Mischa Gabowitsch is member of the Einstein Forum in Potsdam Germany and a sociologist and contemporary historian specializing in the study of protest and social movements in Russia as well as Soviet war memorials. He is the author of Protest in Putin’s Russia published by Polity.
Rage Against the Machine, “Guerrilla Radio,” The Battle of Los Angeles, 1999.
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By Sean — 10 years ago
Kommersant has an interview with Elena Shestopal, the deputy chair of the Political Psychology Department at MGU, on how Russian society views the inevitable election of Dmitri Medvedev. I think the title of the interview, “Thus far Medvedev’s character remains unclear in the consciousness of the masses” says it all. Here is an excerpt.
Almost 3/4 of Russians are prepared to vote for Dmitri Medvedev. Do the people trust the authorities so strongly?
They trust Vladimir Putin personally. Around his person we are seeing the complete consolidation of society in Post-Soviet times. Thus far Medvedev’s character remains unclear in the consciousness of the masses. When we ask people who they will vote for, we hear Medvedev’s name on rare occasions. Usually they answer: “It’s clear for who. Why do you ask?” or “What is to become of us?” Such answers signify the fatality of society and at the same time are angry that “they’ve decided for us.” We’ve monitored the pre-election mood in society since the beginning of the 1990s. Before the anger was that “they betrayed us” etc. But this — “They’ve decided for us and they’ve imposed it on us,” this is the first time it’s happened.
If the people vote “as necessary,” what’s the difference if he’s angry?
Any power needs the genuine, emotional support of the population. Presently the anger means that people perfectly understand that they are manipulated. It means that the PR-industry, which has achieved the consolidation of society, has approached its limit. And if the authorities don’t back off from them, entirely different processes will begin.
What are those processes?
A society which doesn’t seriously believe in the authorities but makes the best with them are very cynical. The people could say to the leadership, “We give you the impression that we trust you, but you then create the impression that you respect us.” After this people become more demanding than they were before. And the authorities can’t give them anymore than they could before. There begins develop mutual discontent among the authorities and in society.
You said that the people still believe in Putin. And he remains as the state’s steering wheel.
Mass consciousness still has not decided how to react to the future tandem. They trust Putin, and not the authorities because in the mass consciousness the president is detached from the system of power according to the age old tradition of separating the Tsar from the Boyars. The President is the symbol of power, and the Prime Minister is only a manager. The change in Putin’s position can turn out and change his value in the eyes of society, which is accustomed to there only being one Tsar.Post Views: 334
By Sean — 5 years ago
This week’s Russia! Magazine column, “Sobyanin Wins! Navalny Wins! The Kremlin Wins?”
I felt something strange while watching Sunday’s Moscow mayoral election: excitement. It had real drama. Sergei Sobyanin’s margin diminished with every counted vote, hinting at the possibility of an unprecedented second round. Like everyone else, I was stunned at Alexei Navalny getting 27 percent of the vote. The election appeared so real it was surreal. Everything in Russia seemed so unpredictable . . . so alive. I too quickly jumped on the Navalny-giving-the-Kremlin-a-bloody-nose bandwagon. And then I thought otherwise.
The unpredictably, not to mention the meaning, of Moscow’s mayoral election depends on what you think the purpose was. If you think this election was about Navalny and his surprise showing, then he made the Kremlin shake in its boots. If you believe the poll was about re-electing Sobyanin, then sure he won, but he has little political capital to show for it. But this election wasn’t about Navalny, though he played an important role. It wasn’t even about re-electing Sobyanin, though that was a key goal. This election was really about the legitimacy of the Russian political system. Given Sunday’s results the plan seems to have worked.
What does legitimacy mean? No leader or ruling elite can rule by coercion alone. Even the most brutal dictator needs the consent of key constituencies to maintain the legitimacy to rule. The Putin system had unquestioned legitimacy for a decade. The politically active part of the population was lulled by prosperity. Everything, however, changed with the 2011-2012 protests. The system was shaken as an important sector, Moscow’s educated, cosmopolitan middle class, broke with Putin. They openly declared the Putin system a sham and its representatives as irrevocably corrupt.
Putin launched a two pronged solution to this problem. The first, and most visible, was a tightening of the political screws. The other was to enact a controlled opening of the political system. This was codified in two reforms in the final days Medvedev’s presidency: the easing of rules on party registration and returning elections to governors and the mayors of Moscow and St. Petersburg. Sunday was the first test of the electoral reforms. And indeed, more political parties participated and, in the case of Moscow and Ekaterinburg, opposition candidates made a strong showing. Most importantly, the status quo remained. United Russia or its affiliates retained political dominance. Everything went off without a hitch. Most of all, in the words of Putin, the vote was “legitimate and transparent” to boot.Post Views: 425
By Sean — 5 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.Post Views: 590