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Trends To Watch In Russia In 2013

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It began with a roar and it ended with a whimper.As 2012 wound down in Russia, the soaring expectations for change that accompanied the civic awakening and mass protests at the year’s dawn had clearly faded.

But the social, economic, and political forces that spawned them will continue to shape the landscape well into the new year.
A fledgling middle class remains hungry for political change, splits still plague the ruling elite over the way forward, and a fractious opposition movement continues to struggle to find its voice.

With the Kremlin unable to decisively squelch the mounting dissent and the opposition unable to topple President Vladimir Putin, Russia has entered an uneasy holding pattern that has the feel of an interlude between two epochs.

“I don’t think we are at the end of the Putin era, but we are at the beginning of the end,” says longtime Russia-watcher Edward Lucas, international editor of the British weekly “The Economist” and author of the recently published book “Deception.”

With economic headwinds on the horizon, generational conflict brewing, and new political forces developing, Russian society is changing — and changing rapidly. But the political system remains ossified.

So what can we expect in 2013? Below are several trends and issues to keep an eye on in the coming year.

The Oil Curse: Energy Prices And The Creaking Welfare State

If 2012 was all about politics, 2013 will also be about economics.

The Russian economy, the cliche goes, rests on two pillars — oil and gas. And both will come under increasing pressure as the year unfolds.

World oil prices, currently hovering between $90 and $100 per barrel, are expected to be volatile for the foreseeable future. And any sharp drop could prove catastrophic for the Russian economy.

Energy experts and economists say Russia’s budget will only stay balanced if oil prices remain between $100 and $110 per barrel. Five years ago, the figure needed for a balanced budget was $50 to $55.

Meanwhile, Moscow’s dominance of the natural gas market is being challenged by the development of new energy sources like shale gas and liquefied natural gas.

“The Russians are going to have to face, just as the Saudis did in the 1980s, the possibility of dropping energy prices,” says Nikolas Gvosdev, a professor of national security studies at the U.S. Naval War College.

The flush days when petrodollars could power Russia’s economy and lubricate Putin’s political machine are coming to a close.

How the political system responds to these challenges will be a key question in 2013.Leading Russian economists like Deputy Prime Minister Arkady Dvorkovich and former Finance Minister Aleksei Kudrin have stressed the need to diversify the economy away from its dangerous dependence on nonrenewable energy. Both Putin and Prime Minister Dmitry Medvedev have likewise made calls for diversification.

But despite all the rhetoric, there has been little real action.

Part of this is due to fierce resistance from powerful figures in the Russian elite with ties to the energy industry, like Rosneft CEO Igor Sechin, a longtime Putin crony.

But the reasons for inaction are actually much more fundamental. Diversifying and modernizing Russia’s economy would entail a degree of decentralization and the subsequent development of alternative centers of economic power. This, in turn, would eventually lead to new centers of political power with more independence from the Kremlin than Putin appears willing to tolerate.

“The decoupling of gas and oil prices, the large quantities of liquefied natural gas on world markets, the growth of shale gas have all [diminished the regime’s] ability to collect natural-resource rents,” Edward Lucas says. “And the collection and distribution of those rents is central to its model.”

With resources declining and no economic diversification program in sight, the authorities appear to have concluded that they need to reform the country’s creaking social-welfare system. But such a move is certain to be politically volatile, especially since Putin’s main base of support is now the rural poor and the working classes.

The Kremlin is still haunted by the protests that broke out in 2005 when the government attempted reforms to the social safety net.

Fathers And Children: The Looming Generational Conflict

When Putin took power in 2000, the 40-something former spy looked like an energetic young leader, especially compared to his geriatric predecessor, Boris Yeltsin.

But more than a decade later, he and his team are aging together. And by most accounts, they intend to remain in office at least until 2018 — and possibly until 2024. By that time, much of his ruling circle will be in their 70s.

The comparisons to Leonid Brezhnev that accompanied Putin’s return to the Kremlin were not superfluous. In addition to the fears of stagnation, the graying of Team Putin also sets the stage for a generational conflict within the elite.

“The lack of institutional mechanisms for promotion and rotation is a problem because, when you don’t have that, it leads the younger generations to get frustrated if they don’t believe there is a way to advance within the system,” Gvosdev says. “If everything is blocked off it creates tension. You can’t just freeze the government establishment because the energy of people is going to be directed toward breaking into it or replacing it, and that becomes a danger.”

How this generational discord develops will be one of the key underlying trends to watch in 2013. This is especially true since a whole new cohort entered the elite over the past four years.

During his presidency, Dmitry Medvedev made a concerted effort to bring younger cadres into the Kremlin, which analysts say added a political element to the generation gap.

“Real fragmentation is taking place by age because Medvedev rejuvenated the system of administration,” prominent Moscow-based sociologist Olga Kryshtanovskaya told the daily “Nezavisimaya gazeta” this summer. “The more conservative older part of the elite was irritated by this and moved toward Putin. And those who were younger moved toward Medvedev in hopes of a quick career if Medvedev remained for a second term.”

The young guns who came in with Medvedev are also ideologically inclined toward greater pluralism. “Many observers are convinced that these leaders are giving financial support to the opposition,” Kryshtanovskaya said.

The generational gap in the elite is mirrored by a similar one in society as the cohort born after the fall of the Soviet Union — and which has only faint memories of the chaos of the 1990s — comes of age.

“This group of citizens sees itself as not only post-Soviet, but non-Soviet,” says Masha Lipman of the Moscow Carnegie Center. “They don’t consider themselves to be vassals of the state. They are more free-thinking.”

Lipman adds that this younger generation is helping fuel Russia’s civic awakening. “This process is irreversible,” she says. “And as Russia continues to urbanize and cities become centers for younger people, this process will only accelerate.”

Strange Bedfellows: When Aleksei Meets Aleksei

When speculation emerged that anticorruption blogger Aleksei Navalny and former Finance Minister Aleksei Kudrin may be cooperating politically, it raised eyebrows among Kremlin-watchers.

And the reason for the interest goes much deeper than an abiding fascination with these two emerging players on the political scene.

An alliance of the Alekseis would have pointed to one of the key developments analysts have been watching for since mass protests broke out a year ago: collaboration between the technocratic wing of the elite and moderate elements in the opposition.

Such a marriage makes sense in many ways. Elite technocrats understand that Russia is dangerously dependent on energy exports, that current levels of corruption are unsustainable, and that in order for the economy to diversify and modernize, the political system will need to become more pluralistic.

Moreover, as moderate opposition activists come to understand that a colored revolution in Russia is unlikely, they are more likely to place their hopes in evolutionary change.

And in the event that the Putin regime begins to look dangerously shaky, overtures from inside the halls of power to the opposition will become more likely.

“We are going to see more people toying with defection to the opposition, people opening up back channels,” says Mark Galeotti, the author of the blog “In Moscow’s Shadows” and a professor at New York University. “We’re going to see the economic elite trying to reach out [to the opposition] and this is going to be very dangerous for the state.”

On the opposition’s Coordinating Council, a bloc is already emerging that seeks to negotiate political change with willing elements in the Kremlin, rather than trying to topple the regime, according to press reports.

The faction apparently includes 16 members of the 45-seat council. In addition to Navalny and his backers, it reportedly includes socialite-turned-activist Ksenia Sobchak and her supporters, as well as longtime opposition figure Ilya Yashin and entrepreneur Aleksandr Vinokurov, the co-owner of Dozhd-TV.

For his part, Kudrin has been trying to position himself as a bridge between the opposition and the authorities to foster what he calls “evolutionary change” toward greater pluralism. So has billionaire oligarch and former presidential candidate Mikhail Prokhorov.

If a bridge is ultimately built between the opposition and the technocratic wing of the elite, it could result in negotiated political reforms, in the co-opting of a vital wing of the Kremlin’s opponents — or a measure of both.

“I think it is more likely that as we see divisions within the regime that one faction tries to exploit public discontent,” Lucas says. “It will still be kind of ‘inside baseball’ rather than a 1917-style change.”

Beyond The Street: Will The Opposition Mature?

Bouts of soul searching are an inevitable ritual after the past few opposition demonstrations.

The heady days of December 2011 and January 2012, when dissenters found their voice and discovered they were not alone, are a fading memory. Likewise, the period from the beginning of the year until Putin’s return to the Kremlin in May, when the opposition seemed to control the national conversation, is also over.

And opposition leaders look increasingly uncertain about what to do next.

“They’re focusing on the glory days, the revolutionary days of December through May. But nobody is thinking about what happened after May, when they lost control of the agenda,” says Sean Guillory, a fellow at the University of Pittsburgh’s Center for Russian and Eastern European Studies. “How are they going to recapture the agenda and how are they going to really start making connections with society?”

The opposition, of course, is not a unified movement. It comprises nationalists, leftists, and liberals, united only by their opposition to Putin.

Will a single leader emerge in the coming year? Will the Coordinating Council, an elected body designed to bridge the divides in the opposition and establish a bond with civil society, prove an effective form of collective leadership?

“A process we are going to see is the opposition actually beginning to fragment,” Galeotti says. “You will begin to see ideological blocs, real opposition movements rather than just the generic ‘we want Russia without Putin’ thing. But it will be a painful process.”

What happens with the opposition, whether it is able to move beyond the street and develop into a potent political force, is a trend to watch because there is a deep well of discontent in society to potentially tap.

“They have this feeling of stagnation,” Lucas says. “Of institutions that don’t work, of a public life plagued by lies, evasions, and propaganda. They want more decent behavior by public officials and public institutions and they aren’t getting it.”

Copyright (c) 2013. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036

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Russia lacks sufficient number of migrants to fulfill its ambitious development plans

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Despite various official efforts, including regular payment of maternal capital to stimulate birth rates and regulating migration policy to boost population, Russia is reportedly experiencing decreasing population. According to the Federal State Statistics Service, Russia’s population currently stands at approximately 144 million, down from 148.3 million.

Experts at the Higher School of Economics believe that regulating the legal status of migrants, majority of them arriving from the Commonwealth of Independent States or the former Soviet republics, could be useful or resourceful for developing the economy, especially on various infrastructure projects planned for country. These huge human resources could be used in the vast agricultural fields to boost domestic agricultural production. On the contrary, the Federal Migration Service plans to deport all illegal migrants from Russia.

Within the long-term sustainable development program, Russia has multibillion dollar plans to address its infrastructure deficit especially in the provinces, and undertake megaprojects across its vast territory, and migrant labor could be useful here. The government can ensure that steady improvements are consistently made with the strategy of legalizing (regulating legal status) and redeploying the available foreign labor, majority from the former Soviet republics rather than deporting back to their countries of origin.

Moscow Mayor Sergei Sobyanin has been credited for transforming the city into a very neat and smart modern one, thanks partly to foreign labor – invaluable reliable asset – performing excellently in maintaining cleanliness and on the large-scale construction sites, and so also in various micro-regions on the edge or outskirts of Moscow.

With its accumulated experience, the Moscow City Hall has now started hosting the Smart Cities Moscow, international forum dedicated to the development of smart cities and for discussing about changes in development strategies, infrastructure challenges and adaptation of the urban environment to the realities of the new normal society.

Kremlin Spokesman Dmitry Peskov told reporters that Russia lacks sufficient number of migrants to fulfill its ambitious development plans. He further acknowledged that the number of migrants in Russia has reduced significantly, and now their numbers are not sufficient to implement ambitious projects in the country.

“I can only speak about the real state of affairs, which suggests that, in fact, we have very few migrants remaining over the past year. Actually, we have a severe dearth of these migrants to implement our ambitious plans,” the Kremlin spokesman pointed out.

In particular, it concerns projects in agricultural and construction sectors. “We need to build more than we are building now. It should be more tangible, and this requires working hands. There is certainly a shortage in migrants. Now there are few of them due to the pandemic,” Peskov said.

Early April, an official from the Russian Interior Ministry told TASS News Agency that the number of illegal migrants working in Russia decreased by 40% in 2020 if compared to the previous year. It also stated that 5.5 million foreign citizens were registered staying in Russia last year, while the average figure previously ranged between nine and eleven million.

On March 30, 2021, President Vladimir Putin chaired the tenth meeting of the Presidential Council for Interethnic Relations via videoconference, noted that tackling the tasks facing the country needs not only an effective economy but also competent management. For a huge multinational state such as Russia, it is fundamentally, and even crucially important, to ensure public solidarity and a feeling of involvement in the life, and responsibility for its present and future.

At this moment, over 80 percent of Russian citizens have a positive view on interethnic relations, and it is important in harmonizing interethnic relations in the country, Putin noted during the meeting, and added “Russia has a unique and original heritage of its peoples. It is part of our common wealth, it should be accessible to every resident of our country, every citizen, everyone who lives on this land. Of course, we will need to review the proposal to extend the terms for temporary stay of minors of foreign citizens in the Russian Federation.”

President Vladimir Putin has already approved a list of instructions aimed at reforming the migration requirements and the institution of citizenship in Russia based on the proposals drafted by the working group for implementation of the State Migration Policy Concept of the Russian Federation for 2019-2025.

“Within the framework of the working group for implementation of the State Migration Policy Concept of the Russian Federation for 2019-2025, the Presidential Executive Office of the Russian Federation shall organize work aimed at reforming the migration requirements and the institution of citizenship of the Russian Federation,” an official statement posted to Kremlin website.

In addition, the president ordered the Government, the Interior and Foreign Ministries, the Federal Security Service (FSB), and the Justice Ministry alongside the Presidential Executive Office to make amendments to the plan of action for 2019-2021, aimed at implementing the State Migration Policy Concept of the Russian Federation for 2019-2025.

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Nobody Wants a War in Donbass

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image source: euromaidanpress.com

Any escalation is unique in its own way. Right now there’s a combination of unfavorable trends on both sides, which are leading to an escalation of the conflict. This combination creates additional risks and threats that weren’t there before.

On the Ukrainian side, the problem is that the president is losing his political position and becoming a hostage of right-wing and nationalist forces. Many of the reform initiatives that he came to power with have stalled. Political sentiments are changing within his faction. They’re saying that with his recent steps, in particular the language law and the closure of television stations that Kyiv dislikes, he’s starting to stray towards the agenda of his predecessor, Poroshenko. And this means a weakening of his position. Probably, he’s already thinking about re-election and how he will look during the campaign. Here, the trend is unfavorable.

On the other hand, there’s the arrival of Biden, who will always be more attentive to Ukraine than Trump. There’s an expectation that the U.S. will be more consistent and decisive in its support for the Ukrainian side in the event of a conflict. This invigorates the forces that are looking for an escalation.

The conflict in Nagorno-Karabakh also played a role. They said there was only a political path to resolving the conflict, but in Karabakh [the Azerbaijanis] used force and made real progress. This motivates the people who think that military force can resolve a conflict. Moreover, Ukraine is carrying out defense cooperation with Turkey, so there may be hopes that the balance of forces will shift in Kyiv’s favor.

There’s also a radicalization of the political leadership of the DNR and LNR. They say that [full-scale] war is, if not inevitable, than very likely—and Russia must intervene. The idea that the DNR and LNR should join Russia is gaining popularity once again. This is facilitated by Russia’s actions. In the last two years, the mechanisms for granting Russian citizenship to residents of the LNR and DNR have changed. Hundreds of thousands of LNR and DNR residents are already citizens of the Russian Federation, and Russia has—or at the very least should have—some obligations towards its citizens. This gives hope to [the residents] of the LNR and DNR that if an escalation begins, Russia won’t remain on the sidelines and we will see large-scale intervention. Without Russia, the conflict will not develop in the favor of the republics.

As for Russia, our relations with the West continue to deteriorate. There’s Biden’s statement about Putin being a killer, and relations with the European Union. We are witnessing an accumulation of destabilizing trends.

I don’t think anyone wants a real, big war, since the costs of such a conflict will exceed the political dividends. It’s difficult to predict what such a conflict might lead to, given that the stakes are very high. But an unintended escalation could occur.

Hopefully, all of those involved have enough wisdom, determination, and tolerance to find a positive solution. So far, we are far from a serious conflict, but we’re closer than at the beginning of April 2020 or 2019. Unfortunately, we’re headed downhill, and it’s difficult to say how long it will go on.

To prevent a [full-scale] war from starting, the situation in Donbass needs to be stabilized. That’s the first task. In recent weeks, the number of ceasefire violations has been increasing, and the number of victims is growing. We need to return to the issues of the withdrawal of heavy weapons, the OSCE mission, and monitoring the ceasefire.

The second task is to discuss issues of political regulation. The main uncertainty is how flexible all the parties can be. The Minsk agreements were signed a long time ago, [but] it’s difficult to implement them in full, there needs to be a demonstrated willingness not to revise them, but to somehow bring them up to date. How ready are the parties for this? So far, we aren’t seeing much of this, but without it we will not advance any further.

The third issue is that it’s impossible to resolve the Donbass problem separately from the problem of European security as a whole. If we limit ourselves to how we fought in Donbass, Kyiv will always be afraid that Russia will build up its strength and an intervention will begin. And in Russia there will always be the fear that NATO infrastructure will be developed near Voronezh and Belgorod. We have to deal not only with this issue, but also think about how to create the entire architecture of European security. And it isn’t a question of experts lacking imagination and qualifications, but of statesmen lacking the political will to seriously deal with these issues. Because if you reduce everything to the requirements of the formal implementation of the Minsk agreements, this is what we’ve been fighting about for seven years already.

I think that Ukraine will now try to increase the political pressure on Moscow and get away from the issue of the Minsk agreements. And going forward a lot depends on what the position of the West and U.S. will be. To what extent and in what format will they provide support in the event of an escalation? This is still an open question. And, I think, even Biden doesn’t know the answer to it.

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Updating the USSR: A Test for Freedom

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Thirty years ago, on March 17, 1991, the only all-Union referendum in the history of the USSR took place. One question was put to a vote: “Do you consider it necessary to preserve the Union of Soviet Socialist Republics as a renewed federation of equal sovereign republics, in which the rights and freedoms of a person of any nationality will be fully guaranteed?” Almost 77 percent of those who voted said “yes” to the preservation of the USSR in an updated form. The authorities of Armenia, Georgia, Latvia, Lithuania, Moldova and Estonia refused to hold the referendum on their territory. By that time, the legislative and executive bodies and institutions in these republics were already controlled by secessionist forces, which did not hide their intentions to leave the USSR.

The March 17 referendum at that time was the only convincing attempt to appeal to public opinion on the most important issue of the political life of a huge country. However, the results did not change anything — by December 8 of the same year, the leaders of Belarus, Russia and Ukraine decided to dissolve the USSR. The referendum itself became the beginning of the end of a unique state — an experiment in the vast expanses of Eurasia. By that time, the republican elites were already ready to take power and wealth into their own hands; the events of August 1991 spurred this readiness — in Turkmenistan, where almost 100 percent of the population voted to preserve the USSR, on August 22, 1991, all enterprises were placed under republican control.

All the republics of the USSR met the new year in 1992 as newly independent states. For some of them, this status was a long-awaited event, for which they had fought. Others were, according to former Prime Minister of Kyrgyzstan Apas Jumagulov, “thrown out of the union, cut off as an unnecessary part of the body.” Many economic ties broke off immediately, while others collapsed gradually; the rest survived and were even strengthened. In politics, everyone was left to their own problems. Azerbaijan, Armenia, Georgia, Moldova and Tajikistan plunged into bloody political and interethnic conflicts during their first years of independence.

The path of the countries that emerged from the ruins of the USSR over the years was the road to gaining their own subjectivity in international politics. With great difficulty and despite all odds, Armenia and Moldova are coping with this task. The majority — Russia, Azerbaijan and all the countries of Central Asia — were able to solve the problem more or less successfully. Georgia and two Slavic republics — Belarus and Ukraine, were hanging in the “limbo” between external management and full-fledged statehood. The three Baltic republics quickly transferred their sovereignty to the European Union and NATO. In their independent development, they had to make, in fact, the only decision, which, moreover, was due to historical reasons and external circumstances. This decision was made and now the fate of Latvia, Lithuania and Estonia cannot be perceived outside the context of Russia-West interaction.

For the rest, the direct link between success in creating their own statehood and the scale of interaction with the West (Europe and the United States) is quite obvious. This historical fact reveals a relationship between the ability of small and medium states to ensure their sovereignty and the interests of the great powers in their neighbourhood. Such powers were Russia and the European states, united into the European Union simultaneously with the collapse of the USSR. Also, an important role was played by the United States, which always sought to limit Russian opportunities and supported the newly independent states. At the same time, an attempt to choose in favour of closer relations with the West to the detriment of Russian interests in all cases, without exception, led to a very shaky statehood and the loss of territory.

The dramatic fate of Armenia, Georgia, Moldova and Ukraine shows that the strong collective institutions of the West are capable of exerting a stabilising effect only on those states that directly became part of them.

In all other cases, no matter how complete absorption becomes possible, an orientation towards these institutions only leads to the use of small countries in a diplomatic game with bigger partners.

Therefore, the experience of the development of such major players as Azerbaijan or Uzbekistan is indicative — they were able to confidently form their own statehood, without finding themselves in a situation of choosing between conflicting poles of power. Their main resource turned out to be a rather fair demographic situation. But not only this — the population of Ukraine has also been and remains large by European standards. Kazakhstan is a success by this indicator; equal to the average European country or small Asian states.

Therefore, the ability of most of the countries of the former USSR to build relatively independent and stable statehood played no less important role. In many ways, this ability was established during the years of the Soviet Union’s existence. Founded on December 30, 1922, it was not just a continuation of the Russian Empire, which had collapsed five years earlier. Its main distinguishing feature was its unique model of state administration, based on the full power of one political party. As long as the unique position of the Communist Party remained in the Soviet state, the experiment could exist. With the abolition of Article 6 of the Constitution of the USSR, its days were numbered regardless of the desire of the population or the real readiness of the elites to take full responsibility for what was happening.

The USSR model of state structure, new by historical standards, created the conditions for a rather unique experiment, within the framework of which union republics were created, none of which, except for Russia, Georgia and Armenia, had the experience of centralised state administration within the territorial boundaries that they acquired within the framework of the USSR. At least the peoples inhabiting them can boast of a significant experience of statehood as such. Thus, most of the countries of Central Asia trace their ancestry back to great empires or urban civilizations of past centuries.

The Baltic republics were always on the sidelines — their independent statehood arose during the collapse of the Russian Empire and existed as such for almost 20 years before being incorporated into the USSR in 1940. Russia has returned to its historical state of being a major European power or empire of the 19th century, with the development of a multinational and multi-faith society central to its development objectives. In fact, Russia has not lost anything really necessary for its survival in international politics.

The peculiar structure of the USSR formalised the situation in which the former outskirts of the Russian Empire ceased to be part of the Russian state, although Moscow served as the centre of the union. Russia among them was in the most ambiguous position — it did not have its own most important institutions of Soviet statehood — the party organisation and the republican State Security Committee. Russian nationalism was subjected to the most severe and consistent persecution by the Soviet authorities.

The vast majority of republics within the USSR, for the first time, received the experience of building their own state and their national elite.

The backbone of the ruling class was the Soviet and party nomenklatura, which all took power, with few exceptions, after 1991. Even in Tajikistan, where the first years of independence were overshadowed by the civil war, it was this part of society that was eventually able to establish control over the situation. In other Central Asian countries, elites formed on the basis of the state tradition established during the Soviet era, gradually supplemented by representatives of a new generation that grew professionally after the collapse of the USSR.

Thirty years is a sufficient period to assess the results of the independent development of the countries that emerged from the republics of the former USSR. Now the period of their growing up can be considered complete; ahead is an independent future. Russia is increasingly feeling independent and not particularly obligated to its neighbours. In any event, Moscow will continue to follow a moral imperative of responsibility for maintaining peace and strictly ensure that its neighbours correlate their actions with Russian security interests.

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