News 30 March: The Paradoxes of Russophobia

Medvedev gives his first foreign media interview (to the Financial Times), in which he charts the bedrock of his presidency.

  • Will continue to pursue primarily Russia’s, not the West’s, interests.
  • Will work in tandem with Putin, to whom he is neither puppet nor rebel.
  • Will strive to root out “legal nihilism” / proizvol in Russia and corruption, including amongst the siloviki (“power people”) by asserting the law’s supremacy over executive power, cultivating popular respect for the law and improving the courts system, e.g. by raising pay for judges.
  • Will keep trying to demolish Russophobe myths.

Speaking of “legal nihilism”, it seems Medvedev has already started work in this area by forbidding state inspectors from carrying out checks on small businesses in the absence of a court ruling. Hopefully this should help expand the role of small businesses in Russia’s economy, which now make up just 1.1mn small businesses, 3.4mn individual businesspeople and 17% of GDP (typically 40-70% in advanced industrial countries), and expand the middle classes.

As I’ve covered here, NATO is split over whether to admit Georgia and Ukraine to a MAP (Membership Action Plan) at its summit in 2-4th April – western Europe, led by Germany, is opposed to antagonizing Russia and jeopardizing its co-operation on Afghanistan; the US is concerned about losing influence in NATO and many of the Visegrad countries are worried about Russian neo-imperialism towards its non-NATO Near Abroad. Another comprehensive account of the situation over at Christian Science Monitor, as well as pro-expansion pieces calling for public pro-NATO “education” campaigns in the Ukraine here and here (Vladimir Socor). This is because NATO membership in the Ukraine, as in Bulgaria and Slovakia before, is unpopular – the majority are against joining, and some Crimeans have mounted protests. Even in the West, a poll finds a broad desire to cooperate with Russia – pluralities oppose the American missile plan in every major European country.

In breaking news, McCain Backs Tougher Line Against Russia, calling for the West to cease tolerating “Russia’s nuclear blackmail or cyber attacks” and kick it out of the G8 (and replace it with such economic powerhouses and paragons of human rights as India and Brazil). Meanwhile, Joe Biden says that the Bush administration “rebuffed some sensible Kremlin proposals”, before claiming “Messrs. Bush and Putin largely abdicated these responsibilities”; accuses Russia of “bring Russophobia back into fashion”, before going on to encourage meddling in Russia’s internal affairs under the guise of improving American national security. Scratch a Russophobe, and you find a seething soup of paradoxes – just like with deranged Russophobe Lucas and his The New Cold War book, which was recently trashed in Prospect magazine (see review here). No wonder then that Putin cautions us to why the West is so intent on smearing Russia.

MOSCOW. Feb 14 (Interfax) – President Vladimir Putin believes that certain negative publications in the Western media on the state of democracy in Russia are an attempt to pressure Russia, and said that Moscow will not react.

“One must soberly look at what is happening in the media, and analyze. But reacting nervously would dishonor Russia. We’ll not go nervous,” Putin said at a news conference in Moscow on Thursday.

Some countries try to achieve their goals in a competitive fight, including through the mass media, Putin said.

“We all know that, definitely, a monopoly exists in the world (mass media) in some countries and, of course, political centers in these countries are trying to use these channels to influence our population, the population of European countries and the North American continent,” he said.

Such attempts fail, which can be seen, among other things, from the selection of Sochi as the host city for the 2014 Winter Olympic Games, he said.

“Various means are being used in the world to attain one’s political or economic goals,” including the media, Putin said.

“A discussion is on democracy in Russia. What’s the idea of heeding Russia’s opinion on Kosovo, some argue, if Russia herself is not a democratic country? We must understand for what purpose all this is being done,” the Russian president said.

The same refers to the problem of locating a missile shield in Europe, he said. “What’s the big idea listening to what these Russians think about missile defense? They cannot be trusted, because they have problems with democracy there,” Putin said.

Turmenistan, Kazakhstan and Uzbekistan have said they will start selling gas at “European” prices as of January 2009, effectively doubling them. This will hit Ukrainian industry hard; nor can they do much about it, since one of their main arguments about how Russia should supply them with subsidized gas was a threat to source it directly from Central Asia. Now that is irrelevant. Gazprom’s agreement to this means it will no longer be possible to provide allied Armenia with cheap gas; nonetheless, co-operation between Armenia and Russia will not stop, what with bilateral trade increasing by 60% over the previous year and heavy Russian investment into Armenia’s economy. Israel becomes visa-free for Russians. In a recent Levada poll, more Ukrainians would prefer to concentrate on joining the Union of Russia and Belarus (43%) than the European Union (30%).

Meanwhile, Georgian opposition leader Irakli Okruashvili has been given an 11 year jail sentence in absentia for extortion. Strange that they’d do that just a few days before the NATO summit. Still, the Western media would much rather concentrate on demonizing Russia – a playboy “fierce critic of the current regime in Russia” billionaire going missing must mean the KGB is at work again.

Russia’s economy continues to boom, with 7.8% growth in Jan-Feb 2008. A piece about how Moscow is Turning Old Factories Into Prime Property by converting its industrial areas into much more valuable office space and moving production out into the Moscow Oblast industrial parks. In the spirit of the times, Ruconomics offers three suggestions on battling corruption.

  • The law must be inflexible, prescribing a set list of instructions invulnerable to idiosyncratic bureaucratic interpretation.
  • The creation of an honest, independent judicial system.
  • Competitive media, free from pressure from vested interests and citizen monitoring of the bureaucracy.

Quite obvious, really. Also from the same blog, a post about a none too bright bureaucrat called Yakimenko, who wishes to solve the demographic problem via means of mass impoverishment, citing the experience of Africa and his own parents as an example.

At the global level, the credit crunch continues unabated as financial markets search for signs that the worst is over, what with Bear’s collapse, Lehman’s last-minute redemption and a rally across many of the world’s stockmarkets this past week. However, house prices continue on their precipitous decline, and it seems to me more and more that this is a case of general insolvency rather than simply illiquidity (the Fed, obviously, has the other idea). Finally, searching for signs that the trough has passes may well be a sign that things are actually really bad.

Perhaps the most convincing argument that we are not yet at the bottom is that so many people think that we are. The clamour to call an end to the crisis in recent weeks in itself shows that optimism has not been extinguished. History’s worst bear markets have been punctuated by many rallies when people thought the worst was over.

This may also accelerate the Euro’s displacement of the dollar as the world’s reserve currency, and as such weaken the US economy and its geopolitical power.

The Financial Times also has an interesting article on how, apparently, state ownership is no longer a burden for Chinese companies, what with their burgeoning profits (quite a change from the 1990’s) and innovative technological adaptation and marketing and managerial competence – although there are caveats to that success.

The world is having problems with rice production. Is the problem just one of institutional failure and trade restrictions, as the Economist sees it? Or is it something deeper, to do with exhaustion of carrying capacity and linked with things like the peaking of grain production per capita? Time will tell.

See Carla Bruni nude here. Who says politics can’t be sexy?

Talking about nudity, or representations of the human form in general, see the controversial film by Geert Wilders, Fitna, which was cowardly censored by Livelink. For if this kind of spinelessness continues, the above may become a thing of the past in Europe if the more dire predictions of Muslim demographics turn out to be true.

Finally, a word about the Tibet protests. The Western media is all up in arms over how the brutal PLA is crushing the freedom-loving Tibetans, neglecting to mention the fact that old Tibet was a feudal theocracy, that the demonstrating Tibetans display their anger by performing pogroms on local ethnic Han Chinese and ignoring the possible role of the CIA in stirring up unrest (see Tibet, the ‘great game’ and the CIA).


  1. Oleg Nevestin says:

    Putin is right, again. Russia should ignore Western “opinion”, which basically is just a mix of silly lies and pathetic whining. All Russia should preocupy itself with is building up its economy. Year after year, with unflinching focus. Everything else will follow. The West is in initial stages of economic and political collapse anyway, so listening to these morons is just a waste of precious time.

  2. Anonymous says:

    Stalker,I copied this post from the oildrum website. What is the opinion in Russia about limiting oil production for the reasons stated in this comment? I have been thinking about this for a while, selling oil and putting it in funds of declining currenices seems ridiculousHello, TODers! look at the pace of growth of russian foreign reverves based on profits from oil export:…I am a financial journalist in Moscow, and as I am informed there is a growing concern about the real value of dollar. Some people think its better to cut export – the oil in the fields rises in price faster then the foreign currency reserves (mostly dollars), which are excessive and actually depreciating in terms of the real thing i.e. oil. Russia has a strongly positive trade balance and great export surplus (12 billions a month now), but we dont really need it – we need to sterilaze the surplus by dollars and Treasuries buying. So, in fact, we are just changing appreciating oil for depreciating dollars. That’s ridiculous:)DJP

  3. Giuseppe Flavio says:

    I have found this article about Litvinenko think you can find it interesting.

  4. @oleg,I agree. By and large, our world respects only the strong, and it’s easier to be strong if you’re rich.@giuseppe,Thanks for the article. I’ll feature it in the next News section.@anonymous,Which Oil Drum post? Can you give us a link please?On this topic, yes, there are voices in support of capping Russian oil production (go here for the full article –, and I agree that that is probably a good idea. BTW, at least as of 2006 (latest info I found), Russia keeps its forex in a dollar euro ratio of 60-40. If anyone has any more recent data, it would be much appreciated.

  5. stalker says:

    Furthermore, according to the IMF Russia’s policies in regard to keeping most FOREX reserves in $ are actually quite typical.