A genuine good thing or conservative ideology?

The rouble’s value has dropped like it’s hot as the global economic crisis extended to Russia, and the initial negative coverage has taken an interesting spin.
An article published in the Moscow Times Friday suggested that the ongoing devaluation of the national currency would balance out the over-high salaries of the last few years over the long term.

Basically, during the economic mess before Putin’s administration (you always have to give him at least that much credit) the rollercoastering values of the rouble (though it was still mostly in the low region – it was a kiddie coaster) led many employers to pay wages in foreign currencies. As the rouble stabilized, workplaces gradually switched over, generally giving their employees a fixed rate of 28 roubles on every dollar. The fixed conversion rate meant that employees benefitted as currency values rose, giving some of them de facto raises of 20% or more.

The analysts cited in the article argue that the value swinging in the opposite direction will eventually bring about pay grades that match the level of output by employees.

This is an interesting punctuation in a long series of panic articles on ruble devaluation. It’s as if they’ve been telling people to run around and scream their heads off for the last month, and suddenly stopped, raised their hands in exasperation and said, “Okay guys, chill out.”

Obviously there’s no guarantee that everything’s going to be okay and the rouble will settle firmly into the 28 per dollar ratio. The stance this article takes means that the currency could devalue considerably for an indefinite period of time, and employers can always point to the text and claim its still balancing out. I mean, its not as if they could do something absolutely crazy like automatically correct the pay grades by returning to foreign currency wages (of course, this assumes foreign currencies are stable to strong, which they’re not. But the lack of stability also pokes holes in the corrective wages argument because it takes away the constant in the equation).

The theory essentially places the burden of the economic troubles on employees. Hey, times were good, but now you’re going to take a hit for God knows how long, and then you’ll be getting what you deserve. Which is to say, much less than you were making before.

Say wha? Russian politics professor predicts US will become junkyard salvage.

I first heard about this a few months ago in The New York Times when the recession was gaining its first  wave of major press time, but it reappeared again in the Moscow Times on January 12 with some pretty strong language attached to it. Its clearly a heavy hitter with the latter paper’s audience; it’s remained the top story for the last three days.

Igor Panarin, the Dean of International Relations at the Foreign Ministry’s Diplomatic Academy, predicted that the United States would split into six territories by 2010.

Panarin said there was a roughly 50% chance that economic and political disaster would lead to the worst-case scenario of a total economic collapse in the States, leading to wealthier states withholding funds from the federal government and threatening secession and war. The country would then be carved into portions controlled or influenced by Russia, China, Japan, Canada, the European Union, and Mexico.

What was interesting about the article was Panarin’s detailing of a “Pacific Doctrine” to guide Russia in carving a place for itself in a world without the US. Particularly telling was his use of the phrase “A New Russia Upon a Hill” – of course alluding to John Winthrop’s quote about the New England colonies of early America.

The prediction is getting press because of an earlier prediction Panarin made which came true. He supposedly predicted the current financial crisis back in the early ’90s. Even if he has achieved some sort of Nostradamic credibility, I think 50% is a bit high for the odds of such an elaborate scenario to take place.

Even if secession became a possibility, to suggest the country would be picked over by foreign powers like vultures on a carcass is ludicrous. Granted, to claim they wouldn’t try is also ludicrous, but in  a secessionist future, we’re talking about large regions with rooted populations of former Americans. Most likely the regions would reform into more manageable, autonomous economies.

No end to gas woes

In my household, gas is something we only giggle about when we happen to stumble across it, but they just can’t stop discussing the stuff on the other side of the Atlantic.

Chances are you’ve seen it in the news almost every day for the past month, but basically Russia and its national gas supplier, Gazprom, chose to discontinue their deal to provide gas at vastly discounted prices to the Ukraine at the end of last year. The decision was based on long-running accusations that the former Soviet Republic was turning a profit by reselling the inflowing petrol.

The flow was officially shut off on Jan. 7, and the matter was complicated by a decision to withhold petroleum to European Union countries to make up for the Ukraine’s alleged wrong-doing.

This was especially interesting to me, because it made me realize the unique way that the Kremlin makes its announcements. Instead of directly addressing a camera and the television viewing audience, officials will sit down and televise a staged conversation. For the issue surrounding the EU, Prime Minister Vladimir Putin sat down with Gazprom President Alexei Miller, and Miller explained his reasons for believing supplies to Europe should be cut. The meeting ended when Putin said,  “Yes, hearing your reasons, I agree. Go ahead and do it.” And, kids, that’s how policy is born.

An agreement had been reached to resume gas flow on the condition that the lines be inspected by EU monitors. But according to today’s article on Deutche-Welle World, President Dmitri Medvedev says no dice. The Russian leader nullified the three-way deal on accusations that negotiators from Kiev tried to tack on a handwritten note to the document adding unapproved sweeteners to the deal.

This is hilarious to me, because I can’t help but picture a stack of official looking contracts with a messy napkin stapled somewhere in the middle with “ALSO MORE GAZ, PLEEZ” written in a scrawl with some backwards letters.

Anyway, EU officials are now contemplating legal action to ensure their deal is honored. Considering that the EU gets roughly 25% of its gas from Gazprom, Russia holds the muscle in this deal. Even if they achieve a legal success, I’m going to file away their chances of not being shafted into my personal “Fat Chance” category.

S Rezhdestnom (Merry Christmas)

Merry Christmas everybody! Apartment blasts and Ukrainian/Russian “gas wars” abound, but I thought I would just share a little gem from English language news channel RussiaToday:

The decline of ‘Putinism’

The Moscow Times ran a story on Prime Minister Vladimir Putin’s declining public popularity in the face of Russia’s economic troubles. The article presented a couple of interesting theories as to why, after 8 years, the public is turning on the former president:

1) The presidency – not the president – is the sacred cow: this theory was offered by Sergei Markov, a deputy of the United Russia party to which Putin belongs. It’s an interesting idea, but this theory is problematic in that Putin would be only one example of its truth across only two presidencies in the Russian Federation. The Federation’s first president, Boris Yeltsin, was subject to dismal public ratings during his tenure.

2) Putin had an unspoken pact with the Russian people – improve the economy, and enjoy untouchable status: The Communist Party members in the Duma put forth this argument when they motioned to have Putin answer for the failure of Russian industry to hold its own. This is classic socialist thinking, but it makes no sense – the economy didn’t significantly tank until after Putin left the presidency for the Prime Minister’s seat.

The key word here is public. The majority of the students I met in Moscow last March expressed displeasure with the Putin administration (one even created a youtube video protesting the rigged election with his own semen - adding ‘a few million more ballots.’). However, the Putin administration kept a strong grip on opposition speech. Despite his admirers and the presence of such PR campaigns as Putin’s Youth, I believe people were already frustrated with his leadership during the allegedly rigged elections that resulted in Medvedev’s victory. The tanking economy simply gave them an excuse, otherwise they would be specifically targeting Medvedev himself.

Protests, police brutality and maybe-missiles

The Russian Federation earned two briefs in the New York times today, both casting a negative light on the government’s policies during the global economic crisis.

An increase of tariffs on foreign automobiles led to protests in several Russian cities. In Vladivostok, Russia’s largest port city on the Pacific coast, OMON police detained about 100 protestors while breaking up a gathering, according to the Moscow Times. BBC Video of the protest shows officers using force to detain the protestors, who are for the most part just spinning around a statue in a circle.

Vladivostok stands to take the largest toll from tariffs that could be raised as much as 200 percent. A large portion income for the city lays in Japanese auto imports.

But, while meeting with Russian car industry leaders, Prime Minister Vladimir Putin made it clear he would not reconsider the move towards higher tariffs, citing the importance of buying Russian cars in a time of  national crisis. He also said that the real problem, where Vladivstokians are concerned, is the high price of shipping Russian vehicles to the country’s Far East.

Putin himself is regularly transported in a government-owned Mercedes-Benz, a German vehicle.

The police crackdowns in Vladivostok seem to make it clear that the Russian government’s – especially the United Russia party’s – efforts to quelch opposition extend to grassroots politicking. However, police officials said the official reason for the crackdown was a lack of proper permits on the part of the protestors.

Meanwhile, Russia’s weapon systems industry is booming. Or maybe not, depending on who you ask.

Iranian officials reported that they were in the process of receiving a Russian manufactured Surface-to-Air-Missile defense system. The S-300 (called an SA-20 in the West) would be capable of tracking incoming aircraft and firing at them from 100 miles away.

The problem? Russian officials were only recently denying that such a deal would take place. In September, Foreign Ministry spokesman Andrei Nesterneko said outright that the deal would not happen.

The report could be a passive-aggressive half truth on the part of Iran, similar to former Iraqi leader Saddam Hussein’s non-denial of WMDs, which some analysts believe were a means to appear more formidable to countries sharing borders. But the truth of the report would not be surprising, either. Russia announced its intentions to sell to Iran and Venezuela back in September, including the possibility of SAM systems, and discussions of an oil coalition among the countries would only enhance the likelihood of such a deal.

Such deals give Russia a significant international foothold, notably with countries with which the Bush administration has had tensions.

Not quite cold

In 2001, President George W. Bush, in a press conference alongside Russian President Vladimir Putin, made the comment that he “looked [Putin] in the eye,” and that he “got a sense of his soul.” Over the past eight years, as Russia has made international headlines with increasing frequency, the statement has been made famous in part by the efforts of political cartoons like the one below:

Ramirez’s interpretation puts a whole new spin on Bush’s originally positive comment. While politically right-leaning commentators love to collect from the Cold War well when its convenient, the above cartoon – and others like it - at least present an accurate depiction of the split that exists in Russian growth.

Russia under Vladimir Putin, and now Dmitri Medvedev,  has achieved stability light years above the mess of the ’90s. The government is able to come to effective decisions, and quality goods are widely available. But much of the prosperity has come through direct and indirect crackdowns on journalism, silencing of political opposition, and questionable voting practices.

Authoritarianism is on the rise, but its certainly no Soviet Union. Russian citizens have more choice in the private sector, but they do not have all the individual freedoms offered by Western style democracy.

The Russian Federation is an entirely new animal. The country is quickly regaining its super-power status – has arguably already regained it - and wields significant influence on European affairs via the oil market. Not even a year into his presidency, Medvedev has already made moves to create an economic alliance with Venezuela and the Middle East.

Is this bad? Good? It is certainly relevant, and American response has been uneasy toward an uncertain future, if not reaching the panic levels of the last century. That’s why I will be exploring the ongoing narrative of this Lukewarm War in my blog, regularly chronicling Russia, and Russian-American relations in the media of both countries.

Sposiba and Dozvedanya,

Daniel Nash