Kettle, Meet Pot

Corruption across EU ‘breathtaking’ – EU Commission” says a headline in the BBC. The Commissioner responsible for the report said that she believed the cost of corruption was “probably much higher” than the €120 billion (US$162 billion) the report estimates. And indeed that is probably correct because corruption within EU organs themselves was not included. Given that the auditors have persistently found money missing in the EU accounts (or, as it is quaintly put in Eurospeak: “error rates”) for nearly two decades, 4.8% of €138.6 billion (€6.6 billion or US$8.9 billion) in 2012, there may well be more. Almost half the businesses operating in Europe say they find corruption to be a problem, More than half the people surveyed think the problem is getting worse. 8% claim to have personally experienced something in the past 12 months.

Here’s the actual report.

Now, these are precisely the politicians, followed enthusiastically by a barking pack of reporters, opinioneers and editorial writers, who are always ready to lecture Russia and posture as an paradigm to be emulated. Indeed Ukraine is being torn apart precisely by the pretension that the EU is the only route for it to get out of stagnation and corruption. I do not believe that tu quoque is a particularly effective way of arguing but there are times when outright hypocrisy must be acknowledged. Eurosceptics like myself have always expected that huge uncontrolled bureaucracies producing ever more layers of regulations is a strong precondition for corruption – how else can a company or individual navigate through contradictory and incomprehensible regulations than by the lubrication of a shot of cash in the right place? It is to the credit of the EU that it produced such a harsh report.

And it’s not just hypocrisy that Ukrainians should think about. What if the EU structure is in fact the principle cause of stagnation and corruption just as communism was? There are important similarities after all: faceless, well-paid bureaucrats at the centre conducting experiments on a powerless population.

Who are the faceless gnomes of Brussels to lecture Moscow or Kiev or anyone else?

Who can take anything they say seriously any more?

 

Sochi-Adler Krasnaya Polyana Panorama

There has been an unceasing campaign to denigrate the construction in the Sochi-Adler area. Incompetence, corruption, double toilets and so on and on. In all of this, few people have been shown what has been built for the total cost of 55 billion or so US Dollars. We have a preview; but first a discussion of cost.

Most Western sources claim that the real cost of the Sochi Olympics is the 55 billion and Putin is assumed to be lying when he says the cost is 6 billion or so. Now that Navalniy has his report out that claims to measure the alleged corruption, the Western media is full of wide-eyed quotations from it. But Western discussions, and Navalniy (not, I suspect, by coincidence) ignore the other stated purpose of the construction which is to create a full-scale sports and holiday complex in Russia’s Riviera. The aim being to attract Russian tourists away from foreign holidays and provide some development and employment opportunities in the chronically depressed North Caucasus.

So what is the real cost of the Olympics? 1) All of the 55 billion or 2) just the proportion that would not have been spent if the Olympics weren’t coming or 3) something in-between? The first question to be answered is how much of the total is definitely Olympics-only spending. Here Navalniy actually agrees with Putin: from his report “Olympstroy spent $6.3 bn to construct 11 sport venues”; that is the number Putin gives.

The disagreement is over what column to put the other expenditures in. Navalniy insists they all be charged to the Olympics, Putin that they be charged to resort complex construction and necessary infrastructure improvement. That’s what the disagreement actually amounts to, not that anyone in the Western media will tell you: Putin says some is Olympics, most is infrastructure, Navalniy says all is Olympics. But they agree on the total that has been spent. Putin wants to play the Olympics costs down, Navalniy wants to play them up; so each picks his favourite split. Each is being disingenuous.

Certainly an immense amount of money has been spent on sports facilities, visitor amusements, transportation facilities, hotels, restaurants and the rest. So, Dear Reader, you decide the split. How do you judge the most expensive single project (the 5-6 billion road-rail connection to the ski resort, replacing the Soviet-era link)? Would it have been built anyway to connect the town of Adler (where, as we have interminably been told, it doesn’t snow much) to the ski resort area where it does? Or do you judge that it was only built because of the Olympics? Or should only some of the cost be assigned to the Olympics and how would you assign it? How about the airport at Adler? The port development at Sochi? The isolation hospital in Lazerevskiy district? The Adler power station? The shopping mall? Putin says none, Navalniy says all but they don’t disagree that 50-plus billion was spent overall. And, when you make your decision, what makes you think the next person would agree? The only correct answer is that, when the Olympics are gone, there will still be a vast complex of modern facilities in a place and situation that ought to be pretty attractive to tourists.

The truth is that a large high quality resort complex has been constructed, together with a great deal of infrastructure created or improved; some of this was built only because the Olympics were coming. So what is the cost of the Olympics? I don’t know either. 6 billion seems too narrow a definition but 55 billion is far too high. Can we pick a number out of the sky and say 7 or 8? Certainly a ludicrous amount of money to shell out for a few weeks of sports; probably an argument for having a permanent facility but, given that there wasn’t much there in the beginning except Nature, not absurdly high as these things are priced.

These panoramic photos show what has been done. And don’t forget, Dear Reader, Navalniy and others would like us to believe that a third of the money was stolen: look at all this stuff and decide whether that sounds right.

Russian language only, but you’ll get the idea.

PS. The toilet story isn’t true.

REPRINT: Wikileaks And The South Ossetia War

Though I originally meant to write my own analysis of what the Wikileaks cables have contributed to our understanding of the 2008 South Ossetia War, I realized that I would essentially be trying to duplicate the excellent efforts of Patrick Armstrong. (See also the New York Times article Embracing Georgia, U.S. Misread Signs of Rifts). Patrick’s article for Russia Other Points Of View is reprinted below:

I have been a diplomat: I have written reports like the ones leaked and I have read many. And my conclusion is that some report writers are better informed than others. So it is with a strange sense of déjà vu that I have read the Wikileaks on US reports.

My sources for the following are the reports presented at this Website (passed to me by Metin Sonmez – thank you):  (Direct quotations are bolded; I will not give detailed references – search the site). The reports published there are a small sample of all the communications that would have passed from the posts to Washington in August 2008. They are, in fact, low-grade reporting tels with low security classifications and only a partial set at that. Nonetheless they give the flavour of what Washington was receiving from its missions abroad. (It is inconceivable that the US Embassy in Tbilisi was reporting everything Saakashvili told it without comment in one set of reports while another said that he was lying; that’s not how it works).

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