The Putin cult continues. Even though he’s no longer President, he’s still the man. Russians are still curious about Putin’s many movements, appearances, and events reports the Moscow Times. Where will he be today? What did the vozhd say on his working trip to Kazakhstan? Just who are those lucky personages graced with his exalted presence? What a better way to follow the goings on of “Mr. Erotic Dream” than to give him his own website! To quote, Italy’s Gay TV host Alfonso Signorini, “Won-der-ful!”
Putin’s web site, which will be located at www.premier.gov.ru, promises to offer detailed information on Putin’s activities. For example, visitors will be able to click on a horizontal timeline to find out where Putin is at that moment and what he is doing, while an interactive map of the country will show where he has been and where he is planning to go, Peskov said.
“It will be a modern site with good anti-hacker protection,” he added.
Putin will not address Russians regularly like President Dmitry Medvedev has started doing through a new video blog launched this month on the Kremlin web site, Peskov said. But Internet users will be able to send questions to the prime minister.
What’s next a 24/7 Putin webcam?
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- By Sean — 6 years ago
The financial crisis in Cyprus has put Putin in a bind. On the one hand, sitting silent and allowing Russian depositors take up to a 10 percent haircut on its $31 billion in Cypriot banks jeopardizes Putin’s standing with the Russian elite. On the other, if Putin is serious about anti-corruption and de-offshorization, the crisis gives him opportunity to make some modest headway. Either way, the Russian government’s hesitance in striking a deal with Cyprus reflects the schizophrenia between Putin the populist patriot and Putin the guarantor of the class interests of the Russian bourgeoisie.
The European Commission, European Central Bank, and International Monetary Fund have inadvertently accomplished a remarkable feat: prompting the normally disharmonious Russian bourgeoisie to suddenly sing in tune. Note some of the reactions from Russia’s bourgeois quarters. Putin furiously denounced the Troika’s plan as “unfair, unprofessional and dangerous.” Medvedev took the defense of the Russian bourgeoisie even further by red-baiting the EU with comparisons to Bolshevik expropriations. Oligarch and faux-oppositionist Mikhail Prokhorov warned the tax on Cypriot depositors could open “Pandora’s box.” Similar to Medvedev, neoliberal champion and effervescent Putin hater, Yulia Latynina blasted the EU’s “confiscation” as indicative of socialism. The crisis even has the Moscow Times running uncharacteristic op-eds imploring Putin to stand up for Russian capital against EU “bullying.” Even Andreas Aslund, who is ever dour on Putin’s Russia, believes that in this instance Putin “is undoubtedly getting strong advice to act from wealthy, smart, and daring Russian businessmen.”
The great irony in all this is that we find the Russian elite, which normally has no problem cannibalizing each other’s assets at home, defending in Cyprus what they are unwilling or unable to institute in Russia: a working legal system that protects capital from predation. With Cyprus the Russian elite gets its cake and eats it too: capital extraction at home and a safe harbor for its storage in its safe Cypriot colony.
How did Cyprus become so important to Russian capital? As Business Insider explains, all roads lead back to the Cypriot-Russian 1998 Double Tax Treaty:
Additionally, according to Bloomberg Russia billionaire reporter Rich Lesser, there is no penalty for moving money out of Cyprus, so if you want to move your money to another tax shelter, say, The British Virgin Islands, you’re free to do that.
So some oligarchs do.
How does this work? According to the Christian Science Monitor‘s Fred Weir:
“For quite a long time, Cyprus has been the major offshore zone where Russian corporate earnings are banked, and then re-invested in Russia,” says Grigory Birg, co-director of research at the independent Investcafe equity research provider in Moscow.
It works like this: Russian companies and wealthy oligarchs set up shell companies in Cyprus, which then invest in Russian operations and “repatriate” their profits to Cyprus, where they pay a flat corporate tax of 10 percent compared to more than 20 percent in Russia. Since Cyprus adopted EU banking rules in 2004, experts say, the scrutiny has become a little tougher, but not enough to discourage most rich Russians.
According to Russian central bank figures, little Cyprus invested almost $14-billion in Russia in 2011, compared with barely $2.3-billion invested by Russia’s biggest European trading partner, Germany.
“Cyprus is really convenient place for Russians, because it’s in the EU, has a low tax rate, and has adapted itself to Russian customers. It offers infrastructure, proximity, and Russian-speaking staff. It’s about capital protection … but now, no matter what happens with this tax plan, that’s bound to change,” says Mr. Birg.
Basically, Cyprus is for Russians as Caribbean tax shelters are for American oligarchs: a means to squirrel money away from the prying eyes of government auditors and tax collectors.
At the same time, Putin’s allegiance to the Russian elite puts him at odds with his de-offshorization efforts. Again Weir:
“Russian authorities have long pursued a campaign of “de-offshorization,” declaring that this practice of cycling money through other countries is bad for Russia,” says Alexei Makarkin, deputy director of the independent Center for Political Technologies in Moscow.
“In practice, it has usually meant that money just gets shunted from one offshore destination to another…
The crisis certainly presents Putin with an opportunity to fight corruption, as Stefan Wagstyl of the Financial Times notes. Indeed, Russia’s first intervention into the crisis suggests that anti-corruption and de-offshorization is on Putin’s mind. Ten days ago, Kommersant reported that the Ministry of Finance considered giving Cyprus aid in exchange of the names of its Russian depositors. The hope is that even modestly depriving Cyprus as a Russian tax haven will stave off the capital outflow from Russia. Capital flight from Russia is already around $14 to $16 billion so far this year, exceeding Central Bank estimates of $10 billion for the entire year. Medvedev even floated the idea of creating an offshore zone in the Far East. The money would still be under a tax haven but in Russia where the government would know who’s depositing, how much, and ostensibly where the money came from. This would undoubtedly give Putin some leverage in keeping the increasingly fractured elite in line. However, given that a main reason Russians park their money abroad is to avoid government raiderstvo, I seriously doubt a Sakhalin tax haven will be much of a draw.
The Cyprus crisis has pitted Putin against himself. It opposes Putin the patriot against Putin the guarantor of Russian elite; Russian national interests versus Russian class interests. I can only speculate how this internal struggle has played in the recent ebbing of Russian-Cypriot negotiations.
- By Sean — 11 years ago
Western leaders have been hoping and praying that Dmitri Medvedev will be more “liberal” in foreign and domestic policy. According to a LexisNexis search the new President elect’s name is often followed with words like “liberal,” “liberal instincts,” “liberal inclinations,” and the like. It’s not that Medvedev hasn’t given Westerners any reason to hope. Take this exchange from Medvedev’s 18 February interview with Itogi for example:
But now we will soon have a new holiday, the Day of the Lawyer. If only it could help create the rule of law.
I agree. To overcome the legal nihilism preventing the country from developing harmoniously is a long and difficult job. As it turned out, to establish a workable model of a market economy is much easier than laying the foundations of a state in which people respect the letter of the law. This is another demonstration of the thesis that democracy cannot occur in any given place after two or three years. It requires painstaking, persistent work to improve the legal and political system. Of course, one can not forget the distinctive characteristics of the Russian situation. You know, justice has always relied on a mechanism for enforcing its implementation, some kind of public stick. But if it is not based on a set of moral imperatives, on internal convictions and moral principles, if it simply aspires to the crude power of a punitive machine, then the structure it creates will be flawed and ineffective. In the nineteenth century, the Russian government was far from perfect but it was a developed system based on a set of moral and religious values. In the twentieth century, the second part of this disappeared: people were deprived of their faith in God and the state came to demonstrate either naked coercion, which at times was extremely cruel indeed, or weakness and complete failure. These are both equally bad. We all remember what the well known doctrines of the thirties and forties led to, when the talk was of class dictatorship and the presumption of guilt in criminal trials. This helped resolve some tactical problems, but in the long-term planted a time-bomb that ended the very existence of the Soviet state. You have to feel what justice is, accept it voluntarily, not obey it in some insanely prostrate way. The explosion was inevitable, it would have happened sooner or later. People rushed to the other extreme and took to systematically breaking laws. This is what happened in the nineties.
Do you think that the current system of justice is better?
Though based on quite good, solid regulatory framework, our judicial system continues to function, getting its bearings from old traditions. Disregard for the law in various sectors of society remains widespread. Until we change people’s attitudes, until we convince them there is only one law and no one is above it, there will be no change for the better. The strength of the rule of law consists in the fact that no one can influence it. Neither pressure from various authorities, including the most powerful, nor pressure from business nor social forces. Justice should be in harmony with all the participants in this process, and refuse to cave in to anyone.
These are fine words, Dmitry Anatolyevich, but how can they be put into practice?
You can start small. For example, recommend that judges at all levels keep to a minimum all contact with businessmen and even representatives of public services. To retain maximum independence and objectivity.
You can’t put people in a cage.
You don’t have to. It’s enough if you can completely eliminate the personal factor. The more faceless the legal machinery becomes, the stronger it is. I am absolutely convinced of this.
I guess we will have to see which Medvedev Russia and the world will get. Instead of getting to carried away with liberal fantasies, perhaps we should take heed of what Putin told reporters in regard to how his protege might approach foreign policy:
“I have the feeling that some of our partners cannot wait for me to stop exercising my powers so that they can deal with another person. I am long accustomed to the label by which it is difficult to work with a former KGB agent. Dmitry Medvedev will be free from having to prove his liberal views. But he is no less of a Russian nationalist than me, in the good sense of the word, and I do not think our partners will have it easier with him.”
Oh yeah that. Nationalism. No matter how liberal Medvedev may seem, if anyone thinks he’s going to go against Russia’s short and long term national interests, or more importantly, against the interests of Russia’s elite class, then keep dreaming.
Plus Medvedev has more pressing issues at hand. First and foremost is to establish his own power base in the Kremlin and in Russia’s regions. That process is already starting. Medvedev doesn’t official become president until early May, yet yesterday Putin ordered that the presidential administration to begin working for Medvedev, along with giving him a presidential level security detail. The Moscow Times is speculating that one of Medvedev’s first moves will be to fire the current cabinet and put his own guys in power. Potential members of Medvedev’s “clan” are his former law school chums from Leningrad State University. They include Anton Ivanov, chairman of the Supreme Arbitration Court; Ilya Yeliseyev, deputy chairman of Gazprombank; Konstantin Chuichenko, head of Gazprom’s legal department; and Nikolai Vinnichenko, head of the Court Marshals Service. This group is already being dubbed as the “civiliki.” All of these guys have come up on Medvedev’s tail. For example, between March 2001and March 2005, Chuichenko went from heading Gazprom’s legal department to being elected to the supervisory board of Sibneft. The others on this list shot up to important positions in media, energy, and the legal system. And the ride on Medvedev’s tail brought others riding on the civiliki tails. Such is the nature of Russian “networkism,” as Alena Ledeneva told Graham Stack in December. The question now becomes whether there will be a clash between Medvedev’s clan of civiliki and the siloviki.
If establishing a base in the Kremlin was difficult enough, it appears that he will have to do the same in Russia’s regions. Andrei Serenko’s recent article in Nezavisimaya gazeta, “Revenge from the Underground,” is a good example of what Medvedev might face. Serenko notes that the Presidential elections produced cleavages between provincial political elites. In Volgograd, for example, elites split into a “high turnout party” and a “low turn out party.” The former, mostly comprising of governors and mayors, saw the election as a test of their “professional aptitude and administrative effectiveness.” Translated, regional leaders saw high turnouts as a way to demonstrate their loyalty to the center, and specifically Putin’s choice, Medvedev. The latter are those elites’ local rivals. The “low turnout party” were those who recently lost power to the local political bosses and now seek to exact “administrative revenge.” The hope was that lower numbers for Medvedev would give the “low turnout party” a way to discredit their rivals in Moscow’s eyes.
As Dmitri Savelev, the director of the Institute for Effective Government, told Serenko, an “administrative partisan movement” has arisen in Russia’s Central and Souther provinces bent on returning ousted “old elites” to power. One way to do this was by messing with Medvedev’s local returns. The “Yarolsav opposition,” for example, tried to discredit their rivals by “intentionally discrediting the numbers of [Yaroslav] Governor Bakhukov and lowering the electoral returns for Dmitri Medvedev in the region to 30 percent, and at the same time increasing the returns for Liberal Democratic Party to 20 percent and more.” It doesn’t seem like the Yaroslav “low turn out party” was very successful. Returns show that Medvedev got 63 percent compared to Zhirinovsky’s 13 percent. In the Duma elections (also held on March 2), United Russia got 49 percent compared to LDPR’s 13 percent.
This doesn’t mean that Medvedev isn’t going to have to reestablish central control. As Serenko concludes, while regional leaders formed a united front for December’s Duma elections, the presidential election has “intensified competition among various groups of regional elites, thereby shaking the stability of the regional political system which was formed during the rule of Vladimir Putin. It’s obvious that the task of restoring this stability will be one of the priorities for Dmitri Medvedev’s administration.”
Taming the center and the periphery. Sounds like Dima already has a lot on his plate even before he actually gets to sit at the table. And people wonder why Putin is sticking around as Prime Minister.
- By Sean — 11 years ago
Russian Election Day has come and gone. Finally. Nevertheless, the mandarins of the American media are dutifully filling column inches with reports about Russia. Sadly, like most reporting on the Slavic nation, one you read one, you’ve pretty much read them all. The Washington Post is a typical example of how little American newspapers editors understand about Russia. Here are a few examples:
The Kremlin has rounded up a collection of three losers for Mr. Medvedev to run against, including the head of the Communist Party and a buffoonish ultranationalist, while disqualifying the most serious opposition candidate, a liberal former prime minister.
By “liberal former prime minister,” they mean Mikhail Kasyanov, or as they call him in Russia “Misha 2%.” The editors from the Washington Post can’t get it through their thick skulls that the “head of the Communist Party” and the “buffoonish ultranationalist” are the only serious opposition simply because they actually have political constituencies. To suggest otherwise would be like saying Ralph Nader is the only serious opposition in the American election. The real sad part is that instead of allowing Kasyanov to run openly and uninhibited to show the world that Russians don’t care about him, the Kremlin’s minion in the Central Election Commission disqualified him for allegedly faking signatures. I believe this claim. But the election is all bullshit anyway so the way I see it you might as well let all bullshitters play. At least that way the whole process won’t be so goddamn boring.
So the benighted slag and drag is piling up highthis Russian Presidential election day. It’s no wonder that when Tim Russert asked Hillary Clinton “Who the next Russian President will be?”, she garbled her answer with “Med . . . um . . . Medeveda . . . Mededevda . . . whatever.” No matter Bush didn’t know who Pervez Musharaf was when he was running the first time. Hopefully for her, if she wins, which looks unlikely, she won’t discover Medvedev’s name in a similar context in which Bush had to learn Musharaf’s. You can see a clip of of Hillary’s verbal stumbling on Siberian Light. (Btw, Andy has also be doing some live blogging on the election.)
Luckily, there is one diamond amid the pundit zirconia, and even more surprisingly it’s from the chief mandarin of them all, the New York Times. Rather than turning to their editorial board to make yet another dull comment, the Times has enlisted Princeton historian Stephen Kotkin to give his assessment of Russia via a book review of Anders Aslund’s Russia’s Capitalist Revolution. More important than what Kotkin thinks of Aslund’s book is what he says about the election. “Dmitri A. Medvedev will be anointed president of Russia today thanks to the political handiwork of Vladimir V. Putin. But maybe the real winner is economic globalization.” Agreed. And this is what many Russopundits should understand. Putin may not be a liberal in the political sense, but he’s certainly one in the economic sense. This is the secret of the success of Putin’s Plan. Russia’s increasing integration into the global economy has produced enough trickle to enough Russians to build a middle class. Once you have that class as your political back pocket, how the poor live doesn’t matter. Especially since the uppity middle class despises them anyway. As Kotkin writes,
Most Russians do not love Mr. Putin per se, but they love Mr. Putin’s Russia. They love being middle class. They love planning for the future. It is no comfort to the politically persecuted, but average wages in Russia are leaping 10 percent a year, in real terms.
The growing millions of Russian homeowners, vacationers and investors may seem inclined to authoritarianism or just apolitical. But they certainly value a strong ruble, moderate inflation, affordable mortgages, access to higher education, satellite television, Internet connections, passports, foreign visas and — above all else — no economic shocks.
So as much as people like Aslund want to argue that Putin had nothing to do with Russia’s economic resurgence, the truth is that he and his circle are reaping the political benefits. Enough Russians see that things are good now and the man in office is Putin. This makes Medvedev’s win a no brainer even if the election was a shining example of the democratic process. Given this, perhaps the real farce would be holding an actual democratic election. That would certainly be the worst thing for Russia’s “liberals” because it would expose them for the politically bankrupt “opposition” that they are. Putin has unwittingly done the liberals a great favor. His Plan has all but buttressed their their self deluded right to exist.
Plus why pretend there is a contest when there actually isn’t one in real political terms? Dima is Putin’s man, so by that simple fact he’s also most Russians’ man. So instead of harping again and again on the obvious–Russia is not the democratic, liberal nation we all pray for–we need concentrate on why Russians may not love Putin, but they love Putin’s Russia. As Kotkin rightly says, quoting Dmitri Trenin, “There is a Russia beyond Putin’s.” True enough, though Mr. Trenin does not detail that Russia. Almost no one does.” True that.