In a reversal of its own decision, the Russian Supreme Court upheld the Moscow Regional court’s ban of the National Bolshevik Party. The Supreme Court’s ruling further reveals the farce of Russian democracy. Forget about what you think about the NBP, the fact that the Supreme Court contradicted itself so quickly, shows that either larger forces were at work behind the scenes or that the Court itself wields arbitrary power. In a statement to reporters after the verdict, NBP leader Eduard Limonov had this to say: “This was a historic humiliation for the Supreme Court. Big players such as the Prosecutor General’s Office intervened and pressed the judges to discard their previous verdict.” Could this be any closer to the truth? Hardly.
The ban is in response to the fact that the NBP uses the word “party” in its name even though it’s registered as a social organization. But as Limonov tells Kommersant, the NBP repeatedly tried to reregister to comply with the law but were denied. What’s next for the Natsbols? According to Limonov, “We will collect 50 thousand applications as the law demands. This is the only thing left for us, to demand legal recognition. This is a struggle. But we also exist as a large organization. Needless to say, the drama continues.
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By Sean — 11 years ago
As of Friday, the price of oil on the world market stood at $50 a barrel, the lowest it’s been since May 25, 2005. This is both bad and good news for Russia. As the world’s largest oil producer, Russia’s economy and international standing is measured in its ability to pump and sell crude. Russian independence is in relation to the price of oil. For the power elite in Russia the drop in oil prices bodes as a possible bad omen. But not quite yet. According to statements by Russian Development and Trade Minister German Gref, Russia’s Stabilization Fund, which now stands at $88.5 billion as of January 1, will not begin to take a beating until or if oil prices drop below $27 a barrel.
However, for consumers in Russia, who pay an average of $1.45 for a gallon of gas in Moscow (1 gallon equals 3.785 liters and it is now 38 rubles to the dollar), the drop in oil prices provides more relief to an ever increasing autocentic nation where monthly income averages around $300 a month.
But Russia’s, let alone the world’s other industrial(izing) nations, fortunes and misfortunes in regard to the price of oil might not be fully in their own hands. In the era of globalization, economic (mis)fortune is determined by the strength of the vast economic web that spans to every corner of the globe. Russian domestic economic policy is merely an afterthought when local conflicts in Asia, Africa, and the Middle East can veer the global economic rudder. The power of “peripheral nations” to affect the economic stability of “core nations” is a result of what analysts call the “resource curse.” Impoverished nations who have oil and gas as their sole economic resource are also some of the most politically unstable, making them an increasing factor in determining the economic future of the world’s powerhouses.
Nothing points to this fact more than Sebastian Junger’s excellent article “Blood Oil” in the most recent issue of Vanity Fair. Junger argues that the world’s oil prices could potentially be held hostage by small militant groups like Movement for the Emancipation of the Niger Delta. Since January 2006, MEND has intensified attacks on Nigerian oil pipelines and infrastructure and has repeatedly kidnapped oil workers. The effect of one attack on a Shell oil field in early 2006 resulted “in roughly 250,000-barrel-a-day drop in Nigerian oil production and a temporary bump in world oil prices.” The group’s most recent incident occurred Sunday, when MEND members hijacked a cargo ship and took 24 foreign nationals hostage. It is too early to tell if this attack will have an impact on the price of oil when markets open on Monday.
The threat of small power, Junger argues, can have nightmarish economic affects. In one scenario hypothesized by the Oil ShockWave conference:
[A] near-simultaneous terrorist attacks on oil infrastructure around the world could easily send prices to $120 a barrel, and those prices, if sustained for more than a few weeks, would cascade disastrously through the American economy.
Gasoline and heating oil would rise to nearly $5 a gallon, which would force the median American family to spend 16 percent of its income on gas and oil—more than double the current amount. Transportation costs would rise to the point where many freight companies would have to raise prices dramatically, cancel services, or declare bankruptcy. Fewer goods would be transported to fewer buyers—who would have less money anyway—so the economy would start to slow down. A slow economy would, in turn, force yet more industries to lay off workers or shut their doors. All this could easily trigger a recession.
Granted, by Oil ShockWave’s estimation the American economy would most likely be directly affected by such attacks. As of November 2006, the United States imports 10,126,000 barrels of oil a day, 919,000 of which comes from Nigeria and 1, 444,000 from Saudi Arabia. But suffice to say, a slump in the American economy would send shockwaves around the world.
How would regional conflicts affect Russia? If the last year is any indication, the economic prognosis of high oil prices is good for Putin’s state. The war in Iraq, political tension and instability in the Middle East and West Africa, and ecological disasters like Hurricane Katrina has produced a boom for Russia. The macroeconomic success of the Putin Administration is funded by petrodollars. This is not to say that as the world largest oil exporter, global instability is only good for Russia. Multinational oil conglomerates have hardly complained about rising oil prices. At the bottom line, the real beneficiaries of high energy costs are the global elite.
Still, the fact that 60 percent of Russia’s budget comes from oil and gas revenues makes it increasingly hostage to political (in)stability around the world. While, say, attacks by Nigerian militants in the Niger Delta might spike oil prices to Russia’s benefit, “at the same time,” writes Igor Nikolayev, “Russia is gradually becoming integrated into the international economic community. That means it is important to take into account economic-growth trends in industrial nations and emerging markets, the volatility of the world’s major currencies, and the movement of leading stock-market indices, among other factors.”
Thus, a paradox. Economic forecasters in the Kremlin are hedging their bets that oil prices will remain around $61 a barrel for 2007. From this estimate they are predicting that the Russian economy will show a 4.8-4.9% percent growth rate from 2007-2009. High oil prices equal a continued economic boom.
Yet, the maintenance of high oil prices comes at, albeit a long term cost. First, prices will rise at home, cutting into household and personal incomes creating dissatisfaction among the population. This is possibly the least threatening outcome since the Kremlin hardly responds to domestic political pressure. Second, high oil prices will raise tensions between Russia and importer regions like the European Union and its near abroad—Ukraine, Belarus, Georgia. It is no surprise that questions about Russia’s “reliability” come exactly when prices are so high that it gives Russia extra muscle against its customers. Nor is it strange that Russia’s problems with its near abroad have come when energy has become an effective political weapon against its former satellites. The cost of high prices here can potentially be costly, but that cost is more in relation to wider geopolitical struggles. If the English language media is any indication, Russia’s energy supremacy and its willingness to wield it have inaugurated a new Cold War. Third, and perhaps most costly, is that high oil prices resulting from geopolitical instability only hurt Russia in the long term, especially if its economic fate beyond petrodollars is increasingly tied with the economies of the United States, Europe, and East Asia. The Russian state might continue the fantasy that petrodollars can maintain its national sovereignty, but that may one day become a fetter on its economic solvency.
Hence Russia’s crude paradox. Either way you cut it, in the long run oil is more a curse than a blessing.Post Views: 544
By Sean — 13 years ago
—Who will, if anyone, replace Putin after 2008? This is the question that has been on almost everyone’s lips for weeks, if not months. Opinions have vacillate between speculations about Putin changing the Russian Constitution so he could run again, or a candidate hand will be picked by Putin to run for President. That person would be an instant favorite. Both scenarios are possible. But it seems that the latter is the most likely. Putin himself was hand picked by Yeltsin. It appears that he is going to continue the tradition.
The question then becomes who? And further what kind of person will it be? The Moscow Times has an article suggesting that whoever Putin picks, it will probably be a compromise between him and the siloviki and an unnamed progressive St. Petersburg group. The siloviki are a Kremlin call of St. Petersburg intelligence officials who are the base of Putin’s power. In terms of what type of figure that will be, a report by Renaissance Capital (the report is only available to RC clients) suggests the following:
“If the siloviki are able to nominate a candidate, then the next president is likely to push to extend state control outside of the strategic sectors of the economy and into the most dynamic sectors of the Russian economy, undermining economic recovery.”
Perhaps so, but I am not convinced that increased state control will undermine economic recovery. If anything’s for sure, the lack of state control over Russia’s energy and natural resources has only lead to plunder, theft, and corruption. This is not to say that this wouldn’t happen under state control, but at least the state can direct the country’s resources in a direction that benefits the overall the interests of the country. The history of state deregulation, especially in conjunction with structural adjustment, has only led to further problems. Just look at Argentina.
The Russian government’s primary concern according to the Moscow Times is to facilitate a smooth and peaceful transfer of power. The 2008 election should not be viewed without Ukraine, Georgia, and Kyrgyzstan in mind. The so-called “colored revolutions” have cast a dark cloud over Russian domestic politics and there is fear that “revolution” in Russia might be next.
As for Putin himself, some are claiming that he will stay in politics perhaps as the head of United Russia or run one of Russia’s energy outfits. Only time will tell.
Komsomolskaia Pravda also ponders life after Putin but from a different perspective. The concern for the Norka Analytical Group is not who, but what will happen after Putin. Their focus is also on the question of state de/regulation. The article states:
“In the course of their economic transformations, Russia and China have dispelled the myth that private property is superior to state property. As practice shows, industrial efficiency doesn’t depend on the form of property ownership – it depends on the efficiency of the management system, which is not determined by the form of property ownership. Without going into a detailed analysis of the efficiency of China’s state economy and the inefficiency of Russia’s private sector, a number of conclusions may be drawn, the most important of which is this: the private sector in Russia is incapable of ensuring national economic development. The Russian-style capitalist will never build new enterprises that take five to seven years to provide a return on investment. He might invest in a football club, a casino, or a hotel, but he’ll never invest in innovation projects that are a method of industrial development.
The only source of funding for this development, inherited by modern Russia from the USSR, is undoubtedly the natural resources sector – which Yeltsin’s reformers hastened to transfer into private ownership. At present, even though most of the profits from energy resources are going to a group of individuals, the state is receiving substantial sums in the form of taxes and tariffs. But the economic bloc of the federal government, as represented by the so-called liberal ministers, is denying the need to develop the state sector of the real economy and doesn’t know how to use this money in private enterprise.” [Translation: Tatiana Khramtsova]
Putin’s achievement, according the Kom Prav, is that he’s put a stop to the liquidation of Russia’s state industries that began with Gorbachev and accelerated under Yeltsin.
—The Economist sets its sights on the ubiquitous problem of corruption in Russia. According to a report by Indem, “since 2001, in the number and size of bribes given by young men and their families to avoid conscription and, relatedly, in those paid to get into universities. (Fixing a court case, Indem found, has got a bit cheaper.)” Russia’s corruption index, as calculated by Transparency International, ranks Russia next to Niger, Sierra Leone and Albania.
As the Economist is quick to point out: Corruption in Russia is not simply about paying bribes to lower officials and police, it kills. The corruption of local officials has aided the blowing up to two planes and the Beslan and Nalchik attacks. Corruption makes Russia’s fight against terrorism that much more difficult.
—Mosnews is reporting that Kyrgystan’s Prime Minister, Felix Kulov is offering to resign after the in response to protests and a possible parliamentary inquiry into his involvement in the killing of deputy Tynychbek Akmatbayev. Akmatbayev was killed in a convict’s riot on Thursday in a Kyrgyz penal colony. According to witnesses,
“The clash in the prison colony No.31 in the village of Moldovanovka, it was Akmatbayev and one of his aides who first opened fire. One of the convicts, Aziz Batukayev, who is considered to be the ring leader among the convicts, ordered the killing of the MP. It was reported that he had hostile relations with the MP’s brother, Ryspek Akmatbayev, a well-known criminal. According to sources from the penitentiary, “the riots started after convicts demanded that their living conditions be improved”.
Protesters in Bishkek are claiming that Kulov is connected to the murder.
—Another outbreak of bird flu is being reported in Chelyabinsk region, in Russia’s South Urals. So far 33 birds from two different farms have died. According to an unnamed Russian agricultural ministry official,
“The risk of the lethal strain of avian flu rearing its head in Moscow or its surrounding area was “minimal”, despite an outbreak in Tula, 300 kilometres (188 miles) south of the capital. Veterinary services said Friday they suspected that the bird flu virus had now spread to 24 areas, of which 20 were in the Novosibirsk region of Siberia, three in the Kurgan region of Siberia and one in the southern region of Stavropol, though tests were still ongoing.”
The Moscow Oblast administration has decided to destroy all wild birds near poultry procession facilities to prevent the spread of bird flu into the area. Russia Profile claims that this aggressive stance in is reaction to the EU upholding its ban on Russian poultry exports.
—Kommersant is reporting that Russia’s Deputy General Procurator Nikolai Shepel’ is claiming that preliminary investigations show the Nalchik attacks were carried out by an underground international terrorist organization, and that there are strong connections between the Nalchik attacks and similar acts in Ingushetia and Beslan. He told Kommersant, “a serious organization resists us with an ideology that is a dangerous to the state.” He also claims that while the majority of militants in Nalchik were Kabardins, “persons of Chechen and Ingush nationality” were also present. Found among several of the “bandits” were written letters testifying that they were dying for “glory of God and belief.” Thus continues the effort by the Russian government to connect their regional conflict to the global war on terrorism.
For a more comprehensive discussion on Nalchik and its significance, I recommend Russia Profile’s very interesting weekly roundtable.Post Views: 1,341