Feeling the pains of economic crisis? Can’t find a suitable place for expanding market share? Don’t fret. There is one sure fire way to keep those exports up. Sell more weapons. President Medvedev seems to agree, according to comments he made on Tuesday. Russia sold 10 percent more weapons in 2008–a record $8.35 billion worth. The Russian President hopes that 2009 will be another bumper year despite the economic crisis. “We must treat markets more attentively, look in different directions, diversify our supplies, reach markets where we haven’t been present.” Or to quote Blake from Glengarry Glen Ross, “A-B-C. A-Always, B-Be, C-Closing. Always be closing, always be closing.” That means closing those sales to returning customers like China and India and increasing market share in Venezuela, Algeria, and Iran. It is this kind of success that makes Russia’s second to the US in the death market.
Second? Indeed, both AP and the NY Times point to Russia’s silver metal to the US’s gold. AP even goes so far to say that Russia is in “a close second” to the US, though how close isn’t mentioned. Actually, the Russia’s and the US’s arms market share isn’t close at all. The United States sold $36.4 billion in arms last year, a whopping 45% higher than 2007 and four times more than Russia. Sales are expected to top $40 billion in 2009. Take that you Russians! A-B-C! Such salesmanship has already catapulted the US over Russia’s 2008 record. The United States has already filled orders for $11.8 billion since October when the fiscal year began.
Money flows from the barrel of a gun bypassing the mouths of the destitute. Or as President Ike Eisenhower said in 1953, “Every gun that is made, every warship launched, every rocket fired signifies in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. This is not a way of life at all in any true sense.”
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By Sean — 10 years ago
Dmitri Medvedev announced the end of what he’s calling “peace enforcement” operations in Georgia, officially ending five days of fighting. “I have made a decision to end the operation to force Georgian authorities to peace,” he said in a meeting with his military staff. Fighting is still being reported, which isn’t surprising. War machines are easy to turn on. Turning them off requires a big wrench.
The final (preliminary) tally? Russia says about 2,000 civilians killed by the Georgian military; 18 Russian troops and 52 wounded. Russia used 9,000 troops and 350 armored vehicles. The Georgians claim 150 deaths and hundreds injured. Robert Guliye, the mayor of Tskhinvali, reports that 70% of his city’s buildings have been damaged or destroyed. Of the 30,000 residents, only half remain. So far there are no estimates on the amount of ordinance used in the conflict.
This is a big day for Dima. His first military victory as bat’ka. What no flight suit, big banner, and slogan? Surely Dima, you can squeeze some more political capital out of this?
I’m sure he will once he gets out from under Putin’s shadow. Putin, at least in the Western press, has been the face of the war, the little evil demon everyone loves to hate. A headline in the NY Times says it all, “Russia, and Putin, Assert Authority.” How does the Times come to this startling conclusion? Well, it uses a new theory to understand Russian politics: “The Rolled up Sleeves Theory.”
In recent days, Mr. Putin has appeared on television with his sleeves rolled up, mingling with refugees on the border with South Ossetia — the very picture of a man of action.
By contrast, Mr. Medvedev is shown sitting at his desk in Moscow, giving ceremonial orders to the minister of defense.
Putin looks all tough, Medvedev, always the bureaucrat, sits behind a desk. While Putin gets a firm talking to from Bush in Beijing, Medvedev cruises on the Volga. One wonders if the continued stress on Putin in the Western press is really because he is in charge or because he’s become the perfect villain, a kind of “Man of Action” action figure. Apparently, the answer is all in the rolled up sleeves.
Another way to look at the dyarchy is to wonder if balance even matters. Clearly, each man has their roles, and Dima, with his sweet smile and boyish looks, just doesn’t have the image (yet) to deal with international condemnation. Putin’s been around the block. Putting him up in front of the camera is a good PR move. I’m sure the Russians knew they were going to take all the shit no matter what they did. So why take the chance of having the new Prez get the beatdown. Dima is just too mild mannered and sensitive to deserve all that. Plus, Putin doesn’t give a rats ass about Bush and Cheney, let alone McCain and Obama. Basically, Putie’s position on all their blustering is “Save for the who gives a shit channel.”
Can you really blame the Russians? The anti-Russia propaganda machine immediately went into full swing as if all the talking points, footage, interviews and talking heads were already in the medai pipe. Black PR was already assembled. Reuters and other news outlets used staged photos in its reporting. Now CNN is being accused of using footage of wrecked tanks and blown out buildings from the South Ossetian capital Tskhinvali and claiming it was Gori. Rumors and Georgian PR of Russia’s movements were swallowed throughout (even by myself). Fiction became fact. For example, there were constant reports that Russia took Gori but come to find out they didn’t. Reports are coming out about cyberattacks on media. Russia Today, the Kremlin’s English language channel, was crippled by alleged Georgian DDoS attacks (DDoS attacks were used by the Russians against Estonia during the Bronze Soldier affair) as was RT correspondent and commentator Peter Lavelle’s blog. Georgian officials also claimed that their sties were victim to Russia cyberattacks.
To get a sense of how thick the PR is take this passage from Ames’ “Georgia Gets Its War On . . McCain Gets is Brain Plaque”
The invasion was backed up by a PR offensive so layered and sophisticated that I even got an hysterical call today from a hedge fund manager in New York, screaming about an “investor call” that Georgian Prime Minister Lado Gurgenidze made this morning with some fifty leading Western investment bank managers and analysts. I’ve since seen a J.P. Morgan summary of the conference call, which pretty much reflects the talking points later picked up by the US media.
These kinds of conference calls are generally conducted by the heads of companies in order to give banking analysts guidance. But as the hedge fund manager told me today, “The reason Lado did this is because he knew the enormous PR value that Georgia would gain by going to the money people and analysts, particularly since Georgia is clearly the aggressor this time.” As a former investment banker who worked in London and who used to head the Bank of Georgia, Gurgenidze knew what he was doing. “Lado is a former banker himself, so he knew that by framing the conflict for the most influential bankers and analysts in New York, that these power bankers would then write up reports and go on CNBC and argue Lado Gurgenidze’s talking points. It was brilliant, and now you’re starting to see the American media shift its coverage from calling it Georgia invading Ossetian territory, to the new spin, that it’s Russian imperial aggression against tiny little Georgia.”
The really scary thing about this investor conference call is that it suggests real planning. As the hedge fund manager told me, “These things aren’t set up on an hour’s notice.”
War is waged through imagery and propaganda mediated by the government official, the public relations agent and the investment banker. Unfortunately for Georgia, its seems that Saakashvilli’s little adventure is going to cost them. The Bank of Georgia has halted all loans and suspended online banking for fear of mass withdrawals and capital flight. Georgia’s economic future, which until a week ago looked bright, is now in question.*****
Now that the fighting is winding down, the main question is: what is to be done? What to do with Saakashvilli? Surely, things can’t go on as they did. The use of violence has essentially provided the answer: South Ossetia will split from Georgia. Permanently. It’s only a question of when. Violence has redefined the theater of politics.
Many have pointed out that the South Ossetians and Georgians lived in peace in everyday life. The same was said about the Serbs, Bosians, Kosovars, Shia, and Sunnis. But violence is an act of creation as much as destruction. Violence concretizes Identities. As Franz Fanon pointed out in a different context, violence initiates a series of acts of mutual and self recognition. It is first the recognition of the Other. “They are the Georgians, we are Ossetians.” Second, it is an act of self-recognition. “We, Ossetians, are here!” Or “We, Georgians, are here!” Lastly, violence is a strange recognition of one’s own humanity. As Sarte wrote in his “Preface” to Fanon’s Wretched of the Earth, “Don’t be mistaken; it is through this mad rage, this bile and venom, their constant desire to kill us, and the permanent contradiction of powerful muscles, afraid to relax, that they become men.” Is it possible that this five day war has created a new sense of Ossetianess? Of Georgianess?
And what of Russians? The media chorus has announced that for Russia the South Ossetian War was a declaration of Russia streghten. A kind of perverted “We’re here. We’re queer. Get used to it!” True, the Russian leadership has been tired of America’s finger wagging and double dealing for too long. It’s quick response in South Ossetia was a statement that Russia is back. It dashed Georgia’s NATO ambitions with guns and bombs in a mere five days. The Europeans were already reluctant about letting Georgia into the gang. Now there is no way they’re going to grant NATO membership to Georgia and risk being drawn into a future military conflict with Russia. Sure, they may like Saakashvilli’s pro-Western prostrations, but at some point they become a burden.
In Russia, the war was a prime-time sensation. It captivated the nation, intrestingly not unlike Russian football. As Kommersant reports,
Indeed, the Olympics, feature films or soap operas were practically of no interest to the Russians older than 18 years. The nation was watching the news, doubling and tripling the ratings of news programs. News spots won the first five lines in Top 20, which had happened in peacetime very long ago given that it is the height of summer now.
Russia’s political parties were all towing the line in their own belligerent fashion. Duma Speaker and United Russia leader, Boris Gryzlov exhumed Hitler and declared that Saakashvilli should put in prison. “There is no other place for him,” he said. Just Russia’s Sergei Mironov also played the Hitler card. As did the Communists. Zyuganov called Saakashvilli’s actions “fascistic.” Georgia’s attack on South Ossetia was a “war crime.” There is a specter haunting Eurasia . . .
The outcry in the Duma had its populist antecedent. Andrei Bely’s Movement Against Illegal Immigration announced that it will raid places where Georgians gather in Moscow. On Monday, 500 members from the pro-Kremlin youth groups Nashi, Molodaya gvardiia, and Mestnye staged an Orthodox pray-in for God to stop Georgia’s aggression. Orthodox prayers were accompanied with the slogans, “Ossetia, we mourn with you!” and “Saakashvili is a hitman.” Unsurprisingly, Nashi has taken to the war. War, whether real or virtual, has always been truer to its calling. On its website, it echoed calls that Saakashvilli is a war criminal and demanded that Georgian athletes be expelled from the Olympics. They even demanded that the bronze medal the Georgians won in women’s shooting should be revoked. Nashi and Mestnye also staged a 300 strong rally in front of the Georgian embassy in Moscow. Perhaps commentators are right and Nashi has indeed lost its purpose. They just lack the umph of three years ago. No 50,000 or 100,000 beaming youths in red and white T-shirts on the streets. One would thinka real war would be a perfect opportunity to mobilize the masses. It just goes to show that History does indeed occur twice. The first time as tragedy and the second as farce.
As for the Russian public, poll figures provided by the Levada Center show that Russians firmly support (71%) South Ossetia in the conflict and the vast majority (80%) think that South Ossetia should join Russia (46%) or become an independent state (34%).
Finally, the peace plan drawn up between Medvedev and French President Sarkozy has been released. Its six points are as follows:
1) Non-use of force.
2) Stop all military action.
3) Free access to humanitarian aid.
4) Georgian troops return to their previous positions before the conflict.
5) Russian troops return to the lines they held before the start of the military operation. Before an international solution is worked out Russian peacekeepers are taking up an additional security role.
6) The start of an international discussion over the future status of South Ossetia and Abkhazia.
It seems that Saakashvilli will keep his job. That is of course there isn’t talk behind the scenes of him bowing out “gracefully.” It does sound like a good time for him to “spend more time with his family.”Post Views: 1,228
By Sean — 2 years ago
I wrote an article for OpenDemocracy on microloans and debt collector violence. I’ve been mulling the article since January when I read a gruesome story about a debt collector throwing a Molotov cocktail through the debtor’s window severely burning his two year old grandson. A Google news search revealed that though this incident was one of the most tragic, it was hardly exceptional. But the idea sat and so did the saved links.
Then two things happened.
First, was all of the reporting on Putin’s alleged connections to $2 billion in the Panama Papers. Many Western reporters were bemoaning the fact that the Russian federal media wasn’t covering the story and how the details in the Papers revealed the nature of corruption and power in Russia. As usual, Mark Galeotti provided one of the more cogent comments. But besides Mark’s intervention, most commentary read as recycled verbiage salted and peppered with new flashy metaphors.
Second, on April 5, another story sprang up in the Russian press. In the town of Iskitim in Novosibirsk oblast, four masked debt collectors broke into the home of Natalia Gorbunova, beat her husband and 17-year-old son, and then raped her in front of them. Gorbunova had taken a 5,000 ruble microloan in 2014 and now the collectors were demanding 240,000.
It was the contrast between the global media outcry and analytical mummery about Putin’s alleged billions and the complete silence about what ordinary Russians like Gorbunova have to deal with. But this is always the case. Stories about the Gorbunova’s of the Russia are few and far between. It’s easier to obsess over Putin than to illuminate the complexities of Russian daily life.
I hope that my OpenDemocracy article is a modest contribution to the latter.
Here’s an excerpt:
Media reports of harassment and violence against debtors have become all too common. Most debtors and their relatives are subject to constant harassment —in Stavropol, debt collectors shut down a hospital’s phone system with their constant harassment of a hospital worker over the telephone. Similar incidents have happened in other towns as well.
Threats and outright violence are increasingly frequent. In January, debt collectors in Ulyanovsk threw a Molotov cocktail through the window of a 56-year-old grandfather, severely burning his two-year-old grandson. The grandfather took a 4,000 rouble ($60) loan to buy medicine; the collectors demanded he pay them 40,000 ($598).
In Krasnodar, a debt collector broke a woman’s finger over a 300 rouble ($4.50) debt payment. In Penza, a 54-year-old woman took a microloan for 30,000 rubles ($448) to, once again, buy medicine. She put her home down as collateral. The collectors now say she owes 470,000 rubles ($7,022), and as a result, they’re to seize her home. In Rostov-on-Don a collector was sentenced to ten months in prison for threatening to blow up a kindergarten if an employee didn’t repay his loan.
In Yekaterinburg, collectors “cut the telephone wires and filled the locks with glue” as they locked a debtor’s child in an apartment. Aleksei Selivanov, a Yekaterinburg lawyer who defends debtors against predatory lenders, was threatened by a group of collectors led by Maksim Patrakov, a former Donbas volunteer fighter. According to the jurist, Patrakov threatened to throw him in a car trunk and murder him out in the forest. The media is filled with these stories.Post Views: 1,833
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: 866