it should rest on a regional and global non-block basis. Only then will we be able to ensure peace and tranquility on the planet."

In such a world there should be no room for unilateral sanctions triggered by a single superpower.
 
 #40
http://politicalviolenceataglance.org
May 12, 2015
A Symposium on the Crisis in Ukraine
By Rachel Epstein for Denver Dialogues

It's been well over a year since Russia annexed Crimea, and the cease-fire agreed at Minsk for the fate of war-torn Eastern Ukraine from February 2015 is in tatters. With the 70th anniversary of Victory in Europe Day having just passed and Western-Russian relations at a post-Cold War nadir, this symposium examines the politics behind the crisis in Ukraine and the implications for international security.

Our contributors include: Valerie Bunce, the Aaron Binenkorb Professor of International Studies and Professor of Government at Cornell University; Donald Abenheim, Associate Professor of National Security Affairs at the Naval Postgraduate School and a long-standing advisor on democratic civil-military relations to central European nations seeking to join the North Atlantic Treaty Organization; and Steven Pifer, who was the U.S. Ambassador to Ukraine from 1998-2000 and who is currently a Senior Fellow in the Bookings Institution.

[Contributors' insights on the Ukraine crisis were more extensive than I have space to present here. For a fuller treatment of the issues, and responses to some additional questions, see the complete transcripts at the Si� Ch�ou-Kang Center for International Security and Diplomacy.]

EPSTEIN: Russia has never acknowledged that it has a military role in eastern Ukraine. At the same time, it has accused the U.S. of deploying military trainers to eastern Ukraine. Who is winning this information war, and how do people in the region-that is, in Ukraine, Russia and neighboring countries-interpret the conflicting claims?

Abenheim points out that Russia has successfully mobilized what are, in fact, old techniques to modern effect, including various kinds of overt and covert subversion:

ABENHEIM: The Russians have very effectively waged a propaganda campaign in Ukraine that began with the hacking of the Victoria Nuland telephone call-a psychological operations coup de main of the first order. This propaganda offensive has since unfolded with a special operations campaign that has or has not used fifth column fighters on the classical pattern one knows from irregular conflict in the 20th century. While it is politically incorrect for some in the year 2015 to say so, I am especially reminded of German irregular warfare/covert operations to undermine the Dollfuss/Schuschnigg regime in Austria in 1934-1938, as well as the campaign against the Czechs at the same time. From there, the Russian side along with its sympathizers elsewhere in the world have put the Ukrainians, the west European EU powers, and NATO on their back foot with a remorseless propaganda offensive, complete with the reincarnation of the Ukrainian Waffen SS...

Pifer agrees that Russian efforts have been fairly effective, including in Western Europe, even if the objective evidence is not on Russia's side:

PIFER: Russian denial of its military role is simply not credible. Even if one discounts NATO and Ukrainian reports about the presence of Russian military personnel in the Donbas and the influx of Russian military equipment, there are ample other reports. In February, for example, a pro-Russian journalist reported on the fighting around Debaltseve with several 'separatist' tanks in the background. Those tanks could only have come from the Russian military, as they had reactive armor and other equipment that is only known to be in the Russian army's inventory.

Russia nevertheless is doing well in the information war... State-sponsored outlets such as RT and Sputnik receive considerable funding from the government... [They] seek to create smoke and confusion rather than offer a coherent story. Witness the effort that Russian media put into theories regarding the MH-17 shoot-down: it was downed by a Ukrainian fighter; it was shot down by Ukrainians believing they were shooting down President Putin's plane; it was a CIA special mission to damage Russia's image, using a plane full of dead bodies. All of these aimed to discredit the most likely explanation: Russian-backed separatists used a Russian-provided surface-to-air missile to down the plane... The Russian public largely buys the Kremlin's line, and it appears to have made in-roads in Europe, where some accept the argument that Russian action in Ukraine is defensive, triggered by NATO and EU enlargement.

Bunce is more skeptical about how successful the Russians have been, except in Russia itself:

BUNCE: Russia has lost its information war with neighboring countries, including not just those neighbors that are members of the EU and NATO, but also neighboring countries that are part of the European neighborhood, such as Georgia and Moldova. In addition, Russian allies, such as Belarus and Kazakhstan, are resisting adhering to Russia's line on this conflict, because of their fear that Russia could do similar covert interventions in their countries.

The one exception to this generalization is Russians themselves who live in Russia. Here, it is important to recognize that Putin controls the media; his annexation of Crimea in March, 2014 has been extremely popular at home and boosted his popular support; but a majority of Russians, however, do not and would not support military intervention in Ukraine. In this sense, the domestic benefits of this war for Putin depend upon his ability to engage in covert, not overt aggression in Ukraine.

EPSTEIN: Further on the same theme, with Russia as a party to the Minsk 2 cease-fire agreement from February, which called for the evacuation of 'foreign forces,' how can Putin then convince his public that Russian forces are not involved?

BUNCE: The Russian media has portrayed political change in Ukraine as not just the work of Ukrainian fascists (a trope that plays especially well in Russia), but also the work of the West in general and the United States in particular. Thus, to refer to the evacuation of 'foreign forces' in that agreement is merely to reinforce not just the official characterization of the conflict in Russia, but also Putin's recent claims to rule-for example, his appeals to Russian nationalism, his recognition of Russian exceptionalism, his commitment to expanding Russian influence in the international system, and his criticisms of the West as a decadent culture and a major force for instability in the international system...

Referring specifically to Russian annexation of Crimea, Abenheim notes:

ABENHEIM: Surely there remain critical and informed Russians at home who are skeptical of this neo-imperialist undertaking, and its ill effects on life and treasure, but I am also sure that, with the recent murder of Nemtsov, opposition is much more problematic.

Pifer's assessment of the information environment in Russia:

PIFER: More Russians seem to understand what's going on, but it is not clear that a majority do... In Soviet times, the general public was hugely skeptical about what they saw on television or read in the newspapers. The Russian public today appears to be far more accepting and far less questioning of what they see, particularly on television. By some accounts, the propaganda on Russian domestic media is worse than it was during the Soviet period.

EPSTEIN: Weak state capacity and corruption in Ukraine arguably contributed to the country's vulnerability to Russian intervention and destabilization. However, the Ukrainian government is now 1) challenging the oligarchs and 2) pushing for anti-corruption reform. Are these steps likely to help stabilize the country and ward off Russian aggression? Or will these measures exact costs on the government by undermining critical support for the regime?

BUNCE: No doubt, there will be broad popular support for challenging the oligarchs and pushing for anti-corruption reform. Most Ukrainians agree that these are serious problems, and they help explain the abysmal performance of the Ukrainian economy since Ukraine became an independent state on January 1, 1992.

Because Poroshenko is himself an oligarch, he is signaling with such actions that he is breaking with his past and is committed to changing the way politics and economics have been conducted in Ukraine. While these actions will help stabilize Ukraine, they are likely viewed by some citizens, especially in pockets in the eastern half of the country, as threatening their economic livelihood.

But Bunce also points to the perverse incentives that Ukrainian reform provides to Russia:

BUNCE: [I]t is important to recognize that Russian aggression grows out of Russian interests in destabilizing Ukraine and thereby undermining its transition to authentic democracy and closer relations with the West. Thus, Russia wants Poroshenko's government to fail. In this sense, the more successful Ukraine is in dealing with its domestic problems, the more incentives Russia has to continue its aggressive policies.

Pifer on the same question:

PIFER: Over the past 25 years, oligarchs have played an out-sized role in the political and economic life of Ukraine... Reducing their political influence is an important part of building a modern European democracy and will also aid the anti-corruption effort... The political risk for Poroshenko is that oligarchs may well push back against efforts to curb their influence, adding another headache for a Ukrainian government that already faces a long list of reform and political challenges, on top of dealing with Russian aggression in the east.

Our contributors are in fairly strong agreement that the Ukraine crisis is testing the will and capacity of those very organizations that were intended to cement the security and prosperity of European and Transatlantic communities following World War II.

EPSTEIN: Recently in the Financial Times, Wolfgang M�nchau wrote that "a failed Ukrainian state or further annexation of its territory by Russia...would signal to the world that the EU is chronically incapable of defending its common interests." M�nchau was arguing, therefore, that the crisis in Ukraine represents a much more dangerous threat to Europe, and one imagines also to NATO (even though Ukraine is not a member of the EU or NATO), than the ongoing economic crisis in Greece. Is he correct?

BUNCE: The economic and political difficulties of Greece are not equal to the existential threats posed to Europe by Russian actions in Ukraine; that is, its invasion and then annexation of Crimea, followed by its aiding and abetting popular rebellion in eastern Ukraine.

Bunce goes onto to point out the bind in which the West now finds itself:

BUNCE: Just as Ukraine's economic and political problems are much deeper than those of Greece, so Russia has a strong domestic and international interest in continuing its policies of de-stabilizing the country...it is unclear how the Europeans can deter Russian aggression without encouraging more aggression, boosting Putin's domestic support and undermining both the political and economic reforms in Ukraine and the Poroshenko government.

If anything, Abenheim is even more concerned about what the knotted crises of Ukraine and Greece mean for global security:

ABENHEIM: The problems of economy and European institutions can easily become issues of war and peace. The union of French and German coal and steel in 1950, whence came the EU, did arise from this insight, which is no less valid now, even if populist terrible simplifiers in their number in the AFD, UKIP and the Le Pen party want to junk it. If both Greece and Ukraine become failed states within Europe, they can well emulate the experience of ex-Yugoslavia in the 1990s or something worse from the epoch 1919-1939.

On the possibility that Europe's terrible history can suddenly reappear, Abenheim says:

ABENHEIM: When I reflect on the fate of Greece in Europe, I recall its unhappy history in the inter war period, to say nothing of its martyrdom in the second war itself, and the aftermath of civil war and strife until 1974. In the same way, the fate of Ukraine as a nation that must overcome its past poses a challenge for the EU, which is indeed as grave as the author in the Financial Times article suggests, if not more so. And both crises must be mastered by policy makers at the same time, while the Middle East goes up in flames, and instability in Africa threatens peace and security in Europe, as well.

Perhaps most provocatively, Pifer notes the following:

PIFER: Vladimir Putin has shown a readiness to challenge the post-Cold War European security order, violating the cardinal rule of no use of force to change borders or take territory. Do his ambitions go beyond Ukraine? Europe and the West have to assume that they might, and they need to be prepared to fend off a possible Russian security challenge.  If Russia makes that challenge-say, a little green men incident in Estonia-and Europe does not respond adequately, that will be a greater disaster than a Greek exit from the euro or even a failed Ukrainian state.
 
 #41
Kyiv Post
May 14, 2015
Editorial
Damaging diplomacy

One assumption since Russia started war against Ukraine last year is that Europe will be softer against the Kremlin than America, which claims to stand tough in defense of Ukraine's freedom.

But these assumptions are highly questionable, and may never have been true, especially in light of U.S. Secretary of State John Kerry's May 12 trip to Russia. The U.S. stance during President Barack Obama's lame-duck phase - and lame is now the operative word - is weakening. The softer rhetoric more closely matches the West's tepid actions in punishing Russia for its annexation of Crimea and war against eastern Ukraine.

Kerry visited Russia for three stated reasons: to press for peace in Ukraine, to get help in ending the civil war in Syria and, nebulously, to stay in touch. His cloying body language with Russian President Vladimir Putin in Sochi was as disgusting as his public words. Not once did Kerry mention Russia's war crimes or human rights violations. Not once did Kerry mention the need for Russia to pay for lives lost and the theft of Ukrainian national territory. Not once did Kerry assign blame for the war where it belongs - to Putin. Not once did Kerry mention slain Kremlin critic Boris Nemtsov and his report, published on May 12, that implicates Russia in war crimes.

So if America won't stand up to Putin, who will?

Even German Chancellor Angela Merkel had the grit to stand side-by-side with Putin and condemn him for the criminal and illegal annexation of Crimea. Even NATO Secretary General Jens Stoltenberg showed sense on May 13 when he blamed Russia for cease-fire violations and amassing military forces capable of delivering a fast and crippling strike against Ukraine's troops.

While speaking truth does not qualify as courage, not speaking truth is cowardice. It is also not shrewd diplomacy. Incredibly, Kerry managed to obliquely criticize Ukrainian President Petro Poroshenko for suggesting that he will stand up to Russian aggression and win back conquered Ukrainian land.

Some fear that Kerry's mission was to sell out Ukraine in exchange for Russia's help in tamping down Russian-backed Syrian President Bashar al-Assad's murderous rampage against his own people. We don't believe that is the case. We believe that the U.S. supports Ukraine, but is simply not doing enough in all areas. We also believe Obama and Kerry don't want to do more to stop the nuclear-armed dictator's threat to world peace, starting with his attempt to destroy Ukraine. They are not alone in appeasement. Two U.S. arms makers want to buy Russian rocket engines, Reuters reported on May 14, despite objections from U.S. Sen. John McCain and others.

We agree with Russian scholar Leon Aron: "Despite the obvious reality that Putin can end all hostilities in Ukraine by making a 30-second phone call to Donetsk and Lugansk, Kerry continued the charade of the Minsk-1 and Minsk-2 negotiations, in which an aggressor (Russia) was treated as a peacemaker."

We also agree with exiled Russian opposition leader Garry Kasparov, who called U.S. appeasement "an inspiration to the other autocrats and thugs who do not fear American influence and power in the hands of those who are afraid to use it."

And we fear that The Wall Street Journal's editorial board may be right: "Western Europeans will conclude that Americans won't object when they ease sanctions, while Estonians, Moldovans, Poles and other Eastern Europeans will wonder if their territory is also negotiable."

Neither side reported a breakthrough, for one simple reason: Putin doesn't want one - not in Ukraine at least.
 
 #42
Rossiyskaya Gazeta
May 13, 2014
Russian daily looks at Kerry's "open, businesslike" talks with Putin
Konstantin Volkov and Kira Latukhina, Dialogue trickles out. Vladimir Putin and Sergey Lavrov hold talks with John Kerry, who has come to Russia for first time in two years

Russia's president has held talks with US Secretary of State John Kerry at Bocharov Ruchey, his Sochi residence. They lasted four hours and five minutes and were mainly devoted to Ukraine. After the official part Vladimir Putin proposed continuing the conversation over a glass of Krasnodar wine.

Also participating in the talks at Bocharov Ruchey were Foreign Minister Sergey Lavrov; Yuriy Ushakov, aide to the Russian president; John Tefft, US ambassador to Russia; and Wendy Sherman, US under secretary of state for political affairs.

The meeting was completely closed to the press: journalists were permitted only a brief protocol photo opportunity, without words. The press waited in vain for several hours for at least some news from the Security Council room where Russia's president and the US secretary of state were conferring.

At the same time the American side was "in a hurry" to report the brief results of the talks even before they ended. "We held a frank discussion with President Putin and Foreign Minister Sergey Lavrov on key issues, including talks on Iran, Syria and Ukraine," John Kerry reported on his Twitter page while the talks were in full swing. The secretary of state's microblog also said that it is important to keep open the lines of communication between Russia and the USA in respect of topical global issues.

That morning Dmitriy Peskov, the Russian president's press secretary, had told journalists that the Kremlin rates positively Kerry's decision to travel to Sochi: this will promote a dialogue and help normalize relations. "We have repeatedly declared at various levels, and the president has said, that Russia never initiated this 'chilling' of relations, and we are always open to the showing of political will for a broader dialogue," Peskov declared. "The agenda is as extensive as possible - first, bilateral relations, but then all the 'hot spots,'" the head of state's press secretary announced in answer to a question as to whether Ukraine, Syria and Iran would be discussed.

The talks were open, businesslike and quite well-disposed, Yuriy Ushakov, aide to the Russian president, said upon their completion. The secretary of state conveyed greetings from Barack Obama and emphasized that the latter was very interested in Putin's reception of Kerry. Kerry voiced sincere gratitude in connection with the USSR's contribution to Victory in World War II. "He spoke a great deal and with feeling on this subject," Ushakov remarked.

Putin and Kerry exchanged opinions literally on all key issues on the modern agenda. A significant place was occupied by a discussion of the Ukrainian issue, the Russian president's aide reported. The Russian side gave assessments of the causes of the Ukrainian crisis. It was pointed out that Moscow seeks the fulfilment of the Minsk accords in full and will do all it can to promote this.

This was also confirmed by Lavrov. "We agreed to use the influence of the Russian Federation and the USA to prompt them to seek ways to fulfil everything that was agreed upon in Minsk," the Russian foreign minister remarked.

Putin and Kerry also exchanged opinions on the Middle East and on certain issues in the disarmament sphere and touched on North Korean problems. They spoke about the struggle against terrorism.

"The president proceeded from our fundamental interest in returning bilateral relations to normal," Ushakov emphasized. "This accords with Russia's interests and, I hope, with US interests and is extremely important from the viewpoint of ensuring international stability and security," he said. According to Sergey Lavrov, Russia and the USA understand the need to avoid steps that might do long-term harm to relations.

"Of course, this is far from being a breakthrough, but the first signs have appeared that there is an understanding that the two great countries must return to normal cooperation," the president's aide pointed out.

The president suggested a Krasnodar wine tasting, and the conversation continued in an informal atmosphere, Ushakov shared the details. Some representatives of the American delegation were invited.

The question of a meeting of the leaders of Russia and the USA was not discussed, but Ushakov commented that the international schedule permits this, mentioning the G20 in Antalya and the Russian president's possible participation in the jubilee session of the United Nations.

Earlier, the meeting of the Russian foreign minister and the US secretary of state had been the first meeting on Russian territory for the heads of the two states' foreign policy departments since the start of the Ukrainian crisis.

Sergey Lavrov and John Kerry met in the library of the Rodina [Motherland] health resort, which was long ago turned into a five-star hotel but retains the external appearance of Stalin's time, with columns, stucco and long cypress avenues leading to the sea. The Russian minister drove to the talks venue in a white Pobeda [vintage car] decorated with St George's ribbons, and he himself was at the wheel. He also arrived in it for the wreath-laying ceremony at the memorial to the people of Sochi who died in the fighting in the Great Patriotic War.

In the talks the ministers discussed the difficulties in the present Russian-American relations, as well as the Iranian nuclear talks and the crises in Ukraine, Syria and Yemen. The only question they did not touch on was the anti-Russian sanctions introduced by Washington, since this is not within the competence of the US Department of State. The US embassy in Moscow had explained before Kerry's arrival that "this visit is part of our ongoing efforts to maintain direct contacts with high-ranking Russian representatives and to explain the US approaches."

On the eve of the meeting Sergey Lavrov and John Kerry had had a telephone conversation, initiated by the American side. Kerry congratulated Lavrov on the 70th anniversary of Victory, pointing particularly to the huge contribution of the USSR's peoples to the cause of defeating the Nazis. At the same time, so the Russian Foreign Ministry points out, Russian-American relations are now "going through a complex period" occasioned by Washington's unfriendly actions. "By groundlessly holding Russia responsible for the crisis in Ukraine, which was largely provoked by the United States itself, in 2014 Barack Obama's administration took the path of curtailing bilateral ties, proclaimed the policy of 'isolating' our country in the international arena, and demanded that states that traditionally follow in Washington's wake support its confrontational steps," the Russian Foreign Ministry declared on the eve of Kerry's arrival. The joint presidential commission consisting of 21 groups to resolve very diverse issues is not working. Moscow is also concerned about the expansion of the NATO infrastructure, particularly its eastward advance. In addition, it is still unclear how the interests of adopted children from Russia are to be protected.

Some backstage moments of the meeting were cited by Mariya Zakharova, deputy leader of the Russian Foreign Ministry Information and Press Department, who touched on the subject of the exchange of gifts between the delegations on her Facebook page. Thus, Sergey Lavrov presented John Kerry with Krasnodar tomatoes and with potatoes which, according to him, are distantly related to those presented to him earlier by his American counterpart, and with a sport shirt with the Victory logo. The head of the Department of State in turn produced a list of Russian media quotes that, in his opinion, do not reflect the real potential of Russian-American relations. At the same time a response to Zakharova's report came from the US embassy, whose press secretary Will Stevens elaborated on his Twitter page that "the real gift for Lavrov was a briefcase," providing a photograph to confirm his rejoinder.
 
 #43
Analysts: West is insincere in professing commitment to peace in Ukraine
By Tamara Zamyatin

MOSCOW, May 14. /TASS/. At a meeting in Antalya NATO's foreign ministers followed in US Secretary of State John Kerry's footsteps to call for a negotiated settlement of the Ukrainian crisis on the basis of the Minsk Accords. Experts polled by TASS suspect that these statements are not quite sincere, not backed up by real action and targeted at attaining long-term geopolitical aims.

"We reaffirm our strong support for the settlement of the conflict in eastern Ukraine by diplomatic means and by dialogue," NATO foreign ministers said in a news release on Wednesday. For his part John Kerry after a meeting with Russian President Vladimir Putin in Sochi on May 12 said: "If indeed President Poroshenko is advocating a forceful engagement at this time, we would strongly urge him to think twice not to engage in this kind of activity. That would put Minsk in serious jeopardy and we would be very, very concerned of the consequences of what that kind of action would be."

The president of the National Strategy Institute, Mikhail Remizov, believes the United States and NATO countries are afraid another round of war in Donbas may have a very deplorable outcome for the Ukrainian army, too, just as all of the previous ones. "The West has made a decision to start a long big game, paying lip service to a political settlement of the crisis, but in reality bolstering the institutions of power in Kiev and building up the combat potential of the Ukrainian army. The ultimate aim of the United States and other NATO countries remains the same: winning Ukraine in the long term," Remizov told TASS.

"Russia's relations with the United States and NATO over the crisis in Ukraine are a zero sum game. Anything that spells a gain for the West is a loss for Russia, and the other way round. So this game is going to last a while," the analyst said.

The director of the Institute of Political Studies, Sergey Markov, has no certainty the West is really committed to the idea of settling the Ukrainian crisis through negotiations by the conflicting parties. "Statements by Kerry and NATO's other foreign ministers in support of the Minsk Accords are nothing but a fine declaration with no real action to rely on," Markov, a member of the Civic Chamber, told TASS. Influential Western politicians have issued no calls to Kiev for ending the blockade of the Donetsk and Lugansk people's republics or the observance of human rights in Donbass. In fact, they hope for the economic strangulation of Donbass after the attempts at subjugation by military force has failed," Markov said.

"Federalization should be the watchword of the day for those politicians who really wish to see peace in Ukraine," Markov believes.

Deputy Director of the CIS Countries Institute, Vladimir Zharikhin, has a different point of view. "I have studied the Minsk Accords closely enough, and I have arrived at the following conclusion: the agreements are a compromise between Russia and the European Union letting Ukraine move towards euro-integration without the self-proclaimed Donetsk and Lugansk republics, which would remain a buffer zone. Possibly, with this scheme in mind the West is urging Kiev to see a political settlement of the crisis in the southeast of Ukraine, and not a military one," Zharikhin said.

Nor does he rule out that the West may have developed the awareness the unabated criticism of Moscow for its stance over Ukraine and the regimen of sanctions both encourage Russia to seek closer relations with China in politics, the economy and military cooperation. "Russia's rapprochement with China and India makes quite real, albeit in the long-term perspective, a Global East project, possibly opposing the Global West. This may explain to an extent why the United States and NATO countries, while keeping up pressures on Moscow over Ukraine, have decided to backtrack from their unconditional support for Kiev and began to persuade the Ukrainian authorities to opt for a political settlement of the conflict," Zharikhin said.
 
 
#44
Voice of America
May 14, 2015
Russia-US Dialogue Elevated, But Ukraine Tensions Remain
by Daniel Schearf

Political analysts agree the four-hour meeting this week between U.S. Secretary of State John Kerry and Russian President Vladimir Putin was a step up in contact between the two countries.

Despite tensions over Ukraine, the two sides hold regular discussions, including president-to-president phone calls and numerous meetings between their top diplomats. But Dmitri Trenin, director of the Carnegie Moscow Center, said the face-to-face talks with Putin, believed to be the only real decision-maker in the Kremlin, were more significant.

"I don't expect a thaw in the relationship," Trenin said. "I think that the differences are pretty serious. They can't be bridged in one meeting.  Something more has to happen, but it's important that the dialogue at least was elevated to that level."

Kerry's last meeting with Putin was in 2013, before relations soured over Russia's granting asylum to former National Security Agency contractor Edward Snowden. Snowden leaked classified information on a massive U.S. electronic spying program before fleeing to Moscow.

Relations then dropped to a new low over the Kremlin's annexation of Crimea and ongoing military support for pro-Russia rebels in eastern Ukraine.  The last year of clashes with Ukrainian government forces has left around 7,000 people dead, most of them civilians caught in the crossfire.

Syrian peace efforts

Trenin said the fallout between Washington and Moscow also affected peace efforts on Syria, where a four-year civil war has left more than 200,000 people dead.

"I think at that point they were really thinking about producing the level of interaction between the United States and Russia that would make it possible to stop the conflict in Syria and start the rehabilitation of the country. ... Unfortunately, we lost two years," he said.

At a joint news briefing following the Sochi meeting, Kerry and Russian Foreign Minister Sergei Lavrov struck distinctly conciliatory tones, including on the issue of Ukraine.

While disagreeing on how the conflict started, they acknowledged both Kyiv and the rebels had been violating the cease-fire and vowed to use their influence to try to stop the fighting.

Pavel Felgenhauer, a defense analyst and columnist with the Novaya Gazeta newspaper in Moscow, argues that the Kremlin does not need to use its influence because it is the one giving orders.

"These are of course to some extent proxy forces, but they are under Russian direct military command and their logistics are all controlled by the Russian military," he said. " ... They do as they're ordered. If they shoot, the orders come from Moscow.  If they don't shoot, the orders also come from Moscow."
Despite mounting evidence, Russian authorities consistently deny they are offering arms or troops to the rebels.

Surge in combat?

The meeting came as fears rise of a possible new surge in fighting between rebels and government forces near Ukraine's port city of Mariupol.   

International monitors with the Organization for Security and Cooperation in Europe have documented sporadic fighting and a buildup of tanks and other military hardware, especially on the rebel side.

Some analysts believe the rebels want to take not only Mariupol, to have access to the sea, but also territory farther west to form a land bridge linking Russia to Crimea.

Trenin argues that the buildup is defensive and says the rebels are preparing for any Ukrainian attempts to retake lost territory.

"Anyone who's thinking about rebuilding the economy of the region would need to look at Mariupol," he said. "So, it's very important for the rebel leadership in Donetsk. However, having said all that, I believe President Putin has very real control over rebel actions of that kind.  No major offensive, I don't think, is
possible in that part of Ukraine ... absent a Russian nod or Russian acquiescence.  And this I don't think will be given under the present circumstances."
Trenin said the Kremlin is pushing for the West to accept its authority over Crimea in exchange for accepting Ukrainian authority over the rebel-held southeast, known as the Donbas.

Observers note Crimea was not raised at the joint news conference.  

Analysts, however, say Western governments and Kyiv are not likely to give in to Russian pressure, because doing so would legitimize its violation of international law.  German Chancellor Angela Merkel, in a visit to Moscow  on Sunday, called the annexation of Crimea "criminal."

More than Mariupol

And, despite the diplomatic gestures, military analyst Felgenhauer said he thought  the Kremlin was preparing the rebels for a new offensive.  He said  resources going into backing the rebels, instead of economic development, indicated that a surge in fighting was inevitable. Russia, he said, wants more than just Mariupol.

"The real issue is not Crimea, not Donbas, it's the entirety of Ukraine," he said. "Russia wants all of Ukraine. Not Mariupol, not Donbas, and not only Crimea - all of it - as a Russian proxy.  And, [it] will not settle for less."

Felgenhauer said that the Kremlin is always open for dialogue and negotiations with the West, but that it will not compromise on the issue of returning Ukraine to its sphere of influence.  

The crisis in Ukraine was sparked when Russia-leaning President Viktor Yanukovych abruptly pulled out of a trade deal with the European Union in favor of one with Russia.  

A popular uprising last year against his government in Kyiv turned into bloody street clashes and sniper fire. Yanukovych fled to Russia and, as a Western-backed interim government came to power, the Kremlin seized Crimea and began supporting rebels in the east.
 
 #45
Russia Insider
www.russia-insider.com
May 14, 2015
Kerry's Sochi Visit: Is the US Backpedaling on Crimea?
At the end of the day, what we saw with Kerry in Sochi was the inevitable result of failed US policy
By Danielle Ryan
Danielle is an Irish journalist and blogger. She has a degree in Business and German from Trinity College Dublin and studied political reporting at the Washington Center for Politics and Journalism in Washington, DC. Special interests: American politics and foreign policy, US-Russia relations and media bias. Her blog can be found at journalitico.com.

I'm not buying John Kerry's nice talk in Sochi. Not yet, at least.

It's been two days since his t�te-�-t�te with Vladimir Putin at the Black Sea resort, and so far, there's been no obvious volte-face on the apparent Russia-strategy rethink. But while there's cause for a healthy dose of skepticism, there's also cause for (very) cautious optimism.

Kerry didn't exactly bring a 'reset' button, � la Hillary Clinton in 2009, but he did bring with him a new and notably cheerier demeanor.

Whether the talks marked a true turning point in this so-called 'new Cold War' it is too soon to tell - but what is obvious, no matter which way you spin it, is that the talks marked a turning point at least in Washington's own mentality about the Ukraine crisis. Giving up on its principles and various 'red lines' is not something that comes easily to the White House, nor to any administration anywhere - but sometimes it has to be done.

Crimea presents one such situation.

The fact that Kerry didn't mention the 'annexation' of the Crimean peninsula during his press conference following talks with Putin has not gone unnoticed and is perhaps the most telling sign that the US sees itself facing an impasse on that particular dispute.

Of course, we don't know what Kerry said behind closed doors - but up until now, he has never missed an opportunity to publicly pull out the Crimea card, so the fact that he didn't can likely only mean one thing: Barack Obama's administration is beginning to realize that for relations to improve enough to keep Russia on side where its help is needed (IS, Iran), they will at some point be forced to give up on Crimea, if for no other reason than the fact that it is ultimately a dead-end argument.

Essentially, Washington will give up on Crimea because Russia never will.

Obama knows that. Kerry knows that. Victoria Nuland and her cookie-distributing crew know it. It's just a matter of figuring out how to accept it and move on with minimal embarrassment.

After so much tough talk and hysteria, Washington is highly unlikely to publicly accept or recognize the will of the vast majority of Crimeans. Perhaps they never will. But there are bigger fish to fry in the world and the Crimea question will slowly fizzle out until it seems like no one in the West really cares much about where Crimea does or doesn't belong. For Russia, the result will ultimately be Crimea and (no) Punishment.


No doubt Kerry's trip to Sochi rattled some feathers in Kiev. Petro Poroshenko is probably feeling irked by it all - but what he hasn't seemed to grasp is that he is ultimately irrelevant in comparison to Putin and Russia and that the extreme nationalism and fanaticism on display in his country right now won't sit well with the freedom-loving West forever.

In fact, after Crimea failed to make an appearance, the second-most significant element of Kerry's visit to Russia was the fact that he gave a rare public warning to Poroshenko, telling him to "think twice" before reigniting the conflict in the east. This is the first real acknowledgement from Washington that there are two sides in this war, and that the blame can't be placed entirely at the door of the separatists or the Kremlin.

At the end of the day, what we saw with Kerry in Sochi was the inevitable result of a failed policy.

Washington tried to pull off some great geopolitical chess move in Ukraine - and failed miserably on every count. The sanctions which were meant to cripple the Russian economy and weaken Putin's domestic support had only a minimal effect on the economy (compared to the designed intent) and had a polar opposite effect on Putin's popularity; The economy has proved remarkably resilient in the face of what some have called outright 'economic warfare' - and Putin is more popular than ever. One can only imagine the surprise and bewilderment inside the White House as this all began to play out.

Furthermore, the inflammatory rhetoric designed to isolate Russia from the rest of the world also proved to be a failure, with Russia turning to its many alternative international partners - from Turkey, to India, to China and Brazil.

The Obama administration vastly overestimated the strength of its hand in Ukraine and underestimated Russia's ability to withstand whatever was thrown at it - at least this time. As such, US policies have been a disaster from start to finish and at some point, that's going to have to sink in.

Unfortunately, even if this change in tone does signal a substantial change in tack, it could very well be short-lived. Given the acrimonious relationship between Hillary Clinton and Vladimir Putin, we could see another famous 'reset' if she wins the presidency next year. But this time the mis-translation on the button may well be the more appropriate word to use from the outset.

I don't know if a year and a half of Obama trying to back-pedal on Ukraine to save face and bring a bit more warmth into the big freeze of 2014-15 would be enough to make Hillary and Vlad kiss and make-up. The pair have traded insults at quite an unusually personal level for two people trained in the fine art of diplomacy.  

For its part, Western media has largely been uncharacteristically reticent on exactly what Kerry's visit means - perhaps, because like the rest of us, they really don't know - although they're not usually as shy to speculate.

If Kerry's cordial tone in Sochi really does mean change is afoot in Washington-Moscow relations, the mainstream American media may eventually find they need a way to wriggle out from under the piles of propaganda they've been bombarding people with for the past two years without making it look like a loss for their team.

They may even need to take a moment to reconsider their evangelism for the anti-Russia cause in general. But given the time and energy they've put into this narrative, they're not likely to give it up easily. Whatever happens, rest assured they'll find a way to spin it as a win for Obama.

Kerry may yet backtrack on the small bit of progress made in Sochi this week - at this point it's all a guessing game - but if he does, it should be clear by now, that it will be more to America's detriment than Russia's.
 
 #46
From: Carnegie Endowment for International Peace <[email protected]>
Date: May 13, 2015
Subject: Event-Russian Roulette: A Screening With VICE News Reporter Simon Ostrovsky

The Global Think Tank
Carnegie Endowment for International Peace
Russian Roulette: A Screening with VICE News Reporter Simon Ostrovsky
EVENT DETAILS
DATE     Wednesday, May 20, 2015
TIME     5:30 to 7:45 p.m.
LOCATION     1779 Massachusetts Avenue NW, Washington, DC 20036
SPEAKER     Simon Ostrovsky
MODERATOR     Andrew S. Weiss
CONTACT     Anna Taylor
+1 202 939 2318 | [email protected]

Since launching the Russian Roulette series in March 2014, VICE News reporter Simon Ostrovsky has filmed and released over 100 video dispatches, creating a truly singular body of combat reportage about the Russian annexation of Crimea and the bloody war in eastern Ukraine. Ostrovsky and his VICE News team have courageously navigated the challenges of operating in a conflict zone since the crisis first erupted. The VICE News crew have interviewed everyone from rank-and-file fighters and local warlords to innocent civilians trapped in the war zone. Along the way they have transformed Western audiences� understanding of the crisis in Ukraine. Ostrovsky was himself kidnapped and interrogated by pro-Moscow separatists last April, but was released four days later.

The Carnegie Endowment for International Peace invites you to an exclusive screening of some of Ostrovsky�s most captivating dispatches. Following the screening, he will discuss his experiences reporting from Ukraine and share his impressions of the ongoing crisis. A short reception will follow.

Attendance is by invitation only and any additions or transfers must be approved.

Register: http://carnegieendowment.org/events/forms/?fa=registration&event=4897&lang=en&id={89BDFC3E-8CD0-E011-887D-1CC1DE7955DB}&mkt_tok=3RkMMJWWfF9wsRojuajMZKXonjHpfsX57%2BQuW6Kg38431UFwdcjKPmjr1YcIT8J0aPyQAgobGp5I5FEIQ7XYTLB2t60MWA%3D%3D

Speaker
Simon Ostrovsky, who was born in the former Soviet Union, is an American journalist, director, and producer based in Brooklyn, New York. Prior to his work with VICE News, he produced documentaries and short films for Al Jazeera English, HBO, and BBC Newsnight.

Moderator
Andrew S. Weiss is vice president for studies at the Carnegie Endowment for International Peace and oversees Carnegie�s work on Russia and Eurasia. He served on the National Security Council staff during the Clinton administration.


 
#47
Date: Fri, 15 May 2015
From: PONARS Eurasia / IERES <[email protected]>
Subject: REMINDER: Invitation: War, State, and Society in Ukraine

IERES - The Institute for European, Russian and Eurasian Studies

War, State, and Society in Ukraine

Dominique Arel (University of Ottawa)

Keith Darden (American University)

Georgi Derluguian (New York University Abu Dhabi)

Chair: Evgeny Finkel (GW)

The Euromaidan and the violence in eastern Ukraine have become the
center of political, popular, and scholarly attention across the globe.
At the same time, the war and its impact on Ukraine's state and society
cannot be reduced to the analysis of violence and armed struggle alone.
This event offers a broader analysis of the Ukrainian revolution and war
by putting the events in historical and sociological perspective,
analyzing the role of historical memory during wartime, and
understanding violence as a state-building mechanism.

Dominique Arel is Associate Professor and Chair of Ukrainian Studies at
the School of Political Studies, University of Ottawa. Keith Darden is
Associate Professor at the School of International Service, American
University. Georgi Derluguian is Professor of Social Research and Public
Policy, New York University Abu Dhabi. Evgeny Finkel is Assistant
Professor of Political Science and International Affairs, George
Washington University.

Monday, May 18, 2015
6:00 pm - 7:30 pm
Lindner Family Commons (Room 602, 6th floor)
1957 E St NW
Washington DC

Please RSVP at
https://goo.gl/jKGxwc

This event is on the record.