Unrest in Russia

December 21st, 2008 9:29pm

Funny, how quickly things can go sour. The Russian government is the latest to face social unrest, linked to the global economic crisis. As blog-readers might have gathered, I was in Ukraine last week - and a Russian economist mentioned to me that there were demonstrations in Vladivostock against the new tariff on car imports. The FT is now reporting that the trouble is spreading.

More broadly, the Russian government is facing a serious economic crisis on several fronts. Just six months ago, its huge pile of almost $600 billion in foreign reserves seemed a symbol of the country’s new-found strength. But they have got through roughly a quarter of that in just three months - mainly through supporting the rouble. At this rate, it will all be gone well before the end of 2009. That is not an entirely implausible scenario, because the fiscal pressures on the Russian government are only likely to grow over the next year. Official projections are still that the economy will grow by about 3%; but private-sector economists in Moscow are talking about a deep recession. With oil down at just over $40 a barrel, the cash-spigot has been turned off.

There is a danger that, as the government comes under increasing fiscal pressure, it will be tempted to raid the foreign reserves for ordinary budget spending - espescially if the alternative involves cutting social spending and risking further popular unrest. Local governments are also likely to be screaming for financial support from Moscow.

The whole Putin phenomenon has been based on oil wealth and economic growth. So what happens now?

The personal style of Vladimir Putin

December 7th, 2008 9:43pm

Here is a sinister little story from Russia. Memorial, an organisation dedicated to documenting the horrors of Stalinism, has had its offices in Saint Petersburg raided. Orlando Figes, the distinguished historian, is outraged and reckons it is all part of an official effort to rehabilitate Stalin and the Soviet Union.

If there is a cult of personality in modern Russia, it is clearly still centred around Vladimir Putin. The prime minister staged his annual phone-in show last week and hugely amused the audience by publicly discussing the rumour that he had threatened to have the Georgian president Mikheil Saakashvili, “hung by one part”. (The balls, in fact.) This kind of remark sounds entirely in character. Putin is obsessed with castration. I was once at a press conference in Brussels with him, when he offered to castrate the Le Monde correspondent, whose offence had been to ask a question about Chechnya.

Meanwhile, Putin’s personal style becomes ever more imperial. I was chatting over the weekend to a senior western European politician who claims that Putin rarely gets into the office before 11am and then usually goes off to the gym for a couple of hours. But this is not to say he is slacking. He likes to make 3am phone calls to his officials. Now who does that remind me of?

A Polish missile crisis?

November 6th, 2008 12:03pm

During the presidential election campaign Joe Biden warned rather injudiciously that world leaders would test Barack Obama’s mettle within six months of him taking office. Well, it doesn’t seem to have taken them that long. On the very day of Obama’s election, the Russian government announced plans to deploy cruise missiles in Kaliningrad, a tiny Russian enclave that borders Poland.

The Russians deploying missiles in a way that threatens American strategic interests and poses a test for a new, young, charismatic American president - what does that remind you of? JFK and Cuba, of course. A few months ago I heard Robert Kagan, an adviser to McCain, argue that inexperienced and liberal presidents are more likely to end up in dangerous international confrontations because hostile foreigners are more likely to put them to the test, and the new president is going to feel the need to show that he is tough. Eisenhower got through eight years without a truly dangerous confrontation with the Russians. But Kennedy had the Cuba missile crisis

With any luck, however, the Polish missile crisis won’t get anywhere near as dangerous as that. First, the Russians have their timing slightly off. Obama doesn’t take office until mid-January. By then the crisis might have been resolved, or the Americans might have got used to the idea of the new Russian deployment. Second, the missiles are actually going to be deployed on Russian, rather than Cuban soil. That obviously makes a big difference.

But the Russians have still miscalculated. I know that there was debate in Democratic Party circles about the wisdom of the anti-missile system that the Americans are deploying in Poland and the Czech Republic, which the Russians are so narked about. But there is no way that the Americans or the Poles will back down now. In fact, there was no way they could back down, after the Russian invasion of Georgia. The real debate in Obama circles will not be about whether to withdraw the missile system from Poland - it will be about whether to deploy Nato troops and assets in the Baltic states - and so heighten tensions with Russia still further.

Column: Between cold war and appeasement

September 9th, 2008 5:31am

In May of this year a close aide to President Mikheil Saakashvili of Georgia visited me in London. He complained about Russian provocation: the next time a Russian military plane violated Georgian airspace, he said, the Georgians would shoot it down. He added that the Georgian government had informed the US of its intentions and had been given the go-ahead.

I recorded the conversation at the time on my blog (“War over Georgia”, May 16) and wrote: “I think that shooting down a Russian plane would be the stupidest thing they could possibly do. It would give Russia exactly the excuse it needed to launch military operations against Georgia.”

In recalling this conversation now, I do not mean to endorse the accusation of Vladimir Putin, the Russian prime minister, that the war in Georgia was a US-inspired provocation. Who knows what further conversations took place between Tbilisi, Washington and Moscow in the subsequent three months before the Georgians moved in on the separatist enclave of South Ossetia? There is little doubt that the Russians were baiting the Georgians – and actively preparing for war.

The remainder of this column can be read here. Please post comments below.

War in Georgia

August 9th, 2008 11:46am

There are two things to say about the fighting in Georgia. First, the Georgians had every right to try and take control of South Ossetia - it is part of their country and there is no doubt that the Russian-backed separatists had been acting in a highly provocative fashion.

But second - the Georgians have made a terrible mistake. In a post on May 16th, I argued that Georgian threats to shoot down Russian planes buzzing their airspace would be self-defeating, giving Russia an “excuse to launch military operations against Georgia”. Attacking South Ossetia was an even worse error. By becoming (apparently), the first to shed blood the Georgians lost the moral high ground and gave Russia the causus belli it sought.

Continue reading "War in Georgia"

Medvedev and Brown

July 8th, 2008 12:17pm

So much for a “fresh start” between Britain and Russia, in the Medvedev era. It sounds like Gordon Brown and President Medvedev had a pretty disastrous meeting yesterday.

There is a striking contrast between the way the Russians are willing to deal with the British and their treatment of the Americans. Put bluntly, the Russians seem happy to beat up on the British and are much more careful to maintain a reasonably friendly relationship with the Bush administration.

It is true that there are some very tricky issues between Russia and Britain - the BP row, the legacy of the Litvinenko murder and so on. But the Russians also have serious disputes with America - over missile defence, Nato expansion etc. I’m afraid it may simply be that it is easier to bully Gordon Brown’s Britain than George Bush’s America. In fact, I wonder whether Britain might not be becoming a surrogate for Russian anti-American feeling? Continue reading "Medvedev and Brown"

Column: Respect for the law is in Russia’s interest

June 10th, 2008 7:32am

A burglar breaks into your house, ties you up and starts loading your possessions into a bag labelled “swag”. From behind your gag, you say: “May I suggest that behaving in this fashion is not in your long-term interests?” That could be true. But the remark still sounds a little weak.

Such bleating, however, tends to be the stock response of western businesses when they run into nastiness in Russia. The current dispute between BP and its Russian partners does not involve overt law-breaking. But BP executives may feel that they are being subjected to a sort of legalised mugging.

Tony Hayward, BP’s chief executive, is struggling to rescue the situation. Last week he issued the standard, futile appeal to Russian self-interest, arguing that the country’s economic future depends on “consistent application of the rule of law”.

The remainder of this column can be read here. Please post comments below.

Medvedev in Saint Petersburg

June 7th, 2008 5:29pm

I am in Saint Petersburg - or Leningrad, as the British Airways announcer insisted on calling it, when they called my flight. I’m not sure what Lenin would have made of the St Petersburg Economic Forum, which is a sort of Russian Davos conference, which is taking place this weekend. Last night, they re-staged the storming of the Winter Palace - only this time the people doing the storming were oil company executives and investment bankers, intent on getting into a champagne reception at the Hermitage. To add a slightly surreal touch, Roger Waters of Pink Floyd was playing a concert in the square outside.

With the oil price hitting new highs, the Russians are in a swaggeringly confident mood. President Medvedev opened the conference this morning and got a standing ovation - simply for walking into the room. In his speech he lambasted the US for “economic egotism” and for “aggressive financial policies” which had plunged the world’s poor into crisis. It was a bit like hearing an old Communist hailing the final crisis of capitalism. (Except that Medvedev also said that he would like to turn Russia into an international financial centre.)

After the speech, I spoke to some of the assembled throng. A western ambassador called Medvedev’s discourse a piece of “elegant anti-Americanism”. I would agree, except that I’m not sure about the elegant part. A journalist friend said that it reminded him of Vladimir Putin’s bellicose Munich speech, in which the Russian lambasted western security policies - perhaps this was the economic part of the critique?

But in Russia, there are always westerners who are keen to look on the bright side. One banker mused that this was simply Medvedev shoring up his nationalist credentials, so that he could embark on liberal reforms at home. “That’s what really interests him”, he claimed.

Whatever - it was a confident and slightly alarming performance from Russia’s new president.

War over Georgia?

May 16th, 2008 12:40pm

Tensions between Russia and Georgia are heightening. In the latest development, the Russians have accused Georgian special forces of aiding anti-Russian insurgents. The Georgians meanwhile are outraged by the build-up of Russian forces in the separatist Georgian province of Abkhazia. They are now talking about a military response. And that would mean a shooting war with Russia - albeit, probably, quite a short one.

Specifically, the Georgians point to the downing of Georgian drones flying over Abkhazia, which is (after all) part of their country. They say that one of their drones was definitely shot down by a Russian Mig. They are threatening to shoot down the next Russian Mig to over-fly Georgian territory. And they say that they have tacitly been given the go-ahead by the Americans to do this.

It may be that the Georgians are just talking tough, in the hope of provoking the international mediation over Abkhazia that they desperately want. I hope so. Because I think that shooting down a Russian plane would be the stupidest thing they could possibly do. It would give Russia exactly the excuse it needed to launch military operations against Georgia.

Column: Power and Russia’s backyard

April 15th, 2008 8:48am

In Winston Churchill’s memoirs, he records a meeting with Stalin in October 1944: “The moment was apt for business, so I said ‘Let us settle our affairs in the Balkans… So far as Britain and Russia are concerned, how would it do for you to have 90 per cent predominance in Romania, for us to have 90 per cent of the say in Greece and go 50-50 about Yugoslavia?’ While this was being translated, I wrote out the percentages on a half-sheet of paper. I pushed this across to Stalin… There was a slight pause. Then he took his blue pencil and made a large tick upon it, and passed it back to us. It was all settled in no more time than it takes to set down.”

I was in Georgia – Stalin’s birthplace – last week. The country regained its independence in 1991. But its leaders fear that they may yet be subject to a modern version of the Churchill-Stalin percentages deal – in which the west casually assigns Georgia into Moscow’s “sphere of influence”.

The remainder of this column can be read here. Please post comments below.