Johnson's Russia List
2015-#251
27 December 2015
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"We don't see things as they are, but as we are"

"Don't believe everything you think"

You see what you expect to see 

In this issue
 
  #1
Kremlin.ru
December 25, 2015
Gala reception celebrating arrival of 2016

Vladimir Putin attended a gala reception at the Kremlin celebrating the arrival of 2016.

President of Russia Vladimir Putin: Ladies and gentlemen, colleagues, friends,

It gives me great pleasure to welcome you and wish you a Happy 2016. There are signs of the approaching holiday everywhere, and it feels like there is no need to even look at the calendar.

It is wonderful that we mark such a warm holiday as the New Year during the winter season, and as it approaches, we traditionally summarise the past year, make plans, compare them to what has already been done and feel full of resolve to achieve even more.

There were many events in this past year, but the most significant was certainly the 70th anniversary of our people's Victory in the Great Patriotic War. We marked this sacred date by paying our respects to the older generation, our fathers and grandfathers. The fate of the victors' generation inspires us to this day.

It is very important that Russian society remains cohesive in this difficult period, that we work in unity and are always ready, despite any trials, to defend our core values, to protect national interests and our country's security.

These sincere feelings towards the Fatherland, this pride towards our nation, fill our lives with great meaning. The striving to make an input into Russia's development is becoming a matter of pride for millions of people. They must be confident that their efforts, work and creative search will receive support of the authorities, at all levels of government, that we are all working for the common good, so that life changes for the better.

Friends, I would like to sincerely thank you for your work. Each of you here today in this room, at this New Year's reception, has accomplishments and results of your own - professional, military, cultural, scientific or humanitarian achievements. I wish for you to continue achieving impressive results, to be open to all new and progressive developments, and to benefit Russia.

I think we should now take our minds off our everyday worries and affairs, to relax, spend time with friends, and charge ourselves with light, positive emotions. Incidentally, I think many of you will agree with me, it is easier to tackle any challenge with that kind of attitude - and we are facing many challenges.

I want to once again wish you a very happy New Year with all my heart. I wish you health, happiness and joy. Let us raise our glasses to Russia, to success in all our endeavours for the common good.

Happy 2016!


 Bloomberg
December 17, 2015
This Russian Bear Is Hitting the Mall
After sweeping YouTube and Netflix, Masha and the Bear looks to licensing.
By Ilya Khrennikov

The bear has long been a ferocious projection of Russia's power at home and abroad. Lately, a Russian bear that's more like a kindly uncle has been winning hearts from Baltimore to Berlin: the affable and patient companion of a mischievous girl in the cartoon Masha and the Bear. The series, which has won accolades worldwide, is one of the top-rated channels on YouTube and made its debut on Netflix in August. The producers are planning a licensing push into everything from yogurt to burgers to plush animals.

Moscow production company Animaccord has released 52 six-minute episodes in which the hyperactive Masha typically annoys her long-suffering companion, who's more interested in fishing or playing checkers. In one story, she wakes him up from hibernation and demands that he teach her to ice skate; in another, he must repeatedly launder and mend her dress after she's covered in mud, food, and ashes. "Our six-minute series suits the YouTube format very well," logging a total of more than 5.5 billion views, says Dmitry Loveyko, co-owner of Animaccord. "No amount of promotion could have gotten us to that level. The Internet is a very honest thing."

Loveyko started Animaccord in 2008 with Sergey Kouzmin, a friend from his time at Novosibirsk State University in the 1990s. They teamed up with animator Oleg Kuzovkov, who had the idea of adapting the traditional Russian stories of Masha and her bear to a world of TVs and cell phones. They sought to do for television animation what Pixar Animation Studios and DreamWorks Animation were doing for the big screen. The company uses software from Pixar and Autodesk but also developed its own programs to render images such as water, the bear's fur, and snow (in abundant supply in stories set in Russia). Animaccord says the show costs about $50,000 per minute-expensive for TV-and that the first 52 episodes took seven years to make. An additional 26 are in the works, to be released over the next three years.

Animaccord has grown from about 60 employees two years ago to more than 100, including 70 animators. It's developed two spinoffs from the series, one in which Masha narrates fairy tales but confuses the details, and another called Masha's Spooky Stories, aimed at kids slightly younger than the original's primary audience of 3- to 9-year-olds. Loveyko says he doesn't have the production resources for a feature-length film or a series with new characters, but he doesn't rule them out.

The series in February won the best animation award at Kidscreen, an annual children's entertainment conference in Miami. In October it was the No. 5 channel on YouTube, with 383 million views for the month, according to researcher Tubefilter. The most popular episode, "Masha + Kasha," has had almost 1 billion views, far ahead of anything from the likes of Walt Disney or Nickelodeon. Masha has been translated into 25 languages and airs in more than 100 countries. An English-language YouTube channel, introduced in September 2014, has garnered more than 240 million views. Animaccord hired Elsie Fisher-the voice of Agnes, the youngest of the three girls in the Despicable Me films-to dub Masha. Netflix shows Masha in North America and says it's considering adding it in other countries.

Animaccord doesn't release details about its finances, but researcher Social Blade estimates the series earns as much as $1.5 million a month from advertising on YouTube. The real money, though, is in licensing, which Animaccord says accounts for about two-thirds of revenue. Loveyko expects retail sales of licensed goods globally to jump next year by about 25 percent, to $300 million, which would mean about $15 million in profit for his company. Last year, Italian confectioner Ferrero sold 37 million chocolate bars with Masha and the Bear on the label in Russia, and Danone sold 33 million licensed yogurts in Ukraine. Burger King has been offering a Masha-branded kids menu in Russia since January, and German toymaker Simba Dickie is introducing Masha-themed plush animals and construction sets. Masha has "proven that it works perfectly for merchandising, not only for toys but apparel, school bags, and sweets," says Michael Sieber, Simba Dickie's chief executive officer. "It has great potential. It won't be just a short hype but a long-term story."

The bottom line: Sales of licensed goods from Masha and the Bear could reach $300 million next year as the Russian cartoon's popularity soars.


 
 #3
AFP
December 25, 2015
Russia warming '2.5 times quicker' than global average: report

Russia is warming more than twice as fast as the average for the rest of the world, the country's environment ministry said Friday, sounding an alarm on the rise in floods and wildfires nationwide.

A government report on environmental protection said temperatures in Russia had warmed by 0.42 degrees Celsius per decade since 1976, or 2.5 times quicker than the global warming trend of 0.17 degrees.

"Climate change leads to growth of dangerous meteorological phenomena," the ministry said in a comment to the report published Friday.

There were 569 such phenomena in Russia in 2014, "the most since monitoring began," the ministry said, specifically mentioning last year's ravaging floods and this year's "water deficit" east of Lake Baikal, which led to a "catastrophic rise in fires."

Fires around Lake Baikal, including the nearby Irkutsk and Buryatia regions, tore through hundreds of square miles in the pristine area, with locals and campers forced to dig ditches as state media at one point offered the theory that fires were fueled by "self-igniting air" caused by ozone anomalies.

Climate change has contributed to unprecedented loss of water in the Baikal itself, dropping to minimal water levels allowed by the government several times this year, including this week.

"The level of Baikal has dropped to 456.1 meters (above sea level)," despite minimal water use by hydropower stations downstream on the Angara river, environment ministry spokesman Nikolai Gudkov told RIA-Novosti agency Friday.

Abnormal weather

President Vladimir Putin rarely voices concerns about climate change, having famously said in the past that a little warming would not hurt the country and seeing it as a boon for Arctic development.

Experts however have cautioned that warming could hurt energy infrastructure on permafrost in Siberia and increase other risks.

The report states that while Russia is warming on the whole, some areas in the Far East and southern Siberia are experiencing harsh winters.

Out-of-control fires and deadly floods have hit Russia nearly every year this decade, and the emergency situations ministry in October conceded it has to come up with a new strategy.

"There are new threats in face of climate change," emergencies minister Vladimir Puchkov said at a conference in October, adding they require "new measures to protect infrastructure."

"Permafrost is receding, there are earthquakes where there weren't before, there are landslides, flash floods, blow-outs of gas condensate and so on," he said.

World nations earlier this month reached a climate accord in Paris which sets the goal of limiting global warming to "well below" two degrees Celsius over pre-industrial levels, though experts warn that emissions-curbing pledges may be too little too late.

While the total emission of greenhouse gases in Russia has not grown over the past five years, car emissions are increasing.

Half of Russia's auto transport still consists of inefficient vehicles with polluting engines over a decade old, the report said.

Weather in Moscow and surrounding regions has been abnormally warm in recent days, with historic temperature records broken every day of the past week, the latest on Thursday with 8.5 degrees Celsius (47 degrees Fahrenheit) in Moscow.

The warmth led city hall to close the capital's ice rinks, while bees left their beehives and snowdrops suddenly bloomed in Moscow's parks.
 
 #4
Levada.ru
December 26, 2015
Key Russian pollsters say Putin dubbed as man of year

Most Russians consider President Vladimir Putin as the man of the year among Russian politicians and public figures, showed surveys conducted by the country's three main pollsters.

A poll conducted by the independent Russian polling organization Levada Centre said that 56 per cent of respondents dubbed Putin as the man of the year, who is followed by Russian Foreign Minister Sergey Lavrov (10 per cent), Defence Minister Sergey Shoygu (8 per cent), Prime Minister Dmitriy Medvedev (4 per cent) and Belarusian President Alyaksandr Lukashenka (2 per cent).

The pollster's respondents were also asked to name the woman of the year. Both German Chancellor Angela Merkel (6 per cent) and Russian Federation Council speaker Valentina Matviyenko (also 6 per cent) were the most popular "answers". The poll was conducted on 18-21 December among 1,600 respondents in 48 Russian regions.

A poll published by the Russian polling organization Public Opinion Foundation (! FOM) showed that 64 per cent of respondents considered Putin as the man of the year. Lavrov and Shoygu come next, 9 and 4 per cent, respectively. The poll was conducted on 6 December among 1,500 respondents across 53 regions of Russia.

As many as 74 per cent of respondents polled by the state-owned Russian Public Opinion Research Centre (VTsIOM) on 19-20 December named Putin as the politician of the year. Lavrov was named by 13 per cent, Shoygu and Medvedev - by 5 per cent each.

As regards the main event of 2015, 43 per cent of respondents believe it is the war in Syria and 26 per cent think it is the conflict between Russia and Turkey. The poll was conducted among 1,600 respondents in 46 regions of Russia.

Asked to list the best TV shows in 2015, VTsIOM and Levada respondents specified the same shows on state-controlled Channel One TV.


 
 #5
Politico.eu
December 23, 2015
POLITICO Caucus: West needs to make up with Putin
Majority of experts say ISIL in Syria will be beaten by assisting Russia and Iran on a diplomatic deal with Assad.
By  VINCE CHADWICK
[Text with charts here http://www.politico.eu/article/politico-caucus-time-to-work-with-putin-syria-assad-insiders-poll/]

This week, as the EU extended sanctions against Russia for six months, the POLITICO Transatlantic Caucus polled 76 diplomats, elected officials and advisers, who wrote candidly on condition they be quoted anonymously. The group generally agreed a diplomatic solution to the Syrian conflict was key to stopping ISIL, but were split on whether the West's relationship with Russia would improve in 2016, as well as on U.S. President Barack Obama's handling of foreign policy.

Thirty-three percent saw migration as the biggest threat facing the EU, continuing a trend from the October poll, followed by Islamist terrorism (15 percent) and the rise of populist parties and threats to democracy (12 percent).

The Caucus includes NATO Deputy Secretary-General Alexander Vershbow, six countries' ambassadors to the EU, former World Bank President Paul Wolfowitz, President of the Eurogroup Working Group Thomas Wieser, and Republican U.S. Congressman Reid Ribble. A full list of participants is here.

"It is time to put an end to the sanctions against Russia and to build up instead a strategic partnership," said one Caucus member. Another argued that it is sanctions, coupled with "economic pressures on Russia due to the low oil price," that "will push it towards more cooperation with the West."

Fifty-three percent believe the best way to deal with ISIL in Syria is to work with Russia and Iran on a diplomatic deal with Syrian President Bashar al-Assad.

"The air campaign, two-pronged and uncoordinated as it is, will be counterproductive," said one Caucus participant. "An anti-[ISIL] alliance, including Turkey, needs to be forged following which further direct military action beyond just airstrikes could be launched."

Just 16 percent of Caucus members favored putting NATO boots on the ground in Syria. U.S. Secretary of State John Kerry was in Moscow last week for talks aimed at finding common ground with Russia on Syria, while a U.N. Security Council resolution passed Friday called for a ceasefire and peace talks between Assad and anti-regime rebels, who have also been targeted in Russian airstrikes.

A U.S. State Department spokesman said last week that "nobody's given up on the notion that Assad has to go," but Western officials conceded the Syrian leader may be allowed to retire to either of his principal backers Russia or Iran, rather than face war crimes charges in the Hague.

"It should be made clear that it is not because we suddenly approve of Assad," said one Caucus member of the need for a diplomatic push, "but there is simply a greater challenge."

Others were less optimistic about collaboration with the Kremlin.

"Russia is a basket case whose only agenda is nuisance," said one participant. "Russia never treats an entity smaller than itself as an equal partner. The fact that Russia, with a
population less than a third that of the EU's, and an economy one-eighth the size of the EU's, manages to push the EU around speaks volumes [about] the historic lack of ability among the EU heads of state."

Obama's performance also split the group, with 51 percent approving of his handling of American foreign policy in 2015.

The U.S. president deserved some credit for the Iran nuclear deal and the Paris climate accord, they said, but was also labeled "indecisive, excessively cautious," "confused, not taking into account long-term scenarios," and "too wishy-washy on Syria and [ISIL]."

"Why not accept that a strong Assad is better than [ISIL]?" one asked.

German Chancellor Angela Merkel - Time magazine's Person of the Year and the weather vane for Europe's response to everything from the migration crisis to Grexit - won the most support (40 percent) as the leader to watch in 2016.

"She does not have a real challenger in Germany," as one Caucus member put it, "and Germany does not have a real challenger in Europe."

Meanwhile in Brussels, approval ratings for the main players from each EU institution have fallen since October.

Forty-seven percent marked European Commission President Jean-Claude Juncker's performance good or very good, down from 65 percent in October. Twenty-seven percent rated the efforts of European Council President Donald Tusk as poor or very poor, compared with 22 percent last time. Those close to the former Polish prime minister acknowledged in a POLITICO profile in October that he has had a slow start and steep learning curve in his first year.

One of Tusk's main challenges in early 2016 will be Britain's attempt to renegotiate its relationship with the EU. Ninety percent of the POLITICO Caucus agreed that Europe would be weaker without the U.K., where polls show support for an Out vote gathering momentum.

"[The] U.K. leaving would be a watershed event for the EU, and might lead to it all unraveling over a period of time," one Caucus participant said, while another added Britain's "economic and cultural energy ... and obviously it's political significance" account for much of Europe's global clout.

But "Brexit will be far worse for Britain than for the EU," another argued.

At last week's EU summit, British Prime Minister David Cameron said he saw a "pathway" to an agreement with member countries, though he would not compromise on a controversial push to withhold in-work benefits for EU migrants for four years.

"If some member states do not want to obey the same rules," one Caucus member responded, "I would not see a problem in letting Britain go."


 
 #6
Russia Insider.com
December 26, 2015
A Christmas Present to Russia-bashers from Johnson's Russia List
The US establishment writers on Russia are one and all "presstitutes" and when you put their writings together, back to back, in 40 pages or so as JRL has so kindly done in their Christmas eve issue, the result is an astounding propaganda barrage.
By Gilbert Doctorow
The author is the European Coordinator of The American Committee for East West Accord and a regular contributor to RI. His most recent book is Does Russia Have a Future? (August 2015).
 
Claims to be objective, but in fact has an establishment, neocon flavor...

The author is the European Coordinator of The American Committee for East West Accord and a regular contributor to RI. His most recent book is Does Russia Have a Future? (August 2015).

This essay is dedicated to the 24 December 2015 issue of Johnson's Russia List.

I begin with a brief description of JRL to those of you in the general public who are, likely as not, unfamiliar with this internet resource. I then make an aside to share some personal reflections on the context for this remarkable edition: the bitterly partisan Information War over the nature of Vladimir Putin's 'regime' and how to conduct relations with it. And I conclude with a detailed response to one of the articles in the Christmas eve issue, chosen precisely because of its scholarly pretentions and seeming freshness of material versus the rehash of analyses of why Putin's Russia is failing that we get in all the rest of the 24 December entries in JRL.

Johnson's Russia List (www.russialist.org) is an internet digest published roughly six days a week year round and focused on Russia, now with a separate section on Ukraine. The JRL is a project domiciled at the Elliott School of International Affairs, George Washington University and operated by David Johnson who founded it something like twenty years ago. Its banner tells us that it receives partial funding from the George Soros' Open Society Foundation, partly from the Carnegie Corporation, New York, neither of which may be considered neutral in matters concerning Russia, quite the contrary. But further funding comes from the voluntary contributions of subscribers, of whom there are perhaps 600 [DJ: 6000], mostly American academics and university centers having an interest in Russian affairs. Appearing in JRL is an ambition of a great many wannabe experts and authorities in the field, mostly but not exclusively political scientists and journalists.

As an institution seeking to be fair-handed in purveying news and opinion about Russia, the JRL has been in the cross-hairs of activists on both sides of the highly divisive pro- and anti-Putin camps. About a year ago one of the most outspoken Russia-bashers, liberal economist Anders Aslund, publicly broke with JRL for what he saw as going easy on Putin in its selection of material. Alternative media commentators like Michael Averko have hit out at JRL for the opposite alleged abuse. In Johnson's defense, one might argue he chooses selon le march�, ie., from what is being published.

Undeniably, US and UK scholars and pundits are lopsided in their bias against Putin and Russia. Nevertheless, even within the scope of this allowance for what there is to choose from and the presumed desire to run his shop straight down the middle, the 24 December issue of the Johnson's Russia List was a doozy. The count was 14 articles or transcripts of video events slamming Russia and Putin to 0 articles holding any other view. And among the publishers or hosts of the 14 entries being republished in JRL are not just heavy guns in the media wars but also would-be temples of learning: Radio Free Europe/Radio Liberty, the European Council on Foreign Relations, Foreign Policy magazine, the Center for European Policy Analysis, the American Council on Foreign Relations, The Moscow Times, the Kennan Institute, The National Review, Forbes.com and Home Box Office.

Putin's personality figures large in nearly all of these essays and discussions as the sole explanation for all the turns in Russian foreign and domestic policy. This is entirely in keeping with the ad hominem argumentation that has become the norm in political discussions generally in the US. Joseph Stalin, with his no man, no issue philosophy of governance must be chuckling, wherever he is, over how this view has caught on in what passes today for polite society.

The phenomenon is something I felt acutely this past spring in its McCarthy-ite form when I appeared as one of three participants in the Euronews hosted talk show The Network. The subject of the day was the assassination of Kremlin critic and opposition politician Boris Nemtsov, who was shot down within proximity of the Kremlin walls a few days earlier. We were discussing media coverage of that event and who was to blame for politically motivated crimes in Russia, when a fellow panelist, Elmar Brok, the chairman of the European Parliament's committee on foreign relations, who was irritated by my insistence that Russian media gave a great many different takes on the news and was anything but monolithic, said in an aside to me that was picked up by the microphones and later went on air: "How much is the Kremlin paying you?" Not being a hardened politician like Brok, stunned by the way a senior official of the EU could stoop to such low-life viciousness, and naively believing that Europe's most watched news station would not broadcast crude libel, I said nothing in response and the talk moved on.

Having just come back a week ago from Moscow, where my stay was picked up by a Kremlin-funded institution, I now can give a fairly precise answer to MEP Brok's impertinent and malicious question: for three years of occasional guest appearances as interviewee and panelist on the Cross Talk program of Russia Today, I have been paid 3 nights in a 5 star hotel in downtown Moscow, lavish buffet breakfasts, a tour of the Kremlin and a seat at the banquet dinner celebration of Russia Today's 10 years on air where Vladimir Putin was the keynote speaker.

For this token of respect by my hosts at RT, I am duly grateful. Yet, I know full well that it is not to be compared with the lavish hospitality bestowed on attendees at the annual Kremlin-organized gatherings of the Valdai Discussion Club to which many senior US academics, Angela Stent, of Georgetown University, to name one, Robert Legvold of Columbia and Tufts, to name another, have been invited regularly notwithstanding the fact that most are hostile, at best agnostic to the 'Putin regime' in their public writings and appearances.

Now that I have 'come clean' about Kremlin blandishments that have come my way, I turn to my political opponents who have a monopoly in yesterday's JRL and ask how much they are benefiting in terms of grants, professional promotions and access to the high and mighty in Washington for publicly supporting the propaganda lines of State Department handouts. I wouldn't dream of accusing them of being on the CIA payroll...

Put another way and avoiding rhetorical questions, I assert plainly that the Establishment writers on Russia are one and all "presstitutes" and when you put their writings together, back to back, in 40 pages or so as JRL has so kindly done in their Christmas eve issue, the result is an astounding propaganda barrage.

From these collected rants by some very well known "authorities," I have chosen the one piece which presents itself as sort of scholarly. In this it stands apart from the slapstick humor of Richard Haass and Kimberley Marten in the transcript of an HBO airing and from the rehash of analyses of the fatal weaknesses in the Putin regime that constitute the bulk of the writings of other essayists.

Unlike the others, Kirk Bennett's article would appear to break new ground. In "Russia and the West. The Myth of Russia's Containment: Has the West always had it in for Russia? Hardly" we are treated to an historical analysis intended to debunk what the author identifies as a key Kremlin propaganda line.

It tries to refute Vladimir Putin's assertions in several speeches that the West has always been an opponent of Russia, whether out of envy or fear. This victimization narrative of the Kremlin, in the view of the author, and of the great majority of U.S. international relations experts, is used to whip up patriotic fervor in the broad Russian population and underpin a regime that is undergoing great strain from economic hardships and stagnation, as well as from the international isolation that followed its annexation of Crimea.

The author starts out in paragraph two citing the Russian poet Fyodor Tyutchev to show us he is no carpetbagging political scientist, that Russian studies are in his blood. Indeed, as we see through his text to the end, he has read his Russian and European history.

That is his strong point, compared to many of the other loudmouths in the articles republished by Johnson's Russia List. It is also his weak point: he has read Russian history but he has not researched or written it. This is not an accusation, but a mere statement of the facts. Bennett is introduced to us as a 'former U.S. Foreign Service officer who spent most of his career working on post-Soviet issues." For an historical overview like the article in question that goes back almost 300 years, he is clearly something of a lightweight.

Bennett's article appeared originally in The American Interest, the publication founded and run by the key popularizer of Neoconservative philosophy, Francis Fukuyama. He otherwise has recently published in the online platform of The American Center for a European Ukraine, which should explain where he is coming from politically and to whom he is reaching out.

In effect, Bennett is just one more American thinker who presumes that he understands Russian history and Russian national interest vastly better than the Russians themselves do. In this regard, my best advice to him and to his followers is to sit down with a couple of books written by Dominic Lieven, a scion of one of the great families in the Russian Baltics who is presently a visiting professor at Yale University and who spent more than 25 years as professor of Russian history at the London School of Economics.

The two books in question are Russia Against Napoleon (2012) and The End of Tsarist Russia (2015). Both present the history of momentous periods from a novel perspective, Russia's own, based on extensive work in the Russian historical archives. Together they sweep into the dust bin most of the simplistic remarks of Bennett about the nature of Russian-European relations since the 18th century up to 1917.

For example, Lieven explains at length the competing imperialisms, European and Russian of the 19th century, which were underpinned not only by Russia's Panslavism, but by Pan-Germanism and by myths to justify Anglo-Saxon world hegemony, all of which put the powers at odds and which spread widely the denigration of Russia that survives to our day in the West.

From Lieven's archival research and detailed attention to the advice the Russian rulers received from their senior advisers, both in 1812-1815 and in 1906-1917, both from generals and civilians, it is clear that the Putin narrative on Russian history which Bennett tries to shoot down had far wider acceptance among serious, well-educated Russians and far more subtlety to it than Bennett can imagine.

But Bennett's problem is not just his average-level consumer's as opposed to scholar's knowledge of Russian history. It extends to current events. Bennett distorts present realities. Yes, he is right that Vladimir Putin from time to time plays the 'victimization' card, just as from time to time, more generally, the Russian President invokes nationalism. The simple fact is that in Russia, just as in most Western countries including the USA, nationalism has broad resonance and popular understanding, playing as it does to the heartstrings, whereas Realpolitik, which is the dominant approach to policy behind Putin's thinking, is seen as cold and unfeeling by the public, too cerebral, so is held back from the addresses to the nation that Bennett cites.

It would be more appropriate to describe Vladimir Putin's characterization of Russia's talking partners on the international stage as "Frenemies."

Anyone paying close attention to his major speeches knows that he is never excited, least of all does he engage in "tirades" over the conduct of this or that country in its relations to Russia because the underlying expectation of Putin is that all countries are in permanent competition for their own advantage and only alignment of interests can ensure genuine meeting of minds and common action. Personalities as such count for almost nothing.

Contrary to the facile generalization of Bennett, Vladimir Putin has always followed a foreign policy that had a plan A, of joining NATO or otherwise entering into a shared security platform with the West, and a default position plan B of going it alone, as we now see today after the sharp confrontation over Ukraine.

It will be interesting to see in the days ahead if David Johnson has the courage of his convictions and publishes my indictment of his latest harvest of anti-Russian invective.


 #7
The Unz Report
www.unz.com
December 25, 2015
World Map of Putin Derangement Syndrome
By Anatoly Karlin
[Map here http://www.unz.com/akarlin/putin-approval-map/]

Note that this indicates net approval, that is, the percentage of people with a favorable view of Putin minus the percentage of people with an unfavorable view of him.

One immediately striking thing is just how how uniform Western attitudes are. Note how countries where net approval of Putin is below -20% are almost exclusively Western countries, while the only two notable countries in the Western geopolitical bloc to approve of Putin are Greece and Bulgaria. Both of which happen to belong to Orthodox civilization, going by Huntingtonian definitions.

Really, Ukraine is the exception that proves the rule. Although Putin's approval rating of -38% is considerably negative and far worse than before 2013, one has to admit - regardless of his particular opinion on the Maidan and the Donbass conflict - that most Ukrainians have no obvious cause to love Putin and plenty to hate him. Nonetheless, remarkably, far more people the US (-44%) and especially Europe (-50% to -70%) dislike or hate him.

What all this says about the agenda and central management (if any) of the Western MSM I leave as an exercise in speculation to the reader.

Incidentally, Americans dislike Putin considerably less than Europeans. This is a lot less surprising that it might seem at first glance because there is a powerful socially conservative but counter-culture demographic that is cool with Trump and spawned NRx and the Red Pill, admires the cartoons of the real Ben Garrison and makes counter-signal memes for fashy goys, provides an audience for The Unz Review, etc. This demographic is much less prevalent in Europe, where the Right tends to be crusty old Cold Warriors and the Left has been more comprehensively hijacked by Social Justice than even in the US. This reaches a symbolic apogee in second-to-last Sweden Yes! which gives Putin a -77% net approval rating.

Incidentally, this is not a new development, I wrote about it half a year ago and Russia watcher Patrick Armstrong presaged its appearance even earlier:

"It's a fun and counterintuitive fact but Putin is more popular in the US (21%) than he is in any major NATO country bar Germany (23%). Moreover, the US takes the lead if only West Germany is counted (19%), since the overall German score is influenced by the unusually Russophilic attitudes of the East (40%). Maybe because Americans respect manliness, at least marginally more so than limp-wristed Europeans if dank memes on the Internet are anything to go by?"

Most of the rest of the world outside the West either couldn't care less about Putin (e.g. Latin America, Africa) or continue to be positive towards him (e.g. India, China). Incidentally, this just goes once more to confirm that at least from a global demographic point of view, talk of Russia's "isolation" from the international community is complete and utter nonsense. This is rather obvious but even - especially - obvious things need to be repeated when they are so strenuously and regularly denied by the media.

There are a few countries where Putin is even more popular than he is in Russia itself. The highest on the list, giving him a 79% net approval rating, is Armenia. This is also unsurprising since relations between Armenia and Russia more than passingly resemble those between Israel and the US when it is run by Republican Presidents, down to the influence of powerful ethnonationalist lobbies. On that front, they have recently integrated their air defense systems. Another prominent member of that crowd is Serbia, where Putin is as popular as in Russia. No surprise there, and they certainly have no reason to love NATO.
 
#8
Moskovskiy Komsomolets
December 18, 2015
Putin's presser seen as attempt to restore government's "moral authority"
Mikhail Rostovskiy, Putin in the Role of Doctor Ouch-It-Hurts [fairy-tale doctor]. Journalists Arrived at Press Conference As If for A Romantic Rendezvous

"Two friends meet. One asks the other: 'How are things?' The other says 'My life is all stripes: black ones followed by white ones.' 'Which one is it right now?' 'Right now, it's a black one.' Six months go by. 'Well, how are things? I know, all stripes. Which one is it now?' 'Right now, it's a black stripe .' 'But it was a black one last time!' 'Turns out, it was a white one then after all.' This is roughly the situation that we are in today" - hearing this allegorical description of the state of affairs in the Russian economy from the lips of the president during Vladimir Putin's major annual press conference, for a while I was plunged into a state of complete stupor.

Come on, Putin! Come on, you optimist! Not everything in our country has gone to pot, surely? Surely even the Russian Federation president himself is not prepared to admit the failure of his course, and for this reason not to utter the mantras that are mandatory for any state politician in virtually all circumstances: "Of course, we do have some difficulties! But we are successfully overcoming them!"?

As you have no doubt already guessed, however, my state of profound shock did not last for long. Putin was certainly not planning to give in. He merely intended to shake his audience up a little - and he found for this purpose such an effective method as beginning with an RIP and ending with a toast [i.e. reversing a standard Russian proverb meaning "to begin on a merry note and end on a sad one"].

"Statistics show that the Russian economy has, by and large, passed the crisis point. The peak of the crisis, at any rate - not the crisis, but the peak of the crisis. Since the second quarter of the current year, signs of stabilization are being observed in business activity... In September and October, the growth of GDP (already the growth) by comparison with the previous month was 0.3 and 0.1 per cent respectively. From May, the volume of industrial production also stopped shrinking. In September-October, a growth in industrial output, albeit a small one, was recorded!" - yes, Putin is a magician after all!

If I had not been following the rouble exchange rate, which is still hovering in the region of the historical minimum against the dollar, I would perhaps have believed that right now in our country we have by no means a black stripe, but a white stripe, even a very white stripe. And what other conclusion is it possible to draw if, in the president's words, he "supports the policies of the Central Bank" and the government is working "satisfactorily" and no "significant changes" in it should be expected?

However, enough carping at words. Let us concentrate not on the words, but on the essence of the president's performance: Precisely what political aims did VVP [Vladimir Vladimirovich Putin] plan to achieve during his large-scale press conference, and how far was he successful?

Here is how I saw the political situation as of the moment prior to the beginning of Putin's conversation with journalists. Within the past few weeks and months, the Russian authorities have committed a whole series of significant political blunders. Putin's recent speech to the Federal Assembly was, in my view, excessively emotive, excessively belligerent, and none too persuasive. Addressing parliamentarians in the Kremlin, VVP behaved like a man possessed by resentment against Turkey. Like a politician whose ability to make cool-headed, calculated, and essential decisions did not seem obvious. I will not hide that this state of affairs frankly scared me.

The cabinet of ministers headed by Dmitriy Medvedev has not looked its best in recent times either. The episode involving the truckers and the Plato [tax] system was a major political failure on the part of the Russian government - an example of how not to do things. I grant that there is some sense in Plato all the same. But even if this is indeed so, the government did not lift a finger to convince the population of this.

As even the Kremlin admits in unofficial conversations, the introduction of the system of levelling a charge on drivers for driving on the federal highways had, in the most banal way, been insufficiently prepared. The government provoked social protest with its own hands.

The episode of the video about the general prosecutor dealt another blow to the government's authority [a 43-minute video released this month by anticorruption campaigner and opposition politician Aleksey Navalnyy claims that General Prosecutor Yuriy Chayka's two sons have amassed large sums of money with the help of Russian officials under their father's patronage]. Yes, it managed to quickly move the conversation into the sphere of "the Motherland's enemies commissioned this [Chayka accuses Hermitage Capital co-founder William Browder of ordering the making of the video] How can you believe such a thing?" But as the saying goes, a sediment remains - and not just a sediment. Questions remain: Let us grant that this was a "commission." But does this mean that all the claims adduced in the film are untrue? The feeling remains that the authorities are not telling the whole story.

Vladimir Putin's main task at the press conference, from my point of view, was to relieve all these numerous negative feelings - to restore the government's moral authority in the eyes of those social groups that have so warmly supported VVP in recent years.

And Putin attempted to achieve this task with the aid of a frontal attack. Premier Medvedev, the government in the broad sense of this concept, the Plato system, General Prosecutor Chayka, and the other figures and offices from the sphere of government and business - VVP did not simply not "surrender" anybody at his press conference. He covered everyone with his broad back, cloaking them all in his presidential authority.

Why? Because the most important thing for Putin right now is to demonstrate the following: That it was not only during the period of economic prosperity that direct pressure on the Russian authorities was a useless occupation. The Kremlin is even less prepared to submit to pressure in a period of the growth of economic problems than it was before. The entire thrust of Putin's speech, it seems to me, can be reduced to one phrase: I am prepared for compromises. But not for ultimatums.

A little earlier, I said that Putin covered everyone. But this "cover" does not bear an unconditional character. Putin did not drive himself into a trap. The president flung the door open wide for the reforming of the Plato system. VVP gave to understand that the authorities are not ignoring the allegations levelled at the general prosecutor - they are dealing with them in a nonpublic manner.

As for Putin's "satisfaction" with the government's work, that is a separate conversation altogether. Premier Medvedev is also the official leader of the main party of power, the United Russia Party. Next to no time remains before next year's parliamentary elections. In such conditions, the president simply cannot afford to publicly "sink" the premier - on the contrary, he is forced to make a show of his support for him.

Therefore, in the place of the people whom VVP protected with his back at his press conference, I would not particularly flatter myself: Putin was not protecting them. Putin was protecting himself and the political regime that he created.

How successful was this presidential defence? I was very sickened by the form in which Putin, by mistake, expressed his no doubt sincere anger over the murder of Boris Nemtsov. "It is by no means a fact that a man needs to be killed. I will never accept this."

Putin's idea - even if stated as a joke - of giving the Nobel Peace Prize to FIFA head [Sepp] Blatter, who is currently accused of corruption, appeared strange to me. I was amused that Putin mixed up Reagan with Roosevelt, "conditionally quoting" the phrase that the latter uttered about the Nicaraguan dictator in 1939: "Somosa is, of course, a son of a bitch. But he is our son of a bitch!"

But on the whole, in my view, Putin actually looked very good in his press conference. The answers that VVP gave were, as a rule, based on logic rather than emotions - a very gratifying circumstance against the background of VVP's recent Message to the Federal Assembly. True, the president effectively did not answer some questions - but surely it has never been otherwise?

Putin showed that he is still at the wheel, and that his hands do not tremble on this wheel. This is perhaps the main result of the just over three hours that he spent in seclusion with journalists.


 #9
Politkom.ru
December 21, 2015
Putin's presser suggests shift from domestic populism to geopolitical issues
Tatyana Stanovaya, head of the Analysis Department at the Centre for Political Technologies: "President's priorities"

On 17 December Russian President Vladimir Putin held his final news conference, which lasted more than three hours. The general impression from his message indicated weariness on the part of the president and a decline in his interest in domestic issues, in the sphere of both the economy and also domestic policy. But in foreign policy too the head of state's focus of attention has shifted from Ukraine to the set of Syrian problems, the most acute of which has turned out to be Turkey.

Vladimir Putin has looked appreciably less convincing this year. Whereas in previous years the news conference was utilized as an opportunity to present a previously considered and comprehensible picture of the world and offer an interpretation of the events and challenges to which Putin himself wanted to personally respond, this time no integral picture emerged. In the context of the current news conference, Vladimir Putin reacted to external irritants in the shape of not always palatable questions. And here the questions turned out to be more important and more interesting than the answers. Putin's weariness was palpable at the beginning of the event, when he began with a comment that all the important things had already been spelled out in his address [to the Federal Assembly] and asked those present to move on more quickly to specific questions.

The president used the first question to present a synopsis of the financial and economic situation in Russia. The generally extremely positive and optimistic assessment took no account of the collapse in world oil prices that has happened in recent days. Here Putin, answering a question about the deterioration of the situation in the economy, preferred to start with a joke suggesting that things will get worse. But turning the conversation into a joke against the backdrop of the growth of panic-stricken and alarmist sentiments, on top of the incomprehension of the population and the business community at the anticrisis strategy of the government and the regime, on the whole looked like a significant underestimation of the risks. At the same time, the president acknowledged that "some things will have to be adjusted", but he handed the responsibility for this to the government. Furthermore, he again repeated that Russia has passed the peak of the crisis, which, however, appears to be an already outdated assessment against the backdrop of recent events on the oil market. Talking about the trends in the Russian economy, Putin considered that external conditions remain the source of the problems, whereas inside the country there are signs of recovery. It transpires that Putin can see no need to adjust the economic policy course.

Nor can the president see a need for personnel changes in the government, although he did admit that the question of some structural changes is under discussion. Indeed, in the last two months, rumours have been actively circulating about various versions of administrative reform, but on 15 December presidential aide Andrey Belousov admitted that "our first approach to this minefield was not crowned with success". "We hope that the second approach to the minefield will result in this weight being lifted," he said. It is very important to emphasize that Putin had never before given such an unequivocal guarantee that the government is safe. He described its work as effective, and likewise he also fully supported the Central Bank's policy, responding negatively to proposals by "dirigistes" to artificially lower the refinancing rate in order to support the economy. Russia will meet the challenges of next year with both the previous cabinet, whose membership is unlikely to change in the foreseeable future, and with the previous economic policy agenda.

Generally on the whole it is possible to deduce from the tone of Vladimir Putin's statements an appreciable rapprochement with the elites and a shrinking of opportunities for political criticism of both the government and the heads of state companies. Putin has always positioned himself as the people's president who has followed (and sometimes initiated or instigated) anti-corruption, anti-bureaucrat, or anti-tycoon trends, which has enabled him to strengthen his political leadership's direct connection with the people. Now Putin is increasingly shifting his stance towards support for the elites, distancing himself from "ordinary Russians". The values of social justice, populism and social and popular rhetoric in general have been virtually excised from the president's vocabulary.

In particular, Putin sided with state company bosses, who are frequently criticized for excessively big bonuses and salaries, justifying his stance by citing the importance of maintaining a market level of rewards. Putin's answer to the bluntest question at the news conference, asked by Yekaterina Vinokurova (znak.com) about Yuriy Chayka's children, the Rotenbergs and Pskov Region governor Andrey Turchak, was also indicative. In her question, Vinokurova raised three most important domestic political issues of recent months. Chayka and his children are accused of links with the criminal community and a conflict of interest; the Rotenbergs are being criticized for introducing an unfair system of tolls on federal highways, which led to a the truckers' protests, and Turchak is back in the public eye after his name started featuring in the criminal case relating to the beating of Oleg Kashin.

Vladimir Putin's answer showed that, first and foremost, he regards all possible problems involving representatives of the elite as an internal affair for the regime. And attacks on them are seen as a politically motivated. Putin would not talk directly about the driver for this (in fact he has simply avoided commenting on the substance of these issues), probably delegating this not totally palatable function to his subordinates. But the important thing is that in this situation Putin has lost interest in the activity of the non-systemic opposition and criticism of the "fifth column". This may be linked both to the building of a relatively positive dialogue with the United States on matters relating to a political settlement in Syria and also to the fact that the acuteness of the perception of risks of revolutionary scenarios in Russia is declining.

Another thing that attracts attention is the fact that for Putin, conflict-of-interest issues are things that do not require increased attention and a special political solution. He described the problems raised by Vinokurova as "tangential things" - that is to say, things that, although unpalatable, are inevitable and tolerable. With regard to Chayka, Putin pointed out that conflict-of-interest issues are handled by the president's control administration (that said, the following day Peskov denied that a check is being carried out with regard to Chayka, and previously RBK sources reported that the Kremlin had given the prosecutor-general guarantees of immunity). Putin turned out to be uninformed about the saga involving Turchak's possible involvement in the beating of Oleg Kashin, twice mentioning the governor's father, who has nothing to do with anything (the attacks on Turchak Jr are probably being seen as attempts to get at his father and thereby the president).

The only matter among these issues, for which Putin turned out to be prepared, was a question about the truckers' protests, on which he had something already prepared. Thus, Putin proposed that thought should be given to abolishing vehicle tax for them, liberalizing the system for issuing licences and also improving the affordability of monitoring devices. But these concessions are in the nature of a framework, whereas Putin's actual attitude towards the truckers was manifestly negative, despite the attempt to speak the same language as them (Putin described them as "real men" and "real workers"). He repeated the stance adopted by the government, which has described the striking truckers as grey-economy big-rig drivers and demanded that they be registered. In any event, the concessions identified by Putin are probably the maximum to which the regime is prepared to agree. But Putin emphatically refused to side with the protest.

Furthermore, he offered tangible political protection to the owners of the Platon system, pointing out that its initiator was, in particular, the Rostec state corporation (here Putin omitted to mention the fact that Rostec has de facto pulled out of managing the system and has significantly reduced its capital stake to a symbolic level, handing everything over to Rotenberg's company). As regards the Rotenbergs, Putin described them as private investors who have invested money not just anywhere but in Russia. Admittedly, he also failed to mention that this is borrowed money obtained from a state bank.

Political issues were also raised by an RBK journalist, who asked whether Yekaterina Tikhonova is Putin's daughter and requested protection for Aleksandr Sokolov, RBK's journalist who has been arrested. Putin felt that the right thing to do was not to answer the daughter-related question directly and promised to look into the Sokolov affair, also he was clearly not up to speed on what has been happening. We would remind you that Sokolov was arrested on suspicion of extremism: The Interior Ministry Centre E suspects him of having links to a Washington centre for the study of corruption when preparing a referendum on "regime accountability".

On this occasion social issues were minimized to a significant extent. Individual issues (relating to individual misfortunes) were raised, but Putin did not have any pre-prepared news about general issues. He said that he did not know whether it would be possible to index pensions to inflation for a second time in 2016, but stressed that "we cannot wreck the budget, because things would be worse for everybody". He thereby intimated yet again that it will possibly be necessary to prepare for the worst. Talking about housing and municipal services charges, Putin stressed that all of these issues are looked at by governments [plural as published] and regional authorities, without saying anything new.

One of the important episodes during the conversation related to the raising of the pension age. Putin softened his stance significantly, admitting that the issue now needs to be worked at a practical level. So this issue has finally moved from the hypothetical to the practical level. But Putin was in no hurry to endorse this decision. He stressed that he regards Russia as not ready to raise the pension age and is opposed to the adoption of a decision to this effect.

Only two subjects triggered the liveliest interest on the part of the president - Syria and Turkey. In the former case it is becoming clear that in the current situation virtually the whole of Putin's attention is taken up by precisely this. One of the most important pieces of foreign policy news was the president's statement of Russian support for the US initiative to prepare a UN Security Council resolution on Syria. "I believe that after they familiarize themselves with the draft, it is bound to suit the Syrian authorities too. Although there are possibly some things that they will not like," Putin pointed out, intimating that Russia may act as a constructive arbiter between the West and Bashar al-Asad. But on the subject of the fate of Al-Asad himself, Putin only repeated that his future must be decided by the Syrian people.

Right now, however, Turkey is becoming the most sensitive and emotionally painful issue for Putin. For him the actions taken by Ankara, which decided to down a Russian bomber, remain a betrayal that cannot be understood or forgiven. Here Putin stressed that Russia had been prepared to take account of Turkey's interests in the region, but the Turkish side did not make the effort to inform Moscow about important nuances of its Syria policy. "I had never heard of the so-called Turkomans," he pointed out, intimating that Russia might have refrained from bombing areas of special significance for Turkey. But this explanation appears far-fetched: Turkey had repeatedly warned about violations of its airspace, but Kremlin officials probably did not regard these concerns as significant enough to be taken into account. There was also a conviction that Turkey would not dare to act independently at variance with US and NATO policy, despite the fact that on many occasions already Ankara has de facto demonstrated independence and had differences with the alliance on issues of geopolitical significance for the country. It is likely that Russia's neglect of the Turkish situation may be linked to the Defence Ministry's increasing influence on foreign policy and on the Syrian dossier in particular, whereas the Foreign Ministry's influence may be declining, which might also be the reason for losing sight of important nuances of the Syrian bundle of interests.

Something else that attracts attention is that Putin's anti-American rhetoric is abating appreciably. It virtually disappeared from the news conference, if you disregard the episode involving Putin's suspicion with regard to Turkey, which could have allegedly committed a "hostile act" against Russia in order to "butter up the Americans". The interpretation of foreign policy problems through the prism of Russian-American confrontation remains very strong and is clearly an obstacle to understanding moves and actions by other countries, whose degree of independence the Kremlin is inclined to underestimate. In any event, as the Centre for Political Technologies predicted, we see the personalization of the conflict between Putin and Erdogan: the president pointed out that the restoration of relations is impossible under Turkey's current leadership.

Ukraine also remains on the radar to a significant extent, but Putin's emphasis is shifting. On the most pressing problems that would appear to be of priority significance for Russia, Putin has started to avoid formulaic responses, which most likely indicates a decline in the acuteness of the problem in the head of state's eyes. This applies to two issues. First, the possible exchange of Capt Yerofeyev and Sgt Aleksandrov, who have been captured by the Ukrainian army, for Ukrainian citizens under arrest in Russia, including Nadiya Savchenko. Putin for the first time allowed the possibility of such an exchange on an "all for all" basis. The Kremlin had previously rebutted in every way even the raising of the question of an exchange (talking only about prisoners of the war in the Donets Basin [Donbass]), while the public stance on Savchenko's fate was extremely hard-line. Second, Putin said that there are Russian military personnel in Donbass, but not in a regular-army capacity, immediately triggering a big reaction. Dmitriy Peskov then had to clarify Putin's response, stressing that he was nevertheless talking about volunteers. The military conflict in eastern Ukraine has clearly receded into the background to some extent, and Putin is paying less attention to his own forms of words while his stance is becoming less principle-minded.

Meanwhile, another issue has come to the fore - the free trade zone whose operation ends on 1 January. Putin clearly dislikes this prospect, but he is positioning the decision that has been adopted as an enforced move linked to the entry into force of the economic part of the association agreement between Russia [as published, could be the EU] and Ukraine. The deferment de facto obtained by Russia did not lead to compromises, which the Kremlin had been hoping for and the agreement will start operating without consideration for Moscow's stance.

Yet another important statement was the acknowledgement of the likelihood of the abolition of the visa regime with Georgia. The acuteness of the conflict with that country is declining. However, this is linked not to positive moves, but to the ousting of this issue by other more acute ones. Against the backdrop of Syria and Ukraine, the difficulties with Georgia appeared to be less significant.

Vladimir Putin is attempting to delegate responsibility for the resolution of domestic policy and financial-economic issues to one level down, which is leading either to "stick flexing" (as in the persecution of Sokolov, for example) or to inaction (as with regard to the sluggish economic policy).

Here we are seeing conspicuous estrangement between the president and the population - whereas previously Russians' social situation was a political issue of personal significance for Putin, now it is increasingly losing political significance for him and becoming an administrative problem. Instead geopolitical issues are becoming entrenched in Putin's priorities as the most significant issues generating increased interest and active involvement. Such a change of priorities may lead in the future to a weakening of Putin's image as the national leader and a consolidating figure for Russian society and also to the politicization of social problems, but now from the viewpoint of an increase in the mood of protest.
 
 #10
www.rt.com
December 27, 2015
'I've seen Russia's future and its name is probably Vladimir Putin'
By Bryan MacDonald
Bryan MacDonald is a journalist. He began his career in journalism aged 15 in his home town of Carlow, Ireland, with the Nationalist & Leinster Times, while still a schoolboy. Later he studied journalism in Dublin and worked for the Weekender in Navan before joining the Irish Independent. Following a period in London, he joined Ireland On Sunday, later re-named the Irish Mail on Sunday. He was theater critic of the Daily Mail for a period and also worked in news, features and was a regular op-ed writer.

Back in 1974, Jon Landau, a Rolling Stone critic famously said: "I saw rock and roll future and its name is Bruce Springsteen." Soon afterwards, Landau took a gamble. He stopped writing and became Springsteen's manager. A position he holds to this day.
For Russia and its President Vladimir Putin, Landau's sentiments are often turned the opposite way. "I've seen the future and it's NOT Russia/Putin." All through the 1990s, there were myriad books and articles predicting Russia's demise. In 1999, Anders Aslund, a Swedish employee of the Atlantic Council, a pro-NATO think tank, warned Russia was about to imminently collapse in an infamous Foreign Policy piece.

Ten years later, George Friedman of Stratfor (known as the "shadow" CIA) followed Aslund's lead but suggested an early 2020s timeframe. Right now, entering 2016, Friedman's prognosis seems way off.

In recent years, a collection of journalists and academics has forecast Putin's political downfall. A hilariously inept effort was Ben Judah's "Fragile Empire." This tome suggested that "Russia fell in and out of love with Putin." At the time of book's publication, in 2013, Putin's poll numbers "languished" somewhere north of 60 percent. Now, they are close to 90 percent.

Then there was Oliver Bullough's "The Last Man in Russia", a prognostication on how demographic despair, fueled by excessive alcohol consumption, will eventually extirpate Russia. This bout of tendentious crystal gazing doesn't tally with Russia's improving demographics. With a fertility rate of 1.71 (in 2013), Russia outpaces Japan, Germany, Italy and Canada in the old G8 and isn't far off the UK, USA and France. Furthermore, Russia is the world's second biggest immigration destination after the USA.

Luckily, both writers were able to review each other's books in the media, blocking informed critical assessment. Here's Judah praising Bullough in Standpoint and Bullough returning the favor to Judah in Literary Review and the Daily Telegraph. A friend in need is a friend indeed.

Always backing the wrong horse

In a bizarre anomaly, being hopelessly wrong on Russia doesn't seem to derail careers in any sense. If a football pundit kept predicting that Bayern Munich would be relegated and they instead won the Bundesliga, that pundit's future would look bleak. Nevertheless, it appears that analysts can indulge in endless erroneous palmistry about Russia and suffer no consequences at all.

Of course, Russia's biggest critics are liberals. For instance, Aslund's contempt for Russia seems grounded in Moscow's failure to fully complete 'reforms' he pushed in the 90s. In a horrid case of "Groundhog Day," the Swede today advises the Ukraine government, which currently seems to be making precisely the same mistakes Boris Yeltsin's Kremlin made in that misguided decade. The parallels are striking, hyper-corruption, civil disorder and the fire-sale of national assets to oligarchs and foreign investors. At the same time as the social state collapses and health and education services become mired in ever-increasing malfeasance, Western governments and think tanks support the radicals as "progressive." For Russians, it's familiarity to the point of deja vu. "I went to bed in Kiev in 2014 and woke up in Moscow in 1993," as a long-time ex-USSR watcher recently said over a pint.

So why do the liberals, who dominate Western discourse, hate Russia so much? The answer to this is perfectly simple. Look around Europe and North America, and it's pretty clear that the governing elite doesn't really reflect the opinions of the majority of the population. A visit to any provincial English or French town would prove that quickly. It's also interesting that Angela Merkel's warm welcome for migrants isn't reflected by any of the German people I know, except for a few in Berlin (who incidentally aren't net tax payers).

After decades of centrist domination, this demonstrates why the neoliberal establishment is so panicked about the sudden emergence of renegade political forces across the Western world. Think Britain's Jeremy Corbyn, France's Marine Le Pen, Spain's Podemos, America's Donald Trump and Bernie Sanders, Greece's Syriza and Italy's Beppe Grillo. Poland's new government has the Economist - long an unconditional lover of the country - in a frenzy of exasperation.

Russia beat all these countries to it. All through the 1980s and 1990s, liberal "reformers", led by Mikhail Gorbachev and Boris Yeltsin foisted dramatic change on the country. The results weren't bathed in glory as living standards collapsed and social cohesion broke down. Putin seemed to sense this and introduced what some commentators have described as "illiberal democracy." That said, Putin remains more liberal than the vast majority of the Russian population and some of his associates (Dmitry Medvedev and German Gref spring to mind) would be considered Westernizers.

The people have spoken

As Matthew Dal Santo pointed out in a wonderful recent Lowy Interpreter piece (a must read): "Since 1996, the Levada Centre has been asking Russians what they want of their presidents. Their expectations have changed little. In 2012 (that is, even before the outbreak of the Ukraine crisis), Russians' top four priorities were: restoring Russia's great-power status (57% versus 54% in 1996); law and order (52% versus 58%); a fairer distribution of the national wealth (49% versus 37%); and increasing the state's role in the economy (37%, unchanged)," he wrote.

"Such attitudes reflect continuing nostalgia for elements of the Soviet system and dissatisfaction with the Westernising path followed after the USSR's collapse. In 2012, only a minority (16 percent up from 13 percent in 1996) believed Russia should continue to pursue the liberal reforms of the Yeltsin era and even fewer (5 percent down from 6) thought convergence with the West something to be desired. Today, however, 70 percent of Russians say they're proud of their country, whereas less than half did so a decade ago. Significantly, since 2014, 68 percent of Russians believe their country to have regained great power status," Dal Santo concluded.

Interestingly, in 2004, the oligarch Mikhail Khodorkovsky, now a self-appointed "opposition leader," wrote: "Putin is probably neither a liberal nor a democrat, but he is still more liberal and democratic than 70 percent of our country's population."

The fact that Western analysts consistently fail to grasp this is explained in what a Russian diplomat once told me: "Western reporters and academics in Moscow only talk to Russians who speak English. Russians who speak fluent English are maybe 50 percent liberal. Russians who don't speak English are maybe five percent liberal. The fact is the second group is 20 times bigger than the first group. This is why coverage of Russia in Europe is so out of step with the reality on the ground. If these guys really wanted to understand Russia, they'd go live with a family in Barnaul for a year and stay well away from 'Hipster' bars in Moscow."

Dmitri Trenin, director of the Carnegie Moscow Centre and a widely respected expert, criticized Russian liberals by saying they "have the same problem the revolutionaries have always had in Russia: they look down on the rest of the country as dupes."

Since Putin returned to the president's office in 2012, there's been a campaign in the Western media to demonize him as much as possible. Many editors and correspondents seem to be under some illusion that if Putin was to resign or be ousted tomorrow, that a more favorable (to western interests) figure would take his place. A Kremlin suspicion has been that American NGOs were preparing for such a "regime change."

Be careful what you wish for

However, the reality is that Putin's successor would probably be considerably more unbending than the man they constantly deride. Well-placed Moscow sources suggest that Dmitry Rogozin or Sergey Ivanov would be next-in-line if the current president exited without much warning. Ivanov, an outwardly urbane English speaker, is considered the leader of the Silovik faction in the Kremlin, a group of officials with backgrounds in the state security services. Rogozin, a former leader of Rodina (a nationalist party), last year described the sale of Alaska (in 1867) as a "betrayal of Russian power status" and claimed that Russia had the "right to reclaim our lost colonies."

Putin's 2015 has been a mixed bag. His surprise intervention in Syria helped to smooth relations with some Western countries - most notably France - that had been seriously damaged over Ukraine. There are also indications that EU anti-Russia sanctions may end in 2016, possibly as soon as March. Kiev's predicable self-immolation has made some EU countries weary of continued support, aside from the mutual economic damage the embargoes have caused. American and British attempts to isolate Russia were stillborn and the Obama administration has dramatically changed tack, with John Kerry and the US president intensively engaged with their Russian counterparts recently.

Still, Russia has numerous problems. Thanks to low resource prices and the government's repeated failure to adapt the domestic economic model, the country is in deep recession. For the first time since the 1998 crash, living standards seem set for a sustained plunge. Meanwhile, social friction has emerged in pockets, the recent truck drivers protests being an example. With a few million people forecast to fall out of the middle class in 2016, the situation could get worse before it gets better.

Nevertheless, Russia is not about to collapse any time soon. Predictions along those lines only serve to make their authors look stupid. With sky-high approval ratings, allied to a lack of any realistic opposition candidate, the president's job also looks fairly secure in the short-to-medium term. To paraphrase Landau, I've seen Russia's future and its name is probably Vladimir Putin.


 
 #11
Levada.ru
December 24, 2015
Over one-third of Russians familiar with Navalnyy's anti-corruption film - poll

Almost 40 per cent of Russians are in some way familiar with the film produced by the opposition leader Aleksey Navalnyy's Foundation for Fighting Corruption about alleged ties of the Russian Prosecutor-General Yuriy Chayka's entourage with criminal groups and their involvement in illegal activities, a poll conducted by the independent Russian polling organization Levada Centre showed as published on its website on 24 December (bit.ly/1OjI9cY). The majority of those who watched the film believed the allegations were true.

Still, the majority of those surveyed, 62 per cent, have heard about it for the first time from the poll itself, while only 5 per cent have watched it. Others have either heard something about it (23 per cent) or know what the film is about, although they have not watched it themselves (10 per cent).

However, of those who have at least heard about the film, only 7 per cent believe that the accusations against Chayka are completely gro! undless. Thirty-nine per cent believe that they seem to be true, although it is hard to evaluate credibility of these accusations, and 27 per cent are convinced that everything the film reports is true.

Of those who believe that the accusations are true, 82 per cent think that the case described in the film is typical for Russia and only 10 per cent think that it is a unique case.

At the same time, only 7 per cent believe that Chayka will be dismissed, 13 per cent believe that those who prepared the report will be persecuted, 21 per cent that a probe will be conducted and if the ties are proved those involved will be dismissed, while 28 per cent believe it will have no consequences.

The survey was conducted on 18-21 December among 1,600 people from 137 population centres across 48 regions.

According to Levada Centre deputy director Aleksey Grazhdankin, residents of large Russian cities are more familiar with the film. In Moscow, 60 per cent have hear! d about it, 11 per cent have watched it and 92 per cent believe that the accusations are true. "The biggest difference is in the fact that 29 per cent of Moscow residents say that now the film creators will be persecuted, across Russia in general only 13 per cent think so," Grazhdankin said as cited by the website of Russian business newspaper Vedomosti on 23 December (bit.ly/22qosuB).


 
 #12
Kremlin.ru
December 24, 2015
Meeting with Government members

Vladimir Putin held the final meeting of 2015 with Government members.

President of Russia Vladimir Putin: Mr Medvedev, colleagues, friends,

I would like to begin by thanking the Russian Federation Government, its ministries and agencies and all your employees for the good work. In a frankly complicated situation, you have demonstrated a high level of responsibility and the ability to resolve complicated tasks.

The implementation of our anti-crisis plan made it possible to support the real sector of the economy and increase trust in the banking system. There is obvious proof of this, which is the trust of the people manifested in growing amounts deposited by both legal entities and individuals with the country's banking system.

We have launched import replacement programmes, which is important in itself. However, what is more important is that this should lead (and we have made our first steps in this direction as well) to a technological upgrade of production and promote exports. Active use is being made of project financing, the Industrial Development Fund and the Russian Export Centre.

At the same time I would like to stress that we have to move faster here; businesses are, of course, counting on all these instruments, therefore, it is important to further enhance their efficiency.

I would like to note the growing potential of our defence industry. We have upgraded the equipment, at least to a large degree, and we are implementing the plans we made earlier, disbursing the allocated funds, introducing modern technologies and increasing labour productivity.

Agriculture is also demonstrating positive dynamics: in the first 11 months of this year, there was an almost 3 percent growth.

Industrial production is growing in the Far East. Priority development areas, the free port mechanism (as you may remember, we decided to expand this practice), infrastructural support for projects and the Far East Development Fund have all shown their worth.

Another important development was the launch of the Crimean energy bridge. I would like to thank all those who took part in this effort.

Another significant achievement I would like to mention was the launch of the Eurasian Economic Union and the further development of integration with our closest partners and allies.

Colleagues,

The most important task facing the Government is to bring Russia's economy back to stable growth. I dealt with this in detail in my Address to the Federal Assembly, as you may remember, and at our meeting on the practical work to meet our targets.

I would like to repeat that we should be ready for a possible extension of the period of low prices for our main exports and, possibly, of external limitations. We need to make progress using our reserves. The current difficulties should stimulate greater efficiency of the economy and the social sphere.

I would like to name once again the key areas of our future work.

The first one is achieving a balanced budget policy. We have enormous unused reserves in terms of both revenue and spending. You all know the figures, we spoke about them at our meetings and they are quoted by the Accounts Chamber. The total annual amount of inefficient federal budget spending this year only in a number of areas, such as budget investment, state purchases, and financing of state order is about 220 billion rubles.

The debt on mandatory payments to the federal budget is growing, while unfinished construction of infrastructure, social and other facilities has reached almost 2 trillion rubles.

Cash disbursement from the budget remains low. I would like you to analyse all these issues and report on the measures taken at one of our next meetings.

The second is the need to ensure the smooth implementation of our plans to support those sectors of the economy that are at risk, as we have said on numerous occasions: these are the automotive industry, railway machinery, light industry and construction sector.

Third. Special attention should be given to modernisation of the housing and utilities sector, ensuring strict compliance with the resolutions made earlier.

Next. Our main priority in the social sphere is the transition to a fairer system whereby assistance is provided to those who really need it.

And one more thing. Today unreasonable, frankly profiteering price hikes on goods and services are leading to lower living standards. We need to use all market instruments available to hold back the prices and increase the share of low-cost, high quality local goods.

There are of course areas where we simply need to be more efficient, so to speak. We are all aware of the situation with the heavy trucks: we already said that we have to cancel the transport tax in a timely manner. We could have helped people come out into the open and retain their profits to be able to support their families, like the possibility of shifting to a patenting mechanism, as I have said before. There are also other situations where we need to move faster.

However, overall, I would like to stress that the Government was efficient, it has demonstrated the right approaches to the complicated tasks facing the country, and I would like to thank you for this.

A happy New Year to all!


 
 #13
Moscow Times
December 24, 2015
Can Russia's Economy Recover in 2016?
By Martin Gilman
Martin Gilman is a former senior representative of the International Monetary Fund in Russia and a professor at the Higher School of Economics.

A year ago it seemed that the Russian economy was in free-fall. One rating agency, when downgrading Russian credit early last January, cited a significant deterioration in the economic outlook, the continued impact of western sanctions, plunging oil prices, shocks to the banking sector (from the ruble depreciation, market volatility and drastic hikes in policy rates) as some of the main reasons.

The turmoil in Russian markets toward the end of last year came on top of a period where most of the main macro-economic indicators were already a source of growing concern. As the International Monetary Fund noted last summer, Russia already entered 2014 with declining potential growth owing to the stabilization of oil prices, stalled structural reforms, weak investment, declining total factor productivity and adverse population dynamics. In addition, the ongoing slowdown was exacerbated by the dual external shocks from the sharp decline in oil prices and sanctions.

With Chinese demand withering and US shale producers coming on stream, OPEC became increasingly an irrelevant sideshow. In these circumstances, the seemingly irreversible softening in oil prices led to severe pressure on the ruble, a surge in inflation, market turbulence, and concerns over financial stability. In response, the authorities accelerated their long-anticipated move to a floating exchange rate in November 2014, thus protecting both the budget and foreign exchange reserves. As the ruble dropped, inflation accelerated and hit double digits on an annual basis starting in December 2014.

The accelerating decline in world oil prices and the steady strengthening of the US dollar in the second half of 2015 have imposed a double whammy on the Russian economy. In retrospect, the forecasts of a year ago now appear to have been far too optimistic with respect to both of these parameters over which Russia has no control. Real income has declined along with productive investment. In the climate of uncertainty prevailing this year, not to mention geo-political concerns, neither consumers nor enterprises were anxious to spend. Bank borrowing has reflected this relative abstention.

As a consequence, real GDP is now expected to decline by 3-4 percent driven by a contraction in domestic demand weighed down by falling real wages, high interest rates, and weakened confidence. With the underlying determinants so much worse than foreseen earlier in 2015, it says something about the resilience of the economy that the expected outturn is not even worse. For technical reasons, there is a reasonable chance that the poor results for this year may be revised upwards.

Like the rest of the world, there is nothing that Russia can do about the surging value of the US dollar. From 52 rubles to a dollar a year ago, the exchange rate now stands at 71 rubles, a depreciation of 27 percent. Russia is not alone. Even the Euro has depreciated by about 11 percent. By allowing the ruble rate to adjust, the Central Bank has been able to maintain its foreign exchange reserves, limiting the drop to 4 percent.

But what about next year? Many observers consider that the economic situation will continue to unravel.

There has been considerable hand-wringing about Russian economic prospects. This is no surprise as the oil price this week hovers around its lowest point in 11 years, or just over $34 per barrel. No doubt the prices of Russian assets reflect a significant risk premium to compensate for a potential crisis situation on the back of further drop in oil prices, geo-political confrontations, on-going sanctions (and the associated limited access to markets, banking sector stress, and corporate default concerns), and deeper economic stress - since all of these risks are biased to the downside in the near term. And, in the longer term, there are of course additional concerns such as the rule of law, the protection of property rights and the general legal framework, which are clearly not among Russia's competitive advantages.

This may be too pessimistic. Modest growth should resume in 2016. However, the recovery is likely to be modest as the limiting factors behind decelerating potential growth will take time to be addressed, leading to medium-term growth of 1-2 percent per year.

Unfortunately, despite all the talk about economic diversification, the years of high oil prices discouraged the galvanization of political will to pursue tough structural reforms to improve the investment climate. A long period of oil prices below $ 40 per barrel might just be the trigger to induce piece-meal structural changes as foreshadowed in President Putin's annual address to the Federal Assembly earlier this month.

It could also be that the pervasive sense of pessimism has been overdone. When we start back to work after the New Year's holidays, we should not be too surprised by the headlines reporting the welcome drop in inflation back into single digits (largely because of base effects, but real nevertheless). And barring a geo-political disruption, the CBR will be able to proceed rapidly to cut its benchmark discount rate starting in the first quarter of 2016.

That said, medium-term prospects remain highly uncertain. The external environment is not benign: there are just too many accidents waiting to happen in economic and financial terms, whether in the Eurozone, the Middle East, China, or Japan. And more fundamentally, if Russian policy-makers cannot summon the political will to promote a thriving private sector, then productive investment as the critical driver of long term sustainable growth will not materialize.
 
 #14
Russia Direct
www.russia-direct.org
December 23, 2015
Is Russia ready to withstand low oil prices?
Questions remain as to how well Russia's economy will be able to cope with low oil prices in 2016.
By Dmitry Dokuchaev
Dmitry Dokuchaev is a Russian journalist and a columnist, who deals with economic issues. He has extensive experience in different Russian media, including Izvestia, Moscow News, The New Times, The Echo of Planet.

Global oil prices are falling at an alarming rate. In the past week alone, the price per barrel has lost more than 8 percent - the biggest drop since March. The cost of the benchmark North Sea Brent blend, for February delivery, slumped below $37 a barrel, and there is currently no reason for the trend to slow down.

A major factor in this sharp decrease in the price of oil is a decision made by the Organization of Petroleum Exporting Countries (OPEC) on Dec. 4. Contrary to the expectations of many, far from reducing its production ceiling from 30 million barrels a day, OPEC raised it by 1.5 million barrels to the current level of actual production.

In doing so, OPEC effectively legitimized the situation in the global oil markets, which for two years now has been marked by a substantial excess of supply over demand. It is a basic law of economics that prices in such situations have nowhere to go but down.

Another factor here is a recent report from the International Energy Agency (IEA), which forecasts that the global oil market will remain oversupplied at least until late 2016 because of the inability of oil exporters to agree on cutting production.

A blow to Russia's budget

For many oil-producing countries, the current situation of falling oil prices is full of risk, and Russia, whose economy has been in a prolonged recession since last year, is no exception. And with oil prices falling below the $40 a barrel mark, the future would appear to be far from rosy for the Russian economy.

According to Russia's Ministry of Finance, the country's budget deficit will reach 1.5 trillion rubles (approximately $21 billion at today's exchange rates) in 2016. In terms of the budget, this means an increase in the deficit to 5 percent of GDP, whereas in his recent address to the Federal Assembly President Vladimir Putin stressed that the deficit needed to be no higher than 3 percent.

Furthermore, the Ministry has repeatedly stated in the past that with oil prices at $40 a barrel or less, the government will be forced to take measures to raise income, to take a more conservative approach to spending, and introduce measures to stimulate economic growth.

In other words, budget cuts are expected, not least in welfare, which could hit ordinary people particularly hard. An alternative would be to reduce Russia's massive defense spending, but the government is hardly likely to do this, given the actual war with the unrecognized Islamic State of Iraq and Greater Syria (ISIS), the frozen conflict in Ukraine, and other terrorist and geopolitical risks.

Nothing left to chance

In a recent television interview, Prime Minister Dmitry Medvedev emphasized that, "If the need arises, if the times are hard, if we face a worst-case scenario on the oil and gas market, we'll have to make adjustments. In this respect, the position of the Government will be absolutely realistic."

It is worth noting that at the moment Russia's national currency is mirroring oil prices, falling day after day against the dollar and the euro. Today, the ruble is at more than 70 to the dollar, and more than 78 to the euro.

That said, Deputy Finance Minister Maksim Oreshkin sees no macroeconomic reasons for the ruble to fall to 100 to the dollar in 2016. In terms of the balance of payments, the economy has adapted to oil prices in the region of $40-50 a barrel, so there should not be any more major fluctuations in the currency, he explained.

In the Finance Ministry's baseline forecast, with the price of oil at $50 a barrel, the ruble will be stronger in 2016 than forecast by the Ministry of Economic Development (63.3 rubles to the dollar), because of a decrease in capital outflows.

"The ruble could be significantly stronger in 2016 if we are talking about capital outflows at the same rates as we have seen in the second half of this year. The Ministry of Economic Development is assuming much higher capital outflows next year than we are expecting," says Oreshkin.

In his words, capital outflows from Russia in 2015 will not exceed $60 billion, and will be even less in 2016. This is despite the fact that capital outflows from Russia in 2014 amounted to a record $154 billion.

A world of cheap oil

Russian Finance Minister Anton Siluanov has already admitted that oil prices could even drop as low as $30 a barrel next year. The market is becoming increasingly convinced that the situation with excess supplies to the global market will continue for a significant part of next year as well, and this will continue to put pressure on prices.

The Finance Ministry expects oil prices to hover between $40 and $60 a barrel over the next seven years.

"As far as we can see, a serious increase in the price of oil - to more than $50 [a barrel] - cannot be expected. The oil industry is structurally changing. It could turn out that the global economy will not need as much oil in principle. We will live in a different world and under different conditions," said Oreshkin last week.

It is no coincidence that Putin, in his address to the Federal Assembly, said that Russia needed to be prepared for the sanctions and the low commodity prices to last much longer.
As challenging as the situation is, there is some evidence that Russia is indeed prepared, believes Sergey Zhavoronkov, a senior researcher at the Gaidar Institute for Economic Policy.

The expert highlights the fact that although the fall in oil prices is not yet on the scale of the collapse of 2008, Brent prices at less than $40 a barrel still fall under the Bank of Russia's stress scenario. And since the financial authorities are considering such a scenario, it would probably not take them by surprise.

The answer to the low prices includes the Reserve Fund, which, Siluanov estimates, amounts to 8.3 trillion rubles, or 11.3 percent of GDP. Such reserves, say Central Bank analysts, would enable Russia to withstand the current low oil prices even until mid-2017 to early 2018 without reducing spending.

At the same time, according to Zhavoronkov, what is happening to the Russian economy today is fundamentally different from all previous periods of low oil prices. The reason for this difference is the devaluation of the ruble by the Bank of Russia at the end of 2014.

In previous periods, devaluation followed low oil prices, but this time the Bank of Russia took the initiative and the risk, and has been proven correct. An all-purpose mechanism was conceived to help the economy withstand external shocks: floating the ruble. In effect, this mechanism protects the economy, enabling it to adapt to global changes.

Essentially, the devaluation of the ruble has helped the government to stave off some of the most disastrous effects of the fall in oil prices. As Chris Weafer, a partner at Macro-Advisory in Moscow, notes, every additional barrel sold produces the same revenue in rubles as before, allowing the government to keep the budget deficit in check.

Experts say that Russia's main challenge today is to maximize capital inflows and minimize the impact of the Western sanctions against Moscow that were imposed because of Russia's involvement in the conflict in Ukraine.

As such, Russia is acting to diversify its market, moving away from Europe and seeking new partners in China and India. China, it may be recalled, is one of the world's biggest oil importers, and in recent months has signed several 'oil-for-loan' agreements with Russia. In May, Russia became the country's biggest oil supplier for the first time.

"If the current price of oil is maintained not for a few months, but for a long time, the Russian economy, as in 2015, will face increased risks of negative growth and a weaker ruble. But if oil recovers to closer to $50 a barrel, there will be some sort of micro-stabilization and nothing terrible will happen," says Oleg Kuzmin, Chief Economist for Russian and the CIS at Renaissance Capital.

In this context, it is worth noting that both OPEC and the IEA forecast that in the medium term, oil prices will gradually increase between now and 2020, reaching $80 a barrel in five years' time.


 
 #15
Russia Beyond the Headlines
www.rbth.ru
December 23, 2015
Ruble rollercoaster: How Russia was shortchanged in 2015
National currency lost half its value in the space of a year.
ANNA KUCHMA, RBTH

The ruble has lost half its value in a span of just over a year.

Since November 2014, foreign exchange value has been unregulated by the Russian Central Bank. Experts are divided in their opinions of the bank's actions, with some suggesting that regulatory control could make a comeback in 2016.

When Russia's Central Bank gave up selling dollars from its reserve fund to buy rubles, Russia's national currency swiftly began to lose value.

The decision, experts say, was forced by rapidly declining oil prices.

"It would have been practically impossible for the Central Bank to restrain the further fall of the ruble with foreign currency interventions," says Fin Expertise analyst Natalya Borzova.

"The liberalization of the exchange value helps the economy react to the realities of the market more flexibly. In particular, oil-producing countries, where the value of the national currency is fixed to the dollar, encountered a 20 percent budget deficit that had to be compensated with reserves," explains Alexander Kuptsikevich, financial analyst at FxPro. In essence, the Central Bank had no alternative, he adds.

Ekaterina Vlasova, an analyst at Citi Research, believes that the Central Bank changed the ruble to a free-floating regime rather quickly. "It became possible thanks to the preparatory stage in the course of which the Central Bank gradually increased the ruble's flexibility."

Liberation effect
According to Dmitri Savchenko, analyst at Nordea Bank, immediately after the liberalization, the ruble's exchange rate dependence on the price of oil increased by 88 percent. This is evident when the ruble exchange rate peak values are compared to oil prices (see diagram).

Vlasova adds that besides oil prices, geopolitical risks and Russian domestic factors also affect the ruble's exchange rate - interest rates, tax payment periods and repayment of foreign debts. Nevertheless, the dependence on oil was the main factor. The situation changed only in the last months of 2015. In December, with the fall of oil prices to $36.4, the ruble's exchange rate increased to 70.55 rubles per dollar. But the ruble had reached this level in August when oil prices had not fallen to such low levels.

"This means that if there was an absolute correlation between oil prices and the ruble exchange rate, the dollar would now cost 88.8 rubles, not 70-71," remarks Alexander Abramov, a professor of Capital and Investment Markets at Moscow's Higher School of Economics. "That is, the monetary authorities were able to significantly decelerate the falling value of the ruble in comparison with the fall in oil prices."

Industrial blow

However, since its liberalization the ruble has "depreciated by practically 50 percent against the dollar," says Vladimir Rozhanovsky, director of the analytical department at OK Broker. "In such a situation it has certainly become easier filling the budget, but at the same time export-import activities are having difficulties."

Due to sanctions on the Russian financial sector, industry has been deprived of inexpensive western financing, adding to industry's losses. "A large part of industry's expenses goes towards equipment, components, electronics, which they buy abroad," Rozhanovsky adds.

If the Central Bank had not let the ruble go, losses related to devaluation would have been less than a third of what has been witnessed, he says. He also suggests that in 2016 it is possible the bank will re-introduce controls over the ruble.

The Central Bank admits that the weakening of the ruble has clearly had an impact on industry. "However, the positive contribution of growing export revenues [in export-oriented production - RBTH] has exceeded the negative impact of the exchange rate dynamics on expenses," its press office says.

The bank does not intend to toughen its exchange rate policy, the press office adds. "At the same time the Russian Central Bank reserves the possibility to perform currency interventions to support financial stability."


 
 #16
Russia Insider
www.russia-insider.coom
December 23, 2015
2016 Prognosis: Another Tough Start for Russia Before Return to Growth
And informed, exhaustive and sober look at the state of Russia's economy and finances and their likely trajectory in 2016
By Ben Aris
[Text with charts here http://russia-insider.com/en/business/2016-prognosis-another-tough-start-russia-return-growth/ri12002]

Originally appeared at bne IntelliNews

However, the structure of the budget is also a bet. The military spending is a drain on the economy that cant be sustained for more than a year without change. Likewise, the enshrining of a 3% deficit and the reluctance to increase taxes or reduce subsidies to state-owned enterprises means the government is hoping that oil will recover to an average of $50 in 2016.

If it doesn't (as appears increasingly likely at the time of writing) then more cuts can be made, but this will hurt the blue-collar workers most, which are Putin's core constituency, and comes at a political cost the Kremlin is unwilling to pay at the moment.

The parliamentary elections in 2016 and presidential elections in 2018 are already looming over the agenda and the goal is to get passed these two milestones with as few changes to the current set-up as possible. Only after 2018 is the prospect of radical change and reform possible.

For investors this means there are investment opportunities in the bond market, which has been an outperformer in 2015 thanks to the belief that the high-water mark of the political clash with the West over Ukraine has passed.

A more stable political situation will also improve the equity story, mainly because Russian stocks are so cheap, even by its own low standards. The beneficial effects of steep ruble devaluation in December 2014 are working their way through into some sectors. Many raw material producers with costs in rubles and revenues in dollars have already been winners.

Agriculture has also been a stellar story in 2015 and will continue to improve in 2016. And the crunch is forcing a rapid consolidation in organised retail and banking in particular; the Central Bank of Russia (CBR) closed a record 100 banks in 2015 and will continue until it has reduced the number from the current 700 odd to around 300.

Economic Outlook

The economic outlook in 2016 will be largely determined by what happens to two factors: can the CBR cut rates down into single digits, which is a function of what will happen with inflation, and where will oil prices settle?

While there are grounds for optimism on the first score - largely because inflation was falling steadily in the second half of 2015 (and may be overestimated - see section) - there is less grounds for optimism on the second score, after OPEC effectively abandoned its production quotas in December 2015.

Having said 2016 will almost certainly be better than 2015, as the economy appears to have bottomed out in the summer of 2015 and while no one is expecting strong growth in 2016 - the estimates range from -0.7% to the most optimistic forecast from Sberbank of 2.5% - growth is expected to build as the year wears on.

In addition to the economic variables, the other big uncertainty is politics. There has always been a specific "Russia risk" to investing here, but this political factor has taken on global proportions since the conflict with Ukraine started and more recently the military campaign in Syria. This factor is entirely unpredictable.

On the one side is the implacable opposition of the United States to President Vladimir Putin and Russia's attempt to increase its say at the geopolitical high table. On the other is European business's desire to trade with Russia and their countries' dependence on Russian energy and raw material exports.

However, the biggest change to doing business in Russia is the apparent new policy of the government to keep the ruble weak and so encourage the development of local production. Russian wages are now already less than Chinese wages and a start to import substitution has been made (most noticeably in cheese production). But the jury remains out on the question whether a weak ruble will be enough to counteract the endemic problems of corruption, red tape and aged infrastructure.

In the medium-term, business should win out over politics as money speaks louder than guns. But the path between here and there is fraught with problems, none of which will necessarily be solved quickly or easily. In the meantime, sanctions on Russia will remain in place and coupled with low oil prices this will have a negative impact on Russia's development. Politics means things could get worse even if the underlying economics are improving.

Sanctions Outlook

At the end of 2015, it was clear that sanctions against Russia will be extended by at least another six months. Despite some opposition from Italy, Luxembourg and some other EU members, ambassadors representing the 28 EU states decided on December 18 to prolong the measures from January for six months for Russia's support of the pro-Moscow separatist conflict in Ukraine's eastern Donbas region.

EU sanctions automatically expire after the end of each six months, but for them to be lifted the Minsk II accord has to be fulfilled. This requires several steps to be taken by both sides. At the time of writing, Ukraine had failed to meet many of the conditions including: given general amnesty to rebels fighting in Donbas and to change the constitution to give the region "special status".

For their part, Russia has not withdrawn its support for rebels nor removed its military personnel "holidaying" in the region. It is unlikely to do so until Kyiv meets its obligations, which are politically difficult for Ukraine's embattled President Petro Poroshenko to fulfil. The upshot is a stalemate that will continue for the foreseeable future.

Putin was hoping that his "pivot to Syria" by launching airstrikes there would do more to break the EU-US resolve in perpetuating sanctions. While the launch of military operations in the Middle East has introduced cracks in the alliance - noticeably France has also called for closer cooperation with Russia - these have not been sufficient to break EU unity.

Putin is now faced with a problem in that Russia cannot afford an extended military campaign in a foreign country that is costing $3mn a day. That is probably the US strategy: "Go ahead, knock yourself out. We can wait."

Still, the sanctions regime could be lifted in 2016 due to the resistance by Italy and several other southern European states to its continuation. Russia's economy is now large enough that the economic pain it is suffering is infecting the rest of Europe.

The measures and Russia's retaliatory ban on EU food has hit European businesses hard. Farming groups say the two-way sanctions led to the loss of some €5.5bn of agri-food exports. The European Commission offered a €500mn relief package in September as protests against continuing the sanctions grew, but farmers said the package was not enough.

Italy's position on delaying the vote on extending sanctions was supported by Luxembourge, Hungary, Greece, Cyprus and several other countries. Poland, the Baltic states, and some other Eastern European nations have been implacable and remain firmly against lifting the sanctions.

* Outlook: first half tough, second half better

The outlook for growth in 2016 is confused as it depends heavily on oil prices, which are in a period of flux. International financial institutions (IFIs) are almost universally predicting another year of recession with a 0.7% contraction.

The government's official position is more optimistic, based on its assumption of an average oil price of $50 in 2016, forecasting 0.7% of growth. Putin added at his annual press conference in December that he is expecting growth of 1.9% in 2017 and 2.4% in 2018 based on $50 oil. But he also conceded that a review of the budget was likely due to over-optimism on the oil price.

However, there is more upside than downside this year. The most optimistic is Sberbank's chief economist Evgeny Gavrilenkov, who says several surprises could produce 2.5% of growth in 2016. The main factors are based on consumer deleveraging coming to an end; if borrowing restarts, that will drive consumption faster than expected (many Russian banks are forecasting 0% growth in the retail sector). And Gavrilenkov believes inflation is overstated, so once the CBR switches to a new basket in January, inflation will fall fast, allowing rapid cuts that will in turn lead to more corporate borrowing and growth.

Goldman Sachs also has a rosy prediction, as it believes Russia could see the biggest disinflation of all the emerging markets, with inflation falling from 15.6% at the end of 2015 to only 4% a year later with 500bp interest rate cuts to an overnight rate of 6%. If this holds true, then Russia could bounce back strongly.

* Recession is over!

"The recession is over!" declared Minister of Economic Development Alexei Ulyukayev in November. Whichever scenario manifests itself, the economy probably passed bottom in the middle of 2015 with a 4.1% y/y contraction in the third quarter of 2015 before ending the year with an estimated 3.7% y/y contraction.

More economists were coming round to the official prediction of growth at the end of 2015. Fitch Ratings expects the Russian economy to stabilise in 2016, forecasting 0.5% growth after an expected contraction of 4% in 2015, the agency said in its "2016 Outlook: Emerging Europe Sovereigns" report published on December 14. "The whole of Emerging Europe will benefit from a stabilisation in the Russian economy and stronger growth prospects in central and eastern Europe (CEE) in 2016, although political, policy and external challenges remain," Fitch says in the report.

That still doesn't mean 2016 will be a return to any sort of "feel good" factor. Alfa Bank's predictions for the main parameters are typical and make for fairly gloomy reading.

* #Oil prices

Oil prices dynamics remains the wild card and fell to a seven-year low in the middle of December, crashing through the psychologically important $40 mark. Russia has enough reserves to weather $50 oil for several years, but analysts were starting to ask if Putin can maintain his "fortress Russia" stance with oil under $40, which will play havoc with the budget and exhaust Russia's considerable reserves very quickly.


The 2016 budget assumes a price of $50, and the Ministry of Economic Development is predicting oil could return to $65 by the end of 2016. That would be a comfortable level, as following the devaluation of the ruble the break-even price of oil for the budget dropped from $115 to about $70.

However, at the start of December, Opec failed to agree on an oil production ceiling for the group, which means that producers will probably pump as much oil as they can to make up for revenue lost from the low prices. Russia has already been playing this game for most of 2015.

A significant gap still exists between production and demand, not helped by global soggy growth, especially in China. Opec says it expects demand to increase in the second half of 2016 as most markets recover, but as previous years have shown, even making six-month forecasts has been a largely fruitless occupation.

Russian Finance Minister Anton Siluanov warned on December 12 that Russia should be prepared for the price of oil in 2016 to dip below $30 per barrel. "The International Monetary Fund has downgraded the forecast of the world economy for the fourth time over the last year, this suggests that the demand for oil will also fall," Siluanov said.

"We are seeing now the large volumes of oil reserves and will see the large oil output from the new players in the next year - I mean Iran with 1.0mn-1.5mn barrels per day - all this suggests that the low oil prices will dominate next year ...

There is no defined [oil production] policy among OPEC countries, everyone works for himself, everyone fights for markets, and it leads to a further decline in oil prices."
* Russia's consumption growth model is exhausted

In previous years, Russia had domestic consumption to fall back on to bolster growth. But falling real incomes already led to retail turnover contracting more quickly than other parts of the economy. This is a trend that is likely to continue, unless there is a recovery in consumer borrowing (see below).

Russia's 2000-2008 consumption growth boom was based on income growth of about 10% a year in real terms - far ahead of both inflation and productivity gains, and super-charged by retail lending. But that came at the expense of squeezing corporate profits and companies have run out of space to keep increasing pay at above-inflation rates.

A variety of factors is weighing on consumption. Inflation is high (albeit falling slowly), held up specifically by sanctions-induced high food prices.

Real income growth has reversed and gone into the red (see section), which has depressed retail shopping and undermined that growth driver. The combination of high food prices and falling income means the share of food in the average shopping basket has risen from a low of 25% in 2007 to 50-55% in 2015, according to VTB Capital.

These trends are likely to persist in 2016, all else being equal.

* Hope for return of consumer borrowing in 2016

That said, the massive deleveraging amongst consumers, who were so over-borrowed in 2014 that it forced the CBR to hike prudential rules to cool lending, has probably come to an end and should lead to some recovery in borrowing in 2016.

The CBR cracked down on retail borrowing several years ago to nip a consumer borrowing bubble in the bud. That led to a massive deleveraging by the population which is now coming to an end.

According to Sberbank, the level of consumer indebtedness is now less than at the start of the bubble and borrowing could restart in the New Year, supporting retail trade. That has opened up the possibility of a resumption of borrowing in 2016 and better-than-expected retail numbers.

"It is likely that at some point next year, deleveraging will stop and households will start to borrow again, but at a lower rate," Sberbank's chief economist Gavrilenkov said in a note in November.

"The debt servicing burden on households will diminish in 2016 (regardless of the scenario, our base case assumes 12% nominal wage growth, our higher and lower cases assume 17% and 0%, respectively)."
The size of this effect will depend on how fast the CBR can continue its policy of cutting interest rates. "The CBR could easily cut its key policy rate by at least 300bp between now and year end. Whether the regulator will slash rates further will depend on actual inflation in 2016," Gavrilenkov added.

At the end of 2015, commercial bank rates for consumer loans were exceptionally high: around 26% for loans up to a year and 19% for loans longer than that, including mortgages.

The consumer debt/GDP ratio reached just 15% in 2014 and fell to around 14% in 2015, which is low by international standards. This will rise going forward, but only if the CBR can radically reduce inflation and cut rates.

* Productivity is improving

Another slow-moving driver that underpins growth is Russia's ongoing improvement in labour productivity. Russia remains the least productive country in Europe; its productivity is half the European average and below even the embattled Greek level.

However, the slowdown of 2015 has refocused Russia's leading companies from growth and grabbing market share, to cutting costs and improving profits by being more productive.

Russian productivity gains passed their Soviet peak in 2003 and have grown steadily since then, largely unperturbed by the various crises in between. Currently, Russia's productivity is at an all-time high and continues to grow at twice the rate of the rest of Europe, according to the Vienna Institute for International Economic Research (WIIW).

If the government follows through on any of its promises for structural reforms, then significant growth could come from simply improving the way companies work, without investing a kopeck: various studies from McKinsey & Co and the World Bank concluded that Russia's economy could double in size just from bringing a relatively small share of workers up to international productivity standards or better management techniques.

While a revolution in productivity is highly unlikely (the government has consistently failed to deliver on structural reforms for two decades and there is no reason to expect anything else in 2016), the organic improvement in productivity driven by progressive sectors like telecommunications and mass retail means Russia's growth is more robust than first seems and so less dependent on external factors; indeed, the worse the headlines get, the more focused on productivity gains Russian companies are.

#REFORMS

The Kremlin is fully focused on modernising the military and so little or no attention is being paid to deep structural reforms to the economy. Instead, the government is tinkering with the tax system to squeeze more cash out of the budget and that will have an indirect effect on inefficient companies and regions as subsidies become smaller and harder to get.

Given the political calendar of elections in 2016 and 2018, don't expect any major economic reform initiatives to start until after then.

#BUDGET POLICY & DEFICITS

Is the Russian 2016 budget wildly over optimistic about conditions in the upcoming year?

In December, the Duma approved a budget that assumes $50 oil and a modest 3% deficit at most. However, on the same day, Opec announced it was abandoning production ceilings and within a week oil was trading below $40.

Another crucial assumption in the budget is that a third (32%) of spending will go to the military with few cuts (and $1.2bn for the Syria campaign). The other really big spending item is the 27.6% that will go on social payments, which apart from a lowering of the index rate for pensioners to 4%, way below inflation, also remains largely untouched. Spending under the heading of 'national economy' will rise from 14.7% to almost 16.0% - mainly support for state-owned enterprises. The state is even going to maintain its spending on state-controlled media (international broadcaster RT and its pet news agency Sputnik) at 0.5% of GDP.

However, economists say that the state can't afford to do any of these things. Even the CBR tried to reduce the military spending (former finance minister Alexei Kudrin lost his job from taking the same stand), but it got shot down.

Clearly, Putin is putting geopolitical goals ahead of macroeconomic recovery. And while the numbers look bad, thanks to Russia's reserves and the Kremlin's policy of not touching things like personal income tax or retirement ages for nearly 15 years, the state actually has a lot of wiggle room to raise more money from the people and debt, and make more cuts if it has to.

In effect, the 2016 budget boils down to a "do the obvious things and hope for the best on oil". The upside is that Putin will maintain his support amongst his core constituency (the main beneficiaries of that social spending), as well as being able continue his geopolitical goals. The downside is not pleasant, but Russia could cope even with even $35 oil for a while. The beauty of this plan is that if things do go badly, the geopolitics provides a ready-made scapegoat with which to blame the increased burdens that the population will ultimately carry.

Domestic politics plays a role here too: income tax and retirement age hikes are specifically on the cards, but neither is likely to happen soon: Duma elections are due to be held in 2016 and presidential elections in 2018, when Putin is widely expected to re-elected to his last (according to the current constitution) term in office. Any meaningful restructuring to these parameters will be delayed until after those elections.

#Deficit

In January-November the budget posted a deficit of RUB897bn ($12.7bn) or 1.3% of GDP, according to preliminary data from the finance ministry. For the same period of 2014, the federal budget ran a surplus of almost RUB1.3 trillion or 1.9% of GDP. Worse, the deficit for the full year is expected to be about 3% of GDP - Putin has said 3% is a "red line" that must not be crossed - on the back of accelerated military spending.

Falling oil prices, even with the ruble devaluation, will result in monthly revenue being about RUB300bn lower than initial expectations, according to Alfa Bank (January-November revenues stood at RUB12.2 trillion).

Russia has started to run federal budget deficits and these will persist for the next few years if oil stays below $70 - the current break-even price of oil for the budget.

The cabinet now favours budget stability over consumer expectations and most of the pain of the fall in oil prices has been passed on to the people in the form of a devalued ruble. Thanks to the beneficial effects of devaluation on the government's dollar earnings from oil duties, its ruble revenues will go up and allow it to meet its nominal spending obligations and keep the deficit to a reasonably small number.

This hands-on approach is clearly seen in the state's decision to abandon the "budget rule" where expenditures are linked to the average price of oil over the last three years and go into "manual mode" of choosing any assumptions for oil they want. In addition, the decision to allow the ruble to freely float in November 2014 was a way to cut the budget break-even level for oil prices from $100 per barrel to the current $70.

The full-year 2015 deficit is expected at RUB1.7 trillion, or 3% of GDP, and the same level is predicted for 2016. If oil were to stay at the current level of $40/barrel for all of 2016, then the budget deficit could be as large as RUB4.1 trillion or 5.2% of GDP, according to the finance ministry.

# Non-oil deficit

The headline deficit is important, as it is the one that needs to be funded. But to get a better sense of the health of the economy it is more useful to look at the non-oil deficit: the deficit Russia would have if you count out the government's oil revenues.

The government uses its oil money to subsidise its spending and in the boom years it ran a surplus even counting out the oil money. But since the middle of the noughties it has used this money to invest. The rule of thumb was the government tried to keep the non-oil deficit to -4% of GDP until 2008 (with a headline surplus including oil money).

That broke down in 2008 when the government started depending heavily on its excess oil revenues to prop up the economy and the non-oil deficit soared to nearly -14% of GDP. While there was some respite in 2011 (and the headline budget was running at a surplus), the situation has deteriorated again steadily since then.

In 2015, for the first time the government finds itself in the extremely uncomfortable position where both the headline and non-oil deficits are negative. The levels are not quite back to the depths of 2009, but if oil stays at $40 in 2016 and adds 2% to the deficit, then the non-oil deficit will again approach the 14% mark, making the current crisis as bad as the 2008 one.

#Reserve funds

The government has considerable reserves funds in the Reserve Fund that can be used to top up budget spending, and the National Welfare Fund, which is supposed to be used for paying pensions in the future. The funds held RUB3.4 trillion and RUB4.6 trillion respectively at the end of 2015. The state has already said it will spend at least RUB2.5 trillion from the Reserve Fund to supplement the 2016 budget spending and the finance ministry says this "rainy day" fund could be exhausted in 2016.

The National Reserve Fund is not supposed to be touched, but clearly it remains available should things get really ugly.

Almost all of the 3% deficit from the end of 2015 will be funded exclusively from the Reserve Fund, leaving about RUB1 trillion in reserve if 2016 also turns out to be another bad year.

In addition, the budget contains a fund of RUB1 trillion "industrial support" money with no fixed purpose. Spending of half of this amount is under Putin's personal control and it will be used to fight fires, be they political (like truckers protesting against new harsh taxes), economic (like worse-than-expected tax receipts) or corporate (the need to bail out state banks).

#Big Ticket items

- Military spending: This is by far the biggest ticket item in the budget and is running at over 4% of GDP - more than double the Nato member average. Military spending increased by 37% year-on-year (y/y) in November compared with 23% y/y growth in the first 10 months of 2015, and will not abate until 2018 at the earliest when the current military modernisation plan expires.

- Re-capitalising banks: Russian banks have already received RUB2.5 trillion in new capital in 2015 and they could well need the same amount again in 2016. Just VEB, the de facto state development bank, needs a RUB1.2 trillion ($20bn) bailout as of the end of 2015. The state is trying to find a way to plug this gap without adding the sum to the public account and so push the federal deficit over 3%.

Again, the liberals in the government (specifically Economic Development Minister Ulyukayev) have argued that there is no way to do this without adding to the public debt burden, but the Kremlin will veto any attempts to do so. And VEB is not alone. The queue amongst state-owned companies for government help is long.

- Overestimating growth: The official prediction in the 2016 budget is for 0.7% growth in 2016, whereas most of the IFIs predict a contraction of the same amount. The Ministry of Finance has pointed out there is a risk of a shortage in revenue of RUB1.2 trillion-1.5 trillion if the government overestimates the rate of growth.

#Safety cushion

But the news is not all bad, as the state still has some wiggle room left to raise extra cash by increasing the debt; making manoeuvres with the tax system and reducing the scale of tax breaks; a moderate reduction of subsidies for state-owned enterprises and some of the regions; tightening the criteria for receiving social assistance, or putting investment plans on hold. However, all this comes at cost of delaying the eventual economic recovery.

Debt is one place where Russia has the most room to move. The budget contains provisions for RUB300bn ($4.27bn) and $1.5bn of borrowing in 2016, which are extremely modest levels compared to previous years when RUB800bn was typical for the domestic market; prior to the sanctions, Russia would issue $7bn in Eurobonds every year as much as a benchmarking process for corporate issues as anything else.

#INFLATION & INTEREST RATES

The rate of inflation will be one of the key determining factors for the speed of growth (or not) in 2016. High inflation is depressing consumption and it is preventing the CBR from cutting interest rates, which is in turn killing investment and hence growth.

The 6.8% assumption in the 2016 federal budget also looks extremely optimistic. Russia ended 2015 with headline inflation on the order of 15.6%. While the rate had been falling, fresh drops in the oil price have led to more devaluation, sending the ruble through the RUB70 mark against the dollar, which will increase inflationary pressures. These forces were already in evidence in December when the CBR decided not to cut rates from the still high 11%.

Policy rate

The CBR's imposition of an emergence interest rate hike to 17% in December 2014 killed off virtually all economic growth in 2015.

After oil prices settled and the meltdown of the current was over, the CBR cut rates five times to the current 11%, but this is still too high. "The companies that want to borrow from us, we don't want to lend to, and the companies we want to lend to don't want to borrow at these rates," Herbert Moos, the CFO of VTB told bne IntelliNews in an interview, summing up the dilemma everyone finds themselves in.

Investment, and hence growth, won't resume until rates are cut to a more "sensible" level. The CBR is hoping to get rates down to 8.5% in 2016, at which point enough investment projects become viable that investment will start to have a visible affect on growth. But with the ongoing fall in oil prices and associated ruble devaluation this is not a given.

Inflation is the accelerator on the speed of rate cuts: in the last half of 2015 inflation clearly started to moderate as the worst of the devaluation effects worked their way through the system. The hope is that inflation will continue to moderate in 2016, allowing for another round of policy rate cuts.

Is Russia's inflation overstated?

Is inflation really as high as official data suggest? That was the question posed by Sberbank's Gavrilenkov in a paper in November. His argument is the basket of goods used by the CBR to measure price changes is no longer relevant, as it was full of expensive imported goods that no one is buying any more. If he is right, then inflation could come down faster than expected in 2016.

Gavrilenkov pointed out that according to official statistics food purchases have contracted very sharply, while non-food sales soared, which looks strange. At the same time, VTB Capital reported that the share of food in Russia's spending has increased from an all-time low of 25% of total income in 2007 to 50-55% now. So food spending should have at least stayed the same, or gone up. Indeed, poultry sales have rocketed this year, a largely domestically produced agricultural product that is cheap and filling.

"We think these peculiar developments can be explained by the fact that the consumption basket has changed significantly this year as consumers have been shifting toward cheaper products," Gavrilenkov said. "Perceived inflation may have been lower than the officially calculated statistic, as the official data are based on last year's consumption basket, which contains a higher proportion of more expensive foodstuffs."

Overall, official statistics will report a deep contraction in consumer demand this year amid a decline in retail sales over the full year. The state statistics service Rosstat seems to have conceded the inflation point, as it will introduce a new basket of goods in January and the new methodology could result in a rapid fall in the headline inflation rate, which would be good news for economic prospects in 2016.

"The numbers may look different next year due to the State Statistics Service switching to a 'fresher' basket more appropriate for 2016, which will reflect the shift in the structure of consumer demand. As a result, inflation may fall more than the consensus expects, as there will be fewer imported items in the basket and movements in the exchange rate will have a less significant impact on aggregate CPI. As a result, lower inflation should have a positive impact on real consumption next year," says Gavrilenkov.

IP & #INVESTMENT

Industrial production contracted by an estimated 3.5% in 2015, but began to recover in the second half of 2015 and is likely to continue to expand in 2016, albeit at a modest pace. Alfa Bank predicts a 0.5% expansion in 2016.

The impact on industry has been very mixed and depends on how exposed to FX companies are. However, by the end of 2015 after being negative for almost two years, the Purchasing Managers' Index for manufacturing turned positive for the first time (anything over 50 points means growth), as it seems the majority of Russian companies had adjusted to the new post-devaluation reality.

The agricultural segment fared best, output increasing 7.7% y/y during the month to bring growth to 3.0% y/y over the January-October period, and Russia was on track to bring in a bumper harvest of 104mn tonnes of grain in 2015.

Corporate profits

The collapse of the ruble has not been bad news for everyone and corporate earnings are set to grow faster than GDP in 2016.

In the past, real incomes had been growing much faster than real GDP. At the same time, a strong ruble and climbing wages dragged on the competitiveness of the tradable sector. As a result of both these factors, corporate earnings lagged as a share of GDP. Now that oil prices have plummeted, and will seemingly not reverse to their previous heights anytime soon, this imbalance should unwind. The normalisation of corporate earnings as a share of GDP is worth a 10% increase in aggregate profits.

In some sectors the crisis has been a boon. Supermarkets is the most obvious example, where the strong companies with financial resources in reserve have been opening new stories as fast as possible, leading to an accelerated consolidation in the sector.

Overall, Russian enterprises earned RUB592bn in net income in September, which was a 140% y/y gain, and the nine-month y/y gain was also a positive 29.7% with the trend accelerating as the year came to a close.

Perhaps surprisingly, amongst the biggest winners were manufacturing (55.3%), retail and wholesale (30.3%), and agriculture (46.7%). Worst off were real estate (-6.9%) and construction (-10.3%).

Raw materials and agricultural firms have benefited from the devaluation, as their costs are in rubles, but exports in hard currency. Magnitogorsk Metal Combinat reported record revenues and leading agricultural concern Rusagro has also had a record year. However, other sectors like high-end (imported) retail goods have suffered (there are reports that 17% of stores in Moscow have closed in 2015), while the tourism and automotive industries have been decimated.

In general, most businesses have adjusted to the changes and, as in 1999, the collapse of the ruble has created new opportunities that some are stepping into. While the dollar value of earnings has collapsed, in many sectors the ruble value of revenues continues to climb.

This economic activity will underpin Russia's ongoing development and stave off related problems like social unrest, as people still have jobs and wages, albeit in devalued rubles.

Fixed investment

Russia's Achilles' heel is its lack of investment. The economy will not rebound or return to strong growth until this problem is solved and currently investment is contracting every year.

Investments were recovering in the second half of 2015 and grew 22% m/m  in October but fell 5.2% y/y, which was less than the 5.6% fall a month earlier. The full year is expected to see a 5% contraction in investments.

Russia needs to see fixed investment growing by 20-25% a year to fuel strong growth but investment has been contracting adding to the country's economic woes.

Investments in the boom years were made on the presumption of a $2 trillion sized economy, but that has been cut in half to about $1 trillion as of the end of 2015 and consequently a big gap has opened up in investment activity as companies, especially in the investment intensive sectors like car building, have curtailed their expansion plans.

Banks' role in investment

Banks are not participating in driving investment and can't while interest rates are so high. The share of bank lending as a source of investment in production capacity declined to 8.7% of total investments in the first nine months of 2015, compared with 9.8% over the same period a year earlier. However, corporate loans significantly outpaced consumer loans in banks' portfolios, but still remain insignificant as a source of economic growth.

FDI up

Finally, foreign direct investment (FDI) picked up somewhat in 2015, although currently this is almost exclusively foreign companies already working in Russia reinvesting their profits.

FDI remains way off its boom year high and is unlikely to change in 2016, but the residual FDI from existing investors is another long-term slow moving force like the slow productivity gains that will set a base to slow progress and change irrespective of what else happens.

CURRENT ACCOUNT & #TRADE

Current account

Despite the collapse in oil prices Russia has managed to maintain a current account surplus: Russia Inc is still in profit as a whole, albeit earning less than half what it did in the boom times.

The current account surplus widened to $60.8bn in the first eleven months of 2015, compared with $54.2bn a year previously, despite the dramatic contraction in the oil price: oil prices plummeted 46.6% y/y to $54.9/bbl Brent, from $102.8/bbl in the same period. Russia was expected to end 2015 with a $65bn surplus - better than expected at the start of the year.

Imports have obviously been depressed by the devaluation of the ruble, but other factors improving the balance of payments have been the collapse in tourism and corporate foreign debt redemption in 2014- 15 are coming to an end as companies have largely paid off their international debts, which is most visible in the fall in "capital flight" (see section), which is mostly money leaving Russia to pay off external debt.

Capital flight

Having peaked at about $150bn in 2013, capital flight is now falling steadily and finished 2015 with about $60bn of flight capital. The trend is expected to continue in 2016.

Net capital outflow was $53bn in January-November 2015, down from $118.7bn a year earlier. This outflow was associated with foreign debt redemption and took place mostly in 1H15. And in July through November, net capital outflow was only $2.7bn, with a net inflow in September of some $5bn.

The $60bn for 2015 was a surprise and almost half the initially projected outflow figure of more than $110bn, according to Finance Minister Siluanov.

There are no predictions for capital flight in 2016 at the time of writing. But clearly as most capital flight is being driven by corporates paying off debt and the bulk of the deleveraging process is already over, the amount of capital leaving in 2016 will be on the same order as 2015 and probably less, leaving more to bolster reserves.

As an aside, the CBR's campaign to close banks has been directly influencing capital flight as the reduction of "questionable transactions" in the national accounts has fallen in line with number of bank licenses withdrawn. And that pace is increasing: in 2015 the CBR closed a record 100 banks.

Russia's consumer market has expanded from the 21st largest in the world in 2000 to the ninth in 2014. Initially, consumption found support in the sharp personal income tax cut to 13% in 2002, and the subsequent 12% p.a. average real income growth in 2000-2007. The expansion of retail loans from $2bn in 2000 to $140bn in 2008 was the second crucial factor behind the increase.

Russian salaries represent 52% of GDP as of 2014, which is high when compared with other EMs. However, corporate profits have fallen at 32% of GDP, the lowest since 2000, and obviously companies are being increasingly squeeze hence the wage freezes and cuts.

Nominal wages rose 3.0% y/y in October and 5.1% over January-October. As year-on-year inflation was extremely high at over 15%, real wage growth was deeply negative, contracting 10.9% y/y in October and 9.3% in January-October.

However, the slowdown in y/y inflation, which will occur rapidly between November and April, will improve the real wage growth statistics.

The expectations is for either high single-digit or low double-digit growth in nominal wages in 2016, which will bring real wage growth back into positive territory.

Putin raises minimum wage by 4% to $87 a month

Putin threw a sop to falling income levels by signing a law on increasing the minimum wage by 4% from January 1, 2016, the government reported on December 15. This is in line with pension increases, but less than inflation or even the projected levels of inflation in 2016. The minimum salary will be RUB6204 ($87) a month in 2016, up from RUB5965.

Raising of the minimum wage will affect about 700,000 workers, 43% of whom work in state and municipal institutions, while 57% represent the real economy. These are Putin's core voters.

This increase will not reduce the number of Russians who live in poverty, which has been rising in 2015 to reach 20.3mn in January-September, or 14.1% of the total population, the state statistics agency Rosstat reported earlier in December. The subsistence level, which serves as a poverty measure, amounted to RUB9673 ($140), a rise from RUB8086 in 2014 and the poverty level will rise again in 2016.

Pension and state wages

The government's generous pension increases - especially in the run-up to the 2012 presidential election that saw Putin's return as president - have also had a major impact on retail, as have continued above-inflation hikes in the pay of public servants.

The 30% average pension increase in 2007-2010 and sharp jump in public sector salaries in 2012-13 resulted in consumerism prevailing until 2014. As a result, consumption in 2014 was 22% higher than in 2008, while GDP had increased only 6% during the same period.

However, the cash-strapped government has cut the pension hike index to the below-inflation rate of 4% for 2016, and suggested it will stay there indefinitely.

Likewise, public employees have seen their pay frozen at current levels. (One of the unintended consequence of this policy has to seen official corruption come roaring back.)

# BANKS AND BANKING

Russian banks are in a world of pain as the sector is slowly being crushed in the weight of very high interest rates and starved by their lack of access to international capital markets. However, a bank crisis is still a way off thanks to the state's large reserves, which have been used to prop up the sector while the CBR actively closes small banks in an enforced consolidation.

"The model is broken," one senior Russian banker tells bne IntelliNews. "In the old days we could borrow long-term cheap money from abroad, and lend it domestically with shorter maturities and at higher interest. It was easy."

Russian banks - not just those on the sanctions lists - are cut off from the international markets by compliance and risk offices who will not approve loans to any Russian bank in case it winds up on a sanctions list down the line. However, an easing of political tensions has seen some new debt issues by Russian banks in the last quarter of 2015.

The capital of banks has been shrinking after net interest margins (NIMs) were compressed in the last year. However, NIMs were starting to widen towards the end of 2015 and the profitability of banks in 2016 has improved. Net interest margin is expected to fluctuate at 3-3.5% in 2016, while reserves for bad loans will remain at 4.5-5.5% of the sector's total loan portfolio.

Still, Standard & Poor's sees significant increase of risks for capital sufficiency of large Russian banks in 2016 and 2017 due to weak economy, the agency said on December 14.

Liquidity risks and capital erosion are no longer seen as neutral and will be the main factors behind the negative rating actions in the coming quarters, S&P notes.

The agency estimates its own-calculated capital sufficiency of the top 30 Russian banks decreasing to 5% as of end of 2015 compared with 6% a year ago, considerably weakening banks' ability to tackle serious stress situations. Average capital sufficiency is expected to deteriorate further to 4% by the end of 2015 and to stabilise at 3.5-4% in 2016.

At the same time, higher transfers for reserves will undermine the internal capital generation capacity of Russian banks and financial indicators in general in 2015-2016, S&P believes.

For banks actively involved in retail crediting market lower margins and higher reserves might shake the existing business models, S&P warns.

In 2015, Russian banking sector lost an estimated RUB50bn-RUB70bn ($0.7bn-$1bn), the worst result in a decade, compared with RUB220bn net profit in 2014 under IFRS and around RUB1 trillion in "normal" years.

"What we're facing now is a massive crisis. Zero profits, growth of reserves while the Central Bank is involved with financial recovery procedure," the CEO of Russia's largest bank Sberbank Herman Gref said in November. "The next year will not be simple either."

According to Gref, the financial recovery of banks will take several more years due to tightened requirements to capital and from the viewpoint of introducing state-of-the-art technologies, transparency and risk management.

Bank sector enforced consolidation

Russia's largest private banks are consolidating their market share amid the ongoing recession, a credit positive trend likely to carry over to 2016, Moody's Investors Service said in a report published on December 8. This process has been catalysed by the CBR aggressive campaign of closing small banks.

Moody's calculated that the share of assets at the top five privately owned banks increased to 12.5% in mid-2015, from 10.8% at the end of 2014 and 8.4% at the end of 2013, according to the agency's assistant vice president Elena Redko. "The share of smaller private banks, on the other hand, fell to 18.9% from 23.4% at end-2013," Redko notes.

The CBR shuttered a record 100 banks in 2015. The number of banks has fallen steadily from over 4,000 in the early 1990s to 923 at the end of 2013, 834 at the end of 2014 and 797 banks at the time of writing.

Yet that is still way too many. The top 50 banks account for well over 80% of the system's assets, while the bottom 700 are largely glorified treasury operations for companies and oligarchs - or what a former Renaissance Capital analyst Kim Iskyan famously dubbed, "bank-like institutions" that are little more than money-making scams.

Putin has suggested that Russia should copy Germany and reduce the number to around 300. And if the current pace of bank closures continues, that goal will be reached sometime around 2025 - although as the number of insignificant banks dwindles the danger of destabalising the system by closing them more quickly recedes, so the process can be expected to accelerate from here.

Russia's CB to double funding deposit insurer amid banking sector clean-up

The pace the CBR can close banks is limited, among other things, by how fast the state's Deposit Insurance Agency (DIA) can refund money on deposit lost during the closure.

The first RUB1.5mn ($21,286) of deposits is guaranteed and the DIA has been burning though its capital in 2015 to the point where it was nearly out of money by the end of the  year. The DIA's charter requires it to have a minimum of RUB40bn.

The CBR stepped in in December offering a fresh RUB140bn ($2bn) injection to replenish its funds. The CBR's current credit limit for the DIA is RUB110bn, and the expansion will more than double funds available for compensating guaranteed deposits for failed banks and banks that had their licenses revoked. So it looks like there will be no slow down in bank closure rate in 2016.

The look for the ruble and hard currency reserves are both dictated by what will happen to the oil price and so little can be said at 2015 came to an end. However, most analysts are predicting a ruble dollar exchange rate of RUB70/$1 in 2016 with hard currency reserves remaining flat at about $360bn as Russia Inc more or less breaks even.

US stocks are at highes, while the gap between European quality share valuations and US has never been higher, according to the Financial Times. This suggests when stability returns investors will turn to developed Europe first for returns before they move to more exotic assets such as Russian.

#BONDS

Russia's bond market came back to life in the last quarter of 2015 with the first large benchmark-sized issues in nearly a year: Gazprom, Norilsk Nickel and Lukoil all got Eurobonds away worth more than $1bn.

More borrowing in 2016 is expected as spreads come down. Russia was a star bond market performer in 2015 and could repeat the trick in 2016.

Fitch on October 16 affirmed Russia's long-term foreign and local currency issuer default ratings (IDR) at BBB-, outlook negative, remaining the only one of the "big three" agencies to maintain an investment grade rating on the country, one notch above junk.

Fitch reiterated its stance that the sovereign balance sheet remains a key rating factor supporting Russia's creditworthiness, with lower oil prices and/or stronger demand for foreign currency presenting the main downside risks to the reserves outlook.

Fitch Rating's head of sovereigns James McCormack said in late November that among its emerging market peers, Russia is least likely to have its investment-grade rating revised downwards in 2016.

"In some respects Russia looks the least vulnerable," McCormack said, adding its response to the low oil prices has been better than AA-rated Saudi Arabia's "rather modest" cuts to its budget.

#EQUITY

Russia's equity market remains moribund due to the gamut of risks investors face. The leading RTS index has been range bound between 800 and 1300 for years now and it would take a clear end to the economic and political risks for equities to break out of this range. Sberbank was one of the few investment banks to publish an index target for 2016 and set it at 900.

"Assuming flat oil, we set our RTS target for end 2016 at 900. This target implies 10% EPS growth and a 2016E P/E of 6.0. Risks to this view lie in lower oil and black swan-type geopolitical events. Upside risks include revivals in the oil price, rapprochement with the West and the announcement of a comprehensive reform agenda," Andrei Kuznetsov of Sberbank said.

Despite the volatility, the Russian equity market was one of the best performing in the world in 2015 with the MSCI Russia returning +13.4% at the time of writing with only Japan (+12.5%) and China (+11.4%) also in positive territory. The MSCI EM index by comparison was down -14.9% over the same period.

As in previous years, the dividend paying stocks remain the most attractive for those portfolio investors interested in Russia. Most of these are in the oil and gas and raw material sectors plus telecoms. Russia continues to show a hefty premium of 34% in terms of dividend yield, with the 2016 dividend yield expected at a level of 4.83% compared with the MSCI EM avera��ge of 3.19%.

The surprise on offer in 2016 is that the government may force more state-owned companies to pay dividends using IFRS calculations. The state has already said that it will stick with its policy of forcing its companies to pay 25% of net profit (under Russian accounting rules) as dividends but if it forces companies to switch to the IFRS accounting standards, these profit and dividend payments could expand sharply.

"Potential positive surprises include Lukoil, Alrosa, Gazprom and Transneft. Meanwhile, discussion regarding the shift of state companies to dividend payouts based on IFRS net income is not fading away. Along these lines, we think that Gazprom and Transneft might raise their dividends," Gazprombank said in a note.

 
 #17
Kremlin.ru
December 24, 2015
Statement for the press following Russian-Indian talks

President of Russia Vladimir Putin: Mr Prime Minister, ladies and gentlemen,

The first official visit to Moscow by India's Prime Minister, Mr Narendra Modi, is coming to an end. Our talks were very substantive and fruitful. I hope they would assist in promoting the privileged Russian-Indian strategic partnership.

Yesterday Mr Modi and I had a separate informal meeting, where we covered key world developments. It is important that Russia and India have very similar approaches to the main global challenges.

Our countries are in favour of a political settlement of the Syrian conflict and national accord in Afghanistan. We are convinced that the entire international community would benefit from the creation of a broad anti-terrorist coalition acting based on international law and under the aegis of the United Nations.

Russia favours further enhancing of India's role in resolving global and regional problems. We believe that India as a great nation with its balanced and responsible foreign policy is a worthy candidate to the position of a permanent UN Security Council member.

I would like to remind you that Russia actively supported India when it joined the Shanghai Cooperation Organisation. We closely cooperate within BRICS, the rotating presidency of which we will hand over to India in February 2016.

In the course of today's talks in restricted and expanded formats, as well as at our meeting with leading Russian and Indian business community representatives, we spoke about developing the entire range of bilateral relations, giving special attention to trade and economic cooperation.

Unfortunately, in the first 10 months of this year our mutual trade has gone down by 14.4 percent. This was mainly caused by a drop in energy prices and lower demand for machine building produce due to unfavourable external market situation and exchange rate differences. We agreed to enhance our efforts to bring trade to a stable growth trajectory, discussed practical measures to develop and diversify trade and lift administrative and other barriers. The key role here belongs to our Intergovernmental Commission, which met on October 20 in Moscow. Our significant reserve is in building up investment cooperation.

We agreed to increase mutual investment though greater industrial cooperation and implementation of major infrastructure and energy projects. Russia is assisting in building the Kudankulam Nuclear Power Plant.

The first unit of the plant was commissioned in June 2014. Weeks remain before the launch of the second unit. We intend to begin the construction of the third and fourth units in the near future. Negotiations are underway on units five and six.

We have agreed on India's assigning another plot for the construction of Russian power units, where we intend to use the latest WWER-1200 reactors built with the application of the latest and safest technologies.

These are all practical steps directed at implementing an important document we signed one year ago - the Strategic Vision of Russian-Indian Cooperation in Peaceful Nuclear Power Use. It contains plans to jointly build in India at least six more power units over a period of 20 years.

The export of Russian hydrocarbons to the Indian market is growing. The agreement between Rosneft and Essar envisages large-scale deliveries of oil and petroleum products to Indian refineries - up to 10 million tonnes a year over a period of 10 years.

This year Gazprom has also delivered 5 consignments of liquefied natural gas to India, and we are implementing major projects in energy generation. The Silovye Mashiny corporation has completed deliveries and commissioned equipment for the Teri and Balimela hydro power plants and the Konaseema combined cycle power plant. Three units of the Sipat thermal power station are being built on a turnkey basis.

Large-scale business ties between Russia and India are by no means limited to energy. Thus, I would mention our strategic cooperation in the diamond industry. Russia is the largest diamond producer in the world with 27 percent of world extraction, while India is a leader in cutting diamonds with 65 percent of the trade. Almost half of the Russian feedstock is delivered to India.

Last year during our joint participation in the International Diamond Conference in New Delhi, Mr Prime Minister and I agreed to further enhance our cooperation, and work is underway. Thus, Alrosa has increased the number of its long-term contracts from 9 to 12. To expand cooperation, a special customs zone is being set up at the Mumbai diamond exchange.

We also agreed to launch new joint projects in such high technology areas as aircraft engineering, automotive industry, metallurgy, pharmaceuticals and the chemical industry. We discussed the prospects for Russian businesses to take part in the Indian import replacement programme, which is appropriately called Make in India. We see this as an additional opportunity for the creation of joint ventures, technology transfer and production of high-value-added goods.

The protocol that has been signed on simplifying travel requirements for certain categories of citizens of our two countries will promote more active business contacts and a more liberal visa regime. Now business people can visit Russia and India on direct invitations from their partners.

Our two countries have traditionally been working together in the sphere of military and military-technical cooperation, and I am not only referring to deliveries of ready-made goods, but also to close technological cooperation. An example of such cooperation is the joint creation of the BraMos missile complexes. We have already launched mass serial production of anti-ship missiles in the interests of the Indian Navy. Equally promising, in our opinion, is the discussion on projects to develop a multi-functional fighter aircraft and a multi-purpose transport aircraft. We have noted the importance of regular Indra joint land, naval and air force exercises.

Humanitarian ties remain another important component of the Russian-Indian partnership. This year Russians have shown great interest in events of the Indian culture festival. We hope that the festival of Russian culture, which will be held in India next year, would be just as memorable.

In conclusion, I would like to thank our Indian colleagues and friends, and Mr Prime Minister personally for the constructive joint work. We will continue to do everything possible to develop the Russian-Indian partnership for the benefit of our two countries.

Thank you very much for your attention.
President of Russia Vladimir Putin: Mr Prime Minister, ladies and gentlemen,

The first official visit to Moscow by India's Prime Minister, Mr Narendra Modi, is coming to an end. Our talks were very substantive and fruitful. I hope they would assist in promoting the privileged Russian-Indian strategic partnership.

Yesterday Mr Modi and I had a separate informal meeting, where we covered key world developments. It is important that Russia and India have very similar approaches to the main global challenges.

Our countries are in favour of a political settlement of the Syrian conflict and national accord in Afghanistan. We are convinced that the entire international community would benefit from the creation of a broad anti-terrorist coalition acting based on international law and under the aegis of the United Nations.

Russia favours further enhancing of India's role in resolving global and regional problems. We believe that India as a great nation with its balanced and responsible foreign policy is a worthy candidate to the position of a permanent UN Security Council member.

I would like to remind you that Russia actively supported India when it joined the Shanghai Cooperation Organisation. We closely cooperate within BRICS, the rotating presidency of which we will hand over to India in February 2016.

In the course of today's talks in restricted and expanded formats, as well as at our meeting with leading Russian and Indian business community representatives, we spoke about developing the entire range of bilateral relations, giving special attention to trade and economic cooperation.

Unfortunately, in the first 10 months of this year our mutual trade has gone down by 14.4 percent. This was mainly caused by a drop in energy prices and lower demand for machine building produce due to unfavourable external market situation and exchange rate differences. We agreed to enhance our efforts to bring trade to a stable growth trajectory, discussed practical measures to develop and diversify trade and lift administrative and other barriers. The key role here belongs to our Intergovernmental Commission, which met on October 20 in Moscow. Our significant reserve is in building up investment cooperation.

We agreed to increase mutual investment though greater industrial cooperation and implementation of major infrastructure and energy projects. Russia is assisting in building the Kudankulam Nuclear Power Plant.

The first unit of the plant was commissioned in June 2014. Weeks remain before the launch of the second unit. We intend to begin the construction of the third and fourth units in the near future. Negotiations are underway on units five and six.

We have agreed on India's assigning another plot for the construction of Russian power units, where we intend to use the latest WWER-1200 reactors built with the application of the latest and safest technologies.

These are all practical steps directed at implementing an important document we signed one year ago - the Strategic Vision of Russian-Indian Cooperation in Peaceful Nuclear Power Use. It contains plans to jointly build in India at least six more power units over a period of 20 years.

The export of Russian hydrocarbons to the Indian market is growing. The agreement between Rosneft and Essar envisages large-scale deliveries of oil and petroleum products to Indian refineries - up to 10 million tonnes a year over a period of 10 years.

This year Gazprom has also delivered 5 consignments of liquefied natural gas to India, and we are implementing major projects in energy generation. The Silovye Mashiny corporation has completed deliveries and commissioned equipment for the Teri and Balimela hydro power plants and the Konaseema combined cycle power plant. Three units of the Sipat thermal power station are being built on a turnkey basis.

Large-scale business ties between Russia and India are by no means limited to energy. Thus, I would mention our strategic cooperation in the diamond industry. Russia is the largest diamond producer in the world with 27 percent of world extraction, while India is a leader in cutting diamonds with 65 percent of the trade. Almost half of the Russian feedstock is delivered to India.

Last year during our joint participation in the International Diamond Conference in New Delhi, Mr Prime Minister and I agreed to further enhance our cooperation, and work is underway. Thus, Alrosa has increased the number of its long-term contracts from 9 to 12. To expand cooperation, a special customs zone is being set up at the Mumbai diamond exchange.

We also agreed to launch new joint projects in such high technology areas as aircraft engineering, automotive industry, metallurgy, pharmaceuticals and the chemical industry. We discussed the prospects for Russian businesses to take part in the Indian import replacement programme, which is appropriately called Make in India. We see this as an additional opportunity for the creation of joint ventures, technology transfer and production of high-value-added goods.

The protocol that has been signed on simplifying travel requirements for certain categories of citizens of our two countries will promote more active business contacts and a more liberal visa regime. Now business people can visit Russia and India on direct invitations from their partners.

Our two countries have traditionally been working together in the sphere of military and military-technical cooperation, and I am not only referring to deliveries of ready-made goods, but also to close technological cooperation. An example of such cooperation is the joint creation of the BraMos missile complexes. We have already launched mass serial production of anti-ship missiles in the interests of the Indian Navy. Equally promising, in our opinion, is the discussion on projects to develop a multi-functional fighter aircraft and a multi-purpose transport aircraft. We have noted the importance of regular Indra joint land, naval and air force exercises.

Humanitarian ties remain another important component of the Russian-Indian partnership. This year Russians have shown great interest in events of the Indian culture festival. We hope that the festival of Russian culture, which will be held in India next year, would be just as memorable.

In conclusion, I would like to thank our Indian colleagues and friends, and Mr Prime Minister personally for the constructive joint work. We will continue to do everything possible to develop the Russian-Indian partnership for the benefit of our two countries.

Thank you very much for your attention.


 
 #18
Washington Times
December 23, 2015
Obama's disrespect for Putin coming home to roost
By L. Todd Wood

I find it very disturbing the number of times that President Obama has disrespected Russian President Vladimir Putin. Mr. Obama's behavior is not fitting for a president of the United States, and it has produced serious blowback, which we'll discuss in a minute. But first, how about a walk down memory lane?

During the 2013 NSA spying controversy, when Edward Snowden was given asylum in Russia, Mr. Obama quipped regarding Mr. Putin, "I know the press likes to focus on body language, and he's got that kind of slouch, looking like the bored kid in the back of the classroom." The comment seemed to come out of nowhere and was beneath the leader of the Free World, betraying some type of deep-seeded, schoolboy insecurity.

During comments at The Hague in 2014 Mr. Obama said, "Russia is a regional power that is threatening some of its immediate neighbors - not out of strength but out of weakness. They don't pose the number one national security threat to the United States. I continue to be much more concerned when it comes to our security with the prospect of a nuclear weapon going off in Manhattan." The immediate question that comes to mind is if he is more worried about a nuke going off in Manhattan then why is he importing Islamofascism by the truck load, but that's for another column.

When discussing Russia in a 2014 interview with the Economist, Mr. Obama once again opined, "I do think it's important to keep perspective. Russia doesn't make anything," Mr. Obama said in the interview. Immigrants aren't rushing to Moscow in search of opportunity. The life expectancy of the Russian male is around 60 years old. The population is shrinking," I guess the president hasn't been to Moscow recently and seen the throngs of immigrants from central Asia looking for work.

In comments about Russia during his 2015 State of the Union address, Mr. Obama said, among other things, that the "Russian economy is in tatters." Russia's economy is in tatters, but why crow about it?

And finally, during a recent Steve Kroft interview on "60 Minutes," Mr. Obama continued the meme, "Well, Steve, I got to tell you, if you think that running your economy into the ground and having to send troops in in order to prop up your only ally is leadership, then we've got a different definition of leadership. My definition of leadership would be leading on climate change, an international accord that potentially we'll get in Paris. My definition of leadership is mobilizing the entire world community to make sure that Iran doesn't get a nuclear weapon. And with respect to the Middle East, we've got a 60-country coalition that isn't suddenly lining up around Russia's strategy. To the contrary, they are arguing that, in fact, that strategy will not work."

First of all, everyone knows the 60-country coalition is a pipe dream and everyone knows Iran will get a nuclear weapon. But the real question is why President Obama routinely feels the need to denigrate a former superpower, bent on re-emergence, stocked to the gills with nuclear weapons?

We are seeing the fruits of his words as Mr. Putin lands an expeditionary force in the Middle East, rapidly expands air bases in Syria and sells Iran sophisticated weapons systems by the ship load. Even one of our closest allies, Israel, knows there is a new sheriff in town and is acting accordingly, coordinating with Russia with its efforts against the Islamic State.

Whether you are a fan of Vladimir Putin or not, is not the question. The question is how the president of the United States should be conducting himself in office when it comes to public humiliation of a significant world power.

Some, but not all, of Russia's behavior can be attributed to Mr. Obama's mocking of the Russian president. It certainly did not further America's strategic interests to disrespect a leader who carefully crafts his machismo with the Russian public and where the weaponized population is yearning again for Russian greatness. Russians will suffer great hardship for the good of the state. There is a high probability they will ride out the oil price collapse and Western sanctions.

One also wonders how the Democratic Party can call out Donald Trump's politically incorrect comments and wonder aloud about its effect on geopolitics, when their own president is guilty of the same offense with real consequences.


 
 #19
Gulfnews.com
December 24, 2015
US-Russia cooperation crucial in Syria
While Putin must engage more seriously in global efforts to launch a political transition, America should have no illusions about probability of success
By Michael McFaul
Michael McFaul, US ambassador to the Russian Federation from 2012 to 2014, is professor of Political Science, Hoover Institution fellow and director of the Freeman Spogli Institute at Stanford University.

Russian President Vladimir Putin's decision to intervene in Syria marked a major turning point in Russian foreign policy in 2015. Over the last 15 years, Putin has increasingly relied on the use of military power to achieve his domestic and foreign-policy objectives, starting with the invasion of Chechnya in 1999, then of Georgia in 2008 and then of Ukraine in 2014. Putin's Syria gambit was the logical, if dramatic, next step in Russia's increasingly aggressive foreign policy.

Syria, however, is supposed to be different from these previous interventions. While Putin correctly calculated that most of the world would condemn his military actions in Chechnya, Georgia and Ukraine, he hopes for solidarity and support from the international community for his actions in Syria.

Pro-Kremlin commentators point to United States Secretary of State John Kerry's recent trip to Moscow as proof that military intervention to fight terrorism in Syria has ended Russia's international isolation and generated new respect for its standing as a responsible global power. Russia is back, so the argument goes, because the world needs Russia.

Such conclusions are premature, though. In the long run, Russia could become a partner in the global fight against terrorism. And, in principle, the US, the European Union and countries around the world should welcome Russian cooperation in this mission. In practice, however, several key short-term issues must be resolved before the long-term goal of cooperation with Russia can be achieved.

First, Russia, which has intervened to defend its long-time client, Syrian President Bashar Al Assad, must stop bombing Syrian opposition forces supported by the US and its coalition, and start fighting Daesh (the self-proclaimed Islamic State of Iraq and the Levant) instead. In the first weeks of the Russian bombing campaign, the strategy was obvious: Eliminate all third parties in the civil war and thereby force the world to choose between the lesser of two evils - Al Assad or Daesh. More recently, Russian bombers have begun to attack a few Daesh targets, but the Kremlin's air campaign remains focused on other opposition forces. To be a partner with the West, Russia must change its bombing targets dramatically and permanently.

Second, Putin must engage more seriously in the international efforts to launch a political transition process in Syria. Al Assad cannot stay. He could serve in an interim, transitional role, as some dictators have done in other transitions from authoritarian rule. But he cannot remain in power for the simple reason that his presence only drives more volunteers to the Daesh cause. Al Assad's regime has killed more people in Syria than all other groups combined. He rarely attacks Daesh terrorists, focusing his military efforts instead on other insurgents. He is not, therefore, a useful ally in the fight against terrorism.

Moreover, the vast majority of victims of Syrian government military operations are civilians, not terrorists. According to the Syrian Network for Human Rights, Al Assad killed 181,557 civilians between March 2011 and November 2015, while Daesh murdered 1,777 civilians during the same period. If the objective in Syria is to stop the civil war, Al Assad should be no one's idea of a peacemaker. As a demonstration of Russia's influence over the regime, Putin should first pressure Al Assad to stop killing civilians. If Putin cannot achieve this objective, there is no reason to believe that he can deliver Al Assad or his generals to the negotiating table.

Third, Russia must change its bombing methods. Too many civilians are dying. These types of attacks by Russia generate more inspiring footage for terrorist channels on YouTube - exactly what Daesh wants.

Fourth, Russian media must stop accusing the US of supporting Daesh. How can the US join forces with a country that makes such false claims and portrays America as the enemy?

Fifth, Putin needs to stop the flow of fighters from Russia into Syria. Even Russian estimates suggest that by September 2015, some 2,400 Russian citizens had joined Daesh.

Finally, to be a useful partner in Syria, Russia must stop expecting concessions from the US on Ukraine. Such linkage will never work.

To enable cooperation with Russia, the US and its allies also must make some adjustments - as well as some commitments. First, moderate opposition groups receiving money and weapons from the US should not be compelled to fight only Daesh. Rather, they should be able to define their own military strategies, including a focus on fighting Al Assad's forces as a means of pressuring the regime to negotiate. They cannot be expected to fight Daesh when Al Assad is attacking them.

Second, US officials must press the Kremlin to get serious about pushing for a political transition, ultimately including free and fair elections. The US and the rest of the world cannot be tempted into believing in the false promise of autocratic stability. Al Assad's dictatorship has produced only death, displacement and instability over the last four years. There is no reason to expect that his regime could produce stability in the future.

Third, American leaders must be crystal clear about segregating US support for Ukraine and cooperation with Russia in Syria. Sending ambiguous signals serves no purpose.

Finally, US leaders must remain realistic about the weak prospects for successful cooperation. Russia's bombing campaign has changed little on the ground, and its pledges to support a political transition are not new. Two previous international peacemaking efforts in which Russia participated (Geneva I and Geneva II) ended in failure.

In the year ahead, the US should seek an alliance with Russia to defeat Daesh; but it should do so with no illusions about the probability of success - and real concerns about the cost of failure.


 
 #20
Moscow Times
December 24, 2015
Putin's Pivot: Out of Ukraine, Into Syria
By Matthew Bodner

"How great is it that our nation is ruled by a man that we can be so proud of?" To be honest, this is a first in my life." This was the praise given to President Vladimir Putin in the wake of his speech before the United Nations General Assembly on Sept. 28 in the Noviye Izvestia newspaper.

The writer was Alexander Kalyagin, a prominent Russian actor and theater director, and a Soviet screen icon, and he continued: "Every word, every pause, every intonation was in place. Having heard [Putin's words], 'Do you understand what you've done,' I couldn't help but applaud."

Kalyagin's lofty appraisal of Putin's General Assembly address - his first in a decade - was symptomatic of a wider trend - across Russia's cultural and political elite, it was an event that marked Russia as a major player in world affairs once again.

The Russian president sought to reinvent himself as the world's newest peacemaker. While hitting on several familiar chords concerning the conflict in Ukraine, the core of Putin's speech focused on presenting Russia's take on the fight against the Islamic State, and proposed an international coalition with the Syrian government to stop the extremist group's rise. The Islamic State is a terrorist group banned in Russia.

"We think it is an enormous mistake to refuse to cooperate with the Syrian government and its armed forces, who are valiantly fighting terrorism face-to-face," Putin said. "We should finally acknowledge that no one but President [Bashar] Assad's armed forces and [Kurdish] militias are truly fighting the Islamic State and other terrorist organizations in Syria."

The remarks were part of a three-front campaign waged by Putin from mid- to late-2015 to divert international and domestic attention away from Ukraine toward Syria, where Russia has the diplomatic clout to make itself useful to the West in the Middle East - thereby giving Moscow leverage to break economic sanctions, as the conventional wisdom goes.

Having been eagerly accepted at home, Putin's pivot met mixed results abroad, where the Kremlin's diplomatic and military push in Syria has seen the regime of its ally Assad spared from imminent collapse, and diplomatic isolation from the West apparently ended - but no concessions on sanctions are in sight.

A Wild Year

Putin started 2015 with a relatively strong hand. A major rebel offensive in January on Ukrainian government forces holding onto the town of Debaltseve in eastern Ukraine resulted in Kiev forces ceding the area to pro-Russian forces. He was assumed to be calling the shots at peace talks in Minsk on Feb. 11, where the sides finally agreed to cease fire under the supervision of German Chancellor Angela Merkel and French President Francois Hollande.  

But as the year dragged on, Putin found himself in an increasingly difficult position. By mid-summer, Ukrainian forces had recaptured Debaltseve, and Western sanctions against Russia for its actions in Ukraine and attempts to diplomatically isolate Moscow were taking a toll.

Despite the officially defiant rhetoric coming out of the Russian capital, economic sanctions imposed by the EU and U.S. in 2014 combined with low global oil prices to deal real damage to the Russian economy.

Putin needed to find a way to change the game and begin normalizing relations with the West on his own terms, and an opportunity began to take shape in early summer 2015, as the Syrian refugee crisis flared to unimaginable levels.

Russia has maintained close ties with President Bashar Assad since the start of the Syrian crisis in 2011, and used its relationship to leverage itself as a sometimes useful partner for the West in that shattered Arab republic - a card he would attempt to play again.

"Call it geopolitical blackmail," said Vladimir Frolov, a prominent Russian international affairs expert. By inserting himself as an unavoidable obstacle to finding a peaceful solution to the 4 ? year-old Syrian civil war, Putin hoped to negotiate and end to economic sanctions.

It was a bold move, and Putin pushed his luck to the limit by executing a risky military and diplomatic effort to trade a solution in Syria for compromises with the West in Ukraine - where the most recent cease fire under the Minsk agreement appears to be holding.

In doing so, Putin hoped to break his diplomatic isolation imposed during the crisis in Ukraine. But there was also a matter of domestic political necessity, as the now-frozen Donbass conflict was used domestically as a driver of favorable public opinion.

"They also wanted to steer the conversation away from Ukraine [to] give the Kremlin some breathing space to wind down the war in the Donbass," Frolov said, a move which entailed a serious media blitz painting Islamic radicals in Syria as Russia's number one enemy after more than a year of rhetorical blasts at alleged neo-fascists sitting in power in Kiev.

The move succeeded in certain aspects, but failed in others. Though the U.S. and Russia have been conducting high-level talks on finding a resolution in Syria since at least May - in a sense ending diplomatic isolation - the West has yet to budge on sanctions or Ukraine.

Meanwhile, Putin has tied his nation to the fate of the embattled Assad regime, perhaps portending to a drawn out Russian military involvement in the region if peace is not forthcoming in the next year. Russia's campaign was set to last just a few months, but last week Putin signaled Russia would remain involved for the long-haul.
 
Engineering the Pivot

The administration of U.S. President Barack Obama has repeatedly shown a willingness to sit down and talk with the Russians as relations soured, and this tendency has applied particularly to Syria - such as in 2013 when Russia was called upon to destroy Assad's chemical weapons.

But things had become more antagonistic between East and West since then. The Kremlin, according to Western officials, was blatantly supporting pro-Russian troops in eastern Ukraine - a fact Putin essentially admitted to last week - and was disingenuous about peace in Ukraine.

Opportunities to come together against terrorism in early 2015, after a terror attack on the offices of French satire journal Charlie Hebdo shocked the West, were largely squandered by the conflict in Ukraine and the habit of hostile rhetoric cast by both sides.

Efforts to iron out these issues and conduct more serious talks on the situation in Syria, the Islamic State, and possible coordination in finding a peaceful settlement to the conflict began as early as May, when Putin approached the U.S. to begin feeling out his opportunities to again leverage his favor with Assad to strike some deal with the West that would see Russia's position on the international stage elevated, his standing at home shored up, and sanctions lifted.

But the West's concern with the situation in Ukraine - its insistence that a new cease fire must be signed and implemented before serious conversations on Ukraine could be had, and sanctions could be lifted - remained a sticking point.

Bolder action was needed, and Putin made his move in earnest in September. At the beginning of the month, a new Minsk cease fire agreement was signed between Kiev and pro-Russian rebels in the Donbass. Though shaky at times, the agreement continues to hold.

With Ukraine apparently frozen, Putin used the UNGA as his platform to launch a rhetorical shift from Ukraine to Syria, as well as to secure a private audience with Obama to reportedly discuss cooperation in Syria, as well as the situation in Ukraine.

As this was going on, reports began circling the Russian and international media that the Defense Ministry was moving weapons, equipment, aircraft and support personnel into Syria via airlifts and sea shipments - foreshadowing its open intervention in the conflict.

Breaking Isolation

After a 90-minute meeting held behind closed doors at the United Nations at the end of September, in which Putin said the two world leaders discussed increasing bilateral cooperation against the Islamic State, officials in Washington were ready to listen.

A senior administration official, speaking to the Wall Street Journal in the wake of the meeting - the first official meeting in over two years - said that Obama walked way with a greater understanding of Putin's intentions in Syria, believing them to be fighting the Islamic State.

But it was an illusion that did not last, and this is where Putin overplayed his hand. Within a day or so of Russia's open intervention in the Syrian civil war on Sept. 30, officials from capitals throughout the West felt they had been lied to - Russia was there to save Assad, not to fight the Islamic State.

The U.S. and its Western allies that are bombing Islamic State targets in Syria quickly retrenched and fielded a new party line in the face of Putin's final play of 2015: the door is open for cooperation with Russia in Syria if it plays a constructive role in Assad's departure.

The two sides have so far only managed to hash out an agreement on safely operating in Syrian air space, despite their different and sometimes opposing missions. This is where the two sides have seen most regular communication.

Overall, engagement between the two sides has therefore been compartmentalized in several ways: Ukraine and Syria are separate issues; talks are being held on broad issues as the senior level; and coordination in Syria handled by military commanders in theater.

Quagmire

While Putin appears to have won the public relations pivot at home, and made considerable progress in ending Russia's diplomatic isolation, his military adventure in Syria has not yielded the speedy results the Kremlin anticipated - slowing additional diplomatic efforts.

"The initial Moscow plan was to gain fast success in Syria and to guarantee a strong position for initiating an international forum for a peaceful resolution of the conflict," said Vadim Kozyulin, a military expert at the Moscow-based PIR Center think tank.

"It looks like that amount of military success is not sufficient for making the diplomatic stage of the plan successful," Kozyulin said, forcing Russia to dig in deeper to the conflict - the Defense Ministry in recent weeks has gradually deployed new hardware to the fight.

The military efforts have been complicated by the development of the situation on the ground, and the interests of other actors involved in Syria - such as Turkey - who have their own sets of interests in the resolution of the conflict.

For example, Russia's bombing of Turkmen rebels in northwestern Syria likely factored heavily into Ankara's decision last month to shoot down a Russian Su-24 fighter-bomber aircraft, sparking a spat between Russia and Turkey that has further complicated the situation.

At his end-of-year press conference last week, Putin claimed that he was never informed about Turkmen rebels fighting in Northern Syria, but later Turkish President Recep Erdogan said that "I told Mr. Putin myself there was no [Islamic State] presence in Northern Syria, but mostly Turkmen."

The spat with Turkey has been a distraction from Russia's primary goals in Syria, and in the weeks since the downing of the Su-24 fighter-bomber the two sides have been playing rhetorical chicken, each trying to look tougher than the other.

A Seat at the Table

Putin received two boosts from terror attacks since October. The first was the bombing of a Russian airliner on Oct. 31, killing 224 Russian citizens. Then, in November, Paris was rocked by several coordinated terror attacks - all allegedly tracing back to the Islamic State.

This has elevated Western fears of terrorism emanating from Syria, piquing interest in possible cooperation in several Western circles, and given Putin an opportunity to realign his rhetoric with prevailing international attitudes toward the threat of the Islamic State. A Western power - France this time - was officially called an "ally" the first time since the annexation of Crimea.

Contact between Russia and Washington has been restored in several areas after almost two years of relative silence, particularly at the senior level: U.S. Secretary of State John Kerry has visited Moscow twice since May, and Obama has met Putin three times since September.

"I think from this perspective, the plan - despite its chutzpah - worked better than even initially envisioned," said Frolov, though the Islamic State attacks in Paris and Egypt certainly helped Putin's hand on the diplomatic front.

"The plan helped changed the conversation and pierced Russia's diplomatic isolation after Ukraine, and it elevated Russia to a peer-partner to the U.S. and EU in the Middle East. It failed completely, however, to get Russia out of the Ukraine sanctions," he said.

Although the U.S. and EU maintain they are willing "to keep the door open" to cooperation with Russia in Syria, as U.S. Defense Secretary Ash Carter wrote in a piece published by Defense News on Dec. 13, concessions in Ukraine remain off the table.

Putin appears to have underestimated the West's resolve and ability to compartmentalize Syria and Ukraine as two issues, despite Russia's attempts to trade one for the other.

Indications can be found on both sides that positions are softening, but the golden compromise - Assad can remain in power for a set transition period, but must ultimately leave - has yet to materialize as 2015 draws to a close.

Russia may yet be the one to budge first as the consequences of its economic crisis continue to mount. But this hinges on the outcome of upcoming peace talks between the Syrian government and various elements of the Syrian opposition.

As noted by Dr. Karen Dawisha, author of "Putin's Kleptocracy" and scholar of Russian foreign policy in the Middle East, "the Syrian regime has been and will remain a strategic interest and ally of Russia, [but] Russia's loyalty is to the regime, and not to Assad personally."

Meanwhile the West continues to dial up the sanctions heat with regard to Ukraine, and a message appeared to be sent on Dec. 22. Despite progress made on Syria with Russia, the U.S. imposed new sanctions on Russia just after the EU voted - after tarrying in indecision for a little while - to extend its sanctions. And this is the message Vladimir Putin will have to take with him to 2016.

 
 #21
Russia Insider
www.russia-insider.com
December 24, 2015
Amnesty Publishes a Biased Report About Russia's Campaign in Syria
Report makes wild allegations of war crimes without substantiating evidence
By Alexander Mercouris
Alexander Mercouris is a writer on international affairs with a special interest in Russia and law.  He has written extensively on the legal aspects of NSA spying and events in Ukraine in terms of human rights, constitutionality and international law.  He worked for 12 years in the Royal Courts of Justice in London as a lawyer, specializing in human rights and constitutional law. His family has been prominent in Greek politics for several generations.  He is a frequent commentator on television and speaker at conferences.  He resides in London.

Amnesty International has just released a report accusing the Russian authorities of "shamefully concealing" large numbers of civilian deaths caused by Russian air strikes in Syria.

The report also says the Russians might be committing war crimes in Syria.

The Russians have responded to the report by saying it is littered with cliches.

Having read the report, I can say it provides no evidence a court could use.

As Amnesty says, its report was researched "remotely".

That means there was no field work. No investigators visited the six places where Amnesty says the attacks by the Russians discussed in the report took place.

The report is based entirely on reports of alleged eye witnesses and video evidence provided to Amnesty by third parties.

This in itself is worrying. Given that Syria is in a state of civil war with a long history of evidence being manipulated by both sides - especially by the rebels - in pursuit of their objectives, this is a fragile reed upon which to build a report like this.

As it happens, detailed examination of the six incidents shows there is no conclusive evidence linking the Russians to any of them.

An attack on Talbisseh on 30th September 2015 is said to have been the result of "suspected Russian air strikes on Karama Street". Use of certain munitions is attributed to the Russians because "Syrian government forces are not considered capable of delivering them" ("considered" by whom and what if that assumption is wrong?). An attack on Darat Izzah is attributed to a "suspected Russian sea-launched cruise missile". Civilian deaths on Nuqeyr "purportedly involved cluster munitions". An attack on Al-Ghantu involved "suspected Russian air strikes". Two missiles that attacked Sermin were "fired by suspected Russian warplanes".  

Lastly, the report discusses an attack on Ariha without mentioning the Russians or providing any evidence they were involved at all.

Given the myriad number of air forces now operating in Syria, it is impossible to see how Amnesty can be sure that any of these incidents - if they even happened - involved the Russians.

Amnesty tries to get round this by saying the volume of noise of some of the attacks, and comparisons with post-attack reports provided by the Russians, indirectly confirms their involvement.

To say this is unconvincing would be an understatement.  

As any investigator knows, relying on what a witness claims to have seen is problematic enough. Drawing deductions from the volume of sound a witness claims to have heard is hopeless.

As for the coincidence of some of the incidents to the post-attack reports the Russians have provided, that is interesting but hardly conclusive.  It would after all be an obvious step for someone trying to fabricate evidence of atrocities by the Russians to try to match incidents to attacks the Russians have admitted being involved in.

In a particularly farfetched piece of reasoning, Amnesty tries to use a Russian denial of the destruction of the Omar Bin Al-Khattab mosque in Jisr Al-Sughour in order to "prove" its claim the Russians did actually destroy the Omar Bin Al-Khattab mosque.  

The argument is that because the Russians denied they destroyed the mosque, but supported their denial by showing a picture of a different mosque, that somehow "proves" they destroyed the mosque.

That is a classic example of a non sequitur ("it does not follow").  

To see how bad this reasoning is, just consider what Philip Luther, Director of Amnesty's Middle East and North Africa programme, has said about this incident:

"By presenting satellite imagery of an intact mosque and claiming it showed another that had been destroyed, the Russian authorities appear to have used sleight of hand to try to avoid reproach and avert scrutiny of their actions in Syria. Such conduct does not cultivate confidence in their willingness to investigate reported violations in good faith. Russia's Ministry of Defence must be more transparent and disclose targets of their attacks in order to facilitate assessment of whether they are complying with their obligations under international humanitarian law."
If there is a "sleight of hand" it is in this argument.

Firstly, it is a huge - and unwarranted - leap to say it proves bad faith because the Russians provided a photograph of the wrong mosque.

It is equally possible there was simply a mistake. That would be very likely if the Russians were confused about which mosque they were supposed to have destroyed - because they didn't in fact destroy any mosque.

More fundamentally, what this argument does is try to prove a positive - that the Russians destroyed the Omar Bin Al-Khattab mosque - out of a negative -  that the Russians showed a satellite image of the wrong mosque.

This is flawed reasoning by any measure, and it proves nothing. It does not prove that the mosque - if it was destroyed - was destroyed by the Russians. It could equally well have been destroyed by someone else. In a conflict like the one in Syria there is no shortage of others who might have done it.

The entire report is in fact riddled with this sort of bad reasoning. Besides its repeated use of the word "suspected" ("suspected" by whom?) exposes it for what it actually is - a tissue of guesses and suppositions.

The real concern must however be about the provenance of the information - such as it is - upon which the report is based.

When discussing the attack on Maasran the report says it arrived at its conclusions based on "images and reports sent to it by Syrian human rights activists and also documented by military and security organisations".

Though Amnesty claims to have spoken to some of the alleged witnesses, it is likely most of the information in the report - and all the video evidence which Amnesty claims to have seen - comes from these sources.

This begs the obvious question of who these "Syrian human rights activists" and "military and security organisations" are, and how much reliance can be placed on them?  

What criteria does Amnesty use to determine whether someone reporting out of Syria is a "human rights activist"?  

The expression "human rights activist" implies someone whose primary concern is for human rights and who is therefore in some way detached from the political struggle.

Anyone who has followed the Syrian conflict with any care knows that no such people exist. Individuals and organisations who report about Syria claiming to be "human rights activists" - such as the Syrian Observatory of Human Rights - turn out invariably to be anti-Assad activists and members of the Syrian opposition. As such they cannot be assumed to be unbiased or impartial reporters of what is going on.

A reporter does not have to be impartial to be objective and accurate. Gleb Bazov and Colonel Cassad who report about the Ukrainian war from a militia perspective are neither unbiased nor impartial and make no pretence to be. However experience has shown them to be extremely reliable and accurate.

The same unfortunately is not true of the Syrian conflict. This has been proved countless times (see for example here my discussion about the Ghouta chemical attack of August 2013) whilst the fact that the people Amnesty is in contact with claim to be "human rights activists" as opposed to "opposition supporters" - which is what they really are - is in itself good reason to doubt what they say.

Far more disturbing than this reliance on "Syrian human rights activists" is however the reference to "military and security organisations".

Who are these "military and security organisations"?  Are they perhaps the intelligence agencies of the Western powers?  If so, should Amnesty be getting its information from such a source?

It is comments like this that explain the concern of many people like me, who have strong historic links to Amnesty, and who are left wondering whether it bears any resemblance to the organisation they once knew?

I have dissected Amnesty's report on the Russian campaign in Syria to expose its obvious flaws.  

Doing so in a sense is however hardly necessary. There is no need to get lost in the detail.

The reality - as everyone knows - is that it is hardly conceivable Amnesty would ever publish a report about the Russian military campaign in Syria that gave it a clean bill of health.

The report in fact brings together two of Amnesty's perennial villains - the Russian government and the Syrian government - and given what Amnesty routinely says about each of them, nothing different from the report Amnesty has just published could have been expected.

Ever since the start of the Syrian conflict Amnesty has campaigned against the Syrian government, calling for Western military intervention in Syria to "protect civilians", for the establishment of "safe havens" and "no-fly zones" (as to what all that means see my discussion here) and has tried to orchestrate public campaigns against Russia's support or perceived support for the Syrian government.

To expect Amnesty not to find fault with a Russian military intervention in Syria that is defeating all those objectives would be naive.

This is quite apart from the fact that Amnesty has a long history of hostility to the Russian government.  

It has backed groups like Pussy Riot. It named people like the oligarch Mikhail Khodorkovsky - an individual the European Court of Human Rights says is guilty of massive tax evasion - "prisoners of conscience".

Amnesty's reporting of the Ukrainian conflict has also leaned heavily in favour of the Ukrainian government and against the east Ukrainian militia  and Russia.  

It has for example laid heavy stress on individual human rights violations it claims were committed by the militia whilst all but ignoring the Ukrainian army's indiscriminate shelling of cities and its attempts to besiege them.

Amnesty has also vigorously supported the claims of Western governments that the Russian army is intervening on the militia's side in the Ukrainian war - to the point of publishing actually inconclusive satellite pictures to prove it - as if it was itself an intelligence agency.

The report on the Russian campaign in Syria has to be read in this context.  

It is not an impartial fact-based study carried out after careful field work on the ground. Rather it is simply part of the ongoing campaign in the West to turn Western public opinion against Russia's military campaign in Syria.

That this is so is shown by the claim in the report that the Russians are deliberately targeting civilians and are therefore committing war crimes - an incendiary allegation Amnesty has also made against President Assad.

In the case of the Russians it makes no sense. Why would the Russians deliberately target civilians - something that can only provoke them to join the rebels - at the same time as they have been working hard to get a political process started to end the Syrian war?  Surely the one contradicts - and completely undermines - the other?  

None of this is to say that no civilians have died in Syria as a result of Russian air strikes. Some have certainly died and it would be absurd to pretend otherwise. However to claim there is a deliberate policy of targeting civilians defies logic, and finds no support in anything the Russians have said or done, or which appears in the report whose flaws I have dissected.

As it happens the report does give an account of one incident which might - if true - show how civilians might have been killed during a Russian air strike without the Russians intending it.

This is the attack on Al-Ghantu, in which several members of a single extended family sheltering in the basement of what the report calls a civilian building are alleged to have been killed as a result of a Russian air strike.

The report says the family "were related to a commander of a local armed group who was away at the time of the attack".  

Amnesty does not identify the man in question or the group he leads. One wonders why?

Regardless, this account sounds very like an attempt to kill a rebel commander which missed him but which killed instead members of his family.   

The Russians have claimed on several occasions that they have killed rebel commanders in air strikes.  It is entirely plausible that they target rebel commanders intentionally, and that this was an attempt to kill one.  

If so then it obviously was not intended to kill civilians since the intended target was not the civilians but the rebel commander.  

The Russians might have been guilty of recklessness about whether civilians were in the basement when they attacked it in the belief the rebel commander was there. Or they might have mistaken the basement for a bunker or command post. Or they might have thought only the commander and his guards were there.

In any of these cases the killing of the civilians would not have been deliberate. It would have been - in the horrible language of modern war - not intentional but "collateral".

Some might argue - as I do - that trying to assassinate someone far from the battlefield in this way is wrong. However the point is that it is precisely what the Western powers do all the time - with barely any complaint from Amnesty.

To take one example amongst legions: during the 2011 Libyan campaign the Western military made what were obvious attempts to kill Gaddafi.  The fact Gaddafi was being intentionally targeted was not even denied, though the Russian government complained about it.

One such attempt involved an air strike on a residential villa. It missed Gaddafi - who was not there - but killed one of his infant children and three of his grandchildren. Here is what I wrote about it.  

At the time I called this an "ongoing descent into barbarism".  

If Amnesty condemned it I never heard about it, and I have found no record of it. If Amnesty did condemn it, they certainly don't draw attention to it. Certainly they have not accused the Danish government - whose aircraft carried out the strike - of committing war crimes.

Why then does Amnesty find the attack on Al-Ghantu so much more objectionable?

The short answer - there is no other - is that it is because the attack on Gaddafi's villa - like scores of other attacks on civilian facilities in any number of countries before and since - were carried out by the Western powers, whilst the attack on Al-Ghantu was - allegedly though not definitely - carried out by the Russians.  

It is impossible to avoid the feeling that for the authors of the Amnesty report it is that - not the deaths of civilians - that is in the end what matters.

Amnesty International was once a universally respected organisation, greatly admired for its courage and integrity. Its founding purpose was to campaign for political prisoners - people imprisoned not for their crimes but for their beliefs - regardless of their political views or of the political views of those who had imprisoned them.

As someone who has supported Amnesty's campaigns in the past, it pains me to see it departing so far from its founding purpose by taking sides in conflicts so openly and in such a brazenly political way.  

I hope and believe there are still people in Amnesty who realise the folly of this, and who will fight back against it before it is too late.

As for the report about Russia's military campaign in Syria that Amnesty has just published, it falls so far below its old standards that it has to be treated more as a piece of anti-Russian propaganda than as a serious critique of the Russian military campaign.

 
 #22
www.opendemocracy.net
December 22, 2015
Russia's politics of paranoia
Russian society tries to keep its nerve. The Kremlin thrives on it, the papers amplify it-but nobody can quite control this profound paranoia.
By ANNA ARUTUNYAN
Anna Arutunyan is a Russian-American journalist and the author of The Putin Mystique. She is currently a fellow at the Kennan Institute in Washington.

Russian society tries to keep its nerve. The Kremlin thrives on it, the papers amplify it-but nobody can quite control this profound paranoia.

For the average consumer of news, there is a rational way to process a media scare: take the statistical probability of the cause of the anxiety actually taking place, and compare it to a slew of equally bad things that are far likelier to happen. For instance, there were 10 cases of Ebola in the United States in 2014, including two deaths, but 32,719 fatalities from car accidents in the previous year.

On the surface, a similar rationalisation could be applied to the atmosphere of fear and paranoia currently brewing in Russia. Despite this growing climate of fear amid a spate of increasingly restrictive laws, the average citizen should-theoretically at least-worry more about seat belts than what his own government could do to him. That is, unless he or she is a political activist. There is growing concern about spymania: new, harsher amendments to treason legislation in wake of the Ukraine crisis and Russia's worsening relations with the west have resulted in an increase in treason cases, from four in 2013 to 15 in 2014.

More worrying still is the growing list of people who, by many accounts, could be regarded as political prisoners. According to a registry compiled by the SOVA Center for Information and Analysis, there are currently 54 people 'incarcerated for actions that are not violent and not ordinarily criminal in nature, but who have made various statements or participated in the actions of certain groups.' Alexander Verkovsky, director of SOVA, conceded that most of these could not be considered political prisoners: many of these cases their criminalised statements did include calls to violence.

Still, according to the Memorial society, there are 40 political prisoners in Russia. This is too many, and the arbitrariness of some of the accusations is terrifying. But put into perspective, this is a mere drop in the ocean of the 1.5 million that, according to many accounts, were detained by the NKVD during 1937-1938.

Amplifying paranoia

Fear is exacerbated by murders of perceived political opponents in which the criminals are rarely, if ever, brought to justice. Here, too, the numbers indicate a lesser danger on an individual level than the amplified message sent by the murders themselves.

A murky investigation process followed the shooting of opposition leader Boris Nemtsov. Ten months later, the culprits are yet to be named. Russia is rightly seen as a dangerous place for journalists, with 56 people murdered for their work as journalists since 1992, according to the Committee to Protect Journalists. While these killings were committed by non-state actors and mostly during Boris Yeltsin's presidency, the fact that so few murder cases are brought to justice sends a powerful message-one which translates into general fear.

In a politically repressive climate, even relatively small numbers of killings such as these are enough to act as repressive mechanisms on their own-regardless of the political regime's motivations.

A strange thing happens: even though numerically these instances share a statistical likelihood of Ebola, their sheer arbitrariness elevates them into something a lot more immediate. Through traditional and social media, each instance of these so-called precision repressions is amplified and weaponised into a potent source of anxiety: it is scary enough that a single mother is currently on trial for posting anti-Putin pictures on the VKontakte social networking site without going through the numbers and estimating the actual likelihood of it happening to you.

Fifth and sixth columns

But who, exactly, weaponises fear, and how? This is precisely what is misunderstood about repressive regimes, and Russia's relatively soft repressive regime in particular.

The model of authoritarian governance makes us think that there is a bogeyman in the Kremlin signing off on each of these cases, which could not be further from the truth. Nor do I believe for a moment that someone in the Kremlin is directly ordering the assassination of journalists and politicians in order to instill a climate of fear and keep the rest in line. The weaponisation of fear is not deliberate, and that is precisely what makes it so potent.

We can look at three elements involved in creating and spreading the climate of fear. One comes from the state-controlled media, but the other, quite paradoxically, comes just as easily from the independent media, reflecting the arbitrary realities of the day.

In the first case, bellicose Duma deputies and Kremlin supporters are shown on state media lambasting traitors, foreign agents, and fifth columnists. Their rhetoric could, in fact, translate into the harassment of journalists by local officials, or even violent attacks like that on Boris Nemtsov.

In the second case, the independent media highlights the victims of precision repressions, feeding into the cycle from the other end. This is by no means to suggest they are doing a disservice, merely that-as a side effects of reporting on repressions-the media amplifies their effect. Spokesmen for the political regime may even argue with this reporting and sincerely downplay the scale of the repressions (I am already anticipating inane accusations of being a Kremlin apologist for suggesting that the actual number of repressions is relatively small in the context of Russia's past) or say that they are not repressions at all. That makes little difference: the fear that is spread is the fear of the regime itself.

But the third, and possibly the most powerful, element is society. This is where a certain sheer unpredictability is exposed: the lack of boundaries in what is permissible and what is not, in what is dangerous and what is safe.

Take the recent case of a man who stabbed his friend to death for claiming-probably in jest-that he was an agent of Obama. Or another man who snitched on his neighbour after stealing his Wi-Fi and using it to access supposedly anti-Russian Internet content. According to this man's complaint, filed to Roskomnadzor, Russia's federal media agency, his neighbor was an 'enemy of the people' because his neighbour's Wi-Fi gave gave him access to anti-Russian' content. In closing, the man requested that his neighbour's apartment should be taken away and given to him instead. In this last case, Roskomnadzor fortunately rebuked the man, telling him that the category of 'enemy of the people' no longer legally exists. But cases like it raise tremendously important questions.

A climate of fear

If there are enough people who believe in enemies of the state, foreign agents, and fifth columnists, if they believe they should be neutralised and that their property is fair game, then how many of those people work in law enforcement, with hopes of being promoted? When hearing of the targeted repressions reported in the independent press, how many of them will interpret the instances as a signal that they might be thinking the right thoughts, rather than that their government is committing rights violations?

Russian society already suffers from lack of trust: according to the Levada Center, only 27 per cent of Russian respondents said that they believed other people should be trusted. That figure was 69 per cent in Sweden, 42 per cent in the United States, and an average of 45 per cent among 29 countries surveyed. In this kind of environment, there is little keeping one individual from taking the signals to repression he sees all around him as a call to action.

The effects of this background noise can have restrictive consequences for journalists and professionals. Fear is internalised-it plays an invisible role in how you make decisions. A number of professionals have confessed to me they are living without the ability to make long-term plans (though this is as much a product of the economic crisis as it is of elusive paranoia).

As a freelance journalist, I will inevitably weigh the potential risks of doing a particular story against two purely professional factors: the importance or newsworthiness of the story itself and the advantages in terms of reputation and income. Risk-benefit analysis plays a role in many professions. But when the risk is as unquantifiable as it is here, you sometimes find yourself opting out not because the risk is too great, but because the stress of worrying about possible risk outweighs whatever benefits the job will bring.

For the journalistic community as a whole, the effect can be even greater polarisation. On the one hand, it is clearly less risky and more profitable for a Russian journalist to err in favor of state interests (or whatever you perceive those state interests to be). On the other, internalised fear pushes towards ostracisation, the illusion of irrevocable choices, of the apparent need to determine (for whose sake it is not clear) where your loyalties lie.

It is a complex question exactly how much of this weaponised fear is metabolised into direct support for the Kremlin. Opinion polls cannot dig into the souls of their respondents and psychoanalyse them. But it is unlikely that the two can be separated; moreover, fear can act as a powerful aphrodisiac.

Still, the most dangerous aspect of this fear is precisely the lack of boundaries, and paradoxically, the lack of agency on the part of the Kremlin. Putin's Russia has already been described as a sort of marketplace for policies, where the man in power rarely gives a direct command. Instead, he merely indicates his approval for certain actions through hints and signals that can be easily misinterpreted amid the competition for his favour.

The weaponisation of fear in this environment can have any number of agents-and not necessarily those under the control of the Kremlin. That the Kremlin seems to lack control over what appears to be its own weapon only feeds into the fear itself.
 
 #23
100 Million Fewer People Speak Russian Now than Did 25 Years Ago
Paul Goble

Staunton, December 26 - The number of people who speak Russian has declined by 100 million since 1989 or 27 percent, according to Leonid Slutsky, the chairman of the Duma committee on compatriots and Eurasian integration.  (In 1989, 370 million said they spoke Russian; now, 270 million do.)

But instead of seeing this as the natural result of the demise of the USSR and the declining importance of the Russian Federation, Russian nationalist commentator Vladimir Linderman insists that this is the result of the declaration of "a war to the death" against the Russian language (regnum.ru/news/polit/2044486.html).

This loss of 100 million Russian speakers, the Riga-based writer and activist says, is made up primarily by losses in Eastern Europe and those parts of "the third world" in which "the USSR had strong positions." In other former Soviet republics, there is a downward trend but it is not as serious.

Sociological studies in Latvia show, he continues, that "approximately half of the graduates of schools with Latvian as the language of instruction are not capable of performing work connected even with an elementary knowledge of Russian." And he predicts that "five to ten years from now," the situation will be the same in Ukraine and Kazakhstan.

Even more, Linderman says, "the virus of de-russification is extending its destructive work within Russia itself, on the territories of the national republics."  This is happening not only through educational policies but also through migration: "For anyone coming from Central Asia, it is simpler and more comfortable to master Tatar or Turkish."

It is time to recognize that this is a question of national security: "It is possible to have the best tanks and rockets in the world, but what value do they have if the war for the hearts and minds of people will be lost?"

Of course, Linderman continues, a knowledge of Russian is no guarantee of "love or even sympathy to Russia."  "Spies usually have a perfect knowledge of the language against which they work, and the experience of Ukraine has shown that millions of people for whom Russian is the language of the family ... can angrily deny their 'Russianness.'"

But at the same time, he says, one needs to remember the relationship between the necessary and the sufficient.  Knowledge of Russian is necessary, but it is not sufficient. Moscow msut recognize that "the derussification of neighboring states [is] a threat to the security of Russia no less than the placement of NATO forces on Russia's borders."

Even more, the Russian activist says, Moscow must recognize that "the military-political expansion of the alliance and the derussification of territories under its control are not two different processes but a single common one."

Turkey provides an even better example, he suggests. "The growth of Turkish influence, not only in economics but in the humanitarian sphere - in Kazakhstan and Central Asia not to speak of Tatarstan already today threatens the security of Russia."

Moscow must respond in two ways. On the one hand, it must make the defense of Russian and Russian-language education part of its relations with all these states. "Every closed Russian school, every attack on Russian-language media, the liquidation of a monument or museum connected with Russian history" and so on - all must be opposed and carry a price for those who do these things.

And on the other hand, Moscow must support local movements "prepared to fight ethnocratic regimes" in the name of defending Russian.  In short, those who support the Russian language and Russia must "move from passive defense" to active offensive maneuvers against their opponents.

nfortunately, Linderman says, he does not yet feel that the leadership in Moscow has fully understood the extent of the threat, and until the Russian government does, "the titular nationalists" in these countries won't stop until they reduce Russian speakers to the status of "small museum minorities."


 
 #24
Kremlin.ru
December 25, 2015
Meeting of the Presidential Council for Culture and Art

Vladimir Putin chaired a meeting of the Presidential Council for Culture and Art in the Kremlin.

President of Russia Vladimir Putin: Good afternoon, colleagues.

This meeting is taking place ahead of the New Year, so I want to begin by wishing you a Happy New Year. Greetings to all of you!

The year of 2015 was marked by the 70th anniversary of Victory in the Great Patriotic War, and the event, as you know, is linked with the creation of the United Nations and UNESCO.

These organisations have played a crucial, a key role in establishing the post-war world order, in forming the principles of solidarity, humanity and international law, and in affirming the priority of countries' and peoples' humanitarian and cultural development.

These celebrations are reflected, one way or another, in practically all the cultural events of our nation, including the Year of Literature. Its main goal was to serve as a reminder of the exceptional significance of literature in people's lives and, of course, renew the interest in books and reading in society.

I do not know whether we were able to renew interest in books, given the development of the Internet, but we certainly need to inspire people to read more. Perhaps we should really emphasise books, because they are not tablets, they can be works of art in and of themselves. So I think our efforts will not be in vain if we continue working in this direction.

You are well aware how much demand there was for many of the events that were part of our Year of Literature. No less successful was our celebration of the 175th anniversary of Petr Tchaikovsky's birth. Its culmination was the 15th International Tchaikovsky Competition.

I would like to thank everyone who organised it, who helped in the work to hold this large-scale international event, and I want to thank Maestro Gergiev. We can state that this year, the Tchaikovsky competition was reborn in its prior glory. This was a great success.

In 2015, the Khersones Tavrichesky reserve was given the status of an especially valuable Russian cultural heritage site, as was the Museum of the Heroic Defence and Liberation of Sevastopol. The events immortalised at these sites are fundamentally important for understanding Russian history, its continuity and succession are largely dependent on perceptions of the origins and the nature of our statehood, the establishment and development of Russian civilisation.

The year 2016 has been declared the Year of Russian Cinema. We must do everything possible to ensure that it will be memorable and beneficial for millions of our citizens. In particular, it is imperative to continue developing the network of film screenings in the Russian regions, first and foremost in small towns. And, of course, we need to strive to ensure that our films are shown, that they are screened, as well as determining methods for further developing national cinematography and increasing its competitiveness.

The government is supporting the creation of all the necessary technology and production facilities to do this. Our viewers await talented, powerful Russian films that follow the best traditions of Russian cinematography to reflect and help understand the nation's contemporary life and our place in the world, telling honestly about the most important historical events and current heroes.

Preserving historical memory is one of the key priorities. Our material cultural heritage plays a special role here. In recent years, society and the media have often focused on loud conflicts around construction in conservation areas and the destruction of monuments. It is imperative to analyse these cases as thoroughly as possible, including so as to identify gaps and omissions in the legislation.

Clearly, we need changes in the procedures for monitoring preservation of heritage sites. I consider it important to strengthen cooperation between relevant government agencies and volunteers and public associations. They are usually the ones who are the first to raise the alarm about the loss or threat to monuments, but they are not always heard.

I ask the Culture Ministry to submit with clear proposals for protecting monuments of federal, regional and local significance against destruction and barbaric treatment, and jointly with public movements to determine the role and rights of motivated members of the public, local historians and enthusiasts who care about history. We have many such individuals.

I will note that the topic of preserving cultural heritage has a special place in the Basics of State Culture Policy, which were approved a year ago. At the time, I also gave instructions to prepare a draft strategy for implementing these Basics. As I understand, this work could not be completed on time, first and foremost due to insufficient coordination, although we designated this as a priority objective a year ago.

The Basics of State Culture Policy, as well as the strategy for their implementation, are complex, multifaceted documents and cover a wide range of areas, from the economy to public life. We discussed this all in detail and I do not think there is any point or need to repeat it now.

One thing is clear: we must complete development of the strategy as quickly as possible. Perhaps we should use our successful experience working on the Basics to do this. I recall that the work was difficult, but it was nevertheless completed.

It is also imperative to renew the work of the working group in the Presidential Executive Office. It would be expedient to involve not only professional creative trade unions and cultural figures, but also public organisations like the Russian Popular Front, geographical, historical, military history associations and other groups.

I repeat, the strategy for implementing the state culture policy concerns all citizens in our country, and the process of preparing this document should correspond to its significance.

<...>

With regard to our meeting, just as with previous ones, it has been interesting and very useful. I very much expect that just like last time, we will not only make progress in preparing fundamental documents based on the result of our meeting, particularly the document pertaining to executing the Basics of our culture policy, but also resolve specific urgent issues that you raised today.

 Thank you very much. Happy New Year!


 
 #25
Russia Direct
www.russia-direct.org
December 24,2015
The best books about Russia in 2015
Russia Direct has collected a list of the Top 10 most influential books about Russia from 2015 - including books from former Russian leaders Yevgeny Primakov and Mikhail Gorbachev.
By Dmitri Elkin
Dimitri Elkin is a Russian-American businessman and writer. He holds a degree in mathematics from Moscow State University and an MBA from Harvard University. His book Russia Turns the Page - Historical Sketches of the End of the Post-Soviet Period was recently published in Moscow.

The recent geopolitical turbulence involving Russia has produced a side benefit: It reinvigorated the process of analysis of Russia by the outside world, and stimulated the process of critical soul-searching inside Russia. After the break between Russia and the West over the Crimea, the old assumptions of the post-Soviet period were largely swept into the dustbin of history.

The new period that is now at hand requires a fresh and unclouded look at Russia's place in the world. This has opened the door for some old voices and some new ones to share new perspectives about Russia's relationship with itself and with the rest of the world.

The top ten books on this list were chosen to cover the entire spectrum of political views: those critical of Putin's policies and those which support the Kremlin, books written by Westerners and those by Russians, books about Russia's past and about those that give an outlook on Russia's future. In recent years, it has become a tradition for some of the best books about Russia to be written by foreigners who live here (think Lenin's Tomb: The Last Days of the Soviet Empire).

And so it is the case this year: the top selection for 2015 is a biography of Putin, written by a New York Times correspondent, Steven Lee Myers, who lived in Russia during much of the times about which he writes.

1. The New Tsar: The Rise and Reign of Vladimir Putin By Steven Lee Myers (New York: Knopf, 2015)This book develops an intimate portrait of Vladimir Putin, starting with his early family life, youthful aspirations, and his achievements and disappointments. Putin's early life was unremarkable, and his early career was marked by failures. Enamored by spy stories, he clawed his way into the intelligence service, where he made only modest progress.

After the traumatizing fall of the Berlin Wall, Putin's dream job turned into a dead end. Putin resigned from the KGB after he became an advisor to the liberal mayor of St. Petersburg, Anatoly Sobchak. Putin's stint as a democratic reformer did not work out either, and Putin lost his job after his charismatic but unfocused political boss lost his re-election bid.

Fortunately, Putin's administrative skill was noticed in Moscow, and he was invited to serve in Boris Yeltsin's administration. The times were turbulent, and when Putin became Russia's prime minister, he himself expected his job to last only a few months. Putin's fortune finally changed for good when Boris Yeltsin handpicked him as the successor.
The book provides many fresh details about Putin, collected by the author through interviews with those who know Putin personally. Myers has been able to not only make sense of Putin's conduct, but also capture the spirit of the times. This book is as much the story of a country as it is the story of a man. It is a very engaging book, but it should come with a warning: the reader may develop affection for the book's protagonist.

2. After the Kremlin (In Russian) By Mikhail Gorbachev (Moscow: Ves Mir, 2014)

In his 85th year, and more than 25 years after his resignation as the first (and last) President of the USSR, Mikhail Gorbachev is enjoying a modest political renaissance.  He was awarded Russia's highest honor for his 80th birthday.  He has recently written several books, and his book signing ceremonies have had people lining up for hours.

In his latest book, Gorbachev covers both his personal experiences, as well as Russia's progress since the fall of the USSR. He provides a frank assessment of Russia's leaders who came after him: Yeltsin, Putin, Medvedev, and again, Putin. He also addresses the two questions that now haunt Russia - whether Perestroika was a mistake, and whether the current "managed democracy" is Russia's only viable political alternative.  Gorbachev's answer to both questions is an emphatic "no."

3. Russia and the World in the 21st Century (in Russian) By Dmitri Trenin (Moscow: Publisher E, 2015)During the post-Soviet period, Russia had two foreign policy strategies, says Dmitri Trenin, a longtime director of the Carnegie Moscow Center. The first strategy was integration with the West; the second was integration with the former Soviet republics across the post-Soviet space. All Russian presidents pursued these contradictory processes in parallel.

Russian leaders Boris Yeltsin, Vladimir Putin, and then Dmitri Medvedev made entreaties for Russia joining NATO, while trying to keep its neighbors, including Belarus, Ukraine, Georgia, and Kazakhstan under the Russian aegis. The Ukrainian crisis of 2014 derailed both of these strategies, and now Russia is forced to rethink what to do next.

According to Trenin, it did not have to be this way. The Ukrainian crisis occurred, in part, because political leaders were not paying attention to what was happening in Kiev.  The decision-making was delegated to second- and third-tier foreign policy bureaucrats who tried to make history in accordance with their personal views. Tactfully, the author does not name any names.  

4. Hopes and Concerns (in Russian) By Yevgeny Primakov (Moscow: Centerpoligraph, 2015)

The Former Prime Minister of Russia, Primakov was one of Russia's most lucid political thinkers until his passing away in June 2015 at the age of 85. His last book offers a sweeping analysis of Russia's domestic and foreign policy struggles over the past six years, starting with the election of Medvedev as Russia's third president, and ending with an analysis of the ISIS threat.

Domestically, Primakov is critical of "pseudo-liberals," who, by excessive belief in the benefit of an unregulated free market, brought the country to ruin in the 1990s. On foreign policy, he thinks that the world will face the dangers of instability until America accepts that its era of geopolitical hegemony is over.

Primakov was hugely influential in post-Soviet Russia, and he probably comes very close to being Putin's mentor. This book, therefore, is a very good guide for those political analysts who may be concerned with the question of what Putin will do next. This is the last chance at a glimpse inside the mind of one of the authors of Russia's current multi-vector diplomacy.   

5. Frontline Ukraine: Crisis in the Borderlands By Richard Sakwa (London:  I.B. Tauris, 2015)

Professor Richard Sakwa is a premier British expert on Russia, but he is undeservingly less known in the U.S. This book is dedicated to an analysis of the 2014 crisis in Ukraine, but it delivers much more than that.

Through the prism of the Ukrainian revolution, the reader sees the problems of the international order after the end of the Cold War, the flaws of U.S. foreign policy, and many of Russia's challenges.

The story of the Ukrainian crisis is largely a story of misunderstandings and accidents. Readers will surely smile at the irony of the fact that one hundred years after the First World War, Europe is attempting to break apart again, a process made easier by "a febrile atmosphere of exaggerated moral indignation."

The book is a definitive work for the chain of events that caused what increasingly looks like a Second Cold War.

6. The Last Empire: The Final Days of the Soviet Union By Serhii Plokhy (New York: Basic Books, 2015 paperback edition)

The book challenges the traditional narrative of the collapse of the Soviet Union as the result of America's efforts.  In 1991, the author was a Soviet citizen who found himself without a country. Now, Plokhy is a professor of history at Harvard University.

Supplementing his first-hand recollections with interview and research, including recently declassified documents from the George Bush Presidential library, he shows that America was deeply uncomfortable with the prospect of the U.S.S.R.'s collapse, fearing a civil war that would turn its former enemy into "Yugoslavia with nukes."
Recommended: "What price will Moscow pay for its 2015 foreign policy moves in 2016?"

By 2014 it turned out that violence on the Soviet space was not avoided but simply delayed. Many of the issues that plague the Russia-Ukrainian relationship now stem directly from the events described so clearly in this book.

7. Putinism: Russia and Its Future with the West By Walter Laqueur  (New York: St. Martin's Press, 2015)

Putinism: Russia and its future with the WestLaqueur has been studying the Soviet Union and Russia for more than 50 years, and this is his attempt to assess prospects for the emergence and shape of a "new Russian idea" that could replace Communism.

The author demonstrates an impressive erudition, bringing to bear references to Russian philosophic, literary, political and religious thinkers of the past 500 years. As for the Russian idea itself, its core component is identified as nationalism accompanied by anti-Westernism.

Many Russian readers may disagree with such a bleak assessment, but they would certainly not dispute the author's observation that Russia cannot exist without a manifest destiny. At least in this one respect, Russia does not seem to be very different from the United States.

8. Russia in Global Politics. New Rules in the Game Without Rules (in Russian) Edited by Fyodor Lukyanov (Moscow: EKSMO, 2015)

The collection of twenty-seven essays from leading Russian political scientists offers analysis of the issues that Russia faces on the international stage, including its relationship with the U.S., Europe, Asia and Ukraine. The book is edited by Fyodor Lukyanov, one of the most prominent Russia's political scientists and the Editor-in-Chief of Russia in Global Affairs.

The book's key premise, expressed in the lead essay, is that after the post-Soviet period ended, the world entered into a new and highly uncertain period, where the old rules no longer apply, and new rules have not yet been formed.  Consequently, there are no laws that can be violated.  Everything is relative, and therefore anything is possible. As Russian classic Fyodor Dostoyevsky once observed, such a set up does not bode well for humanity.

9. Peripheral Autocracy. How and Where Russia Has Arrived (in Russian, with English summary) By Grigory Yavlinsky (Moscow: Medium, 2015)

The book by a veteran of Russian politics is aimed at the Russian reader, yet its ideas will resonate with most Americans. The founder of Yabloko, one of Russia's oldest liberal parties, Yavlinsky sees the world along the democracy-vs.-autocracy dimension. He is critical of Russia's current political state, and argues that Russia meets the two criteria of an authoritarian system: the impossibility of a grassroots movement to replace those in power, and the personalized nature of presidential power transfer that happens without real political completion.

These ideas may not be new, but what is new is that Yavlinksy lays the blame for establishing such a system with Boris Yeltsin. Yavlinsky sees Putin's current power as the direct continuation of the system of the government, which materialized in the 1990s. The book is pessimistic in its assessment that the Russian democratic failings were preordained by Russia's tradition of entrenched power of centralized bureaucracy embodied in the Kremlin.

This is speculative. However, it is factual that Yavlinsky several times tried to get into the Kremlin himself, running for Russian presidency both against Yeltsin and Putin. To what extent Yavlinsky's embrace of historic determinism is determined by his own electoral failures, is for the reader to decide.

10. Restless Empire: A Historical Atlas of Russia By Ian Barnes (Boston: Harvard University Press, 2015)

The collection of historic maps assembled by the veteran British historian Ian Barnes tells a visually captivating story of the millennium-long progress of the Russian state from a small collection of city-states on the fringes of the civilized world into the world's largest empire, stretching from Armenia to Alaska, at its peak in the 19th century.

The maps are supplemented with commentary and illustrations that tell two kinds of stories - those that will be of interest to Russian history buffs only, and those that will be directly relevant to the present political moment, including the status of Crimea and the role of Ukraine in the creation of the Russian state.  

A picture is worth a thousand words, and this book offers many rich and beautiful images that go a long way in providing the historic context for anyone who contemplates Russia's past, present or future.
 
 #26
Russia Beyond the Headlines/GODLITERATURY.RU
www.rbth.ru
December 25, 2015
What books caught Russia's imagination in 2015?
A list of 2015's top-selling books in Russia has been published.

RBC Style magazine has compiled a list of the most popular books of the year, based on sales figures provided by Russia's leading publishing houses.
 
Planet Water, a new book by Boris Akunin, took first place. It consists of three detective stories about Erast Fandorin, a Russian Sherlock Holmes figure who is already famous in Russia. The book, which is set at the start of the 20th century, sold 168,000 copies across the country.
 
Shantaram by Gregory David Roberts, came in second, contradicting the stereotype that people do not read long books anymore. The book relates the adventures of an Australian who has escaped from prison and sold 118,445 copies. The Russian translation was published in 2010, but interest remains high.
 
The Martian by Andy Weir sold 107,000 copies to take third place. The book was published in Russia in 2014 but only took off following the release of Ridley Scott's film of the same name in mid-September 2015.
 
20th-century classics such as 1984 by George Orwell and To Kill a Mockingbird by Harper Lee also made the top ten, as did Dmitry Glukhovsky's Metro-2035, the sequel to his fantastic novel Metro-2033.
 
Another weighty tome took tenth place: Russians bought 65,285 copies of Donna Tartt's The Goldfinch.

 
 #27
www.pravdareport.com
December 22, 2015
Western experts: Russia wants to destroy our empire of goodness
By Alexander Chausov

Bloomberg publication has recently published several geopolitical forecasts for the near future. The forecasts include unfavorable scenarios for the United States. In some of them, Russia takes the leading geopolitical position in the world and resolves the crises in the EU and in the Middle East.
 
In one of the forecasts, Putin winds Obama around his finger. The international coalition wins complete victory over the Islamic State. The current wave of migrants to Europe comes to naught. Europe lifts sanctions against Russia, and Putin becomes No. 1 peacemaker on the planet. Angela Merkel restores her authority as the leader of both Germany and the European Union.

A directly opposite scenario is seen unfavorable for the United States. When flows of refugees never stop and the coalition plunges deeper into the war again these Lenox State in the Middle East, when the followers of the French National Front and euroskeptics win in France, and the European Union collapses as a geopolitical alliance - all this is beneficial for the United States.
 
There are two aspects that are important for Russia here. The first one is the fear of American political and media elites in front of Putin and Putin's Russia. It's not even about the Russian army and the Russian political power - it's about the effect of suddenness. Until recently, many people in the West believed that Russia was a weak country with a weak economy and corrupt political system that may collapse as a result of even a small crisis. The maximum that Russia can hope for is to play the role of a gas station or a regional leader at least.
For many years, Western people believed that Russia can not make any progress in foreign policy, nor can it express its own sovereignty and defend its positions. Every time it happens, leading Western publications are so shocked that they put Russian President Putin on top of their rankings of international policy-makers.  

 However, Putin works as any statesman should work on an international level. On the basis of international law Russia defends its sovereignty and national interests. However, our American partners are so used to their own exceptionalism that they cannot even accept the idea that someone else can use their own rhetoric or show political resistance to them.
All these issues reflect the modern political structure of the world. As for the above-mentioned forecasts for the development of political situation in Europe and the Middle East, it appears that American experts recognize the helplessness of the US foreign politics. It was NATO military operations in the Middle East that triggered the current refugee crisis in Europe. If nothing changes in the near future, the United States will lose the fight. Even if it does change, the White House will not have anything to celebrate.
 
These are the results of the policy of the US State Department for the recent years. Sooner or later, America was supposed to come across an obstacle that it would not be able to overcome,  and now it seems that the moment has come. Interestingly, Russia either remains on its current positions or strengthens them in both scenarios.
If you read what Western media write about Russia, one may see that Western experts have a game approach to Russia and Russian politics. In their eyes, Russia is putting enormous pressure on the West as if it is a goal for Russian President Putin to topple the West. Most Western experts see Russia as the country that  attacks their "empire of goodness."
As a matter fact, Russia's current confrontation with United States is one of the measures that the country was forced to take. Russia does not want to end America's domination in the world. Russia only wants to ensure its own security, stability and economic profits. We do not want to start confrontation with the United States for the purpose of confrontation.

Russia's recent achievements in foreign policy come as a shock for American elites. The Americans approach Russia's successes absolutely differently. This is a good thing because the less the Americans understand what we do, the more chances we have to achieve our global objectives.

American experts need to think more about the failure of the "flawless" political system of the United States. If they find the reason, they may do something to fix it. Yet, this is not going to happen.


 
 #28
Washington Post
December 26, 2015
Editorial
China and Russia's Orwellian attacks on Internet freedom

LAST WEEK brought a positively Orwellian moment to the debate about Internet freedom. Chinese President Xi Jinping spoke at a state-organized Internet conference in Wuzhen, in Zhejiang province, where he was once party secretary. Mr. Xi declared, "As in the real world, freedom and order are both necessary in cyberspace." He added, "Freedom is what order is meant for, and order is the guarantee of freedom." These slogans are more than just propaganda from the leader of a country with the world's largest Internet censorship operation. Behind them lurks a dangerous ambition.

In China today, there is no Internet "freedom," if the word means freedom to visit Facebook, Google or other vast stores of online information that are blocked off by the authorities and their Great Firewall. On vibrant social media, China's 670 million online users can often find a way to be heard, if fleetingly, but a sustained challenge to the ruling power of the Communist Party is invariably squelched. Mr. Xi talking about "freedom" is like saying black is white. His words were live-tweeted by Xinhua, China's official news agency, and posted on YouTube, even though Twitter and YouTube are blocked for most people in China.

The real danger in Mr. Xi's remarks is the word "order," because he envisions not only politeness but also obedience. In China, the party-state sets the rules that determine what Internet users can see and say, and they have been tightened recently. Having established "order" within the walls of China, Mr. Xi has increasingly promoted it as a model of "Internet sovereignty" for the rest of the world, saying that each nation should set its own rules for the Internet within its boundaries.

Russia has been heading in the same direction for several years as President Vladimir Putin attempts to extinguish any serious opposition. The security services in Russia have direct access to the Internet through a physical monitoring system. In July 2014, Russia adopted a law requiring that citizens' data be stored on Russian soil and, therefore, subject to monitoring. This is a challenge to Facebook, which has tens of millions of users in Russia, as well as to other tech giants such as Apple and Google. Compliance with the Russian law has not been enforced yet, but there are reports that it may begin in January. The companies should resist the effort. An online petition drive directed at the leaders of the tech companies has garnered more than 42,000 signatures with the appeal "Don't move personal data to Russia!"

China and Russia have both attempted in recent years to nudge global Internet governance toward their misguided "sovereignty" model, so far without a lot of success. But as Mr. Xi's speech suggests, they haven't given up. And they won't. The digital revolution has delivered a truly global information superhighway. This powerful and remarkable invention must not be squandered or put in the hands of those who would use it to stifle free speech, freedom of association and human rights.
 
 #29
Rossiyskaya Gazeta
November 24, 2015
Russian paper carries senior judge's article on confronting global terrorism
Valeriy Zorkin, chairman of the Constitutional Court: "Law against chaos - Valeriy Zorkin: Chaos instils such terror in the masses that they are willing to accept even a totalitarian order capable of curbing chaos"

The series of recent catastrophic terrorist acts in the Sinai, Paris, and in Mali have shown - moreover with the utmost clarity - that the modern world is very fragile. That it is possible to try to blow up this world, using certain means - first and foremost terror, but not only that. That if such a fragile world can be blown up, then the chaos that theorists have long been talking about from different angles will prove not to be a theoretical abstraction but a rude reality. A reality quite capable of devouring everything that seems valuable and unquestionable, that is, inextricable from the world in which we live.

And in actual fact, neither human rights can be taken from the world in which we live, nor the norms of humanity, nor tolerance understood as a reasonable indulgence and willingness to engage in dialogue, nor rationality - these, it would seem, are the irrevocable achievement of recent centuries. Nor, finally, the legal culture, to the improvement of which we have devoted our lives. And which we consider to be the very important framework around which the entire stable structure of the modern world is constructed.

The trouble is that we can simply wake up one day and realize that the world in which we lived no longer exists. But there is a completely different world denying everything that I have listed above. A world, in which stability and order have been abolished. A world in which peoples and states survive in waves of an all-embracing chaos, about which the great Russian poet Aleksandr Blok wrote the prophetic lines:

"The frenzied dragon did not guard,

Gehenna did not burn below us,

The waves of time submerged us,

And our fate was momentary."

Have there not been precedents that could be repeated? Have people not once before woken up and, looking out of the window, suddenly discovered that the world in which they were used to living no longer existed?

Once again we are faced with the possibility of such a chaos as reality. Several such challenges and several "symmetrical" responses to these challenges - and Europe will turn into a realm of chaos, torn apart by nationalist and religious passions. And after Europe, the chaos will spread to the remaining regions of the planet. Which legal problems are placed on the agenda by the real possibility, first of macro-regional, and then of global chaos? The conceptual and simultaneously professional-legal comprehension of the experience of the last quarter of a century is relevant today as never before. Since the threat of chaos has arisen within what has been seething and bubbling all this time.

Fascist barbarity and "controlled chaos"

The modern world has clashed not so much with an Islamic revolt against an arrangement for human life imposed upon this world. The modern world has clashed with a particular kind of archaic barbarity. People sometimes try to call it Islamic, adding the obligatory epithets "extremist", "radical", "terrorist", and so on. But it is not Islam. It is Islamism - a fascist barbarity, which just covers itself in the clothing of genuine Islam, but has essentially nothing to do with Islam. Moreover, enlightened, traditional Islam is being attacked by this archaic, misanthropic Islam with particular relentlessness. After all, it is not for nothing that the notorious "Islamic State"* threatens to destroy not only Sufi Islamic monuments and relics, but also the Kaaba, which is sacred for all Muslims.

And yet, we cannot reduce the problem even to an archaic Islamist challenge. Because in actual fact, all kinds of archaic elements are invading our lives together with the chaos. Both concealed behind the masks of various classical religions, and directly showing their sinister regressive grins.

But how did this occur? The most important thing here, in my view, is to look carefully at the supposedly good idea of "forced democracy", with the help of foreign military invasions. And to interpret the accumulated experience of attempts to implement this idea. After all, it is in this experience that we need to seek something that enables the incursion of chaos, something that lets the genies of Islamic or other archaicized or archaicizing barbarity out of the bottle.

It is already obvious now that the so-called "forced democratization", carried out through external intervention - of the secular structures of an "authoritarian regime" in the developing countries in general and in the Islamic countries in particular - leads to an effective regression of the political and state-legal system to the stage of pre-state existence. And to the collapse of sociality into endless conflicts on an ethno-tribal and sub-faith basis, and to society splitting into irreconcilable pre-state tribes and a "war of everyone against everyone". It is this social-state regression that awakens and summons up these genies of ancient barbarity, which had been suppressed but slumbered in the depths of the secular state destroyed by external intervention.

The experience of almost 15 years of such "democratization" has shown the inevitability of its disastrous consequences. And after 15 years of such experience, the world has every reason to think that it is not a matter of "democratic idealism" but of the deliberate creation of so-called "controlled chaos".

We cannot suspect the circles of highly-educated and very well-informed individuals taking strategic decisions in America of socio-political naivety. And accordingly, of hoping that the complicated societies of countries with their own ancient histories and cultures that are "democratized" in this way will go down a historical path that it took the Western societies thousands of years to cover in a matter of a few years. Or of hoping that a section of the society of these countries would not respond by turning to their own socio-cultural antiquity as a means of resisting "the intolerable newness", which was also being crudely imposed from the outside.

The events of recent years in Syria, Iraq, Libya, Egypt, Yemen, Nigeria, Mali, and also the recent terrorist acts in the Sinai and in Paris, show that the genie of the so-called "Islamic State", summoned from the abyss "by the democratic interventions", has acquired truly global ambitions. And that it is no longer merely making verbal statements about the spread of the Islamic terrorist caliphate, far from just to the countries of Islam. And that this genie is quite capable - if the appropriate immediate opposition is not provided to it - of spreading chaos, regression, and medieval archaism to other regions of the world.

At the same, we cannot fail to understand that in the guise of this "caliphate" we are dealing with an extremely ambitious enemy, who is already presenting to the world a considerable number of features of an alternative - terrorist and barbaric - statehood. Including not only a "trophy" economy of trading in stolen oil, stealing from the population, selling historical artefacts on world black markets, and the slave trade, but also its own tax system, its own judiciary, its own armed forces, police, territorial administrations, electronic and printed media, religious schools, hospitals, up to and including its own rubbish collection services.

Moreover, we cannot fail to realize that the newly-emerged "caliphate" also has the powerful tool of influence of an archaic but strong ideological fervour plus quite modern network mechanisms for transmitting this fervour globally. And we are seeing how the newly emerged "caliphate" is not only recruiting a multitude of supporters from various regions on the planet but is rapidly drawing into its orbit of influence the majority of regional terrorist Islamic organizations in various countries - some of Jabhat al-Nusra [Al-Nusrah Front] in Syria, some of the Taleban in Afghanistan, Boko Haram in Nigeria, and so on.

So the world has found itself facing a very powerful and global challenge. A challenge that requires urgent recognition and a global response. We - from our own professional point of view - do not have the right to fail to ask the question of why such a threat has proven to be possible.

Crisis of international law

The collapse of the USSR and the cessation of the confrontation between the West and the Soviet military-political blocs created the phenomenon of a unipolar world headed by America.

And it had already become clear by the 1990s that America, led by NATO, had started to more and more actively promote its interests for global hegemony in the international arena, in circumvention of the UN - the only legitimate body for solving international problems. I remind you that the NATO decision to bomb Serbia in 1999 was taken without a resolution by the UN Security Council. Just as lawless were the NATO war in Iraq in 2003, and the war by a coalition of NATO and a number of Arab states against Libya in 2011. The illegal process of the external neutralization of the elected ruling regime began four years ago in Syria.

What in these circumstances should and could the UN have done? The accusations against the UN concerning the ineffectiveness of its mechanisms are largely valid. The spirit of the ten basic principles of international law set out in the UN Charter, the 1970 Declaration of the Principles of International Law, and the 1975 Helsinki Final Act of the Conference on Security and Cooperation in Europe, has still to this day not been backed up by the letter of precise and consistent legal stipulations. And that this constantly causes legal conflicts between opposing interpretations of the system of fundamental principles of international law.

So the stability of the world is to a huge extent held hostage to the ability of one of the parties in a conflict to "push through" their own interpretation as the only correct one.

But that is not everything either. The world community has still, over three decades of regular but fruitless attempts, not created fully-fledged legal tools to curb the challenge of terrorism that has acquired a global reach. There is still no fundamental document on fighting international terrorism capable of providing a single regulatory framework for this struggle. Although it has long been clear that we cannot limit ourselves to any precise national legislation in the fight against this global challenge.

Since there is no such fundamental document, international practice more and more extensively uses interpretations of international law that are advantageous to one of the parties and double standards in the sphere of evaluating terrorism. And we have been seeing for a long time how competing powers under the banner of supporting the fight for "national self-determination", "democracy", or "human rights", use terrorism as a tool for an "undeclared war" against geopolitical and geo-economic competitors.

A very important factor that to a huge extent defines the current crisis in international law is the new role of the mass media in the global world. The practice of interpretations that incorporate disinformation and evaluation, which experts have long been calling "information wars", is more and more persistently displacing international law.

But the sphere of this kind of "interpretation" is a "two-way street". The organizers and leaders of the largest Islamic terrorist structures and, first and foremost, the so-called "Islamic State", which claims to be global in nature, understand very well both the weaknesses of the existing system of international law and its capacities for "subjective interpretations". And they actively use these weaknesses and these capacities both for attracting supporters and recruiting fighters, and to justify their own terror.

As a result, an attack on international law is under way from both sides. Through the illegal actions of the largest countries in the world, denying the spirit and letter of the UN's legal stipulations and replacing these stipulations with their own interpretations of what is just and unjust. And through the Islamic terrorists, entering the world "space of interpretations" not only with their ideology of archaic medieval "justice", but also with the barbaric practices of mass indignities, enslavement and murders.

Meanwhile, the lack of clarity of a number of international laws, which opens up the possibility of their politically dangerous interpretation and impedes appropriate legal responses by the world community to global challenges, including terrorism, has already long been clear. Some countries are seeking to add principles that are even vaguer to the initial principles and norms of the UN - and even more accessible to arbitrary interpretations and use in information wars - such as the need for "humanitarian interventions" and "responsibilities to defend".

Ever louder voices are heard affirming that the UN is an organization that is altogether incapable of work. And that in the new global "post-Yalta" world, it is time to abandon the obsolete principles of the UN Charter. Including the principles of the inviolability of borders and state sovereignty.

Many supporters of such a position state that the unstoppable process of globalization requires the creation of a new single global legal system, in which international law will have the absolute priority over national legal norms and over national legal systems as a whole, including the constitution. In its most radical form, there is talk of creating a World State, a World Government, a World Court, a World Police etc.

I remind you that the UN is the United Nations Organization, and that it was created on the basis of the idea of United Nations and Joint Sovereignties of sovereign states with equal rights for the purposes of creating a stable, peaceful, and developing global community. And that in the world, apart from the community of sovereign nation states, there are no and there are no plans for legal entities, which would possess legitimate powers for establishing world law.

Hence it follows that it is impossible now to create any legitimate organization establishing and enforcing international law that is fundamentally different to the UN in terms of its form of organization. And this means that the only possibility for fundamentally improving the system of international law and international law-enforcement is considered and effective reforms of the legal norms of the UN. Reforms ruling out clashes between the basic principles of the UN Charter and the possibility of arbitrary and random interpretations encroaching on the spheres they regulate.

Risks to national law and order

Despite the processes of globalization, we still live in a world where citizens of the different states are faced with a multitude of divergent cultural, social and religious values.

Each value system has its own set of moral norms that has developed historically and is, as a rule, based on a centuries-old religious foundation (and is rooted in the culture). This set of norms is accepted and supported (via family and social upbringing, education, and social and state cultural policy) by the majority of citizens of this state. And deviation from this set of norms is perceived and rejected by the mass consciousness as "corrupting morals".

In connection with this, I remind you that legal norms have in fact always in human history just legally documented the fundamental values and moral principles of the society for which the legislation was intended. Humanity simply does not know of any other ways of creating stable and effective legal systems.

Here, it seems appropriate to me to recall the position of the great philosopher Immanuel Kant who wrote that nature, which conceived of man as a rational being, had a plan to bring him to achieve a perfect civil association of the human race on the basis of the law. At the same time, Kant spoke of the importance of an individual "moral law within" but he stressed that "man's natural inclinations, directed towards the use of his reason, develop fully not in the individual but in the genus".

The classical liberalism of the modern West as a whole adhered to such a Kantian view of human (including legal) development, at the centre of which were the concepts of the law-based society and the law-based state. It was on this basis that the political philosophy of democracy was also developed and the theoretical principles of legal doctrines. Including the idea of freedom as "man's dependence only on the law" (Voltaire), and also the very important stipulation that man is only free in his actions to the extent that they do not impinge upon the freedom of another person.

Western political theory and practice of recent decades is very substantially shifting the emphasis in the sphere of ideas about human rights and freedoms. In a number of developed countries in Europe people have long been talking about how the protection of the rights of minorities should be the main task of the legal institutions governing the life of society. And the main content of modern regulatory innovations should be protecting minorities from the infringement of their rights. Including the rights of minorities to promote their own values, norms, and way of living in society. Such a policy of creating legal innovations reveals two mutually conflicting trends.

The first trend is the protection of minorities, who the social majority consider to be communities "of corrupt morals", including, and in particular, sexual minorities. At the same time, it turns out that there is protection both for sexual freedom, and the freedom of choice of gender orientation, and even for the freedom to promote among children not only these "freedoms" but also paedophilia. It is obvious that such "legal innovations" cannot help but be perceived by the European social majority, who have kept their traditional values and moral and ethical orientations, rooted in Christian culture, as catastrophic signs of "moral corruption", already at the level of state power.

The second trend is attempts to provide priority protection for the rights of the ethno-religious minorities, of African, Asian etc migrants, within the framework of a policy of "multi-culturalism".

It is impossible not to be aware that the clash between these trends in a single society cannot help but cause fundamental ethical and then also socio-political conflicts both between these minorities and the social majority, and between two groups of "protected" minorities.

Devout Muslims cannot fully integrate into a society that they consider to be profoundly amoral. For this reason among others, they try to protect themselves and their children from sin by shutting themselves up in voluntary local Islamic ghettos. The same ghettos, which while rejecting the wickedness of the external environment of the state that accepted them, become a fertile oasis for the promotion of radical Islamic preachers and the recruitment of personnel for terrorist barbarity.

Of course, the "law-abiding" section of the indigenous moral and ethical majority are willing to tolerate such legal innovations. But the other not so law-abiding section of the same social majority inevitably responds to such regulatory "liberalization" with an aggressive rejection of minorities. Including with violent attacks on gay clubs and beating up the participants in gay parades. Increasing xenophobia and arson attacks on homes in Muslim ghettos. With the political renaissance of extreme right-wing parties and the emergence of influential groups with radical, including neo-fascist ideologies in national and international parliaments.

It is obvious that no "multiculturalism" can withstand such a hellish mixture of irreconcilable moral and ethical norms. The totality of these processes, to a very large extent linked to the "liberalizing" legal innovations, is inevitably making Europe extremely insecure from the point of socio-political unity and the stability of the rule of law.

This was shown particularly clearly by the European-wide political crisis caused by the sudden influx starting this summer of hundreds of thousands of Muslim refugees from Syria, Iraq, Afghanistan, Pakistan, and the countries of Africa. Many analysts describe this crisis as "political chaos", threatening the disintegration of the European Union, and a considerable number of people with evil tongues scathingly call it the "Kidnapping of Europe". And it is still completely unknown whether such a Europe, which has now been drawn out of its usual sense of safe prosperity by the acts of terrorism in Paris, will be able to overcome the chaos and restore unity, not under xenophobic and right-wing-extremist but under humanistic, law-based banners.

I stress that Europe is just an example. What I have said above does not only apply to Europe. This bell is not only tolling for Europe. Similar trends for shifting legal systems towards abandoning the registration of the national moral norms arising from history and culture have already been observed for a long time in almost all the regions of the world, including Russia. And they create similar risks for the stability of society and socio-political and state-legal stability.

What can be done?

Tactics. Firstly, it needs to be realized that the challenge of barbaric terrorist Islamism is global and that the response to it must be global and without delay.

Today's world community is facing not only acute conflicts of interests, but also a profound deficit of mutual trust. Nevertheless, we need to urgently reach agreement on joint coordinated actions capable of crushing the barbaric Islamic terror in its current "ancestral lair" in Syria and Iraq.

Faced with a global threat of this magnitude, all those targeted by this threat throughout the world can and must -for the sake of their own survival and to prevent global chaos -demonstrate a solidarity that is characteristic even of wild animals in conditions of drought and that biologists call a "water truce". That is, quickly create a global anti-terrorist coalition, obtain a broad but specific mandate from the UN Security Council for its operation, and put this coalition into action.

Only such an approach towards the problem will enable coordinated actions against the "Islamic State" and its terrorist allies to be urgently planned and rapidly developed.

Even the most successful operations in Syria and Iraq will not lead to a rapid and full neutralization of the forces of the newly-emerged "Caliphatism". This global evil has already created network structures and "sleeper cells" in many regions of the world, via which Islamic militants will "flow" from their Syrian-Iraqi centre through to other points where their recruitment and terrorist activities will be applied. And they will continue their actions to introduce "barbarity" and chaos throughout the world.

Accordingly, neutralizing the forces of radical-Islamic terrorist barbarity means not a short operation but quite a lengthy war, the final success of which is impossible without the constant, committed and active participation of all the members of the global antiterrorist coalition.

Secondly, the approach of national states towards ensuring security on their territories needs to be revised substantially. Including at the legislative level.

In connection with this, I must draw attention to the false nature of the dilemma, which leading world politicians and experts are currently often proposing to their citizens. This is the dilemma of "the need to choose between freedom and security".

I stress: such a dilemma is meaningless logically and legally. Meaningless simply because security is a fundamental human freedom. It is an absolute imperative, always. And especially now in the context of the terrorist war declared on the world. In these conditions, the key and the priority obligation of the state is to guarantee its citizens the main human freedoms, that is the right to life and security. The particular significance of this priority in conditions of war determines both possible (partial and proportionate) restrictions on other freedoms and the necessary (proportionate and sufficient) transformations of the legal system towards a more marked "military" severity.

People often say now that a risk arises under the pretext of fighting terrorism that human rights will be forgotten. But a democratic state - and no war should be a cause for the abandonment of democracy - must be able to defend itself and society from any threats. Here I must stress that all human rights are real and valid only if there are adequate safeguards and effective protection by the institutions of a competent and strong state. Attempts to deny or even more to sever the link between a strong state and real human rights and freedoms are pointless and dangerous for liberty.

I will explain once again why I am talking about the need for the severity of legal stipulations in the current conditions. The sphere of mass morale in the majority of those countries, which have been subjected to the global terrorism, is in profound crisis. The key factor in this crisis, using Kant's words, is the weakening and the lack of "a moral law within".

This lack in the conditions of the war declared on the world by terrorist barbarity creates serious risks of chaos being introduced to society and of social disaster. And this lack can only be compensated for by quite flexible and simultaneously quiet strict legal regulators. Here, I consider it appropriate to cite the well-known religious maxim: "If there is no fear of God, then fear of man is good".

Strategy. I read with interest the recent statement by American presidential candidate Bernie Sanders calling for the creation of a global anti-terrorist alliance made up of the NATO countries, Russia, and the Arab League, which Sanders suggested calling "NATO-2.0".

However, I cannot help but note, firstly, that Sanders did not include in this future alliance either China or India, or Iran or Syria, or any of the countries of Africa or Latin America. And that, secondly, at the moment Sanders is only a candidate and not the president of America. And that at the moment the American media, and political America as a whole, are continuing and strengthening their information war of falsified interpretations of reality against Russia.

This means it is most likely that the anti-terrorist coalition that I spoke about earlier, if it arises in a situation where the terrorist threat is growing and the leading countries concerned are aware of this, then it is only for a short time and in rather ambiguous and non-strategic formats.

This shows that we cannot avoid a reform of the UN's legal basis, the need for which I have spoken and written about many times. Here we need first and foremost to achieve strict and coherent legal wording for the fundamental principles of the UN Charter, that is, one excluding legal clashes and "free" and randomized interpretations. And also to draw up and adopt - at the level of a separate convention - a strict and comprehensive international legal document on the fight against terrorism.

Further, the elite of countries whose social majorities profess Islam should play a very important role in opposing Islamist terrorism. This is the case because terrorist caliphate terrorism is aimed first and foremost at ideological, political, and armed aggression against these countries and at their seizure. And this is the case because it is the spiritual elite of these countries who have the necessary religious and moral authority for an ideological war against barbaric Islamism.

But for the politics of Muslim countries to take such a turn, their political class must, firstly, become aware of the offensive of barbaric Caliphatism as an existential and moral threat. And set aside their sub-faith differences. And secondly, this political class must believe that transformations really are occurring in international law and law-enforcement, which will in the future exclude "democratizing" foreign intervention in the fate of Muslim countries in the spirit of constructing "controlled chaos".

Finally, I am convinced that the erosion of the "moral law within us" in the majority of developed countries, since it is documented in an expanding body of relevant legal innovations supporting the "corruption of morals", is becoming no longer a potential but a quite real threat to the existence of a united humanity.

I, as a lawyer, understand very well that a social-state or international system, stagnating in its complacent immutability, is doomed to rot and die. And that legal innovation in a rapidly developing world is urgently needed.

But at the same time, I understand no less well that there are different legal innovations. And that in this innovation it is necessary to accurately determine the difference between expedient innovation and the risks of creating catastrophic ruptures between the law and the moral and ethical norms rooted in the social majority. Including mass ideas about virtue and sin, good and evil, and what is just and unjust.

I know that if the flow of legal innovations creates such ruptures, society does not only steadily weaken but also almost inevitably plunges into chaos. Into a chaos of discord, wars, and revolutions. And we all know from world history that such chaos inspires such horror in the social masses that these masses are willing to accept any - even an extremely totalitarian - order, which will be capable of curbing the chaos.

I connection with this, I cannot help but recall the historical lesson of Weimar Germany. Where the increasing gap between the super-crisis social reality and the extremely "free" legal norms that ignored this reality plunged the country into state, political, economic and social chaos. The same chaos, and the horror of which, brought the Nazi party and Hitler to power -moreover in an entirely democratic way.

But even if there is no question of a threat of the totalitarian degeneration of society and the state, chaos will in the final analysis inevitably have to be subdued. To be subdued with stricter and more painful legal measures the deeper the "corruption of morals" has gone and the more extensive the flow of "liberating" legislative and regulatory innovations that caused this chaos was.

This implies a clear conclusion in relation to the strategy for developing national legal systems. The gaps between mass social perceptions of what is good, proper and fair and the new legal standards must not been deepened. The trends for transformations of the "moral law within us", which the social majority categorically rejects, must not be supported by legal measures that contradict the basic values and moral and ethical stipulations of the social majority.

*IS - Terrorist organization banned in the Russian Federation.


 
 
#30
The Economist
December 19, 2015
Travel in Russia
The gauge of history
A train journey north shows how Russia has evolved-and regressed
ON THE MOSCOW-ARCHANGEL LINE

AT TWILIGHT on a clear early-autumn evening, Moscow's Yaroslavsky railway station is an alluring place: all floodlit modernist turrets, gaudy tiles, folkloric decorations and a fairy-tale castle gate, like a triumphal arch, opening the way to the north. The playful station (vokzal in Russian) reflects the sparkling origin of the word in London's Vauxhall, the 17th-century amusement gardens beside the Thames. Russia's first railway line, built in 1837 by Franz von Gerstner, a Bohemian engineer, started in St Petersburg and ended in Pavlovsk, an English-style summer retreat for the Russian aristocracy.

Yaroslavsky station was designed by Fyodor Shekhtel, Russia's finest architect, in the art-nouveau style. He modelled it on a wooden pavilion he had built for the International Exhibition in Glasgow in 1901. The station opened a year later when the line was extended all the way to Archangel, the first port in the Russian empire to conduct trade with England in the 16th century, and an entry point for early travellers to Russia from Europe. Around the same time, Shekhtel was decorating the Moscow Art Theatre, where Anton Chekhov's plays were staged. In that era, the Russian intelligentsia considered itself an integral part of Europe. Now, Russia has seldom seemed farther away.

The journey from Moscow to Archangel is 1,134km (705 miles; see map). It takes more than a day: plenty of time for conversation, reading and reflection. The four-berth compartment is warm and cosy. The rhythm of the train is accompanied by the calming sound of tea glasses clinking on the table of the compartment. Tea is served by Elena, the plump attendant, whose life is entirely the train. "We live on the train for 15 days at a time. We sleep on the train, eat on the train, wash our clothes on the train. We meet and marry people who work on the train and when we get stressed, we knit," she says. She has been doing the job for more than 20 years.

Railways cut deep through the Russian psyche, and train journeys are woven into the nation's cultural life. They tell its story in ways large and small. A kink in the railway line from Moscow to St Petersburg, for example, is where-or so it is said-Tsar Nicholas I's finger got in the way of his ruler when he drew a line between the cities. Whatever the truth of that, over the centuries railways have represented the will of an authoritarian ruler, the supremacy of state power, the boom of private capital, the modernisation of the country, the terror of Stalinism and the mania for ruinous grand projects of Soviet times. All Russian history is there.

Soldiers, civilisers, poets

Railways are often referred to in Russian as "threads". They tie the country together and, in previous decades, civilised it. Vissarion Belinsky, an influential 19th-century thinker, found a strange consolation in watching the first railway being built. "I stand and watch, and it gives my heart some relief: at last we too will have one railway," he said. At last, he felt, Russia would be like Europe.

Trains propelled the country into the modern age, breaking social boundaries, spreading culture and making the population more mobile. Sergei Witte, the railway chief from the time of Alexander III, saw trains as "social mixers". "A railway", he wrote, "is a ferment that causes cultural brewing, and even if it encounters a completely wild population on its way, it can quickly civilise it to the necessary level." Towns that were bypassed by the railway line were destined to turn into backwaters.

These bringers of modernity, like many others, had military roots. One of the first lines from Warsaw (then part of the Russian empire) to the border of Austria and Hungary, its strong ally, was used by Nicholas I to send Russian troops to help suppress a Hungarian rebellion in 1848. Lenin, who arrived from Germany by train to lead the Bolshevik revolution, considered railway stations, along with telegraphs, as major targets to be seized. After the revolution, armoured trains were used in the civil war by both sides: Trotsky turned one into his mobile headquarters. It is partly for defensive reasons, one theory goes, that Russian railway tracks have a wider gauge than European ones: whereas Russia could transport its troops to its borders, a train with foreign troops would not be able to roll into Russia. (To this day, a train journey from Russia to Europe involves a change of wheels.)

The job of railways chief was one of the most important in the country. Witte was also chairman of the Russian council of ministers under Nicholas II; Trotsky, who held the job after the revolution, was also in charge of the Red Army. Nikolai Aksenenko, the railways chief under Boris Yeltsin, was considered as a presidential candidate. Today the Russian railway monopoly, which employs 800,000 people, remains a semi-military organisation. "We have military ranks and are not allowed to go on strike," says Elena, the train attendant. "If a war starts, we will be the first to be mobilised." In the train's strict hierarchy its "chief" travels in a special carriage, which is called his "headquarters".

What makes trains weigh so heavily on Russia's consciousness is the sheer size of the land mass. European railway journeys, with their short distances between stations and the constant sight of human life outside the window, leave little time or space for thought or soul-searching. In Russia, however, train journeys are measured in days and nights rather than hours. It takes six days to travel from Moscow to Vladivostok, a distance of more than 9,000km. All one sees is forest, occasionally interrupted by a clearing or uncultivated fields cloaked, in winter, with snow. You can go for hours, sometimes days, without seeing a settlement or a soul. "In western Europe people die because their space is cramped and suffocating," Chekhov wrote in a letter. "In Russia they die because the space is an endless expanse."

As a result, trains rumble through Russian literature and poetry with remarkable frequency. Rail travel occupies the same place in Russian culture as the road trip in America. Tolstoy's Anna Karenina meets Vronsky at a railway station at the beginning of the novel and ends her life under a train. (Tolstoy, too, happened to die at a station.) In Boris Pasternak's "Doctor Zhivago", the comfortable, softly upholstered trains at the beginning of the novel give way to the freight trains in which Zhivago and his wife escape a Moscow devastated by revolution and civil war.

In "Moscow Circles", a late Soviet prose poem, an alcoholic intellectual reflects on history, philosophy and love as he travels by elektrichka-a suburban train-from Moscow to the provincial town of Petushki. The town becomes a Utopia "where birds never stop singing and jasmine never stops blossoming". (In the end Venichka, the narrator, oversleeps his stop and wakes up heading back to Moscow, where a gang of thugs murder him.)

The vast horizon outside the window contrasts with the confined space of the compartment, which makes the perfect environment for long conversations between strangers-a device widely used by Russian novelists. In Tolstoy's "The Kreutzer Sonata", the main character tells fellow passengers on the train the story of how he came to murder his wife. The Russian philosopher Fyodor Stepun, exiled after the revolution, noted how different Russian carriages are from those in western Europe, "both in the sound of the wheels and in the domestic atmosphere that reigns in them". His trains turned into homes, with a coal-fired furnace providing tea at any time of the day or night. "An hour or two into a journey, a lively discussion is heard from every compartment. On the white tablecloths appetising food is laid out-golden roasted poultry, thin pieces of pale veal, white pots of black caviar..." Sadly, the modern restaurant car features tables with soiled blue cloths, where a drunken waiter serves a piece of rubber chicken and mushrooms drowning in sour cream and cheese.

A line to freedom

The other people in the compartment, a young couple from Archangel with a four-year-old child, strike up a conversation almost without prompting. Vladimir, who works in a shipyard, starts by talking about injustice and corruption. Someone has taken the money he paid for the repair of his car and vanished with it. A local policeman asked him for a bribe of 10,000 roubles ($150) before he would investigate. The conversation turns to local politics in Archangel. "We have everything we need to live well: fish, timber, furs. We could survive without Moscow. If we had a leader, we would go our own way," he reflects.

An hour into the journey, the train passes through the village of Khotkovo. From here it is only a few miles to Abramtsevo, an estate once owned by Savva Mamontov, a 19th-century millionaire, philanthropist and railway tycoon who was responsible for building the line to Archangel under concession from the government. Mamontov was born in 1841 in western Siberia, one of nine children of the rich merchant who built the first part of the northern railway line from Moscow to Yaroslavl. He belonged to the new elite which, by building social and cultural institutions, came to transform Russia into a vibrant European country: not just by copying European ways, but by uncovering in Russia the enormous potential that made it part of the continent in its own right.

After spending time in Milan researching the silk trade and taking singing lessons, Mamontov started a private opera in Moscow which presented Fyodor Chaliapin to the world and first performed Rimsky-Korsakov's "Snow Maiden". At home he composed and staged his own comedies for his family and friends, competing with another amateur from a rich merchant family-Konstantin Alekseev, better known as Stanislavsky, who transformed the art of acting. Stanislavsky wrote of Mamontov: "We, the children of the great fathers and creators of Russian life, tried to inherit from them the difficult art of being rich. To know how to spend money properly is a very great art." Mamontov was described as a Russian Medici-someone who created not just art, but the atmosphere in which it could flourish.

He turned Abramtsevo into an artists' colony where traditional Russian themes and folk motifs flourished. The nation's finest painters, including Viktor Vasnetsov, Mikhail Vrubel and Valentin Serov-all sharing an interest in the subtle beauties of Russian antiquity-flocked to his estate, which nestled in a landscape of birch and pine trees with a winding river in the distance. Vasnetsov designed a small family church in Abramtsevo, a tribute to the spirit of artistic friendship that reigned around Mamontov. The artists who developed Russian themes in Abramtsevo were no less European than William Morris, who championed the Arts and Crafts Movement in Britain. Their quest for Russian antiquity and its European nature pointed them north, towards Archangel.

In the 1890s, a time of extraordinary cultural and economic vitality, Mamontov invested in the extension of the railway between Yaroslavl and Archangel.  He was part of an expedition led by Witte. They travelled by railway to the medieval Russian city of Vologda, sailed up-river to Archangel and then along the coast of Norway, and finally returned through Sweden and Finland. "Emperor Alexander III was fascinated by the Russian north, partly because the peasantry there represented a special, pure Russian type, pure as a result of blood and history," Witte wrote in his memoirs. The Russian north was never conquered by the Tatars and Mongols and was free of serfdom, allowing farmers to own their land. Of all its regions, the north of Russia retained the most vivid memories of life before the Tatar invasion in the 13th century, and remained culturally close to Scandinavia.
Savva Mamontov, philanthropist and railway magnate

Unlike the Trans-Siberian railway, a state project built from 1891 to 1916 that followed the track trodden by prisoners to Siberian exile, the privately financed railway to Archangel was a road to the free land, to private initiative, to the dream of Russia as akin to prosperous Norway. "The road to the north was a road to the Russian West," says Inna Solovyova, a historian. For Mamontov the road to Archangel was as much an artistic enterprise as a commercial one. He dreamed about the revival of the north, about its beauty and riches, and wanted paintings of Archangel by his friends from Abramtsevo to decorate Yaroslavsky station.

The enterprise ended badly for him, however.  In 1899, a year after the opening of the line, he was wrongly accused of embezzlement and arrested. His family and friends, including many Russian artists, came to his defence. He was acquitted, but his business was ruined.

A few hundred miles from Moscow, the train comes to a planned three-hour stop for track maintenance. All that is left of Mamontov's times is an elegant art-nouveau wooden station in Obozerskaya, where half the population of 5,000 work for the railway. A small statue of Lenin among birch trees, a wooden shack passing for a local hospital, a pile of rotting timber in a muddy backyard and a shop testify to the lasting legacy of the Soviet experiment that eliminated people like Mamontov as a class.

The railway was more than a physical concept. In the first years of Bolshevism trains became a metaphor for the nation's new life, roaring towards communism. "Our steam train is speeding ahead/Our next stop is the commune/We have no other path/We are armed with guns," ran a popular song. The engine itself was an image of the future and the modernity promised by the Bolsheviks. Brightly painted carriages covered with slogans contained printing presses, libraries of revolutionary literature and even film-projectors, to show political newsreels to the masses across the country. The carriages were a precursor to television, enabling propaganda to reach even the most remote parts of Russia.

Russian history was often viewed as a track that was fixed from past to future, says Andrei Zorin, a professor of Russian at Oxford University. This led thinkers over the decades to ponder where the country had taken a wrong turn. Petr Chaadaev, an early-19th-century intellectual, lamented that Russia had made no original contribution to world civilisation because it had erroneously absorbed its Christianity from Constantinople rather than Rome. His "philosophical letter" was printed at the time of the first railway construction. Slavophiles saw the root of all evil in the reforms of Peter the Great, while Westernisers blamed the invasion of Russia by the Tatars and Mongols.

Soviet thinkers, too, were preoccupied with the right and wrong turns of history. "If you get lost on a road, you don't have to retrace your steps; you can turn off at the next junction and find an alternative route. But if history is a railway line, you have to go all the way back in order to get on the right track," says Mr Zorin.

Much of the energy of Mikhail Gorbachev's 1980s perestroika generation was spent looking for that crucial point where the Soviet Union had set itself on the wrong course. For the communist reformers, that happened in 1968 when the Soviet Union invaded Czechoslovakia. (In 1968, however, it was Stalin's "great leap forward" of 1929 that was seen as the mistake; Russia had to go all the way back to Lenin's roots, it was argued, in order to advance.) When communism collapsed in 1990, historians went even further back, fixing their sights on the short-lived era of Russian capitalism in the 1900s as the point from which they had to pick up again, as if 70 years of Soviet rule could simply be ignored.

For Vladimir Putin and his intimates the wrong turn was perestroika itself, and the Soviet Union's subsequent collapse. It is fitting that for much of Mr Putin's time in office the Russian railway monopoly was headed by a former KGB colleague, Vladimir Yakunin, one of the regime's ideologues, who has ardently proclaimed Russia's "special way" and the damage globalisation can do to national identity. As a result, Mr Putin's men have traced their way back to the late Soviet period of isolation.

This does not bother Elena, the train attendant. "I've never been abroad and don't want to go. Why would I go there?" Although her own salary has dropped by a third as a result of the present economic crisis, she still backs Mr Putin, who "brought our country up from its knees". Stories about the fabulous wealth and vast country estates of Mr Putin's cronies do not bother her either. "Look at me," she says. "I am not allowed to sell vodka, but if you come and ask me quietly I will sell it to you."

The wrong track

After nearly 27 hours the train arrives in Archangel, a city in the delta of the Northern Dvina river through which the first European traders entered "Muscovy", and to which British ships delivered food as part of the northern convoys during the second world war. In the city's elegant 17th-century merchants' yard, overlooking the steely waters of the Dvina, an exhibition is dedicated to the 70th anniversary of the Soviet victory against the fascists. It bristles with Stalinist posters and slogans and makes no mention of the Allies. One prominent poster shows a Soviet rocket striking an "imperialist" in the face and declares that "Our borders are untouchable." Underneath is a quote from Stalin: "Those who try to attack our country will be dealt a deadly blow, to stop them sticking their snouts into our Soviet backyard."

The city that was meant to open Russia to the world now marks the frontier of an increasingly isolated country. The train terminates here, and then returns to Moscow.
 

 #31
Gallop.com
December 23, 2015
Ukrainians Disillusioned With Leadership
by Julie Ray
[Charts here http://www.gallup.com/poll/187931/ukrainians-disillusioned-leadership.aspx?version=print]

17% approve of Poroshenko's job performance
8% confident in their national government
5% say government doing enough to fight corruption

WASHINGTON, D.C. -- Despite signs last year that Ukraine's then-new president was starting to rebuild Ukrainians' trust in their leadership, President Petro Poroshenko is now less popular than his predecessor Viktor Yanukovych was before he was ousted. After more than a year in office, 17% of Ukrainians approve of the job that Poroshenko is doing. This approval rating is down sharply from 47% a few months after his election in May 2014.

Job Approval of Ukrainian Country Leaders

Poroshenko's low approval rating largely reflects Ukrainians' disenchantment with their leadership, which many feel has failed to deliver on what protesters demanded when they took to the streets two years ago. Since the Maidan revolution, Ukraine's economy has been in shambles, the Crimea region joined Russia and fighting between Ukrainian forces and pro-Russian separatists in the country's East has claimed more than 9,000 lives.

Although fighting between Ukrainian government forces and pro-Russian separatists has decreased recently, Gallup's interviews in Ukraine this year took place in July and August, as renewed fighting threatened the shaky truce. Gallup's polls excluded the Donetsk and Luhansk territories, where security continues to be an issue. The excluded areas account for approximately 2% of Ukraine's adult population.

Poroshenko is not popular in any region of Ukraine. He has the fewest fans in the country's Russian-leaning South and East, where one in 10 or fewer approve of the job he is doing. However, Poroshenko notably also has fewer admirers in the West and South and East than Yanukovych did before the revolution. In the Central and North regions (which include Kiev), roughly as many Ukrainians approve of Poroshenko now (21%) as approved of Yanukovych (20%) in 2013.

As low as Poroshenko's approval rating is, fewer Ukrainians have faith in their national government, which many have criticized for its slow pace of reform. Ukrainians' trust in their national government arguably did not have much room to fall, but the 8% who express confidence in their government is only one-third of what it was in 2014 (24%). It is also one of the lowest trust levels Gallup has recorded in Ukraine since 2006.

Ukrainians Have Little Confidence in Their Government

Some of this distrust stems from Ukrainians perceiving little progress in what U.S. Vice President Joe Biden referred to as the country's "historic battle against corruption" during his visit there earlier this month. Although the government has taken some steps to curb corruption, nearly nine in 10 Ukrainians (88%) say corruption is widespread in their government, and about eight in 10 (81%) see the same widespread problem in their country's businesses. Just 5% of Ukrainians say their government is doing enough to fight it -- similar to the 6% who said this in 2013 before the revolution.

To that effect, fewer Ukrainians now say their leadership is taking them in the right direction than before the revolution. Fewer than one in five (19%) say it is going in the right direction -- down from previous years -- and 65% say it is leading Ukraine in the wrong direction. But as disillusioned as many may be with their leadership, these are not the worst ratings on record. Amid economic turmoil in 2009, only 5% said leadership was headed in the right direction.

Bottom Line

Deep divisions among lawmakers in Ukraine's parliament erupted into a brawl on Dec. 11 -- raising questions about whether the fragile coalition government could fall. While a no-confidence vote in Ukraine's government has been tabled for now, many once-hopeful Ukrainians have already lost their confidence in their leadership, and this incident likely eroded it even further. For many Ukrainians, this may seem like an all too familiar situation -- Yanukovych too had high leadership approval at the start of his presidency, only to see it fall when he did not live up to expectations.

Survey Methods

Results are based on face-to-face interviews with 1,000 adults, aged 15 and older, conducted in July and August 2015 in Ukraine. For results based on the total sample of national adults, the margin of sampling error is �3.8 percentage points at the 95% confidence level. All reported margins of sampling error include computed design effects for weighting.

Gallup's polls in Ukraine in 2015 excluded the Crimea region, which is currently considered occupied territory, and areas of the Donetsk and Luhansk oblasts where security was an issue. The excluded areas account for approximately 2% of Ukraine's adult population.


 
 #32
http://gordonhahn.com
December 26, 2015
Revolution in Vain: Maidan Ukraine Two Years Later
By Gordon M. Hahn

Two years after the Maidan 'revolution of dignity' it is now clear that the Western-backed overthrow of Ukrainian President Viktor Yanukovych was not a revolution and that it was in vain-however one wishes to characterize it. True, as a mass demonstration movement, it could be categorized as a nascent revolution. The movement was opposed to corruption and authoritarianism and supported European integration.

Unfortunately, that nascent revolution was hijacked by neo-fascist elements that infiltrated the Maidan protests, overthrew the government, and then were themselves infiltrated and largely overcome by, and subordinated to several key oligarchs. Not surprisingly, corruption has increased rather than decreased, European integration has stalled, and authoritarianism not just in corridors of power but on the streets under the yoke of roaming bands of neo-fascist groups seeking to foment a second, truly 'national revolution.'

Despite the all too numerous adepts of democratization and democratic 'transition,' this is not the first time nor, apparently, will it be the last time when the West has misunderstood processes it has hoped for, encouraged, and often funded and helped to organize. The Arab 'Spring' is only the most recent set of cases in point. The spring's various revolutions predictably became one big Islamist winter, except in those cases-for example, Egypt-where a counter-revolution returned matters to the status quo ante.

Similarly, in 1991 the adepts got it wrong, taking what they wished for as reality. Few post-Soviet states became democracies because the 'democratic revolution' that overthrew the reformist late Soviet regime of Mikhail Gorbachev's perestroika was assumed to be a 'revolution from below' organized in society by societal opposition forces. This was true in a few of the smaller union republics-the Baltic and Caucasus republics, Moldova and Ukraine. However, in most cases the elements of democratic revolution from below were counterbalanced by less civil revolutions from above and nationalist revolutions from below. In Russia, the revolution was largely one led from above by the Russian President Boris Yeltsin and the Russian state apparatus against the partially reformed but crumbling central Soviet state and regime. In Central Asia, the revolutions from above were not even revolutions but simply a change of sign boards, of branding for still very authoritarian regimes, with the partial exception of Kyrgyzstan, the tulip revolutions and counter-revolutions of which also had strong elements 'from above'.

Thus, it is no surprise that Ukraine's 2004 Orange revolution, as I noted at the time, and the 2013-2014 Maidan revolution of dignity, as I predicted, proved to be something far less than democratic revolutions from below. The failure of the former was evident in its defeat at the polls by the same Viktor Yanukovych in the 2010 presidential election. Relatively free and fair elections have never been a serious problem in post-Soviet Ukraine, except in the November 2004 presidential election and in the some of the recent local elections under the Maidan regime. Corruption, criminality, conflictive political culture, and ultra-nationalism/meo-fascism have been the main aspects of the country's democracy deficit-as they have been in all the former Soviet republics, including the more democratic Baltic states.

In addition to the strong element of revolution from below, the recent Maidan revolt also had elements of revolution from above led by some state officials and state-tied oligarchs. Moreover, the revolution from below was under considerable influence from national chauvinist, ultra-nationalist, and neo-fascist groups. These two factors have created to an ultra-nationalist-oligarchic regime with little popular support and little to no revolutionary accomplishments in terms of democratization. The present regime is no different than Yanukovych's except for a considerable increase in western Ukrainian neo-fascism both in the corridors of power and on the streets and a decidedly more catastrophic economic condition. The lack of any real change represents a failure of Ukraine's most recent pseudo-revolution, with corruption, criminal and nationalist violence, and the lack of rule of law so prevalent it more than negates Ukraine's often relatively free and fair elections.

Regarding corruption, the view is now unanimous that there is more of it than under Yanukovych. Even the West's former 'beacon of democracy' in the former USSR, now Odessa Governor and former president of Georgia Mikheil Saakashvili, now wanted on charges of abuse of power in his native Georgia, famously acknowledged this fact. At a recent government meeting of the 'Council on Reforms', he and ultra-nationalist Minister of Internal Affairs Arseniy Avakov forced the meeting immediate cessation after they exchanged curse words and accused each other of stealing millions and billions. Both were right.

But we do not need to be reduced to taking Saakashvili's word for it-the Ukrainian people say this. A recent Gallup poll released yesterday found that 88 percent of Ukrainians say corruption is widespread in their government, and 81 percent say the problem is no different in the country's business circles. A mere 5 percent of respondents said the Ukrainian government is doing enough to fight corruption-lower than the 6% who said the same in 2013 on the eve of the Maidan 'revolution' (Julie Ray, "Ukrainians Disillusioned With Leadership," Gallup, 23 December 2015, http://www.gallup.com/poll/187931/ukrainians-disillusioned-leadership.aspx).

There are other problems in Ukraine besides corruption. Independent media is being repressed, and state television represents the views of only one part of the political spectrum-those that support Poroshenko, the oligarchs, and the ultra-nationalists. Neo-fascist groups, like the Svoboda Party and Right Sector among many others, continue to undertake vigilante actions, carry out terrorist attacks, and prepare to finish the 'national revolution' they saw Maidan as but the first phase of.

Thus, opposition to the government and regime is ubiquitous. The government's approval rating is the lowest since 2007-during the Orange regime (2005-2010)-with 8 percent approval rating then as now. By contrast, under the overthrown Yanukovych government (2010-2014), public approval of the government was at 26 percent in 2010, 24 in 2011, 24 in 2012, 19 in 2013, and 24 in 2014. Only 19 percent of Ukrainians say the regime is taking the country in the right direction; 65% think it is moving in the wrong direction.

The same pattern-disapproval of 'pro-democracy'-i.e., nationalistic leaders-has been evident in presidential approaval ratings. The Orange president Viktor Yushchenko had approaval ratings of 17 percent and 7 percent in 2008 and 2009, respectively. The overthrown Yanukovych's approval ratings were as follows: 46 percent in 2010, 29 percent in 2011, 28 percent in 2012, and 28 percent in 2013. Petro Poroshenko's ratings were 47 percent upon his arrival in office-similar to Yanukovych's 46 percent-but the fall in his ratings in his second year is much more akin to a full collapse than that under Yanukovych. Poroshenko has fallen from 47 percent in 2014 to 17 percent in 2015. Yanukovych fell from 46 percent to 29 percent and then held steady unti he was overthrown with ratings higher than Poroshenko's present rating.

Although some of the differences in polling results between the Yanukovych and Poroshenko periods can be attributed to the exclusion of Crimea, Donetsk, and Luhansk from surveys for the latter period, since these are regions that were allied with Yanukovych's politics for regional ethnic, linguistice, cultural, and economic reasons. This, however, cannot explain the relative popularity of Yanukovych over his predecessor Yushchenko. And absolutely nothing but corruption and otherwise bad policy can explain the Poroshenko administration's catastrophic ratings.

Poroshenko is unpopular in every mega-region of Ukraine-west, east, north, south, and central-with catastrophic, indeed 'revolutionarily' low popularity ratings in the south and east (not including Crimea, Donetsk and Luhansk no less) at 11 percent in the east and 7 percent in the south. In Ukraine's central and northern regions (the former includes Kiev), barely as many Ukrainians approve of Poroshenko (21 percent) as approved of Yanukovych (20 percent) in 2013 on the eve of the Maidan revolt.

In sum, the Poroshenko's Maidan regime is less popular within the polity it rules than Yanukovych's was in that which he ruled and which was overthrown by a pseudo-revolution or revolt backed as a democratic revolution then and now by the Barack Obama administration and the West's other governments. The country has more in common with Wiemar Germany and 'post-Sovietistan' than a Western democracy.

This raises several questions. Is USAID as active in Ukraine today as it was in 2012 in training activists on how to organize mass demonstrations, sustain long-term protest demonstrations in the central squares of the country's major cities, and resist police anti-riot actions? When demonstrations occur in Kiev, will State Department Assistant Secretary Victoria Nuland and US Ambassador Geoffrey Pyatt go there to hand out cookies? Will US Senators like John McCain go to the Maidan and make speeches urging the population to overthrow Poroshenko and telling Russia not to interfere in domestic Ukrainian politics? If somehow the representatives of Ukraine's most anti-Maidan regions in the south and east seize power by using force in violation with an agreement signed by Poroshenko, Germany, France, Poland and Russia, will the U.S. support the overthrow of Poroshenko? Certainly, there are more questions one could ask...many more.
 
 #33
RIA Novosti
December 25, 2015
Putin warns against moves to close Ukrainian library in Moscow

Vladimir Putin has intervened in the case of the Library of Ukrainian Literature in Moscow, whose director is in custody and facing charges of inciting hatred, RIA Novosti news agency reported on 25 December.

Natalya Sharina was held on 28 October when the Investigations Committee carried out a search of the Library and found "Russophobic" publications. Her arrest and the charges against her have since been described as "disgraceful" and "absurd" by the head of the Russian Presidential Human Rights Council, Mikhail Fedotov (see "Russia: Head of Ukrainian library in Moscow detained" and "Arrest of Ukrainian library director is 'disgrace' - Russian rights council head", by BBC Monitoring on 29 Oct and 5 Nov 15).

"One thing we must definitely pay attention to is the Library and it should not, of course, be lost, absolutely not," Putin said during a meeting with the Presidential Council for Culture. Russian and Ukrainian literature share much in common "and! we must of course preserve this", he said.

The accusations against Sharina are based on the Library's possession of works by Ukrainian authors that, in the opinion of the Investigations Committee, amount to "anti-Russia and anti-Russian propaganda". She is under house arrest, which on 25 December was extended by a court in Moscow until 28 January, RIA Novosti said.


 
#34
Kyiv Post
December 26, 2015
Editorial
Full speed ahead

Adrian Karatnycky of the Atlantic Council is one of the most astute writers about Ukraine today and a longtime friend of the Kyiv Post. He recently penned an op-ed in the Wall Street Journal on Dec. 22 headlined: "A dilemma in the crackdown on corruption in Ukraine."

The gist of his article is that radical or revolutionary change is not in Ukraine's interests now and actually may threaten a fragile state. He makes a plea for civic activists and others to tone down their demands for a war against corruption.

Karatnycky wrote: "Civil society must understand that the government's vacillation in challenging Ukraine's wide array of rent-seeking oligarchs reflects the complexity of Ukraine's democratic politics and the administration's precarious parliamentary majority."

President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk need to "balance the need to confront oligarchic excesses with the need to preserve their majority," he wrote and he worries that new elections for parliament "would usher in a far more populist legislature..."
Ukraine, Karatnycky writes, "can ill-afford to undermine the stability of its state, which is the only instrument for defense against a foreign aggressor and the only legitimate mechanism by which to implement reform."

We don't agree with several of his arguments.

Firstly, Poroshenko and Yatsenyuk are to blame for the political pickle they are in by, as many credible people have alleged, selling high places on party lists in the October 2014 election to many lawmakers who are obstructing reform.

Secondly, Ukraine's leaders compounded their mistake by not overhauling the corrupt, politically subservient and ineffective criminal justice system.

Thirdly, a revolutionary - not evolutionary - approach is what's needed in criminal justice, deregulation and many other areas.

Fourthly, we don't believe the Ukrainian state and people are so fragile. Ukrainians have shown a willingness to defend their rights and their nation, even absent a strong state.
Fifthly, we are not as afraid of new parliamentary elections. Ukrainian voters have progressively purged the worst elements of the Verkhovna Rada in successive elections.

We are humble enough to recognize that our opinions may be wrong and Karatnycky may be right. But from our vantage point, Ukraine needs to move full speed ahead against corruption. Society's discontent is a direct result of moving too slowly, not too quickly, in the anti-corruption fight, so decisive to Ukraine's future.
 
 #35
Wall Street Journal
December 26, 2015
Fight Over Churches Reflects Ukraine's Psychological Split From Russia
By JAMES MARSON

MALI DMYTROVYCHI, Ukraine-Three Russian Orthodox priests arrived at the village church here one afternoon in October, packed gilded icons, censers and chandeliers into a moving van, and drove off.

Their departure marked a victory for Nadiya Myakshyna, a small, 58-year-old woman with an impish smile. This fall, as Ukraine's army battled Russia-backed separatists in the country's far-off east, she had rallied neighbors to oust the visiting clergy and replace them with a priest from a Ukraine-led church.

The story of the church in Mali Dmytrovychi, a village of around 200 just south of Kiev, reflects Ukraine's deepening psychological split from Russia, a rift made wider by a 21-month conflict that most Ukrainians blame on their eastern neighbor.

Russia and Ukraine have centuries of shared history and Russian President Vladimir Putin describes Ukraine as Russia's "brother nation." But the conflict, which has cost more than 9,000 lives, has galvanized many Ukrainians to complete the messy divorce started after the collapse of the Soviet Union in 1991.

Only one-fifth of Ukrainians now have positive feelings toward Russia, compared with four-fifths before the conflict started, according to polls. Surveys show a large majority would vote to join the European Union and the North Atlantic Treaty Organization.

The war has also tested religious loyalties. The Russian Orthodox Church, which claims Ukraine as part of its canonical territory, is closely aligned with the Kremlin. The Moscow Patriarchate, as the Russian church is known in Ukraine, has angered many by not taking a clear enough stance against Russia's aggression toward Ukraine.

In contrast, the head of the Kiev Patriarchate, Patriarch Filaret, has thrown his weight behind the war effort, sending military chaplains to the front, declaring that Mr. Putin was under the influence of Satan, and lobbying U.S. senators for support.

Both style themselves as the Ukrainian Orthodox Church. But large numbers of Ukrainians have switched allegiance to the Kiev Patriarchate, particularly in the west of the country, where antipathy toward Russia is stronger.

More than 44% of Ukrainians belong to the Kiev Patriarchate, while nearly 21% are part of the Moscow Patriarchate, according to a survey published in the spring by the Democratic Initiatives Foundation, a Kiev pollster. In late 2011, the same pollster found 31.1% identified with the Kiev Patriarchate and 25.9% with the Moscow Patriarchate.

Ukrainian President Petro Poroshenko is pressing for recognition of the Kiev Patriarchate as an independent national church as a matter of national security, advisers say, after Russia used cultural and historical links to whip up the conflict in Ukraine's east.

The Kiev Patriarchate, unlike its rival, isn't officially recognized by the global Orthodox community, leading the Moscow Patriarchate to dismiss its followers as schismatics who have turned away from God.

In dozens of places like Mali Dmytrovychi, locals have moved on their own to oust the Moscow Patriarchate.

For Ms. Myakshyna, who works as an administrator at a meteorological center, the battle was personal: Her grandfather, Iosif Kovtunenko, was a priest in the village and was exiled to Siberia for 18 months in the early 1930s and beaten to death in 1960 by Soviet youth activists for refusing to renounce his faith, she said. The church, built in 1763, was converted into a communal grain store and destroyed a few years later.

After the Soviet Union collapsed, locals for years attended a Kiev Patriarchate church in a neighboring village. In 2013 they converted a public building Mali Dmytrovychi into a church, but the parish was registered with the Moscow Patriarchate.

Regular attendance dwindled to only four or five, according to Father Vonifatiy, the 26-year-old monk from the Moscow Patriarchate who led services there.

Last summer, as the conflict in the east dragged on, two neighbors asked Ms. Myakhsyna to lead a campaign for the Kiev-led church. She agreed after a group of Kiev Patriarchate priests came to pray at the grave of her grandfather, whom they consider a martyr.

"I felt the responsibility pass to me," she said.

One hot day this August, she walked the length of the village collecting 142 signatures for a petition in favor of switching to the Kiev Patriarchate.

She and her allies gained access to an annex of the church. They said Father Vonifatiy gave them the key; he said they nabbed it from his desk.

When they came to prepare the room for a prayer service, they said they found a Ukrainian flag-hung when elections are held there-lying on the dirty floor alongside empty bottles of wine used for the Eucharist.

"That was the final straw," said Iryna Krykun, Ms. Myakshyna's daughter. "We saw their attitude to Ukraine."

Father Vonifatiy, who was born in Kiev and calls himself a patriot, said it wasn't a flag on the floor but a curtain that he had used to cover building materials.

The following Saturday, Aug. 23, dozens of supporters converged on the church and called for Father Vonifatiy to leave.

He called their behavior aggressive, and a report on the Moscow Patriarchate's website called the incident "a classic example of a raider attack on church premises."

Videos provided by Ms. Krykun show a peaceful crowd of several dozen raising their hands to vote against him, before the monk says, ruefully: "I love you so much that I'll be sad to bid farewell."

The following day, the villagers came to the church again, where they found a group of Moscow Patriarchate priests and believers bused in from neighboring villages. The head of the village, who was busy with Independence Day celebrations, closed the church.

For the next several weeks, both held services outside on Sundays.

Meantime, Ms. Myakshyna and her allies re-registered an old church community to help them to take control of the building.

In October, Father Vonifatiy admitted defeat, arriving at the church with two colleagues and taking most of the ornaments from inside. The villagers decided not to interfere.

"The most important thing was to get them out of the village," said Ms. Myakshyna.

Father Vonifatiy said he has been disciplined by the Moscow Patriarchate for losing control of the church, and now isn't allowed to serve in the Kiev diocese.

Now, the villagers pray on Sundays in the church with Father Volodymyr from the Kiev Patriarchate. On Dec. 20, he laid the first stone of a new church the villagers intend to build on the site of the 18th-century one.

"We are stubborn. We put up with it, and now we give them payback," said Ms. Myakshyna, referring to Russia's historic subordination of Ukraine. "Moscow can't understand."
 
 #36
The Jerusalem Post
December 26, 2015
Crimean Jews angry after Poroshenko says Russia instigating anti-Semitism
Local leaders call Ukrainian president's claims at Knesset false.
By SAM SOKOL

Jews on the Crimean peninsula are up in arms following a speech by Ukrainian President Petro Poroshenko accusing Russia of fomenting anti-Semitism.

"Jewish organizations of Crimea firmly state that these allegations are false and are a clumsy and hopeless attempt to distort the true picture of the existing inter-ethnic peace and harmony in the Russian Crimea," community leaders from cities such as Simferopol, Yalta and Sevastopol asserted in a joint statement on Friday.

Speaking before the Knesset during a state visit here last week, Poroshenko said Jews living in the Ukrainian territory, which Russia occupied and annexed early in 2014, may find themselves in danger "as the conquerors have started to cultivate the anti-Semitism issue, as well."

While Jewish leaders in Ukraine have come out strongly in favor of their country's battle with Moscow- backed separatists along the Russian border, the Jews of Crimea mostly have sided with Russia in the ongoing conflict.

"Today, we are under the protection of the Russian state. However, we love and remember the real Ukraine, with its national colors, rich culture, hospitable people, where it was before the rampant nationalism and Bandera," they said, referring to a World War II-era Ukrainian nationalist leader who collaborated with the Germans and who is currently en vogue in Ukraine as a hero.

Russia has consistently accused Ukraine's leadership of fascism and anti-Semitism since a 2014 revolution ousted pro-Kremlin President Victor Yanukovich. Both the Ukrainian Jewish community and the government have denied such claims.

And, although instances of anti-Semitic graffiti have risen, the neo-Nazi Svoboda party, which was a large presence in pre-revolutionary Ukrainian politics, has largely collapsed and anti-Semitic violence in both Russia and Ukraine remains very low by Western European standards.

During the immediate aftermath of Russia's invasion, anti-Semitic graffiti was found on a local Reform synagogue.

However, the local rabbi intimated that it was possible that given that a Ukrainian neo-Nazi symbol scrawled on the side of the building was inverted, the entire episode may have been a provocation intended as propaganda.

Since that point, a local Holocaust memorial has been vandalized, but no other incidents have been recorded.

According to Amnesty International, while the Jewish community has emerged from the conflict relatively unscathed, the new leaders of the territory have been "carrying out a catalogue of human-rights abuses against pro-Ukrainian media, campaigning organizations, Crimean Tatars and individuals critical of the regime."

Asked about Russian accusations that his government is anti-Semitic, Poroshenko told The Jerusalem Post last week he could not "react to Russian propaganda."

"It's simple. Nobody in the world believes the Russians during this war - this is just another form of war, not only on the battlefield, but using propaganda spanning hundreds of millions of dollars to create a negative image of Ukraine," he said.

"Poroshenko has no moral right to speak about the Jews of the Crimea, or he does not know or does not want to know the actual situation," Elena Raigorodskaya, spokeswoman for the All-Crimean Jewish Congress and the editor of a local Jewish newspaper, told the Post.


 
 #37
Jerusalem Post
December 27, 2015
Ukrainian legislator toasts Adolf Hitler
Leader of Radical Party condemns President's apology for Holocaust collaboration
By Sam Sokol
[Video here http://www.jpost.com/Diaspora/Ukrainian-legislator-toasts-Hitler-438561]

A video of a Ukrainian opposition lawmaker saluting Adolf Hitler made its way online this weekend, only days after his country's President apologized for Ukrainian collaborators' role in the Holocaust during a state visit to Israel.

In the video, Artyom Vitko, the former commander of the government backed Luhansk-1 Battalion and now a member of the Radical Party of Oleh Lyashko, can be seen sitting in the back of a car wearing camouflage fatigues and singing along to a song by a Russian neo-Nazi band extolling the virtues of the Nazi dictator.

"Adolf Hitler, together with us, Adolf Hitler, in each of us, and an eagle with iron wings will help us at the right time," Vitko sang, saluting the camera with his water bottle as the car's sound system blared "Heil Hitler."

 Vitko's pro-Nazi sentiments emerged immediately on the heels of party leader Oleh Lyashko denunciation of President Petro Poroshenko for for his recent comments apologizing or Ukrainian complicity in the Holocaust.

Speaking before the Knesset last week, Poroshenko said that "we must remember the negative events in history, in which collaborators helped the Nazis with the Final Solution."

"When Ukraine was established [in 1991], we asked for forgiveness, and I am doing it now, in the Knesset, before the children and grandchildren of the victims of the Holocaust... I am doing it before all citizens of Israel," he added.

"This kind of humiliation of Ukrainians has not been recorded in our history yet. During a visit to Israel, President Poroshenko apologized for the 'Ukrainian participation in the Holocaust,'" Lyashko posted on Facebook on Thursday.

"This is exactly situation if we would accuse Georgians and Jews in the Holodomor, appealing to the atrocities of Dzhugashvili, Beria, Kaganovich, etc," he said, referring to a massive famine that resulted from the forced collectivization of farms in the Soviet Union during the 1930s.

The Holodomor, as it is known in Ukraine, killed millions and is seen by many in that country as a genocide on par with the Holocaust.

"The Knesset has not recognized the Holodomor as the genocide of the Ukrainian people. That is a goal for Ukrainian authorities visiting the Holy Land rather than belittling Ukrainians [and] proclaiming inferiority of his people on the international level," Lyashko added.

Poroshenko's comments were laudable and he "acted correctly and courageously when he spoke in the Knesset about the Holocaust the Jewish people endured on Ukrainian soil," Colette Avital, chairwoman of the Center of Organizations of Holocaust Survivors in Israel, told the Jerusalem Post.

"Even though we are not surprised by the comments of the radical leader, Oleh Lyashenko, we are nonetheless shocked by the kind of strange  and irrelevant comparisons he brings up and by his negation historical facts. By now even leaders like Mr. Lyashenko should understand that the tragedy which befell the Jewish people in Europe in general, in Ukraine in particular should be condemned by all, including by him."

"I would say that this is the reason Poroshenko is President and not Lyashko. Lyashko is a populist only saying what he thinks people want to hear," said Ukrainian Chief Rabbi Yaakov Dov Bleich.

The Jewish community, Bleich said, disagrees with the populist politician's definition of humiliation, seeing disgrace as when "one cannot face up to history."

"Pride is to look back, and learn from mistakes. No one accused the Ukrainian people of causing or creating the Holocaust. However, the fact is that there were Ukrainians who participated in the murder and persecution of Jews. They are worthy of condemnation."

"The sight of a member of the Ukrainian Parliament singing a song praising Hitler, underscores the extremely deep problem in today's Ukrainian democracy regarding the ongoing efforts in that country (and elsewhere throughout post-Communist Eastern Europe, especially in Lithuania, Latvia, Estonia and Hungary) to rewrite the narrative of World War II and the Holocaust," said Dr. Efraim Zuroff of the Simon Wiesenthal Center.

"The fact that the Ukrainian authorities honor groups which actively participated in the murder of Jews during the Holocaust and glorify their leaders sends a message that delegitimizes the accurate historical narrative, and paves the way for disgusting scenes like this one. The Ukrainian leadership should not feign surprise or astonishment, they're the ones at least partially responsible."

Earlier this year Ukraine's parliament has extended official recognition to a nationalist militia that collaborated with the Germans during the Second World War.

However, many Ukrainian Jews have appeared rather sanguine, explaining that they believe that such moves are more likely the result of a need to build up a national ethos and raise up heroes during a time of conflict rather than a celebration of such figures' anti-Semitic attitudes. Despite that, such moves have been widely panned by Jewish organizations worried about the long term effects of the glorification of anti-Semites.

Asked about the decision to honor such groups, President Poroshenko told the Post that the government was paying tribute to those who fought for national independence.

"Let's not try to find the black cat in the black room, especially if there is nothing there," he said


 
 #38
Newsweek.com/Atlantic Council
December 25, 2015
PUTIN PLOTS TO MAKE UKRAINE A FAILED STATE
BY IHOR KOZAK
Ihor Kozak is an independent defense and security consultant who advises legislative bodies and governments pro bono, as well as think tanks and media in Canada, the United States and Ukraine on the Russia-Ukraine conflict.

This article first appeared on the Atlantic Council site.

Fighting continues to gradually intensify in eastern Ukraine. The Kremlin-backed militants are now using heavy weapons, including tanks, artillery and ferocious Grad rocket systems, sporadically.

Moscow's rationale behind this latest escalation is to achieve a frozen conflict by gradually sabotaging the execution of the Minsk II ceasefire agreement.

Russian President Vladimir Putin likely realizes that his offensive in the Donbas has essentially stalled and that for now he cannot take more Ukrainian territory, not without sustaining heavy casualties among his regular military forces and triggering additional Western sanctions.

And so it seems that, in order to achieve its long-term strategic goals, the Kremlin's leadership is emphasizing alternative aspects of hybrid warfare. According to retired U.S. Army General Wesley Clark, former NATO Supreme Allied Commander, who visited Ukraine seven times in 2015, "Ukraine is a work in progress by Putin. He has multiple channels to attack Ukraine, economically, politically, diplomatically, militarily."

Recent developments on the security front within Ukraine's borders are disturbing. The Ukrainian security service (SBU) and other law enforcement agencies report a significant increase in acts of sabotage and terrorism. According to SBU official Oleksandr Tkachuk, "Russian special services are intensifying their activities in peaceful cities, trying to destabilize the situation and trying to show that Ukrainian law enforcement bodies and Ukrainian authorities are not able to protect their citizens."

The Ukrainian authorities, to their credit, have been discovering these plots, arresting Russian agents and confiscating caches of weapons and explosives throughout Ukraine (as opposed to mainly in the front-line areas as used to be the case).

On December 10, the SBU neutralized a terrorist group in Kyiv and Kharkiv consisting of eight members with clear links to the Russian security services, three of whom were Russian citizens. They possessed automatic weapons, state-of-the-art equipment and large quantities of ammunition and explosives.

The SBU believes they were planning to carry out acts of sabotage and terrorism in Kyiv and other urban centers of Ukraine. During this operation, the terrorists put up fierce resistance, which resulted in the death of an SBU officer and a militant, while two other were wounded. This, unfortunately, is only one of many similar recent occurrences.

The rise of plots like these is a serious and dangerous development. Combatting these type of threats is more difficult than repelling the attacks on the eastern front lines. If this issue is not dealt with in short order, it could bring about a major setback to the significant progress made to date toward the stabilization of Ukraine and Europe.

Furthermore, if combined with the military escalation on the front lines, the Kremlin's continued political and economic coercion, painfully slow reforms by the government of Ukraine and declining living standards for a majority of the population, Ukraine could, potentially, become a failed state in time-which is exactly what Moscow wants.

To a significant extent, Ukraine's survival depends on successfully confronting the terrorist tactics of the Kremlin. The free world, in turn, cannot afford a failed state in the heart of Europe. It is paramount that Ukraine and the West acknowledge this new and increasing asymmetric threat and deal with it rapidly and decisively. Ukraine needs to utilize every tool it has to detect, contain and remove the threat.

The West should place more substantial pressure on Moscow to force Putin to stop sponsoring terrorism in Ukraine.


 
 #39
https://dninews.com
December 25, 2015
60% of the population of Ukraine will fall below the poverty level in 2016

The collapse is approaching. 60% of the population of Ukraine will fall below the poverty level in 2016. Such a conclusion was made by Vasily Volga, a former MP of the Verkhovnaya Rada and the leader of the "Union of Left Forces", after his analysing the law on the state budget for the next year adopted by the Parliament last night, reports The Politnavigator.

'The only thing you need to know about this budget is that next year, with the best scenario, there will be produced two times fewer goods and services than two years ago.

The amount of the state budget is two and a half times less than two years ago.

The minimum wage in 2016 will be three times lower than it was in 2014. The minimum subsistence level will also be three times less than it was two years ago.

Almost 60% of the population will fall below the level which, in Europe, is considered to be that of extreme poverty. 5 euros a day is a level of poverty, 2 euros a day is a level of extreme poverty.

At the same time the public services will rise to the truly European level next year and will be ten times more expensive than they were two years ago,' informed Volga.

'The social standards are destroyed. In the country there is unleashed the civil war. The citizens hate each other and denounce their neighbours to the SBU. Journalists are put to prison. Thieves and murderers have become national heroes. Anyone dissatisfied is offered to "clear out" of the country. Protests are prohibited and their leaders are immediately recognised as terrorists,' added the politician, describing the situation in Ukraine on the eve of the New Year.


 
#40
http://novorossia.today
December 25, 2015
Saakashvili Living In A Fantasy World, Blames Russia For Turmoil In Odessa

Accusations of inciting separatism in the southern Ukrainian city of Odessa, voiced by Odessa Region Governor Mikheil Saakashvili against Russian presidential aide Vladislav Surkov, have nothing to do with reality, Russian Foreign Ministry spokeswoman Maria Zakharova said Thursday. "We have noticed such accusations," Zakharova said. "In general, we are trying to seldom pay attention to what Saakashvili says, as it is dangerous to health." "Accusations against Surkov of inciting separatism have nothing to do with reality," the diplomat said. "These accusations are unsubstantiated and are based on myths and fantasies." She said this "is not the first time when we hear from Ukrainian officials such accusations." "I would like our Ukrainian colleagues to treat such topics more professionally," Zakharova said. The diplomat did not give any additional characteristics to Saakashvili, as she said she believes "these loud and flamboyant statements were meant to distract attention from the main problem - the difficult social and economic situation int the country and a number of other important isues." "Such statements are made out of internal fear he has had since 2008," she added. "We objectively consider such accusations fictitious.".