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Private habits of Putin (Russian Crisis)
11-01-2015, 04:26 PM.
Post: #71
RE: Private habits of Putin (Russian Crisis)
BAck in the USSr
Anne Applebaum

2643 words
9 Jan 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

Geopolitics Russia's recent history is not about failed democracy, it's about the rise of another totalitarian regime, ruled by an old KGB elite loyal to Vladimir Putin, writes Anne Applebaum.

For 20 years now, the ­Western politicians, ­journalists, businessmen and academics who observe and describe the ­post-Soviet evolution of Russia have almost all ­followed the same ­narrative. We begin with the assumption that the Soviet Union ended in 1991, when Mikhail Gorbachev handed over power to Boris Yeltsin, and Russia, Ukraine and the rest of the Soviet republics became ­independent states. We continue with an account of the early 1990s, an era of "reform", when some Russian leaders tried to create a ­democratic political system and a liberal capitalist economy.

Mostly we agree that those reforms failed, and sometimes we blame ourselves for those failures: we gave the wrong advice, we sent naive Harvard economists who should have known better; we didn't have a ­Marshall Plan. Sometimes we blame the Russians: the economists didn't follow our advice; the public was apathetic; Yeltsin was indecisive, then drunk, then ill. Whatever their conclusion, almost all of these analysts seek an explanation in the reform process itself, asking whether it was effective, or whether it was flawed, or whether it could have been designed differently. But what if it never mattered at all? What if "reform" was never the most important story of the past 20 years in Russia at all?

In her introduction to Putin's Kleptocracy, Karen Dawisha, a professor of political science at Miami University in Ohio, explains:

"Instead of seeing Russian politics as an inchoate democratic system being pulled down by history, accidental autocrats, popular inertia, bureaucratic incompetence, or poor Western advice, I conclude that from the beginning Putin and his circle sought to create an authoritarian regime ruled by a close-knit cabal . . . who used democracy for decoration rather than direction."

In other words, the most important story of the past 20 years might not, in fact, have been the failure of democracy, but the rise of a new form of Russian authoritarianism.'King of thieves'

Instead of attempting to explain the failures of the reformers and intellectuals who tried to carry out radical change, we ought instead to focus on the remarkable story of one group of unrepentant, single-minded, revanchist KGB officers who were horrified by the collapse of the Soviet Union and the prospect of their own loss of influence. In league with Russian organised crime, starting at the end of the 1980s, they successfully plotted a return to power. Assisted by the unscrupulous international offshore banking industry, they stole money that belonged to the Russian state, took it abroad for safety, reinvested it in Russia, and then, piece by piece, took over the state themselves. Once in charge, they brought back Soviet methods of political control – the only ones they knew – updated for the modern era.

That corruption was part of the Russian system from the beginning is something we've long known for a long time, of course. No "even playing field" was ever created in Russia, and the power of competitive markets was never unleashed. Nobody became rich by building a better mousetrap or by pulling himself up by his bootstraps. Instead, those who succeeded did so thanks to favours granted by – or stolen from – the state. And when the dust settled, Vladimir Putin emerged as king of the thieves.

Using a mass of evidence, Dawisha nevertheless argues the KGB's return to power begins not in 2000, when Putin became president, but in the late 1980s. At that time, the then leaders of the KGB, who distrusted Gorbachev, began transferring money that belonged to the Soviet Communist Party out of the Soviet Union and into offshore accounts tended by Swiss or British bankers.

By the autumn of 1991 – after the KGB-led coup in August to overthrow Gorbachev had failed – almost $US4 billion belonging to the Party's "property management department" had already been distributed to hundreds of Party, Komsomol and KGB-managed banks and companies that were swiftly establishing themselves in Russia and abroad. This was an enormous amount of capital in a country that had, at the time, a scarcely functioning economy and hardly any foreign currency reserves at all. In due course, these funds, and the people who managed them, were to become the real foundation for the economy of post-Soviet Russia.

From the very beginning, Russia's current president had a part in this process. In the late 1980s, Putin was a KGB officer in Dresden, East Germany. There is some evidence that he may have been helping the KGB prepare for what it feared could be the imminent demise of the Soviet empire. A few of Putin's Dresden contacts have become startlingly successful in the decades since 1989. Matthias Warnig, a Stasi colleague of Putin's, opened Dresdner Bank's first branch in St Petersburg in 1991, by which time Putin was living there. By 2000, he headed all of the bank's operations in Russia. In 2003, the bank participated in the dismemberment of Yukos, the oil company owned by the jailed magnate Mikhail Khodorkovsky. Since 2006, Warnig has been managing director of the Russian-German Nord Stream pipeline project, a company that won permission to operate during the term of German chancellor Gerhard Schröder, and that later hired ex-chancellor Schröder to serve on its board. In 2012, among other high posts, Warnig became a member of the board of directors of Bank Rossiya, one of the Russian banks now under US sanctions.

After leaving Germany, Putin returned to St Petersburg, eventually making his way, with KGB patronage, into the St Petersburg city government, where he was responsible for "foreign liaisons" – and where he could put some of his foreign contacts to immediate use. In 1991, Marina Salye, a member of the St Petersburg city council, accused Putin of having knowingly entered into dozens of legally flawed contracts on behalf of the city, exporting hundreds of millions of dollars' worth of commodities – timber, coal, steel – in exchange for food that never arrived. Her attempts to censure him came to nothing. At a higher level, Putin had protectors.Links to organised crime

Back in this very early post-Soviet moment – when Western advisers were still streaming into the country to give lectures on the rule of law and judicial reform – Putin personally organised, or helped organise, several institutions that exist to this day. One of the best known is Bank Rossiya, which was founded in St Petersburg in 1990, using money from the Communist Party's Central Committee. From the beginning, according to Spanish police investigators, Bank Rossiya facilitated co-operation between Putin, other city officials and Russian organised crime, allowing the two groups to invest together.

Dawisha describes the origins of the Twentieth Trust, a "construction company" linked to Putin. According to Russia's own Ministry of Internal Affairs, the Twentieth Trust received money from the budget of the city of St Petersburg and subsequently transferred that money abroad.

Novaya Gazeta, a Russian newspaper, discovered that the company had purchased property in Spain where it constructed villas using Russian army labour. These kinds of reports led Spanish police to become suspicious of Russian activity in Spain, and in the 1990s they began monitoring the Russian oligarch, Boris Berezovsky, as well as several well-known leaders of Russian organised crime, all of whom had houses on the southern coast of Spain. In 1999, to their immense surprise, their recorders picked up an unexpected visitor: Putin. He had arrived in Spain illegally, by boat from Gibraltar, having eluded Spanish passport control.

By the time he made this secret visit to Spain – apparently one of many – Putin had already graduated to the next phase of his career: until August 1999, he was the boss of the FSB, the KGB's successor organisation. He had moved from St Petersburg to Moscow, taking many of his cronies and all of his criminal connections with him.

At that time, they were not the only such group to have parlayed state and KGB money into wealth. Yeltsin had also in effect given his blessing to the creation of several large fortunes, including Berezovksy's. But as Yeltsin became increasingly ill and unavailable, Putin persuaded Berezovsky and others in the Yeltsin inner circle he and his FSB colleagues would be the guarantors of their wealth in the event of Yeltsin's demise.

They duly anointed Putin prime minister and then president – the wishes of voters and democratic process had little to do with it. But having obtained high office, he turned the tables on them. Soon after taking over, he made it clear he intended to remove the Yeltsin-era elite and to put a new elite in its place – mostly from St Petersburg, equally corrupt, but loyal exclusively to him. Among others, he removed the chief executive and chairman of Gazprom – the old Soviet gas ministry, now a private company – and replaced them with Dmitry Medvedev, a St Petersburg lawyer and Putin's colleague since his days in the mayor's office, and Aleksei Miller, his former deputy at the St Petersburg Committee for Foreign Liaison. Public relations coup

Very quickly, Gazprom became a source of personal funds for Putin's projects, useful, for example, when he needed a large chunk of money to bribe the president of Ukraine. Gazprom's new leadership grew in wealth and power, and they knew exactly who they had to thank for it. This was not the first time this kind of policy had been deployed in Russia: "change the elite" is an old Stalinist tactic.

But having changed the elite, having taken hold of the most important Russian companies and established himself as godfather to all of the other oligarchs, Putin did not change his ways. After he became president in 2000, it is true that Putin did preserve some of the language of "reform" in his public statements. He appointed "reformers" to top jobs. He kept open lines of communication with the West, particularly after September 11, 2001, when he saw the possibility of a tactical alliance with the West against Muslim radicalism in Central Asia. He remained open to relationships with NATO and with American and European leaders. In 2004, he even declared that "if Ukraine wants to join the EU and if the EU accepts Ukraine as a member, Russia, I think, would welcome this because we have a special relationship with Ukraine". He regularly attended meetings of the G8, an organisation including the US, Canada, France, Germany, Japan, Italy and Russia, whose rules and raison d'etre had been altered specifically to allow Russia to join.

He also carried off an extraordinary public relations coup, and one with far-reaching significance: for four years, between 2008 and 2012, Putin put a seemingly pro-Western, apparently business-friendly, decoy president in charge of the Kremlin: Dmitry Medvedev. Medvedev's reassuring presence not only inspired Barack Obama and Hillary Clinton's "reset" in American foreign policy, but lulled almost everyone in Europe into accepting a gangster state as a difficult, but legitimate partner.

Yet during this same period, as during his own presidency, Putin never abandoned the mafia methods Dawisha has painstakingly described. Though Dawisha argues that Putin always intended to recreate an authoritarian, expansionist Russia, one could also argue that an authoritarian, expansionist Russia was the inevitable result of Putin's need to protect himself, his cronies and their money.

While constantly speaking of "reform" in Western capitals, Putin was systematically destroying the nascent institutions of liberal democratic society. Whatever embryonic political movements had come to life in the 1990s were crushed in the 2000s.

Instead of a genuine media and a real civil society, Putin and his inner circle slowly put into place a system for manufacturing disinformation and mobilising support on a new and spectacular scale. Once the KGB had retaken the country, in other words, it began once again to act like the KGB – only now it was better funded and more sophisticated.

Today's Russian "political technologists" make use of their state-owned media, including English-language outlets such as the TV news channel Russia Today; armies of paid social media "trolls" who post on newspaper comment pages, as well as on Twitter, Facebook and other sites; fake "experts" whose quotes can be presented with fake authority; and real experts to whom Putin's officials have granted special access, or have simply paid. Former Western ambassadors to Moscow, businessmen who have been recruited to Russian company boards, European politicians as high-ranking as Schröder and Silvio Berlusconi – all have been well compensated, directly or indirectly, for offering their support.Undermining the West

Using these different sources, the Kremlin began putting out messages designed not necessarily to make Russia look good, but rather to undermine the Western establishment and Western institutions, including the European Union and NATO. Using both money and information, they seek to empower the Western far right, the anti-establishment left, and the international business community all at the same time. Thus Russia Today supports Occupy Wall Street. A Russian oligarch organises a meeting in Vienna attended by the French National Front, Hungary's nationalist political party Jobbik and Austria's Freedom Party.

Whispering campaigns, conducted in the world's financial capitals – especially Frankfurt and the City of London – hint at the dire things that will happen if sanctions against Russia are not lifted. This system hasn't come about spontaneously, in reaction to events on Kiev's Maidan, although to those who haven't followed the evolution of Russian politics over the past 20 years – or to those who have followed only the narrative of "failed reforms" – it might perhaps appear that way. Indeed, in the months since Putin's invasion of Crimea, it has become fashionable to suggest that the harder-line face that Putin has more recently shown to the world is somehow, once again, the West's "fault", that we have provoked Russia into autocratic behaviou­r through our talk of democracy in Ukraine or that – once again – the "reform process" was somehow brought to a halt because the Russians felt threatened by the expansion of NATO or by Western policy in the Balkans.

But after reading Dawisha's book, and after absorbing the implications of the stories she has so carefully pulled together from so many sources, it is simply not possible to take this argument seriously. Since 2000, Russia has been ruled by a revanchist, revisionist elite with origins in the old KGB. This elite had been working its way back to power since the late 1980s, using theft on a grand scale, taking advantage of the secrecy provided by Western offshore havens and co-operating with organised crime.

Once in power, the new elite sought to maintain control using the same methods that the KGB always used to maintain control; through the manipulation of public emotion; by undermining the institutions of the West, and the ideals of the West in any way that it can. Based on its record so far, it has every reason to expect continued success.

New York Review of Books

Putin's Kleptocracy: Who Owns Russia? by Karen Dawisha, published by Simon and Schuster. Anne Applebaum is a columnist for The Washington Post and Slate, and runs the Transitions Forum at the Legatum Institute. Her most recent book is Iron Curtain: The Crushing of Eastern Europe, 1944–1956. 2014 The New York Review of Books, distributed by New York Times Syndicate.

$4 billion The amount of state funds shifted to Party, Komsomol and KGB-managed banks and companies in Russia and abroad, after the failed coup attempt against Gorbachev in 1991.


Fairfax Media Management Pty Limited

Document AFNR000020150108eb1900002

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12-01-2015, 10:20 AM.
Post: #72
RE: Private habits of Putin (Russian Crisis)
A real pressure for Russia borrowers, with a regular downgrading of rating amid the sanction and lower oil price...

Fitch Cuts Ratings on Russia to Brink of Junk

Fitch Ratings cut its credit ratings on Russia to the brink of junk territory, saying the country’s economic outlook has deteriorated significantly in the past six months amid sharp declines in oil prices and the ruble.

The downgrade brings Fitch’s ratings on Russia in line with those from Standard & Poor’s Ratings Services.

Fitch, which lowered its ratings by one notch to triple-B-minus, also said the Western sanctions first imposed in March 2014 continue to weigh on the economy by blocking Russian banks’ access to external capital markets.

The ratings outlook is negative as the ratings firm said it expects the Russian economy to contract by 4% this year, compared with its previous forecast of minus 1.5%, based on the slight growth seen in 2014.
http://www.wsj.com/articles/fitch-cuts-r...1420838212
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30-01-2015, 09:17 PM.
Post: #73
RE: Private habits of Putin (Russian Crisis)
The Russia's financial issue amid sanction, is improving?

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Russia's central bank makes surprise interest rate cut to 15 per cent from 17 per cent.

AFP

Source: Business Times Breaking News
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23-03-2015, 10:08 AM.
Post: #74
RE: Private habits of Putin (Russian Crisis)
Is America leading the world towards WWIII?

Russia under attack

Why Putin refuses to lie down and play dead?

Russia delivers nuclear warning to Denmark.

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23-03-2015, 11:41 AM.
Post: #75
RE: Private habits of Putin (Russian Crisis)
Amidst the noise, the development is actually quite straightforward. The writing was on the wall when Obama refused to bomb Syria after it crossed the line in the sand by using chemical weapons.

The power vaccum had to be filled by something. Afghanistan were filled by Taliban which were the mujahideen featured in Rambo 3. Iran/ Iraq war bred Osama and Saddam. ISIS was bred by the power vacuum in Syria and Iraq due to US inaction.

Putin is being very opportunistic. Obama is being headstrong in trying to deliver his budget balance promise and reluctance in foreign troop involvements. The dynamics will change very fast if a Republican becomes next US Prez else we will have more years of power vacuum which might not be positive to global geopolitics depending which side of the fence one's philosphy fits.
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23-03-2015, 01:20 PM. (This post was last modified: 23-03-2015, 01:22 PM by sgd.)
Post: #76
RE: Private habits of Putin (Russian Crisis)
a bit of insight on putin's way of thinking. Maybe going reverse giving in to his ego could sooth and produce better result hokkien saying eat soft don't eat hard.

Vladimir Putin ‘dissed’ George W bush's pet dog barney

http://bcove.me/z6vkrlvy

Former President George W. Bush is unveiling a new painting exhibit Saturday that features some of his renderings of the world leaders he worked with during his time in office, including Russian President Vladimir Putin.

“Vladimir Putin, yeah, I met with him a lot during the presidency,” Bush said as he described the painting during an interview with his daughter, Jenna Bush Hager, for NBC’s “Today” show. “I got to know him very well. I had a good relationship throughout, it became more tense as time went on.”

“Vladimir’s a person who in many ways views the U.S. as an enemy,” Bush said. “And although he wouldn’t say that, I felt that he viewed the world as either the U.S. benefits and Russia loses or vice-versa. I tried of course to dispel him of that notion.”

Bush said he learned some of Putin’s character when he introduced the Russian leader to another one of his favorite painting subjects: his dog Barney.

“Our dear dog Barney, who has a special spot in my heart. I introduced him to Putin: Putin kind of dissed him,” Bush told his daughter. “‘You call that a dog?’ A year later, your mom and I go to visit Vladimir at his Dacha outside of Moscow and he says, ‘Would you like to meet my dog?’ Out bounds this huge hound, obviously much bigger than a Scottish Terrier. And Putin looks at me and says, ‘Bigger, stronger and faster than Barney.’”

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23-08-2015, 10:44 PM.
Post: #77
RE: Private habits of Putin (Russian Crisis)
  • Aug 23 2015 at 4:08 PM 
     

  •  Updated Aug 23 2015 at 4:09 PM 


Russia prepares rescue for cash-strapped firms 'too big to fail'

[img=620x0]http://www.afr.com/content/dam/images/g/j/2/a/x/9/image.related.afrArticleLead.620x350.gj5raf.png/1440310153892.jpg[/img]Russian President Vladimir Putin (L) remains popular with Russians but there are deep concerns in business about the risks to the economy. RIA/AP
by Andrey Biryukov
Russia is priming a rescue mechanism for companies on the verge of bankruptcy, an emergency measure that may be taken to contain fallout from the country's first recession in six years.
Prime Minister Dmitry Medvedev signed a government decree that enables cash-strapped companies to receive state guarantees for debt refinancing, provided their "special significance" for parts of the economy merits a lifeline, according to a document released Wednesday.
The move shows the lengths that authorities are willing to go in their effort to head off discontent as a recession gripping the nation of 143 million puts livelihoods at risk. While the poverty rate has soared and with President Vladimir Putin conceded state resources are stretched, the government is trying to keep a lid on unemployment to prevent unrest.
The government is expanding a key instrument of its anti- crisis plan unveiled in January, which allocated 200 billion rubles ($US3 billion) for state guarantees on loans or debt issues by companies. It's the same tool used to stave off an industrial collapse and rescue banks six years ago, when Russia spent more than 3 trillion rubles on stimulus measures, including state guarantees on loans.

Few companies have won state backing so far. The government agreed to provide loan guarantees of 16.7 billion rubles to Russian tank and railcar maker Uralvagonzavod, according to Interfax. In March, the company said it had asked for guarantees of as much as 60 billion rubles.
'RELATIVELY LARGE'
While Industry Minister Denis Manturov said in May that the authorities were ready to provide 20 billion rubles in guarantees to carmaker GAZ Group, no funds have been disbursed. The government has received "relatively large requests" for guarantees, according to Deputy Economy Minister Nikolay Podguzov.
The number of reviewed applications by companies has been limited by a "relatively inconvenient structure of guarantees and a difficult procedure of interaction with banks," Podguzov said in an interview.


The stranglehold of US and European sanctions has blocked access to capital markets and increased borrowing costs. A crisis has spread to almost every third Russian company town, where one employer dominates the local economy, and only a fraction of them will get government aid, officials said last month.
Putin has backed a weak-currency policy to aid producers hit by the economic slump. With the budget pinched by lower oil prices, authorities have responded with spending cutbacks that have spared outlays on the military while channeling the bulk of a stimulus program to support lenders and industry.
The ruble is the worst performer globally against the dollar in the past 12 months with a 47 per cent drop.





Bloomberg

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29-09-2015, 06:51 AM.
Post: #78
RE: Private habits of Putin (Russian Crisis)
Rare glimpse of Godfather's view:

http://www.cnbc.com/2015/09/28/putin-do-...-done.html

Russian President Vladimir Putin told the U.N. on Monday that those who supported democratic revolutions in the Middle East are to blame for the rise of a globally ambitious Islamic State.

"Instead of the triumph of democracy and progress, we got violence, poverty and social disaster — and nobody cares a bit about human rights, including the right to life," Putin said through a translator. "I cannot help asking those who have forced that situation: Do you realize what you have done?"



The Russian president added that the power vacuum following these revolutions led to the rise of terrorist groups in the region — including the Islamic State group.
He told the United Nations General Assembly it would be an "enormous mistake" not to cooperate with the Syrian government to combat the extremist group.

"No one but President (Bashar) Assad's armed forces and Kurdish militia are truly fighting the Islamic State and other terrorist organizations in Syria," he said.



"I must note that such an honest and frank approach from Russia has been recently used as a pretext to accuse it of its growing ambitions — as if those who say it has no ambitions at all. However, it's not about Russia's ambitions, dear colleagues, but about the recognition of the fact that we can no longer tolerate the current state of affairs in the world," he said.

He proposed a "generally broad international coalition against terrorism," likening the suggestion to the anti-Hitler coalition that brought together disparate interests to battle fascism in Europe.


http://www.cnbc.com/2015/09/28/putins-mo...hopes.html

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19-10-2015, 04:30 PM.
Post: #79
RE: Private habits of Putin (Russian Crisis)
Vladimir Putin's unlikely new friends in Europe
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[img=620x0]http://www.afr.com/content/dam/images/g/k/a/e/h/w/image.related.afrArticleLead.620x350.gkcbbd.png/1445228318952.jpg[/img]Russian President Vladimir Putin, second from left, and Kazakh President Nursultan Nazarbayev in Astana, Kazakhstan. Alexei Nikolsky
by Anne Applebaum
The World Public Forum's "Dialogue of Civilisations" meets every year on the Greek island of Rhodes, under the patronage of its founder, Vladimir Yakunin. Until recently, Yakunin was the chairman of Russian state railways and a close ally of Russian President Vladimir Putin. Now he has been ejected from Putin's inner circle, but he still opened the forum in Rhodes this month.
When asked, he angrily denied rumours that a hushed-up corruption scandal had led to his fall from grace. Only an "idiot or a provocateur" could possibly say such a thing, he told a reporter from Politico. A few minutes later, he showed the same reporter his €140,000 watch. "If you want to buy something, what's wrong with that?"
The forum also continued, as in the past, to gather people willing to endorse Russian views of the world. There was Vaclav Klaus, the former Czech president, who called Putin's Syrian adventure a "logical step." There was John Laughland, political director of a Russian-backed think tank, the Institute for Democracy and Cooperation, who argued that the European Union was conceived by the CIA, as part of a US plot to subjugate Europe. Plus dozens of others, from all around the world.
NO MORE 'FRONT ORGANISATIONS'

Once upon a time, we had a vocabulary to describe organisations like the forum or the Institute for Democracy and Cooperation. During the Cold War, we spoke of "front organisations," such as the World Federation of Trade Unions or even the American communist party, which were allegedly independent but secretly supported with Soviet money. Such groups were run by "agents of influence" - people who knowingly promoted the interests of the Soviet Union in the West - or "useful idiots," people who did the same thing, unconsciously, usually out of ideological naivety.
But times have changed, and direct parallels cannot be drawn. Klaus, who is not an idiot, doesn't hide his financial links to Moscow. The forum does not hide its links to Russia, either. Instead, they both seek openly to legitimise the anti-NATO, anti-European, anti-Western views of the Russian elite. In a bid for respectability, the forum's website even displays the many logos of its distinguished "partner" organisations from around the world. Not all of these partnerships are real: A spokesman for the Council on Foreign Relations, whose logo appears on the site, told me that it does not support the forum at all. But if you were just glancing, you'd never know it.
POLITICIANS SUPPORTING PUTIN
Even harder to categorise are the actions of some genuinely legitimate politicians. For example, Andrej Babis, the Czech finance minister, and Milos Zeman, the Czech president - once a regular at the forum - frequently echo or repeat Russian slogans, as occasionally does the Slovak prime minister, Robert Fico. In August and early September of 2014, all three argued against Western sanctions on Russia, using similar language. Zeman called them "ineffective," Babis called them "nonsense" and Fico called them "pointless." Later, they shifted their rhetoric, and began to point to the refugee crisis and radical Islam as the "real" threats to Europe. "The refugee crisis threatens the Czech republic more than Russia," said Babis in September. "Islamist terrorism is a greater threat to Europe than Russia," said Zeman in May.


Like Hungarian Prime Minister Viktor Orban, all of these men have domestic political reasons for offering verbal support to Putin: They want to ride the anti-European Union, anti-"establishment" wave that has washed across all of Europe, and to capitalise on economic discontent. Since the E.U. began, politicians have long found it useful to blame "Brussels" for problems that they cannot fix. But there may be other motives, too. Zeman's close adviser ran the office of Lukoil, the Russian oil company. Babis, who is also one of the Czech Republic's richest men, owns companies that consume a good deal of Russian gas.
But I shouldn't unfairly single out Central Europeans, for there are many other Europeans who support Russian foreign policy with similarly mixed motives. Former Italian prime minister Silvio Berlusconi maintains both a political and a financial relationship with Putin. So does Gerhard Schroeder, the former chancellor of Germany. These men aren't idiots either - but neither are they secret agents, spies or traitors. At the same time, they are working steadily, in their own ways, to undermine Western security and support the spread of Russian authoritarianism in Eastern Europe as well as the Middle East. So what do we call them? We need a new vocabulary for a new era.
Anne Applebaum is a journalist the author of Iron Curtain: the crushing of Eastern Europe 1944-1956.





The Washington Post

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20-10-2015, 01:44 PM.
Post: #80
RE: Private habits of Putin (Russian Crisis)
  • Oct 20 2015 at 5:44 AM 
Russia retreats to industrial self-sufficiency as poverty looms
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[img=620x0]http://www.afr.com/content/dam/images/g/k/4/i/q/j/image.related.afrArticleLead.620x350.gkd45u.png/1445313568589.jpg[/img]The three big rating agencies have issued alerts, warning that the country's public finances are deteriorating fast. AP
by Ambrose Evans-Pritchard
Russia is running out of money. President Vladimir Putin is depleting the Kremlin's last reserve funds to cover the budget and to pay for an escalating war in Syria at the same time.
The three big rating agencies have all issued alerts, warning that the country's public finances are deteriorating fast. There is no prospect of an oil revival as long as Saudi Arabia continues to flood the market. Russia cannot borrow abroad at a viable cost.
Standard & Poor's says the budget deficit will balloon to 4.4 per cent of GDP this year, including shortfalls in local authority spending. A further $US40 billion is needed to bail out the banking system.
Such deficits are manageable for rich economies with deep capital markets. But Russia is in the midst of a commodity slump and a geopolitical showdown with the West. Oil and gas revenues cover half the budget.

"They can't afford to run deficits at all," said Lubomir Mitov, from UniCredit. The finance ministry admits that the funds will be exhausted next year on current policies.
Alexei Kudrin, the former finance minister, said the Kremlin has no means of raising large loans to ride out the oil bust. The pool of internal savings is pitifully small.
Mr Kudrin resigned in 2011 in protest over Russia's military build-up, fearing that it would stretch the public finances. Events are unfolding on cue.
Russia is pressing ahead with massive rearmament, pushing defence spending to 5 per cent of GDP and risking the sort of military overstretch that bankrupted the Soviet Union.


The Stockholm International Peace Research Institute said the military budget rose 8.1 per cent in real terms last year as the Kremlin took delivery of new Su-34 long-range combat aircraft.
It is to rise by another 15 per cent this year, led by a 60 per cent surge in arms procurement. This is an astonishing ambition when GDP is contracting at a 4 per cent rate.
Mr Putin pared back the plans earlier this year but has since restored the original target, claiming that the economy has "hit bottom". Diplomats say the reality is that bombing Syria is eating into the budget.
Mr Putin knows he cannot count on oil and gas, belatedly recognising that US shale technology threatens to cap crude prices for a decade or more.

The Kremlin is now working from the Spartan assumption that oil will remain stuck at $US50 for the next three years. It could be worse. Russia's central bank warned that it may take $US30 oil to stop the US shale juggernaut.
Mr Putin claims to have an ace up his sleeve, though: Russia will fall back on industrial self-reliance.
The Kremlin plans to slash imports across 20 key sectors within five years, from heavy machinery to electrical engineering, cars, tractors, chemicals, pharmaceuticals, and food. The targets are drastic. Foreign farm and forestry machinery is to be cut by 56 per cent, food processing by 53 per cent.
Trade experts are already shaking their heads. Such a reflex usually means a country is going badly off the rails. "In most of the cases I have known, import substitution policies have failed," said Pascal Lamy, ex-head of the World Trade Organisation.

The industrial base of the Soviet era was hollowed out by an overvalued rouble during the commodity boom, and it is far from clear whether Russia can suddenly make these machines all by itself.
Vladislav Inozemtsev, from the Center for Post-Industrial Studies in Moscow, said the likely outcome is a retreat into attempted self-sufficiency and pauperised decline. "This way leads us towards a quasi-Soviet economy detached from the world," he wrote.
Mr Putin is counting on a 50 per cent devaluation to restore lost competitiveness and ignite manufacturing.
But Oleg Deripaska, chief of the aluminium group Rusal, said it is wishful thinking to suppose that a cheap rouble can kick-start an economy tangled up in red tape.
"We should stop looking at the exchange rate and give some thought to the economic policy we really need. Nobody is going to borrow at 12 per cent in hard currency to invest," he said.
The chief effect has been to shrink Russia's economy. "GDP was $US2.3 trillion at the peak. It is now $US1.2 trillion. I fear we are going back to the level of 1998, when it was $US700 billion," said Mr Deripaska.
This would be smaller than Holland ($US850 billion), a remarkable state of affairs for a country vying for superpower status in Europe and the Middle East.

The Telegraph, London

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