The Great Debate UK

from The Great Debate:

Stop the pointless demonization of Putin

American media coverage of Vladimir Putin, who today began his third term as Russia's president and 13th year as its leader, has so demonized him that the result may be to endanger U.S. national security.

For nearly 10 years, mainstream press reporting, editorials and op-ed articles have increasingly portrayed Putin as a czar-like "autocrat," or alternatively a "KGB thug," who imposed a "rollback of democratic reforms" under way in Russia when he succeeded Boris Yeltsin as president in 2000. He installed instead a "venal regime" that has permitted "corruptionism," encouraged the assassination of a "growing number" of journalists and carried out the "killing of political opponents." Not infrequently, Putin is compared to Saddam Hussein and even Stalin.

Well-informed opinions, in the West and in Russia, differ considerably as to the pluses and minuses of Putin's leadership over the years – my own evaluation is somewhere in the middle – but there is no evidence that any of these allegations against him are true, or at least entirely true. Most seem to have originated with Putin's personal enemies, particularly Yeltsin-era oligarchs who found themselves in foreign exile as a result of his policies – or, in the case of Mikhail Khodorkovsky, in prison. Nonetheless, U.S. media, with little investigation of their own, have woven the allegations into a near-consensus narrative of "Putin's Russia."

Even the epithet commonly applied to Putin is incorrect. The dictionary and political science definition of "autocrat" is a ruler with absolute power, and Putin has hardly been that. There are many examples of his need to mediate, sometimes unsuccessfully, among powerful groups in the ruling political establishment and of his policies being thwarted by Moscow and regional bureaucracies. Moreover, if Putin really were a "cold-blooded, ruthless" autocrat, tens of thousands of protesters would not have appeared in Moscow streets, not far from the Kremlin, following the December presidential election. Nor would they have been officially sanctioned – as were the thousands who gathered yesterday before a small group breached the sanctioned lines and violence ensued – or shown on state television.

But consider the largest, and historically most damning, accusation against Putin. Russian democratization began in Soviet Russia, under Mikhail Gorbachev, in 1989-91. "De-democratization," as it is often called, began not under Putin but under Yeltsin, in the period from 1993 to 1996, when the first Russian president used armed force to destroy a popularly elected parliament; enacted a super-presidential constitution; "privatized" the former Soviet state's richest assets on behalf of a small group of rapacious insiders; turned the national media over to that emerging financial oligarchy; launched a murderous war in the breakaway province of Chechnya; and rigged his own re-election. (On February 20, outgoing president Dmitri Medvedev shocked a small group of visitors by finally admitting that Yeltsin had not actually won that election against the Communist leader Gennadi Zyuganov.) Putin may have only moderated those fateful policies, but he certainly did not initiate them.

The catastrophic Yeltsin 1990s, which have been largely deleted from the U.S. media narrative, also put other anti-Putin allegations in a different perspective. The corruption rampant in Russia today, from seizures of major private investments to bribes demanded by officials, is a direct outgrowth of the violent and other illicit measures that accompanied "privatization" under Yeltsin. It was then that the "swindlers and thieves" denounced by today's opposition actually emerged.

The shadowy practices of that still-only-partially reformed economic system, not Kremlin politics, has led to the assassination of so many Russian journalists, most of them investigative reporters. The numbers, rarely cited by era, are indicative. According to the American Committee to Protect Journalists, 77 Russian journalists have been murdered since 1992 – 41 during Yeltsin's 8 years in power, 36 during Putin’s 12 years.

Russia’s Ekaterinburg – model for growth?

–Denis Manturov is Acting Minister of Industry and Trade of the Russian Federation. The opinions expressed are his own.–

President Putin recently noted that Russia has emerged from the global financial crisis in a stronger position than before, and that average wages will increase by 60% by the year 2020. Traditionally, many people think of Russia as a provider of natural resources, and increasingly as a safe pair of hands for mega-events, such as the upcoming Sochi 2014 Winter Olympic Games, the Formula 1 Grand Prix from 2014, and the 2018 FIFA World Cup. Today the Russian economy is the sixth largest in the world, with an output which may potentially exceed US$ 2 trillion in 2012. Russia’s gross domestic product (GDP) expanded by 4.2 per cent in 2011, making the country the third fastest growing economy after China and India.

I take a keen interest in how policy-makers and businesses are finding economic solutions to meet societal challenges, and I hope global business leaders and policymakers will look to the city of Ekaterinburg as a model for growth.

Ekaterinburg has moved from traditional industrial production to a specialisation in science and technology. This shift has led to a rise in GDP of the surrounding region from 20.7 billion Roubles in 2009 to a forecasted 34.3 billion Roubles in 2012. Capitalising on existing industrial expertise taught in the 16 universities around Ekaterinburg, the priority is to turn innovative research into ready-for-market products and services. Business initiatives such as the Titanium Valley Special Economic Zone have been set up close to Ekaterinburg, at a government cost of more than 50 billion Roubles, to attract foreign investment and expertise. Global technology leaders such as Boeing, Rolls Royce and Goodrich have recently set-up shop in the SEZ, and the wider region now hosts 400 joint ventures, involving cross-border capital from 64 countries and input from 300 representative offices of foreign companies.

Freshly adopted laws greatly incentivise foreign investment in the region, such as income tax reduction for newly established enterprises for 5 years (from 18% down to 13.5%) and a guaranteed investment in the region by the Russian government of 8 billion Roubles each year. There is also an immediate appetite in the region for Western equipment in the fields of telecommunications, food processing, safety and security systems, and construction materials. In light of the expertise Ekaterinburg and its surrounding region has amassed in scientific innovation, it will come as no surprise that they are bidding to host the World Expo in 2020, with the theme “The Global Mind”.

Investing in ‘skills for growth’ – the theme of this year’s European Business Summit in Brussels – isn’t just about Roubles, Euros and Dollars; it’s about boosting peoples’ living conditions, finding solutions to common global challenges and improving the future of our young people. Times are tough, but smart, strategic investments in skills and technology will greatly contribute to a sustainable, knowledge-based economy that everyone gains from.

from The Great Debate:

Was a Putin mentor poisoned?

Excerpted from The Man Without a Face: The Unlikely Rise of Vladimir Putin by Masha Gessen, by arrangement with Riverhead Books, a member of Penguin Group (USA), Inc. Copyright © 2012 by Masha Gessen.

Encouraged by his former deputy’s meteoric rise, former St. Petersburg mayor Anatoly Sobchak decided to end his Paris exile and go back to Russia in the summer of 1999. He returned full of hope and even more full of ambition. As Sobchak was leaving Paris, Arkady Vaksberg, a forensics specialist turned investigative reporter and author with whom Sobchak had become friendly during his years in France, asked him whether he hoped to return to Paris as an ambassador. “Higher than that,” replied Sobchak. Vaksberg was sure the former mayor was aiming for the foreign minister’s seat: the rumor in Moscow’s political circles was that Sobchak would head up the Constitutional Court, the most important court in the country.

With characteristic overconfidence, Sobchak immediately ran for parliament -- and suffered an embarrassing loss. But once Putin launched his election campaign, he appointed his former boss his “empowered representative” -- a job that basically entitled Sobchak to campaign for Putin (candidates may have dozens and even hundreds of “empowered representatives”). Campaign Sobchak did, seeming to forget that his political reputation had once rested on his democratic credentials. He called Putin “the new Stalin,” promising potential voters not so much mass murder as an iron hand -- “the only way to make the Russian people work,” Sobchak said.

But Sobchak didn’t stop at the rhetoric. He talked too much, as had always been his way. Just as Putin was dictating his new official life story to three journalists, Sobchak was reminiscing, in response to questions asked by other journalists, and recounting key episodes of Putin’s career in ways that contradicted the story told by his old protégé.

On February 17, Putin asked Sobchak to travel to Kaliningrad, a Russian exclave wedged between Poland and Lithuania, to campaign for him. The request was urgent: Sobchak had to fly out that day, frustrating his wife, who did not like to see him travel on his own. She claimed she had to watch that he took his medicine. Most acquaintances believed the squeaky-voiced peroxide blonde simply did not trust her husband out of her sight. It is also possible that she feared for his safety. But she was in parliament in Moscow that day, and could not join her husband on his emergency campaign jaunt. The former mayor traveled with two male assistants who doubled as bodyguards. On February 20, Sobchak died at a private hotel in a resort town outside Kaliningrad.

Local journalists soon picked up on some odd circumstances surrounding Sobchak’s death. Chief among them was the fact that two different autopsies had been performed on the body -- one in Kaliningrad and one in St. Petersburg, at the military hospital run by Yuri Shevchenko, the same doctor who had helped engineer Sobchak’s escape to Paris; he was now Russia’s minister of health, but he had not given up his post at the hospital. The official cause of death was a massive but natural heart attack.

Still, ten weeks following Sobchak’s death, the prosecutor’s office in Kaliningrad opened an investigation into a possible case of “premeditated murder with aggravating circumstances.” Three months later, the investigation was closed without a finding.

from Ian Bremmer:

Prokhorov’s presidential chances are not the point

By Ian Bremmer The opinions expressed are his own.

After a week full of anti-government and pro-government protests, Russians woke up on Monday to big news. Mikhail Prokhorov, a political novice with billions of dollars—and the New Jersey Nets— to his name, announced his Presidential bid.  Alexei Kudrin, a longtime bureaucratic infighter, also declared his plans to re-enter the political arena. These developments were even more significant considering both were ousted in rather public quarrels with the powers that be just months ago. Kudrin said he would support and aid a pro-reform liberal party that would stand as a counterweight to the incumbent United Russia. Prokhorov intends to challenge Putin for the presidency in March 2012 on a platform that would appeal to Russia’s “disenchanted middle class.”

No matter what Kudrin and Prokhorov say in public, they both represent the same thing to Russia and the world: Vladimir Putin’s iron grip on power. As I’ve written before, Putin is the most powerful individual on the planet. To think that either man would risk his freedom or his fortune to oppose Putin’s Kremlin, no matter what their stated reasons are, is just wrong. That said, there are reasons to watch this “race” as it will give some insight into Putin’s inevitable third term as president.

Putin has had to deal with a growing sense of dissatisfaction in Russia as of late.  Growth and living standards are stagnating, while economic inequality persists. It is unclear whose pockets are being lined with the wealth generated by Russia’s massive natural resources. The lack of freedom of the press, centralized control over economic opportunity, and pervasive corruption that makes a mockery of the justice and security systems and other institutions, are Putin’s levers of power-- and also the focal points for protesters. The protestors’ complaints crystallized last week over United Russia, Putin’s party, winning a smaller but still strong majority in the parliamentary elections. Accusations of election fraud were widespread and tens of thousands took to the streets in protest over the course of last week. Putin has not been in a position to crack down on these protests -- they’re too visible and too widespread -- but be sure that the oligarchs and ruling classes in Russia are on Putin’s side. While his tactics for retaining power have had to change, the outcome is the same.

Monday, a pro-United Russia rally in Moscow had the distinct air of a made-for-media event, with the college kids in attendance complaining their classes had been cancelled in order to compel them to turn out to show their “support” for the current regime. But the numbers, even if not to the extent that the state television claims, were there. Though Prokhorov and Kudrin will deny it endlessly, their candidacies are without a doubt sanctioned by the Kremlin. Just this year, Prokhorov was the leader of a pro-business liberal party that was created by and quite obviously aligned with the Kremlin. He quit because of a falling out with one of Putin’s Kremlin advisors -- but it was not a falling out so great that Prokhorov became persona non grata. Quite the opposite, Prokhorov’s political resurrection may prove too useful for either Putin or the Kremlin middlemen to pass up.

Prokhorov has not forgotten that he owes his fortune and therefore his allegiance to Putin. As he already stated in his press conference, he doesn’t plan to dwell on attacking Putin (no more than 10% of his platform will be anti-Putin), but rather would like to talk about his plans for Russia. Kudrin has all but ignored Putin in laying out his case for a new party. Imagine if Newt Gingrich or Mitt Romney came out tomorrow and said they were done attacking President Obama and wanted to focus solely on their plans for the U.S. Both Kudrin and Prokhorov represent ‘acceptable opposition’ to Moscow. That’s a recipe for a gracious but certain defeat. Kudrin owes his allegiance to Putin for slightly different reasons, but the result is the same: both candidates exist to draw off votes and appease the intellectual classes who are disenchanted with Putin’s leadership. But they will do nothing to keep Putin from a third term as President.

from The Great Debate:

Why is Obama giving Libya to the Russians?

By John Bolton The opinions expressed are his own.

With President Obama’s Libya policy staggering from one embarrassment to another, last week he and Secretary of State Clinton outdid themselves. They publicly welcomed Russia’s effort to insert itself as a mediator, an act of such strategic myopia that it must leave even Moscow’s leadership speechless.

Permanent Security Council members Russia and China abstained on the initial resolution authorizing force to create a Libya no-fly zone and to protect innocent civilians. By not casting a veto, Russia thereby tacitly allowed military action to proceed. As they did, Russia repeatedly second-guessed and harshly criticized NATO’s operations. Now, as a mediator, Russia will, in effect, have the chance to rewrite the Council’s resolution according to its own lights.

Given the uncertain trumpet sounded by both Obama and NATO, and the still-inconclusive outcome of the “kinetic military action,” the reputation and credibility of U.S. and NATO, militarily and politically, have been gravely impaired. The President likely doesn't appreciate these wounds as he leans over backwards not to be seen as the regime-changing unilateralist he imagined his predecessor to be.

We should hope that Russia fails. Mediation was never the correct answer here. NATO, once committed, must prevail by force of arms, as it still could with a modest demonstration of American leadership. Make no mistake: Welcoming Russian intercession between NATO and a military opponent like Libya is nothing less than a massive humiliation for the Western alliance. If the Obama Administration’s misguided worldview favors mediation, whatever happened to the likes of Sweden and Switzerland?

Not only does Russia now have the possibility of reshaping the Libyan morass to its own ends, it is also well-positioned for a dominant role in post-conflict Libya. From the outset, U.S. critics of the intervention raised legitimate questions about the bona fides of the Libyan opposition, embodied in the Transitional National Council (“TNC”), now recognized by over three dozen countries. Last Friday, the United States joined the crowd, while also unfreezing Libyan assets to make them available to the TNC.

from MacroScope:

Give me liberty and give me cash!

Come back Mr Fukuyama, all is forgiven.

In his 1992 book "The End of History and the Last Man", American political scientist Francis Fukuyama famously argued that all states were moving inexorably towards liberal democracy. His thesis that democracy is the pinnacle of political evolution has since been challenged by the violent eruption of radical Islam as well as the economic success of authoritarian countries such as China and Russia.

Now a study by Russian investment bank Renaissance Capital into the link between economic wealth and democracy seems to back Fukuyama.

Looking at 150 countries and over 60 years of history, RenCap found that countries are likely to become more democratic as they enjoyed rising levels of income with democracy virtually 'immortal' in countries with a GDP per capita above $10,000.

" Only five democracies above the $6,000 income level have died. Even democracies above the $6,000 level have a 99 percent chance of sustaining their political system each year. The only exceptions were the military coups in Greece in 1967 ($9,800), Argentina in 1976 ($8,180) and Thailand in 2006 ($7,440), and the events in Venezuela in 2009 ($9,115), as well as Iran in 2004 ($8,475)," RenCap global chief economist Charles Robertson writes.

The $6,000 per capita GDP seems to be a crucial level, marking the point where a country is likely to shift to democracy. Tunisia, which early this year triggered the wave of uprisings against autocracy across the Arab world, recently crossed that threshold.

Conversely, democracy is most fragile at the lowest income levels and when incomes are shrinking. The world's populous democracy, India, is a notable exception as its per capita income was under $800 from 1950-1967, and only exceeded $2,000 in 2003.

Aid: In favour of zero-tolerance

By Laurance Copeland

After one year, the progress report on the Coalition reads “Moving in the right direction, but with a lot more to do”.

Nonetheless, it is a prisoner of its commitment at the outset to leave two departmental budgets untouched: the NHS and international aid. It is not simply the amounts of money involved (colossal in the case of the NHS, relatively small for aid). It is also the signal it sends that there is such a status as sacrosanct, which immediately begs the question from policemen, firemen, teachers, the legal system, the armed forces: why isn’t our budget sacrosanct too?

This week we learned that Dr Liam Fox is opposed to fixing in law Britain’s aid budget at 0.7 % of GDP.  I can understand his disquiet, but I would feel far more sympathy if he favoured instead enshrining in law a more sensible level for international aid – say, 0.0%, or thereabouts. It is not really a question of what we can afford – personally, I would be quite happy to see 0.7% of GDP set aside in a fund to support international disaster relief (think of the 2005 Asian tsunami or the Haiti earthquake) – it is simply that ongoing international aid is at best a waste, at worst it actually damages the poor people it is supposed to help.

The justification for aid is, presumably, that it is intended to alleviate the suffering of those at the bottom of the income distribution in countries which are themselves too poor to be able to help.  However, when you actually look at the list of recipients of aid from the UK, you find that it includes a number of countries which ought to be capable of providing a tolerable standard of living for their own population without outside assistance e.g. Angola, with its vast natural resources (oil, gas, diamonds etc) and, unbelievably, Russia, which is even better endowed both with raw materials and with billionaires.

It was reported a few weeks ago that HMG was considering crossing countries like these off its gift list – not before time, you may think – but that leaves on the list a number of other recipients whose status might well be questioned, notably India.

On the one hand, even after a decade or so of rapid growth, India still probably holds the greatest concentration of misery on the planet. Yet at the same time India feels able to afford not only one of the world’s largest and best-equipped armed forces, with a well-developed nuclear capability and delivery systems to match, but also maintains a gift list of its own, including among its clients Myanmar, Afghanistan, Bhutan and a number of African countries.

from Global Investing:

Russia’s babushka time-bomb

The babushka, that embodiment of Russian grandmotherly goodness that has spawned iconic dolls and inspired a Kate Bush song, poses one of the gravest threat to the Russian economy.

Moscow-based investment bank Renaissance Capital also expects this segment of the demography to spur politically risky pension reforms.

Russia's pension system is coming under increasing strain thanks to growing life expectancy -- particularly among women -- and a shrinking labour force due to the collapse in birth rates in the 1990s.

Since the introduction of the current system, the average life span of the Russian man has risen to 63.4 years, up from 58.7. Over the same period of time, the life expectancy for the country's women has risen to 75.4 years, up from 71.9.

Russian women are thus likely to claim a pension for 20 years after retirement at 55. Compare this to the three to four years that the average Russian man gets.

Little wonder that it's the babushka segment of the demographic that is giving Russian policymakers cause for pause.

"This is becoming expensive. Russia spends 6 percent of GDP on pensions compared to just 1 percent of GDP in Mexico." writes Renaissance Capital Chief Economist Charles Robertson in a note.

from Global News Journal:

UNsensational? Five more years of Ban Ki-moon

U.S. Senators Joe Lieberman and John Kerry look on as U.N. chief Ban Ki-moon addresses reporters in Washington. REUTERS/Molley Riley

It's hard to find a delegate to the United Nations who despises U.N. Secretary-General Ban Ki-moon. But it's even harder to find someone who thinks he has the gravitas and charisma of his Nobel Peace Prize-winning predecessor Kofi Annan, who invoked the wrath of the previous U.S. administration when he called the 2003 invasion of Iraq "illegal." As one senior Western official, who declined to be identified, said about Ban: "It's not as if he's lightning in a bottle, but we can live with him."

The former South Korean foreign minister is in the final year of his first five-year term and is widely expected to run for another stint as the supreme U.N. official. The formal re-election process is likely to commence in the coming months. In the meantime, Ban is visiting the capitals of key U.N. member states to gauge his chances of keeping his job. Those chances, U.N. diplomats say, are excellent. So far, no country has nominated any candidate to oppose him. "I'd put my money on Ban Ki-moon getting a second term," said a Security Council diplomat.

The 15-nation Security Council nominates the secretary-general, though the choice has to be confirmed by the 192-nation General Assembly. Despite the veneer of democracy, it is the five veto-wielding permanent council members -- Britain, China, France, Russia and the United States -- who choose the top U.N. bureaucrat in New York. And none of the five has any serious objections to a second and final term for Ban, diplomats say.

Some people say that running the United Nations is the toughest job on earth. With little real power, he spends his time mediating and negotiating behind closed doors, getting blamed for member states' failures and receiving no credit for his off-camera successes. National lobbyists push and pull him in all directions. The five permanent Security Council members, known as the "P5", regularly insist that he acquiesce to their demands, often pressuring him to reserve a healthy portion of top U.N. jobs for their nationals or preferential treatment for themselves or their allies. Journalists harangue the secretary-general to disclose the details of sensitive negotiations, which he usually tries to keep secret under the label of "quiet diplomacy." Human rights groups routinely skewer him for not being tough enough on the rulers of despotic countries, which are, after all, member states like all the others and don't take kindly to criticism.

Ban has been no exception. He has been publicly clobbered for not congratulating jailed Chinese dissident Liu Xiaobo for winning the 2010 Nobel Peace Prize or raising his detention with President Hu Jintao during a recent visit to China. He was hung out to dry for not being tough enough on Sri Lanka's government and Sudanese President Omar Hassan al-Bashir, who was indicted by the International Criminal Court for genocide in Sudan's western Darfur region. Arab and other delegations from the developing world accuse Ban of being a U.S. lackey, noting how often his statements on the Israeli-Palestinian conflict and other issues echo those of the U.S. State Department or White House.

from Davos Notebook:

Will Goldman’s new BRICwork stand up?

Jim O'Neill, the Goldman Sachs economist who coined the term BRICs back in 2001, is adding four new countries to the elite club of emerging market economies. But does his new edifice have the same solid foundations?

In future, the BRIC economies of Brazil, Russia, China and India will be merged with those of Mexico, Indonesia, Turkey and South Korea under the banner “growth markets,” O'Neill told the Financial Times.

Hmmm.  Doesn't quite grab you like BRICs, does it? The Guardian helpfully offers an amended branding banner of  "Bric 'n Mitsk" (geddit?). But which ever way you cut it, it's hard to see a flood of investment conferences and funds floating off under the new moniker.

Ten years ago, Goldman had this field to itself. Now more and more acronyms are being bandied around by  banks  seeking to pique investors' appetite for higher returns.

Goldman has already launched the N-11, or Next Eleven countries, and other contenders include the VISTA economies (Vietnam, Indonesia, South Africa, Turkey and Argentina), the CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) and the EAGLES (Emerging and Growth-Leading Economies).

So far, none of them have really caught on. One thing you can bank on: the term BRIC will still score highly in any tally of the millions of words that will issue forth from Davos next week.