Thursday’s conviction of Russian opposition activist Alexei Navalny to five years imprisonment on an embezzlement charge rekindled Western criticism of President Vladimir Putin’s supposedly authoritarian governing style, even as Navalny was released from custody a day later to await his appeal and stand in Moscow’s mayoral election in September.
President Vladimir Putin on Friday promised to invest more than $13 billion in updating Russia’s infrastructure but cautioned that there was no “magic wand” that could resolve the nation’s economic problems altogether.
Speaking at a business forum in his hometown of Saint Petersburg, the Russian leader announced plans to build a new ring road outside Moscow as well as a high-speed rail connection from the capital to Kazan, an industrial hub in Tatarstan. He also seeks to update the Trans Siberian railway to Russia’s Far East.
To finance the projects, the government will tap into the $87 billion National Welfare Fund, otherwise intended to provide for pensions.
But with inflation at 7.4 percent and growth forecast to be 2.4 percent this year, even the promise of a lucrative energy deal with China valued at $270 billion might not lift the nation’s spirits. Foreign investors worry that liberals are increasingly marginalized in favor of conservatives in Putin’s government who advocate a more statist economic policy. Read more “Putin Promises Infrastructure Spending, Investors Skeptical”
Since winning a third presidential term last year, Russian president Vladimir Putin has removed liberals from his inner circle, tilting the balance of power in favor of conservative veterans of the nation’s security and spy agencies known as the siloviki.
Wednesday’s dismissal of Deputy Prime Minister Vladislav Surkov, once the Kremlin’s chief ideologist, underlined a trend. He had become somewhat critical of Putin after being removed from his staff in late 2011, apparently in punishment for the ruling party’s 15 percent drop in support in that year’s parliamentary election.
Putin’s longtime finance minister Alexei Kudrin was also dismissed that year. In a television appearance last week, when Putin answered live questions from the audience, he disputed the president’s claim that the slowdown in Russian growth should be attributed to weakened demand for its export products. Rather he urged the government to finally wean itself off oil and gas sales.
While liberal economic and fiscal reforms were enacted during Putin’s early years in power, including dramatic income tax cuts, debt stabilization and education and infrastructure spending that helped fuel economic growth, there has been little progress since Kudrin’s resignation. Both Putin and his deputy Dmitri Medvedev have continually stressed the importance of diversification but done little to reduce the state’s role in, and reliance on, hydrocarbon industries.
Rather state oil major Rosneft has grown into the world’s largest publicly listed energy company by output under the stewardship of Igor Sechin, formerly a Soviet intelligence officer who has been among Putin’s closest advisors since he became chief of staff to the man who was then mayor of Saint Petersburg. Even if he stepped down from a cabinet position last year, Sechin is still seen as the leader of the siloviki.
Sergei Ivanov, another hardliner whom Medvedev dismissed as defense minister as 2008, has returned as head of Putin’s Kremlin administration.
Putin’s own views have long oscillated between the conservatives and liberals in his inner circle.
While pursuing market reforms, he consolidated the energy sector almost under his personal control through the Gazprom conglomerate. He defied some of the tycoons who had been able to take control of entire industries in the wake of the Soviet Union’s collapse but otherwise did little to revise the clientelist power structure that is largely fueled by oil and gas sales. He rejects the hawks’ desire for an alliance with China against the West but seems to have given up on closer relations with the European Union and the United States as well, retreating instead into the former Soviet sphere of influence with an attempt to build an “Eurasian Union.”
The rightward shift might be one of perceived necessity. Increased oil and gas production in North America and Gazprom’s antitrust battles with the European Union prompted Putin to shield the company from foreign legal investigations in September, deepening its dependence on the state and preventing investment from flowing into other industries.
Politically, Putin’s position looks less secure. While he comfortably won last year’s election with almost 64 percent of the votes, it was a drop in support from 71 percent in 2004. Mainly urban and middle-class Russians, whose economic prospects have improved in large part because of the reforms Putin enacted during his first two terms, are increasingly dissatisfied with corruption and nepotism at the top.
Rural and working-class voters, by contrast, have seen little economic improvement in recent years and are turning to communist and nationalist rather than leftist opposition parties. Putin seems to consider this shift the greater threat to his political survival and has resorted to patriotism and populist economic measures to boost his support in the provinces, even after warning in January of last year that Russia’s “multiethnic society” would lose its “strength and durability” if it was “infested by nationalism.”
President Vladimir Putin reminded Russia’s biggest trade partners in Europe on Sunday and Monday how ambivalent they are about their economic relations with his country. Putin’s visit to Germany and the Netherlands was overshadowed by concerns in both nations about the deterioration of human rights in Russia.
The Dutch and Germans are major importers of Russian oil and natural gas and sell agricultural and industrial products, including cars, to the country but are uneasy about the Kremlin’s political interference in energy markets and the maltreatment of Russian gays and international human rights organizations in the country.
German chancellor Angela Merkel suggested in a speech on Sunday that her country could help Russia innovate and diversify its economy. “We believe this can happen most successfully when there is an active civil society,” she said.
We must intensify these discussions, develop our ideas and we must give the NGOs, who we know as a motor for innovation, a good chance in Russia.
Putin’s government sees many such nongovernmental organizations as agents of the West that aim to destabilize it. While aid and charitable organizations that “criticize the current authorities” are perfectly permissible, “the activities of ‘pseudo-NGOs’ and other agencies that try to destabilize other countries with outside support are unacceptable,” the Russian leader wrote last year.
Dutch prime minister Mark Rutte, whose country was the first to legalize gay marriage in 2001, expressed concern about a law pending approval from the Russian parliament that would ban homosexual “propaganda” in Russia. “Gay rights are human rights,” he insisted during a joint press conference with his Russian counterpart on Monday before arguing that the two countries could have different views on “such difficult topics” exactly because they have a strong relationship.
Amnesty International and gay rights movements staged demonstrations outside the Hermitage Amsterdam museum where Putin met the Netherlands’ Queen Beatrix.
In Germany, protesters carried Syrian flags to signal their displeasure with Russia’s support for the Levant country’s embattled leader, Bashar al-Assad, whose regime tried to suppress a popular uprising that has since morphed into an armed insurgency. Russia has resisted calls from countries like the United Kingdom and the United States to impose tougher international sanctions on Assad’s government.
Germany and the Netherlands are less confrontational than their American and British allies who have derided Russia for propping up a Middle Eastern dictator. Neither is keen to criticize Russian policy too vehemently as they depend on the country for hydrocarbon imports.
On the eve of Putin’s visit, the Netherlands’ economy minister announced that the Dutch-Russian joint venture Shtandart had agreed to invest some €800 billion in the construction of an oil terminal in the port of Rotterdam. 30 percent of crude oil and 45 percent of oil products shipped through Rotterdam harbor already originates in Russia. Germany, in turn, is a major recipient of oil and gas that flows through the Netherlands. Russia supplies more than a third of Germany’s natural gas consumption.
Germany’s dependence on Russian energy has created concerns in Eastern Europe about too close a relationship between the two countries that could jeopardize the interests of NATO states situated in between.
German policy toward Russia in recent years has seemingly harkened back to Willy Brandt’s Cold War Ostpolitik that assumed diplomatic engagement alone would help foster political change in the East. Only recent has Merkel adopted a more critical tone but not all members of her government are convinced that is appropriate.
“On the one hand, we don’t want to hold back on criticism regarding Russia’s internal development,” said Guido Westerwelle, the liberal party foreign minister, late last year, “but on the other hand we are very keen for the strategic partnership with Russia to be expanded.”
Dutch officials sound similarly ambivalent when they discuss their relationship with Russia. Foreign minister Frans Timmermans urged the country in February to reject its gay “propaganda” ban but has been more cautious in his criticisms than he was while a lawmaker for the now ruling Labor Party.
The Netherlands is currently the second largest natural gas producer in Europe, after Norway, but estimates are that it will have to import in as little as ten years’ time. If it is to remain a pivotal distributor of gas in Europe, it can ill afford to alienate the Russians.
Russian president Vladimir Putin decreed on Tuesday that any foreign organization that seeks information or changes in contracts from strategically important companies must first seek permission from the Kremlin. The move shields the Russian energy conglomerate Gazprom from a European antitrust investigation.
The European Commission launched an antitrust probe last week to force the Russian gas company to cut prices and publicize the formula that governs its supply contracts to Europe.
“Liberalizing the global economy” is the “key issue” in Vladivostok this weekend, said President Vladimir Putin in an interview with RT television before the leaders of the Asia-Pacific Economic Cooperation organization gathered in the Russian port city for their annual summit. But he knows the Russian people are less sure.
Putin, who started his third term as president in May, reiterated this pledge in Vladivostok on Friday. “We can only overcome negative trends by enhancing the volume of trade, enhancing the flow of capital,” he said.
The protectionism pill, of course, eases the pain temporarily but hampers global economic recovery on the whole. It restrains trade and investment activities.
Russian president Vladimir Putin in an interview that aired on Thursday suggested that Western powers are using terrorists to destabilize the Ba’athist regime in Syria. “This is a dangerous and very short sighted policy,” he said.
The Russian leader, who started his third term as president in May, told Russia’s RT television,
Today, some want to use militants from Al Qaeda or some other organizations with equally radical views to achieve their goals in Syria.
The Moscow Times reports an increasingly apparent nationalist streak in Russia’s street protests against the government of President Vladimir Putin. Ultranationalists are joining ranks with otherwise left leaning demonstrators.
Many observers of the June 12 opposition rally noted a large presence of nationalist groups — from ones carrying the yellow and black imperial flag, the banner of the nationalist movement, to more marginal groups like Great Russia, which sported black Nazi style uniforms with armbands and garrison caps.
Rather than the typically young and liberal protesters who have drawn Western media attention, Putin recognizes that this rising nationalism — which he may have fueled, at least in part — is the greater threat to his regime’s stability and that of Russia in general. Read more “To Putin’s Dismay, Russian Nationalism on the Rise”
In their criticisms of Russia’s continued support for Syria’s embattled president Bashar al-Assad, the proponents of intervention in his country tend to point at Russia’s weapons trade with Syria and the presence of a Russian naval base on its shore as evidence of a shallow self-interest on the Kremlin’s part. The Russian government, they reason, is turning a blind eye to the apparently indiscriminate slaughter of civilians to save a couple of billion dollars worth in arms sales every year.
Imagine that, a state acting in its own interest. But the reality is that Russia has more at stake in the Syrian crisis. It stands to lose more than its only Arab ally if the demonstrations and insurgency in the country manage to unseat the Ba’athist regime. Read more “Russia Has More at Stake in Syria Than Naval Base”